With looming deadlines, Midland officials are rushing to figure out the best course of action to make up a multimillion dollar shortfall in the city’s firefighter pension fund.
Over the last year, city leaders and local firefighters have worked to figure out the best way to make up the deficit, which is near $109 million, according to an official on the board overseeing the pension fund.
“This is what keeps me up at night,” said Justin Graham, a longtime firefighter and chairman of the Midland Firemen’s Relief and Retirement Fund. “Now, I'm having to battle for something that we thought was promised.”
The city is aiming to stabilize the fund by raising approximately $86 million or shrinking the shortfall by changing the retirement benefits it offers.
On Tuesday, during a city council meeting, Midland Mayor Lori Blong said she wants to figure out a solution by the end of the year.
“This has been ignored by city councils and mayors for a long time and we are unwilling to do that at this point,” she said. “We value our firefighters. We need the job they do for the community. We want their families to feel supported.”
Issues with the pension fund came to light in 2021. According to the city, investigations into the fund found problems with its investment strategy, overtime accrual and the benefits firefighters received.
The Texas Pension Review Board has given the city until Sept. 1, 2025 to figure out a plan to address the deficit.
Some of the potential solutions discussed by officials on Tuesday included issuing a bond to make up the shortfall, increasing local taxes, a direct cash infusion along with cutting firefighters’ benefits.
However, some council members seemed leery of issuing a bond or increasing local taxes — both options would require a ballot initiative.
“I don’t think a bond is the best option,” Council Member Robin Poole said during Tuesday’s meeting. “I would much rather move forward with a cash infusion.”
Blong echoed Poole’s sentiment, but said a cash infusion would only be a partial solution.
“I also don’t think a bond is our best solution, I think it’s a cash infusion as well,” Blong said. “But we have a limited amount of cash to allocate to it.”
Officials have proposed directing $47 million of city funds into the pension fund, an option that would still leave a substantial deficit that could require cutting benefits for firefighters to make up the difference. Blong says that could be risky.
“If that is not something the fire department is willing to do we are left with taking this to voters, that is just the reality of it,” Blong said.
Any changes to pension benefits have to be approved by Midland firefighters. If the council members decide to call for a bond election this November they only have until Aug. 19 to make that decision.
Graham says the council needs to be careful because their decision could result in firefighters leaving the department, especially if their pension is dramatically changed.
He said, firefighters are telling him "If we change the structure of the [retirement] plan, well, I'm going to have to leave. I'm going to have to go find a different department”
Last year, firefighters voted to alter how their pension benefits are calculated to address the outstanding deficit. The city has also upped the amount it will contribute to the pension fund.
The council did not take any action during Tuesday’s meeting and negotiations between the city and its firefighters are ongoing.
