AUSTIN — An agreement on a fix for the troubled Dallas Police and Fire Pension system was reached Thursday that will keep the pension system solvent for as long as 46 years.

"Today is a good day," said Mike Mata, president of the Dallas Police Association. "Today is the day we solved the future of the Dallas Police and Fire Pension System."

After last-minute negotiations eased the concerns of the pension board and the police and fire associations, the Senate State Affairs Committee unanimously voted the bill to the Senate floor.

The Senate's newest version of the Dallas pension fix, originally House bill 3158 from Rep. Dan Flynn, has many similarities, but seeks to give the city more flexibility and "gives the beneficiaries a strong voice as it relates to critical issues," said state Sen. Royce West, D-Dallas. Flynn's version would make the pension system solvent in 40 years, the Senate's version will make it solvent in 46.

Without the bill's approval, the fund will go broke in 10 years.

"We have changed the bill up some as it relates to governance and flexibility for the city and also making sure members of the plan are not adversely affected by changes that are made," West said.

The Senate's version includes other measures to prevent oversight issues that led the system to its current insolvent state. The pension board voted against the Senate's plan earlier this week, but agreed after the latest changes. The Dallas City Council gave its approval for the plan this week.

"I think we’ve finally gotten to the place we need to be," said Kelly Gottschalk, executive director of the pension system. "With changes from this morning, we will have the security we need."

New promises

West told committee members that he plans bring an amendment to the Senate floor that will solidify promises made during negotiations for further funding. The promise of funding after its initial seven-year plan was a game changer for many.

"This moves it from a seven-year plan to a forever plan," Gottschalk said.

The Senate's version requires minimum contributions by the city and first responders into the fund, and requires a lump sum of $13 million from the city for each of the first five years. Contribution rates during the sixth and seventh years will depend on the city's hiring plan.

In its seventh year, the city will look to a third-party actuary to determine the fund's progress. The actuary will produce a report on the state of the system, and the report's findings could lead to an adjustment of the minimum contribution rates by the city and system members as well as the lump sum amounts. If the actuary finds that the fund is not on the road to solvency, the system will find itself back before legislature to determine a new plan.

"We believe that having one person chosen by a state agency that has no dog in the race would make it very independent," West said.

Although both the city and first responders will be sharing in the pain of returning the fund to solvency, those involved expressed relief for a fix that gave both sides a voice on major decisions.

"It's not perfect, but it's good," Mata said. "It's stable."

Local control

Under the Senate's version, the system would be governed by six people chosen by the mayor with consultation from the city council and five chosen to represent the police and fire unions' interests. They would need to have a two-thirds majority vote before approving reductions to the city's contribution rates, any increase in member contributions and any move to lower benefits.

They would need to have a two-thirds majority vote before approving reductions to the city's contribution rates, any increase in member contributions and any move to lower benefits.

"It gives the beneficiaries a strong voice as it relates to the critical issues," West said.

Dallas officials agreed.

"Today I'm 100 percent happy," said Dallas Mayor Mike Rawlings, who again committed to working with with police and fire associations until the bill passes.

Rawlings had been publicly unhappy with previous versions of the bill, which he equated to a "taxpayer bailout." Flynn was also not on board with the Senate's original version of the bill.

The city's pension system unraveled after its leaders made risky investments and approved unsustainable benefits, with little oversight from often-absent pension board members. In order to combat the revolving door of oversight, West's version forbids any city employee from serving as executive director of the pension fund for at least three years after leaving city government.

The Senate's version also will require the board to hold its position on the deferred retirement program, which has banned lump-sum withdrawals by its members, trapping some retirees' money.

If the board begins allowing these withdrawals before the bill goes into effect, the agreement would be void. However, the board can allow withdrawals without violating the agreement if a federal court rules that members must have access to the funds.

"I'm one of those retirees that I hope it will allow me and our husband to get our money," said Pat Sanchez, a retiree that worked for the city for 30 years. "It's our life savings. We worked hard to save that money."

The pension problems have made it difficult for Dallas to recruit and retain first responders, but with the new bill and a pledged commitment to recruiting efforts from the mayor, the tide might be turning.

"It hampered our ability to hire the best, to hire anybody really," Mata said. "This is our starting place."

The Senate is expected to debate the amendment to the agreed-upon version of the bill as early as Sunday. Lawmakers are confident about passage. The House must concur with the version that passes out of the Senate, but the bill's author isn't worried.

"We'll find support in the House," said Flynn, R-Van. "It was our job today to fix it, that's what we do in Texas. We fix things."

Updated at 7:26 p.m.: The time the pension system is expected to be kept solvent through the agreement was corrected from 48 years, to 46 years. Also details about a timetable for an actuarial report and a proposed governing board were revised.