CHARLESTON -- A long-discussed measure to help West Virginia cities shouldered with skyrocketing police and firefighter pension costs won approval Thursday from state lawmakers.

Huntington officials championed the legislation as a tool that will allow them to dedicate more money toward infrastructure needs and hiring more public safety employees.

The House of Delegates overwhelmingly approved the legislation by a 93-3 vote during the last day of a special session. The Senate unanimously approved the legislation on Wednesday. The measure apparently has the support of Gov. Joe Manchin because it was one of the primary reasons for his call of the special session.

"I'm just pleased with how such a diverse group of people worked for this solution," said Kanawha County Sen. Dan Foster, one of the key lawmakers who spearheaded the legislation's passage. "I really do feel it's going to make a big difference, not just in Huntington, but in other communities that are hurting throughout the state."

The legislation was put on the special session agenda primarily because of Huntington's worsening financial condition. More than 20 percent, or $8.8 million, of the city's $42 million budget is going to pension costs this year. Under the current funding method, those costs are scheduled to rise to $12.4 million a year by 2015 and not reach their ceiling until they hit approximately $21.2 million in 2023, according to an actuarial report prepared for Huntington earlier this year.

While Huntington officials have relied on fee increases in recent years to offset those rising costs, they also have warned that revenue growth cannot keep up with the current retirement system's costs and that the city will eventually have to file for federal receivership if it is not changed.

The new legislation, which takes effect Jan. 1, 2010, will give cities the option of closing their existing retirement plans to new hires and refinancing those plans over a 40-year period to pay off their unfunded liabilities. Huntington's unfunded liability is approximately $130 million.

New hires will be placed in a retirement plan that is similar to benefits offered to emergency medical services employees across the state. The plan will be administered by the Consolidated Public Retirement Board.

According to actuarial projections, the amount of money Huntington will have to dedicate to pension costs will gradually decline. For example, it will spend $395,000 less on pensions in 2011 than it is scheduled to pay under the current funding method. The following year, it will spend approximately $1 million less. By 2015, the difference will jump to $3.3 million.

"It's not a windfall of money now," Huntington Mayor Kim Wolfe said. "But it allows us to re-amortize our debts on a more level basis, focus on our priorities and not worry about whether we are going to go into federal receivership."

The legislation does not rely on any tax increases, nor does it require any state funding. Cities had hoped for 0.1 percent, or about $2.2 million, of the state tax on fire and casualty insurance premiums being routed to the pension plans.

The existing plans will still be administered by local pension boards, but a state oversight committee will be created to deal with issues such as investments and disability benefits.

Foster said the oversight provisions and absence of state money going toward the new retirement system won over many lawmakers who were initially skeptical about the legislation.

"Everyone gave a little bit and took ownership," he said. "At the same time, we will be able to provide a good and fair retirement system to our loyal public safety employees."

Wolfe credited Foster, Cabell County's delegation, the West Virginia Municipal League, police and fire representatives and the Consolidated Public Retirement Board for working with Huntington and other cities to piece the legislation together. Manchin also played a critical role, he said.

"When the governor came to see me early on, he said if we could get police and fire on board with a plan that didn't need new taxes, that he would put it on a special call," Wolfe said. "I applaud him. He's a man of his word."

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Howie McCormick/The Herald-Dispatch

The West Virginia State Capitol building in Charleston, W.Va. (Photo taken Thursday, February 21, 2008).