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Houston reaches $1.5 billion settlement with firefighters

After months of negotiations to resolve a long-running dispute, the Houston City Council unanimously approved a five-year collective bargaining agreement (CBA) with the Houston firefighters’ union at a cost of at least $1.5 billion.

“This vote today was a show of support and appreciation for firefighters putting their lives on the line on a regular basis,” said Mayor John Whitmire during a press conference Tuesday afternoon. “I’m very pleased to be mayor of a great city today.”

The CBA formalizes an 18 percent pay increase approved by the council in 2021, provides a base pay increase of 10 percent beginning in July and includes additional pay increases of up to 24 percent over the next five years. Last week, the city council voted 14 to 3 to cover the CBA’s $650 million in back pay with judgment bonds that do not require voter approval. The total cost of the settlement is estimated at $1.5 billion.

Houston Professional Fire Fighters Association President Marty Lancton praised Whitmire for his work to negotiate the settlement and the city council’s vote Tuesday, calling it “a historic day.”

“I urge Houston firefighters and their families to relish this well-deserved victory,” said Lancton in a statement. “For eight long years, you have persevered through immense challenges while continuing to protect and serve our community.”

The vote to approve the CBA was initially scheduled for last week but was delayed after City Controller Chris Hollins said he could not provide the required financial certification. He sent Whitmire 44 questions about the details, but the mayor’s office only provided answers to questions about the fiscal details, noting that the controller is not responsible for vetting other aspects of the CBA.

Last Thursday Hollins announced he would certify in time for this week’s vote.

Prior to the vote, Council Member Ed Pollard asked about multiple categories through which firefighters could seek additional pay and questioned why a cap of $10 million had not been added to the CBA. He also queried the mayor about vague language governing the future base pay increases promised to firefighters depending on city revenues.

City Attorney Michel Arturo said the cap and clarifying language were included in a Memorandum of Understanding since the union had opposed its inclusion in the CBA itself.

Pollard noted that the city would be drawing on the fund balance for this year but that there is a projected deficit for the following years covered by the CBA.

“It would be great for us to know what that number is and for us to be able to understand financially going forward over these five years what that cost will be to the city and how is it going to be paid,” asked Pollard. “Nothing has been clarified on how do we pay for that and that has been more so of a wait and see approach which I don’t think gives us real insight on how ultimately we can afford this package and any other package that comes before us.”

Whitmire responded, “We can’t afford not to. We don’t have the fire department that Houstonians need.”

Calling the settlement agreement a public safety issue, Whitmire noted that the city faces a shortage of firefighters and Emergency Medical Services (EMS) personnel.

Whitmire also accused Pollard of trying to gut the agreement.

“There’s no doubt … you’re going to vote no. And if we satisfy today’s questions, you’re going to get coaching by some of the firefighters’ enemies to ask tougher questions,” said Whitmire.

“My questions aren’t adversarial,” said Pollard. “I’m asking for clarification on a CBA that up until maybe last week just got finalized. I just received a copy.”

Whitmire said the city would be getting funding assistance from the state and county among other sources.

Council Member Fred Flickinger praised Whitmire for the deal and the changes, which included keeping random drug testing for employees, but warned of the ongoing fiscal challenges posed by the city’s pension policies.

“The catalyst for this entire thing was the pensions,” said Flickinger. “And I think the mistake the previous administration made was in clawing back what they already had. Nobody likes to give back what they fought for and what they thought was theirs. But I do think with new employees coming into the city we really need to look at a defined contribution rather than a defined benefit.”

Flickinger noted that defined benefit pension plans, which guarantee specified monthly payments irrespective of investment returns, are posing financial challenges for government entities everywhere. He said it would be difficult for the city to continue to pay 30 percent of salaries into pensions.

Over the past few decades, most private companies have adopted defined contribution retirement plans for retirees, while the public sector is facing a pension funding crisis.

According to attorney Steve Dunbar, who addressed the council before the vote, the CBA excludes nearly 200 former firefighters who are pursuing a separate lawsuit against the city. During Tuesday’s meeting Arturo said there may be an additional payout required depending on the outcome of that litigation.

The contract dispute has been pending since 2017 when former Mayor Sylvester Turner and the firefighters could not agree to terms, leading the union to file suit. After taking office in January, Whitmire dropped the city's latest appeal and entered negotiations with the union resulting in the new CBA.

The new agreement takes effect July 1.

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