The City of Dallas is wrestling with a mammoth pension shortfall, with the Dallas Police and Fire Pension fund's liability hitting $3 billion—a financial abyss that taxpayers are inevitably tied to the bridge. This figure dwarfs the city's entire general fund budget, which finances numerous city services, and triples the size of the anticipated 2024 public improvement bond referendum.
The issue has been neglected for an extended period, with few at City Hall bringing the escalating crisis into the limelight. Dallas Firefighters Association President Jim McDade pointed out the stark competition between funding for vital public improvements and the looming pension obligations, emphasizing the need for concurrent solutions for both before prioritizing one over the other. "Both of those are competing for the same dollars. So, we need to work and have solutions for both before we do one before the other," McDade expressed his concerns, according to NBC DFW.
Following efforts that fell short of resolving the pension debacle, such as a 2017 state legislative act and alterations to benefits and contributions, Dallas city officials are now considering the issuance of pension obligation bonds, a move that could impinge on how sizable the public improvement bond referendum might be. The daunting unfunded liability comes as a consequence of fewer than projected employees contributing to the fund and lackluster returns on pension investments.
Hinging on every word he said, Dallas Retired Police Officers Association President David Elliston painted a bleak picture during a Dallas City Council budget workshop. Elliston voiced frustrations, "Our pensions are quickly eroding away. I do not see anything in your budget for police and fire pension system." Echoing this sentiment, former pension board member retired officer Larry Eddington stressed that a failure to remedy the pension issue might drive away potential public safety recruits and businesses from the city, urging the immediate use of pension obligation bonds, as per NBC DFW.
Meanwhile, debates rage at the city council. Chief Financial Officer Jack Ireland suggested a possible May ballot measure to amend city rules to stabilize the civilian employee pension system, facing its own $1 billion shortfall. This proposition, however, sparked criticism from some council members, including Cara Mendelsohn who argued the police and fire pension situation should take precedence. "I have no intention of voting to put this on a ballot when we don’t have a solid plan for the police [and] fire pension fund," Mendelsohn told the news outlet, per The Dallas Morning News.
While city officials explore various solutions such as leasing or selling city-owned property and increasing yearly contributions to the funds, council members advocate hiring an independent consultant to assess both pensions for discrepancies. The urgency is compounded by upcoming state pension review board deadlines and the overarching goal to achieve full funding of both pension systems by 2055. As the city staff and pension boards work through these complex financial maneuvers, the clock ticks for the council to make decisions that will shape the fiscal health of Dallas and determine the security of its public servants' retirements.
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