Detroit's emergency manager has reached a labor deal with its EMT union.
NEW YORK (CNNMoney)
The five-year deal still needs to be approved by other authorities, including Michigan Gov. Rick Snyder, as well as Bankruptcy Judge Steven Rhodes, who is ruling on the city's reorganization efforts.
John Barr, business agent for the union representing the EMTs, said the deal includes 2% annual raises in July of every year starting next year and running through 2018. The EMTs had their pay cut by 10% in July 2012, a year before the bankruptcy filing, and have not had any raises since.
Barr said the ranks are depleted by EMTs leaving for private ambulance services. Only about 175 EMTs are now on staff despite the city having budgeted for 220 positions. Negotiations took about three weeks and the deal was reached Tuesday and presented to membership at a meeting Wednesday, Barr said.
"I think the membership wasn't happy, but they're relieved there's some stability now," he said.
The deal is also important in that it shows that an agreement is possible, despite the city's dire financial condition and the proposal by Emergency Manager Kevyn Orr to make deep cuts in pension benefits and retiree health care coverage.
Barr said there were pension and retiree health care provisions in the agreement but said he could not yet give details.
The agreement was also confirmed by Orr's spokesman, who said details will be released later in the day.
Orr told reporters Wednesday about the deal at a meeting of the Detroit chapter of the National Association of Black Journalists. The Detroit News reports that Orr said he hoped it was the first of many such deals.
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"It's a good sign," the paper quotes Orr as saying. "It indicates our willingness to reach an agreement with an interested party that wants to work with us."
Barr said that the city's bankruptcy lawyers who handled the negotiation told him the city has made an offer to all the public safety unions to try to reach new labor deals.
"We're the ones that took advantage of it," he said.
The city's unions and pension funds have been arguing in bankruptcy court that the city did not negotiate in good faith with them before it filed for bankruptcy in July.
Related: Detroit delays retiree health care cut due to Obamacare site woes
The argument is important, because for the city to be allowed to reorganize its debts in bankruptcy court, it must not only be deemed insolvent. A judge must also determine that the city made a good-faith effort to reach a deal with its creditors, or that it was impractical to do so.
Rhodes is expected to rule sometime later this month on whether Detroit did negotiate in good faith and whether its bankruptcy case can proceed.
-- CNN's Chris Boyette and Poppy Harlow contributed to this report. 
First Published: November 14, 2013: 9:44 AM ET
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