The state House of Representatives committee heard public comment Thursday in support of a bill that aims to fix Galveston’s ailing police pension system, a goal that’s involved months of heated debate between the city and police.
As of May, Galveston’s police pension had $32.1 million in unfunded liabilities, according to actuarial reports.
Fully funding the pension and bringing it back into compliance is a state requirement.
The bill that the House Pensions, Investments & Financial Services Committee heard Thursday proposes the city of Galveston raise its contribution rate from 14.83 percent to 18 percent and that police contribute 12 percent of their salaries to the plan, according to legislative documents.
The bill also would raise the age — to 55 from 50 — at which new employees can draw their pension.
These terms are the culmination of months of discussion between the city and the police pension board.
“This is a problem that’s been kicking the can down the road for 30 years,” Mayor Jim Yarbrough said Thursday.
Raising the city’s contribution rate to 18 percent would cost the city between $400,000 and $500,000 more each year, city officials said. The city’s contribution now is about $1.77 million a year and the proposed increase would push that to more than $2 million, city officials have said.
“The city acknowledged a long time ago more money was needed,” Yarbrough said.
City Manager Brian Maxwell and other city representatives attended the public hearing Thursday.
Chairman Geoff Gainer spoke in favor of the bill Thursday.
“I’m very proud of what we were able to accomplish,” Gainer said. “We all really got on the same page and we realized we were very close in mindset, closer than we thought we were.”
The House committee will vote on the bill as early as Thursday, said Jason Briggs, chief of staff for committee Chairman Jim Murphy.
In the next week, the committee will send the bill back to the city and the pension board to make sure both approve of the text, he said.
If the committee receives feedback from both parties by Thursday, the vote could occur then, Briggs said.
“We want to make sure the deal represents what they really want,” Briggs said.
This plan took many months of work to achieve, said Rep. Dan Flynn, who authored the bill.
“I was extremely excited that the city of Galveston and the police plan worked so hard with my office,” Flynn said.
The staff ultimately is moving the bill toward a vote in the House of Representatives and the Senate, he said.
“This is one of those days that we’ve all been working toward,” Flynn said.
The bill includes other changes to the pension system, including adding an additional city-appointed member to the current seven-member board structure, according to legislative documents.
As it stands, there are four police-appointed and three city-appointed members, a balance that the city has worried could tip benefits in the favor of the police.