Allen Park Michigan Sent Layoff Notices to Entire Fire Department; Allen Park, Hamtramck, Detroit are Bankrupt

Allen Park, Michigan, a town of about 28,000, sent layoff notices to its entire fire department. This is a procedural move because the town is unsure how many it will need to lay off. However, the situation looks grim.

Please consider Allen Park official says layoffs needed to plug $600K deficit

The city's finance director said today that Allen Park must lay off 25 to 30 employees by June to avoid a $600,000 deficit for the current fiscal year.

Tim McCurley said in an interview that the city sent layoff notices to everyone in the fire department to comply with a clause in the firefighters' union contract requiring a 30-day notice. He said some or all of the firefighters could lose their jobs, and that the police department faces layoffs too.

"It's not easy to lay people off," McCurley said. "No one wants to do that. It's never easy, but we are trying to work through it."

The finance director said the layoffs would only keep the city's books balanced for this year and have nothing to do with any funding cuts in Gov. Rick Snyder's proposed budget for fiscal 2012.

According to McCurley, the city faces a fiscal crunch because revenue in several areas has fallen short of projections. Collections from traffic tickets are $819,000 below what was budgeted, and ambulance billing collections are $200,000 under budget, he said.

McCurley said the city also had to refund $80,000 under order of the Michigan Tax Tribunal.

In other areas, spending has exceeded projections, including $130,000 in parks and recreation. McCurley said the city failed to budget for $150,000 for unused sick and vacation time for employees who have retired.

Overtime in the fire department is $150,000 over budget, even after firefighters agreed to limit overtime pay as part of concessions negotiated last year, McCurley said.

City Council members approved laying off the 25-person fire department Tuesday night.

Fire Chief Doug LaFond said he would be laid off as well.

But LaFond questioned the need to eliminate his entire force to make up for shrinking revenue.

"The bottom line is there aren't any other cities in the state of Michigan that are eliminating fire departments because of it," LaFond said.

The fire chief said he did not believe the entire police department was being threatened with layoff, but said the police force is about double the size of his department and could see significant cuts.

This is the second such maneuver we have seen recently where a town sent layoffs to an entire department.

In case you missed it, please consider Providence School Superintendent to Send Dismissal Notices to All 1,926 Teachers; Providence is Bankrupt

Allen Park, Hamtramck,Detroit are Bankrupt

I recommend Allen Park outsource its entire police and fire departments. Moreover, the Mayor should be in touch with the governor about petitioning for bankruptcy.

I have written about Detroit and Hamtramck before. Here are a few links.

• City of Hamtramck, Michigan Seeks Bankruptcy


• Michigan Forbids City of Hamtramck to Seek Bankruptcy; My Advice to Hamtramck: "Default"


• Detroit Mayor Plans to Halt Garbage Pickup, Police Patrols in 20% of City; Expect Bankruptcy, Massive Municipal Bond Turmoil in 2011

It is virtually impossible to solve problems in those cities outside of bankruptcy. Contracts needs to be rewritten, pension obligations shed, and new wage structures mandated (not negotiated).

That cannot be done via collective bargaining, or indeed any kind of bargaining. The mayors and city managers of those towns should all get together and announce intention to default if the governor will not approve a valid bankruptcy process.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List