Police and fire back pay lawsuit could cost Dallas billions

DALLAS — Decades ago, Dallas voters approved a pay raise for emergency workers. But did the city stiff the rank and file?

That’s the central question of a lawsuit that hinges on the legal interpretation of three key words written on a ballot almost four decades ago.

If the city loses the suit, taxpayers could be on the hook for billions in back pay.

Coupled with the current crisis going on with the Dallas Police and Fire Pension System fund, the city could be in a financial bind for years to come.

Sgt. Steve Toth and Andy Braddock signed up to serve the city of Dallas decades ago. They say, after all this time, they still look forward to going to work every day.

“The truth of the matter is a lot of us would have done it for next to nothing,” said Toth, a Dallas police sergeant. “We were doing something that most of us wanted to do our whole lives.”

“I love the fire department,” Braddock said. “I’ve told people if I won the lottery I’d still come to work tomorrow.”

They are two of the many plaintiffs in the legal battle with the city of Dallas over a pay dispute that has been pending in court 22 years.

“It is the longest case pending in Texas right now,” said Ted Lyon, a former Texas state senate and house member and police officer who’s now a plaintiffs attorney representing thousands of the city’s first responders against their employer.

The case has never reached a jury. “The city has filed so many (pretrial) appeals that it is really ridiculous,” Lyon said.

The legal fight dates back to a decision Dallas residents made nearly four decades ago.

In January 1979, Dallas residents went to the polls and voted to give police and firefighters a 15 percent pay raise. They also agreed to keep the different levels of pay among the different ranks in both departments the same.

This means every time, say, the captain’s rank gets a raise, so do the other ranks by that same percentage. The same goes for decreases in pay.

As the years passed, the plaintiffs allege, inequalities emerged in the pay grades. Raises for the lower ranks did not keep pace with the higher ranks, they allege.

“You feel like someone stole money out of your back pocket,” Braddock said. “I mean, that took money off the table for my kids.”

By 1994, the situation boiled over into a lawsuit. More suits followed.

“If they are going to get a raise in those cushy offices, the guy in the street ought to get the raise,” Lyon said.

The central issue is whether the 1979 referendum promised to maintain the pay raise structure for one year, or forever. It all boils down to how both sides interpret one short phrase: “shall be maintained.”

The city argued “shall be maintained” meant for just one year.

“This is a ridiculous lawsuit,” said Mayor Mike Rawlings during a recent city council discussion of Dallas’ financial situation. “In 1979, citizens wanted to give firemen and police officers a raise. They did not plan on it costing 4 billion dollars.”

But Ken Molberg disagrees.

Back then, Molberg, now an elected civil court judge in Dallas, was a young lawyer representing the police and firemen in their efforts to get a raise. Molberg wrote the referendum language that went before voters, and in a deposition, he says he used the phrase “shall be maintained” as an insurance policy for years to come.

“Without that, the city could have come in the next year and given all the chiefs a pay raise, and left everybody else out of the deal,” Molberg said in a videotaped deposition. “That had happened before, and they didn’t want that happening again.”

Who’s right and who’s wrong has yet to be decided. The case has never gone before a jury, but rather has been tied up in pretrial appeals for decades.

Today, the litigation represents 10,000 first responders like Braddock and Toth. Every day that passes without a resolution, more pack pay – with interest – that the city of Dallas may owe accrues.

“This is something the city has continually pushed down the line and caused it to grow,” Braddock said. “I’ve been underpaid for 22 years.”

City officials acknowledge that the litigation has the potential to be a ticking time bomb for taxpayers.

“What this means for the city, in brief, is that could mean a $4 billion cost in terms of back pay,” Elizabeth Reich, the city’s chief financial officer hired in September, told council members recently. Mayor Rawlings has said the litigation, coupled with the pension crisis, could bankrupt the city if left unaddressed.

How much is $4 billion?

We decided to put it in terms of the cost of city services Dallas residents probably enjoy.

Imagine next year’s Dallas city budget with no money for trash pickup and recycling.

No money to keep parks mowed, or library doors open or pay for any other arts or education programs.
No more water utilities and no street repair.

Now imagine extending those cuts for not one, not two, but three more years … and there’s your $4 billion dollars.

Braddock and Toth want to make one thing clear to taxpayers.

“We have no intention of wanting to bankrupt the city,” Braddock said. “That would be insane.”

He and Toth say it’s not about the money anymore. They say it’s about the city of Dallas holding up its end of the bargain with its first responders.

“We took an oath and we have never ever breached that promise to the citizens of Dallas,” Toth said.

“It’s about following through on what the citizens voted for and carrying that out,” Braddock said. “We’re not fat cats. This is not a scheme about how to scam the city of a few dollars. We love our job. We want to come to work.”

“We’re just saying, ‘Mayor, we just want what’s fair and what was promised to us, what the citizens voted in 1979,’” Toth said.

The city is turning to the state for help, but lawmakers have indicated a bailout from Austin is highly unlikely.

The plaintiffs in the pay referendum litigation say they have made several attempts to settle the case, to no avail. If no settlement is reached, the case could to go trail this spring.

If the city loses, taxpayers cold be left to pick up the multi-billion-dollar tab.

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