Retired officer Gilbert Travis makes the trip once a month from San Antonio to find out about the state of his failing pension fund.
“Everything they do in there affects our lives in what we do,” Travis said.
The news was far from pleasant at Thursday's meeting of the Dallas Police and Fire Pension Fund.
The board’s executive director, Kelly Gottschalk, briefed the board and retirees on a new 177-page bill filed by State Rep. Dan Flynn aimed at saving the fund. The House Pensions Committee is scheduled to take up consideration of the bill March 27.
It includes a litany of benefit cuts and other change that's a bitter pill for retirees.
“There's a lot of challenges in the bill,” said pension fund executive director Kelly Gottschalk.
Chief among the concerns is a provision directing a newly structured board to consider taking back interest earned on special retirement accounts known as DROP. Gottshalk was surprised to see a claw back provision in the bill. City officials have been pushing the claw back provision which they call “an equity adjustment.” Retirees are already promising lawsuits if they try.
Deferred Option Retirement Program accounts allowed police and firefighters to retire from the pension and then put their pension checks into special high-interest earning retirement accounts.
Those accounts, along with past bad real estate investments, are a big reason for the fund’s multi-billion dollar funding gap.
“The number one goal would be to eliminate the equity adjustments in the bill,” Gottschalk said.
Another concern is the structure the bill proposes for a new board. She feels it’s too weighted toward the city. They want it to be 50-50.
They are also worried that the bill would raise the retirement age to 58 rather than the current age of 50.
Generally, however, there was praise for Flynn’s effort.
“For whatever reason, this guy feels a sense of responsibility,” said council member Philip Kingston, who is a member of the board.
To avoid the claw backs, Kingston and council member Scott Griggs, who is also on the board, propose giving the fund a portion of the sales tax revenue now dedicated to DART. They would use it to fill about a $450 billion funding gap.
“Do we want another DART station up in Denton or do we want police officers and firefighters to answer our calls when we call 911?” Griggs said.
They are seeking to put it on the November ballot.
The idea's opposed by Mayor Mike Rawlings and other council members. DART leaders have warned of dire consequences, saying it would lead to cuts in bus and train services.
Kingston says the amount of money in question is about $3.5 percent of DART’s budget.
“You all know that DPD and DFR are asked to fund five percent (reductions) for efficiency purposes,” Kingston said. “No one’s ever asked DART to do that not one single time.”
The board is now expected to vote on a resolution in support of the idea at their next meeting.
Council member Erik Wilson, who is also on the board, is opposed on multiple grounds. He said the money would not be immediately sent to the pension even if taxpayers approved it because of debt repayment obligations already in place.
When he said it, Kingston responded saying, “I told you Erik before that’s false. I really wish you would quit saying that.”
Wilson replied that he had been told that by city attorney, DART and the city’s chief financial officer.
He also is opposed on philosophical grounds.
“The pension, however, it was structured and however we got here, the pension did it,” Wilson said. “No one else did it.”
Travis and the other retirees are also concerned about other provisions in the Flynn bill.
It would eliminate cost of living increase. It would turn DROP accounts into annuities based on a life expectancy of 78.
“I don’t have 78 years,” he said, becoming emotional. “I’ve already had a pacemaker put in. I basically died in the emergency room.”
There was more unhappy news for Travis and the other retirees. The board had been scheduled make $280 million in lump-sum withdrawals out of DROP accounts.
They heard Thursday there just wasn't enough money to do it.
The fund’s assets are currently about $2.1 billion. If it falls below, $2 billion then it would trigger them to have to repay a $174 million loan. If that occurred, it would harm the entire fund.
“There’s no excess,” she said. “We can’t pay anything out.”
Travis, 63, has no idea when he'll get access to his money, the money he had counted on. He'll be back next month. He knows the news probably won't be any better.