Detroit comes to terms with largest union, reaches deal with some bondholders
http://www.freep.com/article/20140613/NEWS01/306130166/
Detroit comes to terms with largest union, reaches deal with some bondholders
9:12 PM, June 13, 2014
By Matt Helms and Nathan Bomey
Detroit announced settlements Friday with the citys largest union and a group of holdout unsecured bondholders moves that put the Motor City a step closer to exiting bankruptcy and may encourage more workers and retirees to approve the citys grand bargain aimed at reducing pension cuts and rescuing the Detroit Institute of Arts.
Mediators announced Friday that the city has completed a series of tentative agreements with the American Federation of State, County and Municipal Employees (AFSCME) Council 25, laying the groundwork for new collective bargaining for almost all city workers the union represents.
AFSCMEs leadership also agreed to urge all active and retired city workers to vote to approve the grand bargain, in which the city-owned DIA would be spun off to a nonprofit trust for the equivalent of $816 million from wealthy foundations, the State of Michigan and the museum itself, with proceeds going directly to reduce pension cuts.
AFSCME officials couldnt be reached for comment, but in a statement released by mediators, Council 25 President Al Garrett said: We remain severely concerned with the way this bankruptcy has been handled from its inception. However, the agreements we have achieved are, in our view, the best path forward for city employees and retirees. They simply cannot risk the further serious reductions in pension, pay and job security if the plan, and our collective bargaining agreements, are not approved.