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I-TEAM INVESTIGATION

Hartford pension recipients are right to be worried about potential bankruptcy

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DETROIT (WFSB) -

As the debate over a Connecticut state budget continues, one of the big questions is what to do about Hartford.

The city is asking for $40 million in additional state aid. It said if it doesn't get it, bankruptcy is almost certain.

All week, the I-Team has been exploring what that will mean if it happens.

It spoke with a pair of retirees in Detroit who've been through it and they said people relying on a Hartford city pension are right to be worried.

Hartford Mayor Luke Bronin said his city will run out of money this fall unless state aid arrives.

One of the things the bankruptcy court will do is figure out everyone the city owes money to and all will take a hit.

That includes retirees.

In Detroit, the I-Team looked at how the city resolved the largest municipal bankruptcy case in history. Now, the city is booming.

While many officials said it was good to get it over and done with, one major warning came from retirees who continue to feel the pain every month.

As the first whispers of bankruptcy were heard in greater Detroit, Don Taylor's phone started ringing. Taylor was the president of the Retired Detroit Police and Firefighters Association.

"We hooked up a special hotline because we couldn't handle all the calls," Taylor said.

As the president, he said he knew he had to be ready for his 6,000 members.

First, they were told their pensions and health care would be protected. However, as the size of Detroit's shortfall became clear, some estimates put the reductions for retirees at 40 percent or more.

For his members, Taylor said that might not be survivable.

"Once you retire you learn to live on the income you have coming in and any reduction in that is very difficult for any retiree to replace," he said. "Most people don't hire somebody at 70 or 80 years old and get back into the job market at that time."

"I could have gone elsewhere and made a whole lot more money but I was concerned about the City of Detroit and the fact that I did have a pension," said William Davis, Detroit Active & Retired Employees Association.

After 34 years as a supervisor at Detroit's water treatment plant, Davis represented a group of general city retirees.

"You put in your time for the benefits that you earned," he said.

Both retiree groups addressed the judges' handling of Detroit's bankruptcy with a familiar argument in these cases: Pensioners are different and should get what they were promised, without any reduction.

When the I-Team spoke to Judge Gerald Rosen and Judge Steven Rhodes, it asked for their take.

They said the groups were equal in priority, which means the court expected all of them to give up something for the greater good.

Taylor's group, known to the court as "the uniforms," gave up future cost of living increases and some of the interest income they had banked. However, they did not reduce existing pensions or lose health care.

It cost the union nearly $800,000 in attorneys fees, but Taylor eventually decided to endorse the plan to have some finality for his members.

"The biggest fear I had in dragging stuff out, over 2,000 of our members at the time were over 80 years old," Taylor said. "So if you fought this, it would have taken at least two trips to the Supreme Court and the outcome was unknown, you end up with many dying before there's a resolution and the city would have been in worse shape."

Davis's group and other non-uniformed retirees didn't fare as well.

They said they lost a percentage of their pension and all of their health care coverage.

"The effect on me has been horrible," Davis said. "It's like $1,000 a month cut on me."

And he said he's among the lucky ones.

"I made good money compared to most, my cut was $1,000/month," Davis said. "But there were some people whose cut was $200 to $300 a month and it made it that much harder [for them] to get by."

He said he felt the city let him down.

"Yes the city has let me down, let my family down, let thousands of residents who worked for the city down and their families and friends," Davis said. "The City of Detroit retirees and the City of Detroit workers were like the building block that was working to hold this city together."

They were concessions on different scales, but both men saw their stories as a warning for pensioners in Hartford.

"The outcome's not going to be good," Taylor said. "I don't know how an outcome could be good in a bankruptcy."

Davis said the people in Hartford should be nervous.

"You need to be nervous. You need to be aware of what's going on," Davis said. "Don't believe the suits when they come in and tell you it's going to be all right. It wasn't [for me]."

In the end, the certainty of a settlement won the day.

Members voted to approve the concessions.

One union leader even printed buttons that said "you can't eat principles" as a response to those who said they'd vote "no" on principle.

Thursday, the I-Team's Capital City in Crisis series continues with a look at the suburbs and what they can expect if Hartford does file for bankruptcy.

Other stories in this series:

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