Budget savings in Miramar

This is what I was talking about in my previous posting. Good news indeed.

Miramar ends retiree health benefits for new hires

Decision expected to save $1.5 million over five years

By Jennifer Gollan | South Florida Sun-Sentinel June 12, 2008

MIRAMAR - Responding to the burgeoning cost of retiree health benefits for municipal workers, Miramar on Wednesday joined a growing list of cities no longer offering the perk to new hires.

"It is something that we are more or less forced to do," Commissioner Troy Samuels said after Tuesday night's vote. "Eventually, all other cities in the county are going to have to follow similar measures as they react to property tax reform."

The policy change follows a South Florida Sun-Sentinel analysis of the ballooning cost of retiree health benefits. In Broward County, as of six weeks ago, 19 municipalities offered those benefits to new hires or officials, or both, at a cost of more than $11 million this fiscal year.

Pembroke Pines and Dania Beach have stopped offering the retiree benefits to some or all new hires. Plantation suspended benefits for elected officials retiring after December 1995.

Now Coconut Creek, Sunrise and Hollywood are considering following suit.

"We have asked for concessions from the unions for existing employees and for new hires," said Raelin Storey, a Hollywood spokeswoman.

Sunrise Deputy Mayor Roger Wishner said he will request a thorough review of employee perks this month.

"It is a long-term burden. Based on the long-term decreases in revenue, we have to look at every penny we can save," he said. "The days of giving money away through these agreements are over."

Sagging property values and voter-mandated tax reform are forcing all cities to scrutinize their budgets, looking for ways to trim.

In Miramar's case, the 2008-09 spending plan will be 9 percent leaner than this year's $102 million general fund budget. It faces a $7 million hit from tax reform and declines in property tax revenue.

The city's decision to cut benefits, approved unanimously by the commission, is expected to save about $1.5 million over five years, Samuels said. In addition to not offering retiree health insurance benefits to new hires, the city decided current employees no longer will accumulate credit for retiree health benefits. Government watchdogs lauded the benefit cutbacks.

"It is long overdue," said Dominic Calabro, president of Florida TaxWatch, a nonprofit government watchdog based in Tallahassee that supports slicing the benefits. "Because we have had substantial liabilities in these cities, levels of services had to be compromised to pay these excessive employee benefits."

Broward municipalities that have no plans to eliminate the benefits for new hires include Cooper City, Coral Springs, Hillsboro Beach, Lauderdale-by-the-Sea, Lighthouse Point, Margate, North Lauderdale, Pompano Beach, West Park and Weston.

Some officials argue that retiree benefits attract more-qualified workers.

"Our city has some of the best department heads and employees in the state, and I believe these benefits help attract them," Coconut Creek Mayor Becky Tooley said. "Can we keep it up forever? I don't know, but I would like to try as long as we can."

Miramar will spend about $275,585 this fiscal year to provide 51 retirees with health benefits. But city commissioners said it would be too costly in the future, given longer life expectancies, escalating health insurance premiums and a new accounting rule requiring local governments to disclose the value of health benefits for active employees and retirees.

As part of the cost-cutting package, commissioners also voted to require employees with take-home vehicles to reimburse the city for the gas they use for personal trips. Police and fire employees are exempted. The measure is expected to save the city as much as $60,000 annually.

"This was just one of the many painful cuts in the crisis that we are finding ourselves in," Commissioner Carl Lanke said.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
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