Dallas City Council debates hiring consultant to improve pension fund's rate of return
DALLAS - As retired Dallas police and firefighters approach eight years with no cost-of-living adjustment, Dallas City Council members are debating if the city should hire a consultant to try to improve the fund's rate of return.
Councilmembers are trying to strike a delicate balance between meeting its promise to retired first responders who protected the city while also protecting taxpayers.
Dory Wiley, an outside consultant hired by the city to examine the performance of the Dallas Police and Fire Pension Fund, explained to councilmembers on Wednesday how the fund's previous staff and board got it into a huge financial hole. He says as an outside observer, he tried to warn the board.
"I visited with some of the board members at that time and said, ‘Hey, you’re heading down the wrong road. This is going to blow up,’" he said.
As the city's hired consultant, Wily is working to encourage the council to hire his company or another to serve as a watchdog.
"The goal is to improve performance so we don't have to raise taxes and sell as many assets so we can give a COLA and have a safer city so we can keep attracting top talent and companies to the best city, in the best state in the union," he said.
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Thousands of retired Dallas police officers and firefighters continue to wait and see if the Dallas City Council will agree to the pension fund's plan to keep the fund solvent.
Both councilmembers Paul Ridley and Gay Donnell Willis said they want to see the fund perform better to try to minimize the impact to taxpayers.
"We talk about we will sell this for $5 million and this for $10 million or what can we take from DART and threaten to hobble public transit system. But there hasn't been focus on the fund's performance," Willis said.
That kind of nickel and diming has even hit the library system. One asset the city might put up for sale is the Skillman Branch Library, despite opposition from people who use it regularly.
Councilwoman Paula Blackmon thinks there's got to be a way to improve the fund's rate of return.
"That means more money to the fund and less we have to pay out, which means I could probably keep a library open," she said.
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Dallas City Council concerned over underperformance of the police, fire pension fund
It turns out the sins of the past are continuing to haunt the pension fund today, causing the fund's return to remain well below the national and Texas average.
But Wiley explained the fund's previous bad investments continue to hurt its performance today, and that will not improve in the short term.
"It will take time to deal with assets that are a drag on the portfolio," he said.
The city's proposed pension funding plan is different from the one the Dallas Police and Fire Pension Board already passed and sent to the state pension review board. It may be up to state lawmakers to decide which of the plans needs to be followed.