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Detroit unions to end talks if state plan accepted


DETROIT (Reuters) - Detroit's public employee unions will not negotiate more cost-cutting agreements with the city if it agrees to a state-mandated financial plan designed to stop Detroit from running out of money, the head of a major union said on Monday.

The financial stability agreement drafted by Michigan Governor Rick Snyder's administration would require significantly deeper concessions from city unions than have already been agreed to. Opposition to the plan has come as the city's elected leaders and state-appointed officials try to agree on Snyder's financial plan for Detroit.

A tough stance by union officials could make it much more difficult for city leaders trying to fix Detroit's fiscal crisis without the intervention of a state-appointed emergency manager, who would have far more power to make unilateral changes to contracts under Michigan law.

Most of the city's labor contracts expire on June 30. The proposed consent agreement with the state of Michigan calls for significant changes to Detroit's multiple labor deals.

Detroit's nine-member city council held a public meeting with members of Detroit Mayor Dave Bing's administration to discuss changes to the governor's plan, a draft of which was delivered to them late last week. The council will vote on the amended agreement as early as Tuesday afternoon.

A majority of city council members are expected to vote in favor of the consent deal, even after throngs of residents and community leaders spoke out in opposition of the agreement. Three of the council members helped the governor's office and mayor's staff in crafting the plan.

A meeting of the financial review team slated for Tuesday has been canceled due to a temporary order issued by Ingham County Circuit Judge Joyce Draganchuk, the Michigan Treasury said. No one was immediately available to say whether this court decision would be appealed.

The team, which the governor appointed in December, is charged with sizing up Detroit's financial situation and recommending a course of action.

However, votes cast by council members and the review team may not have much meaning due to legal challenges that threaten to slow the process.

Separately, Detroit labor unions filed a complaint on Friday against Snyder and State Treasurer Andy Dillon in federal district court asking for a temporary restraining order prohibiting the state or city from taking action on a consent agreement that would impair tentative labor agreements which the unions ratified last month.

A response filed by Michigan's attorney general challenged the request, saying the unions were not likely to succeed based on the merits of their case. The response argued that there is no impairment of contracts since Detroit has not formally accepted the agreements with the unions.

A judge scheduled the hearing on the temporary restraining order request for 2 p.m. EDT (1800 GMT) on Tuesday.


As it is written, the consent agreement would implement far more uniformity among contracts as well as additional outsourcing, alterations to healthcare agreements and rewriting of work rules.

The unions completed concession negotiations with Detroit over a month ago and said they have no intention of resuming talks based on Snyder's plan.

"As long as I am president we will not be back at the table prior to the expiration date of our contract," Albert Garrett, president of AFSCME Council 25, told Detroit's city council.

The American Federation of State, County and Municipal Employees, or AFSCME, represents about half of the city's unions and a third of its employees.

Snyder, who faces a deadline as soon as Thursday for acting on the review team's recommendations, is trying to act before Detroit is expected to run out of money in May. Once a plan is in place, city officials would be required to go back to the unions to once again negotiate cost reductions.

Garrett's comments follow a sweeping effort by Bing's administration to forge concession agreements with the city's 48 unions after deep financial problems came to light late last year.

Those agreements, aimed at saving the city $68 million a year, were recently ratified, but were criticized by Snyder as being insufficient.

Snyder's consent agreement is aimed at allowing elected city officials to continue running the city, but with additional help. If the agreement fails to produce the desired result, he could appoint an emergency financial manager.


The consent agreement has been a controversial subject in Detroit. It was drafted largely by the state treasurer in discussions with city leaders and imposes strict financial controls on city operations. It also requires outside leaders to work with Bing on restructuring how the city is run.

Union officials, including Garrett, said they have confidence in a public movement to limit the governor's ability to intervene in the financial problems facing many Michigan cities.

Michigan election officials are in the process of verifying the signatures on petitions aimed at placing a repeal of Michigan's Public Act 4 emergency manager law on the November ballot. If the measure is certified for the statewide ballot, the law would be suspended and the former law, which empowered state-appointed managers with less sweeping authority to make changes, would take its place in the interim, according to Michigan's attorney general. Public Act 4, which allows emergency managers to void collective bargaining agreements and replace local elected officials for the duration of the fiscal emergency, is also facing a constitutional challenge in court.

(Reporting by John Stoll and Karen Pierog; Editing by Tiziana Barghini, Dan Grebler, Gary Crosse. Desking by Christopher Wilson)