Monday, November 24, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Detroit retirees vote in favor of pension cuts

By
July 23, 2014 |

DETROIT — Workers and retirees approved pension cuts in Detroit’s bankruptcy by a landslide, the city reported Monday, a crucial step to emerging from the largest municipal insolvency in U.S. history.

The city disclosed results from two months of balloting, which ended July 11. Judge Steven Rhodes still must hold a trial in August to determine if Detroit’s overall bankruptcy plan is fair and feasible to all creditors, from Wall Street to Main Street, but support from retirees is vital.

“It’s clearly a victory for the city,” said Anthony Sabino, a bankruptcy expert who teaches business law at St. John’s University in New York. “It will pave the way for a confirmation hearing. Detroit will be able to move forward, not with absolute financial certainty but far more than Detroit has enjoyed in decades.”

General retirees would get a 4.5 percent pension cut and lose annual inflation adjustments. They accepted the changes with 73 percent of ballots in favor. Retired police officers and firefighters would lose only a portion of their annual cost-of-living raise. Eighty-two percent in that class voted “yes.”

The counting was done by a private company.

Approval of the pension changes triggers an extraordinary $816 million bailout from the state of Michigan, foundations and the Detroit Institute of Arts. The money would prevent the sale of city-owned art and avoid deeper pension cuts. The judge, however, still must agree.

“It’s absolutely unprecedented in a bankruptcy,” Sabino said.

There are tens of thousands of creditors in Detroit’s $18 billion bankruptcy, from bond holders to businesses that provide soap, but much of the focus of the last year has been on the roughly 32,000 retirees and current and former workers banking on a pension. They have put a real and often anguished face on the process.

The average annual pension for police and fire retirees is $32,000, while most other retired city workers get $19,000 to $20,000. Detroit emergency manager Kevyn Orr has said pension changes are unfortunate but necessary because two funds are underfunded by billions. If investment performance improves in the years ahead, he said, the cuts could be restored.

“I want to thank city retirees and active employees who voted for casting aside the rhetoric and making an informed positive decision about their future and the future of the city,” Orr said in a statement late Monday.

Many organizations, including the leaders of retiree groups, had urged a “yes” vote, insisting it was the best option under tough circumstances. But Dorothy Baker, 64, disagreed. Besides the pension cut, the library retiree who lives in suburban St. Clair Shores would lose a portion of her annuity earnings.

“Don’t they sell assets in bankruptcy? They haven’t sold any assets. There are parking garages and golf courses,” said Baker, who worked for Detroit for nearly 39 years.

The Michigan Constitution says public pensions can’t be cut, but Rhodes, in his most significant decision in the case, said in December that federal bankruptcy law trumps that shield. It was a groundbreaking opinion that could influence local governments across the country that go broke.

Michigan Attorney General Bill Schuette believes Rhodes is wrong, but he said Monday he won’t appeal now that retirees have voted for the cuts.

“I will respect their decision,” he said in a statement.

Separately on Monday, a Boston-based restructuring expert hired to advise the judge said Detroit’s overall bankruptcy plan is “feasible,” a key standard at the upcoming trial. But Marti Kopacz warned that antiquated computer systems, a pledge to spend more than $1 billion to improve services after bankruptcy and a “cultural malady” among workers all will be challenges.

“There are … employees who don’t grasp that their job is to provide a service to the taxpayers versus the taxpayers owing them a job,” Kopacz said in a report.

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

    Cadets raise cash to help wounded Air Force veteran

    By Ian Thompson | From Page: A1, 1 Comment | Gallery

     
    Solano cities gather for Thanksgiving meal

    By Tony Wade | From Page: A2

     
    Food Addicts group sets Thanksgiving Day meet

    By Susan Hiland | From Page: A3

    Local government board schedules meeting

    By Susan Hiland | From Page: A3

     
    Turkey Trot returns Thanksgiving Day

    By Glen Faison | From Page: A3

    Holiday tree-lighting events begin

    By Glen Faison | From Page: A3

     
    Holiday boutiques in full swing

    By Susan Winlow | From Page: A3 | Gallery

     
    .

    US / World

    3 months after Napa quake, recovery rolling

    By The Associated Press | From Page: A1

     
    US looking past Ebola to prepare for next outbreak

    By The Associated Press | From Page: A1

    Anxieties mount as Ferguson waits on grand jury

    By The Associated Press | From Page: A1

     
    Surfer missing off beach south of San Francisco

    By The Associated Press | From Page: A4

    Thief suspect falls through ceiling, leaves phone

    By The Associated Press | From Page: A4

     
    1 killed, dozens injured in California bus crash

    By The Associated Press | From Page: A4, 2 Comments

    San Jose police arrest man after airport chase

    By The Associated Press | From Page: A4

     
    Israeli Cabinet moves to define Israel as Jewish

    By The Associated Press | From Page: A5, 1 Comment

    Former DC Mayor Marion Barry dies at 78

    By The Associated Press | From Page: A5

     
    Islamic State group recruits, exploits children

    By The Associated Press | From Page: A5

    Giffords rides in Tucson cycling event

    By The Associated Press | From Page: A5

     
    Suicide bomber kills at least 45 Afghans

    By The Associated Press | From Page: A5

    Some 30 horses die in stable fire outside Chicago

    By The Associated Press | From Page: A5

     
    Crew blasts off for International Space Station

    By The Associated Press | From Page: A5

    US tells Iran to consider nuclear talks extension

    By The Associated Press | From Page: A5

     
    Damage worse than thought in Japanese earthquake

    By The Associated Press | From Page: A5

    Joey Chestnut devours turkey to win eating contest

    By The Associated Press | From Page: A5

     
    Strong quake in west China kills 5; 54 hurt

    By The Associated Press | From Page: A5

    Boy with fake gun dies after shot by Ohio officer

    By The Associated Press | From Page: A5, 3 Comments

     
    Health care M&A leads global deal surge

    By The Associated Press | From Page: A9

    .

    Living

    Today in History: Nov. 24, 2014

    By The Associated Press | From Page: A2

     
    Community Calendar: Nov. 24, 2014

    By Susan Hiland | From Page: A2

     
    Horoscopes: Nov. 25, 2014

    By Holiday Mathis | From Page: B5

    My sister-in-law expects me to pay her for damages, but she won’t pay me

    By Kathy Mitchell and Marcy Sugar | From Page: A7

     
    Horoscopes: Nov. 24, 2014

    By Holiday Mathis | From Page: A7

    .

    Entertainment

    ‘Mockingjay, Part 1′ opens with $123 million

    By The Associated Press | From Page: B6

     
    TVGrid Nov 25

    By Daily Republic Syndicated Content | From Page: B6

    List of winners of the American Music Awards

    By The Associated Press | From Page: B6

     
    1D, Katy Perry win big at American Music Awards

    By The Associated Press | From Page: B6

    TVGrid Nov 24

    By Daily Republic Syndicated Content | From Page: A9

     
    .

    Sports

    Speights scores 28 as Warriors hold off Thunder

    By The Associated Press | From Page: B1 | Gallery

     
    Hyde scores go-ahead TD, lifts 49ers past Redskins

    By The Associated Press | From Page: B1 | Gallery

    Federer leads Swiss past France for Davis Cup

    By The Associated Press | From Page: B1 | Gallery

     
    Hamilton answers Rosberg in style to clinch title

    By The Associated Press | From Page: B1 | Gallery

     
    UCLA honors Robinson, retires No. 42 for all teams

    By The Associated Press | From Page: B2

    Katy Perry to perform at Super Bowl halftime show

    By The Associated Press | From Page: B2

     
    NFL roundup: Seahawks roll past Cardinals

    By The Associated Press | From Page: B2 | Gallery

    Athletics acquire 1B Ike Davis from Pirates

    By The Associated Press | From Page: B2

     
    Revs win 2-1 at Red Bulls in East final 1st leg

    By The Associated Press | From Page: B2

    Sarvas puts Galaxy past Seattle 1-0 in West opener

    By The Associated Press | From Page: B2

     
    First lady attends Princeton women’s hoops game

    By The Associated Press | From Page: B2

    Stacy Lewis sweeps 3 biggest LPGA awards

    By The Associated Press | From Page: B2

     
    This date in sports history for Monday, Nov. 24, 2014

    By The Associated Press | From Page: B3

     
    .

    Business

    .

    Obituaries

    Leslie “Esi” Gros

    By Nancy Green | From Page: A4

     
    Jack I. Johnson

    By Glen Faison | From Page: A4

    Dorothy Pouge Arnold

    By Nancy Green | From Page: A4

     
    Arthur Irving Weiner

    By Nancy Green | From Page: A4, 1 Comment

    .

    Comics

    Frank and Ernest Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Wizard of Id Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Baby Blues Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Pickles Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    For Better or Worse Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Dilbert Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Blondie Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Rose is Rose Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Zits Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Peanuts Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Beetle Bailey Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Sally Forth Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    B.C. Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Get Fuzzy Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Baldo Nov 25

    By Daily Republic Syndicated Content | From Page: B4

     
    Garfield Nov 25

    By Daily Republic Syndicated Content | From Page: B4

    Cryptoquote Nov 25

    By Daily Republic Syndicated Content | From Page: B5

     
    Word Sleuth Nov 25

    By Daily Republic Syndicated Content | From Page: B5

    Crossword Nov 25

    By Daily Republic Syndicated Content | From Page: B5

     
    Bridge Nov 25

    By Daily Republic Syndicated Content | From Page: B5

    Sudoku Nov 25

    By Daily Republic Syndicated Content | From Page: B5

     
    Baby Blues Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Dilbert Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Rose is Rose Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Frank and Ernest Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Peanuts Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Beetle Bailey Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Pickles Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Wizard of Id Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Sally Forth Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Baldo Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Get Fuzzy Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Zits Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    For Better or Worse Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Blondie Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    B.C. Nov 24

    By Daily Republic Syndicated Content | From Page: A6

    Garfield Nov 24

    By Daily Republic Syndicated Content | From Page: A6

     
    Word Sleuth Nov 24

    By Daily Republic Syndicated Content | From Page: A7

    Crossword Nov 24

    By Daily Republic Syndicated Content | From Page: A7

     
    Bridge Nov 24

    By Daily Republic Syndicated Content | From Page: A7

    Sudoku Nov 24

    By Daily Republic Syndicated Content | From Page: A7

     
    Cryptoquote Nov 24

    By Daily Republic Syndicated Content | From Page: A7