Clash over benefit changes continues between Grosse Pointe Shores officials and retirees

By: K. Michelle Moran | Grosse Pointe Times | Published September 8, 2020

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GROSSE POINTE SHORES — The battle between Grosse Pointe Shores retirees and elected officials over recent changes to retiree health care now has Shores residents taking sides, as well.

The Shores City Council heard from retirees and residents on both sides of the issue during a meeting Aug. 18 at Osius Park. A handful of retirees spent Aug. 15 and 16 hand delivering an information packet they had prepared to roughly 850 to 900 homes in the Shores.

At issue is a change to retiree health care approved by the Shores City Council during a phone meeting in May. Shores officials say the change was necessary to address rising health care costs and the city’s long-term liabilities, but retirees contend that it was a violation of the contracts they, and the city, agreed to years ago.

In June, retirees said they received word that the council voted 6-1 in May in favor of moving retirees to a health care plan in which they have to pay 20% of the costs, similar to the one current employees are on. City Councilman Douglas Kucyk cast the dissenting vote. The council majority said that 60% of the Shores’ health care budget is for retiree healthcare. They said the city has an $11 million retiree health care liability, of which $9.2 million is unfunded.

City Councilwoman Danielle Gehlert said retirees are living longer, which is raising the city’s long-term actuarial costs.

“The council’s not looking to take away the health care from the retirees. … The contract change mirrors that of (the benefits received by) current employees,” Gehlert said.

“It’s a very difficult subject,” Mayor Ted Kedzierski said. “I’ve offered to meet with the retirees to see if we could get some resolution.”

Retirees responded from the audience that the council last month turned down a motion to delay changes to retiree health care so that the Finance Committee could take another look at the issue.

Retirees said they gave concessions in salary and other benefits during their working years in order to be guaranteed retiree health care.

“These employees took pay cuts and didn’t take raises (in exchange for) retiree health care,” said Deanne Younk, wife of Public Safety Lt. Dave Younk, who retired in 2012 after nearly 30 years of service. “All we’re asking is that you honor the contract. We didn’t pick this fight — you did.”

Shores Finance Officer/Treasurer Rhonda Ricketts said altering retiree health care responsibilities will only save the city about $139,000 a year, $68,000 of which is from increasing their share of the costs to 20%.

“We gave our lives here,” said Tom Collins, a Department of Public Works retiree. “I’ve missed I don’t know how many Christmases, weddings (because of work). … It’s a signed contract. Every worker here had to live up to that contract. … We followed the contract. And now that I’m retired, you go and change the contract.”

Collins also chastised the council for making the change in the middle of a pandemic, calling it a “shady, backwoods (political) deal.”

“If you lose your credibility in life, you’ve got nothing,” Collins told the council. “Your word means nothing. And I’m hearing it from residents now. They don’t trust you.”

Shores resident Dr. Raymond Rahi, who addressed the council in July about the retiree health care decision, said he has since heard from many neighbors who agreed with his assertion that the Shores should honor its contracts. He said “true leaders” are people who can review a past decision and see if they can do better.

“I ask you to recognize the value of your employees,” Rahi told the council.

Gloria Anton, a lifelong Grosse Pointer who said she’s spent the last 25 years in the Shores, said she’s unhappy with many of the changes that have taken place under the current council, including changes to retiree health care.

“You do not sign a contract and then arbitrarily change it,” Anton said. “That, to me, is very disrespectful. … We’re feeling let down, and now we’ve got problems we never had before. You fired our (last) city manager, Mark Wollenweber, and made a big display of saying what a great guy he was. The hypocrisy was stunning.”

Wollenweber officially retired Oct. 3, 2019, but it’s a poorly kept secret that some elected officials wanted him to leave after they clashed with the veteran city manager, under whose tenure the Shores achieved AAA bond status.

Former City Councilman Bruce Bisballe, who chaired the Finance Committee, was also sharply critical of the city. Bisballe resigned from the council Nov. 19, 2019, over what he said was “a lack of leadership,” especially from Kedzierski.

“It was not necessary to make our retirees pay (more) for their health care,” Bisballe said. “The mayor said (the Shores) was on the verge of being on the (state) financial watch list. There is no such thing as a financial watch list. The city is strong, financially. It has a AAA credit rating. There’s no one looking at the city.”

Shores officials, including Kedzierski, have said the problem is requirements imposed on municipalities by Public Act 202 of 2017. The act mandates certain minimum retiree health care and pension requirements that never existed before, as well as more costly actuarial evaluations.

Among the act’s provisions is that a municipality can be classified as “underfunded” by the state treasurer if “the actuarial accrued liability of a retirement health system of the local unit of government is less than 40% funded, according to the most recent annual report, and, if the local unit of government is a city, village, township or county, the annual required contribution for all of the retirement health systems of the local unit of government is greater than 12% of the local unit of government’s annual general fund operating revenues, based on the most recent fiscal year.”

“At the beginning of the year, Rhonda presented a budget showing we were going to be short about $320,000 (in the 2020-21 fiscal year), and that didn’t include a fire truck that we needed,” Kedzierski said in June. “Our total city of Grosse Pointe Shores health care cost under covered contracts for 2019 was $795,000, and in 2018, it was $668,000, so health care costs have gone up considerably. So, what we did was very difficult, but our (health care) consultants … (recommended that) we essentially move the retirees to a plan designed to mirror what our active employees receive now.”

Some have countered that the Shores isn’t in dire financial straits; according to U.S. Census data, Grosse Pointe Shores ranks as one of the 10 wealthiest communities in Michigan.

Bisballe pointed to a report compiled eight years ago by the blue ribbon committee to look at retiree health care costs. The committee concluded that changing benefits “would be imprudent … and demonstrate a lack of good faith on the part of the council,” Bisballe said, reading from the last paragraph of the report.

“I urge you to reconsider the action that you’ve taken,” Bisballe told the council.

As to city officials who say the Shores is facing costly sewer work in the near future, Bisballe said those repairs will need to come from a “voter-driven millage,” because they will be too high to be handled by the general fund or water and sewer fund budgets.

Dr. Robert Lee defended the council and said there was a “culture of entitlement that has festered at City Hall” during the tenure of the last three Shores city managers.

“We live in a small city with finite resources,” Lee said. “Despite the outcry of (retirees) … I want to commend this council for grabbing the bull by the horns and (addressing) these future health care (costs).”

Among those who spoke at the council meeting, Lee was in the minority.

“It’s really a shame, because this community should stand up for the commitment they made years ago,” said Fran Bachmann, Bisballe’s wife. “There’s only 35 (Shores) retirees.”

Jeff Manor said he is a retired Harper Woods law enforcement officer who wanted to show support for Shores retirees, many of whom he worked alongside as part of a mutual aid agreement among the Grosse Pointes and Harper Woods for police and fire emergencies.

“I know how important health care is for retirees,” Manor told the council.  “The people I worked with were very dedicated … and the decision you made should be reversed.”

Bob Roney, who said he’s been living in the Shores since 1960, told the council he was “quite embarrassed” by the actions taken by the current council and said the residents have long had a close relationship with city workers.

“The workers here are a part of my family,” Roney said. “I respect them. … I ask you to look into your heart and try to (reverse) this bad decision.”

Current and former employees say the decision to alter retiree health care has hurt morale in the city and is making it harder to find qualified employees to fill job openings. Employees and retirees fear this change also won’t be the only one.

“I certainly hope that you’re not going to find the next thing to take away from us,” said Diane Kortas, wife of Mike Kortas, who retired from the Public Safety Department in 2004 after 28 years.

Several longtime employees have left or are leaving because of the council’s actions, including DPW Director Brett Smith, DPW mechanic Scott DeGeer and Ricketts, whose last day at work will be in October.

The retirees have vowed to continue to speak up and attend council meetings, so it’s likely they will be present for the next meeting, which was scheduled, at press time, for 7 p.m. Sept. 15 at Osius Park. For an agenda or more information, visit www.gpshoresmi.gov.

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