Just days after taking office, Houston Mayor John Whitmire withdrew the city's appeal of a recent court ruling involving an impasse over firefighter pay that is being closely watched by at least one bond rating agency.
The appeal of a Harris County District Court judge's December ruling ordering Houston to negotiate back pay and benefits starting from 2018 was filed Dec. 29 by Mayor Sylvester Turner's administration.
Whitmire, who took office Monday after winning a Dec. 9 runoff election to replace the term-limited Turner, reiterated his campaign pledge to resolve the impasse.
"I want the city to remove itself from the court process as much as possible and focus on resolving this long-standing dispute as fairly and quickly as possible," he said in a statement.
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The trajectory of Houston's AA rating from Fitch Ratings
A rating upgrade could occur from a contract "that results in sustainable public safety spending relative to its resource base and a reduction of carrying costs materially below 20% of governmental spending, leading to a strengthened expenditure framework assessment," Fitch said in a September report. A deal with firefighters that weakens that assessment could lead to a downgrade.
Public safety is the biggest expense for the Houston budget, with property and sales taxes accounting for its largest revenue sources.
Attorneys for the city and the Houston Professional Fire Fighters Association will begin meeting this week and will "remain in constant contact until there is agreement on a path forward," according to the mayor's office.
In his inauguration address, Whitmire said while public safety was his top priority, he aimed to take on other challenges, including infrastructure and the city finances "we can no longer kick down the road to address."
Former Houston Controller Chris Brown, who was also term-limited from seeking a third term in office, has said the city was plugging deficits of $160 million to $200 million with one-time revenue.
The nation's fourth-largest city has general obligation ratings of AA from S&P Global Ratings and Aa3 from Moody's Investors Service.
