The single most important thing you need to do to succeed in negotiating a fair contract is to gather information. Municipalities make claims about their financial position. Often, their first line of defense during negotiations is to claim that they don’t have the ability to pay your requests. This may or may not be totally accurate. By gathering the right information, you can gain leverage and shift the advantage to your side. This will increase the likelihood of negotiating a successful agreement.
What kind information should be gathered? First, start with your municipality’s CAFR or Audit reports. These are valuable documents that allow you to see trends, historical figures, and other aspects of your municipality’s financial position. Look at General or Current Fund assets and how they have changed over time. Consider how fast revenues have grown in relation to expenditures. Also, look to see if funds are consistently being transferred to other authorities without being replenished. I like to call these black holes because money seems to go in, but never comes out.
Second, collect information on the local economy. If the local economy is strong, revenues should be strong as well. Also look at national, state, and regional economies. While many municipalities many deny it, economists have shown there is a correlation between national, state, regional, and local economies. When the national economy performs well, so do local economies as well. If the economy is strong but your municipality’s financial position is weak, perhaps its finances have been mismanaged. Information can help uncover situations like this.
Finally, start to collect information 3 to 6 months before your negotiations begin. This will give you enough time to formulate an accurate understanding of where your municipality stands financially. Plus, they will be aware that you have done your homework. From my own experience, I can tell you that municipalities are much more willing to negotiate a fair contract after they become aware that you have collected the right information.
