HOUSTON – After years of struggles and months of negotiations, Mayor Annise Parker and the Houston Firefighters Relief and Retirement Fund have finalized a three-year agreement that caps escalating taxpayer contributions to the pension system.
"It allows us to take a step forward in unity and better position ourselves for the future," said Mayor Parker.
Under the terms of the agreements, firefighters will have to pay an additional 3 percent into the pension system for the next three years -- that equates to about $9 million per year. As part of the deal, the city will also drop two lawsuits against the fire pension board.
"The firefighters have agreed to increase their pension contributions from nine to 12 percent, which is a 33 percent increase, we haven't had any substantial pay increases in years, so they are the true heroes here," said Todd Clark, Chairman of HFRRF.
This saves the city about $77 million over three years, money that can now be used for other services.
"We would not be able to do this if this pension fund was not in great financial shape," said Clark. "Everything that we have done today that we agreed on is in the best interest of our membership."
"I know it is asking a lot for firefighters to contribute more to their pension," said Parker.
She said the new agreement protects taxpayer interests and provides budget certainty for the next three years. But some people don't agree, saying this could hurt taxpayers once the agreement expires.
"The city and the fund already employ a risky funding policy. The city is not putting in enough money on an annual basis, this means that taxpayers are likely to see the city's contribution rates increase in the coming years," said Josh McGee, VP of Public Accountability for Laura & John Arnold Foundation.
The new mayor at that time will have to renegotiate with the firefighters pension board.