Jim McDade, president of the Dallas Fire Fighters Association, told the Observer that without the date change, he could see a repeat of when police officers and firefighters retired in droves over fears of drastic cuts to their pension benefits, which the associations believe put the public safety of the city at risk.
Dallas city staff have said there is a $1.5 billion debt capacity available now. Of that, $1.1 billion is available for the general obligation bond the city is considering. Some $400 million is reserved for pension use. The police and firefighters associations said in an email to Bond Committee Chairman Arun Agarwal that the city is struggling with two pensions that are underfunded and urgently need to be addressed.
According to The Dallas Morning News, the city has $3 billion in unfunded liabilities in the police and fire pension system, as well as another $1 billion in the employees’ retirement fund. The associations said that the reserved $400 million is insufficient to address the police and fire pension needs.
Mayor Eric Johnson recently appointed an Ad Hoc Committee on Pensions to address both pension issues. However, this committee has yet to propose any short-term or long-term solutions.
“They need to really evaluate the needs of the city before they go forward with a bond.” – Jim McDade, Dallas Fire Fighters Association
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Now, the two associations are pleading with city officials to work to provide confidence officers need that the pension is a priority, that all tools and options will remain available, and that the priority of the city is ensuring long-term stability of the pension and staffing. The associations said this could be accomplished by delaying further action on the 2024 general obligation bond and moving the date of a voter proposition to November 2024.
The associations said they recognize the recommended solution for the pensions may not include city bonding. But because of the size and urgency of the issue, they believe it is inappropriate to proceed with a general obligation bond until they know these funds are not needed to secure the pension plans. “In short, the city’s debt capacity must remain available as possible solutions for pension problems until the committee’s pension funding solution is known to be secured from other sources,” the associations said.
Delaying the bond could benefit the city, too, the associations said. The city’s current bond rating is affected by the looming pension issues. If a plan is devised for funding that doesn’t include the city’s general fund budget, Dallas’ bond rating could improve and increase the available debt capacity beyond $1.5 billion, according to the associations. This would allow for a larger general obligation bond proposition in 2024.
McDade and others have expressed desires to slow down the bond process, especially with the looming pension issues.
“We cannot afford to lose officers like we did last time,” City Council member Cara Mendelsohn said in August, according to the News. “To move forward with this bond in May, when we don’t have a plan (for the pension), is completely irresponsible in my opinion.”
McDade said the whole bond process has felt rushed.
“In our opinion, the city is really rushing through this bond process and making some decisions that are quick,” McDade said. “They need to really evaluate the needs of the city before they go forward with a bond.”
He said when the police and fire departments made their bond presentations to the city’s public safety committee, they asked for over $600 million in the upcoming bond package. That has since been reduced to some $150 million, McDade said.
“We have huge needs in police and fire that have been reduced because the city’s not sure which way they’re going with stuff,” he said. “The city needs to do a really good job of evaluating all of the needs of the city and prioritizing them because we’re not going to be able to do it all. We know that. Everybody wants a ton of stuff. We’re not going to be able to do everything. But what is the best thing?”
Delaying the bond vote could help answer that question.
