July 8, 2014 at 6:32 pm

EM: Pay bump for non-union employees intended to restore earlier cuts

Detroit — The city’s emergency manager has authorized a pay raise beginning this month for non-union employees, including Mayor Mike Duggan and Detroit’s City Council, in an effort to restore cuts made in 2012.

The 5 percent raises, which also cover mayoral appointees, some directors and supervisors, go into effect in the first pay period after July 1, according to an order issued by Kevyn Orr on June 30.

The three-page order notes the raises are consistent with the city’s financial and operating plan and “will help to ensure the efficient operation of the city’s departments.”

Orr’s spokesman Bill Nowling said the pay bump — which mirrors an earlier increase given to a coalition of city unions — serves as restoration for prior cuts imposed on Detroit’s union and non-union workers in 2012. It will also help offset required contributions for pension and health care benefits, he said.

“This is intended as a restoration, and to help offset the costs being added on,” Nowling said.

Nowling added the city anticipated it would do wage restoration in the next year and that it has been built into the city’s bankruptcy plan.

In January, Orr set Duggan’s salary at $158, 559. An additional 5 percent increases his pay to $166,487 per year.

John Roach, a spokesman for Duggan, said Tuesday that the mayor had not previously been aware of the increase and had no immediate comment.

Council members had been making $73,181 and the council president was paid $76,911. With the increase, council members will get $76,840 and President Brenda Jones’ pay will be $80,757.

Orr authorized the non-union raises days after he met with officials representing the city’s largest labor union, AFSCME Council 25, and a majority of the city’s unions represented in the labor coalition, to sign contracts that call for pay increases.

The five-year deal between Detroit and AFSCME includes wage restorations for 3,500 workers who had wages frozen in 2010 and slashed 10 percent two years ago.

The agreement, which went into effect July 1, runs from 2014-18 and calls for a 5 percent pay increase as of July 1. 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.

The state’s Emergency Manager Law allows Orr to set the compensation for Detroit’s elected officials. Without an emergency manager, the city’s compensation changes would be executed through the Detroit Elected Officials Compensation Commission.

Orr, during the contract signings for the unions, said shedding some of its debts has allowed Detroit to achieve the cash flow it needs to achieve the increases that he said are overdue.

“We are well aware that city workers have been called upon over the years to make sacrifices for a number of years,” Orr said at the AFSCME union hall on Lafayette Boulevard last month. “If we could have, we would have achieved this quicker, but with the state of the city, this is a fair outcome ...”

CFerretti@detroitnews.com