Judge: Miami City Commission, not manager, empowered to declare ‘financial urgency’

A judge said Miami City Manager Johnny Martinez wasn’t empowered to declare financial urgency. The decision may now rest with the City Commission.

08/20/2012 5:00 AM

08/20/2012 7:31 PM

The battle to balance Miami’s budget took an unexpected turn Monday when a Miami-Dade circuit judge ruled that City Manager Johnny Martinez did not have the authority to invoke a fiscal tool known as financial urgency.

City leaders were relying on the maneuver, which allows municipalities to unilaterally cut employee compensation during challenging financial times, to fill a $40 million gap in the $485 million operating budget.

The court order was based on a technicality: Judge Abby Cynamon ruled that the City Commission — not the city manager — must decide to declare financial urgency. Her decision voided Martinez’s action.

Her opinion delivered a victory to the Fraternal Order of Police, which sued the city three weeks ago for having improperly invoked the obscure state statute.

“It shows that once again, the city doesn’t know what it is doing,” FOP vice president Sgt. Javier Ortiz said.

In a letter Monday, union leaders urged the commission to “step up to the plate” and vote against financial urgency. But it remains to be seen how commissioners might come down on the issue.

Of the four commissioners polled by The Miami Herald, only Willy Gort said he would support declaring financial urgency. Michelle Spence-Jones said she was opposed, and Chairman Francis Suarez and Vice Chairman Marc Sarnoff said they needed more information on the statute.

Commissioner Frank Carollo did not return calls seeking comment.

Without clear-cut support, city administrators would rather have the issue settled in court than on the commission dais.

“Our game plan is to appeal the ruling,” Miami Mayor Tomás Regalado said. “Everything we did was totally legal. The manager clearly has the power.”

There is still time for the city and its four unions to agree on $40 million in cuts. But if the gap isn’t filled when the new budget year begins in October — and the urgency question still lingers — Regalado said the city may be forced to impose furloughs on its employees.

“Unfortunately, we don’t have too many options,” he said, adding that he hopes to avoid layoffs. “The [tax] rate is already set.”

Last month marked the third time in as many years that Miami has declared financial urgency.

Union leaders decried the tactic, pointing out that Miami’s financial outlook is actually improving. They claimed city officials were using urgency to avoid the negotiating table and cutting administrative costs.

For the past few weeks, the city has been meeting with union leaders to find common ground on potential reductions. But no agreements were reached.

The police union was supposed to come back to the table Wednesday. They cancelled the session after Monday’s ruling was announced.

This is not the first time Miami’s unions have challenged financial urgency.

The police and fire unions sued the city in 2010, saying city officials had no grounds to invoke the statute. The Public Employees Relations Commission, the appeals board for labor disputes, sided with the city. The unions are appealing the PERC ruling.

This year, the police union made its challenge on procedural grounds, prompting Miami City Attorney Julie O. Bru to label the ruling “more form than substance.” She supports Regalado’s call for an appeal.

Attorneys on both sides agree that the 17-year-old urgency statute is vague. It does not define “financial urgency” or say when the provision can be invoked. The law is also fuzzy on the process of declaring financial urgency, though in past practice, it has almost always been the city manager making the call.

Cynamon, the Miami-Dade judge, ruled that the Miami charter and city code “leave no doubt as to the necessity of the City Commission authorizing the declaration of financial urgency.”

“I always thought it should be up to the commission, since we are the ones who set the budget,” agreed Sarnoff.

It is too soon to say if the commission will have a chance to weigh in.

Both Regalado and Suarez have the power to call a special commission meeting, but neither had immediate plans to do so. The only other way for a special commission meeting to take place is to have three commissioners request it.

A third option: The commission could take up the issue at a Sept. 13 budget hearing.

Reacting to the ruling Monday, Commissioner Spence-Jones said: “Thank you, Jesus.”

Spence-Jones had wanted to raise taxes to avoid cuts to police, firefighters and other city employees.

Gort, however, pointed out that the commission has already settled on a tax rate slightly lower than last year’s. As a result, the city can only cut services, impose furloughs or layoffs, or negotiate concessions to balance the budget.

If the commission votes against urgency — or the city loses its appeal — the city and the unions would have to keep bargaining. Failing to reach agreement could wind up at impasse, further dragging out any resolution.

Should they fail to wrap things up before the October deadline, “The consequences are not Armageddon,” the mayor said, noting that the city would have to honor current contracts until new contracts could be negotiated, potentially widening the budget hole.

Robert Suarez, president of the firefighters’ union, said Monday’s ruling marked an important first step in what could be a long legal battle.

“This calls into question the entire practice of declaring financial urgency,” he said. “Hopefully, judges will start to see that this is a problematic law.”

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