Dallas Mayor Mike Rawlings will deliver his annual State of the City address to members of the Dallas Regional Chamber on Thursday.
The speech comes at a difficult time for the city, with an impending crisis concerning the Dallas Police and Fire Pension system.
The fund faces a possible $4 billion in future unfunded benefits after decades of promising too much to retirees with risky real estate investments that returned too little.
The Dallas City Council heard the city's plan to fix the ailing system Wednesday, including a proposal to reduce benefit checks for the members who have withdrawn more than $500 million in deferred retirement funds since August.
Dallas Chief Financial Officer Elizabeth Reich presented the plan to the city council, which is to vote on it next week. She said the proposal would bring the pension plan, which has been plagued by overvalued real estate investments and the large volume of withdrawals, to 100 percent solvency in 30 years.
Actuaries hired by the pension system estimated earlier this year that the plan, which covered about 9,900 members and beneficiaries as of the last annual report, was 45 percent funded and could become insolvent in 15 years. After members withdrew more than $500 million in deferred retirement funds, the $1.5 billion plan is closer to 36 percent funded and could be insolvent in 10 years, the city said.
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On Wednesday, Mayor Rawlings said his State of the City speech will be a “glass half empty, glass half full” view of Dallas.
In addition to the pension concern, a recent report indicated Dallas has a greater percentage of children living in poverty than any other major city in the United States.
On top of those concerns, many major Dallas roads are in need of costly repairs.
But the Mayor said he sees the glass half full when eyeing the possible solutions to these problems.
“We are in a great place, I think, in the City of Dallas. The reason I think we’re going to stay that way is we’re going to take tough issues head on, be honest with people, solve those problems and move forward,” Rawlings said.
“I want to make sure we see the right things happen. That we’re building a city for the 21st Century, for 100 years,” Rawlings said. “And that’s the way we need to think. It’s not just during my term.”
