"Don't Ask, Don't Tell" Policy Will Not Work Anymore for Dallas Police and Fire Pension Fund

Suddenly the problems surrounding the mismanagement of the Dallas Fire and Pension Fund became well known to a large number of North Texas residents, thanks to a lawsuit filed by Dallas Mayor Mike Rawlings on December 5, 2016 at the court of the state Judge Tonya Parker to stanch the bleeding of the fund.

The underlying causes have been brewing for long time, and over the years, they have led to a potential fiscal disaster in waiting for Dallas' City Council and citizens. The administrative structure of the pension fund is partly to blame for this mess. Although Dallas citizens contribute to the fund--based on a recent article penned by former Mayors Ron Kirk, Laura Miller and Tom Leppert, Dallas citizens have contributed more than $1.1 billion to the fund--City Council has no say how the fund is run. Texas legislature should take up this issue without any further delay in the upcoming legislative session and make amends to it.

Over the years, pension board has failed to ensure the role of a responsible and responsive custodian to sustain the long-term fiscal health of the pension fund that Dallas' heroic police and fire personnel have come to count on as their prime dependable retirement source. Instead, pension board looked the other way as risky investments have been made in real estate without appropriate vetting and oversight.

Another key problem that had afflicted the pension fund was its board's failure to adjust to a changing time when company after company had been leaving the defined benefit plans to a more sustainable defined contribution plan. The pension fund continued to provide a very lucrative plan, called the Deferred Option Retirement Plan, or DROP, to long-serving police and fire personnel, making many of them millionaires. DROP provides the employees with the opportunity to retire in the eyes of the system while stay in their job. Meanwhile, their retirement check is accruing 8 percent annual returns in their DROP accounts.

Once it became clear that this unhinged plan would exhaust the fund, the pension fund's board took some minimal actions such as recommending benefit cuts and reduction in DROP's rate of return to 3 percent. As the reform measure was recommended to be sent for a rank-and-file vote, a spree of withdrawals began from the DROP accounts. According to some estimates, about $500 million was withdrawn since August 11, 2016 through the day when Mayor Rawlings filed his lawsuit as a private citizen on December 5, 2016.

It is clear that the days of Dallas City Council and its residents to stay on the sidelines while contributing to a bleeding police and fire pension fund are over. Pension fund's board may now expect that Dallas City Council will ask plenty of questions to them as well as tell what needs to be done as long as Dallas citizens are on the hook to fund the plan.

Texas CPS Mess: Partly a Downstream Outcome of a Broader Upstream Malaise

It's all too common to hear the gridlock and bottleneck that has hobbled the Texas' Child Protective Services. The victim of each of these incidents is a Texas child whose life gets upside down due to reasons beyond the child's control. Numerous reports in recent months have been published by various Texas newspapers, including The Dallas Morning News, shining light on the plight and pain of many of our state's young citizens.

According to The Dallas Morning News account, many of the vulnerable kids removed from their families had to spend night at the CPS offices. In Harris county alone, half of the children at risk were not visited by a CPS case worker on time, and worse, one out of five had never been seen at all. Prompted by the news published by The Dallas Morning News and other media outlet covering the horrific conditions of tens of thousands of vulnerable children, Texas' three top government officials--Governor Gregg Abbott, Lt. Gov. Dan Patrick and Speaker Joe Strauss--prodded the head of the Family Protective Services, parent organization of the CPS, to work on a solution to address the problem.

Last month (October 2016), FPS head Henry "Hank" Whitman asked state leaders for an additional $144.5 million in the remainder of the current fiscal year to hire 829 additional case workers and give a pay raise of about 1,000-per-month to each of 7,087 frontline CPS employees. By and large, there is appreciable degree of support among lawmakers for the additional funding requested by Whitman. However, what Whitman has proposed will provide a Band-Aid to a festering wound, but not necessarily cure it. The additional funding of $144.5 million, if approved, will not by itself address the causal factors at their root. Instead, it's a wait-watch-react strategy that's expensive, and provides an ad hoc solution at best.

In this context, the Texas House County Affairs Committee's November 16, 2016, hearing and the panel's Democratic Chairman Garnet Coleman's focus on the causal factors such as parental addiction and substance abuse problems deserve praise. The hearing has tried to put a spotlight on a problem which most Texans don't think when they talk about fixing the CPS. Every year, tens of thousands of Texas children become endangered, or at the brink of being endangered, because of parental addiction, or substance abuse, problems. In 2015 fiscal year (September 1, 2014 to August 31, 2015) alone, according to The Dallas Morning News, approximately 8.1 percent, or 1,626,126, adult Texans had substance use disorder. About a quarter of them, or 689,803, were poor enough to qualify for free, or low-cost, treatment. Unfortunately, only 39,387, a staggering low number, of those qualified had sought help. It would be much more cost-effective and humane if the parents who qualify for such remedial measure can be reached at the first place to provide treatment instead of removing the children from the family after parental substance use disorder gets much worse down the road.

What Rep. Coleman and his panel pointed out is an upstream malaise that afflicts low-income families at a disproportionately higher rate and in turn creates a severe mess down the road, putting children's life at stake in many situations. As a result, an understaffed CPS is always on a scramble mode and the caseworkers are often forced to work on a heavy caseload, leading to missing on-time, face-to-face interviews and costlier intervention on many occasions. Our government officials will serve our great state well if they focus on formulating a strategy that aims at identifying families qualified for indigent care and maximizing the effort to provide it (indigent care) to help parents overcome the substance use disorder. This approach is not only humane as it will minimize the odds of removing the children from their homes, but also smart because it will cost taxpayers less.