Miami Beach police contract, pension savings threatened
Miami Beach learned Thursday that millions in pension savings will be delayed until approved by voters.
By David Smiley
Millions of dollars in pension savings for the city of Miami Beach were further delayed and jeapordized this week after the city lost decisions in two key legal battles over its police union contract and pension reform proposals.
On Thursday, Circuit Judge Gisela Cardonne Ely ruled that pension reforms agreed to last summer by the city’s police and firefighter unions and then passed into law can not be implemented unless voters approve them in a referendum.
The city had hoped the benefit changes would save the city millions, including $1.2 million this fiscal year. But Stephen Cypen, attorney for Miami Beach’s police and firefighters pension fund, said in November that only a voter referendum or a judicial order would allow changes to the laws governing pension plans.
Cypen suggested at the time that the city piggyback on the two recent mayoral recall elections in order to avoid a special election, which can cost several hundred thousand dollars. But at the advice of City Attorney Jose Smith, commissioners decided to sue the pension board, hoping a judge would force the board to quickly implement the benefit changes.
Now the city can appeal or hold a referendum.
“They had two opportunities to get on the ballot with the county, which would have saved them a quarter million dollars,” Cypen said, noting that an appeal would be a costly and lengthy process.
But even a voter referendum may not be enough to enact the city’s pension reform proposals for its police and firefighters pension plan, which is estimated to cost the city $35 million in the next budget year.
That’s because a state hearing officer said Wednesday that the city’s current contract with the Miami Beach Fraternal Order of Police — in which pension reforms were negotiated — should be considered invalid and subjected to another union vote.
According to Hearing Officer Jeffrey Chatham, the police union’s contract was changed after union members voted to approve it. Chatham wrote that Miami Beach administrators and union leaders ommitted a requirement that members would pay an extra 5 percent of their salary toward healthcare when the union voted on the contract in August 2010, and added the stipulation days later.
After realizing an extra 5 percent was coming out of their salaries, 20 union members filed complaints with the state’s Public Employees Relations Commission, or PERC.
The city and union president Sgt. Alejandro Bello argued that union members were repeatedly told before the vote about the healthcare contribution, and the ommission of the new requirement was an accident.
But Chatham recommended that PERC order the city’s police union to vote again on its contract. If members vote the contract down, the city and FOP would go back to the bargaining table.
Bello and Smith said they are objecting to Chatham’s recommendations.
Still, the possibility of the police union contract’s becoming void is problematic.
Without a contract, a vote on pension reforms could also be invalid because voters would be casting ballots on reforms negotiated in a contract that was deemed illegitimate. And while millions in pension savings continue to go unrealized, Smith said it’s possible — though unlikely — that the city could be forced to give back the extra healthcare contribution made by the union’s 360 members.
Said Smith: “We have to regroup and see where we go from here.”
Read more: http://www.miamiherald.com/2011/08/04/2345762/miami-beach-police-contract-pension.html#ixzz1UZ7t0aXi