City of Miami Against Overpaid Firefighters and Police–For The Taxpayers–A Big Lesson for Coral Gables

The City of Miami Commissioners should receive an award for confronting both budget realities and the power of firefighter and police unions to raise salaries and benefits to outrageous levels.  Certainly, the threat of deficits and a potential voter reactions has led the Miami city commissioners to make a decision that correctly weighs the taxpayers’ interests over the firefighters and police who can no longer justify, even by excellent service, ridiculous salaries, pensions and benefits.

The specticle of outraged firefighters and police is not likely to create sympathy among voters and taxpayers.  Let us hope that this is not more political theater but real hard and permanent decision on the future of the budget.

This article from the Miami Herald is worth keeping.

Despite threats of litigation, a vocal crowd of fire union workers and the specter of a showdown with a state magistrate, Miami commissioners imposed steep pension and pay cuts Tuesday in a bid to save a sinking budget.

Scurrying to fill a $105 million budget hole by the last day of September, commissioners opted against laying off almost a third of the city’s 4,300 workforce. Instead, they focused on cutting salaries and tamping down pension and health insurance costs that had spun skyward.

The unanimous 5-0 vote, following a four-hour debate that at times turned contentious, would save Miami $80 million, according to figures supplied by city administrators.

“This is probably the toughest decision I’ve ever had to make in my life,” Commissioner Francis Suarez said, before telling how city police once formed a human chain to help his family escape after a break-in at his home, when his father was mayor.

Still, Suarez was heckled from the crowd before giving way to Commission Chairman Marc Sarnoff. The chair was, in turn, greeted with verbal barbs before he could utter a word.

“It’s something we were sworn to do. This city has to function,” Sarnoff told a crowd of several hundred.

Most in attendance had arrived well before the scheduled 1 p.m. hearing, and City Hall’s historic Coconut Grove chamber was overstuffed — employees spilling into its halls and out the front door.

After the vote, union leaders vowed a fight.

“I’m almost speechless,” fire union chief Robert Suarez told commissioners. “I feel very confident that this experiment being played on city of Miami employees is neither just or legal.”

Police union President Armando Aguilar said he would file a lawsuit Wednesday, arguing the city’s decision was unconstitutional. He said the governor should move to enforce state oversight of the budget, as Florida had done during Miami’s last fiscal crisis in the 1990s.

“The actions you are taking today will cause irreparable damage. Keep in mind, you’re only as good as we make you look,” said Aguilar, as a woman beside him held up a picture of a police officer, in a hospital bed, who had recently been attacked.

Miami has been besieged with bad financial news. The most jarring: The city had to fill a $105 million budget hole triggered in good measure by the sinking real estate market and an enormous pension obligation created by a worker-friendly union agreement reached in 2007.

That agreement, which included dozens of provisions that boosted firefighter salaries, was accepted by a commission that then included Sarnoff and Mayor Tomás Regalado.

On Tuesday, both pressed for cuts.

City Manager Carlos Migoya said Tuesday’s moves will reduce salaries by $31 million and pension payouts by $41 million. The city will also save $7 million by changing healthcare providers and charging employees higher deductibles and copays.

Slashes in salary will begin at 5 percent for those earning $39,000, and top out at 12 percent for anyone making over $120,000. The cuts would take effect Oct. 1.

Heavy salary cuts will come from fire rescue, targeting the 2007 agreement that propped up pay by giving workers financial perks for everything from earning degrees to shoe reimbursements. Many of those perks will be eliminated.

Several firefighters are among the top earners in the city. But by cutting the perks, firefighters said Tuesday, some workers could see pay reduced by 20 percent or more.

The pension payout is an even bigger concern. Miami is on the hook for a $106 million payout in 2011, more than one-fifth of the city’s entire operating budget. That number would have grown to $146 million in 2014.

According to Migoya, a 55-year-old firefighter with 36 years of service who earned $135,000 in his final year of employment could leave the department with a lump sum payout of $984,000 — and $133,000 a year for life.

A police officer, the numbers show, who is 52 and worked 30 years with a final salary of $94,000 could leave with an $832,000 payday — and yearly benefit of $92,000.

Michael Mattimore, an attorney hired by the city to deal with labor issues, said in coming years the pension cost “will actually engulf 100 percent of the budget.”

Tuesday, commissioners took action to reverse that trend. After Sept. 30, yearly pension payouts for anyone who is not yet vested will max out at $100,000. An employee’s pension payout — now based on the highest earning year for police, and two years for fire — will adjust to a five-year average. Also, spouses who now collect pension payouts for life if their partner dies would collect for 10 years.

In May, Migoya declared a state of “financial urgency,” an obscure state statute that triggered negotiations with unions. When those failed, the two sides’ grievances were to go before a state-appointed magistrate.

Even before the magistrate weighed in, Miami called for Tuesday’s meeting.

Essentially, the city believes it has the right to set the union contract terms, which would then be considered when the magistrate rules. Union leadership disagrees.

“I’ve been with the city for 35 years and let me tell ya, for most of ’em I’ve been proud,” said Charlie Cox, soon to retire after leading the city’s general services employees union. “But not this year. Is there respect anymore? No, I don’t believe there is.”

Regalado said the city could have raised about $36 million by increasing property taxes — and made other cuts through massive layoffs he called a “doomsday scenario.” The city did not pursue either.

“We’re not going to kill the city to save the government,” the mayor said.

Read more: http://www.miamiherald.com/2010/08/31/v-fullstory/1801744/miami-makes-painful-pay-cuts.html#ixzz0yIHz5Wm6

About Stephen E. McGaughey
International consultant in economic development programs and projects

One Response to City of Miami Against Overpaid Firefighters and Police–For The Taxpayers–A Big Lesson for Coral Gables

  1. RAN says:

    We’ve let the firefighters run amok. Hogs at the public trough wrapped in the flag. They don’t pay into social security, they have a retirement fund system just for them. Which pays nada for the poor like social security. Most retire with a bogus ‘disability’ status which makes retirement pay mostly tax free. Gold plated medical plans during service and in retirement at little or no cost. Union chiefs declare ‘worlds most dangerous profession’, not even in top ten. Strict seniority system prevents college educated/merit experts from becoming leaders. The guy tasked with analysing complex hazardous material incidents will never have more than a high school education. And affirmative action? It’s a cost to any organization that practices it. The cost here is pretty high. The less able stay less able. Get involved with local government and clean it up…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: