Detroit is dangling at the edge of insolvency, but the city reportedly has enough funds to pay workers nearly $500,000 in bonuses, the Detroit News reported Thursday.
The newspaper said the annual longevity bonuses, which went out last Friday to 1,148 workers, ranged from $150 to $750, depending on how long a worker had been employed.
The city, which has fewer than 10,000 employees, eliminated longevity bonuses for union employees three years ago, the Detroit News added. But a statement emailed to NBCNews by Mayor Dave Bing’s spokesman Anthony Neely said the majority of workers — 697 of them — who got the payments were union members. Neely did not immediately respond to a request for clarification or say which union or unions had members who received payments.
The City Council’s pro tempore president Gary Brown told the Detroit News, “We need to get to the bottom of whether it was intentional or an accident of some sort."
Bing’s statement blamed the council, with which he has clashed as the city’s fiscal crisis deepened. “Mayor Bing’s Administration brought the resolution to end longevity bonus payments... to City Council twice this summer," the statement said. "City Council rejected the resolution in July. A second attempt was approved in September.”
The Council did not immediately respond to a request for comment.
In the statement, Bing also blamed “antiquated” policymaking processes for the failure to implement the decision to eliminate the payments. “The length of time needed to bring about change is often inefficient and counterproductive,” he said. “I expect that once the appropriate ordinance amendment is received by City Council, the longevity bonus payments will end for non-union employees.”
Last Friday, Bing announced at a news conference that the city would lay off 400 to 500 workers over the next few months. The city is struggling to fix its troubled finances and stave off a possible Chapter 9 bankruptcy
If Detroit can't get its financial house in order, it could become the largest U.S. city -- at a population of 700,000 -- to file for bankruptcy protection. Earlier this year, two mid-sized California cities -- Stockton and San Bernardino -- filed for bankruptcy.