Jan. 24--The Parker administration's ongoing battle with firefighter pension officials culminated in a lawsuit Wednesday to have the state law governing the pension board declared unconstitutional and to allow the city of Houston to negotiate its contributions to the retirement system.
The 16-page lawsuit accuses pension board members, a majority of whom are active or retired firefighters, of acting in their own self-interest when they vote on how much the city must contribute to the retirement system.
In announcing the lawsuit, Mayor Annise Parker cited the city's pressing need to reform -- and reduce -- its pension obligations, saying state law allows the city no say in how much it must contribute to firefighters' pensions.
"We're trying to force negotiations," Parker said.
She twice has failed to persuade state legislators to grant the city authority to negotiate with firefighters about their retirement plan, just as it does with the police and municipal pension systems. The mayor has been unable to convince the firefighter-dominated board that controls the fund to implement the reforms she seeks, repeatedly saying the existing plan is financially unsustainable for the city.
State law "gives Houston no input into whether benefits are raised despite the fact that Houston must fund the system," the city's lawsuit states. "... This system of pension funding leaves Houston completely out of the decision-making process. Although Houston must pay vast sums into the system, it has no control over the amount of funding it must provide, or the benefits provided to members. To make matters worse, Houston has no ability to revise the plan going forward to address new employees as it has been able to do with the other pension systems."
A 1997 law
The suit, filed in state district court, asks that the state law governing the firefighters' pension system be declared unconstitutional and invalid.
The law in question was passed in 1997 and applies only to the city of Houston. Under the law, the city's contribution rate is twice that of the pension system's members, plus an additional sum determined by the board, according to the lawsuit.
If the courts agree to strike the existing statute, the law would revert to an earlier version that would allow the city to negotiate with the firefighters' union over pension details.
Parker said that if the city succeeds in winning a greater say in its contributions to the pension system, she did not plan to propose changes for the nearly 3,000 retirees and survivors already receiving payments but would focus negotiations on the pension plans of new employees.
The city's lawsuit also requests that the Houston Firefighters Relief and Retirement Fund be barred from using pension funds to lobby legislators.
Bryan Sky-Eagle, president of the Houston Professional Fire Fighters Association Local 341, said he was shocked by the filing, particularly the timing, as the city and union are in contract talks over wages and benefits. The union does not manage the pension fund.
"Don't be mistaken. This is an attack on firefighters," Sky-Eagle said.
'Publicity stunt'
Todd Clark, chairman of the fire pension fund, issued a statement accusing Parker of a political vendetta for "not supporting her campaigns."
"This lawsuit is not anything more than a power-grab and publicity stunt," he said. "It's interesting that the mayor can finance two lawsuits against the Firefighters' Pension System but cannot finance the retirement of the men and women of the Houston Fire Department who are faced with a high degree of danger mixed with life and death decisions in their job in service to this city daily."
The city first sued the pension fund in 2012, seeking access to actuarial information the board of trustees had refused to release. A state district court judge ruled in the city's favor in December 2012, but fund leaders have appealed.
The city's three employee pension plans are underfunded by $3 billion over 30 years. Without changes, that number is expected to increase by half in the next five years.
Like cities nationwide, Houston has attempted to control costs by cutting pension benefits for new hires. Because state law limits local control of the firefighters' pension, Parker and the City Council cannot extend reductions to firefighters that were applied to police and municipal workers hired since 2004.
Unlike municipal workers and police officers, overtime is counted as part of a firefighter's salary, which Parker said unfairly drives up pension payments.
Clark has disputed the city's calculations throughout the fund's contentious relationship with the mayor, as have union leaders.
"The mayor is a numbers person," Sky-Eagle said. "She was a city controller, and she comes from a financial background. I'm sure she can make them read however she wants them to read."
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