Dallas Police Resignations Soar As "Insolvent" Pension System Implodes

Tyler Durden's picture

A few days ago we noted that the Dallas Police and Fire Pension System (DPFP) took the unprecedented step of halting withdrawals from their DROP fund after a "run on the bank" pushed to the entire pension system, and the City of Dallas, to the brink of liquidity crisis (see "In Unprecedented Move, Dallas Pension System Suspends Withdrawals").  Now, a local CBS affiliate in Dallas is reporting that the pension crisis is driving a massive surge in police resignations.   

Interim Dallas Police Chief David Pughes told city council members Monday that 99 officers have left the department since October 1.

 

City councilman Philip Kingston is among those who blame the situation on the cash-starved police and fire pension fund.

 

“It’s concerning, but it’s not very surprising with the turmoil surrounding the pension system,” said Kingston.

 

In a statement, Mayor Mike Rawlings said, “This is why we are working so hard to address our pension crisis.”

 

The Dallas Police Association said in any given year, about 180 officers leave the department — either to retire or work at higher-paying departments.

 

About half the number have left in a two and a half month period.

Of course, not surprisingly, the majority of the resignations came from older, tenured officers who had the most to lose.

“I think most of those 99 were tenured officers, so those are our most experienced officers, the majority investigative detectives who solve crimes everyday,” said Mata.

 

Councilman Kingston acknowledges the department’s challenge. “I think Chief Pughes is going to have to be creative. There’s nothing we can do to fix that in the short term. He has the number of officers he has and he has got to get results using those officers.”

 

Meanwhile, just like any other government problem, Dallas city council members have decided that the appropriate solution to their liquidity crisis is to offer police officers a 27% pay increase to be phased in over the next three years...that should be "roughly" inline with inflation, give or take 25%.

After months of negotiations, city council members will vote Wednesday on a new contract not only for police officers, but firefighters and paramedics as well.

 

Under the terms, most police officers, firefighters and paramedics would receive merit increases of ten percent the first year, five percent the second year, and ten percent the third year.

 

The Dallas Police Association and a city council member say they think the raises will help keep younger officers from leaving for other departments.

 

“Those individuals who possibly were thinking of leaving, yes, I think this prevents them from leaving. It helps them stay,” said Mata. “So it was definitely a move in the right direction.”

 

“It was important to get those numbers up what our younger officers can make at other places,” said Kingston. “It’s just the right thing to do in general.”

As we've stated many times over the past several months of following the DPFP implosion, taxpayers will be the ultimate loser here...looks like that's already starting to play out.

* * *

For those who missed it, here is what we recently posted after the DPFP decided to halt pension withdrawals.

Two days after the Mayor of Dallas, Mike Rawlings, filed a lawsuit against the Dallas Police and Fire Pension system to block withdrawals, which he referred to as a "run on the bank" of an "insolvent" pension system in "financial crisis, the Pension's board has finally taken steps to halt further withdrawals.  Of course, this delayed action has come only after $500 million in deposits have been withdrawn since just August. 

According to the Dallas Daily News, an incremental $154mm in withdrawal requests were pending at the time the decision was made earlier today.

The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests.

 

The system was set to pay out the weekly requests Friday. Pension officials said allowing the withdrawals would leave them without the liquid reserves required to sustain $2.1 billion fund.

 

"Our situation is currently critical, and we took action," Board chairman Sam Friar said.

Rawlings

While Dallas citizens cheered the decision, even opponents of the Mayor's admitted that the redemptions had to be halted if the city had any chance of saving the pension system from insolvency.

Rawlings on Thursday afternoon told a crowd gathered at a Dallas Regional Chamber that "the bleeding has stopped. We can turn this ship around."

 

The crowd responded with cheers after the mayor's announcement of the board's decision.

 

At the pension board meeting, the mood was more somber.

 

Council member Scott Griggs said he couldn't let the $154 million "go out the door" on Friday.

 

His council colleague, Philip Kingston, a board trustee, said the mayor "unquestionably" forced the pension board's hand. He said Thursday was "the worst day I've had in public office."

 

"Unfortunately, financially, this had to happen," he said.

 

The fund has about $729 million in liquid assets. It needs to keep about $600 million on hand, meaning the restrictions could have been coming at some point even without the mayor's actions. The withdrawal requests this week alone would have meant the fund would dip below that level.

Rawlings

Of course, not everyone was happy with the decision as at least one retired police officer threatened a lawsuit to force the fund to honor redemption requests while another declared that Mayor Rawlings had "successfully screwed over the retirees, the firefighters and the police officers."

One retired police sergeant, Pete Bailey, suggested a lawsuit could be in the offing if the system didn't pay out the requests that were made Tuesday. Friar understood that they might deal with more litigation.

 

"We may just have to deal with that, but that's what the board decides," Friar said. "We acted in the best interest of the pension fund today."

 

Retired Dallas police officer Jerry Rhodes, a pension meeting fixture, said he believed the board did what it had to do. Then he sarcastically lauded Rawlings.

 

"Merry Christmas, mayor," he said. "Hopefully you have a good Christmas because you have successfully screwed over the retirees, the firefighters and the police officers."

Perhaps future ponzi schemes pension systems will take note of Dallas' current situation prior to guaranteeing 8% returns on retirees' pension balances.  Who could have ever guessed that a decision like that could have backfired so badly?

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junction's picture

Let all the cops quit and be done with it.

King Tut's picture

Instead of investing in real estate,  the pension fund should have BTFD.

letsit's picture
letsit (not verified) King Tut Dec 13, 2016 11:30 PM

American has a curse hanging over its head. Nothing will change.
http://biblicisminstitute.wordpress.com/2014/07/17/is-america-cursed/

stizazz's picture

Don't want to be around when SHTF for real.

Mano-A-Mano's picture
Mano-A-Mano (not verified) stizazz Dec 13, 2016 11:32 PM

Choose: bunker or Canada.

SilverRhino's picture

99 have resigned already and 200 more are in the pipeline to resign.   

 

Oh and Ft Worth's police department is about to do the EXACT SAME THING

any_mouse's picture

How many are in the pipeline to join the DPB?

DPD should put in for H1B hires as replacements. Don't promise pensions to H1Bs hires.

911 can be offshored to Chennai for a savings.

Use contractors like the US State Dept does overseas. Higher operating costs, but no pension liabilities.

philipat's picture

Dear letsit, tazs, techies-r-us, stizazz, lock-stock, beauticelli, Mano-A-Mano, mofio, santafe, Aristotle of Greece, Gargoyle, bleu, oops, lance-a-lot, Loftie, toro, Yippee Kiyay, lonnng, Nekoti, SumTing Wong, King Tut, Adullam, espirit, rp2016, Holy hand grenade of Antioch, One of these is not like the others, amongst many others, I wonder why you continue to talk to yourself? When you use honest disclosure in the link to your Biblicism Institute site (Even though the site has no connection whatsoever to your comments) I will  not respond with a SPAM alert. So there is no need to talk to yourself to prevent my SPAM alert appearing right below your fake links. Unless you see the need to congratulate and/or reassure yourself on your clever comments, knowing that nobody else will? Alternatively, it can only mean you are seriously mentally ill. Talking to yourself is not good; you MUST remember to take your meds.

wildbad's picture

BANG!

the sound of rubber meeting road.

ask not for whom the bell tolls, it tolls for thee
Jon Dunne

CCanuck's picture

+100 Wild!

The true tell in this article is stated ...

"Mayor's admitted that the redemptions had to be halted if the city had any chance of saving the pension system from insolvency."

Any chance...hahaaaaaaa it means no chance in politicalese!

Ccanuck

OregonGrown's picture

"Mayor's admitted that the redemptions had to be halted if the city had any chance of saving the pension system from insolvency."

 

Mayor's admitted that the redemptions had to be halted if the city (councilors and mayor) had any chance of saving THEIR OWN pension from insolvency.....    /fixed it

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) any_mouse Dec 14, 2016 12:35 AM

I thought Firemen, Police Officers, Nurses, Teachers and Doctors all work for free? Out of the goodness of their hearts?

At least that's what the socialists here in Canaduh say.

Arnold's picture

When Teachers, Auto worker, Cop and Firefighters were new hired under a tiered system,

poverty wages in other words,

the jig was up for private sector union labor.

Now we go for the public sector unions.

Coming for you .gov.

Jethro's picture

I can promise you that you don't want Indian cops on your streets. Come to think of it, they would technically be an invading mercenary force......they would quickly end up as dynamic sporting targets.

Arnold's picture

Plenty of young Syrians available , I hear.

King Tut's picture
King Tut (not verified) any_mouse Dec 14, 2016 12:49 AM

I believe Dallas has canceled a few police recruitment drives because of a lack of interest 

CCanuck's picture

Think current police recruitment is awful?
Wait till they scrape the bottom of the barrel to fill those positions.
I rember hearing that police departments by law have to consider non-citizens for employment....Police Services across the US are going to be getting a whole lot worse!

Never been to Mexico, can someone tell me what their local police services are like?

Ccanuck

LyLo's picture

My state is seriously in the red.  Not quite Illinois, but not doing nearly as well as Texas. 

My husband counted 8 cop cars escorting a funeral procession today.

I'm curious how long it'll take for it to happen here.  (Who could have possibly seen this coming?!  lol)

ebworthen's picture

Why would they hang on and continue to put their lives at risk when it has been made clear that if you don't work in the Imperial City (D.C.) or Mordor (Wall Street) you are going to get a splintery broomstick up your ass for Service or Investing or Saving or planning for "Retirement" and trusting the Casino and the Wizards of Oz at the FED!?!?

SilverRhino's picture

I don't blame them one bit.  

I walked away from the government work over 20 years ago.   .GOV promises are worth SHIT. 

CheapBastard's picture

Dallas turned into a cesspool way back when J Wily Price took over the city council. Crime soared and places near West End, Deep Ellum, and out by the Half Price Book Store on Northwest HWY became super dangerous with nightly murders or some serious beating people into a coma. I volunteered in that Baylor Hospital back then and I was amazed at the violent crime and most if not all of it was not made public because the city did not want its "reputation or tourism" hurt.

 

I have to sympathize with those cops. Thier hands have been tied for years and this deadly slaughter by BLM was a culmination.

whatamaroon's picture

Notice all those guys retiring are white? That's the ultmate in white flight.

Jethro's picture

2017 is shaping up to be an exciting year

Buck Johnson's picture

You know that, when the shit hits the fan it will blow up big time and so many americans are dependent on their check or govt. handout.  So when those checks fail to go out and or miss a few weeks and/or are cut in half people will riot.

King Tut's picture
King Tut (not verified) bamawatson Dec 13, 2016 11:38 PM

TX should build some more $70M HS football stadiums

Crawdaddy's picture

Freemasons gotta eat too damn it! Otherwise how else will they be able to tell their old high school buddies they are hooked up with the movers and shakers instead of just being a punk ass gopher boy for NWO douchebags. The square and compass bumper stickers are all over collin county tx. They went to the trouble of installing their own little pagan obelisks over by the mall in frisco. As they get bolder, so do we.

Orly's picture

Texas is booming so much that each one of these stadia serve the needs of five or six high schools in the area.

Now there's too many people from arrogant places in many Texas communities.  I do hope they learn to assimilate because I promise you, I ain't going back to the northeast and I don't want it coming here.

Déjà view's picture

A $285 million construction package like Alvin’s (pop. 25,000), the third such proposal in six years, isn’t that uncommon in Texas, where many districts that call themselves “fast growing” have cast off the bonds of fiscal restraint.

In Southern California or Ohio, say, a $50 million school bond measure would be considered large. Alvin’s is hardly newsworthy in a region where another suburban school district got a $1.2 billion package approved last year.

School boards across Texas are responding to a simple incentive: the state’s Permanent School Fund Guarantee Program to repay bondholders in the event of a local default.

The guarantee means cheap money for school districts, few of whom have resisted the temptation to splurge on everything from classrooms to career centers to swimming complexes and football stadiums.

That impatience has a cost. Statewide, school districts owe $43.6 billion just for the interest due on school bonds, as of August 2014, according to data from the state Bond Review Board.

http://watchdog.org/242255/alvin-bond-expensive/

 

West Pearland and other Brazoria County voters gave approval to Alvin ISD’s $245 million school bond proposal Tuesday (Nov. 3).

The measure passed by a margin of approximately 59 percent with a total of 4,921 votes in favor of the measure over 3,404 in opposition (41 percent) according to unofficial results.

The proposal includes $41 million for a new central district stadium in addition to approximately $160 million for three new elementary schools, one replacement elementary school and one new junior high school. Additional money for upgrades to Memorial Stadium are also included in the bond package.

Funding for a new satellite transportation facility, phase two of a career and technical center, upgrades to the Alvin High School auditorium, land for the district’s fourth high school and another elementary school along with a number of other upgrades to district facilities were also included in the bond proposal.

http://www.chron.com/neighborhood/pearland/news/article/Alvin-ISD-school...

Déjà view's picture

Pew listed Texas as one of the 10 worst performing states in the study. The state’s Pension Review Board says that the more than 90 pension systems under its umbrella have about 29 percent of their liabilities unfunded. That amounts to more than $60 billion

http://prattontexas.com/2016/10/01/unfunded-liabilities-a-problem-in-tex...

$70m football stadiums...COPS moonlight there as 'security' for probably $35/hr...LOL!

Orly's picture

Houston is number four on the list of messed up pensions in the country.  

First was Dallas, then Chicago, somewhere else, then Houston.  I personally know a group of people that, if summed, would have a DROP account well in excess of ten million dollars.  And I am talking about fifteen people-ish.

It's ridiculous.

However, that has nothing to do with the excellent schools and the need for a stadium that can hold all these people.

We voted on bonds to build them.  They were needed.

No one was promised an eight percent (with a four percent COLA on top...) annual return on that money.  That was the idiot firefighters and police unions did that.

Please try to seperate the two issues.  One was approved by the voters (football...) and the other was thrown upon us in a midnight negotiation in the dreaded smoky room.

Déjà view's picture

Oblivious Tejas electorate are in a smoke and mirror filled backroom...

Using opaque ballot language, incomplete disclosure and electoral gimmicks like “rolling polling,” local governments – including school districts – have turned an ostensibly democratic process into a rubber-stamping exercise in Texas.

Quintero cited McKinney Independent School District’s bond proposition last May. The measure before voters simply stated:

“The issuance of bonds in the amount of $220,000,000 for the construction, renovation, acquisition, and equipment of school buildings and the purchase of necessary sites for school buildings and the levying of the tax in payment thereof.”

“Nowhere in this short paragraph of legalese do you hear anything about the actual cost of the bond, the tax impact or any mention that $50 million will be spent on a new high school football stadium,” Quintero noted.

The 12,000-seat stadium would replace a 7,000-seat facility that’s seldom close to capacity.

The McKinney school bond, which passed with 62 percent of the vote in a low-turnout election, is typical of debt-loading schemes statewide, where the actual costs, including interest, are hidden from voters.

http://watchdog.org/276640/texas-bond-debt/

LetThemEatRand's picture

I'm guessing that these guys who are trying to pull their money out would not want to hear "I pay your salary!" from the next guy they arrest.  Yet....

Jeffersonian Liberal's picture

Wait, you mean these folks are not in law enforcement primarily "to serve and protect?"

I'm confused.

King Tut's picture
King Tut (not verified) Dec 13, 2016 11:21 PM

Sorry, parasites,  the host is almost dead

Ms No's picture

Well, I guess now might be a good time to open a mobile senorita whorehouse in Texas.

Soros could own that town in a few months.

 

Déjà view's picture

Yep, 81 Tejas Municipalities...for those believing they are '$afe' somewhere off the grid...'Loan' Star State Tejas backs most if not all local debt issued...

 

According to an article last fall in Bloomberg Businessweek, more than 100 high school stadiums had opened in Texas during the previous five years. Pricey upgrades are common, too. Carthage High School, with an enrollment of just 750, used a bond offering to raise $750,000 for a video scoreboard for its football stadium. More than 100 Texas high school stadiums have such scoreboards. Not surprisingly, debt owed by public school districts constitutes the biggest chunk of the state’s soaring local obligations. Over the last decade, it has increased 155 percent, even as the state’s student population has grown just 21 percent. And the fastest-growing part of Texas school budgets is debt service, which has gone up by 126 percent in ten years, to $5.5 billion. Payments on debt now constitute 10 percent of school spending, up from 7 percent a decade ago.

Debt is also growing rapidly among the state’s 81 retirement systems for local-government workers. Not only are these systems poorly funded; it isn’t even clear how much some owe, since they haven’t disclosed the financial information necessary to verify their financial position, even to state oversight officials. After an extensive survey of municipal pension systems, Combs determined that none of the local plans was fully funded and that only 19 percent had 80 percent of the funds on hand to meet future obligations. The Houston Municipal Employees Pension System is only 61 percent funded, for example; Austin’s pension plan for city employees is just 66 percent funded.

http://www.city-journal.org/html/deep-debt-texas-13556.html

delacroix's picture

I don't think there are enough good looking wives in the cop community, to staff a whorehouse.

inosent's picture

"either to retire or work at higher-paying departments" f-n government.

King Tut's picture
King Tut (not verified) inosent Dec 13, 2016 11:30 PM

That's the mentality- my little dipshit, lily-white suburban town of 15K jacked the salaries up to match the much larger city adjacent to us so the "talent" wouldn't quit and go next door. So now these retards make $90K to write speeding tickets.

forwardho's picture

Notice he does not mention the third and most common choice.

Retire with benefits and work for higher paying departments.

double dipping, it's better than sloppy seconds.

Ms No's picture

As much as I don't agree with any of this, If I had to do life all over again, I might go to California right out of college, or even highschool, and work for the government there.  Then buy some cheap-ish property, live cheap and start buying houses in AZ.  Then quit when I had enough rentals.  Those guys made a lot of money and many never did a damn thing.  I wouldn't count on the retirement.  I have a couple retired Californians around me and they are dumb as a box of rocks and not worried about a damn thing.  The cost of living is so high there that anywhere you leave to you are golden after you sell your assets alone.  Of course, I also could've just bought bitcoin when it started or a thousand other things.  20-20 hindsight is a bitch. 

flaminratzazz's picture

nothing like the southwest for shit loads of gunfights

do away with the speed limit, put 9 1 1 on an answering machine, go fishing

CJgipper's picture

I'm in the free state of Tennessee, but you've nearly convinced me to move.

directaction's picture

Can't anyone add and subtract and multiply and divide any more?
I mean, have Americans become so stupid,
That they continually fall for all these public pension ponzis?
No private workers get a pension any more. 

indaknow's picture

Ponzi schemes suck when they come to an end. 

VarenneRiver's picture

If you like your Ponzi you can keep your Ponzi...money not included.