$1 Billion Lawsuit Could Ruin Dallas Finances

A massive liability of at least $1 billion threatens to ruin Dallas finances this year.

Back pay lawsuits by Dallas police officers and firefighters date back decades, but two of the cases are finally set for trials in August and December.

Attorney Ted Lyon represents around 10,000 current and former employees in the largest of the cases.

“This was a contract between the voters of the city of Dallas and the people on the street,” Lyon said.

The city has been fighting the issue since 1979 when voters approved a referendum that said the difference between supervisors and rank and file pay “shall be maintained.”

“Does that mean ‘shall?’ Does that mean ‘maintain?’ I think it does. I think it's pretty simple,” Lyons said.

But Lyon said by 1987, supervisors were getting salaries higher than people below them and in 1994 the first of the lawsuits was filed. Since then, the city has fought the case, insisting it is not required to abide by the 1979 referendum all these years later.

The latest city appeal to the Texas Supreme court was sent back to lower courts for trial on two key questions; whether “shall be maintained” should still be enforced and if so, how much money the employees should be paid.

Lyon said the total is now at least $1 billion. Some employees would easily receive enough to put kids through college.

Even though the North Texas economy is generally good and rising property values mean more tax revenue for the city, Dallas faces huge expenses from deferred maintenance over the years.

“If you continue to defer, you have to pay more and more and more. In many ways, that's what the city has done,” former Dallas City Council Member Diane Ragsdale said.

Ragsdale served on a task force that identified $450 million in needed repairs at Dallas Fair Park. She also leads a non-profit organization that has greatly improved neighborhoods around the park with support from the city.

“This is an example of what can happen if you invest,” Ragsdale said.

Dallas Mayor Mike Rawlings is pushing additional city investment in Fair Park and surrounding neighborhoods.

The city has also identified around $1 billion in street repair needs, a convention center that needs expansion, a public safety pension shortfall of several billion dollars, in addition to the back pay lawsuit liability.

“It should not rob us of our needs, because we, too, have been neglected,” Ragsdale said.

Lyon said the city should start negotiating a payment plan with employees before courts order something more damaging to city finances.

“There's going to be a day of reckoning,” Lyon said. “These cases are going to come to trial this year.”

Rawlings' chief of staff said the mayor is aware of the issue, but declined comment Friday because of the pending lawsuit.