Brownout agreement reached

The Houston Chronicle reports that Mayor Parker and the Houston Fire Department have reached a tentative agreement that would avert upcoming brownouts in fire service. The brownouts were thought to take effect after a City Council committee voted to not allocate any more money to HFD’s budget after they overspent following massive overtime pay (largely thanks to a generous union contract). The standoff was part of a broader disagreement of principles between Mayor Annise Parker and the Firefighter’s Union. Because of a sweetheart law, the union is mostly regulated from Austin, where they receive much nicer terms than the Police or Municipal Employees. Parker has been actively campaigning to nix this State control, thus allowing her to curtail some of the frills of their pension plan.

Recently, neither appeared to willing to budge on their position relating to this overtime/budget crisis. Parker was unwilling to spend more money on the department, while the union was unwilling to accept any sort of cut to their wages or benefits. Accordingly, it looked that the big loser would be the people of Houston, to whom would bear the brunt of diminished public safety.

Click here to read more about an agreement reached!

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What have I missed at City Hall?

I wrote at length about the brouhaha over Firefighter pensions yesterday, and it was certainly an important issue, but was definitely not the only thing that went on at City Hall. As many will probably already know, a local committee held a contentious hearing on the entrance of ridesharing software/transportation companies Lyft and Uber into the marketplace. Additionally, a protest was held immediately outside the building in opposition to the planned “One bin for All” recycling program. Finally, late last night, the Houston Chronicle put out a damning report on the state of the City’s finances, specifically regarding the long-term pension obligations the city faces.

First things first, the Uber issue. Dug Begley, one of the more talented writers at the Houston Chronicle, has the full story on this hearing, including many of the reactions and initial implications. At its core, the issue revolves around whether or not to change the many regulations facing the transportation industry. Countless taxi drivers flooded the public session of the pertinent committee hearing to voice their opposition. I wrote a fairly lengthy piece a few weeks ago on this subject, basically opposed to changing the rules for Uber. My position has only calcified in recent days as Uber has openly thumbed its nose at the City and ignored the rules set in place. Begley’s piece even notes that Uber has already been busted charging fees to customers, something they unequivocally promised not to do until the regulatory controversy was worked out.

Click here to read what else I have missed!

Parker sues HFD Pensions

The Houston Chronicle reports that Mayor Parker has sued the Firefighter’s Union Pension system in order to throw out an obscure state law that binds the hands of the municipality in dealing with pension negotiations. The law, passed in the 1997 session of the State Legislature, deprives the City of Houston of local negotiating authority against the Firefighter’s union. It also requires Houston to make a full contribution to the fund, something not required of its Police Officer pension plan or its Municipal Employee pension plan. Neither of these restrictions apply to any other metropolitan area in the State, only Houston.

Over the past two legislative sessions, Parker has worked tirelessly to convince the Legislature to repeal or otherwise alter the law, thus allowing “meet and confer” conferences between Firefighter’s Unions and the Mayoral administration. The Legislature has not budged, so today the Mayor took matters into her own hands. The City is suing the pension in State District Court, arguing that the law governing the pensions is arbitrary and capriciously, thus unconstitutional. “We’re trying to force negotiations,” Parker said, making the point repeatedly that this was not about screwing the Firefighter’s –especially already retired ones– out of their earned benefits. Rather, it is about making sure the City does not follow the same path as Detroit.

Click here to read more!

Parker names Committee chairs

Shortly after the inauguration nearly two weeks ago (wow, time flies), City Councilmember Stephen Costello announced he had been selected as the Chair of the Finance & Budget Committee for the second straight term. Today, as the Houston Chronicle reports, the Mayor appointed Chairs and Vice-Chairs to the remaining seven committees.

First up, Parker creates a Subcommittee within Costello’s budget committee that will deal with Pensions and Health Benefits. Councilmember Dave Martin, a conservative with somewhat right-wing views on the guaranteed benefits, will Chair this subcommittee. The decision is strange for Parker, as she has often sought a middle ground on this budgetary matter, with views typically aligning with the far more moderate Republican (Costello). Still, sometimes these chairmanships are nothing more than empty titles, so it is possible I might be reading too much into it. Meanwhile, Councilmember Jerry Davis, who is now the Vice-Mayor Pro Tem, will also serve as the Vice Chair of Costello’s Budget and Fiscal Committee.

Councilmember Ed Gonzalez, who previously Chaired the Public Safety Committee, will continue in that position for his final term. Gonzalez also serves as the Mayor Pro Tem. This committee will consider at least one high-profile issue this term, the issue of whether or not to ban texting while driving. Councilmember Brenda Stardig, another Republican with ties to Parker, was named the Vice-Chair of this committee.

Click here to read more!

One question, Mayor…

…just what will you do with another two years?

TheEconomist

The Houston Chronicle poses this question after examining the initial celebratory nature of Mayor Annise Parker’s re-election. Mike Morris at the Chronicle sat down with Parker and discussed the serious issues that Parker plans to bring up for the remainder of her time as Mayor. What is most surprising, however, is just how quickly she wishes for many of these agenda items to be discussed and voted on by the City Council.

Click here to see what issues and when!

More on pensions

The Houston Chronicle continues to discuss the pensions issue that has arisen over public employees pensions throughout this municipal election season. As the astute may recall, I am somewhat dubious as to how big of an imminent crisis this all really is. I have written before that pension reform is often a way to needlessly cut government expenses. Anyways, Mike Morris at the Chronicle continues reporting on this topic.

The article does not introduce very much new information into the topic, briefly outlining the positions on the issue of both Mayor Parker and Ben Hall. Where Morris strikes new ground is in talking with City Councilmember Stephen Costello, who chairs the main fiscal committee. Costello told the Chronicle, on the pension issues, “It’s not the issue of ’30 years from now’. The issue is how we get from here to 30 years from now. That’s the problem we can’t afford.”

Costello then went on to discuss that an ideal solution would be a tax increase or benefit cut. It appears Costello, the moderate Republican, has no aspirations for partisan office with a comment like that…uttering the dreaded “T word.” Costello does mention, however, the possibility of layoffs if neither of the ideal solutions are adhered thereto.

What is most telling, however, is Costello (or Parker) failing to set any sort of timeline on the issue. I would think, then, their intent is to kick the can down the road for two more years, when both of them are out of City Hall. Pensions, it would seem, are just a flashpoint issue in this campaign in an attempt to assuage the concerns of fiscally conservative voters interest groups & donors.

In re Pensions

An editorial by the Houston Chronicle published over the weekend touched upon this topic, and a Mike Morris article on the front page of the Chronicle‘s City & State section on Sunday expanded upon the topic. Municipal pensions.

The argument is somewhat straight-forward. Our liabilities on the Municipal, Police & Fire (all distinct) pension funds all drastically outweigh our funds to cover them. However, there are some straight-forward goals that are easily attainable to solve these issues. All too often, though, the term “pension reform” is a clever euphemism for giving the shaft to public employers. Yet another way to pull a massive scam over the heads of the working person in the name of fiscal responsibility.

Parker’s ideas, which I mostly agree with, are to end the generous cost-of-living adjustments for the workers, as well as give the option to for employees convert to a “defined contribution” plan, which is a fancy euphemism for privatization, since George W. Bush ruined the reputation of that word vis-a-vis retirees. The “defined benefit” plan, or the status quo (actual) pension, would continue for all those who want it, albeit in less generous amounts, under Parker’s plan.

Hall, meanwhile, wants to force all employees hired after 2008 off the road and into the privatized 401k plans. What all this means for Hall’s cozy relationship with the Firefighter’s is somewhat unclear. The Fire pension is the best funded because of special State control that mandates extremely generous contributions from the City of Houston. It is the small bites of Parker’s that led to the exceedingly acrimonious relationship in the first place.

When asked about Hall’s plans, Todd Clark, representative of the Fire fund, dodged the question, but took immediate aim at the lesser demands of the Mayor. Clark went on to disparage both the end of cost-of-living-adjustments (COLA) and the mere option of the 401k plans. From the Chronicle article, Clark’s quote:

“Working as a Houston firefighter is a long-term career. We strongly believe (defined contribution) plans do not provide an adequate retirement after serving three-plus decades protecting the citizens of Houston. The defined benefit that is in place is in the best interest of the Houston firefighters.”

Parker seemed somewhat confident that the COLA could pass through the City Council, but was more ambivalent on the question of the partial privatizations.

Finally, Chalres Kuffner at Off the Kuff has some brilliant commentary on this topic. We largely agree on this issue, believing that pension reform is often a thinly-veiled euphemism for disparaging working people. Oh, and that’s the position of the Texas Observer as well. Back to Kuffner for the close:

Thank God, Bill King finally has a Mayoral candidate he can support. I just wonder if this is what the firefighters thought they were getting when they endorsed Hall. But like Mayor Parker, this is where I get off. Because let’s be clear on something, pension plans generate vastly superior returns than 401K plans. High income workers in the private sector may do better with 401Ks than they would with pension plans, but lower income workers and public employees do better with defined benefit plans. Employers may do better under 401Ks, but that’s because they get to contribute less. Of course, that comes out of the hides of the employees. Not a bad deal for the Bill Kings of the world, who somehow never call upon themselves to make sacrifices for the greater good, but not so good for the affected employees.

Finally, the conflation of the police and firefighters’ pension funds just serves to muddle what the issues actually are. The city’s complaint about the firefighters’ pension fund is that they don’t have any say over how much they have to contribute to it each year. (Perhaps not coincidentally, the firefighters’ pension fund is also one of the best funded in the state.) The city would also like to negotiate over and try to wring some concessions on things like the deferred retirement option (DROP) and automatic cost of living adjustments (COLAs). The city has already gotten most if not all of the concession it sought from the police and municipal employees’ pensions, and if you listen to my interview with CM Costello, you’ll hear him say that the city has largely solved its long-term problems with these pension funds. There are issues in the short to medium term, resulting in no small part from the city’s underpayments to those funds in recent years, but once we’re past that the system is sustainable. Mayor Parker will tell you that if the city can negotiate changes to DROP and get some discretion on COLAs, it will have a handle on the firefighter’ pension fund. Whether you agree with that or you agree with the firefighters, the point is that replacing pensions with 401Ks is hardly necessary. Making bogus comparisons to Oakland or Detroit isn’t helpful.