[Ad Hoc Committee on Pensions on September 19, 2023.]
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I CALL THE AD HO COMMITTEE ON THE PENSION TO HONOR, UH, WE DO NOT HAVE ANY MINUTES.
UM, FIRST, UH, THANK, THANK EVERYONE FOR COMING IN TODAY.
UH, DO WE HAVE ANYTHING ON VIRTUAL? WE GOT, HAVEN'T PRESENTED THAT ON VIRTUAL.
LEMME GIVE YOU SOME, JUST SOME RULES RIGHT NOW.
UM, IN JANUARY OF 2021, THE DALLAS POLICE AND FIRE PENSION ASSISTANCE STUDY GROUP CONVENED TO REVIEW AND REPORT ON THE UNFORMED PENSION SYSTEM.
ROB WALTER AND BILL QUINN WERE ASKED THE CHAIR, THE STUDY GROUP, AND FROM, UH, UH, YOU TODAY, SOME IMPORTANT FINISHED FROM THE 2021 STUDY GROUP.
WE ARE GONNA DISCUSS THE STUDY GROUP, WHAT HAPPENED WITH ROB WALTER AND ALSO BOB.
UH, WHAT WE'RE GONNA TRY TO, UH, ACHIEVE TODAY IS HOW DO WE GET HERE, NUMBER ONE, UH, THE PROCESS AND PROCEDURE, HOW WE'RE GOING FORWARD IS GONNA BE MORE HIGH LEVEL, UM, BRIEFING, UM, SOME OF Y'ALL WAS NOT ON THE COUNCIL IN 2015 IN 2017.
UH, UH, WE ARE TRYING TO GET EVERYBODY UP TO DATE AND TRY TO MAKE SURE THAT WE DO HAVE THE CORRECT INFORMATION, AND WE WANNA MAKE SURE THAT EVERYONE HAVE THE CORRECT INFORMATION.
AND EVERYONE KNEW WHAT HAPPENED IN 2015, 2017, AND ALSO AT THE LEGISLATOR.
AND HOW DO WE GO FORWARD, UH, WITH THAT, ROB, I'M GONNA LET YOU START IT OUT AND, AND, AND HAD YOUR INTRODUCTION.
UH, YOU CAN INTRODUCE BILL HERE AND TELL US, UH, WHAT HAVE YOU FINDING, UH, THIS IS NOT A RECOMMENDATION.
THIS IS SOMETHING THAT THE STUDY GROUP CAME UP WITH.
UH, WE ARE GONNA HAVE A FINAL RECOMMENDATION WHEN WE DO THE ACTUARY SOMETIME IN OCTOBER OR NOVEMBER, BUT WE ARE JUST TRYING TO, TO, TO, TO, TO, TO MAKE SURE THAT WE ARE UNDERSTANDING WHAT IS GOING FORWARD.
WITH THAT, ROB, YOU CAN START.
WE GOOD? HOW'S THAT? THANK YOU.
UM, BILL AND I ARE DELIGHTED TO BE HERE AND, UH, UH, OBVIOUSLY THIS IS AN IMPORTANT MATTER THAT, UM, IS GOING TO REQUIRE THE COLLECTIVE, OUR COLLECTIVE ATTENTION TO ADDRESS.
UM, WHAT WE WOULD LIKE TO DO VERY BRIEFLY, UM, FOR YOU ALL IS, IS REALLY JUST TWO THINGS.
ONE IS JUST TO PROVIDE A BACKDROP OF WHAT HAPPENED, HOW WE GOT HERE, THE NATURE OF THE PROBLEM, AND THEN THE RESULTING, UH, LEGISLATION AND WHAT THAT MANDATES, UM, GOING FORWARD.
UH, AND I'LL HANDLE THAT PIECE.
AND THEN THE SECOND PIECE, UH, BILL WILL ADDRESS, WHICH IS, WHAT IS THE CURRENT STATE OF THE, UH, PENSION FUND AND SOME OF THE ARITHMETIC AND THE NUMBERS AROUND THE CHALLENGES THAT WE CONFRONT.
AND SO, IN THE END, WHAT WE'D LIKE TO BE IS SO THAT EVERYBODY HAS THE SAME BASE OF INFORMATION AS THE COMMITTEE GOES FORWARD AND CONSIDERS THE POSSIBILITIES.
UH, JUST BY WAY OF QUICK INTRODUCTION, I GOT INVOLVED IN THIS BACK IN 2015, IN 16 AT MAYOR RAWLINGS BEHEST WAS VERY MUCH INVOLVED IN THE, THE LEGISLATIVE, UH, PROCESS IN ORDER TO CREATE A, UH, A CONSTRUCT GOING FORWARD.
AND THEN, UH, UH, OF COURSE, UH, MAYOR JOHNSON ASKED ME TO GET BACK INVOLVED A FEW YEARS AGO JUST TO START TO, IN A PRELIMINARY WAY, EXPLORE SOME OF THE POSSIBILITIES.
I ALSO SERVED ON THE POLICE AND FIRE PENSION BOARD FROM 2017 UNTIL 2021.
UH, BILL HAS BEEN STEEPED IN PENSION ISSUES HIS ENTIRE CAREER WAS BACK AT THE E R F ISSUES BACK IN 2 0 4 AND OH FIVE, UH, AND, AND DID AN EXTRAORDINARY JOB CHAIRING THE PENSION BOARD FROM 2017 TILL 21, AND THEN WAS VICE CHAIR TILL 23.
AND THIS HAS JUST ROLLED OFF THE PENSION BOARD.
SO BETWEEN THE TWO OF US, WE, I, I THINK, HAVE A REASONABLE UNDERSTANDING OF WHAT THE PRINCIPAL ISSUES, UH, ARE AND HOW WE GOT HERE, AND SOME OF THE POSSIBILITIES GOING FORWARD WITH THAT.
LET ME JUST BE VERY BRIEF IN A COUPLE OF PRELIMINARY COMMENTS.
UH, AND I THINK, UH, UH, UH, MAYOR PROAM, A ATKINS, THERE'S THESE PAMPHLETS.
I DON'T KNOW IF YOU'VE, DOES EVERYBODY HAVE THESE IN FRONT OF 'EM? OKAY.
UM, AND NOT TO BELABOR THIS, BUT I THINK IT'S IMPORTANT TO UNDERSTAND JUST FOR CONTEXT ABOUT WHAT THE ISSUE WAS.
UH, BACK IN 15 AND 16, AND IT WAS REALLY THE INTERSECTION OF TWO PHENOMENA.
ONE WAS, IT WAS A, AN ARRAY OF, UH, VERY POOR INVESTMENTS, PRIMARILY IN REAL ESTATE THAT
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GOT A LOT OF PUBLICITY, UH, AND A LOT OF CONCERN ABOUT THE SOLVENCY OF THE FUND.THE SECOND WAS, IS THERE WAS A, A CONSTRUCT THAT HAD PUT IN, BEEN PUT IN PLACE THAT WAS PRETTY BENEFICIARY FRIENDLY, THESE SO-CALLED DROP ACCOUNTS.
AND WHAT THE DROP ACCOUNTS ALLOWED ACTIVE MEMBERS TO DO WAS TO MAKE UNLIMITED AND IMMEDIATE WITHDRAWALS.
WHAT HAPPENED WHEN THE WORD ABOUT THE THE POOR INVESTMENT SCENARIOS GOT OUT IS IT TRIGGERED A RUN ON THE BANK.
AND SO IN 2016, ABOUT $600 MILLION WAS WITHDRAWN, UH, UH, TOWARDS THE END OF, UH, MIDDLE PART OF 16 AND THE END OF 16.
UM, FORTUNATELY, TWO THINGS HAPPENED.
ONE IS THE BOARD PUT AN A AN END TO THE, UH, THE DROP ACCOUNTS, AND MAYOR RAWLINGS PRESSED FOR SOME LEGAL RECOURSE.
AND THERE WAS AN INJUNCTION THAT ISSUED OUTTA STATE DISTRICT COURTS IN ORDER TO STOP THE WITHDRAWALS.
UM, HAD THOSE THINGS NOT HAPPENED, UH, WE'D BE IN FAR WORSE SHAPE, UH, INDEED.
THE, THE, UH, THE DROP ACCOUNTS AT ONE POINT GOT UP TO ALMOST 60% OF THE PLAN'S ASSETS.
SO IT WAS IN A VERY UNUSUAL UN UNORTHODOX POSTURE.
SO THAT'S WHERE WE WERE AT THE END OF 2000 AND AND 16, WHICH THEN SPAWNED THE NEED FOR THE LEGISLATURE TO ADDRESS THE ISSUE.
AND THAT'S WHAT HAPPENED IN 2017.
AND THERE WAS A LOT OF ACTIVITY AROUND THIS ISSUE, UH, THAT ULTIMATELY EMERGED WITH, UH, WITH WHAT WAS, UH, DENOMINATED AS HOUSE BILL 31 58, WHICH HAD A COUPLE OF PRINCIPLE COMPONENTS THAT ACTUALLY FAST FORWARD, IT BECOMES HIGHLY RELEVANT TO THIS COMMITTEE'S WORK.
THE FIRST THING IT DID IS IT CHANGED THE GOVERNANCE STRUCTURE SUCH THAT THE MAYOR WOULD APPOINT A MAJORITY OF THE 11 POSITIONS ON THE BOARD.
UH, THE OBJECT THERE WAS TO MORE NORMALIZE THE OPERATIONS OF THE, UH, UH, OF THE, THE PENSION BOARD AS IT WENT FORWARD.
THE OTHER THING IT DID IS ESTABLISH A FLOOR OF CONTRIBUTION, WHICH GAVE THE, THE FUND SOME CERTAINTY OVER THE COURSE OF SEVEN YEARS FROM 2017 THROUGH 2014.
AND OF COURSE, THE CITY KNOWS EXACTLY WHAT THAT MEANS.
THAT MEANS A DEFINED LEVEL OF CONTRIBUTIONS, UH, THAT IT WOULD MAKE IN ORDER TO SORT OF NORMALIZE THE, UH, THE, THE FUND.
UH, AND AS A CONSEQUENCE OF THOSE CONDUCT ACTIONS, IT ACTUALLY REDUCED THE UNFUNDED LIABILITY BY APPROXIMATELY A BILLION DOLLARS.
AND THEN FINALLY, WHAT THE LEGISLATION DID IS IT CONTEMPLATED A GO FORWARD, UM, CONSTRUCT OR PROGRAM.
AND WHAT THAT ENTAILED WAS THAT AN INDEPENDENT ACTUARIAL ANALYSIS WOULD OCCUR, AND THERE, THERE WOULD BE PLANNED CHANGES THAT WOULD TAKE PLACE PRIOR TO THE 2025 LEGISLATIVE SESSION.
AND THAT REALLY BRINGS US TO WHERE WE ARE TODAY, WHICH IS, WE'RE RIGHT AT THE FRONT END OF THAT PROCESS THAT OUGHT TO RESULT IN PLAN CHANGES, UH, BY THE END OF NEXT YEAR AS A CONSEQUENCE OF WHAT THE, UH, INDEPENDENT ACTUARY WILL TELL US.
UH, SO WE CAN BOTH SIZE THE PROBLEM AND THEN BEGIN TO, UH, ADDRESS THE PROBLEM.
BUT IF YOU REALLY CUT THROUGH THE LEGISLATION, ALL IT REALLY DID WAS IT WAS A TOURNIQUET.
IT STOPPED THE HEMORRHAGING, AND IT ALLOWED THE FUND TO STABILIZE OVER THE COURSE OF, OF A COUPLE YEARS, AND THEN BRING US TO A JUNCTURE NOW WHERE WE NEED TO, TO ADDRESS IT.
UM, TWO FINAL COMMENTS, AND I WANNA TURN IT OVER TO BILL, IS THAT, UH, AND, AND BY THE WAY, THE DETAILS OF WHAT HOUSE BILL 31 58 MANDATES IS, IS ON PAGE, UM, FOUR OF, OF THE PAMPHLET.
BUT IN EFFECT, WHAT IT SAYS IS THE CHANGES NEED TO BE MADE SUCH THAT, UH, THE, THE, UH, UNDER, UNDER WHAT IS 8 0 2 OF THE GOVERNMENT CODE IS THAT THE FUND WILL BE FULLY FUNDED ON A 30 YEAR BASIS.
UH, WHICH, YOU KNOW, WHEN YOU PUNCH OUT THE NUMBERS BASED ON WHERE WE ARE TODAY, UH, IT'LL GIVE YOU A SIZE OF THE ORDER OF MAGNITUDE OF, OF THE ISSUE.
UM, THE FINAL THING I WANNA SAY IS, AND I SERVED ON THE BOARD FOR FOUR OR FIVE YEARS, AND I THINK THE BOARD DID, UH, REALLY AN EXTRAORDINARY JOB UNDER, UH, THE LEADERSHIP OF, OF KELLY GOTCH AND TEAM AND BILL QUINN WHO CHAIRED IT.
UH, AND IT VERY MUCH NORMALIZED IN ITS OPERATION.
I'M NOT GONNA SPEAK TO ALL OF THE SPECIFIC THINGS THAT ARE REFLECTED ON PAGE FIVE, BUT THERE WERE LOTS OF CHALLENGES IN THE EARLY YEARS, UM, INVOLVING LITIGATION AND A WHOLE RANGE OF THINGS.
SOME OF THE MORE SIGNIFICANT THINGS THE FUND, UH, HAS DONE, THE BOARD HAS DONE IS IT, UH, HAS REDUCED THE ANTICIPATED RATE OF RETURN TO A WAY THAT IS, UH, PROBABLY MORE CREDIBLE AND MORE RESPONSIBLE,
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UM, AND HAS PUT THE FUND IN A, UM, IN A POSITION WHERE I THINK OPERATIONS ARE, ARE, UH, UH, BOTH RATIONAL, UH, RESPONSIBLE AND NORMALIZED.IF YOU'LL LOOK AT THE ONE COLOR CHART BEFORE WE GET TO FUNDING STATUS, WHERE I TURN IT OVER TO BILL, YOU'LL SEE JUST ON THE PORTFOLIO REALIGNMENT SINCE 2017.
AND THIS IS JUST ONE EXAMPLE OF THE GOOD WORK OF THE BOARD OVER THE LAST SEVERAL YEARS.
AS A CONSEQUENCE, BOTH OF, OF MAYOR, UH, MAYOR'S, UM, RAWLINGS AND JOHNSON'S APPOINTMENTS, UH, WHICH BY THE WAY I THINK ARE, THEY'RE A LOT OF VERY HIGHLY SKILLED AND HIGHLY RESPONSIBLE FINANCIAL EXPERTS.
BUT YOU'LL SEE WHAT'S HAPPENED HERE IS, IS THE FUND.
YOU CAN'T JUST IMMEDIATELY MORPH A FUND INTO, UH, A, A MORE, UH, MIDDLE OF THE ROAD, UM, CONFIGURATION AND AND PERFORMANCE.
BUT OVER TIME, IT'S GONE MUCH MORE TO EQUITIES AND GLOBAL EQUITIES REDUCTION ON IN ALTERNATIVE INVESTMENTS AND REAL ESTATE.
AND SO, AT LEAST IN TERMS OF THE OPERATIONS AND THE CONFIGURATION IN THE PORTFOLIO, THE FUND HAS, UH, IT'S IN REASONABLE SHAPE GOING FORWARD.
UH, THE QUESTION IS JUST ONE OF FUNDING.
AND WITH THAT, I'LL TURN IT OVER TO BILL.
UH, I'D MAKE ONE OR TWO, UH, COMMENTS ON WHAT WE'VE JUST COVERED HERE.
ONE, ONE OF THE OTHER MAJOR FACTORS IN THE PROBLEM WE INCURRED WAS NOT ONLY THE DROP ACCOUNTS, THE WAY THEY WERE STRUCTURED, BUT THEY WERE PAYING VERY HIGH INTEREST RATES, EIGHT, 10% ON DROP ACCOUNTS AT A TIME WHEN THE FUND WAS NOT EARNING ANY MONEY BECAUSE OF ALL THE ILLIQUID INVESTMENTS, THERE WAS ZERO RETURN ON WELL OVER HALF OF THE ASSETS OF THE FUND.
SO YOU'RE PAYING, INCREASING YOUR LIABILITY BY 10% AND YOU'RE NOT GETTING ANY INCOME TO DO IT.
SO THAT, I MEAN, THAT WAS ANOTHER MAJOR FACTOR.
UH, ONE OF THE PRIORITIES OF THE BOARD FOR THE LAST FIVE OR SIX YEARS IS REDUCING THE ILLIQUID ASSETS.
UH, AND WE'VE SOLD SOMEWHAT AROUND $900 MILLION OF ASSETS, WHICH I THINK IS A VERY SIGNIFICANT, WE STILL HAVE FOUR OR $500 MILLION THERE.
I MEAN, IT'S NOT ALL DONE 'CAUSE WE'RE GONNA, WE'RE TRYING NOT TO FIRE SALE ASSETS.
WE WANT TO RECOGNIZE WHATEVER THOSE FAIR VALUES ARE.
SO WE, WE STILL HAVE WORK IN PROGRESS TO DO THAT.
BUT AS WE'VE CONVERTED FROM ILLIQUID TO LIQUID ASSETS AND PUT THIS MONEY INTO PUBLIC EQUITIES AND PUBLIC BONDS, ET CETERA, WE'VE VERY CAREFULLY BEEN ABLE TO GET RETURNS.
AND OUR RETURNS ON OUR PUBLIC PORTFOLIO HAS EXCEEDED ALL THE BENCHMARKS BY ABOUT 1%.
WE'VE EARNED ABOUT 5% VERSUS BENCHMARKS, MARKETPLACE BENCHMARKS OF 4%.
SO WE'RE DOING A CREDIBLE JOB.
THE BOARD IS DOING A CREDIBLE JOB, STAFF IS DOING A CREDIBLE JOB, BUT WE'VE GOTTA CONTINUE DOWN THAT PATH TO DO THAT.
AND THEN HOPEFULLY WE'LL GET A COUPLE OF MORE FAVORABLE MARKETS TO DO THAT.
SAYING THAT IF YOU GO TO PAGE, I BELIEVE IT'S SEVEN OF YOUR PACKAGE, UH, JUST UPDATE YOU ON THE CURRENT STATUS OF THE FUND.
IT RIGHT NOW IS AS A 1, 1 22 IS 41% FUNDED.
MEAN THAT'S AN ABYSMALLY LOW NUMBER, PROBABLY MOST CORPORATE PENSION FUNDS ARE IN THE, THE 70 TO 80% RANGE.
MY CAREER, I I SPENT 40 YEARS IN AMERICAN AIRLINES OVERSEEING THEIR PENSION PLANS IN AN INVESTMENT COMPANY THERE.
AND I'VE ALSO BEEN ON THE BOARDS OF THE NATIONAL RAILROAD INVESTMENT TRUST, WHICH IS $26 BILLION IN SMUS ENDOWMENTS.
I'VE GOT BROAD EXPERIENCE IN LOOKING AT THIS, AND THIS IS CLEARLY AN OUTLIER ON ANYTHING WE WOULD SEE, UH, TO GET TO THAT 41%, WE'VE GOT ROUGHLY $2.2 BILLION IN ASSETS.
AND $5.2 BILLION IS THE PRESENT VALUE OF THE LIABILITIES THAT IS DUE.
THE BULK OF THAT MONEY, 70% OF IT IS DUE TO EXISTING RETIREES OR THEIR BENEFICIARIES.
CONVERSELY, ONLY 30% IS APPLICABLE TO ACTIVE EMPLOYEES TODAY.
SO THAT'S, UH, A NUMBER THAT WE'RE, WE'RE FOCUSED ON THE FUNDING STATUS, AND THERE'LL BE A CHART IN A LITTLE BIT SHOWS THAT WE WOULD, UNDER CURRENT ASSUMPTIONS AND CURRENT CONTRIBUTIONS AND PAYMENTS, ET CETERA, WE WON'T BE FULLY FUNDED UNTIL 2090.
AND I DON'T KNOW IF ANY OF US WILL BE HERE TO, TO, TO CELEBRATE THAT OCCASION, BUT SO WE WE'RE TRYING TO COME UP WITH SOME IDEAS TO AVOID THAT.
UM, BASICALLY, UH, THE, THE LEGISLATION IS REQUIRING THAT A PENSION FUND BE FULLY FUNDED OVER THE NEXT 30 YEARS BY USING A LOT OF ACTUARIAL ASSUMPTIONS, INVESTMENT RETURN ASSUMPTIONS.
SO THERE SHOULD BE ENOUGH MONEY IN THERE WHERE YOU, WITH YOUR ADDITIONAL CONTRIBUTIONS, WITH YOUR INVESTMENT RETURNS, YOU WILL GET TO A FULLY FUNDED POSITION IN 30 YEARS WHERE IT'S 68 AS WE SAID.
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HAVING SAID THAT THOUGH, THAT, I MEAN, WE ARE PUTTING A LOT OF MONEY INTO THE PLAN RIGHT NOW.THE CITY IS PUTTING IN 34 POINT HALF PERCENT OF REGULAR PAY PLUS $13 MILLION.
THAT NUMBER LAST YEAR IS ESTIMATED TO BE ABOUT $165 MILLION.
SO THERE'S A SIGNIFICANT PERCENTAGE, UH, AND ACTUALLY THE EMPLOYEES ARE ACTUALLY PUTTING IN 13 POINT HALF PERCENT OF REGULAR PAY FOR ANOTHER 60 MILLION.
SO WE ARE PUTTING IN ABOUT $225 MILLION.
UH, BUT HAVING SAID THAT, WE'RE GOING BACKWARDS BECAUSE WE'RE PAYING OUT $324 MILLION IN BENEFITS TO RETIREES, WHEREAS WE'RE PUTTING IN 224 MILLION.
SO WE'RE, WE'RE RUNNING A HUNDRED MILLION DOLLARS IN THE RED, EVEN AS WE ARE WITH THESE KINDS OF NUMBERS,
SO, UH, YOU KNOW, WE BENEFIT PAYMENTS ARE EXPECTED TO CONTINUE TO EXCEED THE, UH, AMOUNT RECEIVED UNDER THE CURRENT FORMULA UNTIL THE MID 2000 FORTIES.
SO WE, WE'VE, IT'S A VERY UNSUSTAINABLE SITUATION.
THE NEXT PAGE SORT OF PUTS THIS INTO PICTURE FORM, AND ALL ON THE RIGHT FAR RIGHT HAND SIDE IS A HUNDRED PERCENT FUNDED.
WHEN, WHEN WOULD WE GET TO A HUNDRED PERCENT FUNDED? AND GIVEN THE CURRENT SITUATION, UH, IT OUTLINES JUST WHAT I SAID.
WE STARTED AT 40% FUNDED, UM, BACK A LITTLE WHILE AGO.
WE ARE GOING BACKWARDS BECAUSE OF THE A HUNDRED MILLION DOLLARS DEFICIT PLUS WE'VE HAD TO WRITE DOWN ASSETS.
SOME OF THESE ASSETS THAT WE TALKED ABOUT AREN'T WORTH IT WHEN WE SELL THEM OR WHEN WE VALUE THEM.
THEY'RE NOT WORTH WHAT THEY WERE ON THE BOOKS FOR.
SO A COMBINATION OF HAVING TO WRITE DOWN ASSETS AND HAVING THIS DEFICIT IS A PROBLEM.
ONE OF THE THINGS THE BOARD DID DO, UM, IS WHEN WE CREATE IN 2017 18, WE CREATED WHAT WE CALL A SAFETY RESERVE.
WE PUT ABOUT $150 MILLION INTO A VERY SHORT TERM CASH TYPE OF BOND FUND SO THAT IF MARKETS WERE GOING UP AND DOWN, WE WOULDN'T BE FORCED TO SELL IN BAD MARKETS.
AND THAT'S BEEN VERY GOOD IN 2021.
THAT'S, YOU KNOW, WE WERE ABLE TO USE THAT SAFETY RESERVE PAYOUT BENEFITS AND THEN BENEFIT WHEN THE MARKETS CAME BACK IN 2022.
SO THAT WAS ONE OF THE STRATEGIES THAT WERE EMPLOYED.
BUT IT SHOWS THAT WE, WE WON'T GET TO THE A HUNDRED PERCENT UNTIL AT THE TOP LEFT.
IT'S 2090 UNDER THIS SCENARIO.
SO, I MEAN, IT'S, IT'S OUT THERE.
THE NEXT PAGE SHOWS SOMETHING A LITTLE INTERESTING, AND I DON'T THIS, I THINK THE CHARTS YOU'VE GOT ARE IN COLOR, MINES IN BLACK AND WHITE.
BUT, UH, BUT THIS BASICALLY SAYS UNDER THE CURRENT ASSUMPTIONS, UH, WHEN WOULD WE GET TO THESE FULLY FUNDED RATES? IF WE PUT X AMOUNT OF DOLLARS INTO THE FUND? WE HAVE, IF YOU, ON THE FAR, FAR RIGHT OR THE LOWER LEVEL IS OUR CURRENT FUNDING LEVEL, IF WE JUST CONTINUE TO DO THAT, WE'RE NOT GONNA GET THERE UNTIL 2091, 2090.
HOWEVER, IF WE PUT IN $500 MILLION, WE WOULD GET THERE IN 2067.
AGAIN, THIS ASSUMES PUTTING A BIG CHUNK OF MONEY IN $500 MILLION AND THEN FOLLOWING AND CONTINUING.
HOW WE'RE CONTRIBUTING TODAY, UH, TO THE LEFT SHOWS A BILLION DOLLARS.
THAT WOULD GET US DOWN TO 2055, WHICH IS ABOUT THE 30 YEARS REQUIRED.
I MEAN, THIS IS 2025, SO IF WE PUT A BILLION DOLLARS, IT WOULD GET US THERE ON, ON NORMAL.
AND THEN 2 BILLION IS, UH, WE PUT IT ON THE CHART 'CAUSE IT LOOKS GOOD OR GETS US THERE QUICKER.
BUT IT'S NOT, PROBABLY NOT VERY PRACTICAL.
THE OTHER THING, I MEAN, IT'S NOT JUST PUTTING MONEY INTO THE FUND, BUT IT'S ALSO HOW WE CONTRIBUTE TO THE FUND ON AN ONGOING BASIS.
ONE OF THE THINGS THE ACTUARIES WILL TELL YOU, THERE IS SOMETHING CALLED AN ACTUARILY DETERMINED CONTRIBUTION EACH YEAR.
AND WHAT WE'RE PUTTING IN NOW DOES NOT CLEARLY MEET IT.
AND IF WE WERE TO GO TO SOMETHING LIKE THAT, SOME COMBINATION OF PUTTING MONEY INTO THE FUND, INCREASING THE CONTRIBUTION WOULD START TO GET YOU THERE EVEN A LITTLE BIT SOONER.
I THINK WE'VE, GIVEN WHERE WE ARE NOW, WE WOULD, I THINK THE REQUIREMENT'S ABOUT $60 MILLION A YEAR MORE WOULD GET US THERE.
UH, TO THE EXTENT WE PUT IN A BIG CONTRIBUTION AND MAKE THAT CONTRIBUTION, IT'LL GET US THERE IN A LOT QUICKER TIME.
SO THOSE ARE SORT OF, THERE ARE DIFFERENT LEVERS.
UH, I WOULD POINT OUT THAT THESE ARE ALL ACTUARIAL ESTIMATES AND THEY'RE BASED ON MORTALITY AND INTEREST RATES AND A WHOLE BUNCH OF THINGS.
SO THINGS MOVE AROUND A LOT, BUT THEY'RE GONNA BE GIVEN WHERE THIS SITUATION IS MATERIALLY ACCURATE.
I MEAN, THEY'RE GONNA BE IN THE BALLPARK OF, OF WHAT WE'RE DOING NOW.
ONE OF THE THINGS THE STUDY GROUP WILL BE LOOKING AT IS, YOU KNOW, WE, HOW DO YOU GET TO THESE KIND OF NUMBERS? AND WE'LL, WE'VE GOT SOME IDEAS, BUT WE'VE GOT A LOT OF WORK TO DO.
UH, IT'S WORLD HAS CHANGED, INTEREST RATES HAVE CHANGED DRAMATICALLY IN THE LAST YEAR.
YOU HEARD, UH, COUNCILWOMAN MENDELSSOHN TALKING ABOUT HOW INTEREST INCOME WAS UP ON YOUR EARNINGS.
WELL, IT ALSO AFFECTS THE COST OF DEBT AND THINGS OF THAT NATURE.
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SO, UH, WE ARE WORKING ON A, A VARIETY OF THINGS TO TRY TO COME BACK.AND THAT'S WHEN WE LOOK DOWN THE ROAD.
THAT'S ONE OF THE THINGS WE WOULD COME BACK TO THIS GROUP WITH.
UH, SOME, SOME SUGGESTIONS AND RECOMMENDATIONS.
WITH THAT, UM, WE GONNA ASK QUESTION.
UM, WE GONNA TRY TO STICK TO THE BRIEFING, UM, WHAT THEY GAVE US TODAY.
SO I'M GONNA START WITH, UH, COUNCIL STEWART, YOU HAVE NO QUESTIONS? YES, CHAIRMAN WEST.
UM, SO WHERE DO YOU SEE US GOING FROM HERE? I MEAN, WE'RE GONNA HAVE TO MAKE SOME REALLY TOUGH DECISIONS IN THE COMING YEARS.
I, I DON'T THINK WE HAVE TO SOLVE ALL I'M HERE.
I'VE HEARD WE DON'T HAVE TO SOLVE THIS SITUATION THIS YEAR OR EVEN NEXT YEAR, BUT IT'S NOT SOMETHING WE WANT TO PUSH DOWN THE ROAD TO FUTURE COUNCILS.
SO, I MEAN, JUST KIND OF LOOKING AT THIS, 'CAUSE YOU GUYS HAVE BEEN IN THE WEEDS, UH, HERE.
WHAT, WHAT'S OUR CALL TO ACTION AS A COUNCIL? WE THINK WHAT THE LEGISLATION CONTEMPLATED AND WHAT THE CALL TO ACTION IS, IS FOR THIS FALL, FOR THIS COMMITTEE IN PARTICULAR, TO REALLY ROLL UP ITS SLEEVES AND, UM, EVALUATE THE OPTIONS FOR HOW TO ADDRESS THIS PROBLEM.
AND IT'S REALLY NON-NEGOTIABLE.
WE HAVE TO ADDRESS THE PROBLEM, THAT'S THE MANDATE OF THE LEGISLATION.
UM, WE HAVE IN MIND AND I THINK, UH, UH, MAYOR PROAM ATKINS CAN, CAN OUTLINE A, UM, A SCHEDULE OF WHAT THAT MIGHT LOOK LIKE.
WE WILL GET A PRELIMINARY REPORT FROM THE ACTUARY IN NOVEMBER.
AND SO THAT WILL HELP US REALLY SIZE THE PROBLEM HERE.
UM, ALTHOUGH WE, I THINK WE ALL IN OUR MINDS EYE HAVE A PRETTY GOOD IDEA OF WHAT THE ORDER OF THE MAG MAGNITUDE IS.
UM, THE STUDY COMMITTEE HAS PRELIMINARILY, UH, BASED ON WORK WE DID A FEW YEARS AGO, ASSESSED WHAT ARE THE POSSIBLE REVENUE SOURCES.
AND THERE ARE THREE OR FOUR BASIC BUCKETS THAT WE COULD, WE COULD LOOK TO.
UH, WE THINK IT WOULD BE INCUMBENT UPON US TO REALLY REFRESH THAT DRILL DOWN ON THOSE, COME BACK TO THE COMMITTEE WITH THIS COMMITTEE WITH A MORE DETAILED ASSESSMENT OF WHAT THOSE ARE, THE VIRTUES AND VICES OF EACH SO THAT YOU ALL CAN THEN START TO COALESCE AROUND THE POSSIBLE RECOMMENDATION TO THE BALANCE OF THE COUNCIL.
WE WOULD ENVISION THAT PROCESS CAN, WE CAN COMPLETE THAT PROCESS IN THE BALANCE OF THIS YEAR SO THAT IN 2024, THE COUNCIL CAN MAKE THE MOST INFORMED ASSESSMENTS POSSIBLE OF WHAT, WHICH OF THOSE CHOICES THAT IT WOULD, WOULD SEEK TO EMPLOY.
AS, AS IF YOU LOOK AT, UH, WITHIN THE DECK, THERE'S UNDER THE, THE 31 58 MANDATES, ALL OF THIS WOULD LEAD TO THE PENSION BOARD ULTIMATELY ENACTING A SET OF RULES THAT WOULD SATISFY THE LEGISLATIVE MANDATE, UH, IN BY THE FALL OF 2025.
AND JUST TO THROW IT OUT THERE ON THE TABLE, BECAUSE IT'S ALL, IT'S BEEN CIRCULATING INTO CONVERSATIONS THAT I'VE BEEN HEARING, SOME OF THE MAJOR THINGS THAT ARE ON THE TABLE TO TALK ABOUT ARE A NEW, ANOTHER BOND, RIGHT? UM, AM I CORRECT IN THAT? YEAH, I THINK THAT IF YOU THINK ABOUT IN BUCKETS, AND THIS IS NOT AN EXCLUSIVE LIST, BUT THERE'S OBVIOUSLY THE PENSION OBLIGATION BOND IS A, HAS BEEN A TRADITIONAL VEHICLE THAT HAS BEEN AVAILED, UH, UH, OF, UH, IN, IN SIMILAR CIRCUMSTANCES.
CERTAINLY E R F DID IT BACK IN 2004 AND FIVE AND BILL CAN SPEAK TO THAT, RIGHT? UH, THAT'S A MORE CHALLENGED SCENARIO THE HIGHER THE INTEREST RATE ENVIRONMENT GETS.
AND SO WE'D HAVE TO REALLY, UH, TAKE A, A CLEAR I'D LOOK AT THAT.
UM, ANOTHER VERY TYPICAL MECHANISM WOULD BE TO LOOK AT VARIOUS CITY ASSETS THAT SOMEHOW COULD BE MONETIZED IN SOME FASHION.
AND I, AND I WANNA BE CAREFUL IN USING THAT WORD THAT DOESN'T MEAN NECESSARILY SELL.
UM, THERE'S, IT'S QUITE PERVASIVE AROUND THE COUNTRY.
UM, MUNICIPALITIES, OWNERS OF ASSETS WHO HAVE DONE DIFFERENT PUBLIC-PRIVATE PARTNERSHIPS IN ORDER TO TAP INTO REVENUE STREAMS THAT WERE NOT OTHERWISE AVAILABLE.
EVERYTHING FROM THE LARGEST ASSETS TO A COLLECTION OF THE SMALLER ASSETS, THAT'S A REAL POSSIBILITY HERE.
UH, AND THEN YOU COULD DO IT SORT OF THE OLD FASHIONED WAY, WHICH IS SORT OF TRADITIONAL TAXING TYPE MECHANISMS. UM, SO THOSE ARE REALLY, I THINK, THE THREE BASIC BUCKETS, UH, AVAILABLE TO US.
UH, BILL AND I HAVE SPENT A LOT OF TIME WITH OUR, OUR COMMITTEE, UH, TALKING TO REALLY VERY CAREFUL, UH, AND WELL-INFORMED EXPERTS ON WHAT THE POSSIBILITIES ARE.
SO WE FEEL LIKE WE AT LEAST HAVE A, A A A HANDLE ON WHAT ARE THE RANGE OF, OF, UH, POSSIBLE SOLUTIONS, BILL.
YEAH, THE, THE ONLY THING I WOULD ADD TO WHAT ROB SAID IS, I MEAN, YOU OBVIOUSLY LOOKING AT MONETIZING THE PRIVATIZING ASSETS THROUGH ASSET SALES AND OR LEASES.
YOU'RE ALSO LOOKING AT REVENUE STREAMS, CERTAIN THINGS THAT ARE OUT THERE THAT COULD BE DEDICATED TO MAKING THOSE HIGHER CONTRIBUTIONS.
SO THOSE WILL BE SOME OF THE OPTIONS WE WOULD BRING BACK AND SAY, YOU GOT THIS REVENUE STREAM HERE, IF WE CAN DEDICATED OVER HERE TO, IF PAY THE HIGHER CONTRIBUTION, THAT WOULD HELP.
SO WE WILL BRING BACK A NUMBER OF OPTIONS.
[00:25:01]
I THINK WE'RE LOOKING AT SEVEN OR EIGHT OPTIONS THAT WE WOULD BRING BACK TO YOU, AND WE'LL GIVE YOU THE PROS AND THE CONS.BUT THE, THE ECONOMICS, WHAT WE LOOKED AT IT TWO YEARS AGO WAS A TOTALLY DIFFERENT ENVIRONMENT.
SO THEY REALLY NEED TO BE FRESHENED UP BEFORE WE WOULD'VE EVEN WANT TO, AND BILL, YOU COULD SAY THAT, YOU KNOW, THE OPTION, THE REVENUE OPTION, WE CAN KIND OF LOOK DIFFERENT BECAUSE WE HAD A PANDEMIC, YOU KNOW, THE PANDEMIC HAPPENED, SO THE MARKET CHANGED AND, UH, THE INTEREST RATES GONNA CHANGE.
AND WHEN Y'ALL DID DO THE STUDY, THERE WAS A WHOLE LOT OF OPTIONS.
THOSE OPTIONS OWED OVER, WERE TWO YEARS OLD, SO WE REALLY STARTING ALL BACK OVER.
SO YEAH, CHAD, SO THAT IS GREAT INFORMATION, BUT WE REALLY START ON BACK OVER, I GET THAT, AND I'LL JUST FINISH WITH THIS.
SO THE GOVERNMENT PERFORMANCE FINANCIAL MANAGEMENT COMMITTEE, WHICH HAPPENED JUST BEFORE THIS AND WE FINISHED ON TIME SO YOU COULD GET STARTED ON TIME, WAS, UH, ONE OF THE THINGS THAT WE'RE BRINGING UP IN THAT COMMITTEE, UM, I'VE GOT ALMOST MY ENTIRE COMMITTEE AND MY ENTIRE COMMITTEE IS ON THE PENSION COMMITTEE, IS, UH, IS IS TO LOOK AT THE 50,000 ACRES THAT THE CITY MAINTAINS.
NOW, A LOT OF THOSE ARE PARKLAND AND, YOU KNOW, THINGS THAT POLICE AND FIRE STATIONS THAT WE'RE, WE'RE NOT GONNA GET RID OF, YOU KNOW, ACTIVATE FOR ANYTHING ELSE.
BUT, UH, THERE'S UNBEKNOWNST AMOUNTS OF ACREAGE THAT WE COULD ACTIVATE IN TERMS OF NOT NECESSARILY SELLING, BUT DOING A LONG-TERM LAND LEASE, 99 YEAR LEASE THAT WE MAKE REVENUE ON THAT COULD BE TIED TO THIS.
SO I WOULD JUST ASK, INSTEAD OF US WORKING, YOU KNOW, INDEPENDENTLY, WE KIND OF TIE YOUR WORK TO, TO OUR EFFORTS THAT ARE JUST STARTING WITH THE REAL ESTATE DEPARTMENT TO, TO FIGURE OUT HOW DO WE ACTIVATE THAT, THAT THOSE PROPERTIES, WE ABSOLUTELY WOULD, WOULD WELCOME THAT, EMBRACE THAT, THAT IT NEEDS TO BE A COLICY A DIALOGUE ABOUT.
AND WE DON'T JUST GO OFF AND HERMETICALLY SEAL OURSELVES AND COME BACK WITH A BUNCH OF OPTIONS, BUT REALLY UNDERSTAND, AND WE PLAN ON AND HAVE BEEN WORKING WITH JACK AND TEAM VERY REGULARLY TO MAKE SURE THAT WE'RE OPERATING, YOU KNOW, WE, WE HAVE, UH, WE HAVE ALL THE RIGHT DATA FOR THAT PURPOSE.
CHAIRMAN MENISON, I'M GONNA PASS FOR NOW.
YOU THREW ME OUT
YEAH, JUST OUTTA CURIOSITY, YOU MENTIONED THE THREE MATERIAL ASSETS REMAINING AND THAT YOU WOULD EXPECT THOSE TO NET FOUR TO $500 MILLION.
IS THIS, WHAT'S THE TIMEFRAME? UH, WHAT ARE THESE ASSETS? I DON'T KNOW WHAT THESE LAST, OH, THE A THE, I MEAN, THERE IS STILL REAL ESTATE ASSETS THAT NEED TO BE REALIZED ON.
THERE IS ALSO A COUPLE OF LONG HELD PRIVATE EQUITY FUNDS.
ONE'S AN OIL AND GAS FUND, ONE'S A A DIVERSIFIED PORTFOLIO.
UM, SO I, I WOULD THINK, YOU KNOW, WE'VE BEEN DOING IT WORKING ON IT FOR SIX YEARS AND WE'RE MORE TWO THIRDS OF THE WAY THERE.
HOPEFULLY THE TIMEFRAME WITHIN THE NEXT TWO YEARS OR THREE YEARS, UH, THOSE WOULD BE REALIZED.
AND I, I JUST WANNA COMPLIMENT THE BOARD.
I OBSERVED THIS DID A VERY NICE JOB.
I MEAN, THE BOARD NEEDED TO AVOID ANY KIND OF FIRE SALE SCENARIO, AND YOU CAN IMAGINE WITH THE VISIBILITY THAT THIS FUND, THERE ARE A LOT OF PEOPLE ARE CIRCLING TO TRY TO GET TO, TO REALLY STEAL ASSETS.
UH, THIS BOARD WAS VERY MEASURED AND DELIBERATE IN MAXIMIZING THE VALUE OF THAT, AND IT WAS JUST GONNA TAKE A WHILE.
SO I THINK THE BOARD HAS DONE A, A REALLY VERY NICE JOB IN MAXIMIZING THOSE ASSETS FOR THE BENEFIT OF THE FUND.
YEAH, I JUST, WHEN I HEARD 500 MILLION AND THEN LOOKED AT YOUR GRAPH, I THOUGHT, WELL THAT MIGHT AT LEAST GET US TO THE LADIES T YOU KNOW, TO WORK ON THIS.
SO, UM, THE, THE ONLY THING I WOULD ADD TO THAT THOUGH IS THE CURRENT VALUE OF THOSE ASSETS IS IN THE NUMBERS THAT WE SHOWED YOU, IT'S PART OF THE 2.2 BILLION.
SO SELLING THEM, WE'LL BE ABLE TO REDEPLOY THEM, BUT IT'S NOT GONNA ADD TO THE VALUE OF THE FUND.
UH, THANK YOU FOR THE PRESENTATION.
UH, I DO LOOK FORWARD TO THE POSSIBLE REVENUE, UM, OPPORTUNITIES THAT Y'ALL BRING BEFORE US.
AS MEANT AS, UH, CHAIRMAN, WE SAID EARLIER, UH, PRIOR TO THIS, UH, COMMITTEE WE WERE EVALUATING, UH, OUR SURPLUS PROPERTY AND I THINK THERE IS A LOT OF OPPORTUNITY THERE.
IN PARTICULAR, UH, 22 ACRES SITE IN DEEP BEUM, WHICH IS A VERY HIGH DENSE, HIGH OPPORTUNITY AREA.
UM, AND SO WANNA MAKE SURE THAT Y'ALL ARE AWARE OF THOSE OPPORTUNITIES AS, AS WELL AND JUST WANT Y'ALL TO KNOW THAT WE'RE COMMITTED TO, UH, ENSURING THAT WE, UH, FIX OUR PENSION PROBLEM.
THAT'S, THAT'S VERY HELPFUL TO KNOW.
ONE OTHER THING WE SHOULD HAVE MENTIONED, JUST AS YOU ALL THINK ABOUT AND RUMINATE ON THE, THE ISSUE AND THE CHALLENGE, UM, JUST ORDER MAGNITUDE.
IF WE WERE LITERALLY JUST GONNA WRITE A CHECK INTO THIS FUND TO GET IT TO SOLVENCY ON A, ON A 30 YEAR BASIS, UM, IN TODAY'S DOLLARS, IT WOULD REPRESENT APPROXIMATELY $60 MILLION A YEAR.
AND SO YOU COULD DO IT THROUGH, YOU KNOW, REVENUE SOURCES THAT WOULD FEED INTO THAT.
YOU COULD DO IT WITH A BIG BANG SOLUTION IF YOU MONETIZE AN ASSET.
BUT THAT MIGHT HELP YOU ALL THINK ABOUT SORT OF THE ORDER MAGNITUDE, WHAT THE CHALLENGE IS.
[00:30:01]
COUNCILWOMAN BLACKMAN.SO I'M LOOKING AT THE 2017, UH, LEGISLATIVE SESSION ON PAGE THREE AND IT SAYS, UM, A BRIDGE TO A PERMANENT SOLUTION BY 2025.
SO THAT MEANS THAT WE, WE HAVE TO COME UP WITH A PERMANENT SOLUTION OR IS IT A DISCUSSION OF THIS IS WHAT WE'RE GONNA DO BETWEEN FIVE AND 10 YEARS? YEAH, SO THANK YOU FOR THE QUESTION.
AND IT'S A REALLY, IT'S A VERY INSIGHTFUL BECAUSE WHAT THE LEGISLATION SAYS IS, IS THAT THE PENSION BOARD MUST ENACT RULES THAT WOULD RESULT IN THE FUNDING WITHIN A 30 YEAR SOLVENCY WITHIN A 30 YEAR PERIOD.
NOW IT DOESN'T SAY GIVING YOU MORE DETAILED DESCRIPTION ABOUT WHAT THAT MIGHT MEAN.
IT MIGHT SAY THEY MIGHT COME UP WITH A RULE THAT SAYS WE CONTEMPLATE THE FOLLOWING INFUSIONS OVER TIME.
I THINK THE LEGISLATURE WOULD LOOK AT THAT AND THEY WOULD SAY, WELL, THAT'S EITHER CREDIBLE OR IT'S NOT THAT CREDIBLE.
AND THEN THE LEGISLATURE MIGHT SAY, UH, OR THE PICTURE REVIEW BOARD, OF COURSE, WOULD MAKE AN ASSESSMENT OF THAT UNDER THE LEGISLATION.
AND THERE THERE COULD BE SOME CONVERSATION.
NOW, YOU KNOW, IT, IT, ONE COULD ENVISION IF FOR SOME REASON IT WASN'T SATISFACTORY IN SOME SENSE THE LEGISLATURE COULD ALWAYS THEN ACT ON THAT AND SAY, WELL, THAT'S NOT GOOD ENOUGH.
LET'S THINK ABOUT SOME OTHER POSSIBILITIES.
BUT FRANKLY, I THINK WE'RE WAY PREMATURE ON THAT AND I THINK EVERYBODY ENVISIONS THAT WE WILL GET TO A PLAN AND A SET OF RULES ENACTED BY THE BOARD THAT WOULD BE HIGHLY CREDIBLE AND SATISFACTORY.
'CAUSE UM, YEAH, MY OLD BOSS RAWLINGS, WE ALWAYS, I MEAN, UH, WE DID A LOT OF DISCUSSION ABOUT THIS WHEN I WAS AS CHIEF OF STAFF AND HE ALWAYS SAYS, YOU'VE GOTTA CREATE SOME TENSION.
AND I THINK THAT'S THE WORD HE USED BETWEEN, UM, THE ENTITY SO THAT THEY'RE ALWAYS ON THEIR TOES AND THEY'RE ALWAYS, AND SO TO TAKE IT TO SOLVE, TO TAKE IT TO SOLVENCY, THAT WAS MY QUESTION WITH THAT ONE IS BECAUSE IF YOU FULLY FUND IT, THEN WE MAY GET BACK IN THIS SAME SPOT IN 20 TO 30 YEARS IF YOU FULLY FUND IT WITH INFUSION OF $4 BILLION.
I MEAN, GOING FORWARD THAT IT COULD ALWAYS BE THE CASE IF YOU ARE IMPRUDENT IN HOW YOU MANAGE YOUR ASSETS, INCREASE YOUR LIABILITY.
I MEAN, IF YOU STARTED GIVING OUT MAJOR WAGE INCREASES OF 30% OF THINGS LIKE THAT, THERE'S ALL A LOT OF THINGS THAT COULD GO WRONG.
BUT THIS WOULD BE A PLAN TO NOT FULLY FUNDED IN NEXT YEAR OR TWO, WHICH THE HABIT FUNDED AND AMORTIZED THROUGH EITHER A COMBINATION OF CONTRIBUTIONS OR AS HIT HIT THE BUTTON, THE MIC.
WE'RE TRYING TO GET Y'ALL A SECOND MIC OR TRY THAT ONE, ROB.
THAT WAY Y'ALL DON'T HAVE TO KEEP SHARING.
YEAH, THAT'S A REALLY IMPORTANT POINT IS THAT THE UNDERLYING ACTUARIAL ASSUMPTIONS WITH THAT THE INDEPENDENT ACTUARY WILL LOOK AT AND DEVELOP THAT WILL BE REVIEWED BY THE P R B NEED TO BE REASONABLE.
THEY NEED TO BE SOUND, THEY NEED TO BE SORT OF, UH, NOT ASYMMETRICAL, BUT RATHER THEY HAVE AN EQUAL CHANCE OF BEING.
THEY'RE THEY'RE GONNA BE WRONG.
THE QUESTION IS, ARE THEY GONNA BE, UH, WHICH WAY ARE THEY GONNA FLOW? AND IT NEEDS TO BE AN EQUAL PROBABILITY THAT THEY WOULD BE MORE FAVORABLE OR LESS FAVORABLE, UH, ON THOSE ASSUMPTIONS.
THEN YOU NEED TO GET TO SOLVENCY WITHIN 30 YEARS.
AND THE BILL NUMBERS THAT BILL SHOWED ARE, UH, IF YOU HAVE REASONABLE ASSUMPTIONS BUILT INTO THE ACTUARIAL WORK, UH, IT WOULD TAKE APPROXIMATELY A ONE-TIME BILLION DOLLAR INFUSION IN 2025 TO MEET THE GOAL OR PERIODIC INFUSIONS OF THE COURSE OF TIME THAT WOULD GET YOU THERE.
'CAUSE I WAS GONNA, THAT WAS MY NEXT QUESTION IS CAN YOU MAKE THE INSTALLMENT PLAN, RIGHT? CAN YOU DO 500, YOU KNOW, EVERY TWO YEARS? I DON'T KNOW WHAT THE, THE, THE, THE, THE TIMEFRAME IS, BUT IT'S LIKE, YOU KNOW, DO WE HAVE THE ABILITY TO CREATE A, A INFUSION EVERY SO OFTEN VERSUS AT ONE TIME SAY, YOU KNOW, IN 2025 WE WRITE A BILLION DOLLAR CHECK.
YEAH, I THINK THAT'S WHAT WOULD BE PART OF THE PLAN SUBMITTED TO THE PENSION REVIEW BOARD FOR THEIR EVALUATION TO SAY, WOULD THAT WORK? SO DEPENDING ON THE NUMBERS AND HOW OFTEN YOU MAKE THAT INFUSION, AND AGAIN, THE OTHER LEVER IS JUST INCREASING THE CONTRIBUTIONS TO THE ACTUARIAL DETERMINED NUMBER ON A MORE REGULAR BASIS.
SO YEAH, YOU'D HAVE ALL THOSE OPTIONS AND THEY WILL ULTIMATELY DECIDE IST A REASONABLE PLAN, AN ACCEPTABLE PLAN.
AND I THINK THE TENSION THAT YOU TALKED ABOUT A LITTLE EARLIER IS REALLY THAT THE STATE COULD IMPOSE, OR THE LEGISLATURE COULD IMPOSE FUNDING REQUIREMENTS THAT YOU MAY NOT WANT TO LIVE WITH.
I MEAN, THAT'S THE REAL TENSION HERE.
OR MAYBE THEY'LL HELP US PAY FOR IT.
HOPE SPRINGS ETERNAL, BUT YEAH.
BUT YOU KNOW, WE CAN ONLY A GIRL CAN ONLY HOPE.
UM, AND THANK YOU FOR THIS 'CAUSE I'VE BEEN ON THE CIRCUIT TALKING TO PEOPLE THAT, YOU KNOW, I WAS IN THE MAYOR'S OFFICE WHEN IT ALL CAME DOWN, BUT, UM, I WASN'T IN IT WHEN IT WAS IN 2017.
[00:35:01]
WAS PRETTY CLOSE TO BEING ALL OVER.SO I DO WANNA THANK YOU ROB AND BILL FOR JUMPING IN BECAUSE, AND THEN I KNOW THAT IT TOOK A LOT OF COURAGE AND A LOT OF PEOPLE WERE UPSET.
AND SO, UH, BECAUSE YOU DID, I MEAN, YOU SAVED OUR CITY, LET'S JUST BE HONEST.
AND, UM, AND SO WE'RE NOT OVER, IT'S NOT, WE'RE NOT TO THE FINISH LINE.
WE'VE STILL GOT SOME WORK TO DO, BUT WE GOT THE BOOT OFF OUR NECK.
AND SO I THINK YOU'VE GOTTA COUNCIL HERE THAT'S COMMITTED TO DOING THE RIGHT THING.
AND SO I JUST WANNA THANK YOU.
YEAH, I WOULD JUST ADD THAT, I MEAN, I THINK CLEARLY THE D F P BOARD AND THE COUNCIL AND THE CITY STAFF ARE ALL ALIGNED TO TRY TO FIND A VERY WORKABLE SOLUTION.
I THINK BACK, I WASN'T INVOLVED IN 2016, BUT IT WASN'T AS HARMONIOUS AS, UH, IT COULD HAVE BEEN I GUESS.
BUT NOW I THINK EVERYBODY'S ALIGNED TO MAKE THIS WORK.
HAMMER RESENDEZ, I DON'T HAVE ANY QUESTIONS.
I'LL COME BACK TO, UM, CHAIRMAN MEDICINE.
UM, SO IN 2017 THERE WAS LEGISLATIVE ACTION THAT ALSO CHANGED THE CONTRIBUTION FOR THE CITY WHERE THERE WASN'T A CALCULATION FOR OVERTIME.
HOW HAS THAT IMPACTED THE PENSION? OKAY.
HOW DOES THAT AFFECT THE PENSION? I MEAN, OBVIOUSLY IF THERE WAS CONTRIBUTIONS BASED ON OVERTIME PAY, IT WOULD RESULT IN HIGHER CONTRIBUTIONS FROM THE CITY AND WHATEVER WOULD BE NEGOTIATED WITH THE EMPLOYEES, WHETHER OR NOT THAT WOULD APPLY.
BUT THAT WOULD BE A WAY OF BOOSTING CONTRIBUTIONS ON AN ANNUAL BASIS.
AS I SAID, IT'S TODAY, I THINK IT'S A HUNDRED SIXTY FOUR, SIXTY 5 MILLION FROM THE CITY AND 60 FROM EMPLOYEES.
IF IT APPLIED IT TO PAY, I DON'T KNOW THE EXACT NUMBER WE COULD GET THAT, BUT IT WOULD BOOST THAT BY, UH, WHATEVER THE PERCENTAGE OF OVERTIME IS.
WELL, I HOPE THAT WHEN YOU DO COME BACK TO US WITH SUGGESTIONS THAT IT WON'T BE ONE CHOICE, RIGHT? LIKE WE'RE PROBABLY GONNA HAVE TO DO THE, THE OLD CHINESE BUFFET MENU WHERE WE'RE TAKING SOME OF THIS COLUMN, SOME OF THAT COLUMN AND PUTTING THEM ALL TOGETHER.
UM, AND I HOPE THAT YOU'LL, UM, CONSIDER THAT BECAUSE WE HAVE SUBSTANTIAL OVERTIME FOR BOTH, UM, OUR POLICE AND FIRE ACTIVE MEMBERS.
UM, THE NEXT THING I WANNA TALK ABOUT IS, UM, HOW WE'RE EVEN EXPRESSING THE DATES FOR, UM, FOR ACTION.
SO WE SAY 2025, AND THAT SOUNDS VERY FAR AWAY, BUT OF COURSE THE LEGISLATIVE SESSION BEGINS JANUARY, 2025 AND BILLS WILL BE FILED IN NOVEMBER, 2024, WILL NEED TO BE WRITTEN PROBABLY SEPTEMBER, 2024.
AND WE'LL HAVE TO HAVE THE PLAN TO KNOW WHAT TO WRITE.
SO WE ACTUALLY ARE NOT ON, UM, A VERY LONG LEASH HERE.
WOULD YOU SAY THAT'S TRUE? UH, I, I COULDN'T AGREE MORE.
FIRST OF ALL ON YOUR, YOUR FIRST, UH, UH, OBSERVATION, COUNCILMAN MENDELSSOHN, WE, WE ARE HERE TO SERVE THIS COMMITTEE AND SO WE WOULD VERY MUCH WELCOME THAT.
AND WHAT WE REALLY ENVISION DOING IS IDENTIFYING A RANGE OF OPTIONS HERE, THE VIRTUES AND THE VICES OF EACH, HERE'S THE COST BENEFIT OF EACH, AND THEN PUTTING THEM BEFORE YOU ALL.
SO YOU CAN EVALUATE AND YOU MIGHT PICK THIS PIECE WITH THAT PIECE IN, IN THE ULTIMATE RECOMMENDATION THAT YOU ALL MAKE.
WE WILL HAVE OUR OWN INDEPENDENT VIEWS OF WHAT IS PREFERABLE AND NOT PREFERABLE, BUT THAT THAT'S HOW WE ENVISION OUR ROLE IN SERVING, SERVING THIS COMMITTEE.
IN TERMS OF TIMETABLE, WE'RE REALLY HOPEFUL TO OPTIMISTIC THAT THIS FALL, UH, NO LATER THAN THE FIRST QUARTER, THAT THE COUNCIL WOULD BE IN A POSITION WHERE IT COULD MAKE INFORMED ASSESSMENTS ABOUT WHAT THIS WOULD LOOK LIKE.
WE WOULD HAVE ALL THE DATA AND IT WOULD ROLL VERY NICELY INTO THE LEGISLATIVE REQUIREMENTS IN TERMS OF TIMETABLE LATER IN THE FALL OF 2024, IDEALLY, UH, THE BOARD COULD ACT, THE PENSION BOARD COULD ACT, IT COULD BE PRESENTED, AND THEN WE WOULD BE IN A GOOD POSITION BY THE FALL OF 20, WELL IN, BY THE SUMMER EARLY FALL OF 2024, WHICH IN A PERFECT WORLD AND IN A WORLD THAT WE ALL EXPECT WOULD OBVIATE ANY NEED FOR ANY LEGISLATIVE ATTENTION.
I WOULD SAY THE, THE STAFF IS WORKING VERY CLOSELY WITH THE PENSION REVIEW BOARD.
SO WHAT WE ACTUALLY ACCELERATED THE, THE HIRING OF THE INDEPENDENT ACTUARY, WE WOULD EXPECT TO BE ABLE TO WORK WITH THEM ONCE THE COUNCIL HAS DECIDED WHICH DIRECTION, WHICH MAP THEY WANT TO TAKE.
AND IF WE GET THE THEM ON BOARD, THEN THERE'S NOT GONNA BE ANY REQUIREMENT FOR THE LEGISLATURE TO DO ANYTHING AS LONG AS IT'S AN ACCEPTABLE PLAN.
AND WHAT IF IT WASN'T? WOULD THEY BE ABLE TO COME UP WITH THEIR OWN SOLUTION? SO YEAH, SO IT'S A REALLY GREAT QUESTION AND THERE'S NOTHING SPECIFIC IN THE LEGISLATION THAT SAYS, UH, IF YOU DON'T, THIS SHALL HAPPEN.
I THINK THE SORT OF DAMES THAT HANGS OVER THE HEAD OF, OF THIS EFFORT IS THAT IF THE PLAN IS SOMEHOW NOT SATISFACTORY, IT'S VIEWED AS CONTEXTUAL OR ILLUSORY OR SOMETHING LIKE THAT, THEN IT WOULD BE UP TO THE LEGISLATURE TO DO SOMETHING ABOUT THAT.
IT'S NOT INCUMBENT UPON THE LEGISLATURE.
[00:40:01]
THE LEGISLATURE WOULD SAY, WELL, WE'RE JUST NOT GONNA DO ANYTHING ABOUT IT, OR WE DON'T HAVE TIME TO GET TO IT OR WHATEVER.AND THEN THE STATUS QUO WOULD EXIST.
I THINK THE NOTION IS THOUGH, THAT IF WE DON'T HAVE SOMETHING THAT IS CREDIBLE AND SATISFACTORY, THERE WOULD BE SOME ATTENTION TO IT IN THE 2025 LEGISLATIVE SESSION.
UM, THE NEXT THING I WAS GONNA ASK YOU ABOUT IS, UM, YOU KNOW, YOU WERE TALKING ABOUT PENSION OBLIGATION BONDS NOT BEING A PARTICULARLY USEFUL, UM, AVENUE FOR US BECAUSE OF INTEREST RATES, SO I AGREE.
UM, BUT I STARTED CALLING IT PENSION GENERAL OBLIGATION BONDS, RIGHT? SO WHERE YOU'RE JUST LITERALLY TAKING OUT THE DEBT TO FINANCE IT SO THAT YOU CAN GIVE THE BIG POT OF MONEY UP FRONT.
HOW, HOW WOULD THAT FACTOR IN YOUR ASSESSMENT? I MEAN, I, WE HAVE NOT LOOKED AT THAT AS ONE OF THE OP OPTIONS AT THAT TIME.
INTEREST RATE, THERE WAS SUCH A WIDESPREAD, BUT WE, ONE OF THE THINGS WE WILL NEED TO DO IS GET WITH STAFF AND SEE WHERE THE INTEREST RATES ARE ON TAXABLE AND TAX EXEMPT BONDS AND EVALUATE THAT AS ONE OF THE RECOMMENDATIONS SLASH OPTIONS THAT WE WOULD PRESENT.
BUT I WOULD SAY AT THIS POINT, WE DON'T HAVE AN OPINION ONE WAY OR THE OTHER, BUT UNDER EITHER SCENARIO, I THINK YOU'RE, YOU'RE, YOU'RE RIGHT, UNDER EITHER SCENARIO, THE FACT THAT YOU'RE GONNA BE IN THE SIX, 7% INTEREST, YOU KNOW, INTEREST RATE ENVIRONMENT, UM, GIVEN THE RATE OF RETURN ASSUMPTIONS HAS REALLY, REALLY SQUEEZED DOWN THAT OPPORTUNITY AS COMPARED TO TWO YEARS AGO WHEN WE WERE ESSENTIALLY IN A FREE MONEY ENVIRONMENT.
AND, AND I AGREE WITH YOU FOR THE PENSION OBLIGATION, BUT, BUT YOU KNOW, WE'RE CONSIDERING A GENERAL OBLIGATION BOND FOR THE CITY MM-HMM.
AND MY CONCERN IS THAT WE WILL COMMIT FUNDS AND NOT HAVE THE OPPORTUNITY TO USE THOSE GENERAL OBLIGATION DOLLARS, UM, FOR THE PENSION, SHOULD WE NEED THAT AS PART OF A SOLUTION FOR, FOR REVENUE.
SO, YEAH, AND, AND SO THAT WAS SOMETHING THAT WE DIDN'T REALLY FOCUS ON THAT MUCH BECAUSE OF THE, THE OLD ENVIRONMENT, BUT IT'S ABSOLUTELY SOMETHING WE'D FOCUS ON THIS, UH, THIS FALL AND BRING BACK TO THE COMMITTEE.
SO MY NEXT QUESTION IS ABOUT, UM, THE ACTUARY DETERMINED CONTRIBUTION, WHICH, UM, MY UNDERSTANDING COMES OUT ANNUALLY FOR THE PENSION, BUT AFTER OUR BUDGET SCENARIO, IS IT POSSIBLE THAT WE WOULD ALWAYS GO BACK AND, AND MAYBE WE WOULD MAKE AN F M P C THROUGH THE G P F M COMMITTEE? SO A FINANCIAL MANAGEMENT PERFORMANCE CRITERIA THAT WOULD SAY TO US WHATEVER THAT ACTUARY DETERMINED CONTRIBUTION IS FOR WHATEVER YEAR, THEN THE NEXT BUDGET YEAR, THAT IS WHAT WE NEED TO PUT IN FOR OUR PENSION CONTRIBUTION.
SEE WHAT I'M SAYING? SO IT WOULD ALWAYS LAG A YEAR, BUT IT WOULD ALWAYS BE TIED TO THE ACTUAL NEED FOR CONTRIBUTION SO THAT IT COULD FLOAT.
IS THAT SOMETHING THAT YOU, THAT, THAT, THAT WOULD WORK? I MEAN, CLEARLY THE ACTUARIES DO THIS EVERY YEAR, YEAR IN AND YEAR OUT, AND THE DEMOGRAPHICS SINCE CHANGED A LITTLE BIT, BUT IT'S PROBABLY NOT GONNA BE MATERIAL.
I MEAN, IF IT'S 60 MILLION OF ADDITIONAL MONEY THIS YEAR, MAYBE PLUS OR MINUS FOUR OR 5 MILLION THE NEXT YEAR.
SO I KNOW YOU CAN CLEARLY DO THAT ON A LAG BASIS.
YOU WOULDN'T BELIEVE HOW MANY HOURS WE WOULD FIGHT OVER FOUR OR $5 MILLION ON THIS HORSES
UM, SO I JUST WANNA SAY THAT AS AN OVERALL STRATEGY, I HOPE THAT WE WILL COME UP WITH A SOLUTION THAT WILL MEAN THERE'S NO FUTURE ACTION NEEDED BY OTHER COUNCILS.
MEANING WHATEVER PLAN WE ADOPT, IT DOESN'T NEED TO KEEP COMING BACK.
UM, THE, THE THING I'M MOST CONCERNED ABOUT AND WHEN I WAS G P F M CHAIR WAS CONCERNED ABOUT IS THAT THIS IS HIGHLY TECHNICAL AND I, I THINK WE ARE EXCELLENT REPRESENTATIVES OF OUR DISTRICTS AND OF THE PEOPLE, BUT WE'RE NOT, UM, EXPERTS ON FINANCE LIKE YOU ARE.
AND SO YOU'RE PLAYING A REALLY IMPORTANT ROLE HERE, BUT I THINK IT'S UNREASONABLE TO KEEP ASKING A COUNCIL TO LEARN ALL OF THESE ACTUARIAL TERMS AND HOW ALL OF THIS FINANCE IS GONNA WORK.
AND SO I'M HOPING WHATEVER WE COME UP WITH, AT THE END OF THE DAY, IT IS A FIX, EVEN IF THAT DOES MEAN MONEY DROPPING THROUGH AT DIFFERENT TIMES, BUT THAT WE SAY, THIS IS THE PLAN, WE PASSED THIS PLAN, AND WE DON'T HAVE TO KEEP REVISITING IT SO THAT ON THE RECRUITING SIDE, THEY HAVE SURETY, THE ACTIVE MEMBERS DON'T HAVE TO STAY UP AT NIGHT WORRIED ABOUT THEIR RETIREMENT, AND THE RETIREES CAN GO ON AND LEAD THE HAPPY LIFE THAT WE HAD ENVISIONED FOR THEM.
AND THEN THE LAST THING I WOULD SAY IS THANK YOU FOR YOUR EXPERTISE AND, UM, YOU, YOU GUYS ARE BOTH LEADING, LEADING, UM, FINANCIAL MINDS IN OUR COMMUNITY, AND SO IT'S REALLY IMPORTANT THAT YOU'RE HERE.
AND ROB, JUST KIND OF PIGGY BACK ON, UH, CHAIRMAN MENDELSON, WE TALKED ABOUT ACTUARY AND, AND THIS KIND OF REMIND ME IN 2015, WE, AND, AND JOSH CAN MON CAN CORRECT ME THAT SOMETIME IT DEPENDS ON WHAT INFORMATION THE ACTUARY GET
[00:45:01]
THAT MAKE A BIG DIFFERENCE.SO WE CAN'T JUST RELY ON THE ACTUARY, WE GOTTA FIND OUT THE DATA, WHAT THEY PRESENT TO THEM.
THAT'S WHAT CAUSED A PROBLEM BACK THEN IN 2015.
SO, UM, I'M TRYING TO MAKE SURE WE DO NOT RELY ON XRAY, WE'VE RELIED ON THE DATA, THE INFORMATION THAT ACTUARY GET, AND WE MAKE SURE THAT IS CORRECT INFORMATION.
SO I, I WOULD SAY THIS AND UM, AND I'M NOT GOING OUT ON A LIMB.
WE COULDN'T AGREE MORE THAT IT'S NO BETTER, NONE OF THIS IS ANY BETTER THAN THE ACTUAL DATA.
UM, BUT I, I THINK BOTH OF OUR EXPERIENCES IS WE HAVE A HIGHLY PROFESSIONAL, HIGH INTEGRITY TEAM AND STAFF RUNNING THE PENSION FUND TODAY, AND WE WILL BE ABLE TO RELY IMPLICITLY ON THE DATA THAT THEY PROVIDE TO US.
AND, AND THE OTHER DEAL, I, I'M, I'M TRYING TO MAKE SURE WE STAY ON THE SUBJECT MATTER AT HAND TODAY.
UM, THERE WAS A STUDY GROUP AND A RECOMMENDATION.
THIS IS NOT A RECOMMENDATION TODAY, YOU KNOW, THERE IS A FINAL, A RECOMMENDATION COME IN AFTER EXTRA BRING TO US.
SO RIGHT NOW, COLLEAGUES, IT'S JUST AN UPDATE.
I MEAN, THERE'S A WHOLE LOT OF IDEALS.
WE CAN PUT IDEALS OUT THERE, THEY'RE GONNA COME BACK TO US.
SO WHAT I WOULD LOVE TO DO, IF YOU GOT QUESTION ABOUT THE PLAN, HOW DO WE GO FORWARD, PUT IT IN WRITING SO EVERYONE GIVE TO THEM SO THEY CAN RESEARCH THAT BECAUSE WE WANNA RESEARCH THE CORRECT DATA AND MAKE SURE WHAT WE DO MAKE A, A DECISION BECAUSE EVERYBODY'S LOOKING AT US RIGHT NOW.
AND SO IF WE ASK A QUESTION AND SAY, OKAY, WHAT IS THE PLAN? UH, NUMBER ONE, THE KEY DEAL, WE GOTTA SUBMIT A PLAN TO THE STATE.
WE GOT TO SUBMIT A PLAN, NOT THEM.
WE GOTTA SUBMIT THAT PLAN AND WE GOTTA SAY, WHAT IS THAT PLAN? WE DON'T KNOW WHAT THAT PLAN IS RIGHT NOW.
WE JUST AIN'T GETTING STARTED.
AND SO WE DON'T KNOW WHAT COMMITTEE GONNA COME UP WITH A PLAN, BUT I THINK THIS AD HOC COMMITTEE IS GONNA COME UP WITH A PLAN AND WE'RE GONNA WORK TOGETHER WITH YOU AND ALSO, YOU KNOW, WITH THE, WITH THE PENSION OVER THERE TO MAKE SURE THAT WE DO HAVE A PLAN OR ACTION, BUT A PLAN THAT WE HAVE REVIEWED THE PLAN AND WE DONE EXAMINED THE PLAN, AND TO MAKE SURE THAT EVERYBODY'S EYES ON THAT PLAN.
WE DON'T WANT JUST ONE EYES ON THE PLAN.
WE WANT THIS WHOLE COMMITTEE ON THE PLAN AND, AND COMMITTED ON, ON RELYING ON YOU AS A GROUP, NOT AS INDIVIDUAL, BUT AS A GROUP TO WORK TOGETHER TO COME UP WITH A PLAN, TO COME UP WITH A SUGGESTION.
BECAUSE EVERY SUGGESTION WE LOOK AT RIGHT NOW, YOU LOOK AT A LAST PAGE, YOU KNOW, $2 BILLION, HOW DID WE COME UP WITH $2 BILLION? IS IT $1 BILLION? IT'S A HALF A BILLION DOLLARS.
WE DON'T KNOW WHAT THEY'RE GONNA DO.
AND, AND I WANT TO GET OVER OUR SKI IN AUSTIN RIGHT NOW BECAUSE WE DON'T KNOW WHAT THAT PENSION BOARD GONNA LOOK LIKE BECAUSE THE SAME PEOPLE ARE TODAY MIGHT LIBERIA IN 2025.
WE DON'T KNOW WHAT THE PLAN IS.
SO JUST BE CAREFUL HOW WE DISCUSS WHAT WE ARE TRYING TO DO.
UH, OUR ONLY, UM, RECOMMENDATION AND REQUEST OF THIS COMMITTEE IS THAT YOU ALL LAND ON A SCHEDULE, A REASONABLE SCHEDULE THAT WOULD PUT YOU ALL IN A POSITION TO MAKE THE BEST POSSIBLE RECOMMENDATION TO YOUR COLLEAGUES ON THE COUNCIL SO THAT THE CITY CAN LOCK AND LOAD ON A PLAN BY THE FIRST QUARTER OF NEXT YEAR.
AND WE WILL MOVE HEAVEN AND EARTH AND DO WHATEVER'S NECESSARY TO MAKE SURE THAT YOUR COMMITTEE CAN MAKE THE BEST POSSIBLE EVALUATION AND RECOMMENDATION THAT THAT'S OUR ONLY REQUEST.
AND I, I THINK WE'D WELCOME ANY IDEAS, I ANY SUGGESTIONS YOU MAY HAVE, YOU KNOW, YOU'RE THE EXPERTS IN THE CITY, YOU KNOW WHAT'S OUT THERE, WHAT SOME OF THE ASSETS OF THE REVENUE STREAMS MAY BE.
UM, THERE MAY BE THINGS WE DON'T KNOW ABOUT.
SO IF YOU HAVE IDEAS LIKE WE TALKED ABOUT EARLIER ABOUT THE LAND, LET US KNOW AND WE'LL PUT, INCORPORATE THAT INTO ANY RECOMMENDATIONS WE MAKE.
YEAH, JUST TO UNDERSCORE THAT AGAIN, WHAT WE SAID EARLIER, WE WOULD, WE WOULD VERY, WE, WE DON'T THINK THIS PROCESS, FIRST OF ALL, THIS PRO, IT'S GONNA BE DIFFICULT.
I MEAN, IT'S, IT'S, UH, IT'S GONNA BE VERY DIFFICULT AND THERE'RE GONNA BE A LOT OF TRADE-OFFS, UM, AS YOU ALL CONSIDER THE ULTIMATE RECOMMENDATION DECISION MAKING.
WE WOULD JUST ENCOURAGE AND WELCOME A HIGHLY ITERATIVE PROCESS BETWEEN THE MEMBERS OF THE COMMITTEE AND WHAT WE'RE DOING SO THAT WE GET THIS CRYSTALLIZED AS WELL AS POSSIBLE.
JUST TO COMMENT, I WANTED TO SAY THAT I AGREE WITH CHAIRWOMAN MENDELSON THAT, UH, I SUPPORT US COMING UP WITH A PLAN THAT WHEN WE'RE DONE, WE'RE DONE AND WE'RE NOT PASSING ALONG THE BUCK TO FUTURE COUNCILS, YOU KNOW, DOWN THE ROAD.
WELL, THE GOOD NEWS, THAT'S PRECISELY WHAT THE LEGISLATION CONTEMPLATES AND REQUIRES, BUT IF WE HAVE BOTH A EXTERNAL AND INTERNAL FORCES ARE MOVING US THAT DIRECTION, UH, SO BE IT.
TO SOME EXTENT, THAT'S WHAT THE STATE DID WITH THE E R F WHEN THEY ADOPTED THE ACTUARILY DETERMINED CONTRIBUTION THAT WAS LOCKED IN POLICY.
SO GOING FORWARD, THEY WEREN'T GONNA COME BACK AND SAY, OH, WE'RE GONNA CHANGE THE CONTRIBUTION LOWER AND THEN WE'RE GONNA GO BACK.
THAT'S LOCKED INTO THEIR POLICY.
SO IT WAS, IT'S MORE OF A PERMANENT SOLUTION.
MIDDLE, UM, I HAVE A PARLIAMENTARY
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INQUIRY.SO WE'RE A COMMITTEE OF EIGHT, WHICH I THINK IS THE FIRST I'VE SEEN, UM, SINCE I'VE BEEN ON COUNCIL.
AND YOU MADE THE STATEMENT THAT WE SHOULD ALL WORK TOGETHER AS A TEAM, BUT I THINK WE'RE GONNA HAVE A QUORUM ISSUE.
ANY OTHER QUESTIONS ON THIS ITEM? OKAY, THE NEXT ITEM IS PLAN, WORK FOR THE A HO COMMITTEE ON THE PENSION.
SO THIS IS A PLAN WHERE, WHAT IS THE SCHEDULE AND THIS WHEN TO GET TO THE COMMITTEE AND HOW WE'RE GONNA WORK TOGETHER AND HOW WE GONNA DEVELOP A PLAN.
SO IT'S NOT, UH, UNCOMMON THAT YOU HAVE ASSET TO ROB A BILL OR TO THE PENSION.
UH, UH, MS. SISON, YOU CAN TALK TO ANYONE, YOU CAN COME BACK AND THE INDEPENDENT PERSON THAT SAID, HEY, THIS IS MY SUGGESTION.
YOU DON'T HAVE TO TALK TO ME, UH, CHAIRMAN MARINO, UH, HYMAN OR WILLIS, WE CAN COME BACK WITH YOUR OWN INDEPENDENCE.
SO WE CAN WORK OUTSIDE THE COIN, BUT WE WANT THE BEST IDEAS, WE WANT, WHAT CAN WE DO? BECAUSE WE DON'T HAVE TO WORK IN A GROUP.
SO WE JUST BE CAREFUL THAT I KNOW THAT YOU PROBABLY GOING DOWN AND ALSO YOU'RE THE CHAIR OF THE LEGISLATOR RIGHT NOW.
YOU'D PROBABLY BE WORKING ALONE.
AND SO WE JUST HOPE YOU BRING THE INFORMATION BACK TO US ONE-ON-ONE TO MAKE SURE WE KNOW WHAT'S GOING ON IN AUSTIN, TEXAS.
AND, AND ALSO, UH, MS. BLACKMAN'S, WHEN YOU GO DOWN AUSTIN, TEXAS TOO.
SO WHEN YOU GO THERE, WE GONNA MAKE SURE YOU BRING INFORMATION BACK TO US.
SO THAT'S HOW WE'RE GONNA WORK TOGETHER.
WE'RE GONNA WORK AS A GROUP, YOU KNOW, BUT NOT AS A QUO.
UM, THIS IS A POINT OF INFORMATION.
I'M GONNA GO TO THE PENSION REVIEW BOARD, UM, BOARD MEETING AND, UH, I'M SORRY, THURSDAY.
I HAVE MY DAYS ALL SCREWED UP.
UM, AND THEN I ALSO JUST WANNA SAY THIS PUBLICLY.
I HAVE SHARED THIS OF COURSE WITH ALL THE COUNCIL MEMBERS, BUT, UM, JOSH MON IS MY BROTHER.
I HAVE A OPINION FROM THE CITY ATTORNEY THAT THERE'S NO CONFLICT OF INTEREST FOR EITHER OF US, BUT JUST SO THAT EVERYBODY IS AWARE, UM, I JUST WANTED TO MAKE SURE THAT THAT WAS ALL VERY PUBLIC.
WELL, AND JOSH MON BEEN A FRIEND OF MINE EVER SINCE 2006, AND WE WORKED TOGETHER WHILE I WAS ON THE BOARD, SO I'LL MAKE SURE I AIN'T GOT A CONFLICT TOO.
SO I
SO THE FIDUCIARY RESPONSIBILITY, SO WE DO KNOW, UH, WE ARE WORKING TOGETHER ONE, SO I'M GLAD THAT WE HAVE BROKE THAT ICE, THAT WE CAN WORK AND TALK TOGETHER TO RESOLVE THIS ISSUE BECAUSE IT'S NOT JUST ABOUT THE PENSION, IT'S ALSO ABOUT THE CITY.
UH, UH, ONE THING I JUST WANNA MAKE SURE THAT WE UNDERSTAND THAT WE ARE IN A, A SITUATION THAT I THINK WE GOT SMART PEOPLE ON THIS COMMITTEE.
UH, WE CAN WORK THROUGH THIS, UH, AND WE WORK TOGETHER, WORK INDEPENDENT, AND WORK SMART.
AND I'M, I'M, I'M PUT A, UH, WITHIN A YEAR I THINK WE CAN SHARE, BRING INFORMATION TO US.
WE CANNOT GET STARTED TO ACTUALLY BRING US SOME DATA.
ONCE WE GET THE INFORMATION, WE CAN START WORKING.
BUT IN THE MEANTIME, UH, I I, I ASK EACH ONE, GO BACK AND, AND LOOK AT THE HISTORY BECAUSE YOU GOTTA LOOK AT WHAT HAPPENED IN THE PAST, HOW WE GOT THERE.
WE DON'T WANNA MAKE THE SAME MISTAKE AGAIN.
UM, UH, AND THAT'S THE KEY THERE.
BUT, BUT REMEMBER THERE IS A TIMELINE WE'RE GONNA WORK ON.
TALK ABOUT A PLAN OF WORK, ROB.
YOU KNOW, UH, I KNOW WE'RE GONNA HAVE A MEETING IN, IN, IN SEPTEMBER, OCTOBER IN NOVEMBER AND DECEMBER, BUT WE GOING TO HAVE SOME, SOME, SOME, SOME KEY DEADLINE.
WE SHOULD BE ABLE TO MEET THOSE DEADLINES WITH ACTUARIES.
SO CAN YOU WALK US THROUGH THE DEADLINES AND THE TIMELINE THAT WE ARE TRYING TO MEET? AND SO THE COMMITTEE WOULD, WOULD KNOW WHAT WE TRYING TO ACCOMPLISH.
IF WE GO BACK TO, UM, PAGE FOUR OF THE, THE BRIEFING MATERIALS, AGAIN, THAT LAYS OUT THE STATUTORY SCHEDULE, UH, WHICH, UM, UH, BY NEXT JULY 1ST, UM, THE P R B MUST SELECT THAT INDEPENDENT ACTUARY TO IT TO BE HIRED BY.
THAT'S, THAT'S THE, THAT'S OURS.
THAT SHOULD BE 23 THOUGH, RIGHT? NO, IT'S, WE'RE JUST WAY AHEAD.
SO WE'VE ALREADY, THAT'S ALREADY BEEN SELECTED.
SO, UM, KIRAN HAS THE FIRM AND SO THEY'VE ALREADY BEEN SELECTED AND THAT WORK IS UNDERWAY.
WE ANTICIPATE THAT THEY WILL GIVE US THEIR PRELIMINARY REPORT THIS NOVEMBER.
UM, SO THE QUESTION ON THE TABLE IS, IS THERE WORK TO BE DONE BETWEEN NOW AND THEN? WE OBVIOUSLY AS A GROUP THINK THE MOST IMPORTANT WORK IS GONNA BE
[00:55:01]
DEVELOPING THE, THE VARIOUS POSSIBLE OPTIONS BECAUSE WE CAN, WE KNOW ORDER OF MAGNITUDE, WHAT THE, THE SIZE OF THE PROBLEM.SO THERE'S NO REASON TO WAIT ON THE WORK THAT WE WILL BE DOING IN ITERATING WITH THE, THE, THE VARIOUS COMMITTEE MEMBERS.
UM, WE THINK A SESSION IN OCTOBER TO SORT OF JUST TO CONTINUE TO BRIEF THIS COMMITTEE, MAYBE HAVE STAFF BRIEF THIS COMMITTEE IN WITH MORE GRANULARITY ON SOME OF THE ISSUES THAT WE'VE TALKED ABOUT, WOULD BE GREAT.
WE'D GET THAT REPAIR THAT REPORT IN NOVEMBER.
UH, AND THEN WHAT WE'D LIKE TO DO IS BRING TO YOU ALL IN DECEMBER, THE CONCLUSION, IF NOT CONCLUSION, MIGHT BE TOO STRONG, AT LEAST A HIGHLY EVOLVED, UM, UH, UH, UH, UH, STATUS OF OUR WORK ON THE VARIOUS OPTIONS.
WHAT ARE THE BENEFITS AND THE, THE ADVANTAGES AND DISADVANTAGES IN E OF EACH SO THAT YOU ALL CAN START TO THINK ABOUT WHAT, WHAT THE POSSIBILITIES ARE FOR YOUR ULTIMATE RECOMMENDATION.
WE WOULD ENVISION FROM DECEMBER, SAY, FOR THE NEXT 60 DAYS THERE, YOU MIGHT MIGHT SAY TO US, WELL GO DO SOME MORE WORK ON THIS ONE OR THAT ONE, OR MIX AND MATCH AND DO THESE THINGS.
IDEALLY, IT WOULD PUT, UH, THIS COMMITTEE IN A POSITION TO RECOMMEND IN THE FIRST QUARTER OF NEXT YEAR TO THE COUNCIL ON, WE RECOMMEND THIS AS THE PLAN.
ASSUMING THAT'S THE CASE, THEN THAT DOVETAILS VERY NICELY INTO THE CON THE SCHEDULE THAT'S CONTEMPLATED BY THE LEGISLATION, WHICH MEANS, WHICH IS THE BOARD BY NEXT FALL, BY NOVEMBER 1ST, THE BOARD OF THE PENSION FUND MUST ADOPT RULES THAT REFLECT WHAT IT IS THE CITY HAS RESOLVED TO DO.
ASSUMING THAT SATISFACTORY, THEN I THINK OUR WORK IS, IS COMPLETED ONLY IF THAT'S SOMEHOW NOT SATISFACTORY TO THE P R B, UH, WHICH IS ITS REPORT ON DECEMBER 1ST, 2024.
ONLY IF THEY MAKE A REPORT THAT IS, SAYS IT'S NOT SATISFACTORY FOR ANY REASON, THEN IT MIGHT IMPLICATE SOME LEGISLATIVE ACTION OR EVALUATION.
IDEALLY, IT WILL BE PERFECTLY SATISFACTORY AND OUR, THE WORK WILL BE CONCLUDED.
I THINK WHEN YOU CUT ALL THE WAY THROUGH THAT, THOUGH, FOR PURPOSES OF THIS COMMITTEE, IF IT WERE IN A POSITION BY THE FIRST QUARTER OF NEXT YEAR TO REALLY COALESCE AROUND RECOMMENDATIONS TO THE BALANCE OF THE COUNCIL, THAT WOULD WORK VERY NICELY INTO THE, THE, UH, CALENDAR THAT THE LEGISLATION CONTEMPLATES.
I APOLOGIZE, THAT'S PROBABLY MORE DETAILED THAN YOU WANTED, BUT I THINK THAT'S, UM, WOULD BE THE APPROPRIATE APPROACH.
SO ROB, WHEN YOU SAY Q ONE OF 2024 RECOMMENDATIONS, ARE YOU SAYING EVEN THE BASKET OF THINGS THAT WE'RE GONNA PUT FORTH? I MEAN, LIKE, IT IS PRETTY MUCH TIED UP.
YOU, YOU WANT US TO KNOW BY THEN? I WOULD THINK BY THE, BY THE END OF THE FIRST QUARTER OF 2024, THE COUNCIL, UH, WOULD DECIDE WHAT IT, WHAT, WHAT SOLUTION IT WANTS TO EMPLOY AND SAY WE ARE PREPARED, WE, THE CITY COUNCIL ARE PREPARED TO ACT IN THE FOLLOWING WAYS SO THAT THE PENSION BOARD COULD ENACT A SET OF RULES THAT WOULD REFLECT WHATEVER THE COUNT THE CITY HAS DECIDED BY WAY OF FUNDING MECHANISMS. SO IT'S NOT NECESSARILY HOW YOU'RE GOING TO FUND IT, BUT THE AMOUNT, WELL, THE AMOUNT ALL THE ABOUT AND THE AMOUNT AND HOW.
BECAUSE, UM, I MEAN, IN MY RESEARCH IT'S LIKE, YOU KNOW, YOU'RE LOOKING FOR A BASKET OF THINGS AND WE MAY HAVE TO SELL SOME ASSET.
I MEAN, WE MAY NEED TO, OH, I DON'T THINK, I DON'T THINK YOU HAVE TO, TO ACTUALLY HAVE SOLD THEM, BUT I THINK YOU WOULD HAVE TO BE A, A POSITION WHERE YOU'D SAY, THIS IS THE AMOUNT, UH, THE END GAME IS, IS THE REPORT TO THE P R B MUST BE CREDIBLE.
AND THAT HAS, THE CITY IS COMMITTED TO X AMOUNT AND IT HAS TWO COMPONENTS.
OKAY? ONE IS THAT THE AMOUNT IS A REASONABLE AMOUNT IN ORDER TO FULLY FUND, AND THAT THE FUNDING SOURCES ARE REASONABLE AND RELIABLE FUNDING SOURCES.
IT MAY CONTEMPLATE THAT IT HAPPENS OUT OVER TIME.
P R V WILL LOOK AT THAT AND SAY, EITHER THUMBS UP OR THUMBS DOWN.
AND ARE YOU GIVING A PRELIMINARY REPORT TO THE BOARD, TO THE, UH, THE, THE, THE PENSION BOARD? NO, WE'VE NOT BEEN ASKED TO REPORT PUSH BUTTON.
WE HAVE NOT BEEN ASKED TO REPORT TO THE PENSION REVIEW BOARD.
THE FIRST TIME THEY'LL GET INVOLVED FROM US IS SEEING YOUR RECOMMENDATION.
THIS IS HOW WE PLAN TO FUND THE PLAN.
UH, UH, MR. BLACKLAND, I THANK ROB THAT, UH, WE ARE TRYING TO SCHEDULE A MEETING WITH THE DALLAS POLICE PENSION BOARD, RIGHT? IS THAT CORRECT? WE DON'T HAVE ONE SCHEDULE COMING, BUT WE ARE, WE'RE IN THE PROCESS OF TRYING TO, RIGHT? YES.
AND THERE'S NO REASON IN THE WORLD THAT WE WOULD NOT BRIEF THEM.
OF COURSE, WE COULD RELY ON SENIOR STAFF TO BRIEF THEM AS WELL, BUT IT MAKES ALL SENSE IN THE WORLD THAT THEY APPRISED OF THESE DEVELOPMENTS.
AND, AND, AND GOOD QUESTION, MS. BLACKMAN.
YOU KNOW, I I DID BROUGHT THAT UP RATHER, WE DID HAVE A CONVERSATION THAT I KNOW THEY'RE BEING INDEPENDENT EACH OTHER, BUT I THINK THAT WE ARE IN THIS TOGETHER.
YOU KNOW, IT'S, IT IS NOT INDEPENDENT EACH OTHER.
I, I DON'T WANT TO, TO GET THE WRONG IDEA THAT WE
[01:00:01]
WORKING IN SILOS.YOU KNOW, WE ARE WORKING TOGETHER AND I THINK THAT WE DO NEED TO HAVE A MEETING, UH, WITH THEM.
SO THEREFORE WE'RE ON THE SAME PAGE.
AND, AND WHEN WE GO DOWN TO AUSTIN TO TO HAVE A PLAN, THEY GONNA ASK THAT QUESTION, ARE Y'ALL WORKING TOGETHER? Y'ALL WORKING INDEPENDENT? YOU KNOW? AND, AND ALSO AT, AT CHAIRMAN WEST WAS SAYING ALSO, HEY, WE GOT TO HAVE A PLAN.
WE DON'T WANT TO DO SOMETHING AND OBLIGATE OUR FUTURE COUNCIL MEMBER, HEY, YOU WORK A PLAN, BUT YOU DIDN'T INCLUDE THE PENSION BOARD.
YOU KNOW, WHY DIDN'T Y'ALL WORK TOGETHER? NOW WE WENT ON THE SAME PAGE.
SO I JUST TRYING TO MAKE SURE THAT WE ARE A FAMILY AND WE ALL GONNA WORK TOGETHER, YOU KNOW, YOU KNOW, WE, WE, WE MADE THIS BIG MISTAKE AND WE GOTTA CLEAN IT UP AND, AND WE GOTTA MAKE SURE THAT Y'ALL HERE TODAY, JOSH AND, AND KELLY, Y'ALL HERE TODAY.
AND, AND HOPEFULLY THAT Y'ALL BE AT THE TABLE.
AND SINCE WE DONE GOT THROUGH THAT PEARY RESPONSIBILITY, WE CAN TALK TO EACH OTHER NOW.
A LONG TIME AGO, WE COULDN'T TALK TO EACH OTHER, YOU KNOW, WE HAD TO GET ATTORNEYS TO TALK TO EACH OTHER.
OH, NO, NO, YOU REMEMBER THAT? NOW LET US, LET US BE IN THIS, UH, BED TOGETHER.
YOU KNOW? SO I DON'T WANNA MAKE SURE THAT WE ARE ONE AND, AND MAKE SURE THE PEOPLE ALSO TEXAS, THAT WE ARE COMING DOWN AS ONE GROUP, NOT INDEPENDENT EACH OTHER.
I, I UNDERSTAND NOW IMPLICITLY, SO WE ANTICIPATE BRIEFING, BUT, BUT I WILL TELL YOU, JUST EVEN LEADING UP TODAY, WE'VE BEEN WORKING HAND IN GLOVE WITH KELLY AND TEAM, AND SO WE ARE ALL SYNCED UP AND, AND, UH, BUT WE WOULD ANTICIPATE, WE DON'T HAVE A MEETING SCHEDULE YET, BUT WE WOULD, WE DID ANTICIPATE BRIEFING THE PENSION BOARD ON THE STATUS AND WHAT THE CONTEMPLATED SCHEDULE WOULD BE.
UM, SO I JUST WANNA CLARIFY, SO YOU'RE SAYING THAT IN ADDITION TO THE AMOUNT, WE MUST IDENTIFY THE SOURCE OF THOSE DOLLARS? YES.
THAT'S THE WAY WE THINK ABOUT IT.
OF COURSE, YOU KNOW, THIS IS, IT'S EVERYBODY, IT'S AN EVALUATION OF THE LEGISLATION AND THE CITY CAN MAKE ITS OWN EVALUATION.
BUT IT SEEMS CRYSTAL CLEAR THAT THE PENSION BOARD MUST ENACT A SET OF RULES THAT WOULD GET TO THE END GAME, WHICH IS FULLY FUNDED IN THREE YEARS.
AND THAT HAS TWO COMPONENTS, THAT YOU GOT THE RIGHT AMOUNT AND THAT YOU HAVE RELIABLE FUNDING SOURCES.
UM, BUT I THINK IT COULD BE A MATRIX OF THINGS.
IT COULD BE A COMBINATION OF ASSETS, CONTRIBUTIONS, UM, REVENUE STREAMS, HOW YOU DO THAT.
I MEAN, SO AT THE END OF THE DAY, WE'RE GONNA END UP HAVING TO SAY, HERE ARE ALL THE OPTIONS AND HERE'S THE MATRIX.
IT CAN BE A LITTLE BIT OF THIS AND A LITTLE BIT OF THAT.
AND, BUT THAT'S ALL GONNA BE INCORPORATED INTO A PLAN THAT WILL GET THE PLAN FULLY FUNDED OVER 30 YEARS.
AND THEN, JUST TO BE VERY SPECIFIC, WHEN YOU'RE SAYING A MATRIX AND, AND MULTIPLE ASSETS, UM, LIKE LET'S SAY PART OF IT WAS TO SELL SOME ASSETS, UM, THOSE WOULD BE LISTED OUT SPECIFICALLY WHICH ONES AND PERHAPS A GENERAL IDEA OF THE VALUATION, AND THEN IF WE WERE GONNA USE A SPECIFIC REVENUE STREAM, IT WOULD BE LISTED WHICH ONE AND A A, A GENERAL IDEA OF WHAT THAT DOLLAR AMOUNT WOULD BE, CORRECT? UH, YEAH, I WOULD EXPECT THAT IF I WAS ON THE P R B.
AND, BUT I WANNA BE CLEAR, THE LEGISLATION DOESN'T GET TO THAT LEVEL OF GRANULARITY, BUT THE KEY THING IS IT'S A RECOMMENDATION TO THE P R B AND IT MAKES A JUDGMENT.
IT'S EITHER A CREDIBLE PLAN OR IT'S NOT A CREDIBLE PLAN THAT WILL TURN ON THE LEVEL OF SPECIFICITY AND RELIABILITY OF THE INPUTS.
WELL, I JUST CHECKED THE LINCOLN FOR ALL THE P R B BOARD MEMBERS AND THEY'RE LIKE ALL ACTUARIES.
SO I THINK THEY LIKE IT SPECIFIC
UM, AND THEN, UM, THE OTHER INTERESTING ITEM I THINK THAT YOU'VE HIGHLIGHTED TODAY HAS BEEN, YOU KNOW, FOR US TO HAVE A DECISION BY THE FIRST QUARTER, 2024, UM, ALLOWS JACK TO INCORPORATE ANY ADDITIONAL CONTRIBUTION INTO THE FORMATION OF THE, OF THE 25 BUDGET.
I MEAN, THAT TIMING'S PERFECT FOR YOU, CORRECT? YEAH.
SO, UM, SO SHOULD IT COME FROM SOME AMOUNT OF GENERAL FUNDS OR OTHER KIND OF DEBT? UM, THAT SEEMS TO BE A REALLY GOOD TIMEFRAME ACTUALLY.
UH, I GUESS THE PROCESS PORTION, UH, TRYING TO PROCESS, UM, WE HAVE TO COME UP WITH A PLAN AND THE PLAN HAVE TO BE SURROUNDED BY X AMOUNT OF DOLLARS OR COULD IT BE AROUND X AMOUNT OF DOLLARS AND QUESTION MARKS? YOU KNOW, I'M TRYING TO FIND OUT.
WE, BECAUSE I'M, I'M LOOKING AT NUMBERS, YOU KNOW, WE'RE LOOKING AT 2 BILLION, 1 BILLION AND HALF BILLION DO.
IT SAID THAT YOU GOTTA COME UP WITH A PLAN WITH ACTUAL DOLLARS AND, AND, AND, AND THERE IS A MINIMUM AMOUNT OF DOLLARS THAT YOU GOTTA COME UP WITH.
ARE THERE, UH, A, A PAYMENT PLAN THAT YOU GOTTA COME UP WITH? SO CAN YOU KIND OF LET US KNOW HOW DO THAT WORK? HOW THE PLAN THAT THE STATE IS, IS LOOKING FOR US TO, TO SUBMIT? WELL, THE ULTIMATE JUDGMENT IS P R B AND VERY, YOU KNOW, AND,
[01:05:01]
AND, UH, WHAT THEIR, THROUGH THEIR ACTUARIAL PRISM AND LENS WILL SAY, WILL THIS PLAN THAT YOU HAVE SUBMITTED FULLY FUND THIS WITHIN 30 YEARS? AND THERE ARE A THOUSAND WAYS THAT YOU CAN GET THERE, BUT THEY'RE GONNA HAVE TO BE COMFORTABLE THAT THE INFUSIONS OF CASH INTO THE PLAN ON WHATEVER TI TIMETABLE IS PROPOSED ACTUALLY WILL GET YOU TO SOLVENCY WITHIN 30 YEARS.AND THAT'S GONNA BE HOW MUCH AND TIME VALUE OF MONEY AND THOSE VARIOUS CONSIDERATIONS.
AND THEN THE SECOND COMPONENT THEY'RE GONNA LOOK AT IS THEY'RE GONNA SAY, OKAY, THE SOURCES OF THAT THAT YOU'RE PROPOSING ARE THOSE CREDIBLE, RELIABLE SOURCES OR NOT? I THINK THOSE WILL BE THE TWO BUCKETS OF EVALUATION.
AND THEY'RE GONNA WANNA SEE THAT WITH A LEVEL OF GRANULARITY SUCH THAT THEY COULD ISSUE A REPORT TO THE LEGISLATOR, SAYS, UM, THIS IS A CREDIBLE PLAN JOB DONE.
SO WITH THAT, YOU DONE ANSWER THE QUESTION THAT, THAT WE ARE LOOKING AT, WHAT IS THAT AMOUNT, YOU KNOW, HOW TO GIVE IT TO ME TODAY.
UM, WHAT IS THAT AMOUNT AND, AND IF THAT NOT THE RIGHT AMOUNT AND, AND, AND THAT HAD TO BE AMOUNT IN ORDER TO HAVE THE PLAN INFUSION THAT, SO HOW DO THEY DETERMINE, MAYBE YOU SAID WE DON'T HAVE THAT AMOUNT, BUT THIS PLAN CAN MAKE UP THAT AMOUNT.
BUT AS YOU'RE SAYING RIGHT NOW, THERE IS A DOWN PAYMENT AND THE DOWN PAYMENT, YOU GOTTA HAVE THIS AMOUNT A DOWN PAYMENT, A, A WEED TO THE POINT THAT WE KNOW WHAT THAT DOWN PAYMENT MIGHT BE.
SO NOT TODAY, BUT WOULD THE ACTUARIAL BE ABLE TO TELL US WHAT IS THAT DOWN PAYMENT? AND THAT WAS SOMETHING THAT WE GOTTA DEAL WITH, WITH JACK, UH, WITH US, WITH A BUDGET, BECAUSE WE GOTTA KNOW HOW WE GONNA CUT EVERYTHING DOWN TO COME WITH A DOWN PAYMENT.
AND, AND, AND, AND THAT'S MY MAIN OBJECTIVE RIGHT NOW.
WHAT IS THAT DOWN PAYMENT? AND WE NEED TO KNOW WHAT THAT DOWN PAYMENT SO WE KNOW IN STORE CUTTING AND TRYING TO PLAN FOR THE DOWN PAYMENT TO GET TO THAT TIMEFRAME.
YEAH, I THINK THEY WILL BE ABLE TO GIVE YOU SOME ALTERNATIVE DOWN PAYMENTS.
'CAUSE IF YOU COMMIT TO A HIGHER CONTRIBUTION LEVEL, THE DOWN PAYMENT WILL BE A LOWER AMOUNT.
SO THERE'LL BE, LIKE I SAID, A MATRIX WHERE YOU'LL GET TO PICK AND CHOOSE.
WE WANT TO PUT A 500 MILLION IN AND THEN OUR CONTRIBUTIONS ON AN ANNUAL BASE, THERE'LL BE MORE, OR WE PUT A BILLION IN AND THERE'LL BE LESS.
SO YOU'LL GET TO PICK AND CHOOSE THAT KIND OF NUMBER AND WHEN WE GET THE PICK AND CHOOSE THAT.
SO, UM, I, I THINK, UH, MS. BLACKMAN, I THINK MS. MILLER WANTED SAID, WE LOOKING AT THAT SOMETIME THE FALL OF 24, FALL OF 24 IS, UM, AS THE LEGISLATION REQUIRES, WE'D HAVE TO MAKE A, WE'D HAVE TO SUBMIT THIS P R B BY THAT DATE, CERTAIN, I THINK IT WAS, UH, NOVEMBER 1ST, 2024.
THEY WOULD THEN REPORT TO THE LEGISLATURE BY DECEMBER OF 2024.
SO THAT'S, THAT'S THE ABSOLUTE DEADLINE.
AND, AND WE SAYING THAT, AND THE PEOPLE WHO SITTING ON THAT BOARD RIGHT NOW MIGHT NOT BE THERE IN 2024, IS THAT FIRST STATEMENT MIGHT NOT BE, THEY MIGHT NOT BE THERE, GOT CHANGE.
SO THEY, THEY, THEY MIGHT CHANGE.
UM, BUT ONE WOULD THINK THIS IS SORT OF OBJECTIVELY KNOWABLE, RIGHT? I MEAN, THIS IS A WELL TRODDEN PATH OF WHAT ARE REASONABLE OR WHAT ARE UNREASONABLE ASSUMPTIONS UNDERLYING THESE KINDS OF, UH, PROJECTIONS BASED ON SORT OF THE ACTUARIAL INFRASTRUCTURE.
SO I THINK THAT WE CAN, I THINK WE COULD CERTAINLY HAVE THE ABILITY TO PREDICT WHAT, UH, HOW AN AUDIENCE OF ACTUARIES WOULD RE REACT TO OUR PLAN.
THE ACTUAL DATE IS OCTOBER ONE, NEXT YEAR.
YEAH, I'M SORRY I WAS OFF A MONTH.
WELL, THE LAST THING I WAS GONNA SAY IS, I MEAN, THERE'S OBVIOUSLY THOUSANDS OF PEOPLE COUNTING ON US FOR THIS WORK.
UM, BUT YOU KNOW, WE'VE GOT BOTH POLICE AND FIRE ASSOCIATIONS HERE AND THEY'RE ALSO OUR PARTNERS.
AND WHEN IT COMES TIME TO ACTUALLY GET THIS PASSED IN AUSTIN, THEY ARE EXTREMELY IMPORTANT TO US.
AND, YOU KNOW, MOST ELECTED OFFICIALS DON'T WANNA GO AGAINST POLICE AND FIRE, AND WE WANNA MAKE SURE THAT THEY ALSO HAVE A SEAT AT THE TABLE AND, UM, WE'LL HELP US GET THIS THROUGH.
AND SO I'M HOPING THAT'S WHAT'S REALLY DIFFERENT THIS TIME AROUND, IS THAT WE DO ALL WORK TOGETHER AND CAN WALK HAND IN HAND DOWN TO AUSTIN AND GET THIS DONE.
UM, AND I'M NOT TRYING TO UNDERESTIMATE HOW MUCH DIFFICULTY THERE'LL BE BETWEEN HERE AND THERE, BUT I DO THINK THAT WE HAVE A DIFFERENT SPIRIT THIS TIME.
UM, AND SO I DO APPRECIATE Y'ALL BEING HERE TODAY.
UM, BUT WE WANT YOU TO CONTINUE TO BE PART OF THIS CONVERSATION.
ANYONE ELSE? OH, YOU ABOUT TO SAY SOMETHING, ROB? OKAY.
I, I JUST WANNA SAY THANK YOU RON AND BILL AND, AND JOHN AND KELLY AND THE, AND THE POLICE AND THE, AND THE FIREMEN, EVERYTHING.
AND I KNOW LAST TIME THAT WE HAD THIS, UH, RUN ON THE BANK IN 2015 AND IN 2017
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THAT WE, UM, KNOW THAT WE ARE HERE TO WORK TOGETHER AND WORK AS ONE TEAM TO SOLVE THIS PROBLEM.AND, AND I THINK WE GOT A, A GROUP OF, OF EIGHT HERE.
I THINK WE, THE FANTASTIC EIGHT, WE CAN GET THIS DONE.
AND, AND, AND, AND WE GOT, YOU KNOW, WE GOT PEOPLE HERE, YOU KNOW, LIKE MISS BLACKMAN, YOU KNOW, WAS UNDER, WITH, WITH, UH, MIKE ROWLAND, YOU KNOW, WITH THE PENSION ENDEAVOR.
AND WE, WE KNOW THE HISTORY, WE KNOW THE BACKGROUND, YOU KNOW, SO IT'S NOT LIKE SOMETHING VERY NEW TO US.
WE CAN, WE CAN GET IT DONE, BUT IT'S, WE GOTTA ROLL OUR SLEEVE.
I MEAN, THIS IS SOMETHING COMMITTED.
I MEAN, I, I HOPE THAT YOU OWNERS COMMITTED AND REALLY READY TAKE THIS VERY, VERY SERIOUSLY, YOU KNOW, ON TIME BECAUSE I MIGHT CALL YOU ANYTIME BECAUSE RIGHT NOW I'M TELLING YOU THIS IS MY NUMBER ONE PRIORITY RIGHT NOW BECAUSE THIS IS SOMETHING THAT I CAN LOOK AT A WHOLE LOT OF CITIES RIGHT NOW.
THEY THE WORST CONDITION WE ARE IN RIGHT NOW.
AND WE GOT AN OPPORTUNITY TO, WITH ASSET THAT WE CAN GET OUTTA THE CONDITION.
SO JUST MAKE SURE THAT WE CAN WORK TOGETHER AND, AND, AND MAKE SURE WE TAKE CARE OF DALLAS.
I CALL THIS, UH, AD HOC COMMITTEE, ADJOURN.