Negotiations stagnate over the Midland firefighter pension’s $121 million shortfall

From Marfa Public Radio:

This summer, Midland officials have pushed to figure out how to address a multimillion dollar deficit in the city’s firefighter pension, but recently efforts to stabilize the fund have slowed.

Currently, the Midland Firemen’s Relief and Retirement Fund doesn’t have enough money to pay for the retirement benefits promised to the city’s roughly 250 firefighters. According to a recent audit, the fund is short approximately $121 million, and that number is expected to continue growing.

The state has given Midland until Sept. 1, 2025 to figure out a plan to address the shortfall.

In recent weeks, negotiations between city leaders and firefighters over the best way to move forward have fallen apart. “We are now back to the drawing board on negotiations with the firefighters,” said Midland Mayor Lori Blong in an interview with Marfa Public Radio.

The slowdown in negotiations has been disappointing for Blong, because she thought a solution had been found last month. In July, the Midland City Council agreed to bring a proposal to the firefighters that would have called for an approximately $60 million bond election. The agreement would have also required firefighters to reduce their benefits to help shrink the deficit and freeze their retirement plan for 25 years.

The city council was rushing to find a compromise with firefighters to meet an Aug. 19 deadline in order to call for a bond election in the fall. However, representatives of the firefighters rejected the council’s proposal, dashing those hopes.

Now, Blong said, the city is “looking at all potential solutions” — including things like the city making “a lump sum payment” in the pension fund or “designating oil and gas revenue” to make up the large deficit.

The pension’s multimillion dollar shortfall really came to light after an audit by the Texas Pension Review Board in 2021. City leaders point to mismanagement of the pension and poor investments as the main drivers of the deficit, while firefighters claim short staffing and excessive overtime also played a key role in the ballooning deficit.

Either way, according to Blong, state law requires Midland to pay off this debt, but she wants to find a balance between using city funds to stabilize the pension and reducing the firefighters’ benefits.

“I think that the firefighters are coming to recognize there have to be changes on their side,” Blong said. “So, really the negotiation, from where we stand today, is how much change will they make and how much will the city have to do.”

Both the city and Midland firefighters have already taken steps that have reduced the deficit by millions. Last year, firefighters voted to adjust how their retirement benefits were calculated. And on top of that, the city council voted to increase their contribution to the fund. Both of those adjustments went into effect at the beginning of this year.

For firefighters like Lance White, talks of additional cuts are worrying.

“Most people that become firefighters know they’re not gonna get rich doing this,” he said. “We’re not doing this for the money, we’re doing this because we like to help people. But you would like to know the benefit you were promised is going be there when the day comes to retire.”

White is a captain with the city’s fire department and the vice president of the Professional Firefighters Association of Midland. He said, depending on how negotiations pan out, there could be a lot asked of firefighters going forward. So far some of the options discussed include increasing the amount of time they need to work before retiring along with talks concerning upping the amount firefighters pay into the fund.

White loves being a firefighter as much as he did when he first started 18 years ago, but he’s considering leaving the department depending on what happens with his retirement.

“There have been a lot of sleepless nights thinking about this, worrying about this,” he said. “This is the first time I’ve questioned seeking out other employment — I’ve never thought that up until this point.”

The deficit does need to be addressed though, according to White, but finding the right solution is going to be a delicate balance.

“This is an issue that has to be fixed or the pension fund will run out of money. If the pension fund runs out of money the city is still on the hook,” he said. “So, one way or another, unfortunately, the taxpayers are paying for this.”

As the chairman of the Midland Firemen’s Relief and Retirement Fund, Justin Graham has represented the firefighters in negotiations with the city. He’s adamant that the firefighters are willing to do their part in fixing this expensive problem.

He said, “The firefighters aren’t looking to put this burden on the taxpayer without paying our portion of it.”

A majority of the firefighters must approve any changes made to their benefit package and Graham believes they shouldn’t be rushed by the city while they review their options.

“Every member needs to vet it before they go vote and say, ‘Hey, I’m willing to lose this benefit or I’m willing to change this benefit,’” he said.

Concerns of a “mass exodus” of firefighters continue to grow as negotiations drag on and talks of cuts persist. “I’m not gonna say [morale is at] an all time low,” Graham said, “but it’s definitely hurting from this situation.”

Mayor Blong is worried about firefighters leaving Midland, but she is still dedicated to figuring out a solution that will be the least impactful for local taxpayers.

“I think there are some community members in Midland that say ‘Let’s don’t do anything here, we’ll just let it play out,” she said. “We have to look at the long-term effects on our community and the loss of firefighters and the instability that creates.”

City officials and the leaders of the firefighters are set to continue negotiations and are considering hiring a mediator to help talks move forward.

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