Record Number Of Dallas Police Officers Quit In July Amid Ongoing Pension Crisis

We first introduced readers to the Dallas Police and Fire Pension (DPFP) crisis last summer in a post entitled "Dallas Cops' Pension Fund Nears Insolvency In Wake Of Shady Real Estate Deals, FBI Raid."  For those who have managed to avoid this particular storyline for the past 15 months, here is a brief recap of how it all started from our original post on the topic:

The Dallas Police & Fire Pension (DPFP), which covers nearly 10,000 police and firefighters, is on the verge of collapse as its board and the City of Dallas struggle to pitch benefit cuts to save the plan from complete failure.  According the the National Real Estate Investor, DPFP was once applauded for it's "diverse investment portfolio" but turns out it may have all been a fraud as the pension's former real estate investment manager, CDK Realy Advisors, was raided by the FBI in April 2016 and the fund was subsequently forced to mark down their entire real estate book by 32%Guess it's pretty easy to generate good returns if you manage a book of illiquid assets that can be marked at your "discretion".


To provide a little background, per the Dallas Morning News, Richard Tettamant served as the DPFP's administrator for a couple of decades right up until he was forced out in June 2014.  Starting in 2005, Tettamant oversaw a plan to "diversify" the pension into "hard assets" and away from the "risky" stock market...because there's no risk if you don't have to mark your book every day.  By the time the "diversification" was complete, Tettamant had invested half of the DPFP's assets in, effectively, the housing bubble.  Investments included a $200mm luxury apartment building in Dallas, luxury Hawaiian homes, a tract of undeveloped land in the Arizona desert, Uruguayan timber, the American Idol production company and a resort in Napa.


Despite huge exposure to bubbly 2005/2006 vintage real estate investments, DPFP assets "performed" remarkably well throughout the "great recession."  But as it turns out, Tettamant's "performance" was only as good as the illiquidity of his investments.  We guess returns are easier to come by when you invest your whole book in illiquid, private assets and have "discretion" over how they're valued.


In 2015, after Tettamant's ouster, $600mm of DPFP real estate assets were transferred to new managers away from the fund's prior real estate manager, CDK Realty Advisors.  Turns out the new managers were not "comfortable" with CDK's asset valuations and the mark downs started.  According to the Dallas Morning News, one such questionable real estate investment involved a piece of undeveloped land in the Arizona desert near Tucson which was purchased for $27mm in 2006 and subsequently sold in 2014 for $7.5mm.


Then the plot thickened when, in April 2016, according the Dallas Morning News, FBI raided the offices of the pension's former investment manager, CDK Realty Advisors.  There has been little disclosure on the reason for the FBI raid but one could speculate that it might have something to do with all the markdowns the pension was forced to take in 2015 on its real estate book.  At it's peak, CDK managed $750mm if assets for the DPFP.

The sudden implosion of the fund left active-duty Dallas police and firemen wondering whether that pension check they had been counting on to fund their retirement was about disappear for good.  All of which sparked a mass exodus of Dallas police and firefighters eager to lock in their payout rates before they were slashed by the DPFP board (see:  Dallas Police Resignations Soar As "Insolvent" Pension System Implodes).



Now, despite the passage of a plan designed to 'save' the pension by the Texas legislature back in May, a record 72 officers decided to quit the force in July.  Apparently they were not convinced that the legislature's plan is going to work.

Meanwhile, the steady outflow of officers for over a year now is leading to what many in Dallas are calling a public safety crisis.  Per the local Dallas CBS affiliate:

Dallas Police Association President Mike Mata and others sounded the alarm months ago: Now, by the end of this month, Mata says 72 Dallas Police officers will leave: 70 percent of them are retiring and the other 30 percent are going to make more money at other departments. “We’re losing some of our most experienced detectives: The investigator you want to come out and solve that homicide, that you need to come out and solve that sexual assault.”


Adam McGough, chairman of the Dallas city council’s public safety committee, is also expressing concern. “That’s the first of this number I heard of it. Anytime we have large numbers of officers leaving, it’s concerning.”


Mata says, “We’re at a critical state and we’re not solving the problems that are going to help correct this. That’s why I’m a little disappointed in the city manager’s budget.”

Apparently these officers can't wrap their heads around how an incremental $40 million contribution from the City of Dallas will solve their pension's $3 billion funding shortfall...they aren't the only ones.


fajensen Future Jim Wed, 08/09/2017 - 08:30 Permalink

And indeed they should be - Assuming their masters still needs their ongoing loyalty and commitment, that is. Maybe they found better protection, maybe they are just reducing the "innercircle" to really wring that last bit of juice out bfore leaving for Uruguay. However, when the squeeze moves on to the barons, they will start to look for a new King.     

In reply to by Future Jim

techpriest Michael Musashi Wed, 08/09/2017 - 00:24 Permalink

The thing about social safety nets is that there has to be money to pay for them. My in-laws in China got to experience this firsthand in the 60s, when the plundered money ran out.

Right now they're feeling it in Venezuela, and soon enough, folks in Europe are gonna feel what its like to run out of other people's money. Sweden is set to be a failed state in what, 2030?

But hey, maybe if we got more people to borrow and spend more, we can bring back the good old days and a 10% raise?

In reply to by Michael Musashi

847328_3527 Tue, 08/08/2017 - 21:20 Permalink

Dallas is one of the most dangerous cities in the nation due to years of Dem leadership, a far left city council and serious mismanagement. At one of the superbowl parades there my neighbors daughter was punched in the face "for fun" by a black in front of the police and they did nothing but laughed and told her to go down to the station and file a report. West End is particularly dangerous at night esp the surrounding area which is worse then Somalia. Of ocurse, the entire DART line is a "no go" zone for anyone with common sense.  Dindu charged in DART 7 against 1 beating: 'I can't regret anything'…

Utopia Planitia 847328_3527 Tue, 08/08/2017 - 21:49 Permalink

Yep, to be expected.  In 2001 Kris Kime was murdered at the Seattle Mardi Gras festival while police officers stood by and watched.  The city council and mayor had decreed that No Action was to be taken by the police, for any reason, against the expected rioters.  And Kris Kime's murder was the result (deed done by rioters).  Nobody paid any price for that event other than Kris Kime and his family and friends.  And Seattle has dipped much further into the toilet since that disgusting event. Coming soon - government-funded heroin injections.Soon to come to a city near you (if it has not already arrived).

In reply to by 847328_3527

CheapBastard Mazzy Tue, 08/08/2017 - 22:32 Permalink

Soros is pouring big bucks into texas elections again as he did last time. Most of his "diverse' candidates lost but he threw over $500,000 at the Houston DA race and tons of negative ads against the tough on crime incumbent, Devon Anderson,...sadly she lost and that was a big loss for Houston imo. Crime has been spiking since.One of the first things the new DA Ogg did was to fire a few dozen tough prosecutors and sought to replace with her "diverse peeples." 
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Newly elected Harris Co., Soros-Funded, DA Kim Ogg dismisses dozens of employees HARRIS COUNTY (KTRK) -- Newly elected Harris County District Attorney Kim Ogg sent 37 veteran prosecutors packing today as she prepares to take office on New Year's Day.   Ogg assured the public she will hire a diverse group of prosecutors…   Harris County District Attorney Devon Anderson also shared her thoughts on the matter, releasing the following statement: "Today, Kim Ogg fired by email 37 experienced prosecutors 9 days before Christmas. With her first act as District Attorney, Ogg is endangering the citizens of Harris County. The dedicated prosecutors let go today had a combined 685 years of service."…

In reply to by Mazzy

CheapBastard Déjà view Tue, 08/08/2017 - 22:38 Permalink

That's pretty rare, however. I lived there for awhile and agree with the above and can tesitfy the place has gotten very dangerous since Katrina and the influx of LA gangs. Just turn on the radio now in Austin in the morning and it begins with the crime/murder news, air pollution red alerts and seriosu traffic congestion.They rated Austin as the "most congested mid-sized city" last year. It's so bad many retirees have moved out of the area completely; former professors, etc who thought they would have a nice safe college town to retire in.But no.Austin did not even make the list recently of the Top 20 Best College Towns.The place is more like Little LA now then a pleasant college town.I'm glad I moved away from there to a safe, clean-air, non-congested town/city.

In reply to by Déjà view