Philippe Nassif
We wrap up City Council interviews with At Large #5 challenger Philippe Nassif. Nassif is a first-generation American, the son of immigrants from Mexico and Lebanon. A founding member of New Leaders Council Houston and member of Leadership Houston, Nassif has spent time working in the White House, for President Obama’s campaign, and for Mayor Parker’s administration. He currently works at a women’s empowerment organization where he leads advocacy efforts across 14 states to improve women’s rights around the world. Before I present his interview, I should note that I did do an interview with Durrel Douglas, but as he ultimately did not file for the race, I’m not running it. Here then is my conversation with Philippe Nassif:
(Note: This interview took place after the Supreme Court ruling that required a repeal or referendum on HERO.)
You can see all of my interviews as well as finance reports and other information on candidates on my 2015 Election page.
Wow. This is the first candidate of any kind who has mentioned that the city is on a crash course with bankruptcy, just like the BANG! Train is also on a collision course. All candidates should be addressing the city’s preparations for bankruptcy, or else a plan for dealing with the budget. I would recommend that this candidate read the Arnold Foundation white paper on the city’s pension crisis.
Next maybe someone can address the new METRO network, and the fact that every single route goes due east-west or north-south, thus, if you want to go southeast, for example, you need two buses. For me to go four miles to downtown, it takes two buses and about one hour. Of course the METRO trip planner sent me to the 56 Airline and said to get off at Alabama and Montrose and walk the .2 miles to Jones Hall. It turned out to be over two miles to Jones Hall and nearly one hour walk. I should’ve just walked from home.
So, candidates should fix the budget, stop the tax abatement giveaways to corporations, have a 15 dollar minimum wage, repair the infrastructure and bring back the old METRO.
Jason, only the ignorant believe the city is going bankrupt so I’m back to school you a second time on the subject. I’m sure all anti-pension hawks love the analysis by the Arnold Foundation’s Josh McGee, here is a little history lesson for those that haven’t paid attention to him. When he first started working for the Arnold’s, his FIRST white paper was full of doom and gloom about Houston. As he toured the country, California being a bigger target for the foundation at the time, he was espousing the ills of public pensions and locally appeared on the Michael Berry show where he rattled the saber of bankruptcy left and right. Then the host, who had voted for some pension benefits when he was on council, asked him a few questions. McGee wasn’t prepared to answer them, stating he had not even read a single city budget, nor had he read a single yearly report from any of the city pension groups!
He back peddled by saying his statements were based on California’s much more generous benefits, soon leaving the show. Now his biggest focus is that the pensions cannot earn the requisite return on investment (which they actually exceed on average), followed by a point I agree with him on; the city doesn’t pay in enough each year so the deficit grows.
To some, that is a cry to cut benefits yet again, the billions in employee concessions already made starting 11 years ago already making the city the lowest compensating big city in the country. The city has already cut education requirements and other standards to find marginally qualified workers, the belief that the city can afford another 1200 police officers, several hundred firemen, and such before catching up on past due pension expenses laughable.
First, separate out the true, actuarial cost of the pensions each year and pay that much into them. Then divide the unfunded amount into 20 and pay a portion each year until it is paid off. That will mean cutting other projects but remember, each new project has maintenance expenses too so cutting them now will save more money.
You can apportion out some of the expense to the TIRZ, almost 20% of the city falls into one of these zones so it is not a huge leap of legal logic to say the requirement an expense falls in a zone is covered by the fact that police, fire, and municipal services are rendered in the zones. Then cut projects like bike trails to nowhere, ditch the crime lab in favor of the county’s scandal free lab, and other consolidations. Get corporate sponsors for existing parks, finish the privatization of the zoo, and prioritize everything else.
Wow Steve, you are one of the few unignorant who believe that the city is on track toward fiscal strength. Mayor Parker, when she first took office, showered her wrath upon the workers with a round of layoffs (just like every new corporate CEO does, before taking a bonus) and then she further punished the people by cutting the libraries (still no library stays upon until 9 PM, as they did before Parker) and shutting down the pools, until Sheila Jackson Lee got an oil company to fund them and they opened on the Fourth of July. Mayor Parker has now admitted that her successor will have to deal with the raising the revenue cap, as she will devote her remaining time to her personal agenda.
I guess Josh McGee has studied the city budget since that time he was on the Michael Berry show. Meantime, he is doesn’t come off as anti-pension to me; his first sentence states: “Every Houston city employee who works hard and plays by the rules deserves a fair and secure retirement.” Hardly the stuff of someone who hates pensions. Cities that are forced to negotiate with unions would rather agree to pensions than to raises which have to be paid now. I am not sure how you have come up with the pensions exceed the return on investment. McGee’s paper states, “the highest investment return assumption
for any major plan in the United States—8.5 percent.” And then goes on to say that Chicago got burned with a lower projected return.
The funding gap in pensions has only grown. Yet Houston has increased its revenue. And still more problems remain, specifically infrastructure. The city inflated the number of potholes that it fixed, and the Rebuild Houston money is not being used as the taxpayers voted to use the extra fee. Oddly, Mayor Parker’s only qualification for being mayor is her financial ability, being a CPA. And yet, she did nothing to remedy the problem.
First and foremost, I would suggest that the Krogers and WalMarts and every other big corporation that gets a 380 or other tax abatement to send its profits to headquarters in some other state, should get no breaks. And should pay for repairs to the infrastructure. Get WalMart to fix the Yale Street Bridge, for example. Those who use our community to extract money need to be held accountable to the community. More than just “creating” a few $8 an hour jobs. Have a $15 minimum wage so that some of their profits will stay here in Houston.
Then, like you wrote, some of the projects will need to be cut. And then the city will need to use the Blue Ribbon Actuarial standard to pay a reasonable amount into the pensions. And also might have to charge some fees, and really, the entire state needs to have a state income tax, but of course that won’t happen.
there are a number of reasons why i do not support nassif philippe,first in person like amanda k edwards was , he is just not that nice of a candidate,trust me when i tell you both amanda and him were down right rude and abrasive and his “finance manager ” was well for the lack of a better term ,thought she was holier than thou,at a community where candidates campaigns sponsor the event, nassiff tried to crash the place as a matter of fact for a few minutes he did,
nassif was not giving proper advise on whos who in the political arena’s and decided to just jump right in the deep end and is way over his head ,it would be nice if he didnt show his ass so much but maybe next time he runs for office he wont , =i will vote no on nassif for council .
warmly , joshua
Jason, I’ll address your specific points in order to make it easy for you to follow but again, any candidate that lays the blame to the city’s fiscal woes on pensions is lying. I’ll expand that to say any person saying as much is a liar because even fully funded, pensions would amount to under ten percent of the city’s total budget (addressing the unfunded liability as a separate concern).
1) There is a marked difference between a city being in great shape and being bankrupt. As it stands, Houston can make wholesale cuts to staff and most projects “at will” on a scale far surpassing most cities on the coasts or up north. For a city to be bankrupt, it must be unable to legally make such cuts outside of a bankruptcy court but Houston has a lot of flexibility in that regard, it’s $5.1 Billion dollar budget full of duplicative efforts, wasteful spending, and political payoffs.
2) Parker inherited a nationwide economy in turmoil, I’ll give her that much, and cutbacks were needed (and expected) just like everywhere else in the country. She also raised the cost of medical coverage to retirees by 300% or more (ask Manuel B.) despite long held promises that such was off the table. It’s curious that Parker, one of those who so heavily supported and promoted pension increases as a council member then changed her tune as city controller, telling any who would listen how it was a ticking time bomb, but no one wanted to pay true costs for anything so she was silenced.
3) There are times when a writer soft pedals at first and then lays into a target after you start reading, McGee qualifying in this case. Regarding his points you focus on, one being how the rates of return are arrived at and how such assumptions impact funding levels, here it is:
a) HFD’s rate of return is 10.79% over the last 30 years, 10.03% over the last 3 years
(http://www.hfrrf.org/uploadedFiles/HFRRF/Content_-_Member/Resource_Center/Investment%20performance.pdf)
b) HPD’s rate of return is 10.3% net for the last 30 years, 9.3% for the last 3; they lowered their number to 8% from 8.5% awhile back (so much for McGee keeping up)
(http://hpops.org/Public/RollingReturns.aspx)
c) HMEPS rate of return is 9.29% for the last 25 years and 9.37% for the last 3
(http://www.hmeps.org/assets/hmeps-investments_3-31-13.pdf)
Each of these funds are independently audited by different firms and the city then hires other firms to audit the numbers. McGee does NOT dispute these numbers, only makes the argument that they are higher than other funds that traditionally have smaller returns. The pensions are still subject to the market forces everyone else is but generally invest better, the low years offset by the high years just as they are supposed to be. Arnold, Diamond, King, McGee and other anti-pension hawks largely jumped on the “kill pension” bandwagon right after a historically low year when the market crashed so any projects made back then certainly looked terrible.
4) As each pension system employs a five year smoothing average, saying that they have been getting worse is not true, a recent year netting over 17% return, but HFD is better funded than most pensions in the world, not just state, and HPOPS remains over 80% funded as their employee populace transitions from the original pension to the far lower pension, HMEPS doing likewise.
5) I agree with you about the 380 agreements, having pointed out how retailers like Kroger or Walmart don’t even hire more of those $8/hour employees, so much as shuffle the numbers from one store to another one nearby. While I doubt you could force Walmart to fix the bridge, giving them millions to open yet another store within driving distance of other locations seems silly.
6) The building of additional parks or expanding existing parks, mega-parks in one case, when there won’t be firemen to keep folks safe or police to patrol them seems foolhardy to me too. But you don’t need “blue ribbon” panels, commissions, or other “pass the buck” groups to fund the basics first, then deciding how to spend the rest. The rain fee was used to pay down debt, shuffle public works people working on drainage issues onto that account, and even some projects, all of which have an impact over time but the thought that the city is willing to be flexible as it sees fit rather than when it needs to be is the point I’m making.
You can change resources to deploy manpower as needed or as prioritized in a myriad of ways. For example, I love libraries and have spent endless hours in them locally but during many hours of the day, most branches are ghost towns. Why do we spend precious tax money staffing on days or times when few people use the service? Most public work crews fixing potholes are deployed during peak traffic times during the week, causing congestion and limiting effectiveness so why not change that to reduce travel time and inconvenience? A look at a crew’s assignments shows a huge waste of their time going between spots rather than remaining close and fixing potholes in a smaller area. That kind of thing adds up.