“You don’t see other municipalities allowing an arbitrator do their bargaining going forward — instead of getting a two-year result, they let the arbitrator decide on a seven-year deal,” McLaughlin said, “and they knew there would be a huge fiscal penalty for that. The reason I voted against it in the beginning is that I feel it was political payback.”

In May, PBA President Kenny Apple and other officials said that an agreement that the previous Republican-led administration rejected in 2010 would have saved the city considerably more money. Apple could not be reached for comment on Wednesday.

“[The PBA was] without a contract for five years and this is what the arbitrator awarded,” Schnirman said after Tuesday’s City Council meeting, adding that the budget includes contingency funds to cover costs associated with the contract. “The current budget that we’re in was prepared for this potential award. As mandated by the arbitrator, the award is bondable.”

A ‘manageable debt position’

The announcement of the proposal on Tuesday came on the same day that Schnirman said Moody’s Investors Service reaffirmed the city’s Baa3 bond rating, a credit rating outlook that it had revised in September from negative to stable, which led the city to lift its declaration of a fiscal crisis.

The agency said that it expects the city’s debt burden to remain manageable, given limited near-term borrowing plans, and that the city’s debt is being retired at an above average rate. Moody’s also said that fiscal 2013 marked the first balanced budget the city had implemented in years,
with revenues and expenditures closer to historical results.

“They cited our strengths, our improved financial controls and policies leading to balanced budgets, our manageable debt position, and the positive fact that the fiscal 2014 budget is structurally balanced, without the use of one-time revenues for expenditures and includes a continuing reduction in the city’s accumulated deficit,” Schnirman said, adding that the agency took into account that the boardwalk project is being fully funded by the federal government. “Moody’s stable outlook reflects the significant changes and management practices and budgeting over the past two years.”