Grosse Pointe Shores residents show their support of city retirees

By: K. Michelle Moran | Grosse Pointe Times | Published November 20, 2020

 Signs like this one, in front of a home on Vernier Road, are appearing on front lawns throughout Grosse Pointe Shores.

Signs like this one, in front of a home on Vernier Road, are appearing on front lawns throughout Grosse Pointe Shores.

Photo by K. Michelle Moran

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GROSSE POINTE SHORES — The election might be over, but lawn signs are popping up all over Grosse Pointe Shores.

The signs contain a simple message: “We support Grosse Pointe Shores Retirees.” They’re the latest in a series of efforts by retirees to convince the Shores City Council to undo changes the council made to retiree health care this spring — changes retirees say they weren’t aware of until after the council voted.

During the council’s meeting May 19 — held by phone because of COVID-19 — they voted 6-1 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 noted that 60% of the Shores’ health care budget is for retiree health care. They say the city has an $11 million retiree health care liability, of which $9.2 million is unfunded.

However, as recently retired Shores Finance Officer/Treasurer Rhonda Ricketts pointed out this summer, 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%.

As of Jan. 1, retirees say those among them who are eligible for Medicare will take another financial hit, with higher co-pays and deductibles. Besides posing a serious financial challenge to retirees in the middle of a pandemic, they say that these changes violated the terms of the labor contracts they negotiated while they were still employed by the city.

Retirees say they gave concessions in salary and other benefits during their working years to be guaranteed health care as retirees. It’s something they say was spelled out in their contracts and reinforced verbally by officials over the years.

“We gave up so much to keep the health care,” said Daniel Pullen, who retired as a sergeant with the Public Safety Department in 2015 after 30 years. “We know how valuable health care is.”

In a letter from the retirees delivered to all Shores homes in November, they cite two examples of what this has meant for retirees. For one former public safety officer — whose career was ended by a debilitating injury trying to rescue a contractor from a collapsed trench — he’s now paying about 10% of his annual pension of $40,143 toward health care while trying to support his wife and two children. Another retired public safety officer who retired after 28 years and has a pension of $43,462 is now paying more than 7% of that — $3,056 — to cover increased deductibles and premium cost sharing.

Although the Shores has a balanced budget — it ended the last fiscal year with a surplus of roughly $64,000 — and a AAA credit rating, which is the highest one possible, city officials said they needed to make retiree health care changes because they said it was imposing too large of a financial burden on the small community.

Shores officials, including Mayor Ted 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.”

But when Kucyk asked if the Shores was the only city that isn’t fully funded with regard to other post-employment benefits such as retiree health care  — better known as OPEB — Shores auditor Aaron Stevens responded, “absolutely not,” as Stevens delivered results of the 2019-20 audit during a Nov. 17 City Council meeting. Stevens said the Shores’ OPEB is about 18% funded, which is better than many municipalities.

“You have to recognize you made promises to (your) employees. … You are not required legally to fund your OPEB plan (in advance),” Stevens said. “A lot of my clients don’t fund their OPEB plan. They pay as they go.”

While they may be disappointed by the actions of the council, Pullen said he and his fellow retirees have been heartened by the response they’ve gotten from residents, who’ve been requesting signs and offering comments on their Facebook page, Friends of Grosse Pointe Shores Retirees.

“We’re having great support from the residents,” Pullen said. “The council never asked the residents what they wanted to do (with regard to the retiree health care issue). The council just did whatever they wanted.”

Harry Kurtz is among the residents who now have retiree signs in front of their homes.

“I believe the lawn signs are helping to raise community awareness about what many believe was a poor decision made by the council,” Kurtz said. “It’s amazing how many residents have been putting them out. Hopefully, the four members of the council who promulgated and supported this action will reconsider and do a reset. It was acknowledged the whole thing was poorly handled from the beginning.”

Another resident who’s displaying one of the signs is Dr. Raymond Rahi, who gave an impassioned appeal on behalf of the retirees during a July 21 City Council meeting held outside at Osius Park. He called Shores personnel “the glue that binds this community together,” and said the workers — who have shown great dedication and care to the residents — “mean more to me than dollars and cents on a piece of paper.”

“These agreements … were made in good faith with all of the parties involved,” Rahi said of the contracts. “I don’t like taxes, and I don’t like paying more, but what message does it send when you renege … on the agreements we made decades ago? … What message does it send to our children if our word has no meaning?”

Pullen said the first 100 signs have been distributed to residents, and the retirees were awaiting a printing for 100 more.

“We’re not going to stop,” Pullen said of efforts to get the council to change course. “It’s an ongoing campaign.”

Residents interested in receiving a sign can contact retirees by messaging them through their Facebook page, www.facebook.com/Friends-of-Grosse-Pointe-Shores-Retirees-105514481350010.

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