By Ben Solis
Gongwer News Service
A handful of state agencies have been sued by Detroit retirees for ignoring the tenets of a legislative appropriation that would have allowed associations to seek grants managing retiree future health care benefits in the wake of the city's bankruptcy.
The complaint in Detroit Police & Fire Retiree Health Care Trust v. Department of Labor and Economic Opportunity (COC Docket No. 24-000097) was filed recently in the Court of Claims and alleges that those grants as appropriated did not reach the pockets of those who needed the funding.
Health care benefits for retired police officers, firefighters and other municipal retirees were cut significantly when the city went bankrupt a decade ago.
Part of that deal was the formation of voluntary employees beneficiary associations to manage existing retirees' future health care benefits.
The plaintiff trust was created as well as other voluntary employees beneficiary associations for additional employee classifications.
In 2023, the Legislature appropriated $10 million to award as grants to voluntary employees beneficiary associations in Detroit formed following the bankruptcy.
The Detroit Police and Fire voluntary employees beneficiary association and the Detroit General voluntary employees beneficiary association are the only two entities formed by the city during the bankruptcy and were eligible to apply for the grant.
The Legislature directed LEO to develop a standard application and review process, which would then execute grant agreements with recipients.
Part of the lawsuit claims that the department did not do so, nor did it publish or make the application publicly available.
"After learning of the appropriation, the Detroit Police and Fire VEBA and the Detroit General VEBA each informed the Department of Labor and Economic Opportunity that they were eligible to apply for the grant and asked how to apply," the complaint said. "The department received these requests and discussed them internally, but never supplied the Detroit Police and Fire VEBA or the Detroit General VEBA with an application."
That lack of disclosure contravened the spirit of the appropriation, and LEO "flagrantly ignored the plain and unambiguous wording of the appropriation" by not allowing the eligible VEBAs to apply.
"Instead, House Speaker Joe Tate (D-Detroit), Rep. Tyrone Carter (D–Detroit), and the state instructed the department to misdirect the grant to the Coalition of Detroit Public Safety Unions Trust (the Union VEBA), a VEBA that was not formed during the Detroit bankruptcy and was therefore not eligible to apply for, or receive, the grant," the complaint states.
Gongwer News Service
A handful of state agencies have been sued by Detroit retirees for ignoring the tenets of a legislative appropriation that would have allowed associations to seek grants managing retiree future health care benefits in the wake of the city's bankruptcy.
The complaint in Detroit Police & Fire Retiree Health Care Trust v. Department of Labor and Economic Opportunity (COC Docket No. 24-000097) was filed recently in the Court of Claims and alleges that those grants as appropriated did not reach the pockets of those who needed the funding.
Health care benefits for retired police officers, firefighters and other municipal retirees were cut significantly when the city went bankrupt a decade ago.
Part of that deal was the formation of voluntary employees beneficiary associations to manage existing retirees' future health care benefits.
The plaintiff trust was created as well as other voluntary employees beneficiary associations for additional employee classifications.
In 2023, the Legislature appropriated $10 million to award as grants to voluntary employees beneficiary associations in Detroit formed following the bankruptcy.
The Detroit Police and Fire voluntary employees beneficiary association and the Detroit General voluntary employees beneficiary association are the only two entities formed by the city during the bankruptcy and were eligible to apply for the grant.
The Legislature directed LEO to develop a standard application and review process, which would then execute grant agreements with recipients.
Part of the lawsuit claims that the department did not do so, nor did it publish or make the application publicly available.
"After learning of the appropriation, the Detroit Police and Fire VEBA and the Detroit General VEBA each informed the Department of Labor and Economic Opportunity that they were eligible to apply for the grant and asked how to apply," the complaint said. "The department received these requests and discussed them internally, but never supplied the Detroit Police and Fire VEBA or the Detroit General VEBA with an application."
That lack of disclosure contravened the spirit of the appropriation, and LEO "flagrantly ignored the plain and unambiguous wording of the appropriation" by not allowing the eligible VEBAs to apply.
"Instead, House Speaker Joe Tate (D-Detroit), Rep. Tyrone Carter (D–Detroit), and the state instructed the department to misdirect the grant to the Coalition of Detroit Public Safety Unions Trust (the Union VEBA), a VEBA that was not formed during the Detroit bankruptcy and was therefore not eligible to apply for, or receive, the grant," the complaint states.
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