City of Dallas, Texas Legislators Reach Tentative Deal on Police and Fire Pension
Mike Rawlings speaks about the Dallas Police and Fire Pension System Thursday night.
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The city of Dallas and Texas legislators have reached a tentative deal to fix the city's floundering police and fire pension system. The deal, announced at separate press conferences by Dallas Mayor Mike Rawlings and Dallas-based Texas Sens. Royce West and Don Huffines, makes several key concessions to the city, but includes increased contributions to the fund by the city.
Dallas' police associations are still on the fence over the compromise. “Is everyone happy? No. Which means we have a pretty good bill,” West said. “There’s still some things that the organizations want and still some things that the city wants.”
The Senate bill will give the city a 6-5 majority in appointees to the police and fire pensions system's board, something that Dallas Mayor Mike Rawlings has demanded. It will also require two-thirds majority votes if the board tries to reduce benefits, create a new retirement plan or attempt to take back interest payments made to beneficiaries of Deferred Retirement Option Program.
DROP accounts, which have made the pension system unsustainable, allowed retirement-eligible pensioners to keep working, deposit their pension checks and earn 8-10 percent guaranteed interest.
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Rawlings and his allies on the council also objected to the way the unanimously passed Texas House version of the bill would have funded the system. The House plan, drafted by Rep. Dan Flynn, would've required the city to increase funding to the system indefinitely with a minimum payment based on assumed additions to Dallas' police force, whether the city added those officers or not.
Rawlings called that plan a massive "taxpayer bailout" of the fund, which suffered from years of mismanagement prior to Rawlings and current fund officials taking their posts.
The Senate compromise only requires the city to pay that rising amount for seven years. In 2024, the health of the system would be reevaluated. If it isn't in good shape at that point, the Legislature could move to fix the system in 2025. If the pension fund is on track to be to fully funded, something the Senate bill plans will take 46 years, the city's annual contribution will be set at 34.5 percent of annual police salaries, not counting overtime, with no minimum payments.
The city currently pays 27.5 percent of current cop salaries to the fund.
While Rawlings noted that the new plan "will be expensive," he said Thursday night that he believes the compromise is a good thing for Dallas police and its residents. "We will make sure that the taxpayers are protected, but more importantly the future of our retirees and our active police and fire are all protected. We're all coming together here," Rawlings said.
Frederick Frazier, the Dallas Police Association's first vice president, said that the bill "needed a lot of work," immediately following West and Huffines press conference, before tweeting that Rawlings' event looked like a "SNL press conference." The Dallas Black Police Association criticized handing a majority of the board to the city.
"Our leadership believes that the governance of the pension board should be equally shared between the citizens of Dallas and public safety employees. This entails a pension board consisting of five individuals selected by the City Council and five selected by the public safety groups, with joint selection ability shared on the eleventh pick, who will only vote in the case of a tie," the association said in a statement.
Once the compromise's final language is drafted, the plan will head to a Texas Senate committee sometime this month.
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