Staff at the Detroit Water and Sewerage department thought they might be immune from the cuts facing many public sector employees. Two weeks ago, Mayor Mike Duggan said workers risking their safety in the field would receive hazard pay, and last week, the department wasn’t mentioned as he laid out a series of personnel cuts and reductions to stem a major budget shortfall.
That changed Monday, when DWSD furloughed more than 330 employees in anticipation of a possible $10 million monthly shortfall, in a move that has stirred controversy for both its abruptness and what the union says is a lack of transparency.
DWSD, whose budget is separate from the city’s, will cut more than 200 workers’ hours by 90 percent, and cut more than another 100 by 20 percent through the end of July. Employees will be able to retain their benefits.
The cuts, to save $10.4 million, were made based on what DWSD called “rough” projections of reduced usage among large, non-essential business customers and non-payment by households grappling with lost incomes. Previously, customers faced shut off for nonpayment, but the controversial practice has been halted for the duration of the coronavirus outbreak.
But Tracy Reynolds, president of AFSCME Local 2920, says vague projections are not enough to justify staff cuts.
“They haven’t given us the budget — they didn’t give us any information. They want us to go on their word,” said Reynolds.
DWSD, which operates on what customers pay, had as of this week still not prepared all March bills — meaning it doesn’t have a clear indication of how much money it will need to make up. And though it moved swiftly to sideline workers, other operating cuts won’t come until May, when it has a better idea of the financial dilemma it's facing.
Reynolds says DWSD did not go through the traditional bargaining process in making the cuts, saying furloughs were exempt from bargaining. When the union sent a cease-and-desist, she says the department threatened layoffs.
Eventually, the union agreed to the changes.
In a written statement, the department said it had to respond quickly.
“We are in a crisis and more advance notice was not possible in this case. We needed to react quickly to reduce the impact of revenue losses and hopefully avoid the need to implement large rate increases in future years to cover losses.”
Governmental decision-making has on many levels become more opaque in the midst of the coronavirus crisis, with the full economic impact still unknown, said Eric Lupher, a municipal finance expert and president of the Citizens Research Council of Michigan.
“It’s hard to do business as usual ... so there needs to be some bending,” said Lupher. “The long-term perspective, however, is that this too shall pass. We’ll have to go back to normal order and there will have to be some accountability for decisions being made right now.”
Still, some workers fear the department is using the crisis to draft a blueprint for diminished operations in the future.
Service is reduced, employees are spread thinner, and private contractors will in some cases be brought in to cover the duties of unionized workers.
“It’s a test right now,” said Konata Senior, a field service technician. “Like, ‘Let’s see what we can get the contractors to do, let’s see how much work we can get done with a skeleton crew.’”
The department says it does not now have plans for future layoffs.
“DWSD chose a temporary furlough instead of layoffs because we want to retain our talent and believe we can make adjustments to bring them back to full-time in the near future,” it said in a statement.
It currently has 121 days of operating revenue remaining. It ended the last fiscal year with an $18 million surplus.
While DWSD roughy predicts losing $10 million per month, the Great Lakes Water Authority, which serves the suburbs, is facing an $8.4 million shortfall through June 30. Those losses will be offset with expense reductions, the authority says, though it did not immediately specify what those were.