The City of Dallas saw two varieties of its bonds downgraded Wednesday because of ongoing Dallas Police and Fire Pension funding problems, according to a city news release.
The S&P Global Ratings agency downgraded the city's general obligation bonds from AA to AA-, with a negative outlook. The agency also downgraded the Dallas Convention Hotel Development Corporations bonds from A to A-, with a negative outlook, the city said.
The city's Downtown Dallas Development Authority bonds saw it's A rating unchanged.
According to the news release, S&P said "the continued deterioration in the funded status of the Dallas Police and Fire Pension negatively affects the City's creditworthiness."
More than $500 million has been withdrawn from the fund since August.
Dallas Mayor Mike Rawlings used his own money to sue the pension fund to stop the withdrawals, which he says pose a major threat to city finances.
The pension's board is now allowing some small withdrawals from the fund.
The Police & Fire Pension problems are blamed on a combination of risky investments over the past 10 years that returned far less than expected, coupled with benefits that were more generous than the fund could afford.
Experts have warned that the pension could be insolvent in as little as 15 years.
Despite the bond downgrades, Elizabeth Reich, the city's chief financial officer, said Dallas is thriving.
“Dallas is a thriving City, our economy is strong, and our residents want safe neighborhoods and effective City services," Reich said.
Reich also added the downgraded didn't come as a surprise and that the city agrees the pension issues are a threat to the city's financial health.
"We need a legislative fix, and look forward to working with the State Legislature to provide a secure, stable retirement for our public safety workforce, and to reaffirm the City’s sovereign immunity," Reich said.
"We will continue to work to reach agreement with the Pension system," she said.
NBC 5's Ken Kalthoff and Ashleigh Barry contributed to this report.