NEW ORLEANS (AP) - Mayor Mitch Landrieu and firefighters announced a deal Friday to end a 35-year-old dispute over millions of dollars in back pay and pension payments - but voters must also approve a property tax increase to fund the settlement.
At a news conference in City Hall, Landrieu and firefighters stood side by side to announce the agreement.
Getting a deal done has been a priority for Landrieu, who faced weekend house arrest after a state judge found his administration in contempt of court for not paying firefighters.
“After decades of gridlock, court battles and uncertainty for our firefighters and for taxpayers, together we have solved this problem hopefully once and for all,” Landrieu said.
Under the deal, firefighters would receive $75 million in back pay over 13 years. At the same time, the city would restructure a financially troubled firefighters’ pension fund. The deal calls for $15 million to be paid to firefighters next year and the rest over 13 years.
To pay for the settlement, the city plans on asking voters in April to approve a property tax increase of 2.5 mills. If approved, the millage would mean an approximate increase of just over $2 per month or $25 per year for a taxpayer with a home valued at $100,000 and about $4 per month or $50 per year for a $200,000 home, Landrieu spokeswoman Sarah N. McLaughlin wrote in an e-mail. The city said the tax increase would bring in about $7.5 million a year. The millage would expire after 13 years, officials said.
Landrieu had little choice but to make a deal after courts ruled against his administration.
In August, Civil District Court Judge Kern Reese ordered the city to come up with a plan for paying city firefighters the $75 million - plus $67 million in interest.
After the city failed to come up with a plan, Reese threatened Landrieu with weekend house arrest in September. A few days later, the Louisiana Supreme Court issued a stay.
The fight dates to 1979, when firefighters sued the city for back pay they say was owed them under a 1968 state law giving firefighters annual raises based on their years of service.
Since 2006, firefighters have been paid the proper amount but about 1,100 firefighters were still owed, according to the New Orleans Firefighters Local 632, which has led the fight. The firefighters also were seeking the $67 million in interest.
Successive city administrations balked at paying the back pay.
“We inherited this mess,” Landrieu said Friday.
The deal also calls for overhauls to the firefighters’ pension system, which has run into financial trouble and is the subject of a separate lawsuit brought by firefighters.
Civil District Judge Robin Giarrusso ordered the city to pay millions into the firefighters’ pension to make up for years of partially missed payments.
Under the deal, the city said it would satisfy the $21 million it owes the pension fund by making its annual contribution to the fund. Landrieu said the changes would save between $200 million and $300 million over the next 30 years and keep the pension fund solvent.
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