Talks to save the Dallas Police and Fire Pension Fund are at a standstill, sending Dallas Mayor Mike Rawlings to Austin to explain to a state board why.
The council authorized its four members on the pension board to sue the pension system after mediation failed.
The pension has a nearly $4 billion shortfall and could become insolvent in 10 years. Pension administrators say a lawsuit would strip retirees of their protected benefits.
State regulators met with Dallas leaders on Thursday.
“The news I report today is not good news. We have not reached an agreement,” Rawlings told the state board. “I don't blame anyone who took advantage of the DROP incentive. I bet you would. I bet I would. Those who did so were not greedy. They were taking advantage of an opportunity that should never have been offered. What is the primary responsibility of the fund? To keep it afloat or is it to implement feature plan that makes it more insolvent every day?”
Both the pension board council and the city agreed to give the city 50 percent control of the board. They also agreed to take away interest already given to retirees in the DROP account that allowed them to receive pension checks while still working. They agreed to give the city sovereign immunity that would protect the city from a back pay class action lawsuit by police and firefighters.
“We believe our responsibility is to follow the plan,” said Pension Fund Executive Director Kelly Gottshalk. “When you don't have enough money, people try to say what's important. Everything is important.”
Retirees like Pat Sanchez and her husband don't want to see their hard-earned interest stripped away. They spent more than three decades each with the police department.
“To me, that's like theft,” Sanchez said. “It's our money. We earned that interest. How can they take it back?"
Retired Deputy Chief David Elliston says the city encouraged him to join DROP.
“Most police and fire follow the rules,” he said. “Now for the city to say we shouldn't have been offered that deal? It hurts.”
Police Association President Frederick Frazier says the pension crisis is impacting public safety.
“Our recruitment is not moving,” he said. “We lost 364 officers last year and barely hired 41."
Mayor Rawlings told the pension review board starting a new pension fund is another option but said he doesn't want to do it.
As of now, the city says its plan would fix the fund in 30 years and does include an increase in property taxes. Someone with a home valued at $240,000 would pay an extra $115 a year.