More details are finally coming out about the City of Houston’s settlement and the new collective bargaining agreement with its firefighters, and citizens should pay attention. 

In short, the agreement includes $650 million in back pay issued in a judgment bond. A judgment is a tool provided to cities to issue bonds without a public vote in order to pay a settlement. City Attorney Arturo Michel said the city council will be the body to vote to approve the bonds; however, the Attorney General’s Office will have to sign off and approve the bond issuance before a judge makes the settlement agreement final.

In addition to the backpay, the overall agreement between the two parties includes a new 5-year collective bargaining agreement or contract.  

The administration said the annual repayment for the backpay will be $36 million for 20 to 25 years, and the annual payment for the collective bargaining agreement will also be $36 million but for five years. So, Houstonians will pay $72 million annually for the next five years and then $36 annually for the life of the bond. 

The city attorney said the total price, in the end, will be closer to $1 billion when considering interest and other factors, but when pressed on how the city will pay for it, he said, “That will be forthcoming and developed.”

Ideas mentioned so far have been a garbage fee and a temporary lift of Houston’s local property tax cap; however, nothing has been formally proposed. 

On Monday, two city council members sent a letter to the administration expressing concerns over what they felt were a lack of details surrounding the deal. The administration hasn’t publicly responded to the letter, although the city attorney said responses would be forthcoming. 

This all comes as the city is heading into its budget cycle with budget hearings set to begin in the coming weeks before the July 1 start of the new fiscal year. 

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.