07-01-2009, 02:09 PM
Hollywood commissioners likely to approve firefighters' pay contract
Hollywood commissioners are set to vote on a new contract and proposed pension changes for its fire union.
BY BREANNE GILPATRICK
BGILPATRICK@MIAMIHERALD.COM
As Hollywood commissioners weigh shutting parks, delivering pink slips and hiking the tax rate to close a $22 million budget gap, they are poised to approve a union contract ensuring steady pay raises and solid pension benefits to city firefighters.
The proposed contract, set for a vote Wednesday, would give firefighters a 2.5 percent cost of living adjustment each year for the next three years -- on top of raises they already received for promotions and long-term service. A separate pension agreement guarantees a minimum rate of return to employees, regardless of how well the market does.
Critics say the contract, even with its generally modest increases, comes at a time the city cannot afford it and puts a spotlight on escalating government pension costs.
Yet supporters say it isn't fair to balance the budget on the backs of firefighters, and that the contract includes some of the largest union concessions in recent history.
''On paper, some of these concessions don't look like much, but when you do the math, they're huge,'' said Russ Chard, who represents the city fire union. ``These are huge, huge sacrifices to help bring the city's costs down.''
Employees will pay an additional $10 per month for health insurance. And for new employees, starting pay will drop 14 percent, falling to roughly $34,900 a year. New hires who later enter the popular Deferred Retirement Option Program will also be guaranteed a smaller return on their pension investments.
But others say the proposed contract and pension changes don't go far enough. The benefits are still more generous than most private sector jobs, where workers have faced layoffs, watched retirement accounts plummet and had their pay frozen or cut.
''We're making some small gains on some issues,'' said Commissioner Beam Furr, a longtime critic of the city's union contracts. ``The problem is, we need to make larger gains. I don't think the gains are enough to make this a sustainable plan. Right now, it's kind of in freefall.''
Hollywood has been negotiating with its fire union for about a year and a half. Talks continue with the general employee and police unions -- so the fire contract vote could be a prelude to the outcome of those negotiations.
A hot button issue has been the city's pension plan, fostering a debate that comes as cities throughout South Florida struggle with soaring pension costs growing at a rate far exceeding their budgets.
In Hollywood, the city will need to contribute $9.2 million to its firefighter pension fund in the upcoming fiscal year, according to an October 2008 actuarial report. That number is more than double what the city contributed five years earlier.
Employee contributions over that same period remained fairly steady.
While pensions have disappeared from large portions of the private sector, the Hollywood fire union plan guarantees an 8 percent annual return for retirees currently in the Deferred Retirement Option Program, also called DROP. So, in bad years, the city must contribute additional money to offset the shortfall.
''It's a steady return no matter what the market does,'' said Hollywood resident Sara Case. ``I don't think the city has any business doing that given that our financial situation is so shaky.''
Some cities have taken steps to reduce their pension costs. For example, in Fort Lauderdale new general employees now have retirement plans where employees contribute most of the money. And several cities in Miami-Dade have reached agreements to move some of their unions into the state's larger retirement system, which tends to be more stable.
In addition to the fire union contract, Hollywood commissioners are set to vote on changes to the firefighter pension plan that would cut the rate of return for employees in DROP to 6 percent for current employees who haven't yet entered the program, and to 4 percent for future employees.
Critics want the city to make more radical changes, like moving new employees to the state retirement plan or creating a plan tied to market performance.
But supporters point out state law generally prohibits cities from taking away pension benefits they have previously approved, leaving no quick fix for pension costs.
Commissioners planning to vote in favor of the contract and the pension changes say the fire union already agreed to sacrifices.
''We can't balance our budget on one department's back, and they cut to the bare bones already,'' Commissioner Fran Russo said. ``We could have always asked for more, but they gave up more than they ever have before.''
Hollywood commissioners are set to vote on a new contract and proposed pension changes for its fire union.
BY BREANNE GILPATRICK
BGILPATRICK@MIAMIHERALD.COM
As Hollywood commissioners weigh shutting parks, delivering pink slips and hiking the tax rate to close a $22 million budget gap, they are poised to approve a union contract ensuring steady pay raises and solid pension benefits to city firefighters.
The proposed contract, set for a vote Wednesday, would give firefighters a 2.5 percent cost of living adjustment each year for the next three years -- on top of raises they already received for promotions and long-term service. A separate pension agreement guarantees a minimum rate of return to employees, regardless of how well the market does.
Critics say the contract, even with its generally modest increases, comes at a time the city cannot afford it and puts a spotlight on escalating government pension costs.
Yet supporters say it isn't fair to balance the budget on the backs of firefighters, and that the contract includes some of the largest union concessions in recent history.
''On paper, some of these concessions don't look like much, but when you do the math, they're huge,'' said Russ Chard, who represents the city fire union. ``These are huge, huge sacrifices to help bring the city's costs down.''
Employees will pay an additional $10 per month for health insurance. And for new employees, starting pay will drop 14 percent, falling to roughly $34,900 a year. New hires who later enter the popular Deferred Retirement Option Program will also be guaranteed a smaller return on their pension investments.
But others say the proposed contract and pension changes don't go far enough. The benefits are still more generous than most private sector jobs, where workers have faced layoffs, watched retirement accounts plummet and had their pay frozen or cut.
''We're making some small gains on some issues,'' said Commissioner Beam Furr, a longtime critic of the city's union contracts. ``The problem is, we need to make larger gains. I don't think the gains are enough to make this a sustainable plan. Right now, it's kind of in freefall.''
Hollywood has been negotiating with its fire union for about a year and a half. Talks continue with the general employee and police unions -- so the fire contract vote could be a prelude to the outcome of those negotiations.
A hot button issue has been the city's pension plan, fostering a debate that comes as cities throughout South Florida struggle with soaring pension costs growing at a rate far exceeding their budgets.
In Hollywood, the city will need to contribute $9.2 million to its firefighter pension fund in the upcoming fiscal year, according to an October 2008 actuarial report. That number is more than double what the city contributed five years earlier.
Employee contributions over that same period remained fairly steady.
While pensions have disappeared from large portions of the private sector, the Hollywood fire union plan guarantees an 8 percent annual return for retirees currently in the Deferred Retirement Option Program, also called DROP. So, in bad years, the city must contribute additional money to offset the shortfall.
''It's a steady return no matter what the market does,'' said Hollywood resident Sara Case. ``I don't think the city has any business doing that given that our financial situation is so shaky.''
Some cities have taken steps to reduce their pension costs. For example, in Fort Lauderdale new general employees now have retirement plans where employees contribute most of the money. And several cities in Miami-Dade have reached agreements to move some of their unions into the state's larger retirement system, which tends to be more stable.
In addition to the fire union contract, Hollywood commissioners are set to vote on changes to the firefighter pension plan that would cut the rate of return for employees in DROP to 6 percent for current employees who haven't yet entered the program, and to 4 percent for future employees.
Critics want the city to make more radical changes, like moving new employees to the state retirement plan or creating a plan tied to market performance.
But supporters point out state law generally prohibits cities from taking away pension benefits they have previously approved, leaving no quick fix for pension costs.
Commissioners planning to vote in favor of the contract and the pension changes say the fire union already agreed to sacrifices.
''We can't balance our budget on one department's back, and they cut to the bare bones already,'' Commissioner Fran Russo said. ``We could have always asked for more, but they gave up more than they ever have before.''