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Detroit Declares Bankruptcy, Police Union Sues

July 18, 2013  | 

Photo via Shawn Wilson/Wikimedia.
Photo via Shawn Wilson/Wikimedia.
Detroit filed for bankruptcy today, setting up an historic municipal bankruptcy process in which the city's police union has vowed to fight for retirement and health care benefits for current and retired officers.

The filing begins a 30- to 90-day period that will determine whether the city can claim Chapter 9 protection from creditors and unions over $18.5 billion in debt and other liabilities. Detroit emergency manager Kevyn Orr's bailout plan must receive Gov. Rick Snyder's approval, which sets up a showdown with the city's police union. Snyder authorized the filing Thursday, calling the city's level of debt "unsustainable" in a video on his website.

Orr has been in discussions with the city's two pension funds, including the Police and Fire Retirement System, over cuts. The Detroit Police Officers Association has sued to block cuts to officer benefits, the association's president told PoliceMag.com.

Several pension-related lawsuits in Detroit seek to have a judge block any cuts to the pension system, by arguing that pension benefits are protected by the Michigan constitution, reports the Detroit Free-Press.

"What was loosely proposed to the police union was pertaining to pensions and retiree health-care," DPOA President Mark Diaz said. "The proposal, and I use that word loosely, was absolutely unfathomable. Anyone who retires before they turn 55, those members would not be entitled to health insurance, which in my opinion is absolutely discriminatory based on a person's age."

The union and Orr have been at odds regarding the actuarial reporting of pension benefits and the $3-billion fund that pays out to retired officers. Orr has argued the pension system is less than 80% funded, while the association claims the system is 96% funded. The two sides are using calculations based on differing rates of return, Diaz said.

The Detroit Police Department now counts 1,923 sworn officers to cover a jurisdiction of about 750,000 residents. Chief James Craig took over full time on July 1. Diaz has called the new chief "a cop's cop."

By Paul Clinton

Related:

Municipal Bankruptcies: Running On Empty

Tags: Detroit PD, Pensions, Retirement Benefits


Comments (23)

Displaying 1 - 23 of 23

Jelly @ 7/18/2013 4:26 PM

What? Detroit declares bankruptcy.............SHOCKER

bman @ 7/18/2013 5:52 PM

I am just as shocked as you Jelly. Once again, the unions refuse to acknowledge reality and they wonder anything dominated by a union is either in debt or attempting to negotiate something different. They just dont have a clue anymore.

chuck @ 7/18/2013 6:00 PM

Suing something is that is bankrupt......gets you what?

Former Lawman @ 7/18/2013 6:00 PM

bman: I wonder how you'd feel if you were a cop in Detroit? But of course, you wouldn't or couldn't do the job of a cop...

moe067 @ 7/18/2013 6:21 PM

Hey Jackjelly and Jackbman. It's not about suing and bankruptcy. It's about making institutions (whether private or government) honor the agreements they make with people. Some of us receive injuries while protecting life and property on this job and ask only that institutions honor their side of the deal.

badge16 @ 7/18/2013 6:47 PM

Unfortunately DPD is going to have to suffer because of many years of crooks mis-managing the city...its a tough a job, and the men and women who do it made a pledge to lay their body and life on the line to protect and serve...bman's an idiot for even taking the time to make a useless comment on here...Unions keep us from making $10 an hour to get shot at, and try to provide us with decent health care, which I've had to use on quite a few occasions after getting hurt in the line of duty...shake of the negative comments DPD, your suburban brothers are with you...Godspeed.

Ima Leprechaun @ 7/18/2013 10:27 PM

Sadly this is a GOP ploy to bust emergency and public service union representation. While we know Detroit is in financial trouble due to political corruption the politicians have found a way to blame emergency and public services for their losses. The police, fire, teachers and ems have become the new Jewish Patsy of GOP hate mongers. As politicians "lost" money steadily for years by siphoning off public money to their buddies they now blame the pensions of the public servants for all the city woes. Our pension's were properly run by our own board of regents to make money for our retirees so they could retire within a solid fund. GOP politicians saw this money as theirs and decided to steal it for themselves. This is not just in Detroit but is now happening in every red state. Get ready because you are next.

TC @ 7/18/2013 10:45 PM

Don't worry. OCP Security Concepts will help by augmenting the department with RoboCop. LOL

FireCop @ 7/19/2013 4:39 AM

Unfortunately this is just one more in a long line of 'systems' that didn't live in reality for so many years, while the economy went down the toilet, and now they will pay the price. This isn't a GOP ploy; look at Detroit. It's a ghost town. How do you continue to support these programs when you have no inflow of funds? We got our meagre little pensions stripped in the Southeast because our politicians listened to the horror stories about cops and firefighters in other states retiring and receiving huge checks for life; try living on my $1600.00 a month retirement check....What you guys don't realize is that your story resonates all over the country. Those that are still on the job in Detroit deserve full credit.....but they're going to have to take a hit financially once the whole thing gets worked out. Stay safe.

uslawman1983 @ 7/19/2013 5:21 AM

Over 50 years of Democratic party rule and what do they have to show for it? Detroit now resembles WWII Dresden, Germany. Maybe its time for a change.

Cop One @ 7/19/2013 5:23 AM

Does anyone realize that the median price of a house in Detroit is $7000, not $70,000 but $7000! That should tell you what shape the city is in. I fell sorry for all the Police Officers that have put their lives on the line day after day and now their jobs, retirement and paychecks are in question. You can point fingers all you want as to who is to blame, but what can be done to help these officers and their families?

Bob @ VA @ 7/19/2013 5:43 AM

This is what happens when you run out of other people's money. Far from a GOP conspiracy, this is the direct result of 50+ years of incompetent and corrupt democrats robbing from productive folks who earn the money and giving to those who produced/earned nothing. Eventually the producers leave, with no one left from whom to redistribute wealth to the loafers.

I genuinely feel sorry for the hard working LE and fire professionals who risked their lives daily but will get screwed in all this anyway. Yet I wonder how many voted to keep the corrupt and incompetent in charge of the city for all those years. All the while, the power brokers were making grand promises to the little people to get their votes whilst simultaneously picking their pockets and stabbing them in the back. Making poor choices has consequences.

Warren @ 7/19/2013 6:25 AM

What I know is, all the cities are trying to cut into their most costly expense,,,us (police,fire,ems). There is a push in Texas to do away with our retirement system, and get us on 401K's, the cities will same millions every year. Their counting on the publics mind set that why should they (us) get a special retirement system, while you (public) have a 401K, it works for you, why not police, fire & ems.

I would like to see the unions try and work with the city, but I doubt it will happen..The union should fight for every cent, the police, fire, ems employees worked and died for every penny, while the city sat on their ass and mis-managed the budget. This did not happen over night.

Jim VG @ 7/19/2013 8:02 AM

Ima Leper-
Please explain how this could be the fault of the GOP when Detroit has been run by Democrats for over 50 years. This is not a political discussion but if it was you need to get your head removed from your rectum before you speak.

Ex-SF/EOD/COP @ 7/19/2013 8:54 AM

I have to agree with Jim VG,,,,,Ima Leprechaun,,,,,let me know how the GOP is involved, since Detriot has always been run by Dems. Your an idiot for thinking that,,,,,probably a Dem yourself who, like the rest, refuse to take responsibility.

Bizman&cop @ 7/19/2013 10:31 AM

badge16.....I call Bull Crap. $10 per hour??? Come on sir quit with the standard union rhetoric. The trouble with most unions and rank/file members is that they suppose that intelligent folks (cops) will/would work for fast food rates. Most will/would not. We all agree that everyone wants a fair wage and benefits but with today's labor laws, etc unions are not needed.

Today’s Govt unions all cry that without them (unions) the employees will be mistreated, subjected to greater job hazards and other doom and gloom to include be hung out to dry. Nonsense. Federal and State laws have been passed to abolish an unsafe and hostile work environment. Realize that most of the private world (in the US) is not unionized and are doing just fine. However, it is about time that govt unions start realizing that just because you are in the public sector does not mean you should be entitled to outrageous wage and benefit packages. For example, at the Dept I work for, the average base salary is $45,000per year. PLUS:
• Many hours of OT per month
• Sick days and flex time (not available to the private sector)
• Special events (time and a half)
• Special duties (corps/churches, banks that pay EXTRA to have a uniform at their business)
• Vacation time
• Insurance
• Pensions
• Uniforms and gear

Bizman&cop @ 7/19/2013 10:31 AM

When all of this is added together, total compensation package is well over $90,000 that the junior cop gets and does not reflect the actual cost to the city/county/municipality which is much higher. The unions never bother to mention the true compensation package, just that the lowly cop gets $45 grand per year. Don’t even get me started on what the brass makes. And for the record, while it is true that LE faces some pretty dangerous work, statistically, we are nowhere near other more dangerous vocations, and yet we always use it as a crutch as to explain to the tax payers why we are entitled to more. Let me ask my fellow LE……Are we really that special……so special that because we can (collective bargaining), we negotiate what is ultimately good for us vs. what is good for the community. You know …the community where we all live, raise our families and fellowship with our other non LE friends. What happened in DT will start happening all over the country if we cannot learn to be reasonable and to all live within our means. If you run the taxpayers out of the area, it won’t matter how much you think you are worth…..it won’t’ matter a hill of beans then.

After professional cops are gone (because they bargained themselves out of a job) and when the cities/counties are BK, then LE will be back to the way it was 150 years ago. The sheriff will be the head LE and will deputize able men when the need arises…professional or not.

Respectfully,

Capt. Crunch @ 7/19/2013 11:23 AM

How can anyone run a police department when most of your residents are on welfare. I don't blame the unions, I blame Pres. Obama, because he said he was going to get Detroit, strong again in building cars.

Doug @ 7/19/2013 12:55 PM

Detroit government is as screwed up as the State of California and our US Govt. Social Security program. Why is it a little State like Idaho can have a rock solid retirement system that does not rely on tax dollars and future workers money to pay for retirement. PERSI (Idaho retirement system) has money invested to pay future retirement. Time to pull your head out of your ass Detroit, California, and US Govt. and stop stealing from these retirement accounts to over pay those that take fake disability retirements and allowing the govt. to steal the money from these retirement accounts to use for "other" uses. I have been a govt. employee for 35 years and it sickens me to see the waste of tax dollars. Most Grants are a fraudulent use of tax dollars, and retirement dollars should be used only for retirement. I will be stepping down off my soap box now.

Tom Ret @ 7/19/2013 6:21 PM

One reason why Detroit, other cities and the country are feeling the financial heat is because there has been mega spending on projects and
special interests that are so stupid on their face that it boggles the mind.
From spending millions to protect rodents around Fort Lewis in Washington State to giving aid to other countries to combat their unemployment while ignoring our own cities that are going bankrupt, to building multi million dollar complexes in Afghanistan that will likely be uninhabitable or torn down once we leave, typifies the utter lack of common sense, inability to prioritize, and utter waste of money spent by our government. Obama's war on coal and failure to explore our natural resources have contributed to the economy's malaise. Common sense, not ideological nonsense about global warming and the rise of the oceans is what is needed. Yes, officers deserve their retirement, especially after putting their lives on the line for years. They would have their retirements if the money had not already been spent on hair brain ideas. Detroit and cities like it are screwed unless the nation changes direction and the sooner the better.

Mike @ 7/24/2013 10:57 AM

Hey Phil why don't you shoot yourself in the head and relieve the welfare fund. At least the officers worked for their pension.

badge16 @ 7/28/2013 12:42 PM

Bizman&cop...I really wish that I lived in your world...I'm glad your "department" isn't willing to take advantage of you, but for those of us living in a world where your employer wants you to go above and beyond for the most minimal of pay, it's a little more nerve racking...And yes, without unions $10 is a possibility...It's really hard for me to believe a LE officer isn't pro union, are you private police/security somewhere...I don't really have enough space here to list all of the crap that the city has tried to take from us, including, but not limited too; 30 hour work weeks, absolutely no overtime, work with what you got (guys call in sick and you got one cop, that's what you go with (very safe by the way)), and so on...so, you can call bull crap if you want, but I respectfully disagree with you sir...I hope wherever you work stays the same, because if it doesn't, you are in for a very rude awakening my friend.

roger grover @ 11/30/2013 3:50 PM

i like floridas retirement 25 years or six years of service and leave after 55 years of age also drop plan for five years only state workers county and city are little different also military retirements are better 20 years done, or any federal job, detroit retirment was never that good we could not get them to change some of it. also no social security unles you worked ten years after you retired,but under weep program you get less.

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