(WMC) - Memphis City Council approved the 2015 budget with massive cuts to employee and retiree health insurance.
Employees say they can't survive day-to-day with a 24 percent hike in health insurance premiums. Retirees say they can't live paying 100 percent of their premiums.
On the other hand, the city administration says the city's bank account will go bust, taxes will go up and city services will be cut, if they don't make adjustments to pay off pension debt and close the budget gap.
Union leaders say the city puts projects like the bike lanes before employees.
"We've got to have a bike ride across the bridge for $2 million? When we're treating our employees like this? Who in the hell is going across the bridge on a bike? Some idiot! I know somebody's going to get mad about that, but I'm sorry," said Memphis Fire Association President Thomas Malone.
The city administration says citizens benefit most in the long run.
"We can start thinking about things we can do to really make our city great from the neighborhood level up, so we won't be going from fiscal crisis to fiscal crisis," said Memphis City CAO George Little.
Residents get no tax hike. Active employees: no pay raise. The cuts save taxpayers $26 million a year. Employee health care premiums increase 24 percent. Overall savings pay down pension debt and lower the budget gap, while some retirees will now pay 100 percent of their premiums.
The cuts offer a sustainable budget curbing growing liabilities. Employed spouses are cut from the city's health plan. Money saved will restore fire and police academy classes, but the union says it'll be harder to recruit/retain employees.
Money saved will be used on blight and street repair. The smoker surcharge nearly triples.
"We do value our employees. We do want to attract and retain employees, but we've got to do it in a way we can afford it and sustain it," said Little.
The city says they'll work with people to minimize the impact of the cuts; that starts in January.
Both the fire and police unions say their members have been calling all Wednesday to get assistance for their exit strategy.
"The phone has been off the hook today," said Memphis Police Association President Mike Williams. "We don't get paid commensurate with the civilian sector for the job we do. So if you don't have the pension, if you don't have health care, why are you here putting your life on the line?"
Williams says officers stand at death's door every day and some feel that threat is not worth the return.
"This is a combat zone out here. It's a war zone," he said.
Little says the city will have to deal with collateral damage from the cuts to avert a tax hike or cuts to city services.
"There may be a transitional period. We'll just have to see how that goes," he said. "A lot of other cities are going through real changes in terms of being able to attract and retain particularly in public safety, so we are not alone and I think we'll be competitive."
The savings are supposed to help make the pension fund whole, pay down debt and allow for more neighborhood investment. Pension reform is the next big battle in the coming weeks.
Meanwhile, union and retiree leaders are considering a lawsuit.