Miami imposes "financial urgency" in union bargaining

Reuters News
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Posted: Jul 28, 2012 2:41 PM
Miami imposes "financial urgency" in union bargaining

(Reuters) - Miami officials declared "financial urgency" in a bid to get $40 million in labor concessions from police, firefighters and other union workers, using a Florida law that allows the city to unilaterally alter union contracts, according to media reports.

The declaration in a letter by City Manager Johnny Martinez on Friday was the fourth in four years by the administration of Mayor Tomas Regalado, who has said staff costs had to be cut again because they account for nearly 80 percent of the city's $485 million operating budget for the next fiscal year.

Regalado also has recommended $20 million of other spending reductions. On Thursday, city commissioners voted to keep local property taxes unchanged.

Miami officials were not immediately available on Saturday but published news reports quoted Martinez as saying city officials expected to resume negotiations with unions for police, firefighters, sanitation crews and administrative workers within two weeks.

Regalado resists calls for increases in local property taxes and argues that austerity would encourage outside investment and migration, and leave the city of 410,000 well placed.

"We want to be partners and not adversaries; we want to be a family that works for the city of Miami," Regalado said on Thursday.

Miami officials are pushing for the concessions from the city's four government workers' unions as part of a plan to plug a $60 million gap. Pension contributions, overtime limits for firefighters and higher health insurance contributions are among the city's proposals.

Part of the budget shortfall is caused by the scheduled expiration of temporary concessions made last year by police and other unions.

Labor leaders told city commissioners on Thursday that Miami's unions had made substantial give-backs to help ease financial pressure on the city. Firefighters have said their pay has been reduced by 35 percent in recent years.

Stung especially hard by the U.S. housing collapse, Miami used Florida's financial urgency law in May 2010 to change labor terms that saved the city $80 million. Other Florida cities, like nearby Hollywood, also have used the law to force pay cuts on government workers.

On Wednesday, Moody's Investors Service put $669 million of Miami's debt on review for possible ratings cuts after federal regulators determined that city officials had misled bond investors about its finances.

Other leading ratings groups, Standard & Poor's and Fitch, said their analysts were closely watching the inquiry by the U.S. Securities and Exchange Commission but would take no immediate ratings actions on Miami's debt.

"While Fitch is concerned about the costs and potential operational disruptions associated with the ongoing investigation, recent financial results indicate some modest improvement in the city's overall financial position," Fitch said in written statement.

(Reporting By Michael Connor; Editing by Bill Trott)