Full Text: Ministry of Finance Letter To BTUC

January 26, 2015

The full text of a letter sent by the Ministry of Finance to the Bermuda Trade Union Congress [BTUC], on Friday [Jan 23]  has been revealed, with the letter saying if the BTUC “are unable to agree to continue the furlough, the Government will be forced to take steps to achieve the necessary reductions in expenditures” which “could include a reduction in salaries of Government Employees.”

The letter begins by saying, “The Government is grateful for the collaborative work of the Bermuda Trade Union Congress, as part of the Budget Reduction Working Group, to find savings in Expenditure for the 2015 – 2016 Budget. Your efforts realized proposals for savings of approximately $35 million.”

“You would be keenly aware that the 7% reduction achieved for the current budget year was only achieved with the inclusion of a furlough day for Government employees,” the letter continued. “It is imperative that this furlough be continued in order for Bermuda’s financial health to be improved in accordance with the Medium Term Expenditure Framework.

“You would also be aware that the Government is required to present a budget to Parliament, have it debated, and approved by both Houses of the Legislature in order for any funds to be expended after 31st March, 2015. To be clear, unless a budget is approved as described by that deadline, the Government will not be able to operate, requiring all services to be suspended and all staff to be sent home, unable to be paid.

“In order to meet the 31st March, 2015 deadline, the budget development process must conclude with immediacy. To this end, we invite you to reconsider your position with regard to continuation of the furlough.

“If you are unable to agree to continue the furlough, the Government will be forced to take steps to achieve the necessary reductions in expenditures for 2015-16. Such measures could include a reduction in salaries of Government Employees equal to the savings achieved in the current financial year by the furlough.”

The letter resulted in the BTUC calling a membership meeting today, and for our live blog covering today’s Union meeting please click here.

The full text of the letter is below:

Government of Bermuda
The Ministry of Finance
Ministry of Finance Headquarters
23rd January, 2015

Mr. Chris Furbert
1st Vice President
Bermuda Trade Union Congress
P. O. Box HM 2080
Hamilton HM HX

Dear Mr. Furbert:

Re:

The Government is grateful for the collaborative work of the Bermuda Trade Union Congress, as part of the Budget Reduction Working Group, to find savings in Expenditure for the 2015 – 2016 Budget. Your efforts realized proposals for savings of approximately $35 million. Based on the Government’s agreement to the Working Group’s proposals on an early retirement programme, a freeze on hiring (with exceptions) and reductions in the rates of overtime, a further $5 million is estimated to be saved in addition to the amount recognized by the Working Group. Clearly, this collaborative approach has been fruitful, realizing an estimated $40 million, and the Government is appreciative of your willingness to work together for the good of Bermuda.

As you are aware, in an effort to improve Bermuda’s fiscal condition, the Government has established a Medium Term Expenditure Framework, which requires us to reduce our Government expenditure by 7%, 5% and 3% in successive years. In order to achieve the necessary targets, the savings achieved in each year must be maintained in the next years. You would be keenly aware that the 7% reduction achieved for the current budget year was only achieved with the inclusion of a furlough day for Government employees. It is imperative that this furlough be continued in order for Bermuda’s financial health to be improved in accordance with the Medium Term Expenditure Framework.

You would also be aware that the Government is required to present a budget to Parliament, have it debated, and approved by both Houses of the Legislature in order for any funds to be expended after 31st March, 2015. To be clear, unless a budget is approved as described by that deadline, the Government will not be able to operate, requiring all services to be suspended and all staff to be sent home, unable to be paid.

In order to meet the 31st March, 2015 deadline, the budget development process must conclude with immediacy. To this end, we invite you to reconsider your position with regard to continuation of the furlough. If you are unable to agree to continue the furlough, the Government will be forced to take steps to achieve the necessary reductions in expenditures for 2015-16. Such measures could include a reduction in salaries of Government Employees equal to the savings achieved in the current financial year by the furlough.

We invite your serious consideration of this position and look forward to hearing from you as soon as possible. Given the urgency of the matter we respectfully request a decision on Monday, 26th January 2015 at 12:00 pm. (noon).

Sincerely,

[Signed]
The Hon. Everard T. Richards, JP. MP.
Minister of Finance

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  1. Politricks says:

    This is considered a rude letter?

    You Unioners are being played by your own leaders.

    • arthur conan doyle says:

      I agree – it is to the point but hardly rude. What is the real story here? The letter says the BTUC suggested savings of $37m. Have those been accepted – and Govt still wants furloughs?

      • Onion says:

        The $37m included the furloughs.

        • Claudio says:

          No they did not. Furloughs were only put forward this past Friday and they expected an answer by Monday, throughout negotiations extending the furloughs were never mentioned.

          • Guest27 says:

            Don’t know what union you deal with, but it was mentioned by BPSU.

          • Triangle Drifter says:

            You might want to actually read the letter paying particular attention to the second paragraph.

        • Tough Love says:

          Actually, the $40 million did not include the furloughs. Read the letter again.

          • Onion says:

            I see it now. So they need to save more than $37m per year.

            • Build a Better Bermuda says:

              That is correct, through the efforts of the work group, they were able to find a way to reduce $37m in the coming year, however that does not meet the targeted 5% reduction, so they have requested a continuance of the furlough day. As the unions were involved in the work group, it would be safe to presume that they would have known that the $37m was still short of the 5%, so it should not have come as a surprise to them that governement would seek a continuance to the furlough or to ask for some frame of cuts.

    • Jus' Askin' says:

      “Give it to Us” or “We’ll take it from You” sounds more than Rude to ME
      Does it really seem like OBA is giving them a choice?
      OBA sound like…. :-(

      • Politricks says:

        They did give them a choice to find 5% operational savings other than the furlough option.

        They failed to do so and thus the furlough option is still required.

        • Jus' Askin' says:

          If they are under funded from the beginning, how are they to make more cuts? ;-)

        • get it right says:

          Who’s they…you need to check your facts. The union did their part…now the Government is coming back for more.

          • Double D says:

            They were giving a mandate to find 5% savings. They didn’t. They failed to live up to their end of the bargain. So the Government is making up the difference they couldn’t achieve on their own.

            • scorpio says:

              Who Unions or Government department? Must Government departments out of 74 found their 5% in savings. Just make the other departments cut their budget.

      • theothersidebermuda says:

        In the private sector you don’t even get an ‘option’…you just walk in one day to find you’ve been cut.

    • david smith says:

      its idiots like you and all that like your comment as to why this island is going to hell. its time to shut this small little dot on the map down as all youi fools see are dollar bills.

      • Truthhertz says:

        Shut it down and you won’t have any dollar bills.

        • Mockingjay says:

          Wont be the first time.

        • ????? says:

          And neither would you. Then we will all be in the same boat.

          • Truthhertz says:

            My company will keep on going. We don’t rely on Government for our business.

        • david smith says:

          so because you have to eat ground beef a few nights a week instead of steak every night your crying/! there are people out here who don’t have money to even buy ground beef. its people like you who would turn up your nose because you where asked for $2 to feed someone but you would spend hundreds on a vet bill for a stupid lap dog. that’s why i say shut the island down so that we can all swim together when it sinks, remember, who feels it knows it.

    • Mockingjay says:

      I don’t see the reduced price in eggs and milk !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      • Triangle Drifter says:

        How much has your rent gone down? If you are not renting, how much has the value of your house gone down?

    • jt says:

      This letter is not rude, but labelling it rude shows the virtually impossible mind set govt is having to deal with.

  2. Family Man says:

    That’s it?

    That’s what all this work disruption was about? The continuation of a single furlough day per month?

    One day per month is NOT going to be enough.

    Out of every dollar the government spends, they collect only 80cents in taxes. They have to borrow the other 20cents. Out of every 80cents collected, 55cents goes towards paying salaries, benefits and pensions to the civil service. So more than half of all taxes collected go to paying their salaries and generous benefits package.

    The only way can pay our bloated civil service is to insist on one day PER WEEK.

    • Truth is stranger than Fiction says:

      Sounds like the government is continuing to ask all government workers to work off of minimum wage as if it’s not already hard out here enough with the current conditions. If they feel this way, why they don’t take the challenge and live off of minimum wage also since it shoudnt be such a big deal. If they can talk the talk they should walk the walk and cut their own salaries to make up that 35 million. Let’s see how they make out with a $40,000 annual salary.

      • sage says:

        Best comment yet.

      • Truthhertz says:

        Who makes $40k in the Government?

        I see all the civil service ads and never have I seen one stating that the salary is $40k.

        • get it right says:

          you need to wake up..learn about what your talking about…plenty people work at that salary…so this myth about being overpaid is untrue…we need to publish the government PS scale and have them report just how many people work at each level…

        • ????? says:

          Most Government workers make less than 50K go look it up

          • Truthhertz says:

            I tried and am going off of the ads in the paper I still haven’t seen a job offered by the Government at just $40k. Show me.

            Also, for the lower paid positions how much do they receive in overtime. I have a friends that make a killing (like double to triple time) for working outside of contracted hours. A lot of them actually hold off on the work until the overtime kicks in. I am sure not all do this, but there are some that do. Issues like that need to be addressed as they are bleeding our coffers dry.

        • david says:

          those who get paid in the first 5 PS salary grades. once again people talking about something they know nothing about. shut up and do your homework before commenting!

      • Guest27 says:

        Minimum wage? Your joking right?

      • turtle says:

        That is because the union doesn’t want give up lazy people on government that only go to work to heat the seat!!!!
        GET RIDE OFF THOSE PEOPLE!!

  3. Rhonnie aka BlueFamiliar says:

    Not rude, pretty matter of fact, and not at all surprising.

    Did the unions not expect this? And if not, why not?

  4. Islandguy says:

    I agree the proofs in the pudding, in the case the writting.Seems straight forward and respectable to me..

  5. Really? says:

    WOW!, just WOW! The wording of this letter suggests that no middle ground is possible, either maintain the status quo or you (Govt. workers) will get a spanking. I see trouble ahead.

    • Rhonnie aka BlueFamiliar says:

      Given the discussions leading up to the furlough days being agreed upon, where did you expect middle ground to be found?

    • Onion says:

      The math dictates that. Not the government.

      The OBA is trapped between a rock and a hard place.

    • LiarLiar says:

      The middle ground was the collaboration to find 5% savings. The Unions couldn’t do it and thus the middle ground is now the furlough.

      The Government isn’t asking anyone to take further cuts from what was agreed to in 2013. It is the exact same deal.

      Why are you guys so against saving Bermuda Government finances from complete decimation? Do you understand the consequences of continuing on with the status quo?

      • david smith says:

        saving finances you say?! talk to me about the tax payers money being spent on the America’s cup.

        • Truthhertz says:

          That one event alone is resulting in numerous new construction projects and new hospitality jobs alone. They will result in thousands of tourists flocking to our shores who more than likely wouldn’t have before. It will also create more Govt fees from increased economic activity and tourism.

          It will provide numerous benefits to our now depressed economy. Even Mr. Furbert and the PLP have acknowledged the inherent benefit that this event will produce.

          But if you guys don’t want it here then make your voices heard and have them change their minds about Bermuda. Then you can complain about how all the promises of new hotels and the like were false.

  6. bluebird says:

    The government has run out of “money” we cant keep “BORROWING “to pay the Government workers.
    We cant continue to live on other peoples money.
    we would not be in this position had it not been for the PLP/BIU
    $2BILLION waste of money.
    The Gravey train has run off the tracks.
    SO SUCK IT UP BTUC,IT IS NOW YOUR TURN,as the private sector has been doing for some years.

    • Jus' Askin' says:

      Ah we they still have $800 million ;-)

      • LiarLiar says:

        No it’s not.

        The $800 million has almost been halved and was originally designed to cover 3 years of budget deficits that this Government inherited. They borrowed the whole gamut one time to lock into the low interest rate environment and the impossibility of slashing the $330mn plus deficit in a short period of time.

        So it sounds as if you are advocating that the Government blow the rest of the amount one time and then do what? Borrow more?

        Please explain.

    • scorpio says:

      When did the private sector save government money? Government saved their ***** by giving them concessions on duty. So how long are the Government workers expect to take the cut? Years

      • jt says:

        The private sector pays for every government employee. The private sector will will also pay down every penny of our debt…if we are so lucky.

  7. bluebird says:

    We have 11,300 work permits issued,there plenty of space for the Government workers to find a “JOB”
    11,300 jobs available.

  8. Bermy Bud says:

    Soon it will just be government workers working then u will see who the REAL workers of Bermuda are!!!

  9. M.Smith says:

    Can someone help me by answering this… Are the Govt. Ministers taking a pay cut?.. What about reducing the ministers? How about Bob Richards who makes, or has made $354,000 and his company makes tons from Govt contracts.and is also making $ as the Deputy Premier… is he taking a pay cut?

  10. bluebird says:

    Money don’t grow on “TREES”
    Money comes from outside of Bermuda.

  11. Tony says:

    What the Unions haven’t grasped is that if a budget is not in place by March 31st, then the Government IS NOT ALLOWED to spend money. Thus, no-one will get paid. The Unions made it sound like a negotiation threat when in reality it isn’t.

    Just carry on doing what you did this year, that’s all Government are asking.

    • Unbelievable says:

      Right? How hard is this to understand?

    • get it right says:

      well when your struggling to feed your children, cant afford child care, cant afford clothes – thats bondage…and even prisoners have fixed sentences…we made a deal…we took one for the team and now we have to answer to this mess…clearly by these blogs we know who is struggling and who can afford to take this loss…

    • Theresa T says:

      Thats all???? Have you decided to do without a days pay a month?? Has any of us?? Have you made that sacrifice?? Dont think so!

      • Guest27 says:

        I have with the rest of the Civil Service. It’s what needs to be done. And no I am not at the top end of the pay scale.

      • Truthhertz says:

        If I go with out days pay the taxes the Government receives from my labor are smaller and thus the Government finance problem gets bigger.

        That is how payroll tax works Ms. T.

  12. Tough Love says:

    In the past months the unions said no to keeping the furlough days. This letter (not in person around the table, but sent a letter) is saying it’s either furlough days or no pay after March 31st.

    Why doesn’t the OBA understand that no means no?

  13. bdaman441 says:

    ‘Rude’ in that it was issued on a Friday with a response Required on Monday 12pm …and in case you aren’t clear that means in brackets (noon) < that's actually kind of __________ funny, insulting, unnecessary (your choice not limited to one)

    No mention of can we meet to discuss…with a view to having this resolved by xx date (allowing you to communicate to your members, govt workers, citizens of this country who contribute and have sacrificed over the past year)

    Yeah… rude like that.

    • Unbelievable says:

      bdaman441, This is not a new issue. This was on the cards for months!! The Unions are just stringing everyone along. The Govt has been waiting for an answer from the Unions for months. Now that’s rude!

      • Tough Love says:

        Actually furlough days weren’t included in the previous months talks. Why? Because the union heads said no.

      • bdaman441 says:

        Sorry but where is the mention of this “on the cards for months” timeline?

        If this has been “on the cards for months”, how come workers found out over the weekend? how come there is no mention of how long the furlough days will continue?

        Being strung along

        • Politricks says:

          Workers only found out over the weekends because their own Union leaders failed to keep them abreast of developments.

          Even Mr. Furbert stated on Friday that the working group has met no less than 8 times since October!

          Reading is key!

          • bdaman441 says:

            Agreed, reading is key….and I too HEARD Mr Furbert recount the number of meetings….

            Government also stated they were appreciative of the work done to this date by the working group collective….and they went on to say:

            “At this stage however we need to factor in possible savings from a furlough day or a furlough day equivalent.”

            At what stage….was it at the last meeting in December or was it Friday when the letter was sent?

            It clearly doesn’t look like unions kept the membership completely up to date nor does it appear that government was showing all of its cards either….seeing as there is NO timeline on how long continued furlough days have been on the discussion table nor any mention how much longer does the budget require for workers to endure salary cuts in the form of furlough days?

            You see the reason for my questions above were for clarity….(I didnt get all of the answers from reading) from clarity solutions can arise and everyone walks away from the table CLEAR on next steps.

            Seems questions stir emotions.

            **signs off…..sips water…skips the Kool Aid

            • Guest27 says:

              Let’s see. Bermuda is over $2 Billion in Debt. Add to that another few Billion $ in underfunded pensions and that equates to the huge problem we’re faced with. People need to realize that this debt is not going away anytime soon.

        • serengeti says:

          So is also ‘rude’ that the union gave the government 1 hour and 20 minutes to respond?

          • bdaman441 says:

            I’m pretty sure if a thinking Government presented a question Friday requiring answers for Monday, they were prepared for an answer to go left or right since that time.

            Do you think this is a thinking government?

            Are you saying both requests were rude? Or just the unions’ ?

          • Theresa T says:

            They followed the timeline they were given.

    • Politricks says:

      “The Government is grateful for the collaborative work of the Bermuda Trade Union Congress, as part of the Budget Reduction Working Group, to find savings in Expenditure for the 2015 – 2016 Budget”

      They have been in discussions since October! That is approximately 4 months!

      The Union leaders have been pushing this ultimatum and no collaboration lie since Friday.

      Like I said above you Unioners are being played by your leadership.

      • SMH says:

        Didn’t the union increase their fees by a large % while their members had to take pay cuts? Did Chris F and the other union leaders take a furlough day as well last year or did they received their full pay anyway? Just wondering how shared the sacrifice really is within the union or does this not apply to them?

        • animallover says:

          Yes they did an additional $2 per week per member. So maybe they can help some of these out of work people.

  14. Unbelievable says:

    If you can call a wildcat strike like today over a very simple, respectful and plain letter like this, BTUC/PLP/BIU, then you need to get some thicker skin.

    Jesus.

  15. Truthhertz says:

    I have received ruder bday cards.

  16. Dreadlocks says:

    The PLP caused all these licks!

  17. Bestford says:

    Perhaps as a demonstration of goodwill and solidarity with Government workers it is time for Members of Parliament to take a significant pay cut – say 25% – 50% – to show that they are willing to make the sacrifices that they are asking others to make.

    • serengeti says:

      In addition to the 10% cut they took after the OBA became the government to show goodwill and solidarity?

  18. Truthhertz says:

    Here is an interesting fact that I just came across on the net:

    - USA civil servants make up 0.9% of total population (2.8mn/315mn)
    - UK civil servants make up 0.7% of total population (448k/64mn)
    - Bermuda civil servants make up 8% of total population (5k/63k)

    I know it is not the civil servants fault, but who in the world allowed our public sector to become so bloated?! The worst part is if you even try to attempt to raise taxes to feed the civil service machine the private sector will tank some more and Government finances become worse.

    Good luck OBA. Should’ve lost the last election and allowed your predecessors to fix their mess. I find it disturbing that the culprits who allowed to get this bad somehow are seen as the good guys in this fight. Got to love politics and short memories of the electorate!

    • Triangle Drifter says:

      Short & very selective memories on what they do remember.

      They were warned. They were warned many times. Did they pay attention? Noooooo. Paula said that everything was going to be alright. They listened to what they wanted to hear. Bob Richards & the OBA did not know what they were talking about.

      Now they are all standing behind the BIU fan & something nasty is about to hit it.

    • SMH says:

      Civil Service is WAY more than 8%. you need to base it on % of taxpayers to get a clearer picture

      • Truth hertz says:

        Yeah I know. That was on total population. As a percentage of the working population it is closer to 15% and growing as the private sector shrinks and the public sector remains the same.

  19. Unbelievable says:

    The BIU is hell bent on bankrupting Bermuda. Then let’s see the PLP pick up the pieces.

  20. animallover says:

    I see by the letter from the Ministry that they only want to continue the furlough day, one per month. Well, that;s not bad considering some of us have taken a total pay reduction, but at least we have a job. Maybe the union members need to think about that, it is a highly emotional time right now, but think about it.

  21. obasellouts says:

    lol

    the oba sucks

    • Truthhertz says:

      What is your view on the Party that created our financial quagmire?

      Heroes, awesome and completely blameless is my guess.

    • Creamy says:

      So on the other story, “obasellouts”, you said “3 days or 10 percent or 500 fired”.
      Now we’ve seen the letter. Turns out you’re just a ***** liar aren’t you.

  22. richwhitepower says:

    This is what government wants!!! They wont disconnect among the people. Let dunkley and richards take a paycut as they both own their own companies most if not all government workers have just that one job to survive off. This system was never made to work for the blue collar working

    • Unbelievable says:

      you also don’t know what you are talking about and you’re projecting your own ignorance on everyone else.

  23. Islandguy says:

    I wonder if Mr,Brown or Mrs Cox have an opinion?
    Just saying…..

  24. Jus' Wonderin' says:

    Fire the people that make work then knock off at 1pm sitting in their trucks drinking beers, smokin, etc and the people that get more sick days per year than I (we) get vacations + sick days in at least a couple years combined.

    YOU GOVERNMENT WORKERS HAVE IT EASY AS HELL!! STOP COMPLAINING. ONE URLOUGH DAY AND YOU **** YOURSELVES even though you get PAID SICK DAYS and PAID VACTIONS, so technically the furlough day wouldn’t even matter. GET OVER YOURSELVES AND GROW UP!! And join the rest of the real world like us.

  25. Irritated says:

    I am less on the issue that the letter was “rude” and more on the issue of continuing with a furlough day that we agreed would be off the table after a year and rising health care cost (within the GEHI specifically), and a pension that I will probably not get when I reach retirement age (even though I’m paying my share). I think that cost cutting should certainly come from somewhere but they may want to look higher up than my salary, which barely covers my mortgage, to someone else who has two salaries to support them at over $100,000 each.

  26. Need Peace says:

    If the 7% was achieved with the furlough days, then the next 5% and 3% should be obtainable without the furlough days included, right?

  27. UpsetwithVerdict says:

    tax IB to get the money…they benefit so much by being here and the cost of doing business here has gone up just like everything else…why does the small guy always has to get the punch in the stomach and IB is making mega billions and why give the Green family a break when they already have billions too,but keep taking from the small guy…not fair!!!!

    • Truth hertz says:

      Tax ‘em and watch them leave. They are here for the tax benefits and not for our welcoming attitude (sarcasm). Then when you chase away the one industry that provides 85% of our FX earnings what’s next? Farming on street? If IB leaves we are in serious…you know what.

  28. Lookcloser says:

    Have you looked closely at what is stated in the letter? Remember this letter came in on Friday,January 23rd and asking for their input on Monday(today) at noon. And I quote, “We invite your serious consideration of this position and look forward to hearing from you as soon as possible. Given the urgency of the matter we respectfully request a decision on Monday, 26th January 2015 at 12:00 pm. (noon).” Seriously People how on earth do you, with all respect, think that a membership so huge can come up with any other ideas? Yes,the furlough day is an good idea, but surely why wait to the last moment to write this letter and not ask the Unions to sit down with you and come up with something just as you did last time.

  29. Bill says:

    Guys are making a big deal over “getting an extra day off once a month”. WTF its like getting 12 extra vacation days to either get a part time hustle or look after your family or fix up yah house. Gimmi a break. Although they need to cut some of the over paid (6 figure salary) Civil servants. The ones that have put this island in trouble with their poor decision making skills. Rather than always taking it out of the lower paid blue collar workers. Take the furlough day sounds like a good deal to me.

  30. DWarren says:

    Anyone remember the U.S.Federal gov’t shutdown from October 1st to October 16th 2013? Budget appropriations for fiscal year 2014 were not completed/agreed upon on time. Geez..800,000 gov’t employees were ‘furloughed’ for those 16 days!!!

  31. Robert says:

    Bernews, is there any way you can give us that letter on pdf ?

  32. Allan Kuhn says:

    At the very least, this is the first time, IMO, that we have been given a heads up on the content of the budget and how to affect it. That is reaching out to the people. I am the last person to agree to higher taxes but if that is what it is going to take, then I put my trust in the people we elected to keep it to a minimum. I do not agree to keep the Civil Service as large as it is, so massive cuts in man-power are warranted and long overdue. I had to gasp at the number of people whom marched, which made it abundantly clear just how large the CS has grown! It was a nice gesture to offset layoffs with furlough; but it only bought time no solution. quote: In order to meet the 31st March, 2015 deadline, the budget development process must conclude with immediacy. To this end, we invite you to reconsider your position with regard to continuation of the furlough.

    I quote as some can not see reality when it is right in front of you:
    “If you are unable to agree to continue the furlough, the Government will be forced to take steps to achieve the necessary reductions in expenditures for 2015-16. Such measures could include a reduction in salaries of Government Employees equal to the savings achieved in the current financial year by the furlough”.

    So what will the “Unions” do next, protest the outcome?