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Fix for Dallas fire, police pension system passes Senate

The bill barely made it out of committee last week but was saved by last-minute negotiations

By Dagney Pruner
Dallas Morning News

AUSTIN — The Texas Senate unanimously passed a bill Tuesday that seeks to fix the broken Dallas Police and Fire Pension System. The bill barely made it out of committee last week but was saved by last-minute negotiations between the city, police and fire associations and pension officials.

“This is not just a Dallas issue. This is about the future of our entire state,” said Sen. Don Huffines, R-Dallas, who helped negotiate the Senate’s version of the bill. “The men and women of Dallas police and fire deserve this bill.”

The Dallas pension fix, originally House Bill 3158 from Rep. Dan Flynn, R-Van, was sponsored by Sen. Royce West, D-Dallas, in the Senate. The Senate’s version seeks to make the pension system solvent in the next 46 years; the House’s version would have done it in 40.

Without the bill, the fund would go broke in the next 10 years.

“It’s no easy feat to strike a balance like this. Of course there’s going to be a lot of complaints,” Huffines said. “Nobody, including me, got everything they wanted, although that’s the hallmark of a good negotiation.”

The city, the pension board and police and fire associations have been at odds since the fund’s crisis two years ago. Police and firefighters have had to agree to cut back their benefits, while the city will use taxpayer dollars to make annual contributions to the fund to keep it afloat.

The bill’s committee substitute faced little debate Tuesday after issues with the Senate version were ironed out behind closed doors last week. Police and fire associations, Dallas Mayor Mike Rawlings and pension board members appeared together in agreement for the first time Thursday.

“Today is the day we solved the future of the Dallas Police and Fire Pension System,” Mike Mata, president of the Dallas Police Association, said after negotiations concluded last week.

The Senate’s version, which West laid out Tuesday in an amendment on the floor, requires minimum contributions by the city and first responders into the fund and a lump sum of $13 million from the city for each of the first five years. Contribution rates during the sixth and seventh years will depend on the city’s hiring plan.

In its seventh year, the city will look to a third-party actuary to determine the fund’s progress. The actuary, who must be appointed by mid-summer of 2024, will produce a report on the state of the system and make recommendations. The findings could lead to an adjustment of the minimum contribution rates by the city and system members as well as the lump sum amounts. If the actuary finds that the system is not on the road to solvency, the parties could find themselves back at the Capitol.

“If for some reason the board is not acting in the best interest of the plan, guess what happens in 2025?” West asked. “A legislative session.”

The city’s pension system unraveled after its leaders made risky investments and approved unsustainable benefits, with little oversight from often-absent pension board members.

The mayor, with consulation from the city council, will choose six people to govern the system. The police and fire unions will choose five people to represent their interests. They would need to have a two-thirds majority vote before reducing the city’s contribution rates, increasing member contributions or changing benefits.

“It’s important that this plan is run by professionals and not by politicians,” Huffines said.

Senators praised Sens. Huffines and West and Rep. Flynn for their hard work in striking a deal among the parties just under the wire.

“I really appreciate you spending all the time and effort you did on this, for the city of Dallas but also for our region,” said Sen. Van Taylor, R-Plano. “There cannot be a successful Plano if there isn’t a successful Dallas, so I really appreciate your hard work on this, Sen. West.”

The bill will go back to the House, where they must concur with the Senate’s version before sending it to the governor’s desk for signing.

“This is a monumental moment for everyone involved in the bill,” Flynn said in a prepared statement. “To have unanimous votes from both houses just reinforces the fact that all of our hard work on this pension plan has succeeded in giving both the City of Dallas and the First Responders of Dallas a plan they can both move forward with.”

Copyright 2017 Dallas Morning News

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