Miami, labor unions reach contract agreements that help city balance budget

The city of Miami reached a preliminary contract agreement with the general employees union. The two-year deal will lower employee pension contributions and protect workers from furlough days.

09/21/2012 2:49 PM

09/21/2012 4:22 PM

The last of Miami’s four labor unions gave tentative approval to a new contract Friday, positioning the city to balance its $485 million budget before the new fiscal year begins in October.

The general employees’ new, two-year contract does not include pay raises. But it reduces the amount city workers must contribute to their retirement plans from 13 to 10 percent, and lowers the co-payments for doctors’ visits. Bargaining unit members will also have three furlough days restored and their take-home cars paid for by the city.

Meanwhile, Miami will save nearly $10 million by changing the actuarial formula used to calculate the city’s pension contribution.

General Employees union president Anthony Hatten called the deal “hard fought.”

“It’s a fair resolution for the next two years,” Hatten said. “Hopefully we can move forward and do even better the next time.”

Earlier in the week, the firefighters union gave a tentative nod to a two-year contract that restores frozen pay increases. Firefighters will continue to chip in 10 percent to their retirement plans.

That contract will save Miami $8.5 million through revisions to the pension formula and the Deferred Option Retirement Plan, known as DROP.

“I’m not happy that we have to sacrifice for another year,” firefighters union President Robert Suarez said. “But I’m encouraged that we were able to negotiate ways to save money, rather than just accepting the way the city would have done it had we not had input.”

Said Commission Chairman Francis Suarez: “It was a no-brainer for the employees to opt to negotiate new contracts rather than having reductions imposed on them.”

City officials said the agreements were necessary to close Miami’s $40 million budget gap.

The process could have gone differently. In July, City Manager Johnny Martinez declared a state of financial urgency, a legal maneuver that would have allowed the City Commission to force concessions on the four labor unions.

Martinez had consistently said he would rather negotiate new contracts than impose one-time cuts or furlough days.

“I’m always pleased when we don’t have to jam anything down anyone’s throats,” Martinez said.

Mayor Tomás Regalado said he, too, was satisfied to have contracts with the unions.

“They have a commitment from this administration that we are going to respect the agreements,” Regalado said. “Hopefully, we’ll be able to start building trust again.”

Miami reached tentative agreements on two-year contacts with the police and sanitation workers unions last week.

Both will save Miami millions of dollars, mostly through tweaks to the pension formula.

The police contract promises a 3 percent raise in April 2014. Current police department employees will continue contributing 10 percent of their salaries to their pension plans. New hires will contribute 13 percent.

Sanitation workers won’t get raises, but they will be spared furlough days or increased healthcare costs. Like general employees, sanitation workers will have their pension contribution lowered from 13 to 10 percent.

The four bargaining units will vote on their respective contracts in coming weeks.

The last step will be for the City Commission to give final approval at a budget hearing Thursday.

Commissioner Willy Gort said he believes the contracts will provide a source of stability for the cash-strapped city.

“We can finally start changing the perception that we are going to be bankrupt,” he said.

Miami Herald staff writer Charles Rabin contributed to this report.

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