The city’s firefighters filed a lawsuit in state district court Wednesday against the City of Fort Worth over failed contract negotiations and proposed pension cuts.
The lawsuit follows the city negotiators’ refusal earlier this month to take the contract talks with the Fort Worth Professional Firefighters before an arbitration board. In December, they also rejected a suggestion from firefighters to work with a mediator in an effort to break the logjam.
“The past year and half has been frustrating as the city put a disingenuous ‘take it or leave it’ contract on the table,” said Jim Tate, president of the association, in a statement. “Our compensation requests have been fair and professional, including a request to self-fund increased contributions to our own retirement plan in order to make sure it remains sound.”
Last week, Fort Worth City Council members voted unanimously to approve a resolution outlining potential cuts in pension benefits for firefighters, leaving the firefighters with two options — accept the city’s contract or sue the city.
“It’s unfortunate the parties find themselves at an impasse. However, just like any other large city in America, Fort Worth faces significant fiscal challenges in delivering essential city services to neighborhoods,” said Mayor Betsy Price in a statement.
The resolution approved by the council notifies the Employee’s Retirement Fund that they plan to reduce the multiplier used to calculate benefits to 2.5 percent and raise the number of high salary years used to determine a firefighter’s retirement pay to five years. Overtime pay is not included, unless it is overtime built into the pay base.
Currently a firefighter’s retirement pay is based on the three highest salary years, the multiplier is 3 percent, and the final calculation of retirement benefits can include overtime.
“The unfunded liability in the city’s pension fund is a serious and lingering threat. You don’t have to look further than Detroit to see the serious implications of this issue,” Price said in her statement. “We simply must continue to take a stand when it comes to protecting taxpayers and preserving the health of the city’s pension fund for our retirees. I believe the pension plan can remain competitive while also being sustainable and affordable.”
The members of the Fort Worth Professional Firefighters voted 511 “against” and zero “for” the city’s offer during six days of voting, Jan. 2 - Jan. 8. The members unanimously voted for the pursuit of judicial determination to settle the lawsuit, according to a press release from the firefighter’s association.
City’s hard line on pensions
The city has been talking tough on the pension fund because, as of of January 2013, the unfunded liability of the fund was over $1 billion, said Assistant City Manager Susan Alanis in a previous article. The amount of obligation may fluctuate following other changes for police and city employees, which the council voted on in October 2012.
The reductions for general employees and police affected future service, not benefits already accrued, with the city reducing the multiplier used in calculating benefits, raising the number of years for service for retirement pay and eliminating overtime in the calculations.
The city is already facing a lawsuit from police on the changes, with Steve Hall, former president of the Fort Worth Police Officers Association, and Rick Van Houten, the current president, filing a federal suit in November 2012.
The lawsuit alleges that the city violated the Texas Constitution in cutting benefits promised to officers when they were hired.
The firefighters association had proposed separating the firefighters’ pension fund from the Fort Worth Employees’ Retirement Fund, which includes other city employees and police, to allow firefighters to boost their contribution — now at 8.25 percent of their pay — by 4.39 percentage points. The increase would not require an increase in city contributions.
The city, however, says that breaking the funds apart would expose the city to litigation from other employees and the city would also be liable for covering the increased payout if the health of the fund fails.