New Deal in Dallas Pension Crisis

Must pass both Texas Senate and House by May 29

A promising new deal in the Dallas Police and Fire Pension crisis is the result of negotiations with state senators in Austin the past two days, according to participants in the talks.

Pension uncertainty coupled with low Dallas public safety pay is blamed a flood of police officers leaving or retiring. The police force of less than 3,000 is the smallest force in years, and police response to calls has slowed.

"We believe that a resolution is close at hand," said Dallas City Councilman Erik Wilson, who is also a member of the Police and Fire Pension Board.

Dallas City Councilman Adam McGough is one of the new faces from Dallas City Hall to enter the pension negotiation with Texas senators this week after the Texas House unanimously approved a version of the deal a week ago with provisions that Dallas leaders strongly opposed.

"And I believe that this was a situation where everybody got something out of this," said McGough.

Mayor Mike Rawlings complained House Bill 3158 was too costly for taxpayers who also demand solutions to other Dallas problems like crumbling city streets. The mayor insisted the city should also get the majority of appointees to the pension board to improve oversight. In the current arrangement, eight of 12 trustees are employees or retirees who control their own benefits. The remaining four are Dallas City Council members.

"The best part about the negotiation is that everybody's involved," McGough said. "We had all the parties that have interest in this and it was an opportunity to lay everything out on the table."

Since the measure moved to the Senate, people involved in the talks said the new version of the bill reduces cost to taxpayers and gives the city six appointees on an 11-member pension board.

The Dallas City Council was scheduled to approve a resolution supporting the new version Wednesday, but Wilson made a motion to postpone the city vote indefinitely.

"We're optimistic progress is being made and we did not want to jump in front of the legislation," Wilson said. "As we always said, this was going to be a sacrifice from all. I think we're at a point where we're close to everyone agreeing to it. I think it's a win-win for everyone."

Thomas Glover, president of the Black Police Association of Greater Dallas, is not sold on the deal.

"We need the full council's attention and we need the citizens to know what our concerns are," he said.

Glover insists governance of the fund should be split evenly. And he strongly opposes that "clawback" on Deferred Retirement Option Plan (DROP) savings money already promised to plan members in the past is in the bill.

"I don't think that you're going to do your best in recruiting if people think you're going to break your promise," Glover said. "If we don't have a decent pension and we don't have good pay, the best people that would be here in the police and fire department are going elsewhere."

The fund heading toward insolvency within 10 years is blamed on deception about the true financial picture by past pension managers. Overly generous past benefits could not be supported by overvalued investments the fund held. Much of that situation has been reformed, but the fund is still billions short of future obligations.

All versions of the deal also include reduced benefits and higher employee contributions along with more money from the city.

Any new plan approved by the Texas Senate must be reconsidered by the Texas House, but McGough said he expects the House to accept Senate changes if employee and retiree groups also agree.

"What they said from the beginning was, 'Dallas, you come up with an option. You come up with an agreement and we'll honor that.' And I believe that's what's going to happen," McGough said.

The deal must pass before the current session of the Texas Legislature ends May 29.

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