Mayor Parker and current members of Council will receive pensions from the city some day. They also will some day vote on what steps the city should take to deal with the pension system. Is that a problem?
“Whenever you’re an elected official, there’s not an easy way around it,” agreed Josh McGee, vice president for public accountability initiatives at the Houston-based Arnold Foundation, who has studied pensions nationwide.
Both McGee and University of Houston economics professor Steven Craig said they are less worried about council conflicts of interest than about pension boards’ makeup.
As a recent city bond prospectus describes it: “The majority of the trustees of each pension system have a personal interest in the pension plan administered by each board of trustees.” It also notes, “No legal challenges have arisen as a result of potential conflicts of interest.”
“There is no one representing future taxpayers” on the pension boards, Craig wrote in an email. “It is a terrible thing to ask taxpayers of the future to pay for wages of the past.”
Todd Clark, chairman of the board of trustees of the Houston Firefighters’ Relief and Retirement Fund, said in an emailed statement: “It is absolutely suitable for those whom the plan is for to be on the board, particularly as opposed to parties that may want to use the plan money for other things.”
Seems to me we ask taxpayers of the future to pay for lots of things from the past. I don’t know what’s so terrible about asking them to honor good faith agreements made before their time. Clark is absolutely right to note that having pension boards made up entirely of people for whom it is other people’s money is problematic in other ways. I don’t see what the fuss is about. Find me a publicly traded company whose board of directors has no stockholders in that company on it, then we can talk.
Council Member Bradford, who as a 24-year HPD employee is one of those people eligible for a substantive pension, tries to bring some perspective.
Bradford said he does not support a change in the pension boards, though he is open to discussing it. He noted, as pension officials do, that pension obligations currently account for only 9 percent of the city’s general fund budget. Yet, much of the recent discussion of the city’s long-range finances has revolved around pensions.
“If we change the board of the pension, you’ve still got 91 percent of the problem elsewhere,” Bradford said.
You mean 91 percent of the budget elsewhere, which as we all know goes primarily to the police and fire departments. Pensions are going to account for a bigger share of the budget soon, but it’s still the case that HPD and HFD are the biggest items in there. I’m just glad I’m not the only one saying that we do have other things to look at and talk about than just pensions.