MIAMI, FL – Miami city administrators say they can balance the city’s $485 million operating budget without raising taxes, but it involves winning $40 million in union concessions.
That may be easier said than done. Negotiations with the police union are stalling, Fraternal Order of Police President Armando Aguilar said.
“I didn’t close the door, but I told them my ultimatum: I’m not willing to give up what we gave last year, and not what they want this year,” Aguilar said.
Mayor Tomás Regalado said the city will likely have to declare financial urgency, a provision in state law that allows municipal leaders to unilaterally change employee contracts.
“It seems that they don’t have the appetite to even consider the concessions,” Regalado said. “That leaves no choice for us.”
Either way, the proposed budget is far more complete than it was last July, when staffers were still scrambling to crunch the numbers. Budget director Danny Alfonso plans to have this year’s proposal ready for city commissioners early next week, he said Friday.
The financial picture is brighter than a year ago. Revenues are up, thanks to an increase in property tax values and the number of people seeking building permits and other services from the city. The $485 million proposed budget represents a $2 million increase over last year.
Regalado won’t be recommending an increase in the overall tax rate.
Should the commission accept his proposal, the new rate would be $8.47 for every $1,000 of taxable assessed property value, down from $8.50 last year. The average homeowner would see a savings of $3.54.
Commission Chairman Francis Suarez said reducing taxes is the right move.
“People are expecting government to be leaner and create efficiencies, as they have had to do in their own personal lives.” Suarez said.
Still, city officials must fill a $60 million budget hole, a gap that exists because many of last year’s union concessions, such as the moratorium on new police cars, expired after one year. The city must also contribute more to its pension funds this year to offset a loss in revenue from investments.
Health insurance and fuel costs have also risen, Alfonso said.
Alfonso’s team has a plan to save $20 million by eliminating 27 vacant positions, renegotiating some information technology contracts and reining in spending across all city departments. The plan also suggests cutting back on bulky trash pickups for a savings of $1.4 million.
But the remaining $40 million must come from concessions from the city’s four unions.
Alfonso said half the gap could vanish by adjusting the way pension benefits are calculated.
City officials are suggesting a menu of other concessions to union leaders. Among them:
• Having police officers continue paying a per-mile fee for their take-home cars.
• Having the fire department keep overtime spending flat.
• Having firefighters and solid waste employees pay higher co-pays on their health insurance.
“There is a fiscal reality that we are facing and we are asking [the unions] to continue to help,” Alfonso said.
Although negotiations are ongoing, the Fraternal Order of Police’s Aguilar is not optimistic.
“They have come to think that the employees are a bank account that they can take money out of,” he said. “That’s just not acceptable. Our job is to go to work, not to balance their budget.”
Should the negotiations fall through, city officials have until mid-August to declare financial urgency. The move would likely be unpopular. When Miami declared financial urgency last year, union leaders called for Regalado to be recalled. The city ultimately won concessions from the unions before having to impose any meaures.
Commissioners have until September to approve the budget. They must submit a final copy to the state in October.
Budget hearings are planned for Sept. 13 and 27.
Suarez, the chairman, said the city is in better shape than in previous years. He credited rising real estate values, and work done in previous years to cut spending and boost the reserves.
“Our goal is to not raise taxes, not impact our employees and maintain services,” Suarez said. “It’s a difficult task, but that’s what we’re shooting for.”
From The Miami Herald