Staggering taxpayer cash infusion suggested for Dallas Police and Fire Pension fix

Dallas city leaders Thursday received options from actuaries on how to fix enormous unfunded liabilities in the Dallas Police and Fire Pension Fund.

Councilmembers were told a $1.3 Billion cash infusion from taxpayers would set the fund on a much better course, but the total unfunded liability is still $3 Billion.

No one knows where the city can find the kind of cash that was suggested.

Police and fire employees plus retirees are watching the situation very closely.

Retired Deputy Police Chief David Ellison ran the North Central Police substation from 2004 to 2009 before he retired.

“Took time away from our lives and our families to earn the wage that we were promised and we're entitled to receive that retirement,” Ellison said.

Police and fire retirees receive no cost of living increases until 2073 and current employee retirement benefits are at risk without major changes to the Dallas Police and Fire Pension Fund.

“We've made the cuts. Employees have made the cuts. Now it's time for the city to do something,” Dallas Firefighters Association President Jim McDade said.

A major increase in employee contributions and a reduction in benefits was part of the 2017 pension fix approved by the Texas Legislature.

There are hundreds fewer employees contributing to the fund than the city counted on.

“One of our issues is we expected that our payroll would go up more than it actually has,” City Councilmember Kathy Stewart said.

Actuary experts hired to analyze the fund and offer options said Thursday a cash infusion of $1.3 billion would limit future city payments to the fund at a more reasonable level.

But the total unfunded liability is still $3 billion.

“I think a lot of folks would like to do a cash injection to sort of mitigate our payments into this,” Councilmember Chad West said.

The Dallas Chief Financial Officer is working on figures for how much cash the city can afford.

Councilmember Cara Mendelsohn said the situation is sort of like a mortgage.

“I just pay it off early, I'm going to save myself a lot of money,” she said.

There is a benefit to earlier payment into the fund, but the experts said the difference with a pension is that it must be set up so that benefits to future retirees would never end.

The experts said a comparison with other Texas cities supported their recommendation against any additional reduction in pension benefits or increase in employee contributions from the rates agreed to in 2017.

“A good pension for our police and fire, it is a recruitment tool and a retention tool,” McDade said.

One of the experts’ scenarios also provides a small immediate cost of living increase for retirees and additional cost of living increases in future years, instead of forcing them to wait decades.

“There's always places you can find to put money but the people who defend and protect public safety are important,” Ellison said.

Dallas must have a new police and fire pension plan ready for state officials by next year.

“To see this number, it's a lot. And we have other things that we have to balance on top of this,” City Councilmember Paula Blackmon said.

The pension figure cited Thursday is even more than the entire $1.1 billion public improvement bond referendum planned for 2024 to address many other pressing Dallas problems.

City officials hope to somehow solve the pension issue without additional borrowing. 

More discussions are planned in December.