DETROIT (WWJ/AP) - The cash-strapped City of Detroit has issued bonus checks to nonunion city employees.
The end-of-the-year checks were cut to city employees and managers Friday as part of so-called longevity pay, which is offered under city ordinance. They ranged from $150 for five years of service to $750 for 26 years. Taxes are taken from the payments.
The checks have prompted criticism from City Council members, union leaders and others who question the wisdom of issuing year-end payments when the city is deep in debt and has a budget deficit of more than $200 million — not to mention the city is facing a financial review that could lead to a state takeover.
“It sends a horrible signal to all employees, the city and anybody that watches (Detroit government),” Council President Pro Tem Gary Brown told The Detroit News. “We need to get to the bottom of whether it was intentional or an accident of some sort. That has to be an oversight, and we have to get to the bottom of whose oversight it was.”
City workers have been receiving longevity pay since the ordinance was passed in 1964, during a time when the city had a thriving tax base instead of massive financial problems. The payments were eliminated for union members in 2009 amid the city’s growing cash crisis.
Mayor Dave Bing this year discussed the need eliminate all longevity pay.
Mayoral spokesperson Anthony Neely said the Bing administration is “investigating the matter and developing a full review on where we stand on the issue.” Neely said he didn’t know how many employees received the checks or how much money was doled out in total.
The city has nearly 10,000 employees.
Officials in Detroit are trying to fend off appointment of an emergency manager, but state treasurer Andy Dillon this month announced a potential first step in that direction, saying he was leaning toward ordering a new review of the city’s finances.
A consent agreement between Detroit and the state last year let the city avoid a state-appointed manager, but some say they worry that Bing and the City Council aren’t moving fast enough to enact financial reforms.
Treasurer’s office spokesman Terry Stanton said the financial manager “option cannot be taken off the table” and “delaying reforms and tough decisions only promises to make eventual solutions more difficult and painful.”
Public Act 4, the state’s Emergency Manager Law, was struck down by Michigan voters in November, but a less-powerful emergency financial manager is still allowed under a previous statute. Public Act 71, the Emergency Financial Manager law, does not allow a state-appointed manager to void union contracts.
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