Dallas Mayor Mike Rawlings has asked the Police-Fire Pension Board to find a way to halt a run on the system’s money.
In a two page demand letter to board, Rawlings draws a clear distinction between the priority of protecting the pension funds for all public safety employees, and the discretionary fund known as drop.
"We've got to protect the base benefits,” Rawlings said.
The deferred retirement option plan allows employees of retirement age to draw benefits and keeps them in the pension fund with interest while they continue to work.
The mayor says in a matter of months $500 million dollars has been withdrawn from the drop fund and if something isn't done very soon, assets will have to be sold just to keep the fund afloat.
"So, we've got a long term solvency issue and we've got a short term cash issue. What this asking the board to do is to deal with the short term cash issue to give us the runway to get it solvent in the long run. I think we can do that,” Rawlings said.
The mayor outright rejected the pension board's recent request for the city to give the pension fund $1 billion dollars.
"I'll tell you what I'm saying to the taxpayers is we are not going to put this on the burden of property owners and taxpayer to the degree of that everybody thinks they should be,” Rawlings said. “We're just not going to do it. Not while I'm Mayor.”
The mayor gave the pension board a 48 hour deadline to respond to his request to stop drop withdrawals.
"I think if I was on the board or if I was chairman I would call an emergency meeting take this issue up and decide what they want to do,” Rawlings said.
Sources tell FOX4 there are no plans to hold an emergency meeting to meet the mayor’s deadline.
"The pension fund doesn't have enough money and they are not solvent,” said SMU economist Mike Davis.
Davis says the problem is fairly simple, but the solution is not. He agrees with the mayor that drop withdrawals are rapidly draining the fund at the expense of the entire pension fund.
“Somewhere we have to either trim the pension promises that have been made or somehow find money to put into that fund,” Davis said. “We have really two problems and they are both really hard problems.”
Pension member were set to vote on a reduction of benefits earlier in November when a lawsuit was filed by several pensioners questioning the validity of the board structure itself.
A judge granted an injunction suspending the vote until a hearing can be held to review the merits of the case. That hearing is set for Thursday afternoon.