FORT WORTH -- The Fort Worth City Council voted Tuesday to put the brakes on a widening pension gap, much to the chagrin of the unon representing 1,400 members of the city's police department.
Council members say the cost of retiree benefits is becoming unaffordable –– the unfunded pension gap is nearly $750 million and growing. The council voted to make changes to pensions for future service, not current retirees. The new rules remove overtime from pension calculations and use an average of the highest five years of salary, instead of three.
These changes will only impact employees who begin accruing benefits next year, not those who are already on the plan. Mayor Betsy Price and other members of the council said runaway spending on pensions threatens other programs and could force massive tax hikes.
The Fort Worth Police Officers Association immediately vowed to sue the city. The thin blue line was more of a solid blue wall that faced the council Tuesday as they enacted the changes.
Association President Sgt. Steve Hall says it’s unconstitutional for the city to reduce vested benefits. He says some police officers will receive thousands of dollars less than they were promised in retirement.
Hall said police officers will continue to do their jobs, but he believes it could hurt recruitment.
"Every citizen in America weighs daily, is this job worth all the stuff I have to put up with?," Hall said. "Every police officer will make that decision, it will be a personal decision, it’s just human nature, people will make that cost-evaluation.”
About 100 officers who watched the vote filed out in disgust.
Hours after the meeting, the city announced that it filed a petition for declaratory judgment in a district court to clarify whether it has the legal power to order the pension changes. A release said the council "seeks guidance" on whether it can change benefits for current vested employees.
Speaking during the Council meeting, District 3 Councilman Zim Zimmerman said the issue at hand was larger than coming to an aggreement with the city's public safety departments. He also left the decision open to evaluation in the future.
"This is not just a fire department or a police department or a general fund issue, it is a city issue," he said. "We need to keep that in mind. We need to also recognize if we've gotten it wrong, we'll figure it out and we can always go back and adjust."
The city’s unfunded pension liability is $748 million. Before the vote, Price said the pension gap could grow to $1 billion if the council didn’t take action.
"It's not an easy decision, but I think it's the best one we can make today and that would be to approve the city manager's plan to try and move this thing forward and to move the needle a little bit ... so we can guarantee for each one of you in the future that it's going to be there to take care of you as we've promised," said District 4 Councilman Danny Scarth.
Eight members voted for the changes, with one abstaining. Council member Kelly Allen Gray is married to a Fort Worth officer.
The city must still negotiate a new contract with fire fighters. Their current one expires in Sept. 2013.