S&P joins Moody’s in downgrading Dallas’ bond ratings, also blaming police-fire pension fund
One week after Moody’s Investors Service downgraded the city’s bond rating for the second time in 12 years, Standard and Poor’s has followed suit. And, according to a memo Dallas City Manager A.C. Gonzalez sent to the city council late Wednesday, it’s for the same reason: “the size of unfunded pension liabilities.”
According to Gonzalez, S&P is assigning a AA rating to the $227 million general obligation bonds the Dallas City Council approved last week. That’s a downgrade from the prior rating of AA+.
We reported last week that the Dallas Police and Fire Pension Fund is carrying about $1 billion in unfunded liabilities, based in large part on the fact the pension fund’s $3 billion in assets continue to lose value based in part on mismanagement and poor real estate investments. City officials are concerned there are more write-downs looming.
But earlier this week, an outside auditor told the council that the pension system has an unfunded liability of $5 billion. When asked earlier this week about the discrepancies, Gonzalez responded that number was reached using Governmental Accounting Standards Board calculations that will be implemented this year.
Read more: http://cityhallblog.dallasnews.com/2015/11/sp-joins-moodys-in-downgrading-dallas-bond-ratings-also-blaming-police-fire-pension-fund.html/
