FORT MYERS, Fla.- The city of Fort Myers is cutting its contributions to many of its employees. The council voted Monday afternoon to slash the rate to 1.8 percent of salaries, down from the current 3 percent. City staff recommended 1.6 percent.

"This is something that every city in the U.S. is looking at right now. Are the pensions sustainable?," said Council member Tom Leonardo. "It's got to be sustainable and fair to the ultimate boss, the taxpayer."

The decision will affect about 700 employees, virtually everyone outside of police and fire.

The union and the city had reached an impasse on pensions. The union had suggested a compromise: a cut to  2.1 percent.  

Union president Tom O'Malley predicted that deep cuts in pension benefits would hurt those nearing retirement, and drive good employees out of city government.