As I first told you (must credit FrontBurner!), today is the day that Richard Tettamant almost certainly parts ways with the Dallas Police and Fire Pension System. Don’t feel bad for him. He’s had a good, long, two-decade run at the top of the pension system. In 2012, he made about $373,000. And his own personal pension will provide him enough money in retirement that he’ll never spend much time on the Power to Choose site, worrying over electricity prices. Tettamant will be comfortable into his old age.
Now, the 9,000 or so firefighters and cops whose retirements depend on Tettamant’s stewardship of their money — well, we’ll see how the fund’s risky real estate investments shake out in the coming years. This might be a preview of things to come. In 2006, out in Pima County, Arizona, the pension bought 286 acres for $27 million. Never mind that just a year prior to that sale, the land had changed hands for just $3.3 million. The pension had big plans for the dirt, and it must have figured the investment would pay off. It won’t. After a lot of wrangling, the Arizona Daily Star reports today, it now appears the pension will sell the land to the county for $7.5 million, taking a nearly $20 million loss.
What valuation did the pension books reflect for the Pima County land? Was it the purchase price or something closer to the real market value? Apply those questions to all the pension’s real estate — which accounts for half of the value of the fund — and you get an idea of the sort of ugliness that might emerge in Tettamant’s wake.
UPDATE (12:24): Tettamant was voted out this morning.