Even in these boom times, Dallas is broke, thanks to a city council that has been giving away the store

Nothing in Shapiro's letter would give anyone the impression that this issue can be put off. "My staff of the Senate State Affairs Committee met with the Pension Review Board Executive Director Rita Horwitz, and all agree that this issue must be resolved as soon as possible."

She wants a meeting next month.

This is one issue where Mayor Kirk really threw his arms around former City Manager John Ware and gave him his full support. Ware had hired his own expert. Ware's expert said the fund was fine.

Michael Hogue
When it comes to blaming someone for Dallas' budget troubles, many people point fingers at former City Manager John Ware.
Martin Menocal
When it comes to blaming someone for Dallas' budget troubles, many people point fingers at former City Manager John Ware.

But nobody seriously believed Ware's expert.

When Benavides took over as city manager in September 1998, he met with City Auditor Robert Melton, the ex officio chairman of the pension board, and the two of them decided they had better get busy finding $20 million a year to make the fund sound.

Haven't found it yet. Still looking.

But in a year when the council is trying to slip a tax hike past the voters without telling them, when they're already borrowing more money on the street than they borrow in bond sales, when they know they may not only lose the Bell franchise money but also have to pay it back, how likely is it that this city council will stoutly defend the rights of city retirees?

"Virtually nobody is totally protected from cuts," Melton says.

The retirees who have already given their working lives to the city may be protected by one thing: Any change in their benefits has to be approved by the voters. The question then will be whether the voters of Dallas have more of a conscience than their elected representatives do.

That does leave the current employees as a possible source for some or all of the $20 million a year, and they are only too aware of it. John Briscoe, president of the Texas Public Workers Association, says, "There are only three ways to fix it. The employees vote to increase their participation. The citizens vote to decrease benefits. Or the council votes to increase its contribution."

What makes the problem especially grating for employees, Briscoe says, is the blithe unwillingness of the council to face up to it, while they continue to talk of other ways to spend big money.

"They're just sticking their heads in the sand, hoping it will go away," he says.

Briscoe talks about the cost-of-living raise the council wants to give employees -- effectively 1.5 percent, against an inflation rate of 3 percent -- and then he talks about the council's enthusiasm for a plan to spend hundreds of millions on new suspension bridges downtown in order to make an aesthetic statement.

"Those bridges, in my mind, are a symbol. Those things will never happen, but the fact that they would even entertain the idea is so symbolic," he says.

"In the short term, the employees are going to get screwed, and ultimately the citizens will. They're already talking about laying off a bunch of employees. If there is no money, they won't do anything about the retirement fund problem. And good employees will leave."

Of course, that's if there's anything left to leave.

The cement tennis shoe

The really big shoe, the one that could sink the boat, is the series of lawsuits over police and fire pay policies ("Big-time payback," May 27). In 1979 the city council passed an ordinance linking pay levels for police officers and firefighters to the salaries of the police and fire chiefs.

Beginning in 1988, police and fire employees discovered that the city had not honored that ordinance and that it in fact appeared to owe substantial amounts of back pay to almost all of its "sworn" employees in the two departments. Different groups eventually hired lawyers, and several suits were filed.

On May 27, a judge in one of those suits ruled that the city owed 16 firefighters an average of $136,000 each in back pay. There are 824 plaintiffs in the suit, so if that average holds, the total hit to the city could be as much as $112 million

That's the little one.

A much larger class-action suit could bring a judgment as big as $800 million if the same average applies. Bob Gorsky, the attorney in that case, says the real significance of the ruling in the first case is that the judge didn't believe the city's main argument and ploy -- that it had established a retroactive pay scale and ranking system that solved the problem by bringing down the chief's pay.

"That just didn't wash with the court," Gorsky says. He clearly hopes the same argument won't wash with his judge either. In which case, his clients can look to a payday that may nip up in the range of a billion dollars.

The police and fire pay lawsuits are already serious enough that the city has to inform investors of them every time it borrows money with general obligation bonds. The law requires it to make an "official statement," attached to the prospectus for the bonds, warning investors of any big problems the city may face, including lawsuits.

The city's current "official statement" hasn't been updated since last year, the last time Dallas sold bonds. At that time, the statement described alleged damages of $94 million but said the judge was willing to let the city make the suit go away by lowering the chief's pay.

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