The Michigan Supreme Court heard arguments today (Wed.) in a case that could set some parameters on state-appointed emergency managers’ authority to change public employee contracts.
Back in 2012, the city of Pontiac was broke, and under the control of an emergency manager. The city missed a promised three-and-a-half (m) million dollar payment to a union-run police and fire retirees’ health insurance fund. So the emergency manager issued an executive order skipping the payment after the fact – as well as future payments.
Ronald Lederman (LEH’-der-man) is an attorney for the health fund. He says an emergency manager can cut off future payments, but can’t say a past-due bill won’t be paid.
“The city was in default, essentially.”
The Supreme Court’s expected to rule before the end of the summer.