Arbor Update

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Labor settlement dips into Ann Arbor's reserves

15. November 2005 • Murph
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Ann Arbor City Councilmember Greden’s vague warning last week of a costly labor settlement has been explained:

The city of Ann Arbor is facing up to a $4 million tab to settle a grievance filed four years ago by its largest employee union.

The City Council was told of the arbitrator’s decision last week in a closed-door session.

“The math is pretty simple,’’ City Administrator Roger Fraser said this morning. “If you are calculating pain, this hurts a bunch. The question is, ‘How do you handle it?’‘’

Fraser said the arbitrator wasn’t clear on a number of issues, which is why he wasn’t sure how much the final bill would be. He estimated the decision will cost the city between $2 million and $4 million.
. . .
Easthope said the city may have to take it from the city’s general fund reserves, sitting at about $11 million.

The city is already facing up to a $4 million bill to pay for removing dead and dying ash trees on public property. Residents last week rejected a proposed half-mill property tax increase for two years that would have paid for that.


  1. Maybe we can pay the bonuses out in wood stoves and firewood?
       —Murph.    Nov. 15 '05 - 06:55PM    #
  2. What union? Any details on the nature of the dispute?
       —Mark    Nov. 15 '05 - 08:06PM    #
  3. No, let’s have Washtenaw Co. artisans make art and stuff with the wood. The value added (particularly with Ann Arbor prices), will take care of that settlement in no time!
       —Dale    Nov. 15 '05 - 08:06PM    #
  4. But the excess value added to the wood by the striving proletariat must be fairly distributed, comrade. (heh)
       —David Boyle    Nov. 15 '05 - 08:10PM    #
  5. So what Greden was saying was that the Property tax increase was really to pay for the labor settlement? That explains how they ended up with the seemingly arbitrary millage amount of $4 million. But isn’t that, like, illegal or something?
       —Parking Structure Dude!    Nov. 15 '05 - 09:31PM    #
  6. Doh, forgot the link. Fixed now.

    Mark, it’s the AFSCME – “The ruling goes back to union negotiations in 1998, when the city agreed to give one union a bonus as part of a contract settlement. Other unions said they wanted the bonus, too, citing “me too” clauses in their contracts that guarantee them any higher pay or benefits gained by other unions. City officials thought the me-too clauses governed only salaries and not bonuses and other benefits. AFSCME, left out of the original settlement, filed a grievance in December 2001.”
       —Murph.    Nov. 15 '05 - 09:46PM    #
  7. PSD – I think the message was, “Emergencies really do exist.” I don’t see it as so much a bait-and-switch as a, “dang but it would have been nice if this had been worked out a few weeks earlier so that people could have talked about it.”

    I think you’re being kind of silly.
       —Murph.    Nov. 15 '05 - 09:51PM    #
  8. Perhaps, but I think that people would have been feeling even less likely to open their wallets to the tune of $4 million if they knew that the reason it was needed so badly was that the city, due to its own negligence, was about to be in hot water. Which is why I think they wanted to line up the money before the announcement of the grievance settlement.
       —Parking Structure Dude!    Nov. 15 '05 - 10:03PM    #
  9. And anyway, it couldn’t be a “bait and switch” because they pretty much have no choice but to pay for both items. I just find it curious that they requested enough in the millage to cover not the true cost of cutting the trees, which will be lower, but the amount of the settlement.
       —Parking Structure Dude!    Nov. 15 '05 - 10:10PM    #
  10. I should also mention that the first post, at least the reference to illegality, was meant to be somewhat tongue-in-cheek. I apologize if it didn’t come across that way. I would have just appreciated something more from Council than Greden’s ominous but vague threat.
       —Parking Structure Dude!    Nov. 15 '05 - 10:34PM    #
  11. PSD – I don’t get where your last math is coming from. “not the true cost of cutting the trees, which will be lower, but the amount of the settlement”. Both tree cutting and settlement are up-to-$4m pricetags in the only descriptions I’ve seen of either.
       —Murph.    Nov. 16 '05 - 01:50AM    #
  12. Do I hear this right? One union gets a bonus, and we don’t know which one or why. But everybody else then can pile on and demand it too?

    I’d really like to side with unions. But between the autoworkers and AA’s unions, I’m having to work hard, maybe too hard.

    Of course, sticking it to the taxpayers is always a good idea.
       —JennyD    Nov. 16 '05 - 02:20AM    #
  13. Well, come on, let’s be honest—so maybe the numbers aren’t quite equal, but they’re in the same ballpark. No, the millage wouldn’t have paid for the settlement; it just would have saved some cash for paying out the settlement. Whatever: it was really a no-win situation. Though maybe if they’d admitted the settlement earlier and asked for less money for the tree cleanup, it might have passed.
       —Young Urban Amateur    Nov. 16 '05 - 04:03AM    #
  14. The NEWS article was vague on some details, so I’ll fill them in:

    This is not a “settlement” in which the parties reached a mutual agreement. An arbitrator issued a decision against the City.

    The Council was notified of the decision on Thursday 11/10. Those who believe there was a conspiracy to hide the truth (i.e., PSD), or who believe we should have “admitted the settlement earlier” (i.e., YUA), are just plain wrong. Nobody on Council knew of this decision until two days AFTER the ash borer millage failed.

    I issued my ominous prediction on arborupdate because I knew this issue was out there, I suspected we’d lose the arbitration, and I was aware of the potential cost. I had no idea the decision would come so quickly.

    As Murph said, emergencies happen. That’s life. And that’s what the City’s emergency fund is for.
       —Leigh Greden    Nov. 16 '05 - 04:18AM    #
  15. “Do I hear this right? One union gets a bonus, and we don’t know which one or why. But everybody else then can pile on and demand it too?”

    This is fairly typical contract language when you have multiple unions representing employees in a workplace. It ensures that one unit doesn’t get favored over another. It also ensures that managers, who are typically not unionized, don’t enjoy a benefit that isn’t shared with the rank-and-file.

    Don’t blame the unions and the employees for this debaccle – they didn’t approve the bonuses, the City Council did. Blame the City Council and City Administration who either didn’t understand the language or didn’t make the effort to figure out the impact of such a decision.
       —John Q    Nov. 16 '05 - 03:29PM    #
  16. Sure, but didn’t council consider it a real possibility? Is this a complete surprise? I’m not saying the millage proposal wasn’t for cleaning up the trees—of course it was. I guess, though, I can see how all the information was already out there before the proposal, so I can see how the city simply did the best it could with the information it had. Sorry for any confusion my inexact wording might have caused.
       —Young Urban Amateur    Nov. 16 '05 - 06:49PM    #
  17. FYI – that labor settlement was under the former City Administrator and the former Mayor/Council. Just so you know – so don’t go blaming Roger Fraser, John Hieftje or Leigh Greden! Arbitrators take their time about their decisions and announce them when they please.
       —Leah    Nov. 16 '05 - 07:54PM    #
  18. In the few short years I have lived in Ann Arbor, we’ve forked over millions to substitute teachers, millions to city workers for extremely lucrative early retirements, and now millions to unions for nifty bonuses negotiated by our elected officials.

    I think there’s blame to go around now, and then. How many more millions are we going to spend to pay city workers, even as the city says it’s hard up for cash and wants more money from taxpayers?

    There’s a pattern here….
       —JennyD    Nov. 16 '05 - 11:42PM    #
  19. Jenny D, the only pattern here is Michigan state law, which provides many protections to unionized public sector employees.
       —Reality check    Nov. 17 '05 - 03:48AM    #
  20. “Jenny D, the only pattern here is Michigan state law, which provides many protections to unionized public sector employees.”

    Wrong. None of those agreements had anything to do with state law and protecting union employees. Those were deals that were worked out and agreed to by your public officials and public administrators. Please let me know the next time your ready to turn down a payraise or bonus at your workplace. I’ll gladly take that money off your hands.
       —John Q.    Nov. 17 '05 - 02:30PM    #