Dallas Officials and Pension System Disagree on Approval Authority for Funding Plan

Dallas officials and the city’s pension system clash over who has the final authority to approve a $3 billion pension funding plan.

As Dallas officials and the Dallas Police and Fire Pension System work to address a $3 billion pension shortfall, a dispute has emerged over who holds the final authority to approve the funding plan. Recent legal correspondence reveals a stark disagreement between the two parties on this critical issue.

On January 16, Ben Mesches, a lawyer representing the pension system, informed state officials that the pension system’s board has exclusive authority to adopt a funding plan, asserting that city approval was not required. Mesches argued that the state pension board’s interpretation of statutes granting the city final approval was “erroneous.”

City Attorney Tammy Palomino countered Mesches’ claim in a letter dated May 10, insisting that state law mandates a joint formulation of the plan between the pension system and the city. Palomino emphasized that the Dallas City Council must weigh in for the plan to proceed.

Council member Tennell Atkins, chair of the ad hoc committee on pensions, expressed surprise at the January 16 letter. “We as policymakers, we have to stop and turn and say, hey, we don’t agree with the letter.

Kelly Gottschalk, executive director of the pension system, reaffirmed the board’s position of having the final say, referencing a “negotiated right” established by the Texas Legislature in 2017. This legislation restructured the pension fund’s governance and limited the city’s contributions, giving the Dallas mayor authority to appoint six of the eleven board members.

As both parties continue to negotiate, the resolution of this legal standoff will be crucial in determining the future stability of Dallas’s pension system.