DALLAS (CBSDFW.COM) – Signs of hope for Dallas’s pension crisis, that’s what city leaders tried to offer council members in a briefing Wednesday before the pension board meets to tackle the billion dollar problem.
Council members say they’re confident they have options to get the troubled pension system back on track, but they realize the plan presented in their briefing could be the beginning of a complicated negotiation.
The City Attorney and City Chief Financial Officer gave council members a closer look at what they described as a flawed pension system. Now the troubled fund faces more problems as pensioners continue lump sum withdrawals after the mayor sued to stop the practice.
“My fear is that it will continue to further create a run on the bank, if you will, and it will strain negotiations, so of course we want a resolution to this really quick,” Dallas Deputy Mayor Pro Tem Erik Wilson said.
Wilson sits on the pension board. On Thursday the board is set to decide whether to stop withdrawals. That decision will determine what action a district judge will take in the mayor’s lawsuit.
“We’re going to make sure that this thing’s done fairly. There are some folks that took our money out of the system that really wasn’t fair to their partners, and we’ve got a plan now in place as we go forward to rectify that,” Mayor Mike Rawlings said after the briefing.
The city’s plan calls for the state legislature to redesign fund features like the guaranteed 8 percent return on savings accounts, to adjust future payouts, and to give city council veto power along with pension members. Council member Sandy Greyson says she’s hopeful city leaders can make corrections to the fund that will be implemented quickly.
“The worst case scenario is that we can’t find a fix and that the pension fund isn’t there in the future for our police and firefighters. 58 That’s the worst case,” Greyson said.
The city’s CFO says the bailout proposed by the pension fund could end up raising property taxes 130 percent.