MIDLAND, Texas — Time is running out, for both the City of Midland and the Midland Fire Department to reach an agreement on how to fix the Firemen's Relief and Retirement Fund deficit.
The state pension review board wants to receive a 25-year plan for amortization by September 2025. But another deadline demands an agreement before August 19.
On July 23, City of Midland leaders took a big step after approving a memorandum of understanding (MOU) which outlines the expectations of an agreement between two or more parties.
The City of Midland approved the terms to which it will agree to add a bond to the ballot that could fix the underfunded fire department pension fund.
"I want to be clear to say that this council does not want to do the bond, but we do recognize that the cash that the city has on hand is insufficient to create the solution without the firefighters making much more significant cuts," said Midland Mayor Lori Blong.
The Midland Firefighter’s Retirement Fund Pension is nearly $109 million underfunded.
The City of Midland has released an online presentation that includes breakdown items such as comparison of pension programs, an overview of all five possible options, the events that led up the deficit of the MFRRF and the taxpayer impact which is estimated to increase the tax rate by 2.6 cents.
Before the bond can end up on the ballot, Midland firefighters are being asked to agree to the city's approved memorandum of agreement.
The Midland Firefighter’s Retirement Fund Pension is nearly $109 million underfunded.
According to the State of Texas Pension Review Board of November 2021, "Investment underperformance was the primary contributor to an increase in unfunded actuarially accrued liability (UUAL)."
In 2022, The Midland Fire Department voted to change part of the way their benefits are calculated related to overtime.
"In order for this to make it onto the bond would require that the firefighters' actuary produce a ballot indicating the changes that would be made to the firefighter benefits and then the firefighters would have to vote and it was repeated multiple times today. But the firefighters get to make a decision on any change to their benefits," Mayor Blong said. "The City Council has no authority in that, so that vote would have to take place between now and August 19th. And then the City Council would then have to place the item on the ballot for the bond."