The city of Miami and its police union reached preliminary agreement Tuesday on a two-year contract that would give officers pay raises in 2014 while reining in pension costs for the cash-strapped city.
The tentative agreement, which would generate $11.5 million in savings for Miami, represents an important step forward in the city’s quest to balance its budget by the end of the month.
Miami has been trying to close a $40 million hole in its $485 million operating budget by negotiating employee concessions. Earlier this summer, the Fraternal Order of Police had walked out of collective bargaining sessions, and threatened not to return to the table.
“I believe it's a step in the right direction,’’ Miami FOP Vice President Sgt. Javier Ortiz said after 11 hours of negotiations Tuesday. “Ultimately, it will be up to the membership to decide.’’
Some of the proposed contract language was still being reviewed by the city's pension experts late Tuesday night, but administrators were confident the agreements would hold.
If approved, the new contract would award a 3 percent raise to police department employees in April 2014. Officers haven’t gotten a pay increase since 2009. Their salaries were slashed the following year to balance the budget.
In addition, the department would be able to purchase new police cars next year. And officers would no longer have to pay a per-mile fee for their take-home cars.
Most of the savings would come from an accounting change, which would alter the way the city’s pension obligation is calculated. Moreover, new employees would have to chip in more for their retirement plans. Although the contribution required from current employees would stand at 10 percent, new hires would have to contribute 13 percent.
Officers would also give up physicals and new uniforms in the second year of the contract, and the department would cut back on some fuel and overtime expenses.
The proposed contract must still be approved by union members and the city commission. The commission will likely consider it during a closed-door executive session Wednesday and again during the first public budget hearing Thursday.
The agreement could be a harbinger of things to come. City officials want to make a deal with each of the four labor unions, and police and fire union representatives were said to be the toughest negotiators.
After finishing with police, administrators were preparing to work late into the night to hammer out a separate contract with the firefighters union.
Balancing the 2012-13 budget has been a monumental undertaking for the city. Revenues from property taxes are expected to increase by $2 million, but pension and healthcare costs ballooned, contributing to the $40 million gap, budget director Danny Alfonso said.
Despite the hole, the city commission declined to raise taxes. In July, commissioners tentatively set the tax rate at $8.47 for every $1,000 of taxable assessed property — a slight decrease from last year.
Shortly thereafter, City Manager Johnny Martinez declared a state of financial urgency, a legal maneuver that would have allowed forced employee concessions. The action prompted a lawsuit from the FOP.
A Miami-Dade circuit judge voided the city’s declaration of financial urgency in August, but the police union’s victory was short lived. Last week, the Third District Court of Appeal reversed the lower court.
During Tuesday’s negotiations, union leaders implored city administrators not to declare financial urgency in the future.
“You all see it as an accounting maneuver, but it is more than that,’’ FOP attorney Ron Cohen said, likening the action to “a punch in the gut’’ that had done irreparable harm to labor relations.
City administrators would not rule out future declarations of urgency, but they did promise to not reduce wages and benefits for the term of the agreement.
“The next few years are pretty safe,’’ Martinez said. “Things are going in the right direction.’’
Noticeably missing from the negotiations was Miami FOP President Armando Aguilar. Aguilar lost a bid to become the state FOP president earlier this year, but told The Miami Herald he had not ruled out running for local reelection.
Aguilar attended a hearing regarding the financial urgency claim last week.