Budget woes threaten police and firefighters' compensation in Grand Rapids
GRAND RAPIDS, Mich. (NEWSCHANNEL 3) – Grand Rapids is West Michigan's largest city, and it's currently sinking in debt.
If the city runs out of money, city parks and streets, and the repairs they need, will be in jeopardy.
When the current fiscal year ends, Grand Rapids will be almost $2.5 million in the hole.
Cutting benefits to police and fire departments could save a lot of money, but the city won't be able to pass such measures without a fight.
On Tuesday, Grand Rapids' Mayor George Heartwell led a commission retreat to talk about the reality of the years ahead. Meanwhile, the unions are at the bargaining table with the city, but so far they haven't conceded anything.
City leaders know that Grand Rapids will have to tighten its belt again soon. The mayor says the $20 million in painful budget cuts passed in 2009 are just a prelude to what's to come if things don't change.
“The worst case scenario is that we will have fully used up any resources that we have and be in a deficit situation by mid-2013,” said Mayor Heartwell.
The mayor and city manager say employee pensions make for a bleak budget forecast, growing while revenues decline.
“The number one thing driving the cost for our employees right now is our pension costs,” said city manager Greg Sundstrom. “They're on trajectory to rise to be 27 percent of the employee wages.”
The city is currently bargaining with all twelve of the unions representing city workers, asking for a ten percent benefit reduction by December 31st so that the current budget doesn't bounce.
“They city's budget is based on an assumption we will lower the total cost of compensation that is the total cost for all wages and benefits for all of our employees by ten percent,” said Sundstrom.
Mayor Heartwell says it's critical that police and firefighters concede those benefits because they make up two-thirds of the budget, a statistic that will grow to 75 percent in the coming years.
However, the president of the Grand Rapids Police Officers Association, David Leonard, says they city's request for a ten percent total compensation reduction is unfair and “more drastic than what other comparable communities have had to endure.”
The mayor insists the concessions are necessary.
“When we look out five years, that is 75 percent of the city's budget is consumed by police and fire,” said Mayor Heartwell. “You know you got to go where the money is, you got to start with police and fire.”
The president of the Grand Rapids Employees Independent Union, Phil Pakiela, says at this point they are negotiating with the city and hope to be able to find some acceptable middle-ground for a compromise.
