Dallas' top finance official said the City Council should consider asking voters to change city rules as early as May to make up for the funding gap with the military pension system.
Jack Ireland Chief Financial Officer The election was proposed as part of a series of recommendations made to a City Council committee last week on how to adequately fund the city's two pension systems. But this spring's election proposal drew strong criticism from one City Council member, who said he believed a plan to close the more than $3 billion funding gap facing police and fire pension systems should be prioritized. .
Meanwhile, military pensions face a shortfall of more than $1 billion. The City Council has until February 14 to approve the measure for the May ballot.
But Councilwoman Carla Mendelsohn said asking voters to help fix public employee pensions before patching police and fire pensions raised red flags.
“We're not going to put this on the ballot if we don't have a solid plan for policing.” [and] Fire Pension Fund,” said Mendelsohn, who represents Far North Dallas. “I think it is very distasteful that they would do something like this when the most urgent staffing needs in this entire city are the police and fire departments, and we are currently not meeting our staffing goals. .”
He said the city needs more time to consider the possibility of moving to other benefit models for civilian employees, such as a 401K. She also wants to hire an independent consultant to scrutinize both pensions, saying the numbers presented by city officials and the pension commission are different.
“I think the entire management team has a conflict of interest because they're members of the (Employee Retirement Fund) and there's a circle of protection for that,” Mendelsohn said.
But other members of the pension task force pushed back against Mendelsohn's belief that city employees are choosing one pension plan over another. The discussion included several brief moments of contention while Mendelsohn and Ireland spoke to each other. At one point, committee chair Tennell Atkins interjected.
“We're going to be very professional, okay?” Mr. Atkins, Mayor Pro Tem of the Irish Parliament, said after Mr. Mendelsohn interrupted Ireland. “Is it OK if one person speaks and the other listens, and vice versa?'' There are people who are listening to this. ”
Ireland and City Administrator TC Broadnax said city officials are equally committed to ensuring both pensions are paid in full. Broadnax dismissed the suggestion of a conflict of interest as “not true” and “a bit disconcerting.”
“Every employee that works for the city works for me, so whether it's on the police and fire side or the regular employee side, it's up to me to make sure their pensions are paid. “We have an obligation to do so,” Broadnax said. “I appreciate that comment, but it's offensive to think that you can't do both.”
ERF provides retirement, disability, and death benefits to approximately 7,500 active-duty military personnel and 7,800 retirees. The Dallas Police and Fire Pension System provides similar benefits to approximately 5,100 uniformed personnel and approximately 5,300 retirees.
Both plans will be overseen by the Board of Trustees.
The city is assisting both commissions in developing plans to fully fund both pension systems by 2055. Both pension boards must submit these 30-year funding plans to the state Pension Review Board by fall 2025. If nothing changes, it will take more than 50 years to fully fund both, according to commission officials.
For example, officials with the Dallas Police and Fire Pension Board said in November that they predicted the pension's funding rate would be about 41%, and that the system would not be fully funded with cost-of-living adjustments until 2073. He said it would be. Until 2090.
The city's police and fire pension system was on the brink of collapse until the state Legislature passed a bill overhauling the system in 2017. The issue arose after the board approved unsustainable benefits and made poor investments, including owning a 3,100-acre resort in California that it purchased in 2006 for nearly $111 million. The pension plan later sold the California resort in 2018 for $22 million.
Councilwoman Paula Blackmon said she would like to see more city oversight of the pension board and the city's contributions to the fund “so this never happens again.”
“We need people to be careful,” said Blackmon, who represents the White Rock Lake area. She agreed that the city should consider hiring an independent consultant to review both pensions.
Councilman Gay Donnell Willis also said he would like to see the city consider moving civilian employees to different types of retirement plans.
“I would love for you to consider it. I think it needs to be done,” said Willis, whose district includes Preston Hollow and Vickery Meadow. “We must have all our cards in place to meet our obligations to the taxpayers as well as those benefiting from the fund.”
City staff's recommendations on how to fully fund both pensions within 30 years, including the need for the city to raise pensions annually, were made by a research group that included outside actuarial firms and former police and fire pensioners. This is almost in line with the previous recommendation. Prohibits contributions to both funds and prevents increases in contribution rates for police and fire personnel.
The Irish government said it was also considering renting or selling city-owned properties to use the proceeds to reduce the city's future pension contributions.
“Any cash injection into either fund helps the fund and helps the city,” Ireland said. He pointed out that the city is contributing $180 million to the police and fire fund this year alone.
Ireland said any change to the employee retirement fund contribution rate would require voter approval.
ERF board staff told the Legislature's Pensions Committee in December that elected leaders would eliminate the cap on city contributions, increase employee contributions from 13.3% to 14%, and authorize city contributions. It proposed calling an election to add the language to the Charter. The board of directors that approves lump sum payments to the pension fund.
ERF Executive Director Cheryl Alston and Pensions Deputy Executive Director David Ethridge told councilors at a December 14 committee meeting that they preferred to hold the election in May.
Ireland said city councils could decide to hold elections in May or November.