Editorial note: This is the sixth in our series of electronic interviews with City Council, City Controller and Mayoral candidates. We have sent 10 questions based on seven different templates: (1) incumbent City Council, (2) challenger City Council, (3) open seat City Council, (4) challenger Controller, (5) incumbent Controller, (6) challenger Mayoral and (7) incumbent Mayoral. The following are verbatim copies of the questions sent out and the answers received.
Bill Frazer, Candidate for Houston City Controller
Texpatriate: What is your name?
BF: William “Bill” R. Frazer
T: What is your current occupation?
T: Have you run for or held public office before?
T: What is your political affiliation? We understand that City Council elections are nonpartisan, but this is a point many voters find important. If you are not comfortable currently identifying with a political party, what was the last Political Party’s primary election you voted in (a matter of public record)?
T: Typically, this board will defer to incumbents unless we are convinced the incumbent has failed in some way. Do you believe the incumbent has failed at her or his job? If so, why?
BF: The City Controller is elected by voters to serve as a watchdog over tax dollars, conduct audits, and report timely findings to the public in a way that is clear and easily accessible.
The incumbent has been a City official for ten years, 6 as an At Large Council Member and 4 as City Controller. Yet the vast majority of Houstonians are unaware of the serious financial problems the City of Houston faces.
The City has over $2.5 billion in “Decreases in Net Asssets” (“Net loss” in private sector jargon) over the past 10 years. Our city is wasting valuable resources with no leadership or information from the Controller.
Houston has accumulated over $2.3 billion in Negative Unrestricted Net Assets, severely restricting future tax revenues. We’ve pushed payments for promises made into the future long after the services have been received or assets have been consumed.
Houston has been unable to adequately fund its pension plans and, as a result, has amassed over $1.5 billion in high cost debt; over $600 million in pension obligation bonds and $1 billion in IOUs to the pension funds themselves. We’ve promised rich retirement programs without the ability to pay for them.
There has been NO published report on the status of the Dedicated Drainage & Street Repair Fund (or RenewHouston) since the voters approved the drainage fee in 2011. A survey of available documents indicated underfunding of this program of up to $120 million over the initial 3 years. Our infrastructure continues to crumble, and the promised fix is being spent on other programs without full transparency.
No audit reports on key tax incentive issues such as the Ainbinder/Wal-Mart 380 Agreement, the Costco sales tax abatement and other tax programs such as TIRZs. There has been no accountability at a time when the public needs sound financial information to help them understand if these programs are necessary or even working as intended.
The Controller has released Houston’s audited financial statements on or just days before December 31 of each year, after key November election dates. This is 180 days after its June 30th fiscal year end. Public companies with revenues in excess of $700 million or more (compared to the City’s $4 billion) are required to release final annual reports 60 days after their fiscal year end. Although Houston meets the State’s legal requirement, delay in releasing comprehensive financial information for a city of Houston’s size represents a total lack of transparency.
T: Why are you specifically running against this incumbent?
BF: Houston simply cannot afford two more years of excessive debt, excessive spending, lack of transparency, and delayed financial reporting.
The current Controller is an attorney with no accounting training or prior financial management experience. He has his sights set on future elective office and is beholden to the Mayor and City Council to support his political ambitions.
Houston deserves a CPA to serve as City Controller, someone who is uniquely and professionally qualified for the position and who has met the ongoing ethical standards of the profession and the Texas State Board of Public Accountancy.
T: What do you hope to get out of serving as the City Controller?
BF: My wife and I are native Texans and moved to Houston 39 years ago, raised our family here, and have been actively involved in the Houston community. I began my accounting career here in January, 1974 and I retired last year after 26 years as Chief Financial Officer of CBRE Capital Markets to work towards serving the community in a significant fashion. After an extensive study of the City of Houston’s financial condition, I decided my most meaningful contribution would be to take on the City Controller position and put my 39 years of financial management experience to address and to begin solving the very serious financial issues that Houston faces. These issues can be solved with a lot of hard work and help from experienced professional leadership.
T: What is an action as City Controller you would do if elected?
BF: The most urgent financial challenge facing the City of Houston, its taxpayers, municipal employees, its bondholders, the business community, and civic leadership is to fix the City’s three public pension systems. Prior “meet and confer” negotiations have only swept the key financial issues under the rug and have delayed funding. Houston needs a seasoned financial professional as Controller to provide key oversight on any future negotiations and agreements. We cannot afford to push the financial burdens of our decisions onto future generations. For example, in 2006, instead of paying past due contributions, the City issued over $600 million in “pension obligation bonds”. Since then, not one penny has been repaid, at a cost of over $30 million in interest a year. Also, since then, the City has issued $1 billion in IOUs to the pension funds at a cost of over $85 million a year in interest.
Mayor Parker has tried to work with the Legislature to help Houston negotiate needed changes, but she hasn’t received the support she needs from the Houston delegation. I would work with officials in Houston and Austin from both parties to help implement reforms that make the benefits of future retirees safe and stable. The Controller should be someone with professional financial management expertise who can sit at the table on behalf of taxpayers as a meaningful participant in all negotiations and without the distraction of personal political ambitions.
T: Obviously, an officeholder strives to maintain a diverse core constituency and political base, but all candidates have interest groups they have been traditionally strong with and traditionally weak with, respectively. For you, what would be one example of each type of group?
BF: As a first time candidate, I am beholden to no core constituency. CPAs as a whole are not overtly politically active and place the professional and ethical standards and practices of the accounting profession above politics. I am supported by taxpayers who understand the financial issues the city faces. I am building my political relationships from scratch in this campaign by reaching out to Republicans, Democrats, and Independents. I have included individuals in my campaign who are representative of the many ethnicities that comprise our international city and who support improved financial management for Houston. My Steering Committee is comprised of respected Democrats (Mark Lee and David Acosta) and Republicans (Pam Holm and Steve Krueger), and I have participated in the screening processes of organizations across the political spectrum.
I do, however, have a single non-political constituency, the CPA community, who place a very high degree of emphasis on fair financial reporting, accountability, risk assessment and personal and professional ethics.
T: What has been the most important thing you have learned in your campaign?
BF: I have been shocked to learn just how unaware most Houstonians, even very active voters, are of the serious financial challenges the City of Houston faces. I’m convinced we need to make a change in the City Controller’s office in order to begin to right the City’s financial ship.