Houston Mayor Sylvester Turner announced on his website Thursday that his office has developed “preliminary points of understanding” with the city's three pension funds regarding his proposal to reduce benefits and issue pension obligation bonds to reduce total liabilities by $3.5 billion.
Mr. Turner had announced Sept. 14 the adoption of a 30-year closed amortization schedule to pay off the $7.7 billion in unfunded liabilities across the pension funds — the $3.8 billion Houston Firefighters' Relief and Retirement Fund, $4.6 billion Houston Police Officers' Pension System and $2.5 billion Houston Municipal Employees Pension System.
In a presentation on the website, the mayor also announced benefit reductions in the three pension funds would reduce total liabilities by $2.5 billion, and the city would also issue $1 billion in pension obligation bonds, $750 million of which would be contributed to the police officers' pension system and $250 million of which would be issued to the municipal employees pension system.
“Through their pension governing boards, our city employees have put $2.5 billion of concessions on the table. These hard-working public servants are giving up benefits to which they are entitled in order to create a more stable future for our city. City leaders are promising to no longer fudge on what we owe to city employees every year,” Mr. Turner said in the announcement.
“The business community and legislative delegation are helping to get the plan enacted into law. And, as I have said many times before, I will later ask taxpayers to step up and share in these sacrifices by agreeing to repeal the revenue cap that is crippling the city's ability to meet its growing needs,” he said.
A resolution of support will be presented to the Houston City Council on Oct. 26, and state legislation will be filed “as soon as possible,” according to the presentation, with the earliest opportunity occurring in mid-November.
Janice Evans, Mr. Turner's spokeswoman, could not immediately provide further information.