By Tristan Hallman and Robert Wilonsky
The Dallas Morning News
DALLAS — An executive committee representing nearly 8,700 current and former Dallas police officers and firefighters has agreed to a $173.3 million settlement in their decades-old class-action lawsuits against City Hall over years of back-pay claims.
The figure is an agreed-upon price that comes with caveats because it’s not yet a done deal. But the agreement in such a massive case is a significant milestone — one that, while pricey, comes without a tax increase and would remove the biggest fiscal threat hanging over local government.
“If and when it comes to pass, it will be a historic day for the city of Dallas. It’s been 24 years. It’s time for it to be over,” said Ted Lyon, who represents the public safety workers. “It’s important for the city and all the firefighters and police officers to put this behind them and move forward constructively.”
Mayor Mike Rawlings said Tuesday that the settlement was “a prudent move for taxpayers, not only financially, but psychologically.”
“I’m very, very happy that we’ve resolved this,” Rawlings said. “This is a major clearing of the air, and there are no clouds over us anymore with these lawsuits.”
The agreement comes almost seven months after the Dallas City Council voted to spend $61.7 million to settle four lawsuits in Collin County over the language of a 1979 pay referendum that was pushed by police and firefighters and approved by voters.
The city has argued that voters believed the language, which requires the pay differential between the ranks to be maintained, was only meant to apply to the one-time raises called for by the ballot initiative. But police and firefighters long insisted evidence obtained during subsequent years — in which city officials appeared to have interpreted the language as binding in all future raises — showed they were owed money they never received.
The lawsuits have bounced around the courts for years, and both sides have talked settlements at various times without reaching an agreement. The Rockwall cases have been in the state Supreme Court since last fall, after the trial and appeals courts denied the city’s request to throw out the lawsuits on jurisdictional grounds.
City Attorney Larry Casto said negotiations with Lyon have been ongoing for months, but talks got serious again about three weeks ago.
“This is a good day for the city that has been a long time in the making,” Casto said. “It’s my hope all the parties involved see this as a fair and equitable deal, and I believe it is.”
The lawsuits had contributed to a feeling of mistrust of City Hall among first responders, which spilled into pay and pension negotiations in 2016 and 2017.
Rawlings had previously said the lawsuits — and four other similar lawsuits filed in Collin County — could help bankrupt the city, as there were potentially billions on the line. When the Collin County lawsuits settled in November, the mayor said if all the lawsuits had been settled at the same rate, the cost would be $235 million. That ended up being the case.
The city had hoped to settle the Rockwall cases and the Collin County suits at the same time. But the thousands of plaintiffs in Rockwall had wanted a higher figure from the city. Several months of talks hadn’t moved the needle.
“There were times when I thought the two sides were too far apart to reach an accord,” Casto said.
But the Supreme Court’s decision to review the case added further uncertainty to the discussions on both sides.
Late Friday, the city and the plaintiffs asked the court to hold off on considering the city’s appeal in the lawsuits because the two sides had entered negotiations.
Casto and Lyon both said the consequences of losing for their sides could have been catastrophic. Casto said the city was staring at “a potential multi-billion dollar judgment.” And the plaintiffs could have come away with nothing after all these years.
Lyon said the deal “was the best we could get on all sides.” Casto said “the extreme either way was hurtful to both parties” in the “all-or-nothing” case.
The settlement agreement comes out to an average of about $20,000 per plaintiff in the Rockwall cases. But it will be up to the plaintiffs to decide how the settlement will be distributed using a formula that takes into account such things as rank, salary and years of service.
Rawlings said he still believes the city would’ve won.
“It’s a litigious world we live in,” Rawlings said. “When we are playing with taxpayer money, we want to take out as much risk as we can, and that’s what we did here.”
The settlement will need approval from the City Council before moving forward. Rawlings said they’ll vote sometime this summer.
As with the Collin County cases, the city plans to use its existing bond capacity to pay for the agreement, meaning taxpayers would not see an increase in property taxes. Rawlings said it might mean the council can’t lower taxes as much in coming years.
Council member Lee Kleinman, who has battled police and fire associations and was critical of the Collin County settlement, said he was happy the city has bonding capacity available to be rid of the cases. He lauded the mayor, the city attorney and the council for dealing with the settlement, as well as the pension crisis.
“Under Mike and Larry, the council’s attitude was, ‘Let’s clean this stuff up and be done with it,’” Kleinman said.
Kleinman said he wasn’t thrilled that taxpayers would take on the bond debt, but would “rather not have it lingering around.”
The agreement still has other legal hurdles to clear that are “times five” the issues in Collin County, Casto said. Among them is getting the Texas Supreme Court to pause the existing appeal, accounting for all the plaintiffs and figuring out how to administer the settlement.
Still, Rawlings said reaching a price tag is important.
“Getting this behind us helps us be in a better situation for our public safety strategies going forward,” he said. “We could hang on to minimize that or try to win in court. But you’re throwing the dice, and I don’t think that’s what a mayor or a City Council should do.”
On Tuesday evening, Rawlings wasn’t critical of past mayors and councils for not settling the longstanding cases. But he’s glad to be done with them.
“Hopefully,” he said, “you won’t be hearing about police and bankruptcies or lawsuits for a long, long time.”
Copyright 2018 The Dallas Morning News