CAUSE NO.

DC-16-15431

MICHAEL S. RAWLINGS, individually, as IN THE DISTRICT COURT

a resident of the City of Dallas,
Plaintiff,

v.

THE BOARD OF TRUSTEES OF
THE DALLAS POLICE AND FIRE
PENSION SYSTEM, et al.,
Defendants,

v.

LARRY EDDINGTON, et al.,
Intervenors,

v. DALLAS COUNTY, TEXAS

JENNIFER STAUBACH GATES, SCOTT
GRIGGS, PHILIP T. KINGSTON, AND
ERIK WILSON, each as trustee of the Dallas
Police & Fire Pension System,
Trustee Intervenors.

v.

THE BOARD OF TRUSTEES OF THE
DALLAS POLICE & FIRE PENSION
SYSTEM, THE DALLAS POLICE & FIRE
PENSION SYSTEM, SAMUEL FRIAR,
GERALD BROWN, CLINT CONWAY,
KEN HABEN, BRIAN HASS, JOE
SCHUTZ, KEN SPRECHER and THO
TANG HO, each in their official capacity as
Trustees.
Defendants. 116th JUDICIAL DISTRICT

DECLARATION OF KELLY GOTTSCHALK

I, Kelly Gottschalk, hereby declare that the following facts are true and correct:

1. My name is Kelly Gottschalk. I am over twenty-one years of age, have never

been convicted of a felony or other crime involving moral turpitude, and suffer from no mental

DECLARATION OF KELLY GOTTSCHALK 1

TRADITIONAL MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S CLAIM 40

or physical disability that would render me incompetent to make this Declaration. I am able to

declare, and I hereby do declare, that all of the facts stated in this Declaration are true and correct

and are within my personal knowledge, or are known to me through my duties and

responsibilities as Executive Director of the Dallas Police and Fire Pension System (DPFP)

and as Secretary for the DPFP Board of Trustees (Board).

2. I am a custodian of records at DPFP. The documents attached to this Declaration

as Exhibits A-1 through A-12 are kept by DPFP in the regular course of business; it was the

regular course of business of DPFP for an employee or representative of DPFP, with knowledge

of the act, event, condition, opinion, or diagnosis recorded, to make or incorporate these records,

or transmit the information contained in them; and the records were made or incorporated at or

near the time or reasonably soon thereafter. These records are exact duplicates of the originals

(except for the Bates labels that have been added to the copies produced in this litigation).

3. Exhibit A-1 is a true and correct copy of DPFPs Combined Pension Plan

Document, as amended and restated through September 8, 2016.

4. Exhibit A-2 is a true and correct copy of the meeting minutes from the September

26, 2016, Board meeting.

5. Exhibit A-3 is a true and correct copy of the meeting minutes from the December

8, 2016, Board meeting.

6. Exhibit A-4 is a true and correct copy of a Statement from the Dallas Police &

Fire Pension System dated December 8, 2016.

7. Exhibit A-5 is a true and correct copy of the meeting minutes from the December

29, 2016, Board meeting.

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TRADITIONAL MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S CLAIM 41

 8. Exhibit A-6 is a true and correct copy of the meeting minutes from the January

12, 2017, Board meeting.

9. Exhibit A-7 is a true and correct copy of the DROP Policy Addendum adopted

by the Board at the January 12, 2017, Board meeting.

10. Exhibit A-8 is a true and correct copy of a series of slides entitled DROP Policy

Addendum Summary, which I presented at the January 12, 2017, Board meeting.

11. Exhibit A-9 is a true and correct copy of a letter the Board received from DPFPs

actuary, Segal Consulting, dated January 13, 2017.

12. Exhibit A-10 is a true and correct copy of DPFPs Deferred Retirement Option

Plan Policy, as amended through January 14, 2016.

13. The chart pasted below reflects the number of DROP withdrawal requests DPFP

received between June 28, 2016, and January 12, 2017, along with the aggregate amount of

DROP withdrawals permitted, per week, over the same timeframe. An earlier version of this

chart was provided to Plaintiff in Defendants Responses to Plaintiffs First Interrogatories.

Request Distribution Number Total DROP

Week End Date of Distributions**
Date Requests
6/28/2016 7/1/2016 80 $2,362,024.56
7/5/2016 7/8/2016 95 $2,244,921.18
7/12/2016 7/15/2016 87 $6,587,747.56
7/19/2016 7/22/2016 78 $1,397,053.08
7/26/2016 7/29/2016 55 $955,105.10
8/2/2016 8/5/2016 105 $3,718,237.04
8/9/2016 8/12/2016 105 $8,675,339.81
8/16/2016 8/19/2016 155 $41,007,767.20
8/23/2016 8/26/2016 134 $37,898,229.93
8/30/2016 9/2/2016 157 $35,260,879.00
9/6/2016 9/9/2016 128 $28,298,942.40
9/13/2016 9/16/2016 129 $20,234,404.01
9/20/2016 9/23/2016 213 $65,328,916.51
9/27/2016 9/30/2016 266 $79,947,033.43

DECLARATION OF KELLY GOTTSCHALK 3

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 10/4/2016 10/7/2016 165 $39,829,858.82
10/11/2016 10/14/2016 104 $18,662,579.80
10/18/2016 10/21/2016 122 $22,104,059.78
10/25/2016 10/28/2016 87 $9,700,911.32
11/1/2016 11/4/2016 183 $51,902,835.44
11/8/2016 11/11/2016 150 $29,721,418.00
11/15/2016 11/18/2016 98 $13,885,873.85
11/22/2016 11/25/2016 42 $6,552,339.45
11/29/2016 12/2/2016 155 $29,367,950.39
*Requested but not paid.*
Through 12/9/2016 598 $180,948,305.05
12/10/2016 12/16/2016 17 $1,415,804.74
12/17/2016 12/23/2016 12 $827,358.81
12/24/2016 12/30/2016 12 $164,584.05
12/31/2016 1/6/2017 24 $455,050.00
1/7/2017 1/12/2017 18 $1,466,495.84

*Portions of these requests which were intended to satisfy

required minimum distributions were paid on 12/12/16.
RMDs were approximately $1.8 Million

**Distributions exclude monthly installment payments of

approximately $2.2 million per month.

14. DPFP currently anticipates that the DROP Policy Addendum will allow the

following payments to members in 2017: roughly $70 million in minimum annual distributions;

roughly $7 million in required distributions under federal tax law; roughly $11 million in January

and February per the miscellaneous distributions authorized by the Board at the January 12, 2017

meeting. DPFP does not have an estimate of payments that will be made pursuant to the

hardship procedures in Section 6 of the Addendum. Nor does DPFP have a precise estimate of

the pro rata distributions that will be made pursuant to Section 5 of the Addendum. This amount

will calculated on a monthly basis in light of the most current data. That said, based on rough

projections, I currently anticipate that at the regularly scheduled March Board meeting, DPFP

staff will recommend that the Board approve a total pro rata distribution for the end of March or

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early April of between approximately $100 million and approximately $280 million. This is an

estimate only, and is subject to change. The amount to be recommended and the amount to be

paid will depend upon a variety of circumstances, including but not limited to updated liquidity

demands or reserve requirements, updated liquidity proj ections, and possible legislative action.

The decision about any such payment amount will be made by the Board, not the staff.

15. As of February 2017, the total value of all DROP assets is $1.06 billion.

16. Exhibit A-11 is a Jetter from Mayor Mike Rawlings to the DPFP Board, dated

November 29, 2016.

17. Exhibit A-12 is a true and correct copy of a "Summary of Two Plan Proposals

Presented to the Board 2/20/17," dated February 20, 2017.

Kelly Gou hal.k

JURAT

My name is Kelly Gottschalk, my date of birth is 12/29/64, and my business address is

4100 Harry Hines Boulevard, Ste. 100, Dallas, Texas 75219. I declare under penalty of perjury

that every statement in the foregoing is true and correct.

Executed in Dallas County, State of Texas, on the~o;,,....lay of February, 2017.

Kelly JO tL chnlk

DECLARATION OF KELLY GOTTSCHALK 5

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