Discuss Detroit Archives - Beginning January 2006 Detroit unions open to cuts Previous Next
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Username: Detroitman

Post Number: 967
Registered: 06-2004
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Posted on Monday, April 24, 2006 - 6:56 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Detroit unions open to cuts

As Mayor Kilpatrick prepares to unveil budget, Next Detroit report suggests there's even more fat to trim.

Lisa M. Collins / The Detroit News
http://www.detnews.com/apps/pb cs.dll/article?AID=/20060424/M ETRO/604240314/1003
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Username: Jt1

Post Number: 7219
Registered: 10-2003
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Posted on Monday, April 24, 2006 - 10:46 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Pretty important stuff - KK deserves a big congratulations if this is pulled off.

I believe the Unions see that they are not in a position to hold the city hostage and know they need to cooperate for the greater good of the city and the unions.
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Username: Livernoisyard

Post Number: 518
Registered: 10-2004
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Posted on Monday, April 24, 2006 - 11:02 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

"The mayor during his April 12 budget address said he was prepared to mandate wage and benefit cuts should negotiations fail. Contract concessions are a major item in Kilpatrick's many-faceted plan to match city spending with declining revenue. Even with the cuts, City Council finance analysts estimate that the mayor's plan falls $100 million short of necessary spending cuts."

Just where in this article, could any reasonable reader find that KK was up to the task? KK just borrowed $130 million and it stands to reason that KK will have to borrow just about that figure a few months or weeks down the road. And on it goes...

Detroit mayor FY 2007 budget relies on union cuts

Wed Apr 12, 5:21 PM ET

CHICAGO (Reuters) - Detroit Mayor Kwame Kilpatrick unveiled a $1.43 billion fiscal 2007 general budget on Wednesday that he said was balanced by tapping new fees, layoffs and employee concessions.

Key to his spending plan for the fiscal year that begins July 1 is a one-year, 10 percent pay cut for union employees as well as higher contributions for health care coverage, along with 77 more layoffs.

Kilpatrick warned that he has the legal authority to impose these demands on union workers if no agreement is reached in time for the new budget.

"I would much rather come to a meeting of the minds so we can work this out together with our unions," he said in his budget speech. "But I am committed to bringing these costs under control."

He projected that health-care costs will increase 20 percent to $218 million in fiscal 2007, while employee pension costs will hit $133 million.

Part of Kilpatrick's budget balancing plan calls for refinancing nearly $800 million of floating-rate certificates of participation the city sold in May 2005 to reflect a proposed amortization change. The move would save the city $20 million, according to budget documents.

"The key is getting union cooperation in addressing pension funding," said Joe O'Keefe, an analyst at Fitch Ratings, which has put Detroit's "BBB" rating on review for a possible downgrade.

A spokesman for City Council President Kenneth Cockrel, Jr. was not immediately available to comment on the budget.

Kilpatrick also proposed a new $75 per quarter trash collection fee that would raise $67 million a year; creation of a new general services department to oversee city buildings, property and security services; and property sales that would earn $30 million for city coffers.

Kilpatrick said the Motor City has shed more than 5,500 jobs since he took office four years ago, leaving a work force of less than 15,000. The layoffs were aimed at taming the city's ongoing structural budget deficit, with a nearly $63 million deficit from the current fiscal year dealt with in the mayor's fiscal 2007 budget.

The mayor also released a five-year budget projection that shows the city $8.3 million in the black starting in fiscal 2008, with a surplus that would grow to $40.7 million in fiscal 2011.

These future city budgets would benefit from maturing debt, according to the mayor. He said the city will make its final $46 million payment on Greater Detroit Resource Recovery Authority bonds and $40 million payment on fiscal stabilization bonds in fiscal 2009.

"That means we start the following fiscal year with an additional $86 million right off the top," he said.

Michigan's Treasury Department was still awaiting receipt of Detroit's fiscal 2005 audit and application for a cash-flow borrowing of up to $130 million, according to a Treasury spokesman.

A city official has said the borrowing was needed to pay bills and make a pension fund payment due in June.

(Message edited by livernoisyard on April 24, 2006)

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