Commission restrictions could make budget cuts tricky for Miami-Dade mayor

12/06/2013 6:34 PM

12/06/2013 6:36 PM

Carlos Gimenez has a painful $56 million problem.

What he doesn’t have is a painless solution.

Miami-Dade commissioners, under pressure from labor unions, voted late Thursday to restore the pay of most county workers. The unplanned move will blow open a $56 million hole in the current $4.4 billion operating budget.

Mayor Gimenez’s administration will have to come up with a way to make up the money. But he’ll be hamstrung by several commission edicts: Protect public services. Don’t ask a bank for help. Leave most rainy-day funds untouched.

Vaya con Dios.

Gimenez was steaming.

“You’re making all these motions — don’t do this, don’t do this, don’t do this,” he told commissioners. “I’m sorry — does somebody have a printing press back there making money?”

After the mayor said an unknown number of layoffs would be likely, commissioners briefly considered an edict banning that, too. But they realized they couldn’t have it both ways.

Gimenez appears poised to veto the decision. He has until Sunday, Dec. 15 — in practice, until Friday the 13th — to strike down the commission’s vote.

But the board could override him, depending on how many commissioners show up.

Eight of 11 commissioners voted to end the concession that for nearly four years required employees to contribute 5 percent of their base pay toward group healthcare costs. That’s one commissioner shy of the nine-member super-majority necessary to nullify a potential veto, assuming all 13 commissioners are in attendance and none of those who were present Thursday change their minds.

The ninth vote could be Commissioner Jose “Pepe” Diaz, who was absent Thursday because he was hospitalized after undergoing emergency back surgery last week. He signaled how he would vote in a memo to his colleagues.

“As I lay here recovering,” Diaz wrote, “I hope that you will open your hearts and minds to our employees and make a thoughtful and deliberate decision to help them rather than hurt them.”

The other absent commissioner, Juan C. Zapata, said he was out of town for a meeting scheduled long before Thursday’s impasse hearings. He told the Miami Herald on Friday that he would have voted against restoring workers’ pay and intends to do so if Gimenez issues a veto.

“I sympathize with the workers, I really do, but there is a bigger issue at play,” Zapata wrote in an email. “We are on an unsustainable financial course. Those who voted in favor are basically forcing a substantial tax increase. That’s the only way to deal with this.”

The board knew that by siding with labor unions, the county will have to dig into its current budget. An even bigger hole would be created the following year, which already faces a shortfall in the general fund and in the cash-strapped library and fire-rescue departments.

Though others disagreed with Gimenez, at least one commissioner said he could accept some job losses. “I prefer to have a smaller workforce” that’s better paid and more motivated, Commissioner Bruno Barreiro said.

Another, Sally Heyman, said the commission’s choice shouldn’t be limited to slashing jobs and services or hiking the property-tax rate. “What about how to get rid of our waste?” she said, referring to unnecessary spending.

Commissioners asked for most reserves to be protected.

The exception: an $81 million health-insurance trust fund. It had been funded directly by the 5 percent contributions, which cover only a portion of the county’s healthcare claims.

The commission told the administration to keep enough money in the fund to cover 60 days’ worth of claims — about $73 million — and tap the remaining $8 million.

Gimenez’s budget staff had set a nearly $100 million target for the fund. Union leaders has argued the county needs much less, enough to cover only 30 days’ worth of claims.

The administration of Carlos Alvarez, Gimenez’s predecessor, asked employees to contribute 5 percent of their pre-tax pay toward group healthcare costs. It was an alternative to cutting salaries, which would have shrunk workers’ pensions. Gimenez extended the contribution, temporarily tacked on an additional 4 percent, and this year sought to keep the 5 percent one more year.

The contribution does not pay for individual healthcare coverage. Unlike in the private sector, Miami-Dade pays for employees’ insurance premiums. Workers are responsible only for their co-pays and other costs, and for covering their spouses and children.

Instead, the contribution helped each department defray the costs for self-insuring the county’s nearly 26,000 employees. Those healthcare costs amounted to nearly $443 million for the budget year that ended Sept. 30.

In the new year, Gimenez’s administration will have to sit down with its eight unions to negotiate new three-year labor contracts. The mayor said Thursday the county could save a lot of money if the unions agree to redesign the health-insurance plan to make it less generous.

That comment and several others from Gimenez drew loud groans from the audience, underscoring the strained relationship between the administration and the unions.

Then came the finger pointing.

“He’s been the one impossible to deal with,” Mark Richard, an attorney for several unions, said of Gimenez.

The mayor turned to the commission, saying labor won’t agree to much he proposes because unions would rather hit an impasse and appeal to friendly commissioners.

“In order for us to have real negotiations, this administration with the unions, the signal has to come from this board that you’re willing to back this administration,” he said. “If not, why in the world are they going to be negotiating with me?”

A majority of commissioners has rejected Gimenez’s last two recommendations to continue union healthcare contributions. Last year, they also opposed an additional healthcare contribution, finally compromising on a lower one than the mayor requested.

In spite of that track record and of looming election campaigns next year for six of his colleagues, Commissioner Dennis Moss, who voted to restore workers’ pay, told Gimenez that the board is ready to make choices that could make them unpopular with unions.

“I think the commission has the capacity to do that,” Moss said. “The will is there. The commission has it.”

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