June 27, 2014 at 10:58 pm

AFSCME, Orr sign contracts that include pay increase for workers

Wage restorations for 3,500 workers are expected as part of the agreement

AFSCME's Ed McNeil and EM Kevin Orr sign contracts Friday that call for a pay increase and were ratified by workers this week. (David Coates / The Detroit News)

Detroit — Emergency Manager Kevyn Orr and a bankruptcy mediator joined the city’s largest labor union on Friday to sign contracts that call for a pay increase and were ratified by workers this week.

“Their efforts were hard-fought. Very difficult and passionate positions were stated by both sides,” Orr said during the public event inside the AFSCME hall on Lafayette. “I could not be prouder of the efforts people made to get us here.”

Members of American Federation of State, County and Municipal Employees Council 25 and a majority of the city’s unions represented in the labor coalition, ratified the tentative five-year agreements this week during the city’s bankruptcy proceedings.

The deal between Detroit and AFSCME is expected to include significant wage restorations for 3,500 workers who had wages frozen in 2010 and slashed by 10 percent two years ago.

The agreement goes into effect July 1 and runs from 2014-18. The contract calls for a 5 percent pay increase as of July 1, 2014. In 2015, employees will get a bonus of 2.5 percent of annual earnings. A pay increase of 2.5 percent will be given in years 2016, 2017 and 2018, the agreement says.

Ed McNeil, a representative for AFSCME, said the ratification vote was “overwhelmingly supported” by the groups.

“This represents one of our contributions to try to move the city forward,” he added.

Orr said shedding some of its debts has allowed the city to achieve the cash flow necessary to achieve the increases that he says are overdue.

“We are well aware that city workers have been called upon over the years to make sacrifices for a number of years,” he said. “If we could have, we would have achieved this quicker, but with the state of the city, this is a fair outcome ...”

The union contract deal was first announced in April, following other agreements the city had forged with retiree groups and the city’s pension funds to limit monthly reductions.

The city is trying to line up deals with creditors before an August confirmation trial over the feasibility of its restructuring plan and whether its debt reduction proposal is fair and equitable to creditors.

U.S. District Judge Victoria Roberts, who has acted as a mediator in the city’s bankruptcy case, also joined in Friday’s signing event, noting the cooperation from both sides is “why we were able to reach success here.”

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