HOUSTON — Efforts continue to move a deal between the city of Houston and the firefighters union forward.
However, a city leader is warning of the impact it may have on taxpayers.
Houston City Controller Chris Hollins said the city has some serious financial realities that could force city leaders to make some tough choices in the coming months.
Hollins also called the agreement with the firefighters union a significant milestone that could help compensate first responders for their essential work.
That agreement that was signed between Mayor John Whitmire and the Houston firefighters union includes $650 million in backpay and significant pay increases going forward.
“This means that on an annual basis, recurring expenses are hundreds of millions of dollars more than the recurring revenue that we expect to bring in. That's a problem that we have to solve, and there's no way around it,” Hollins said. “Just like each of us works to balance our checkbook at home, you can't repeatedly spend more than you're bringing in without facing the consequences.”
Right now, one strategy is to issue a judgment bond to finance the $650 million in backpay over the next 25 to 30 years. Hollins said the bond may end up costing the city more than $1 billion when adding in interest.