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Retirees, citizens fear bankruptcy

Kevyn Orr

Kevyn Orr

By Zenobia Jeffries
The Michigan Citizen

DETROIT — Shelia Johnson was one of a hundred names called in federal court Sept. 19 for testimony challenging the legitimacy of Emergency Manager Kevyn Orr’s bankruptcy filing.

Johnson was joined by other retirees, city employees and citizens who filed objections to the bankruptcy.

“I retired, after 28 years, as a City of Detroit employee. My husband was in business for 40 years. He fed families,” Johnson told the judge.  “I earned my pension. I paid into my pension. They didn’t give me anything.”

The 61-year-old grandmother said, “I am too old to start over and so is my husband.”

Johnson’s husband, 75, is also retired.  He owned an auto mechanic shop where he employed 10-15 men, Johnson said, adding she was the backbone of the family.

Johnson and her husband depended on her pension — $3000 a month, which is partly used to make their over $300 a month health insurance payments.

Johnson shared with the court the strain and uncertainty the bankruptcy filing is having on her family.

“My nine-year-old grandson asked me, ‘Grandma, are they trying to make us slaves again?’”

Near tears, Johnson asked Judge Steven Rhodes, “How do I answer my grandson? I voted for my city council and my mayor whether I agree with them or not. We do not need a dictator; we do not need a slave owner. I am not a slave.”

The Official Retiree Committee and individual objectors called for a stay on eligibility proceedings until a higher court rules on two federal lawsuits against the Emergency Manager Law, Public Act 436. Some asked for an outright dismissal of the case.

Fifty objectors — retirees, city employees, city officials and citizens — addressed the U.S. Bankruptcy court, over which Rhodes presides.

Some argued EM Orr is not authorized to file bankruptcy — per the bankruptcy law, only elected officials (the mayor, city council) can file bankruptcy.  Many also argued they had not been given timely notification to obtain legal counsel, and the city should not be able to cut pensions.  Until this hearing, retirees’ and citizens’ voices on the issue were silenced.

Given three minutes to make their case, each speaker before and after Johnson echoed her sentiments.

Elmarie Dixon, 65, said she goes to bed at night worrying about the bankruptcy proceedings.

“I’ve worked since the age of 17,” she said. “I’m not a debtor.”

Jacqueline Esthers was hired at $2.24 an hour in 1968. When she retired in the late 90s, she chose to stay in Detroit.

“Now, I want to leave, but I can’t sell my house,” she said.

Olivia Gillon, retired in 2002 after 33 years and nine months.

“I was a dedicated and loyal employee,” said Gillon, who worked her way to the city clerk’s office from an entry-level position in the human resources department.

“I object because the city has too many assets to declare bankruptcy … I object to the emergency manager treating me as an individual creditor,” Gillian said. “Retirees do not get the same treatment as banks. Banks should not be given preferential treatment.”

She criticized EM Orr’s plan to cut retirees pensions and benefits.

“It seems (the EM) is putting the onus on the retirees for fixing the city’s problems. Most of us were not even involved in the decisions that got the city into the trouble it’s in now.”

Paulette Brown worked for the city for 30 years.  She started as a junior typist and worked her way to Manager I at the wastewater treatment plant.

Brown testified that she and her coworkers sacrificed their health and safety working for the city.

“We worked in unsanitary conditions,” she said. “We all breathed in the air of feces and raw sewage on a daily basis.  We continued to do our jobs and fulfilled our agreement with the city.

Brown said, “We did our part, we need the people of the City of Detroit to do theirs.”

She called EM Orr’s strategy of treating pensioners as unsecured creditors cruel.

“Michael Vick went to prison for cruelty to animals, who’s going to prison for cruelty to retirees?”

JoAnn Jackson spoke on behalf of her husband who worked in the Public Lighting Department for 30 years. He retired in 2000 and his health failed from kidney disease in 2002.

“I’m concerned about his pension and his healthcare,” she told Judge Rhodes. “He takes 16 pills a day (to live).”

Jackson said her husband paid into the annuities and insurance.

“We’ve paid our dues and we’re still paying,” she said. “And they’re saying retirees are causing the city to go broke.”

Lu Ann Pelletier and the pensioners noted that pensions are not a debt, but a binding obligation entered into with good faith by the workers.

Pelletier added that proceeding with bankruptcy could lead to additional violations by the city.

“This can lead to a disparity of treatment for a protected group of people,” she said noting the majority of retirees are women and African American. “Women and minorities will be negatively impacted.” Pelletier told the judge these groups are protected under the Civil Rights Act of 1964.

Many of the objectors stated they did not have enough time to obtain an attorney to advise them of their rights.

Two council members gave testimony, Jo Ann Watson and Brenda Jones.

Watson, who has maintained the city would not be filing for bankruptcy if those who owed the city would pay, referred to the revenue sharing agreement on which the state has reneged.

“At least $220 million in revenue-sharing was never paid,” she said, and then referred to Gov. John Engler’s successful push to nullify cities’ residency requirements. “We have lost hundreds of millions more from people who work in the city but continue to live elsewhere.”

She added the federal bankruptcy code does not allow involuntary filing, “Neither the city council nor the elected mayor voted on the filing,” Watson said. “The State of Michigan has material conflicts with the City of Detroit. The State Treasurer (Andy Dillon) admitted the same in my office.”

Recalling that city unions had presented a $120 million cost-saving plan in Dec. 2011 to Mayor Dave Bing, who never sent the plan to council for consideration, Jones told the judge cost savings negotiations with unions were done in “bad faith.”

Rhodes, listened intently to each of the objectors — in the morning and afternoon sessions — at times responding how their comments were “articulate,” “thoughtful,” “passionate” and “compelling.”

The Official Retirees Committee was formed by Rhodes’ order at EM Orr’s request.

Orr filed bankruptcy July 18 with the city $18 billion in debt. Prior to his filing, he did not enter into negotiations with unions and did not meet with pensioners to bargain in good faith as required by the bankruptcy act, according to union officials.

Judge Rhodes said he will consider the day’s arguments as part of his ruling on eligibility to file for bankruptcy. The eligibility trial date is set for Oct. 23.

For audio recordings of testimonies visit 

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