Lincoln Park Retiree Lawsuit

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 1 of 25
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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN
CHARLES N. KAMINSKI, Individually and
Representing All Others Similarly Situated Who
Are Members of The LINCOLN PARK POLICE
AND FIRE RETIREES ASSOCIATION, INC.,
And MICHAEL J. MOULIOS, Individually and
Representing All Others Similarly Situated Who Are
Members of The LINCOLN PARK MUNICIPAL
EMPLOYEES RETIREES ASSOCIATION, Inc.,
Hon.
Case No.
JURY DEMAND INCLUDED

Plaintiffs,
v
BRAD L. COULTER, Individually and In His Official
Capacity as The State-Appointed Emergency Manager
For The City Of Lincoln Park, R. KEVIN CLINTON,
Individually and In His Official Capacity as The Treasurer for
The State Of Michigan, THOMAS E. KARNES, Individually
and In His Official Capacity as The Mayor of The City of Lincoln
Park, Michigan and Commissioner of The City of the Lincoln Park,
Michigan, Police and Fire Retirement Commission, LARRY KELSEY,
Individually and in His Official Capacity as an Elected City Council
Member for the City of Lincoln Park, Michigan and Member of The
Lincoln Park, Michigan Police and Fire Retirement Commission,
PATRICK CULTER, Individually and in His Official Capacity as a
Member of The Lincoln Park, Michigan Police and Fire Retirement
Commission, MATT SADOWSKI, Individually and as a Member of The
Lincoln, Michigan Park Police and Fire Retirement Commission,
THOMAS JANKOWSKI, Individually and as a Member of The Lincoln
Park, Michigan Police and Fire Retirement Commission, THOMAS MURPHY,
Individually and as a Member of the City Council of Lincoln Park; MARK KANDES,
Individually and as a member of the City Council of Lincoln Park and the former
Municipal Employees Retirement Commission; CLIFFORD HARRIS,
Individually and as a Member of the Former Municipal Employees Retirement
Commission; FRANK VASLO, Individually and in His Official Capacity as
The Mayor and member of the former Municipal Employees Retirement
Commission; LISA GRIGGS, Individually and in Her Official Capacity as
a Member of the former Municipal Employees Retirement Commission;
JANICE HOCHBERG, Individually and in Her Official Capacity as
a Member of the former Municipal Employees Retirement Commission;
JOHN DiFRANCESCO, Individually and as a Member of the former
Municipal Employees Retirement System; ELLIOT ZELENAK,
Individually and as a Member of the City Council of Lincoln Park; MARIO
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DESANTO, Individually and as a Member of the City Council of Lincoln Park;

CHRISTOPHER DARDZINSKI, Individually and as a Member of the City
Council of Lincoln Park, THE CITY OF LINCOLN PARK, MICHIGAN, THE
POLICE AND FIRE RETIREMENT COMMISSION OF THE CITY OF
LINCOLN PARK, MICHIGAN, and the CITY OF LINCOLN PARK, MICHIGAN,
GENERAL EMPLOYEES RETIREMENT COMMISSION, JOINT AND SEVERAL,
Defendants.
Mark A. Porter (P-42280)
Attorney for Plaintiffs
Mark A. Porter & Associates PLLC
551 East 11 Mile Road Suite 3-D
P. O. Box 71527
Madison Heights, Michigan 48071-0527
(248) 547 1911 / (248) 547 1917 FAX
mporter@map-law.com
VERIFIED CLASS ACTION COMPLAINT FOR DAMAGES
AND REQUEST FOR INJUNCTIVE RELIEF
NOW COME THE PLAINTIFFS, on behalf of themselves as well as those similarly
situated, and by and through their counsel of record, to state to the Court:
JURISDICTION AND VENUE
1.
The Plaintiffs plead that they possess specific and detailed retiree health care
benefits, based upon accrual and vested retirement rights recognized in Litton Financial Printing
Div. v N.L.R.B., 501 U.S. 190, 192, 206-207, 111 S. Ct. 221 (1991); that case cited with approval
by the Supreme Court in M&G Polymers v. Tackett,
U.S.
, 135 S. Ct. 926
(2015) (Docket No. 13-1010). They allege that the Defendants on July 01, 2015, completely
eliminated those benefits contrary to the U.S. Constitution; and that the Courts jurisdiction is
pursuant to 42 USC 1983 and 28 USC 1331. All actions took place within the venue of this
Court, pursuant to 28 USC 1391, and Defendants of the State, or who are or were members of
the City Council, the Police and Fire Retirement Commission, and the General Employees
Retirement Commission, conducted their business within the judicial district of this Court.
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2.
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Pursuant to Rule 23(a), Rule 23(b)(1), and (2) of the Federal Rules of Civil
Procedure, the Lead Plaintiffs attest that they are representative of a class of Plaintiffs who are
members of two non-profit corporations that limit membership to retirees of the City of Lincoln
Park, Michigan, and their surviving dependents whose specific healthcare benefits were included
in collective bargaining agreements and statutory enactments by the City of Lincoln Park,
Michigan.
3.
The impairments and removal of healthcare benefits as pleaded in this Complaint
entitle Plaintiffs to injunctive and declaratory relief pursuant to 42 USC 1983.

4.
The taking of Plaintiffs property by Defendants Brad L. Coulter and R. Kevin
Clinton without substantive and procedural due process, as well as without just compensation is
contrary to the U.S. Constitution and actionable under 42 USC 1983.
5.
The named Defendants of the State of Michigan and the City of Lincoln Park, and
the City of Lincoln Park Retirement Commissions acted pursuant to official policies and customs
meant to deprive Plaintiffs of their specific vested and protected healthcare benefits.
THE PARTIES
6.
Plaintiffs reincorporate by reference Paragraphs 1-5.
7.
Charles N. Kaminski retired from the City of Lincoln Park [the City] and its
Police Department in 2004, in response to repeated offers by the City to induce its active workers
to retire in early-out programs with the same collective bargained retirement benefits as would
have been present at the normal retirement date. Plaintiff Kaminskis Other Post Employment
Benefits, also known as OPEBs, included specific healthcare insurance benefits which
defined deductibles and co-pays [Attachment #2]. He was the leading advocate to form and
incorporate the Plaintiff Lincoln Park Police and Fire Retirees Association, Inc., and serves
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as its elected President.

8.
Michael J. Moulios also retired in 2004, from a supervisory position in the City
of Lincoln Parks General Employees unit. His post-employment benefits included specific
health insurance policies with detailed deductibles and co-pays, through a collective bargaining
agreement at Attachment #3. He was instrumental in forming the Plaintiff Lincoln Park
Municipal Employees Retirees Association, Inc., and is its current, elected President.
9.
The Plaintiff Lincoln Park Police and Fire Retirees Association, Inc. was
formed and incorporated through the State of Michigan in 2007. Its members are retirees from
the City of Lincoln Park and their dependents, who have accrued and vested retirement benefits
through collective bargaining, the City Charter and the City ordinance enactments, which the
Plaintiff Association is organized to advocate and protect.
10.
The Plaintiff Lincoln Park Municipal Employees Retirees Association, Inc.,
was formed and incorporated through the State of Michigan in 2007. Its members are the retired,
municipal employees, excluding police and fire departments employees, from the City of
Lincoln Park and their dependents; who also have accrued and vested retirement benefits through
collective bargaining, the City Charter and the City ordinance enactments, which the Plaintiff
Association is organized to advocate and protect.
11.
Defendant Brad L. Coulter is by law a State official pursuant to 2012 Public
Act 436, at M. C. L. 141.1541 et. seq., who was appointed by the Governor through an Oath of
Office on July 03, 2014 to be the State-appointed Emergency Manager for the City of Lincoln
Park. The State asserts that his powers are created by P.A. 436, including M. C. L.
141.1552(1)(j) which purports to grant him unlimited powers to reject, modify, or terminate 1
or more terms and conditions of an existing contract.
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Defendant R. Kevin Clinton is the Treasurer of the State of Michigan, a State
Department charged with oversight of State-appointed Emergency Managers. Defendant Clinton

approved Defendant Coulters termination of all of the health insurance contracts for all Lincoln
Park retirees in correspondence dated April 10, 2015. Attachment #4.
13.
Defendant Thomas E. Karnes is the elected Mayor of the City of Lincoln Park,
Michigan, and is also a Commissioner of the City of Lincoln Park Police and Fire Retirement
Commission, who has legal and fiduciary responsibilities on behalf of the Citys retirees and
dependents.
14.
Defendant Larry Kelsey is an elected member of the City Council of Lincoln
Park, as well as a member of the Lincoln Park Police and Fire Retirement Commission, who has
legal and fiduciary responsibilities on behalf of the Citys retirees and dependents.
15.
Defendant Patrick Culter is an active employee of the City of Lincoln Park and
also a member of the City of Lincoln Park Police and Fire Retirement Commission, who has
legal and fiduciary responsibilities on behalf of the Citys retirees and dependents.
16.
Defendant Matt Sadowski was an active employee of the City of Lincoln Park
and was also a member of the City of Lincoln Park Police and Fire Retirement Commission, who
had legal and fiduciary responsibilities on behalf of the Citys retirees and dependents.
17.
Defendant Thomas Jankowski is member of the City of Lincoln Park Police and
Fire Retirement Commission, who has legal and fiduciary responsibilities on behalf of the Citys
retirees and dependents.
18.
Defendant Thomas Murphy is an elected member of the Lincoln Park City
Council, and served on that body during all times relevant to the facts alleged in this Complaint.
19.
Defendant Mark Kandes is an elected member of the Lincoln Park City Council,
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and served on that body during all times relevant to the facts alleged in this Complaint.
20.
Defendant Elliott Zelenak is an elected member of the Lincoln Park City
Council, and served on that body during all times relevant to the facts alleged in this Complaint
regarding the Citys request to the State of Michigan to put the City into State receivership.
21.
Defendant Mario Desanto is an elected member of the Lincoln Park City
Council, and served on that body during all times relevant to the facts alleged in this Complaint.
22.
Defendant Larry Kelsey is an elected member of the Lincoln Park City Council,
and served on that body during all times relevant to the facts alleged in this Complaint regarding
the Citys request to the State of Michigan to put the City into State receivership.
23.
Defendant Christopher Dardzinski is an elected member of the Lincoln Park
City Council, and served on that body during all times relevant to the facts alleged in this
Complaint regarding the Citys request to the State of Michigan to put the City into State
receivership.
24.
Defendant Clifford Harris served as a member of the former City of Lincoln
Park Municipal Employees Retirement Commission, prior to its transfer to the Municipal
Employees Retirement System of Michigan [MERS].
25.
Defendant Frank Vaslo was an elected member of the City Council and Mayor of
the City of Lincoln Park, as well as a member of the former City of Lincoln Park Municipal
Employees Retirement Commission, prior to its transfer to the Municipal Employees
Retirement System of Michigan [MERS].
26.
Defendant Lisa Griggs is currently the Finance Director for the City of Lincoln
Park, as well as a member of the former City of Lincoln Park Municipal Employees
Retirement Commission, prior to its transfer to the Municipal Employees Retirement System of
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Michigan [MERS].
27.
Defendant John DiFrancesco was a member of the former City of Lincoln Park
Municipal Employees Retirement Commission, prior to its transfer to the Municipal

28.
Defendant Janice Hochberg was a member of the former City of Lincoln Park
Municipal Employees Retirement Commission, prior to its transfer to the Municipal

29.
Defendant City of Lincoln Park Police and Fire Retirement Commission was
created by City Charter and incorporated in Chapter 296 of the City of Lincoln Park ordinances.
It is vested with the fiduciary responsibility to carry out the general administration of the Citys
retirement system for the sworn employees of those departments. It was not created pursuant to
Michigan 1937 Public Act 345, and it is not immune from civil process and judgment.
30.
Defendant City of Lincoln Park [General] Employees Retirement
Commission was created by City Charter and incorporated in Chapter 294 of the City of
Lincoln Park ordinances. It was vested with the fiduciary responsibility to carry out the general
administration of the retirement system for non-sworn City employees. Its assets were
transferred to the Municipal Employees Retirement System [MERS] during fiscal year 2011.
31.
Defendant City of Lincoln Park, Michigan is a municipal corporation by
Michigan 1963 Constitution art. 7 21, and at law.

STATEMENT OF FACTS THE CITY OF LINCOLN PARK AND
LINCOLN PARK POLICE AND FIRE RETIREMENT COMMISSION
32.
Plaintiffs reincorporate by reference Paragraphs 1-31
33.
All cited Defendants of the City of Lincoln Park, its City Council and Police and
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Fire Pension Commission are by law Investment Fiduciaries pursuant to M. C. L.

38.1132c(1), known as 12c(1) of the Michigan Public Employee Retirement System Investment
Act, P. A. 314 of 1965.
34.
Michigans Uniform Budgeting and Accounting Act, M. C. L. 141.421 et. seq.,
requires a yearly, standard accounting report with fiduciary requirements from each of the States
municipalities. M. C. L. 141.424 mandates that each municipality shall submit an accurate
Comprehensive Annual Financial Report, called a CAFR, within 6-months of the close of
each fiscal year. The CAFR must conform to generally accepted accounting standards, and the
State Treasurer is mandated by law to monitor each years CAFR. M. C. L. 141.421(4),
141.428.
35.
General accounting principles endorsed by the American Academy of Actuaries
define pension funding ratios in this manner:

90% and above funding Strong funding ratio
80% to 89% funding Above Average
60% to 79% funding Below average
Below 60% funding Weak
36.
As of the date of this Complaint, the city is in Fiscal Year 2014 [FY-2014].
The CAFR for FY 2008-2009, submitted on December 18, 2009, showed that the funding ratio
for the retirees pension funds had fallen to 50.39% as overseen by the Police/Fire Retirement
Commission; and to 41.69% for the General Municipal Retirees Fund, and the responsibility of
the City.
37.
The same FY 2008-2009 CAFR detailed the required, 30-year amortized funding
required for retiree health insurance, based upon mortality tables and expected costs. The CAFR
showed that the funding for retiree health insurance had fallen to a ratio 41% for Police/Fire
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retirees [approximately 132 retirees-dependents]; and 44% for General Municipal retirees [at
approximately 140 retirees-dependents].
38.
FY 2008-2009 began on July 01, 2008, and prior to the financial recession that
began in the late Fall of 2008. The adjusted property values for the City of Lincoln Park were
reported in the FY 2008-2009 CAFR at their pre-recession levels. Nonetheless, no action was
taken by the City, City Council, or its Police and Fire Pension Commission to correct and shore
up the funding of the pension systems.
39.
Each successive CAFR report filed at the State Treasurers office and the Citys
offices, including the Citys Retirement Commissions, showed continuing and dangerous drops
in the funding ratios all of which were completely ignored by the Defendants at the City of
Lincoln Park, its City Council and the Retirement Commissions:
CAFR FY 2009-2010 Funding Ratios & Paid Costs
Police/Fire Pensions
41.62% Funded
General Retirees Pensions

35.47% Funded
Police Fire OPEBs

58% Costs Paid
General Retirees OPEBs

57% Costs Paid

39% Funded

34% Funded
Police/Fire OPEBs
66% Costs Paid
General Retirees OPEBs

69% Costs Paid

36.7% Funded

33.8% Funded
Police/Fire OPEBs
69% Costs Paid
General Employees OPEBs

65% Costs Paid
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40.
< 35% Funded

28% Funded
Police/Fire OPEBs
58% Costs Paid
General Employees OPEBs

58% Costs Paid
As of the close of FY-2014 [ending June 30, 2015], the Citys funding ratios for
retiree pensions are valued at less than 25% for both the Police/Fire and General Retirees
pension funds.
41.
On June 18, 2012, the Lincoln Park City Council appointed Gregory Capote as
City Manager. He was fired, however, by the same City Council on January 23, 2013, after
publicly stating that the financial challenges that this city has, have been building for a really
long time.
42.
During the fiscal year 2009-2010, the City moved the remaining assets of the
General Employees pension system to the Municipal Employees Retirement System [MERS],
a public nonprofit organization that was created by the Michigan Legislature in 1945. The City
and its Defendants, however, routinely ignored the audits and warnings from MERS that the
pension system for Citys General Employees was failing at a catastrophic rate, and required
increased funding.
43.
The yearly CAFR audits for fiscal years 2010-2013 showed an increasing number
of material weaknesses in the Citys budgeting and oversight of its finances A material
weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a
reasonable possibility that a material misstatement of the entity's financial statements will not be
prevented or detected and corrected on a timely basis. [CAFR, FY 2012-2013 by Plante Moran,
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December 19, 2013].

44.
On August 19, 2013, the City Council voted to request a State of Michigan
review, in order to put the City under some form of State receivership and 2012 P.A. 436,
which could be used as a vehicle to void its retiree health care obligations. P.A. 436 would also
be used to avoid the responsibilities of the Police and Fire Pension Commission members, who
are defined as investment fiduciaries at M. C. L. 38.113(3). Those duties include:
a.
discharging the responsibilities of the City and Police Fire Pension
Commission solely in the interest of the participants and the beneficiaries.

b.
acting with the same care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person would act;

c.
use due diligence to balance liquidity and current return of the investments
of the system relative to the anticipated cash flow requirements of the system;
d.
ensure that projected return of the investments of the system are relative to
the funding objectives of the system.

e.
give appropriate consideration to investments that would enhance the
general welfare of this state and its citizens when those investments offer the safety and
rate of return comparable to other investments permitted under the PERSIA; and,
f.
balance the funded pension systems ratio based upon the ratio of
valuation assets to actuarial accrued liabilities on a plan-year basis.

45.
In December, 2013, the MERS annual audit showed that the Citys General
Employees pension system had sunk to a 22% funding ratio, and reminded the City that
employee pensions were supposed to be pre-funded, under State law.
46.
In June 23, 2014, the City Council and the Police and Fire Retirement
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Commission received dire warnings in the actuarial valuation for FY 2012-2013, submitted by
Gabriel Roeder, which stated at the outset:
The System is not well funded. The assumptions have not been updated in several
years and may understate contribution requirements. There is currently no margin
for future improvement in the mortality assumptions requirement. The current 30-year
open amortization period defers contributions and increases the risk that the plan may
not accumulate adequate assets to pay benefits when due.
******
The current negative cash flows are approximately $2 million and could exhaust the
System assets in roughly 9 years in the absence of investment returns. This could be
much shorter if the City does not make the contribution requirements under the current
methods and assumptions used in this report. Receipt of contributions is mission
critical. (Emphasis in original).
The Gabriel Roeder valuation also showed that the Police-Fire pensions funding ratio
had dropped from 100% funded in FY 2003-2004 to below 60% funded in FY 2007-2008, a
weak fund by the standards of the American Academy of Actuaries. It demonstrated that at
the start of FY 2008-2009 before the recession hit the United States the City and Police and
Fire Retirement Commission were fully apprised of the increasingly precarious fund balances.
47.
The Defendants at the City Council and the Police and Fire Retirement
Commission knew that retired police officers and fire fighters who were relying on those pension
funds had not received Social Security credits, nor made payments into the Social Security
system while working for the City, given that the City had long-ago opted-out of that program.
48.
The Defendants at the City Council and the Police and Fire Retirement
Commission were aware that the retirees depended upon a financial barbell of retirement
benefits. On one end of the financial barbell were the monthly pension payments to the retiree or
surviving dependent. On the other end were health insurance benefits, contracted through Blue
Cross and Blue Shield of Michigan [BCBSM].
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Those contracted BCBSM health insurance benefits were themselves incorporated
into contractual obligations through collective bargaining agreements, City ordinances tiedbarred to collective bargaining agreements and contracts of employment with the then-employed
City workers, now retired. The City Council had intentionally been underfunding those yearly
obligations, as pleaded in Paragraph-39, above.
50.
The Defendants at the City Council and the members of the Citys Retirement
Commissions knew that if the pension funds continued their catastrophic declines in value all
the while underfunding the health insurance contracts of the retirees and dependents that those
deficits would directly imperil the retirees access to health insurance benefits. The Defendants
were counting, however, upon the State Treasurer and the State-appointed Emergency Manager
to terminate the then-existing retiree health insurance benefits for all City retirees.
51.
The named Defendants of the City Council and the members of the Citys
Retirement Commissions, joint and several, created the direct and proximate breaches of
fiduciary duties and reasonable care against the Citys retirees and dependents that by their acts
and omissions impaired the health insurance contracts for the retirees and dependents. They
created the fait accompli as they awaited the State and its appointed Emergency Manager to
completely impair and destroy all contractually-created retiree health insurance benefits.
STATEMENT OF FACTS THE STATE TREASURER
AND STATE EMERGENCY MANAGER
52.
53.
2012 P.A. 436, the so-called Local Financial Stability and Choice Act, is a faux
and non-transparent imitation of a true receivership. By Michigan law, a receiver is a
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ministerial officer of the Court. Cohen v Bologna, 52 Mich. App. 149, 151, 216 N.W. 2d. 586
(1974). The receiver is to be the impartial administrator of the assets and debts of all parties.
54.
No such objectivity exists within P.A. 436. The Legislature created a Ferris wheel
of appointments, powers, and small, illusory list of appeals by a city government but not its
citizenry. The Governor and State Treasurer appoint a State Emergency Manager, who answers
only to them. M. C. L. 141.1549(1), (8). The Emergency Manager then eliminates all levels of
local democracy, by overriding the Home Rule Act, the City Charter; and all ordinances,
including criminal and non-criminal, as well as administrative. M. C. L. 141.1552(1)(dd).
55.
The States Emergency Manager Orders are binding on the local governments
elected officials and employees. There are no appeals to a State Administrative Law Judge.
Instead, an appeal from the local elected officials goes to the Local Emergency Financial
Assistance Loan Board, which is within the Department of Treasury. The same State Treasurer
who appointed the State Emergency Manager also presides over the Loan Board. M. C. L.
141.932(1).
56.
All other appeals from a local governments council only go to the State
Financial Authority, which, in reality, is also the State Treasurer. M. C. L. 141.141.1542(u)(i).

57.
It is important to note that there are no avenues for any appeals of the States
Orders and their results by ordinary citizens, vendors, or public employees who have been
adversely affected by the States Orders. PA 436 eliminates all avenues for those people to
petition the government with their grievances. In truth as well as in practice, they have been
reduced to mere vassals of The State.
58.
Emergency Managers are State officials at law under 1963 Constitution Article
11 7; at M. C. L. 141.1549(3)(d), and (9)(c). The State Emergency Managers answer only to

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the State Treasurer and the Governor. Id, at (8). As a State official, the Attorney General must
represent an Emergency Manager, by law at M. C. L.141.1560(2).
59.
There are no requirements that pending actions by the State Treasurer and
Emergency Manager be made public, prior to the issuance of an Emergency Order. All
transparency regarding the first, second, and final readings of pending changes to the City
Charter and ordinances are eliminated contrary to the Constitutional requirements mandated of
the State and Federal Legislatures. In place of the democratic process is simply the issuance of
arbitrary and executive fiats which are claimed to have the force of law under P.A. 436.
60.
Following the overwhelming rejection of 2011 P.A. 4 by the electorate, the State
Legislature re-enacted over 98% of PA 4 through 2012 P.A. 436. It then added language
claiming to make it an appropriation act under 1963 Michigan Constitution art. 2 9 and
void any attempt by the States electorate to further interfere with the powers of the States
actors. The Michigan Governor promptly signed the enrolled Bill that became PA 436, and it
became effective on March 28, 2013.
61.
P.A. 436 asserts to give broad-based powers, with no limits imposed by the
States citizenry, whether by referendum, petition, appeal, or transparency. All powers under
P.A. 436 are bestowed upon the named Defendants as the State Treasurer and the Stateappointed Emergency Manager, both of whom are acting under color of Michigan law.
62.
Defendant Brad L. Coulter took the oath of office as the State official designated
as the State Emergency Manager for the City of Lincoln Park on July 03, 2014. His appointment
was made subsequent to the vote by the named Defendants of the Lincoln Park City Council on
May 22, 2014. The City Councils vote ensured its surrender of all authority to the Emergency
Manager, as provided by P.A. 436.
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63.
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In his first report to State Treasurer on August 20, 2014, EM Coulter wrote of the
ongoing mismanagement of the Police and Fire Retirement System by the named Defendants of
the City and the Police and Fire Retirement Commission:
The Emergency Manager is also concerned about the history of using
annual contribution rates that were clearly below what is required to
keep the system funded. There is concern over the lower than required
investment returns achieved and the Emergency Manager will be benchmarking these returns against other retirement systems as well as various
market indices. Attachment #5, at page-8.
64.
On January 17, 2015, EM Coulters report to the Michigan Governor included a
tentative proposal to invoke P. A. 436 to completely eliminate the contractually-created health

insurance coverages for all Lincoln Park retirees and dependents:
The Plan proposes reduction in retiree health care spending from $4.2 million
per year to $1 million per year. The $1 million is assumed used for stipends and
alternative coverages. The Emergency Manager will contract with health care
experts to assist retirees transition into plans on the health care exchange and
explore options for subsidies and alternative coverages. Attachment #6.
65.
On April 22, 2015, EM Coulter issued a series of ten Emergency Orders that by
their language terminated all health insurance contracts then in effect for Lincoln Park retirees
and dependents. The two Emergency Manager Orders that terminated the health insurance
contracts relied upon by lead Plaintiffs Charles N. Kaminski and Michael J. Moulios are
Attachments #2 and #3, respectively. The other eight Orders, which affected the balance of the
proposed class of Plaintiffs, were identical in their language.
66.
As a requirement of P.A. 436, EM Coulter received the written approval of the
termination of health contracts from Defendant R. Kevin Clinton, the State Treasurer. The
approval recited certain provisions of PA 436 at M. C. L. 141.1552(k), including:
The proposed [collective bargaining agreement] modification will only
be effective while the City of Lincoln Park remains in receivership
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under PA 436 of 2012. Attachment #4.

That aleatory language is illusory, however, given that the average age of the class of retirees is
approximately 70-years as of the date of this Complaint, and most retirees will die under the
increased financial hardships and contractual impairments created and imposed by Defendants.
67.
Defendants Coulter and Clinton based the termination of retiree health insurance
contracts upon the financial barbell analogy detailed in Paragraph-48, above. The purported
financial savings taken from the terminated health insurance contracts supposedly will be used to
re-fund the two defined benefit pension systems, with a goal of 60% funding at the end of 2035.
The deliberate contract impairments were carried out over time through the actions of the
Defendants of the City Council and the Retirement Commissions, who were by law the
fiduciaries for the retirement systems a M. C. L. 38.1132b(c)(1). They then solicited State
receivership, and the contract impairments were completed by the total termination of retiree
health care coverage by the Defendants of the State of Michigan.
68.
Pursuant to P. A. 436, the City will remain under State receivership, with either an
appointed State Emergency Manager or a purported State-appointed Transition Team for at

least 20-years into the future. By then, most of the retirees and their dependents will have died,
without recourse or relief from the imposed contract terminations.
69.
The Emergency Orders terminating retiree health care insurance created token
stipend payments for retirees and dependents under 65 years and over 65 years:
Single
Couple
Family
Under 65 Years
Over 65 Years
$150.00/Month
$350.00/Month
$425.00/Month
$50.00/Month
$50.00/Month (Each)
N/A
In addition, however, retirees and dependents over 65 years had to begin paying into a
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Medicare Part B program each month individually, when the contractual reimbursement for
premiums from the City of Lincoln Park was terminated on April 22, 2015. Also terminated was
a small, yearly check of approximately $300.00 to each retiree, which was a City obligation used
to adjust yearly pension payments. The retirees contractually-created prescription benefits were
also terminated, resulting in monthly costs that have dramatically increased.
70.
There is no available enforcement under P.A. 436 to maintain even the token
stipends cited in Paragraph-69. The notices published by EM Coulter only last until January,
2016; they can be completely revoked at any time, with no appeal process available through PA
436.
71.
Plaintiffs, who are Presidents of their respective retiree associations, have
attached relevant documentation of the immediate consequences of the actions of Defendants, by

way of the affidavits of a retiree and two surviving dependents, at Attachment #8.
a.
Surviving Dependent Agnes Rotz is a member in good standing of the
Lincoln Park Municipal Employees Retirees Association. Her husband was a city
employee, who died in 1968. Her total annual pension payment from the City is only
$1,134.00, with additional Social Security payments of approximately $13,000.00/yearly.
b.
Surviving Dependent Helen Huff is a member in good standing of the
Lincoln Park Police and Fire Retirees Association, and receives a pension payment from
the City of approximately $11,820.00/yearly, plus yearly Social Security payments of
$7,000.00.
c.
Retired Lincoln Park Police Chief Robert Duncan is a member in good
standing of the Lincoln Park Police and Fire Retirees Association, and served the City
from 1946 through 1978. The yearly pension for he and his wife is $22,620.00. In
18
Pg ID 19
addition to paying for their health insurance as of July 01, 20015, however, they also
must now pay an additional $2,250.00/yearly for Medicare Part-B. The newly imposed
health insurance costs will now consume a minimum of 42% of their total yearly income.
COUNT I IMPAIRMENT OF CONTRACTS

72.
Plaintiffs reincorporate by reference Paragraphs 1-71 of this Complaint.
73.
All Defendants, at all times relevant to this Complaint, acted under color of law in
regards to all allegations and facts contained in this Complaint. The Complaint is brought
pursuant to 42 U.S.C. 1983 through the Fourteenth Amendment of the U.S. Constitution.
74.
The Contract Clause of the United States Constitution provides that no State shall
pass any law impairing the obligation of contracts. U.S. Const. art 1, 10, cl. 1.
75.
The collective bargaining agreements, separation and settlement agreements
between Plaintiffs and their class members are contracts within the meaning of the Contracts
Clause. City of Lincoln Park ordinances, past practices, handbooks and agreements are also
enforceable contract rights for the members of Plaintiffs class.
76.
Defendant Brad L. Coulter, with the approval of Defendant R. Kevin Clinton,
acted under color of law through 2012 P.A. 436 override the City of Lincoln Parks Home Rule
Charter, ordinances, budget resolutions to override and cause the removal and deprivation of the
Plaintiffs rights, privileges and immunities that are secured by the Contracts Clause.
77.
Defendants Thomas E. Karnes, Larry Kelsey, Patrick Culter, Matt Sadowski,
Thomas Jankowski, Thomas Murphy, Mark Kandes, Elliot Zelenak, and Mario Desanto,
John DiFrancesco, Clifford Harris, Frank Vaslo, Janice Hochberg, and Lisa Griggs all acted
19
Pg ID 20
joint and several under color of City ordinances, budget resolutions, and their statutory
designations as fiduciaries to intentionally impair retiree pension and health care protections by
their continued and unilateral reductions in funding and investments , thereby being the direct
and proximate cause with Co-Defendants Coulter and Clinton of the deprivation of Plaintiffs
rights, privileges and immunities as secured under the Contracts Clause.
78.
P. A. 436 is facially invalid, and a direct legislative assault upon the Contracts
Clause, claiming to give an Executive Branch appointee of the State the unlimited power to
reject, modify, or terminate 1 or more terms and conditions of an existing contract without
limitation. MCL 141.1552(1)(j), (k).
COUNT II VIOLATION OF FIRST AMENDMENT RIGHTS
TO PETITION GOVERNMENT AND PRESENT GRIEVANCES
79.
Plaintiffs reincorporate by reference Paragraphs 1-78 of the Complaint.
80.
2012 P.A. 436 is facially violative of the First Amendment of the U.S.
Constitution, in that it completely strips the citizens of Lincoln Park of input, access, and selfdetermination:
a.
PA 436 and the appointment of a State Emergency Manager automatically
voids the statutory Home Rule Act, MCL 141. 1552(1)(dd).

b.
The State Emergency Managers powers under color of law are superior
and supersede all powers of the elected bodies of the City of Lincoln Park. Id.
c.
The appointment of the State Emergency Manager terminates all functions
of the City Council, including but not limited to the introduction and public readings of
proposed ordinances. Instead beyond the view and knowledge of citizenry the
Emergency Manager simply issues Orders without advance notice or comment. The
20
Pg ID 21
Emergency Manager also has the unlimited discretion to revoke and modify existing City
ordinances. All of the Orders, by P.A. 436, claim to have the force of legislated law.
d.
The City Council has only a faux appeal of any State Emergency Mangers
actions to the same State Treasurer that already approved the Emergency Managers
actions. MCL 141.1559. There is absolutely no appeal provided in P. A. 436, however,
for any citizen, employee, retiree, vendor, or other person who has been adversely
affected by an Order and/or Ordinance issued by the State Emergency Manager. The
State asserts total immunity for all actions taken by its Emergency Manager,
whether his actions are Constitutionally valid, or unconstitutional. MCL 141.1560.
e.
In order to carry out the States Orders and whims beyond the view of
the public, PA 436 permits the Emergency Manager to eject and ban any local elected or
appointed official or employee, agent, or contractor of the local government from access
to the local government's office facilities, electronic mail, and internal information
systems. M. C. L. 141.1550(2).
f.
While the State maintains its grip upon the City under PA 436, all City
elections for City officials become nugatory and meaningless.

81.
The total ejection and elimination of citizen assembly and right to petition the
State government under PA 436 requires strict scrutiny by the Court, Nader v. Blackwell, 545
F.3d. 459, 475 (6th Circ. 2008). The trampling of First Amendment freedoms clearly
demonstrate irreparable injury to Plaintiffs. ACLU of Kentucky v. McCreary County, 354 F.3d.
438, 445 (6th Circ. 2003).
21
Pg ID 22
COUNT III UNCONSTITUTIONAL DEPRIVATION OF

PROPERTY INTEREST WITHOUT DUE PROCESS
OR JUST COMPENSATION 42. U.S.C. 1983
82.
83.
The Plaintiffs collective bargaining agreements, as well as the City of Lincoln
Park charter, ordinances, separation and other employment agreements created property rights
between the Plaintiffs and Defendants.
84.
Defendants Thomas E. Karnes, Larry Kelsey, Patrick Culter, Matt Sadowski,
Thomas Jankowski, Thomas Murphy, Mark Kandes, Elliot Zelenak, and Mario Desanto,
John DiFrancesco, Clifford Harris, Frank Vaslo, Janice Hochberg, and Lisa Griggs all acted
joint and several under color of City ordinances, budget resolutions, and their statutory
designations as fiduciaries to intentionally deprive the retiree pension and health care protections
through their continued and unilateral reductions in funding and investments, without notice or
providing due process to the Plaintiffs. They were the direct and proximate cause with CoDefendants Coulter and Clinton of the deprivation of Plaintiffs property rights as secured
through the Fourteenth. Amendment and actionable under 42 U.S.C. 1983.
85.
Defendants Brad L. Coulter and R. Kevin Clinton, acting under color of law
through 2012 P.A. 436, deprived Plaintiffs and the memberships of all property rights related to
health insurance, without any due process or independent appeal because no due process or
appeal is provided by PA 436.
REQUEST FOR PRELIMINARY INJUNCTION
86.

22
87.
Pg ID 23
The continued harm inflicted upon Plaintiffs by the facial and as-applied
provisions of 2012 Public Act 436 cannot await a final disposition of this case. Without any
rights to petition their governments, much less receive advance, public notice of the States
Emergency Orders, all protections contained within the First Amendment have been destroyed
through Legislative enactment and Executive Branch fiats.
88.
The language contained at M.C.L. 141.1552(j) is a direct, head-on assault on the
U.S. Const. art 1, 10, cl. 1. It goes beyond impairment actions against Plaintiffs, and escalates
the violations to the complete destruction of both the contractual rights of the Plaintiffs, as well
as all contractual obligations on behalf of the named Defendants.
89.
The use of 2012 PA 436 by Defendants stripped elderly retirees of their only
protection against rising medical costs, and was done without any due process of right of appeal
to an independent forum, contrary to the Fourteenth Amendment of the U.S. Constitution.
90.
The damages are irreparable, in that the financial inability to access medical
treatment and prescriptions forces elderly Plaintiffs to put off and delay that treatment as long as
possible. The damages are immediate and beyond computation however, they are not merely
economic, in that they directly and adversely affect Plaintiffs access to appropriate health
care. The loss is beyond that which can be financially recovered in contrast to active
employees of the City, who still draw paychecks, have access to overtime, etc.,. Sampson v.
Murray, 415 U.S. 61, 90; 94 S. Ct. 937 (1974); also Basicomputer Corp. v. Scott, 973 F.2d 507,
512 (6th Circ. 1992).
91.
There is no adequate remedy at law. The actions and omissions of the Defendants
of the City of Lincoln Park, coupled with their active solicitation of State intervention, have
placed Defendants in a position where no appeal to any independent forum was available. A
23
Pg ID 24
theoretical right to recover money damages will not constitute an adequate legal remedy where
difficulties in the collection of any judgment render that remedy illusory. Winston v. General
Drivers, Warehousemen & Helpers Local Union No. 89, 879 F. Supp. 719, 725 (W.D. Ky.
1995). In the case at bar, over 200 class members will all have individual claims against
Defendants on an ongoing basis for medical treatments and prescriptions.
92.
There is a substantial likelihood that Plaintiffs will prevail, in that 2012 PA 436 as
applied destroys protections against impairment of contracts; the due process property rights to
medical care; and the First Amendment rights to petition and participate in the Plaintiffs
government at both the local and State levels. ACLU of Kentucky v. McCreary County 354 F.3d.
438, 445 (6th. Circ. 2003).
93.
The Plaintiffs Complaint has demonstrated numerous, serious questions going
to the merits and irreparable harm which decidedly outweighs any potential harm to the
defendant if an injunction is issued. Friendship Materials, Inc., v. Michigan Brick, Inc., 679
F.2d. 100, 105 (6th Circ. 1982)
94.
The issuance of a preliminary injunction supports the public interest. The Court is
requested to give notice that the average age of the Plaintiffs proposed class is 70-years. The
public interest question directly confronts the question of whether the City and State can strip
away health insurance contracts [individually with Blue Cross-Blue Shield of Michigan, as well
as through collective bargaining and individual contracts]. Those contracts have been in place
and relied upon the Plaintiffs members for decades. The benefits were not merely reduced, but
completely eliminated under the guise of a law that facially, and as-applied, violates the U.S.
Constitution. It is always in the public interest to prevent violation of a party's constitutional
rights. G & V Lounge, Inc. v. Michigan Liquor Control Comm'n, 23 F.3d 1071, 1079 (6th
24
Pg ID 25
Cir.1994).
PRAYER FOR RELIEF
WHEREFORE, the Plaintiffs request that this Court:
A.
Issue a Preliminary Injunction against all Defendants.
B.
Certify this action as a class action, appoint Plaintiffs Charles N. Kaminski and Michael
J. Moulios as class representatives, and authorize their counsel of record for this
Complaint to serve as the attorney of record for the certified members of the class.
C.
Declare the acts and omissions of all Defendants to be unconstitutional, in violation of

the Plaintiffs rights under Federal law, and void ab initio.
D.
Enter an Order compelling Defendants to reinstate the level of benefits provided before
the Orders issued by the State and State Emergency Manager were released.
E.
Enter an award of attorney fees pursuant to 42 U.S.C. 1988.
F.
Have the Plaintiffs Otherwise Made Whole, by such other relief as required by
law and equity.
JURY DEMAND
Plaintiffs hereby demand a trial by jury on the issues set forth by this Complaint.
Respectfully Submitted,
August 08, 2015
/s/ Mark A. Porter

Mark A. Porter (P-42280)
Attorney for Plaintiffs
Mark A. Porter & Associates PLLC
551 East 11 Mile Road Suite 3-D
P. O. Box 71527
Madison Heights, Michigan 48071-0527
(248) 547 1911
(248) 547 1917 FAX
mporter@map-law.com
25
2:15-cv-12810-GAD-RSW Doc # 1-1 Filed 08/10/15 Pg 1 of 2
Pg ID 26
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN
CHARLES N. KAMINSKI,
LINCOLN PARK POLICE
AND FIRE RETIREES ASSOCIATION, INC.,
MICHAEL J. MOULIOS,
LINCOLN PARK MUNICIPAL
EMPLOYEES RETIREES ASSOCIATION, Inc.,
Hon.
Case No.
LIST OF ATTACHMENTS
Plaintiffs,
v
BRAD L. COULTER, R. KEVIN CLINTON,
THOMAS E. KARNES, LARRY KELSEY,
PATRICK CULTER, MATT SADOWSKI,
THOMAS JANKOWSKI, THOMAS MURPHY,
MARK KANDES, CLIFFORD HARRIS,
FRANK VASLO, LISA GRIGGS, JANICE HOCHBERG,
JOHN DiFRANCESCO, ELLIOT ZELENAK,
MARIO DESANTO, CHRISTOPHER DARDZINSKI,
THE CITY OF LINCOLN PARK, MICHIGAN, THE
POLICE AND FIRE RETIREMENT COMMISSION OF
THE CITY OF LINCOLN PARK, MICHIGAN, and the
CITY OF LINCOLN PARK, MICHIGAN, GENERAL
EMPLOYEES RETIREMENT COMMISSION,
JOINT AND SEVERAL,
INDEX OF PLAINTIFFS ATTACHMENTS

Attachment #1
Notarized Verifications of Plaintiffs
Attachment #2
Charles Kaminski Collective Bargaining

Agreement at Time of Retirement
Attachment #3
Michael Moulios Collective Bargaining

Agreement at Time of Retirement
Attachment #4
Letter of Michigan Treasurer R. Kevin

Clinton to State Emergency Manager
Brad Coulter, April 10, 2015
Attachment #5
Report of State Emergency Manager

Brad Coulter, August 20, 2014
1
Pg ID 27
INDEX OF PLAINTIFFS ATTACHMENTS CONTD

Attachment #6
Report of State Emergency Manager,

to the Governor on January 17, 2015,
Including Summary of August 20, 2014
Attachment #7
State Emergency Manager Orders #22

and #24, Issued April 22, 2015
Attachment #8
Affidavits of Retirees, Class Members,

and Members in Good Standing of
Plaintiffs Retirees Associations
Attachment #1
Notarized Verifications
Of Plaintiffs
Charles Kaminski,
Michael Moulios
Pg ID 28
Pg ID 29
Pg ID 30
Attachment #2
Charles Kaminski,
Collective Bargaining Agreement
At Time of Retirement
Pg ID 31
Pg ID 32
Pg ID 33
Pg ID 34
Pg ID 35
Pg ID 36
Pg ID 37
Attachment #3
Michael Moulios,
Collective Bargaining Agreement
At Time of Retirement
Pg ID 38
Pg ID 39
Pg ID 40
Pg ID 41
Pg ID 42
Attachment #4
Letter of State Treasurer
R. Kevin Clinton to
State Emergency Mgr.
Brad Coulter
April 10, 2015
Pg ID 43
Pg ID 44
Pg ID 45
Attachment #5
Report of
Brad Coulter
August 20, 2014
Pg ID 46
Pg ID 47
EMERGENCY FINANCIAL AND OPERATING PLAN

FOR THE CITY OF LINCOLN PARK, MICHIGAN
August 20, 2014
Prepared By:
Brad Coulter
Emergency Manager
Page 1 of 17
Pg ID 48
The Emergency Manager estimates the annual contribution needs to be increased by $2 million per year
in order to start toward funding the system to 100%. The Emergency Manager has requested analysis
from GRS to confirm this estimate and better understand options for funding the system.
The Emergency Manager is also concerned about the history of using annual contribution rates that were
clearly below what is required to keep the system funded. There is concern over the lower than required
investment returns achieved and the Emergency Manager will be benchmarking these returns against
other retirement systems as well as various market indices. The Emergency Manager will explore the
possibility of exercising rights under Section 12 (m) of the Act, where in the case of plans that are not at
least 80% funded, allows the Emergency Manager to remove one or more pension board trustees or
allows the Treasurer to name the Emergency Manager as sole trustee for the pension system.
This plan assumes the City contributes an additional $2.0 million per year toward the Police Officers &
Firefighters pension. The actual amount required will be refined as the Emergency Manager works with
actuarial experts to determine the true extent of the underfunding and options for pension contributions.
Total Increase in Annual Pension Funding Assumed

With a goal of having both plans funded to 100% over the next 20 years, the total increase in pension
contribution assumed in this plan is $4.0 million per year resulting in a total annual contribution of $9.6
million starting in fiscal year 2015-2016. The Emergency Manager will be working with MERS, GRS and an
independent actuary to determine the final contribution stream that must be paid into the systems.
In order to help pay for this increased pension contribution, the Plan proposes the $4.2 million per year
spent on retiree health care is reduced to $1 million per year. The $1 million in retiree health care
spending is proposed to be used for stipends or other replacement benefits for the retirees. The
Emergency Manager plans to contract health care experts to assist retirees transition into plans on the
health care exchange and explore options for subsidies and alternative coverages.
The Emergency Manager acknowledges there is a risk of lawsuits being filed against the City for taking this
action and legal fees defending this action could be expensive. But, the Emergency Manager sees no other
viable alternative for shoring up the grossly underfunded pension system.
Section 4.01: Bankruptcy

Under Section 18 of the Act, the Emergency Manager may provide written notice to the Local Emergency
Financial Assistance Loan Board requesting authorization to proceed under Chapter 9 of Title II of the
United States Code, Adjustment of Debts of a Municipality, by stating no feasible financial plan can be
adopted that can satisfactorily resolve the financial emergency in a timely manner. Or the Emergency
Manager can determine that an adopted financial plan, in effect for at least 180 days cannot be
implemented as written, or as it might be amended, in a manner that can satisfactorily resolve the
financial emergency in a timely manner.
The Emergency Manager has determined the initiation of bankruptcy proceedings under the Act is not a
viable option at this time for achieving the objectives of the City for the following reasons:
Page 8 of 17
Attachment #6
Report of
Brad Coulter
January 17, 2015
Pg ID 49
Pg ID 50
EMERGENCY FINANCIAL AND OPERATING PLAN

FOR THE CITY OF LINCOLN PARK, MICHIGAN
August 20, 2014
Prepared By:
Brad Coulter
Emergency Manager
Page 1 of 17
Pg ID 51
The Emergency Manager estimates the annual contribution needs to be increased by $2 million per year
in order to start toward funding the system to 100%. The Emergency Manager has requested analysis
from GRS to confirm this estimate and better understand options for funding the system.
The Emergency Manager is also concerned about the history of using annual contribution rates that were
clearly below what is required to keep the system funded. There is concern over the lower than required
investment returns achieved and the Emergency Manager will be benchmarking these returns against
other retirement systems as well as various market indices. The Emergency Manager will explore the
possibility of exercising rights under Section 12 (m) of the Act, where in the case of plans that are not at
least 80% funded, allows the Emergency Manager to remove one or more pension board trustees or
allows the Treasurer to name the Emergency Manager as sole trustee for the pension system.
This plan assumes the City contributes an additional $2.0 million per year toward the Police Officers &
Firefighters pension. The actual amount required will be refined as the Emergency Manager works with
actuarial experts to determine the true extent of the underfunding and options for pension contributions.
Total Increase in Annual Pension Funding Assumed

With a goal of having both plans funded to 100% over the next 20 years, the total increase in pension
contribution assumed in this plan is $4.0 million per year resulting in a total annual contribution of $9.6
million starting in fiscal year 2015-2016. The Emergency Manager will be working with MERS, GRS and an
independent actuary to determine the final contribution stream that must be paid into the systems.
In order to help pay for this increased pension contribution, the Plan proposes the $4.2 million per year
spent on retiree health care is reduced to $1 million per year. The $1 million in retiree health care
spending is proposed to be used for stipends or other replacement benefits for the retirees. The
Emergency Manager plans to contract health care experts to assist retirees transition into plans on the
health care exchange and explore options for subsidies and alternative coverages.
The Emergency Manager acknowledges there is a risk of lawsuits being filed against the City for taking this
action and legal fees defending this action could be expensive. But, the Emergency Manager sees no other
viable alternative for shoring up the grossly underfunded pension system.
Section 4.01: Bankruptcy

Under Section 18 of the Act, the Emergency Manager may provide written notice to the Local Emergency
Financial Assistance Loan Board requesting authorization to proceed under Chapter 9 of Title II of the
United States Code, Adjustment of Debts of a Municipality, by stating no feasible financial plan can be
adopted that can satisfactorily resolve the financial emergency in a timely manner. Or the Emergency
Manager can determine that an adopted financial plan, in effect for at least 180 days cannot be
implemented as written, or as it might be amended, in a manner that can satisfactorily resolve the
financial emergency in a timely manner.
The Emergency Manager has determined the initiation of bankruptcy proceedings under the Act is not a
viable option at this time for achieving the objectives of the City for the following reasons:
Page 41 of 50
Attachment #7
Plaintiffs Health Insurance
Termination:
Orders of State Emergency Mgr.
Brad Coulter, April 22, 2015
Pg ID 52
Pg ID 53
EMERGENCY MANAGER OF THE CITY OF LINCOLN PARK

ORDER NO. 22
ORDER OF THE EMERGENCY MANAGER OF THE CITY OF LINCOLN PARK
City of Lincoln Park/Action Under Sections 12(1)k and 12(2) of PA 436 of 2012 of the Local
Financial Stability and Choice Act Related to Health Care for Retirees of Government
Employees Labor Council
BY THE AUTHORITY VESTED IN THE EMERGENCY MANAGER FOR THE CITY OF LINCOLN PARK
PURSUANT TO MICHIGANS PUBLIC ACT 436 OF 2012
BRAD COULTER, THE EMERGENCY MANAGER, ISSUES THE FOLLOWING ORDER:
WHERAS, the Local Financial Stability and Choice Act (Act 436 of 2012/MCL
141.1541, et. seq.) in Section 10 empowers an emergency manager to issue orders to the
appropriate local elected and appointed officials and employees, agents, and contractors of the
local government a manager considers necessary to accomplish the purposes of the act and any
such orders are binding on the local elected and appointed officials and employees, agents, and
contractors of the local government to whom they are issued.
WHEREAS, Section 12(1) of the Act provides that [a]n Emergency Manager may take
one or more of the following additional actions with respect to a local government that is in
receivership, notwithstanding any charter provision to the contrary:
(g) Make, approve, or disapprove any appropriation, contract, expenditure, or loan, the
creation of any new position, or the filling of any vacancy in a position by any appointing
authority;
(k) Subject to section 19, after meeting and conferring with the appropriate bargaining
representative and, if in the emergency managers sole discretion and judgment, a prompt
and satisfactory resolution is unlikely to be obtained, reject, modify or terminate one or
more terms and conditions of an existing collective bargaining agreement. The rejection,
modification or termination of one or more terms and conditions of an existing collective
bargaining agreement under this subdivision is a legitimate exercise of the states
sovereign powers if the emergency manager and the state treasurer determine that all of
the following conditions are satisfied ;
(l) Act as sole agent of the local government in collective bargaining with employees or
representatives and approve any contract or agreement;
(ee) Take any other action or exercise any power or authority of any officer, employee,
department, board, commission, or other similar entity of the local government, whether
elected or appointed, relating to the operation of the local government. The power of the
emergency manager shall be superior to and supersede the power of any of the foregoing
officers or entities ;
Pg ID 54
WHEREAS, Section 12(2) of the Act provides that [e]xcept and otherwise provided in
this act, during the pendency of the receivership, the authority of the chief administrative officer
and governing body to exercise power for and on behalf of the local government under law,
charter, and ordinance shall be suspended and vested in the emergency manager.
WHEREAS, on April 9, 2015, I requested the State Treasurer to concur in my
determination under Section 12(1)k of the Local Fiscal Stability and Choice Act, Public Act 436
of 2012 (Act) to allow termination of those sections of the Collective Bargaining Agreements
with the unions listed above concerning health insurance.
As stated in the April 9, 2015, correspondence to the State Treasurer, in my sole
discretion and judgment, a prompt and satisfactory resolution of outstanding issues is unlikely to
be obtained. Therefore, I determined that the four conditions of Section 12(1)k of the Act had
been satisfied.
On April 10, 2015, the State Treasurer concurred with my determination and made his
separate determination (see attached) that the four conditions of Section 12(1)k of the Act had
been satisfied.
IT IS HEREBY ORDERED THAT:
I.
By operation of law, as provided in Sections 12(l)k and 12(2) of the Act, pursuant to the
determinations made by both myself and the State Treasurer, the sections of all Collective
Bargaining Agreements with the City and the union listed above concerning retirees 1, as
well as all past and present City Council resolutions or ordinances regarding retiree
health care and Medicare Part B reimbursement, are terminated and replaced with the
following:
Healthcare
Effective July 1, 2015, all retirees receiving City provided health care shall be provided
monthly payments to be either used toward purchasing health insurance or as a
supplement to income. All retirees must enroll in the City provided group coverage and
pay for this coverage if they would like to continue having health insurance through the
Citys group plan. Alternatively, retirees may take the monthly payment and purchase
coverage on their own, or take the money as income. These payment amounts are set
through June 30, 2016 and will be re-evaluated every budget year.
The City will pay the following monthly amounts based on the coverage being offered:
Non-Medicare Eligible Retirees
Single:
$150 per month
Couple:
$350 per month
Family:
$425 per month
Unless otherwise noted, retiree shall only include those individuals who retired from the City of
Lincoln Park on or before April 22, 2015 and are eligible to receive City provided retiree health care. In
addition, retiree shall include eligible spouses of retirees as well as eligible dependents.
1
Pg ID 55
Pg ID 56
EMERGENCY MANAGER OF THE CITY OF LINCOLN PARK

ORDER NO. 24
ORDER OF THE EMERGENCY MANAGER OF THE CITY OF LINCOLN PARK
City of Lincoln Park/Action Under Sections 12(1)k and 12(2) of PA 436 of 2012 of the Local
Financial Stability and Choice Act Related to Health Care for Retirees of Lincoln Park
Police Command Officers Association
BY THE AUTHORITY VESTED IN THE EMERGENCY MANAGER FOR THE CITY OF LINCOLN PARK
PURSUANT TO MICHIGANS PUBLIC ACT 436 OF 2012
BRAD COULTER, THE EMERGENCY MANAGER, ISSUES THE FOLLOWING ORDER:
WHERAS, the Local Financial Stability and Choice Act (Act 436 of 2012/MCL
141.1541, et. seq.) in Section 10 empowers an emergency manager to issue orders to the
appropriate local elected and appointed officials and employees, agents, and contractors of the
local government a manager considers necessary to accomplish the purposes of the act and any
such orders are binding on the local elected and appointed officials and employees, agents, and
contractors of the local government to whom they are issued.
WHEREAS, Section 12(1) of the Act provides that [a]n Emergency Manager may take
one or more of the following additional actions with respect to a local government that is in
receivership, notwithstanding any charter provision to the contrary:
(g) Make, approve, or disapprove any appropriation, contract, expenditure, or loan, the
creation of any new position, or the filling of any vacancy in a position by any appointing
authority;
(k) Subject to section 19, after meeting and conferring with the appropriate bargaining
representative and, if in the emergency managers sole discretion and judgment, a prompt
and satisfactory resolution is unlikely to be obtained, reject, modify or terminate one or
more terms and conditions of an existing collective bargaining agreement. The rejection,
modification or termination of one or more terms and conditions of an existing collective
bargaining agreement under this subdivision is a legitimate exercise of the states
sovereign powers if the emergency manager and the state treasurer determine that all of
the following conditions are satisfied ;
(l) Act as sole agent of the local government in collective bargaining with employees or
representatives and approve any contract or agreement;
(ee) Take any other action or exercise any power or authority of any officer, employee,
department, board, commission, or other similar entity of the local government, whether
elected or appointed, relating to the operation of the local government. The power of the
emergency manager shall be superior to and supersede the power of any of the foregoing
officers or entities ;
Pg ID 57
WHEREAS, Section 12(2) of the Act provides that [e]xcept and otherwise provided in
this act, during the pendency of the receivership, the authority of the chief administrative officer
and governing body to exercise power for and on behalf of the local government under law,
charter, and ordinance shall be suspended and vested in the emergency manager.
WHEREAS, on April 9, 2015, I requested the State Treasurer to concur in my
determination under Section 12(1)k of the Local Fiscal Stability and Choice Act, Public Act 436
of 2012 (Act) to allow termination of those sections of the Collective Bargaining Agreements
with the unions listed above concerning health insurance.
As stated in the April 9, 2015, correspondence to the State Treasurer, in my sole
discretion and judgment, a prompt and satisfactory resolution of outstanding issues is unlikely to
be obtained. Therefore, I determined that the four conditions of Section 12(1)k of the Act had
been satisfied.
On April 10, 2015, the State Treasurer concurred with my determination and made his
separate determination (see attached) that the four conditions of Section 12(1)k of the Act had
been satisfied.
IT IS HEREBY ORDERED THAT:
I.
By operation of law, as provided in Sections 12(l)k and 12(2) of the Act, pursuant to the
determinations made by both myself and the State Treasurer, the sections of all Collective
Bargaining Agreements with the City and the union listed above concerning retirees 1, as
well as all past and present City Council resolutions or ordinances regarding retiree
health care and Medicare Part B reimbursement, are terminated and replaced with the
following:
Healthcare
Effective July 1, 2015, all retirees receiving City provided health care shall be provided
monthly payments to be either used toward purchasing health insurance or as a
supplement to income. All retirees must enroll in the City provided group coverage and
pay for this coverage if they would like to continue having health insurance through the
Citys group plan. Alternatively, retirees may take the monthly payment and purchase
coverage on their own, or take the money as income. These payment amounts are set
through June 30, 2016 and will be re-evaluated every budget year.
The City will pay the following monthly amounts based on the coverage being offered:
Non-Medicare Eligible Retirees
Single:
$150 per month
Couple:
$350 per month
Family:
$425 per month
Unless otherwise noted, retiree shall only include those individuals who retired from the City of
Lincoln Park on or before April 22, 2015 and are eligible to receive City provided retiree health care. In
addition, retiree shall include eligible spouses of retirees as well as eligible dependents.
1
Pg ID 58
Attachment #8
Affidavits in Support,
Retiree Association Members
Robert Duncan,
Helen Huff,
Agnes Rotz
Pg ID 59
Pg ID 60
Pg ID 61
Pg ID 62
Pg ID 63
Pg ID 64

Lincoln Park Retiree Lawsuit

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Lincoln Park Retiree Lawsuit

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2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 1 of 25

UNITED STATES DISTRICT COURT

JURY DEMAND INCLUDED

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 2 of 25

DESANTO, Individually and as a Member of the City Council of Lincoln Park;

, 135 S. Ct. 926

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 3 of 25

The impairments and removal of healthcare benefits as pleaded in this Complaint

entitle Plaintiffs to injunctive and declaratory relief pursuant to 42 USC 1983.

The taking of Plaintiffs property by Defendants Brad L. Coulter and R. Kevin

Plaintiffs reincorporate by reference Paragraphs 1-5.

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 4 of 25

as its elected President.

The Plaintiff Lincoln Park Municipal Employees Retirees Association, Inc.,

Defendant Brad L. Coulter is by law a State official pursuant to 2012 Public

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 5 of 25

Defendant R. Kevin Clinton is the Treasurer of the State of Michigan, a State

Department charged with oversight of State-appointed Emergency Managers. Defendant Clinton

Defendant Larry Kelsey is an elected member of the City Council of Lincoln

Defendant Thomas Murphy is an elected member of the Lincoln Park City

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 6 of 25

Defendant Elliott Zelenak is an elected member of the Lincoln Park City

Defendant Mario Desanto is an elected member of the Lincoln Park City

Defendant Christopher Dardzinski is an elected member of the Lincoln Park

Defendant Clifford Harris served as a member of the former City of Lincoln

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 7 of 25

Municipal Employees Retirement Commission, prior to its transfer to the Municipal

Municipal Employees Retirement Commission, prior to its transfer to the Municipal

Defendant City of Lincoln Park [General] Employees Retirement

Defendant City of Lincoln Park, Michigan is a municipal corporation by

Michigan 1963 Constitution art. 7 21, and at law.

Plaintiffs reincorporate by reference Paragraphs 1-31

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 8 of 25

Fire Pension Commission are by law Investment Fiduciaries pursuant to M. C. L.

Michigans Uniform Budgeting and Accounting Act, M. C. L. 141.421 et. seq.,

General accounting principles endorsed by the American Academy of Actuaries

define pension funding ratios in this manner:

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 9 of 25

General Retirees Pensions

Police Fire OPEBs

General Retirees OPEBs

CAFR FY 2011-2012 Funding Ratios & Paid Costs

General Retirees Pensions

General Retirees OPEBs

CAFR FY 2012-2013 Funding Ratios & Paid Costs

General Retirees Pensions

General Employees OPEBs

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 10 of 25

CAFR FY 2013-2014 Funding Ratios & Paid Costs

General Retirees Pensions

General Employees OPEBs

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 11 of 25

December 19, 2013].

discharging the responsibilities of the City and Police Fire Pension

Commission solely in the interest of the participants and the beneficiaries.

circumstances then prevailing that a prudent person would act;

the funding objectives of the system.

give appropriate consideration to investments that would enhance the

valuation assets to actuarial accrued liabilities on a plan-year basis.

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 12 of 25

2:15-cv-12810-GAD-RSW Doc # 1 Filed 08/10/15 Pg 13 of 25

Those contracted BCBSM health insurance benefits were themselves incorporated

Plaintiffs reincorporate by reference Paragraphs 1-51.

and non-transparent imitation of a true receivership. By Michigan law, a receiver is a