Jacksonville had money on hand to pay its police when the city asked for wage cuts in 2009, an economist representing a police union testified Wednesday in hearings about a lingering labor dispute.

“The city had the ability and funds,” consultant Lawrence Jessup told special magistrate James Sherman, an arbitrator weighing arguments from the city and the Fraternal Order of Police about stalled police contract negotiations.

The arbitrator’s conclusions aren’t binding, but they will set the stage for a likely final order by the City Council.

Jessup told a lawyer representing the city that more than $90 million sitting in city accounts was “spendable” at the end of the 2010 budget year.

That seemed to capture the core of a Fraternal Order of Police argument that changes in pay and health benefits weren’t needed for the city’s financial health.

The changes would cost union members about $7 million yearly, Jessup said.

The city kept about $45 million in accounts reserved for emergencies, but more than $40 million in other reserves was “unassigned” and could be used if city leaders approved, Jessup said.

“So, in other words, the city would be using [concessions by] the FOP bargaining unit simply as a means to shore up its fund balance?” asked Paul Daragjati, a lawyer for the union.

“Well, to contribute to it,” Jessup said.

But, Daragjati stressed, “not to actually fill a gap.”

Union president Nelson Cuba said afterward that the available money was what he described earlier as “slush funds.”

Questioned by a lawyer for the city, Jessup conceded having money on hand doesn’t prove the city was wrong to build reserves. John Griffin, a Tallahassee-based labor lawyer, said the city aspires to keep 5 percent to 7 percent of its money in reserves.

“It’s a matter of what their policy is going to be,” said Jessup, who said he had dealt with cities with reserves ranging from 5 percent of their yearly budget to one, Weston in South Florida, with a 150 percent reserve.

“They could have operated for a year and a half without raising any taxes,” Jessup said of Weston.

“That’s their choice. The question is what’s reasonable,” he said. “That’s a political decision.”

Read more at Jacksonville.com: http://jacksonville.com/news/crime/2011-09-14/story/economist-jacks...