Dallas Police and Fire Pension fund review leads to contentious City Council meeting
DALLAS - 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.
This week, tensions were evident between the pension fund and some city council members.
Dory Wiley, the president and CEO of Commerce Street Holdings was hired by the city for a one-time examination of the Dallas Police and Fire Pension Fund performance.
Dory Wiley
"They have worked them down. Now, the end result of what they have on their balance sheet for those assets would be basically the worst of the worst," said Wiley.
Ryan Wagner, the Chief Investment Officer for the pension fund added that the fund has gotten $1.4 billion back from the bad investments so far.
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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.
"What is left is very hard to just go out and sell and reallocate to somewhere else in the portfolio," he said.
Some Dallas City Council members, who have been thrown into a role outside their normal purview, continued to feel uneasy about the fund's performance.
"We need to have that independent evaluation, whether it is monthly, I don't know, but it needs to happen," said City Council member Gay Donnell Willis.
Councilman Paul Ridley suggested the city bring on a consultant like Commerce Street to fill that role more consistently.
"Why we are using portfolio managers that are in the bottom of the performance rankings? That just boggles my mind. That has got to change," Ridley said.
Councilwoman Paula Blackmon urged moving the discussion to the full City Council.
"When mama writes the checks, mama gets to ask the questions," she said.
The questions were being asked of a firm that could be getting a check if the city decides to hire Commerce Street.
"We are about to write a $200 million check this year. Do you have good faith that putting it in this fund it will it be used wisely and invested wisely, and we will get that return?" asked Blackmon.
"I have not seen the plan to invest the $200 million," replied Wiley. "They certainly have an extremely qualified board, they have a qualified staff, I think. I am concerned about the relationship between the city and the staff."
Councilman Zarin Gracey pointed out that the officials with the pension fund seemed to be in "defense mode," during a hearing.
"We are sitting here, hearing things that we can't respond to. There are statements being made that we don't get to respond to or explain, that is why we are defensive. We would like to have a fair review of this, and I feel like this is more of a setup than a fair review," replied Kelly Gottschalk, the Executive Director of the Dallas Police and Fire Pension.
The pension fund submitted a plan to the state that will provide a small increase to benefits to combat the impact of inflation.
It would be the first cost of living adjustment in eight years.
The city has not yet voted on a plan.