Dallas City Council has until August 12 to call a bond election for more than $900 million. All three potential propositions, if voters approve, would mean a tax increase.
City staff briefed council members on a potential 2026 bond on Wednesday.
The proposed bond involves funding related to public safety, including the Dallas Police and Fire Pension System.
The last bond election was in May 2024 for $1.25 billion in funds. It has ten voter approved propositions that involve 850 projects for various citywide use.
How much would it cost to conduct a bond election?
Dallas City Secretary Bilierae Johnson said the city has $1.6 million set aside to conduct the election.
If a bond election is called, it would include three propositions for voters to approve. They are:
- Proposition A: Public Safety Facilities. This would use $443 million in general obligation bonds. It would fund improvements and additions to the city's public safety facilities. The estimated repayment amount would be more than $629 million.
- Proposition B: City Facilities and Service Centers. This would use $17 million in general obligation bonds for city fleet maintenance. The estimated repayment amount would be more than $24 million
- Proposition C: Pension Obligation Bonds. This would issue $500 million in pension obligation bonds for the Dallas Police and Fire Pension System. The estimated repayment would be more than a billion.
What projects are in the General Obligation Bond Program?
- Law Enforcement Training Center at UNT Dallas: $82 million needed
- Public Safety Training Complex at Dallas Executive Airport: $149 million needed
- Emergency Operation Center and 911: $40 million needed
- DPD Property Room, Evidentiary Vehicle Storage Facility and Crime Lab: $150 million needed
- Fire Station #4: $22 million needed
- Fleet Maintenance Facility at Southeast Service Center: $17 million needed
What are Pension Obligation Bonds?
Pension Obligation Bonds are taxable bonds issued to fund the unfunded portion of pension liabilities. The Pension Obligation Bonds proposed for a 2026 election would go to the Dallas Police and Fire Pension System.
The Dallas Police and Fire Pension System, or DPFP, is an independently governed unit of Dallas that provides retirement, death and disability benefits to city police officers and firefighters.
The DPFP has had rocky funding over the years. "Ill-advised" real estate investments between 2005-2009 were brought to light in 2015.
Chief Financial Officer Jack Ireland said the city has discussed pension obligation bonds since 2023 to "identify potential ways to set that fund on a more sound financial path."
Dallas has issued pension obligation bonds before. Ireland said the city issued them for the Employee Retirement Fund in 2005 when the system needed an infusion of funds.
However, pension obligation bonds are considered high risk because it assumes the rate of return will be greater than the owed interest rate, according to the Government Finance Officers Association.
This could leave municipalities with both the debt service requirements of the taxable bonds and the unfunded pension liabilities, according to the GFOA.
The city of Dallas has a joint agreement with the DPFP board.
Kelly Gottschalk, DPFP executive director, told KERA on Wednesday that the method Dallas funds the pension system is entirely within the city's discretion.
"That said, from the pension system's perspective, any additional funding received sooner rather than later would be viewed favorably," Gottschalk said in an email.
Voices in support
Some council members like Council Member Jesse Moreno were supportive of the potential bond. Moreno said he favored giving voters the option to support or oppose a bond program.
"I am definitely in support delivering the long overdue training facility, the public safety facility, updating our 9-1-1 centers and making sure that we are delivering on what the residents have said is their number one priority," Moreno said.
Voters approved the $90 million bond in May 2024 for public safety facilities. The bond designated $50 million for the construction of a police training academy.
Plans for a police training academy have been in the works since 2021 and, at the time, was estimated to cost $140 million. The city entered into a nonbinding agreement with UNT Dallas to put the training facility on a 20-acre site on campus.
That facility is expected to have a groundbreaking in September of this year with an opening estimated for June 2028. The updated cost for the training center is now estimated to be $227 million, with a current funding gap of $82 million — more than double than the initial estimate.
Voices in opposition
Other council members like Council Member Adam Bazaldua voiced opposition to the potential bond. Bazaldua said the 2024 bond was not yet a third of the way complete and was against asking voters for more money.
He added that fiscal disciple was not a priority in how the city planned and that Dallas was not living within its means. He referenced how the city could not take care of its City Hall building and said history was repeating itself.
"I'm adamantly opposed to this," Bazaldua said. "I think it is absolutely fiscally irresponsible and I can't wait to campaign against this if this council supports it and sends it to the voters and I absolutely will not be voting for it as a voter."
Both Bazaldua and Council Member Cara Mendelsohn said funding for the Emergency Operation Center and 911 facility should be separate items from the police academy.
Moving 9-1-1 and emergency services from City Hall has been part of the debate on whether the city will stay or leave the building.
"The way to show a commitment to success of the academy is to make it an independent proposition, which I believe will pass," Mendelson said. "But if it's placed with moving 9-1-1, I believe we'll see a total failure of this bond project and I will join Council Member Bazaldua in telling voters not to support it."
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