The Dallas City Council approved spending up to an additional $500,000 to continue its legal battle against the Dallas Police and Fire Pension System over who should have the final say on a plan to address a $3.4 billion pension system shortfall.
The City Council on Wednesday unanimously approved increasing the city’s total contract with the law firm Tillotson Johnson & Patton to $600,000. The police and fire pension system board sued the city last year.
The legal funding increase comes as the city continues to challenge a Travis County District Court ruling from last year, which ordered Dallas to move forward with the funding recommendations made by the Police and Fire Pension System Board. Oral arguments are scheduled between both parties in the Eighth Court of Appeals in El Paso on Nov. 12.
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The dispute centers on whether the pension system board can unilaterally increase the city’s pension contributions by more than half a billion dollars over 30 years without the city’s approval.
Political Points
The pension board argues that state law gives it sole authority to set contribution rates, while the city insists that such a move would strain its budget and force cuts to essential services. The pension as of last year was 32% funded.
The Police and Fire Pension Board adopted a funding plan in August 2024 that requires the city to increase its contributions by $26 million in the first year, with further increases over three years. The city had proposed a five-year ramp-up instead, arguing that the faster timeline would overburden taxpayers.
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A Travis County judge sided with the pension system board earlier this year, ruling that the board had the legal authority to implement its plan without the city’s consent.
The city appealed that decision.
In its legal briefs to the appeals court, city attorneys argue the pension system’s plan violates state law, which requires joint approval between the city and the pension system for any funding changes. The city also says the pension system board’s plan illegally reinstates cost-of-living adjustments before the pension reaches the required 70% funding level.
The pension board, in its response, argues the state explicitly grants the board the exclusive authority to adopt a funding plan. The pension system also contends that its plan complies with state law, including actuarial recommendations and a 30-year funding timeline.