On Wednesday, officials said a cash infusion from taxpayers is among the options for a predicted billion dollar shortfall in the Dallas Police and Fire pension fund, along with cuts in benefits and higher city contributions.
At a city council briefing, new pension officials blamed their predecessors for promising benefits more than they could afford and concealing losses in risky real estate investments.
“With the FBI looking at various things, it's obvious why they’re doing that,” said Councilman Scott Griggs, also a pension board member.
The latest news from around North Texas.
Griggs said some deals were made over a steak dinner and a bottle of wine without proper regard to investment fundamentals.
From assets of nearly $3 billion now, scheduled payments to retirees and dependents are forecast to take the fund to a zero balance by 2030 and a deficit of $1 billion by 2033.
“The people who got us where we are have been shown the door and are being pursued,” said Councilman Philip Kingston, another pension board member. “We recognize this is a very, very serious problem. No kidding. It really is. But it is a solvable problem. It’s not a time to panic.”
Public safety employees attended the meeting, including new Pension Board President Sam Friar, who is also a Dallas Firefighter.
“We’re one of the lower paid fire and police forces in the area so yea, it will be difficult,” Friar said. “It’s a bitter pill to swallow. However, we want to sustain a long term pension fund for our members.”
New administrator Kelly Gottschalk was recently hired to help fix the problems.
“We definitely can’t just invest our way out of the problem. We are looking at plan design changes as well as partnering with the city to see if we can change contributions,” she said.
Mayor Mike Rawlings complained that it took three years to get the straight answers presented Wednesday.
“This is a Bernie Madoff sort of thing. The guys at the front got their money and now, the guys at the back are having to pay the price,” Rawlings said. “Time’s a wasting and if we don’t deal with some of these issues now it’s going to cost us more down the road.”
Councilman Lee Kleinman, another pension board member, said a voter referendum on support for the system will likely be needed, but the amount of money to request from taxpayers has not been decided.
“That’s not on the table, until we get a set of reforms laid out by the pension system and come to the city and say 'here are the reforms we’re willing to make for the city participation.'”
The pension board and Dallas City Council will negotiate a plan over the next few months.