Follow CBSDFW.COM: Facebook | Twitter

DALLAS (CBS11) – Dallas’ chief financial officer Elizabeth Reich warned city council members the Police and Fire Pension Fund could run out of money in five to seven years, not ten years as first projected.

Reich blamed part of a new plan approved by the pension board last Thursday allowing certain police officers and firefighters to receive large amounts of retirement money if there’s excessive liquidity in the fund each month.

“The impact of those immediate withdrawals on insolvency would be very serious,” said Reich.

Last Friday, the pension board insisted in a statement that its short-term plan won’t jeopardize the fund.

The city and the pension board are now trying to reach agreement on a permanent plan to fix the fund’s finances.

“We are planning to have a mediator come in next week and we are hopeful that will be fruitful,” said Reich.

The goal is to finalize a deal and bring it to state lawmakers, who must give their final approval by the time their legislative session ends in late May.

Republican State Representative Dan Flynn is leading the effort to pass a bill.

Flynn told CBS11, “They have some big differences but the idea is we have a plan. That’s very important because Wall Street gets concerned when we don’t have a plan.”

Under the city’s proposed long-term fix, which would cover the next 30 years, police and firefighters would have to come up with $3.5 billion in higher contributions and reduced benefits.

Taxpayers would contribute an extra $4.1 billion into the system.

“Actuarial soundness must be there to be sure there’s a retirement plan for those individuals who have retired and for the new ones coming in,” said Flynn.

Because of the pension problems, the city’s credit rating has been lowered.

As a result, it costs taxpayers more to borrow money.

Reich also outlined an alternative that would start a new retirement plan for police officers and firefighters.  

She said the city isn’t advocating for this plan.

Mayor Mike Rawlings, who has led a legal fight against the pension fund, didn’t attend the city council briefing Wednesday because he was in Washington, D.C. for the winter meeting of the U.S. Conference of Mayors.  

(©2017 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)