(Bloomberg) -- Dallas's rating on about $1.7 billion of general-obligation bonds was cut one level to AA from AA+ by Fitch Ratings, which cited growing pension liabilities for the police and fire department pension system.
Fitch kept a negative outlook on the rating, meaning it could be reviewed again for additional cuts. The total unfunded pension liability to the city's general fund had risen to 40 percent, according to a Fitch statement. The amount has risen because of increasing losses on speculative real estate investments and most recently a rush of retirees making calls on deferred pay. The pension is attempting to slow the flow of payments.
The city ended fiscal 2015 with a net surplus of $19.4 million, or 1.7 percent of spending, and reserves of $181.7 million. The fiscal 2016 budget is balanced.
To contact the reporter on this story: Darrell Preston in Dallas at dpreston@bloomberg.net. To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net.
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