Fort Worth is scrambling to find a fix to shore up its pension fund, which will go bankrupt within 30 years if nothing is done, according to city leaders.
When City Manager David Cooke stood in front of the Fort Worth City Council Tuesday to brief them at an afternoon work session, he was blunt.
“This is a very difficult issue and there are no simple solutions,” he said.
There’s not enough money going into the city’s retirement system to cover everything the fund will pay out over the next few decades. Fort Worth’s firefighters, police officers and city workers are required to pay into the fund, and retired city employees count on pension payments. But the system is on track for a big shortfall: about $1.6 billion.
“Somewhere along the way, if we don’t do anything,” Cooke said, “this fund runs out of money in the future.”
It took years to get this bad — some poor investments, short-sighted decisions in the ‘90s and, most recently, the recession. And it’s cost the city. Twice credit agencies have downgraded Fort Worth’s credit rating, making it more expensive to borrow money.
In recent years, the city has been trying to get the pension fund under control. The city has paid more money into the system. City workers are putting more of their own salaries toward into the retirement account and retirement benefits for new employees are less generous. But, none of this has been enough.
The city isn’t alone in its pension woes. Dallas and Houston have struggled recently, but Fort Worth Mayor Betsy Price wants to avoid having state lawmakers in Austin step in and force a solution, so she hopes the city will be able to solve the problem before the next legislative session starts in January 2019.
“I’m always of the opinion that local officials are elected to handle tough decisions, and this is one of them,” Price said. “Austin has no idea what the other demands are in Fort Worth, or they don’t know the face of our retirees and what they face.”
Solving the problem will take some mix of concessions from workers, and more money from city coffers. After two and a half years spent studying the issue, a task force led by the city manager and made up of stakeholders failed to come up with a compromise that everyone could get behind and recommend to the city council.
Adding further complication, city leaders also want to reduce Fort Worth's property tax rate this year so that it's more in line with other North Texas cities. That won't cut homeowners tax bills because property values in the city are ballooning, but it would slow the growth of tax bills. It would also mean the city would have less money coming in to put toward the pension fund if the tax rate stayed the same.
The city already sends about $90 million each year to the pension fund. City Manager David Cooke laid out a proposal that would add up to about $48 million to aid the pension fund each year. Under the proposed plan, the city would kick in more money, workers would increase their contributions, and the fund would save some money by paying out less to some retirees by tightening qualifications for certain benefits.
It’s not the final plan, but more of a first stab in what'll be a weeks-long process, Price stressed.
“Our job is to balance this out as equitably as possible between city taxpayers and our employees,” she said. “We’ve got to figure out how to make the numbers work without asking taxpayers to put too much in, but still understanding where our employees and our retirees are on this.”
Those employees and retirees seem to be in lock step, opposed to the proposed fix. Manny Ramirez from the Fort Worth Police Officers Association says it relies too much on employee concessions and not enough on taxpayer contributions.
“We need the city to pay their fair share,” he said. “Obviously, 'fairness' is malleable, the term, but when you’re speaking numbers, fairness usually equates to 50-50.”
When the city council met again Tuesday night, the chamber was deluged by firefighters in red shirts demanding a better deal. They were joined by police officers, city workers and a host of retirees. And council members got an earful about the most controversial proposal on the table: an elimination of cost-of-living adjustments for some retirees.
Pete Rosenberg told them it’s unfair. He sacrificed for the city, and has the scars to prove it.
“In August of ‘99, in 106-degree weather, I was at a large fire and broke my neck,” he recalled. “I worked a year before they found it out. I have fallen through roofs and had roofs have fallen on me as a firefighter.”
Jerry Horton, who worked at the library, shuffled up to the microphone with the aid of a walker.
“I live in my 100-year-old house, and I’m almost 100 myself. I can get by on mine without any raises, but there are many people who worked their guts out for the city, and you owe them their raises,” Horton said.
“And you know you owe them.”
City Council will spend the next few weeks working on a plan to shore up the pension fund. They want to vote on a solution next month, but the biggest hurdle comes after that: A majority of city workers have to approve any changes to the pension fund.