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2017 results: City bonds

Pension obligation bonds pass easily.

Mayor Sylvester Turner

Houston voters passed a $1 billion pension bond referendum by a wide margin late Tuesday, securing Mayor Sylvester Turner’s landmark reform package and, the mayor hopes, marking the beginning of the end of a 16-year fiscal crisis.

The ballot item’s passage now means the city can follow through on its plan to infuse $750 million into the police pension and $250 million into the municipal workers’ pension to improve their funding levels and lower Houston’s annual payments into its pension funds.

If voters had rejected the measure, up to $1.8 billion of the $2.8 billion in hard-won benefit cuts in the reform bill would have been rescinded, adding tens of millions of dollars in costs to the city budget overnight.

“This effort has not been easy,” the mayor said at an election night party. “Tonight is not a victory for Sylvester Turner. Tonight is not a victory for the members of city council. Tonight is not just a victory for the employees. Tonight is a victory for the city of Houston.”

[…]

Many City Hall insiders and political observers had predicted voters could balk at a $1 billion bond and produce a close vote. But University of Houston political scientist Brandon Rottinghaus said, because the GOP-run Legislature had approved the reform package earlier this year, there was no organized opposition to shake voters from their typical habit of granting approval to city bond issues.

“Because most conservative groups and Republicans and most big players on the state level endorsed the bonds, it was unlikely that there would be much of a fight, and there wasn’t,” he said. “My honest guess is that people probably weren’t that attentive to the importance of Prop. A; it was simply the case that the city was asking for more money, as they routinely do, and the good news is that people typically vote yes.”

I gave up and went to bed before the final results came in, but Prop A had over 77% support, with absentee, early, and Election Day totals all being at about the same level. Turnout was higher than predicted, with over 87,000 votes being counted with a fifth of precincts still not having reported. I’ll have more analysis of this for tomorrow, but in the meantime, the other bonds passed, too.

Houston residents can look forward to a smattering of facility upgrades – including repaired libraries, new community centers and renovated fire stations – thanks to what appeared to be overwhelming voter support for $495 million in public improvement bonds.

Propositions B through E passed easily Tuesday despite anemic local turnout in a city lacking a marquee race.

The bonds’ passage, which will not require a property tax increase, would authorize Houston to issue $159 million in public safety debt, $104 million for parks, $109 million for improvements to general government facilities and $123 million for libraries. They are the first the city has requested since 2012.

[…]

Meanwhile, residents of Houston’s Heights neighborhood, in the northwest, were set to further loosen restrictions on area alcohol sales.

Heights voters already had lifted a 105-year-old ban on the sale of beer and wine at grocery stores last year, but customers who wanted to drink at neighborhood restaurants or bars still had to join a “private club” by submitting a driver’s license for entry into a database.

Passing Proposition F lifts that requirement, leaving the neighborhood nearly wet. Liquor sales at grocery and convenience stores still would be banned.

I don’t expect that last bit to change any time soon. Props B through E were at similar levels of support as Prop A, garnering between 72 and 76 percent; Prop F, limited to just part of the Heights, had over 62%. I should note that the other four citywide props did have official, if perhaps not organized, opposition, as the Harris County GOP and conservative groups like the C Club and the HRBC opposed them. Didn’t have much effect, I’d say.

Elsewhere, school bond issues in Spring Branch and Katy were approved, while all seven constitutional amendments were passed. As I said, I’ll have more to say on Tuesday’s results tomorrow.

UPDATE: Final turnout in the Harris County part of the city was 99,460, which is higher than anyone projected it to be.

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13 Comments

  1. David Fagan says:

    While it is such a victory for the police and municipal, since they are receiving funds, the greatest cost and benefits cut comes from the responsible fire department. If one reads the bonds proposal, it appears to be a loophole around the revenue cap. The mayor campaigned on lifting the revenue cap, but now does not. Is the mayor changing his mind, or is he bought by powerful local finances? One way or another, the fire department is thrown under the bus and left in the wind, picking up the tab of less responsible entities. Houston, if you do not want a fire department, just say so and let these hard working citizens move on to more sustainable careers.

  2. Steve Houston says:

    David, that narrative only works if you fail to consider that the majority of cuts this time and the previous benefit cuts were incurred by the municipal and police. While there is no doubt that compensation has been lowered for all Houston city employees, HFD’s pension is still better than the other two courtesy of the totality of cuts over the years.

    For all the rhetoric about such cuts, did 75% of HFD quit? 50%? 25%? 10%? Seriously, several hundred additional employees working for the city retired this year over what was anticipated. For all the grumbling, most stayed. For the most part, public safety employees are adored, given the best pensions and direct pay, and appreciated but demanding a blank check from the public lest you make sweeping claims about the public not wanting you just seems like the latest sour grapes.

  3. David Fagan says:

    Mr. Houston, feel free to point out any false statement made in my comment.

  4. Steve Houston says:

    Mr. Fagan, I already did. No one is holding a gun to the head of employees to stay, they are always free to seek more lucrative employment elsewhere if they emotionally feel they are not paid enough.

  5. David Fagan says:

    Soooooo, what is the false statement made in my comment? It sounds like you are actually agreeing with the points made, Mr. Houston. But it is entertaining that I can basically comment on the mayor being bought out and lied on his campaign promises, corrupt, and that the bonds are a loophole to the controversial revenue cap, but the only thing that is important is to, once again, take an opportunity to criticize the fire department, aren’t these other issues of any importance Mr. Houston? Please do not feel you have to agree with me, I enjoy the objective dialogue.

  6. Steve Houston says:

    Okay David, you asked for it:
    A) “While it is such a victory for the police and municipal, since they are receiving funds, the greatest cost and benefits cut comes from the responsible fire department.”

    Considering they had more cuts than you and gave up more in benefits repeatedly, calling what happened to them a “victory” seems petty on your part, but also a lie. Neither were made fully whole with the forthcoming bond amounts either. It would also be safe to say that your pension board was anything but “responsible” since it continually provided old information trying to sway public opinion on your funding levels, waiting until the state legislature passed the law before declaring the city had to catch up on money owed as part of the now-failed lawsuit.

    B) “The mayor campaigned on lifting the revenue cap, but now does not. Is the mayor changing his mind, or is he bought by powerful local finances?”

    The Mayor also campaigned on pension reform for all three pensions, and a great many other things, but was dressed down by City Council for endangering pension reform with his desire to remove the revenue cap. Your false dichotomy fails to consider that he can’t do any of his reforms without the backing of others, primarily City Council but also the state who was ultimately responsible for stripping away some of your future benefits.

    C) “One way or another, the fire department is thrown under the bus and left in the wind, picking up the tab of less responsible entities. ”

    The fire department wasn’t even paying their own way, let alone that of “other entities”, the pension cost per employee more than it could sustain without massive infusions of additional money.

    D) “Houston, if you do not want a fire department, just say so and let these hard working citizens move on to more sustainable careers.”

    HFD is the second most costly department of the city of Houston’s massive operating budget. The bulk of funding is in personnel that are in fire suppression though some 80% of the calls for help are medical in nature. If the billions of dollars of tax money thrown at HFD in recent years are not a sign of “wanting a fire department”, I’d be curious to hear just what you expect of the city. I know, you want “more” of an endless stream of money to line your pockets with, more equipment you use once every few years, and for a gold plated pension that is not just a little better than that of other city employees, but a lot better. Did I miss anything? lol

  7. David Fagan says:

    Feelin faklempt, here’s a topic- “when negative Nancy keeps spewing the same gossip, there must be something else” – talk amongst yourselves, Just remember Barbra Joan Streisand – a voice just like buttah…..

  8. Steve Houston says:

    David, if there are any “negative Nancy’s” going around espousing half truths and lies, it is you and some of your colleagues that fit the description. Are you telling us that your pension board did not attempt to get the city to pay in a great deal more this past summer (ie: benefits not sustainable for the same costs), that the city did not owe the other pensions hundreds of millions of dollars, that those other pensions did not have multiple tiers of cuts over the years, or that the Mayor did not campaign on pension reform for all three systems? Your own pension board agreed to hundreds of millions in benefit cuts before they got pissy when more cuts were imposed on them, the attempts to rewrite history by some of you is simply laughable. More conservative friends of mine think the state legislature should have no role in determining your pay and benefits to begin with, at least unless the state is going to pick up the tab, and people like you have definitely pushed many more people into that line of thinking.

  9. David Fagan says:

    Rep. Jim Murphy – “Currently, taxpayers are charged 8% interest on the $1 billion which the City of Houston borrowed from the police and municipal workers retirement funds (by not making its contributions).”

    Houston Chronicle- “The revenue cap, Turner said, hurts the city’s credit rating and hamstrings its ability to provide sufficient services and compete on a global scale.”

    “The issuance of $1,010,000,000 pension obligation bonds for the purpose of funding a portion of the unfunded liability of the City with respect to the Houston Police Officers’ Pension System and the Houston Municipal Employees Pension System as contemplated by the pension reform plan contained in Senate Bill 2190 (adopted in the 85th (2017) Texas Legislature, Regular Session), and the levying of taxes sufficient for the payment thereof and interest thereon.”

    Steve Houston- “Prop A is the cornerstone of the pension deal to save Houston billions of dollars at the expense of employees so it makes sense to vote for them, just to screw those freeloaders out of their benefits.”

    David Fagan- “Houston, if you do not want a fire department, just say so and let these hard working citizens move on to more sustainable careers.”

  10. Steve Houston says:

    David, do you disagree with any of the statements you just posted or even find them particularly negative? Murphy was pointing out how the city owed the money and how interest arbitrage made sense, just as Bill King pointed it out a few years back. Turner’s quote in the Chronicle is also accurate, the revenue cap is frowned upon by investment bankers everywhere, your likely interpretation of the pension legislation almost certain to be different than that of the courts, and my comment was regarding the point of view of the general voting populace how the deal will save the city lots of money but it comes on the back of employees, most (not HFD) who had already endured larger previous cuts. Your ending comment is the most negative of the bunch, the suggestion that anyone doesn’t support having a fire department when the city has budgeted almost a half billion dollars for fiscal 2018, is insane.

  11. David Fagan says:

    Steve,

    Murphy’s comment is one of the first times a person in position has addressed the real problem with the pension problem and he addressed the police and municipal, that the city did not make their contributions and did not hold up their responsibilities. I realize you are a researcher and already know this fact whether it is an issue that supports your point of view or not, Murphy knows it and stated it.

    Turner’s quote is during his campaigning time and the voters were not allowed to vote on the cap, though everyone seems to accept the idea that it is a hindrance.

    Your quote – “your likely interpretation of the pension legislation almost certain to be different than that of the courts” I suppose must refer my direct quotation of the wording of Prop A which was printed on the ballot which was provided to voters. They voted on this direct wording. Which, draw your own opinions, provides a loophole around the revenue cap. The last statement about providing taxes to support it is the key.

    Now, Mr. Houston, whether a person fills a pot hole, writes a speeding ticket, helps lifting an elderly Houstonian up off the ground, or puts out a fire, no one, including yourself, has the self righteous ability to call them “freeloaders”, and to suggest that “to screw those freeloaders out of their benefits” is a positive attitude to fellow citizens is a disgusting point of view, coming from a politician or a person who just wants to dominate a blog comment section. Steve Houston made the comment, so Steve Houston should own it.

    When it comes to David Fagan’s comment “Houston, if you do not want a fire department, just say so and let these hard working citizens move on to more sustainable careers.” points to the basic supply and demand. Yes it is expensive, but if Houston does not want to afford it, just say so and allow people to make a more sustainable decision for their own future. Telling employees that there will be a future benefit for them when in reality it will be in the hands of unknown politicians who want to use the money set aside for said benefit and leave the promised benefits in jeopardy to the point of reduction or not being available at all is not in the employees’ best interest. If the future of these employees are not going to be supported, say it now so they can find a career that will support them in the future.

    When the discussion comes to the point of resorting to just name-calling, such as ‘insane’ shows a lack of desire for understanding another point of view. I do not need the final word and I am done with this conversation.

    Good-Bye

  12. C.L. says:

    David, you should have stopped when you were ahead.

  13. Steve Houston says:

    CL, he was never “ahead”. lol

    David, by all means, let the laws of supply and demand rule, the proof that the city wants a fire department found in its willingness to spend a half billion dollars a year to keep the department. Your sarcasm detector seems faulty too, otherwise you would have figured out my freeloader comment was exactly that, sarcasm, but if elected leaders are unwilling to provide better compensation, feel free to move on so those more willing can step up for any of the few openings that arise.

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