Miami Springs is at loggerheads with its police union over a move to change retirement benefits. City Manager Ron Gorland has offered a deal that would decrease the amount officers pay toward their pensions in exchange for giving up other benefits. The union has called the move unfair.
BY THEO KARANTSALIS
SPECIAL TO THE HERALD
The clock is ticking as Miami Springs and the local police union try to reach an agreement over pension benefits by Sunday.
City Manager Ron Gorland has offered a deal that would decrease the amount officers pay toward their pensions from 17 percent of their salaries to 16 percent.
In exchange, the city has asked that officers who are members of the Police Benevolent Association alter their current Deferred Retirement Option Program, or DROP, which allows employees to technically retire but continue working while banking their pension.
The city wants cops to be precluded from accruing additional benefits under the pension plan, among other concessions.
But if an agreement is not made by Sunday’s deadline then what officers are calling a “crippling” contribution rate of 23 percent will go into effect starting Monday, Oct. 1, the start of the 2012 – 13 fiscal year.
"Totally unfair,” said Miami Springs Officer Oscar Garcia after the Monday’s meeting, which included a discussion about the police contract negotiations.
But Miami Springs’ mayor says the change in the pension and benefits system is necessary. Many municipalities across the country have struggled to make good on pension obligations that had minimum impact on city coffers during flush times, but which have become increasingly burdensome as the economy tanked.
“It’s not as easy as police officers make it seem,” said Mayor Zavier Garcia at an earlier budget meeting this month. “We know the system is broken and it needs to be repaired.”
Garcia and Councilman George Lobb voted to accept the Police Benevolent Association’s position, while council members Bob Best and Jennifer Ator voted against it.
“The cost is going up to residents for these pensions,” said City Manager Ron Gorland. “This is paid for by the taxpayers.”
The DROP program is a common for government employees but is unlike almost anything offered to private sector workers: It allows long-tenured employees to technically retire, but start receiving a pension into a tax-deferred savings account, while still working and cashing a paycheck.
Garcia, the union official, represents the city’s 38 officers.
He says that only three top-tier police officials will retire with more than 100 percent of their salary because they will be grandfathered in, and will continue to accrue benefits while in the DROP program.
“The city has attempted to change our pension plan all while bartering for the top three seniors officer’s in our department,” he said.
Tension came to a head last month when two dozen officers protested outside City Hall before a City Council meeting to express frustration with stalled contract talks and a rising percentage of their salaries being eaten up by pension contributions.
The PBA had initially proposed that the city raise taxes to cover the pension costs, saying the estimated $468,000 needed would come out to about $30 per homeowner over a three-year period.
Eligibility for DROP is attained once an officer reaches age 55 and has 10 years of continuous service or has completed 20 years of continuous service.
Officers can retire after about 29 years and receive their full working salary for the rest of their lives. The pay scale peaks at $67,660 the city’s police officers. Sergeants peak at $78,246.
The city has offered to slightly drop the amount officers would have to contribute for their share of the pension obligation.
That one percent drop would cost the city $178,200.
The collective-bargaining agreement between the city and the PBA’s 38 officers expired on Sept. 30, 2009. Since that time, both sides have operated under the old terms while trying to hash out a new contract.
The city has hired attorney Jim Linn, a noted Florida pension expert, for advice.
Gorland said that the city has not heard back from the PBA yet.
An attorney for the PBA said he reviewing the proposal and is in the process of drafting a response.