News Column

Detroit Officials to Get Pay Hike Despite Bankruptcy

July 9, 2014

Joe Guillen, Detroit Free Press

July 08--The city of Detroit's mayor, city council members and other non-union workers received a 5% pay increase at the beginning of the month.

Emergency Manager Kevyn Orr set the pay raise in an order dated June 30. The raises are effective during the first pay period after July 1.

The raise means Mayor Mike Duggan's pay jumps from $158,559 to $166,487. City Council President Brenda Jones' salary goes from $76,911 to $80,757 and the other council members' base pay increases from $73,181 to $76,840.

Although Detroit elected officials' pay is typically set by an Elected Officials Compensation Commission, Orr has broad powers under state law that pull those salary-setting responsibilities under his umbrella, said Bill Nowling, Orr's spokesman.

Orr gave the 5% pay raise to bring non-union salaries in proportion with terms of new union deals that restore some city workers' pay, Nowling said. Beginning in 2012, a pay cut of at least 10% hit all city workers, including elected officials.

Orr's salary of $275,000 is set by the state and will not increase. Workers in his office are considered vendors or personal service contractors and will not get a raise.

Nowling could not immediately say exactly how many non-union workers and mayoral appointees would be getting the raise.

So how can a city in bankruptcy pay for raises? Nowling said the costs are covered in the city's restructuring plan, which is pending in federal bankruptcy court.

Although Orr's restructuring plan has not yet been approved, the city already is budgeting based on that blueprint. The new city budget is effective July 1 and will be amended based on any changes made to the restructuring plan in bankruptcy court.

The recent agreements between the city and many of its unions are not included in the city's most recent restructuring plan filed May 5. But it includes a 10-year, $1.4 billion spending plan to provide city services, reduce blight and improve public safety.

The city filed for bankruptcy last July for relief from about $18 billion in long-term debts and liabilities.

City Councilwoman Saunteel Jenkins said the council did not ask for a raise. She said the city's bankruptcy has helped reduce the city's liabilities, therefore allowing the fulfillment of promises made when salaries were cut years ago.

"When employees were asked to take pay cuts in the first place, the message was, when our financial situation gets better, people will be restored," Jenkins said. "There are resources available to move people closer to what they should be paid."

The Detroit City Council members' pay has been on a downward trend, she said. "People who sat in those seats 20 years ago made more money than we do now," Jenkins said.

Some council members seemed unaware of the raise. Councilman Gabe Leland said he had not read Orr's order, adding he mostly reads material relevant to his district and the city as a whole.

"It must've slipped by me," he said. "Is an update needed? It's worth a look."


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Original headline: EM Kevyn Orr gives Detroit officials, appointees 5% pay raise

Source: (c)2014 the Detroit Free Press

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