The Midland City Council has approved a funding plan to address an approximately $121 million deficit in the city’s firefighters pension fund.
The plan was unanimously approved by council members on Tuesday, after months of negotiations with local firefighters. It lays out a number of steps that will need to be taken to address the deficit, including a 5% reduction of firefighters’ benefits and a lump sum payment from the city into the fund.
The pension’s deficit is a result of years of mismanagement, underperforming investments and other factors that first came to light in 2021. Midland officials have said multiple times that the city is required to find a way to make up the shortfall one way or another.
The deal comes after negotiations between Midland leaders and firefighters stagnated earlier this year. The city’s plan mirrors a proposal adopted by the board of the Midland Firemen’s Relief and Retirement Fund earlier this month. Before the plan can move forward as outlined, the city’s firefighters will have to vote whether or not to change their retirement benefits.
Midland Firemen’s Relief and Retirement Fund’s Board of Trustees Chairman Justin Graham said the proposed changes are necessary and that they will help make up for mistakes made in the past.
“We’re going to try to adjust the things that need to be adjusted to make this thing last into perpetuity,” he said.
Graham said firefighters will have to choose between cutting their retirement benefits, increasing the amount they pay into their pensions or a combination of the two propositions, which won’t be an easy decision.
“It hurts these guys no matter how you look at it,” he said. “This is a cut to their current pay or a cut to their future [benefits].”
The pension board is currently educating firefighters about their options while crafting a proposal to bring to them for a vote. Contingent on whether the firefighters approve the benefit cuts is the city’s commitment to pay a lump sum into the pension to help stabilize it.
Ahead of the vote on Tuesday, Council member Amy Stretcher-Burke explained the situation on KWEL, a local talk radio station. She estimated the expected cash infusion could be over $40 million and acknowledged that this could affect some of the city’s plans.
“Will some projects change or be different? Absolutely,” she said. “This is something that needs to be taken care of.”
Stretcher-Burke said she was optimistic that the city and firefighters are close to a solution.
“It’s not resolved today, but I feel very confident that with this vote today that we are moving forward and I see the light at the end of the tunnel,” she said.
