City manager warns of pending layoff if no contract concessions

By Charles Sercombe
The clock is ticking toward a massive city employee layoff.
City Manager Bill Cooper said unless he hears back from the city’s four employee unions soon, he will have to issue layoff notices within the next few weeks.
“At some point I’m going to have to do something,” he said.
So far, none of the unions have agreed to take a 5 percent salary cut, a wage freeze for three years and other concessions. Cooper recently outlined the city’s projected budget situation for the next three years.
The city is facing a $1 million budget deficit this coming year, and by 2012 there will be a $4.2 million shortfall. Cooper said if the unions don’t agree to the concessions, he will have to lay off 17 police officers, 16 firefighters and three full-time City Hall employees as well as three part-time City Hall employees.
Cooper said he’s shown a PowerPoint presentation to all of the unions except to the members of the city’s two police officer unions. Union representatives from the two police unions were shown the presentation.
One high-ranking officer, speaking off the record, said there’s a credibility problem with Cooper. The source said it was just a few months ago Cooper agreed to a new contract that gave the unions a total of a 12 percent salary increase.
“What happened between then and now?” the source said.
A lot has happened, Cooper said.
After agreeing to the contract, the city administration found out that Hamtramck will receive $1.9 million a year less from revenue sharing from the GM Poletown plant. Also, after weeks of haggling, state legislators and the governor finally agreed on cutting state revenue sharing by 11 percent.
If the city were to lay off 17 officers, the remaining officers would have to work overtime to fulfill the union’s mandatory staffing levels. Cooper said one of the concessions he’s asking for is to suspend the staffing requirement, something the police unions have steadfastly refused to do in the past.
Like many older cities, Hamtramck’s yearly budget is crippled by so-called legacy costs – pensions and benefits for its retirees. That total cost eats up $7 million a year out of a budget of $18 million.
Hamtramck has not faced an economic situation like this since the early 1980s when city employees went without pay for over two months. The city is not alone in facing such a dilemma. Many communities are either struggling to balance their budget or are coming close to insolvency.
Even state officials are at a loss on how to plug the state’s own multi-billion dollar deficit. Michigan and the nation are in one of the worst economic slumps since the Great Depression of the 1930s.
Economists agree that things are going to get worse in the next couple of years.
In the meantime, a small group of residents and city officials met with two Kalamazoo college professors on Sunday to discuss the economic situation in Michigan and the Detroit area and what to expect in the next few years.
The conclusion: Michigan is never going to regain the one million lost manufacturing jobs. Cities, in turn, are going to have to look for alternative ways to fund services.