2022 Pension Obligation Bond Info
On Feb. 15, 2022, the Longview City Council called a $45.6 million bond election to stabilize the Longview Firemen’s Relief and Retirement Fund (LFRRF). Longview voters approved the bond during the May 7, 2022 election by a margin of 2,076 - 1,441.
Voters considered “the issuance of $45,600,000 of bonds by the City of Longview, Texas for the purpose of funding all or a portion of the City’s unfunded, accrued liability to the Longview Firemen’s Relief and Retirement Fund, and levying a tax sufficient to make the payments of principal and interest thereon.”
Following the passage of the bond by voters, the proceeds of the bond was invested as part of the Longview FIremen's Relief and Retirement Fund's portfolio.
What is the Longview Firemen’s Relief and Retirement Fund?
The Longview Firemen’s Relief and Retirement Fund (LFRRF), also known as the Longview Firefighters’ Relief and Retirement Fund, is a pension that provides benefits to retired Longview firefighters and other Fire Department employees. The fund was originally established in Longview in the early 1940’s in accordance with state law.
The LFRRF is an independent entity governed by a 7-person board, as established by state statute. The board consists of three active members of the Longview Fire Department, elected annually for 3-year terms; the City finance director or his/hers designee; two civilian members; and the Mayor or his/hers designee, which has historically been filled by a council member in Longview.
Although the board is independently governed, the City of Longview is financially obligated to fund the LFRRF. It is considered part of the City of Longview’s financial reporting entity and is included in the City’s Comprehensive Annual Financial Report as a Pension Trust Fund.
Why was the bond being considered?
In October 2021, the City of Longview hired a third-party actuarial firm to evaluate the status of the Longview Firemen’s Relief and Retirement Fund and provide recommendations. The firm recommended that the City of Longview consider utilizing a $45.6 million pension obligation bond to reduce the unfunded liabilities of the pension.
- VIDEO - Presentation from HUB International at Jan. 27, 2022 City Council Meeting
- VIDEO - Discussion of Options at Feb. 10, 2022 City Council Meeting
The pension’s unfunded liability was a debt already owed by the City of Longview in order to provide benefits to pension members. The pension obligation bond was a mechanism used to reduce that unfunded liability by investing the proceeds of the bond as part of the LFRRF investment portfolio.