The Dallas Police and Fire Pension fund has $3 billion in unfunded liabilities that might fall to local taxpayers to cover.
After the pension program nearly collapsed due to years of risky investments made by its former managers, as previously reported by The Dallas Express, it was reorganized in 2017 through a deal with the Texas Legislature.
However, the deal did not entirely resolve the problem. The pension program continues to be in financial disarray. Meanwhile, members of the Dallas City Council are trying to determine how to spend the $4.6 billion in taxpayer money proposed by City Manager T.C. Broadnax for the 2023-2024 budget.
At a Dallas City Council budget workshop held on August 8, council members were briefed on the state of the pension fund.
Dallas Retired Police Officers Association President David Elliston said the pension fund had not given retirees a cost of living increase since 2016 and could not do so for 50 years under the terms of the 2017 deal.
“Our pensions are quickly eroding away. I do not see anything in your budget for the police and fire pension system,” Elliston said.
Retired police officer Larry Eddington told council members that if the pension were to fail, it would drive away potential recruits for Dallas Fire-Rescue (DFR) and the Dallas Police Department.
DPD already faces a shortage of roughly 900 officers. The council’s proposed budget recommended hiring more police officers, but those recommendations still fall short by several hundred, as reported by The Dallas Express.
Eddington said officials should utilize pension obligation bonds while the City can still borrow money.
“I helped pass the law years ago so that we could do that if ever it became necessary. It is necessary right now,” Eddington said. “The debt is coming due. They’ve got to fix it. It wasn’t fixed at the legislature.”
However, issuing pension obligation funds would limit the capacity of the upcoming 2024 Bond Program, as reported by NBC 5 DFW.
“Both of those are competing for the same dollars,” Dallas Firefighters Association President Jim McDade told NBC 5. “So, we need to work and have solutions for both before we do one before the other.”
“We increased our contributions. We reduced our benefits. It is still state law that it has to be funded by the city of Dallas,” McDade added. “The city is going to fund it one way or another, period.”
Last November, Dallas Police and Fire Pension System Administrator Kelly Gottschalk said funding the pension cannot be achieved merely through investing and will necessitate substantial funds from the Dallas taxpayer.
The Dallas Express contacted Gottschalk for comment but received no response by press time.
