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Dallas Police & Fire Pension System in financial trouble
Dallas City Council members received two grim presentations on the state of its civilian and uniformed pension systems.
DALLAS - Dallas City Council members received two grim presentations on the state of its civilian and uniformed pension systems.
The pensions are facing massive shortfalls. The police and fire pension could be short by $1 billion or more.
The Dallas City Council members tasked with making the Dallas Police and Fire Pension solvent in 40 years said they regretted that city leaders didn't come to them with solutions sooner.
Dallas Mayor Pro Tem Tennell Atkins expressed frustration that the city has made few changes since lawmakers in Austin worked to bail out the Dallas Police and Fire Pension System.
The pension executive director, Kelly Gottschalk, explained the new board has had a lot of work trying to get out of risky investments made under the leadership of former director Richard Tettament.
Those deals included ultra-luxury homes in Hawaii, Aspen, and California, as well as the $200 million museum tower in Downtown Dallas.
Tettamant was ousted in 2014.
"Drag on our fund, selling assets in responsible way, so not a fire sale. The board has spent a lot of time doing that," Gottschalk explained.
Before drastic cuts to benefits, the fund was in a $5.4 billion shortfall.
Benefit cuts reduced that by $1 billion overnight, but a significant liability still exists.
The latest numbers will be presented next month.
Dallas Police and Fire Pension System could face financial trouble again
FOX 4 obtained an email labeled ‘confidential’ where the leader of the city's bond task force informed the mayor and city council members that before the city seeks to use its entire bonding capacity for infrastructure needs, it may need to consider concerns about the police and fire pension.
"We have to fix this, have to make sure uniformed officers when they retire have a check to cash," Atkins said. "My commitment is to have a plan before Christmas. Six years is too long."
Under the current plan, Dallas police and fire retirees are not eligible for a cost of living increase until 2073.
"We should all be shocked and say this is unacceptable. You have been showing us, I did not understand that we could change it before 2025. But we probably should have," Dallas City Councilwoman Cara Mendelsohn said. "There is a significant change in contribution that has to happen."
Dallas CFO Jack Ireland explained why he did not ask Dallas City Council members to make changes sooner.
"There was a run on the bank, $600 million. Needed to see how things stabilized," he said.
The latest numbers on the health of the Dallas Police and Fire Pension System will be released November 9.
There is expected to be a shortfall of more than $1 billion that the city will have to figure out how to fill.
Lawmakers want the city to have a plan in place by 2025.