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Mitch Landrieu says the city is close to a deal with firefighters
New Orleans Mayor Mitch Landrieu speaks during a press conference next to New Orleans Fire Department Superintendent Timothy A. McConnell at City Hall in New Orleans on Friday, September 11, 2015. Landrieu avoided house arrest with a last-minute court ruling. (Photo by Brett Duke, Nola.com | The Times-Picayune) (BRETT DUKE)
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on October 15, 2015 at 10:29 AM, updated October 15, 2015 at 10:50 AM
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Despite a flurry of last-minute talks, New Orleans firefighters and Mayor Mitch Landrieu were unable to resolve their long-running dispute before the administration presented its budget Thursday morning (Oct. 15). The two sides seemed closer than ever, but Landrieu said that if no deal is found today, he would turn his attention to other things and let the courts settle the matter.
Even as his lawyers were going back and forth with the firefighters Wednesday, Landrieu said that he had had enough. "I can't keep talking about that with them. We either have to resolve it, or we have to wait for the (Louisiana) Supreme Court to rule," he said, referring to the firefighters attempt to have him put on house arrest for failure to pay nearly $100 million in outstanding court judgments. "If we get past (the budget presentation) and this thing is not resolved, then it won't be resolved for the next couple years... It's going to the back of the line, and it will have to wait for the next guys to come in ... It's highly unlikely that we will talk about it again unless a judge forces us to do it."
The city owes firefighters $75 million from a court judgment issued last year, the culmination of a decades-long legal fight over state-mandated raises that previous administrations were required to implement but never did.
In a separate case, the city still owes the firefighters' pension fund $21 million, money Landrieu shorted the system during the first several years of his administration.
The mayor doesn't dispute that the money is owed, but he has vowed not to pay a penny unless the firefighters agree to an overhaul of their retirement benefits.
Since the city's assets are immune from seizure, the firefighters have twice moved to have the mayor and City Council held in contempt. In one of the cases, they succeeded in having him placed on weekend home confinement, but the Supreme Court swooped in and set the penalty aside while it decided whether it was legal to hold the mayor personally accountable for failure to satisfy the city's legal debts.
It was unclear Wednesday what was holding back a deal.
As today's deadline loomed, they appeared to be close to terms on how to satisfy the legal debts. Previous talks centered around a down payment of some kind to be followed by annual payments, funded through the levy of a 2 mill property tax. Since the issue came down to haggling over the particulars, it seems unlikely the debts proved to be the sticking point.
More probably, the two sides are stuck on changes to the firefighters' retirement plan, which calls for workers to accrue each year a small percentage of their final salaries until, after 30 years, they can retire with their full salary.
The city claims that firefighters have for years been inflating their pension benefits through a fanciful reading of state law. Not only did the city want future benefits to be calculated according to a strict reading of the statute, which would result in dramatically slower accrual of pension benefits, the administration said it wanted money recouped from former firefighters that collect allegedly overgenerous retirement checks.
That put firefighter union leaders in a tight spot.
Pension cuts would hit everybody, to a degree. Older firefighters would see their pensions reduced and younger firefighters would have to work longer in order to max out their pension benefits. On the other hand, collection of the $75 million back-pay settlement would benefit predominantly older and retired firefighters, since the case stems from wages lost decades ago. For many, a small dip in their pensions would be more than made up for by their share of the settlement. New firefighters, meanwhile, won't see a nickel of the settlement money.
If the union bosses accepted a deal that saw payment of the $75 million judgment in exchange for deep pension cuts, they would be seen as sacrificing young members' retirements so graybeards, some of whom are owed $100,000 or more, could enjoy a nice payday.
With Landrieu declaring his intention to walk away from further talks if there's no deal today, the firefighters are under pressure to either accept terms or roll the dice in the courthouse.
Even as his lawyers were going back and forth with the firefighters Wednesday, Landrieu said that he had had enough. "I can't keep talking about that with them. We either have to resolve it, or we have to wait for the (Louisiana) Supreme Court to rule," he said, referring to the firefighters attempt to have him put on house arrest for failure to pay nearly $100 million in outstanding court judgments. "If we get past (the budget presentation) and this thing is not resolved, then it won't be resolved for the next couple years... It's going to the back of the line, and it will have to wait for the next guys to come in ... It's highly unlikely that we will talk about it again unless a judge forces us to do it."
The city owes firefighters $75 million from a court judgment issued last year, the culmination of a decades-long legal fight over state-mandated raises that previous administrations were required to implement but never did.
In a separate case, the city still owes the firefighters' pension fund $21 million, money Landrieu shorted the system during the first several years of his administration.
The mayor doesn't dispute that the money is owed, but he has vowed not to pay a penny unless the firefighters agree to an overhaul of their retirement benefits.
Since the city's assets are immune from seizure, the firefighters have twice moved to have the mayor and City Council held in contempt. In one of the cases, they succeeded in having him placed on weekend home confinement, but the Supreme Court swooped in and set the penalty aside while it decided whether it was legal to hold the mayor personally accountable for failure to satisfy the city's legal debts.
It was unclear Wednesday what was holding back a deal.
As today's deadline loomed, they appeared to be close to terms on how to satisfy the legal debts. Previous talks centered around a down payment of some kind to be followed by annual payments, funded through the levy of a 2 mill property tax. Since the issue came down to haggling over the particulars, it seems unlikely the debts proved to be the sticking point.
More probably, the two sides are stuck on changes to the firefighters' retirement plan, which calls for workers to accrue each year a small percentage of their final salaries until, after 30 years, they can retire with their full salary.
The city claims that firefighters have for years been inflating their pension benefits through a fanciful reading of state law. Not only did the city want future benefits to be calculated according to a strict reading of the statute, which would result in dramatically slower accrual of pension benefits, the administration said it wanted money recouped from former firefighters that collect allegedly overgenerous retirement checks.
That put firefighter union leaders in a tight spot.
Pension cuts would hit everybody, to a degree. Older firefighters would see their pensions reduced and younger firefighters would have to work longer in order to max out their pension benefits. On the other hand, collection of the $75 million back-pay settlement would benefit predominantly older and retired firefighters, since the case stems from wages lost decades ago. For many, a small dip in their pensions would be more than made up for by their share of the settlement. New firefighters, meanwhile, won't see a nickel of the settlement money.
If the union bosses accepted a deal that saw payment of the $75 million judgment in exchange for deep pension cuts, they would be seen as sacrificing young members' retirements so graybeards, some of whom are owed $100,000 or more, could enjoy a nice payday.
With Landrieu declaring his intention to walk away from further talks if there's no deal today, the firefighters are under pressure to either accept terms or roll the dice in the courthouse.
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