September 13, 2012 / 8:47 PM / 5 years ago

Ruling voiding part of Detroit fiscal pact to be appealed

Sept 13 (Reuters) - A Michigan judge’s ruling that voided part of Detroit’s financial stability agreement with the state will be appealed, state and city officials said on Thursday.

Ingham County Circuit Court Judge Paula Manderfield on Wednesday tossed sections of the April agreement that allow Detroit’s mayor or program management director to change or suspend collective bargaining agreements with city workers because the sections violate Michigan’s 2011 emergency manager law.

A lawsuit filed against the city, Michigan’s treasurer and others by a Detroit labor union claimed power over collective bargaining deals was reserved only for state-appointed emergency managers under the law, which was used to craft the financial stability agreement.

Detroit, which was on the verge of running out of money earlier this year, avoided the appointment of an emergency manager by entering into a consent agreement that included state oversight.

Terry Stanton, a spokesman for the Michigan Treasury Department, said the state’s attorney general expects to ask the judge to reconsider the ruling, a move that temporarily suspends its implementation.

“We disagree with the judge’s order,” he said. “The financial stability agreement is a mutually agreed to, cooperative agreement entered into voluntarily by all parties; the state, mayor, and city council and one that meets all legal requirements.”

Using that pact, Detroit Mayor Dave Bing in July imposed a 10 percent pay cut and other changes on workers to save $102 million a year. Late last month, a Wayne County Circuit Court judge upheld the move in a lawsuit brought by the Detroit Police Officers Association.

Andrew Paterson, an attorney representing the American Federation of State, County and Municipal Employees Council 25, which filed the Ingham County case, said Judge Manderfield’s ruling voids the 10 percent wage cuts.

Detroit’s financial stability agreement and the emergency manager law have been targeted by labor unions and others with lawsuits and in the case of the law, a Nov. 6 state-wide ballot measure to repeal it.

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