Flint EM says legal ruling may help save city from bankruptcy - ABC 12 – WJRT – Flint, MI

Flint EM says legal ruling may help save city from bankruptcy

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FLINT (WJRT) - (07/11/14) - Flint's emergency manager retiree health care costs place a huge burden on the city, but a recent legal ruling could lighten the financial load.

Darnell Earley says the recent legal ruling could save Flint from bankruptcy.

Earley says that ruling by a federal judge is just what the city needs. It will allow the Flint to reduce its financial obligation for retiree health care benefits.

Late last month, the court stated a preliminary injunction blocking those changes would harm third parties and would not serve the public interest.

"This injunction now allows us to take a look at and implement some of the things that we were proposing all along to implement and that is to spread the cost to the beneficiaries," Earley said.

That injunction was requested in a lawsuit filed by city retirees after previous emergency manager Mike Brown imposed major increases in their health insurance.

"If we don't get some relief from the cost of the retiree health care and the amount of money proportionally that we're spending for the day to day operations of a city that's already in financial receivership, there's very little hope of being able to eliminate the financial emergency and certainly very little hope of being able to sustain it long term," Earley said.

Attorney Alec Scott Gibbs, who's representing the retirees, issued a statement saying he's disappointed with the judge's decision to modify the injunction. He adds that the suit is far from over, and he believes there will eventually be a judgement in the retirees favor.

Earley thinks the courts and the judge understand that this is a serious issue.

"We're cautiously optimistic that we'll be able to address some of the issue and that we're also satisfied that the retirees will continue to receive a very good retiree health benefit as well, they'll just have to pay more for it," Earley said.

Earley says the city is still reviewing how to proceed based on the ruling from federal court.
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