MIAMI (CBS4)- The budget battle is heating up for the City of Miami, and the city has an ultimatum for its unions: renegotiate contracts or face big cuts.

The battle has forced the city to lay down the law with employee unions, specifically firefighters and police. Miami City Manager Johnny Martinez declared a financial urgency late Monday afternoon under state statute, which says that the unions have 14 days to come up or strike a deal with the city.

READ MORE: NBA fines Miami Heat $25,000 for violating 'bench decorum'

If the unions run out of time, the city can impose whatever cuts necessary to balance the budget, CBS4’s Gwen Belton reported. Specifically, if the unions don’t agree to deep cuts to their contracts, the financial urgency declaration will allow the Miami City Commission to make unilateral cuts to fill a $61 million budget hole in 2012.

The move comes as Mayor Tomas Regalado is fighting off calls by union leaders for him to be recalled.

Martinez’s declaration is a sign that he wants to renegotiate the union contracts with the police and fire fighters. Regalado has said in the past that the union contracts are adding to the city’s fiscal woes.

READ MORE: Man faces several charges including pointing laser at BSO aviation unit

Martinez said that a collective bargaining team will contact the representatives of the Fraternal Order of Police Lodge No. 20, AFSCME Local 1907, AFSCME Local 871, and the International Association of Fire Fighters Local 587 to begin negotiations on a new collective bargaining agreement.

CBS4 caught up with Regalado at a charity event at Mary Brickell Tuesday. He said the unions have to give in order to help the city balance its budget. Regalado said he’s asking for $16 million in concessions, not necessarily in salaries but asking for unions to give back, including special pay, perks and bonuses.

The city is also asking for employees to cut down the number of take-home cars. Regalado said all this is necessary to avoid layoffs.

“We did not layoff people last year,” he said. “We are not laying off employees this year. So what we’re saying to them is, ‘Give us something and when things will be better everybody will be happier.’ But this year, we are going to have to take some of the perks that throughout the years the unions have received.”

MORE NEWS: Miami ex-Proud Boys leader Henry 'Enrique' Tarrio to stay jailed until Capitol riot trial

According to CBS4 news partner the Miami Herald, the city invoked the same declaration last year and chopped off $80 million out of union contracts.