Dallas

Dallas Pension Deal is Not Done Yet

Reservations about pension deal announced Thursday

Supporters and critics voiced reservations Friday to the Dallas Public Safety Pension deal announced by the Mayor and State Senators Thursday.

Compared with the deal approved unanimously by the Texas House last week, the new deal limits city contributions and grants the city majority control of the Police and Fire Pension Board.

Mayor Mike Rawlings said seven of eleven public safety employee and retiree groups that participated in negotiations this week signed a paper supporting basic points of the new deal.

The Mayor counted Dallas Fire Fighters Association President Jim McDade as a supporter.

“There’s no agreement in place,” McDade said. “Until we actually see it in writing nobody can agree to anything.”

Mc Dade spent most of the past few weeks in Austin representing 1300 Dallas Firefighters on many issues, especially their pension. The choices are a mix of cuts to benefits and increased contributions from employees and the city.

McDade was pleased with the House version before city leaders pushed for changes in the Senate. Dallas Senators Royce West and Don Huffines held a joint news conference Thursday announcing they support the new deal.

“There’s been a lot of give by members, a lot of give. The majority of the burden is placed on the members of police and fire,” Mc Dade said.

Instead of 8.5% employees would contribute 13.5% of their pay toward the pension fund.

“That’s a 5 percent cut in everybody’s paycheck,” said Mc Dade.

The Senate version grants the city 6 appointees on a new 11 member Police and Fire Pension board. But in return, employees and retirees won a provision that any major change in benefits would require a 2/3rds majority, or 8 votes on the 11 member board.

“It’s a huge change,” Mc Dade said.

The leader of the Dallas Retired Police Association Pete Bailey, said he is opposed to the switch to city control. It could increase the chance of one day imposing his biggest complaint. That’s so called “claw back” of money retirees have already received, which is still included as an option for the future pension board.

“It’s completely illegal and it’s inappropriate. That’s our number one deal killer and we won’t support it,” Bailey said. “We don’t understand why anybody could agree to legislation that has language in it that is presumed to be unlawful.”

The pension crisis is blamed on past investments that returned too little to support generous Deferred Retirement Option Plan (DROP) savings accounts. Reappraisals slashed the true value of fund assets to a level that will leave the fund insolvent within ten years without drastic changes.

The “claw back” provision is still included because the new Senate deal may still fall short on providing sufficient operating cash long term.

“We’ve all brought up concerns with the long term funding that we all believe is necessary,” McDade said.

Employees and retirees suggest Dallas Love Field Airport fees, sales taxes or water bill charges for public safety as other ways to raise pension money.

State Senators opposed a tax increase. The Texas House Pension Committee Chairman said he would oppose any deal that does not fully fund the pension.

Mayor Mike Rawlings said the pension solution will be expensive for taxpayers and it will limit options for other city needs but final figures on the cost are not yet available because the deal is not final.

Even after a pension deal is done, police and fire back pay lawsuits pending for decades are set to start coming to trial later this year.

A 1979 voter referendum granted public safety employees the same pay raises that were given to managers. Employees argued they should have been granted those same raises ever since but the city strongly disagreed. The back pay issue could be another billion dollar liability for Dallas.

“They should have owned up on it a long time ago,” McDade said. “They’ve been kicking the can down the road on this lawsuit for 20 plus years now. It was a simple solution that could have been settled for a few hundred thousand dollars in the early 90’s. The city absolutely refused to do that and now we’re at the point where we are.”

McDade said back pay and the pension are totally separate issues. But back pay is another reason the Dallas Mayor is pushing to limit pension expense for taxpayers.

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