| DETROIT, April 3
DETROIT, April 3 Detroit's new state-appointed
emergency manager on Wednesday disavowed letters sent by the
mayor's office saying that the city would stop honoring
contracts with its police, fire and paramedics' labor unions.
The apparent miscommunication between Mayor Dave Bing and
Kevyn Orr, the former bankruptcy lawyer brought in to clean up
Detroit's finances, highlights the challenges Orr may face as he
assumes increasing power in the biggest state takeover of an
American city in more than two decades.
Written to Michigan's five commissioners of employment
relations, the letters declared that as of March 28, the
destitute city considered itself in receivership status and no
longer bound by its union contracts. March 28 is the date when a
Michigan law went into effect giving the emergency manager wide
powers including to abrogate union contracts.
Orr's spokesman, Bill Nowling, said the emergency manager
had no warning that the letters would be sent.
"That letter was not authorized by the emergency manager and
we are looking into it," Nowling said. "Any action of that sort
has to be authorized by the emergency manager and this was not."
A spokesman for Mayor Bing, who has said he will try to work
with the emergency manager, declined to comment.
According to a copy of the letters, written by Lamont
Satchel, the city's director of labor relations, the city was
freed from all collective bargaining agreements under state law
once it was in receivership.
"The City is no longer obligated to participate in
collective bargaining," said the letters, which were given to
Reuters by a union official copied on the correspondence.
The letter also declared the city's withdrawal from all
mediations and arbitrations and ordered Michigan's bureau of
employee relations to dismiss any pending union issues. The
bureau mediates and arbitrates labor disputes on which the city
and its unions cannot reach agreement.
The city's unionized police, fire, and paramedics are
working under contracts imposed on them last summer by Mayor
Bing, which cut their pay by 10 percent. Employees also were
required to pay 20 percent of their medical costs.
Detroit has agreements with some 48 unions, and outside
analysts have said the city needs concessions from organized
labor in order to restore financial health. The city is running
a $100 million annual budget deficit and a state report said it
has some $14 billion in long-term debt.
Orr, a former bankruptcy lawyer who worked on the
restructuring of auto company Chrysler, was appointed last month
by Michigan's Republican Governor Rick Snyder despite objections
from elected city officials.