Though challenging to define, urgency is easy to declare. The chief executive of a city or school district can do so without the consent of the legislative body involved, for example a city commission or school board. The CEO then has two weeks to negotiate with the labor unions. If no agreement is reached, the legislative body can unilaterally approve changes to employee contracts.
Statewide, the provision has only been used a handful of times. Although the financial urgency statute became law in 1995 as a way to expedite negotiations in financial crises, it was seldom used until the economy tanked in 2008.In 2009, when the Pembroke Pines municipal charter-school system was facing a $2.1 million budget shortfall, the city used the measure to renegotiate its contract with the Broward Teachers Union.
Pines commissioners invoked the statute a second time to make changes to the pension plan.
Neighboring Hollywood has declared thrice financial urgency. Most recently, city leaders in 2011 relied on the law to slash police and firefighter salaries by 12.5 percent and general employee salaries by 7.5 percent to cover an unexpected budget hole.
Miami has also been a repeat user of the statute.
The city first declared financial urgency to help alleviate a $116 million budget deficit in 2010. Commissioners went on to cut more than $80 million out of union contracts by imposing pay cuts, eliminating perks and scaling back pension benefits. The actions took effect after three of the four union contracts had expired, and lasted one year. The firefighters’ contract was changed despite having one year remaining.
Miami again declared urgency in 2011, when the budget shortfall topped $61 million. But the city was able to reach agreements with its four labor unions before having to force any concessions.
Both Miami and Hollywood have faced legal challenges from their unions. In all cases, the Public Employee Relations Commission sided with the city.
In 2010, the police and fire unions in Miami claimed city leaders had misused the statute.
In its final order in the police union appeal, PERC said “financial urgency” had indeed existed in Miami because the city had instituted a hiring freeze, stopped replacing police and fire vehicles, and eliminated some positions.
Had the city failed to act, PERC wrote, “the city would have been in the untenable situation of being unable to pay for essential governmental purchases, such as improvements, electricity and fuel for city vehicles. The city would have been able to operate or maintain its buildings, and its pension costs would have depleted approximately 25 percent of the city’s budget.”
An appeal of PERC’s ruling is pending, as are appeals in other cases.
David Miller, an attorney who has represented Hollywood in its financial urgency matters and written and lectured on the subject since 2009, noted that PERC did not quantify financial urgency in any of the cases.
“What PERC has said is that it will look at the entire financial picture of the employer and will make a judgment as to whether those circumstances constitute’’ financial urgency, he said.
The battle isn’t over in Miami.
The city needs to plug a $60 million hole in its 2012-13 budget. Although revenues from property taxes are expected to be about $3.3 million more than last year, the city must pay millions more into its pension funds to offset a loss in revenue from investments.
It will ultimately be up to the Miami commissioners to force concessions — a move they might have to make, since raising taxes is no longer an option. Commissioners last week voted to advertise a slight decrease in the overall tax rate, and cannot go back on that decision.
After three years, Commission Chairman Francis Suarez said he is wary of urgency.
“I think we should try to avoid it whenever possible,” he said. “Hopefully, it will be something that we won’t have to invoke in the future.”