Detroit - Emergency Manager
Corrective Actions Already Taken By City
Below is a summary of a proposal made by Kevyn Orr to the creditors of the city of Detroit on June 14, 2013 regarding cost saving decisions already implemented. These items are discussed on page 53 of the original document. The purpose of this post is to give you a simple summary of this section of the plan. Here is copy of entire plan.
The following actions have already been taken by the city and resulted in an estimated $200 million per year in savings. Much of this savings caused hardships on the City's employees and residents.
Reduction of Number of Employees
- Since 2011 the city has eliminated more than 2,700 positions (from 12,302 as of the end of 2010 to approximately 9,560 as of May 31,2013)
- This results in an annual savings of over $100 million
Reduction in Costs by Revision of Employment Terms with the City in July 2012
- The result will be an estimated $102 million in annual savings from the following
- $25 million in wage reductions
- $59 million in retirement benefits
- $9 million in reduced pension costs
- $8 million in changes to work rules
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