December 2016

Greetings!
 
Welcome to the December issue of The Edwards Edition! I hope you had a Happy Thanksgiving and are looking forward to a joyful holiday season. As this year draws to a close, and we look ahead to 2017, my colleagues and I remain committed to ensuring that all of Houston is empowered. We are committed to finding long-term, innovative solutions and delivering services in a manner consistent with what all Houstonians deserve. Under Mayor Sylvester Turner's leadership, City Council recently approved an unprecedented plan to reform the City's pension systems to sustain our dedicated firefighters, municipal workers, and police officers in retirement, while being more fiscally prudent with our limited financial resources.
 
Just a few days later, I joined the Mayor and a delegation of local elected officials and business leaders on a trade mission to South Africa to enhance trade relations between South Africa and Houston. The trip proved productive with respect to increased trade and business opportunities, along with other policy possibilities I have already begun to explore since our return. I invite you to read ahead for details on these exciting developments and more!
 
Finally, on a lighter note, I want to congratulate my City Council team that defeated the Mayor's team (The Turner Squad) in a friendly game of basketball all in the name of our annual Combined Municipal Campaign to raise funds for charity.
 
Stay connected with me by contacting my office at atlarge4@houstontx.gov  or (832) 393-3012 and by following us on social media. Let me hear your thoughts and ideas on the issues important to you!
 
Sincerely,
 
Amanda K. Edwards
Houston City Council Member, At-Large Positon 4



ON THE ISSUES: First Major Step in Pension Reform
 
For years, headline after headline has reported on the pension issue - raising questions about how the City found itself facing billions of dollars in unfunded pension liability and underfunded pension plans. In truth, both the problem and the impending solution were the result of a perfect storm of circumstances about 15 years in the making. On October 26th, City Council voted to reform Houston's three troubled City employee pension programs - adopting Mayor Turner's bold plan designed to reduce debt and help secure Houston's long-term financial health, while providing firefighters, police officers, and municipal workers with reliable and sustainable pensions long after their service to the community has ended.
 
Background
 
About 15 years ago, the City sought, in good faith, to increase pension benefits. In doing so, the City relied on third-party actuarial data that later proved to be drastically inaccurate. The City's reliance upon this inaccurate third-party data helped create a structurally unsound pension system that has been a major headline of local news. As of 2016, the City was weighed down with approximately $5.6 billion[1] in unfunded pension liability. 2016 also marks the year in which Moody's and S&P, the City's credit rating agencies, downgraded Houston's credit ratings and spoke of the possibility of further downgrades if the City did not (a) reform its pension system; (b) remove the revenue cap; and (c) improve its economy. These downgrades hamper the City's ability to borrow money. Finally, the economic downturn in energy and the rising costs of the City's pension payments also forecast that the City would face an even bleaker deficit in fiscal year 2018 (the City faced a $160 million deficit in fiscal year 2017) if the pension systems were not reformed.
 
  The Plan for Pension Reform
 
In light of the unsustainable pension system and the looming financial challenges ahead, Mayor Turner had no choice but to seek to resolve these challenges by presenting a plan for long-term pension reform. By a vote of 16-1, City Council approved the Mayor's plan, which amounted to a fair and balanced package of unique reforms. The pension plan immediately will reduce the newly-estimated $7.8 billion[2] in unfunded debt by more than 30 percent, and set a hard 30-year deadline to eliminate the remaining unfunded liability. Specifically, the City will use pension obligation bonds to pay off pension debt over a closed 30-year amortization. Another novel aspect of the pension reform plan includes the corridor concept. This is a measure by which the City can retain some level of control on assumptions and costs being borne by the City over time. Should the costs or assumptions get out of line, the corridor requires the necessary parties to come back to the table for correction. Another notable component of the pension reform plan is the immediate cost reductions stemming from the three pension plans. Employees agreed to approximately $2.5 billion in immediate cost reductions, including cost of living adjustments, among others. These are sacrifices that will impact families, but were necessary to make Houston's financial structures sustainable and keep costs affordable to taxpayers. This plan also will enable the City to fully fund its share of pension contributions over time, which has been underfunded for more than a decade.
 
This plan is a result of the true leadership of Mayor Turner, who worked in concert with the Houston Firefighters' Relief and Retirement Fund, the Houston Municipal Employees Pension System, and the Houston Police Officers' Pension System. Each of these groups came to the table ready to find a fair compromise that balanced the needs of their members with the City's need for fiscal prudence. The historic nature of this partnership cannot be overstated. Never before have all three pension systems come together to work with City leaders in a way that resulted in long-term solutions to this complicated issue. The City applauds them for this shared sacrifice on top of their excellent service to Houston.

Next Steps Forward
 
Setting Houston on a path toward fiscally-sound management was no easy feat, and, even as the City celebrates this huge first step in that process, the work is not yet complete. Houston needs the Texas State Legislature to support this plan for pension reform. The City will present this plan to the Texas Legislature for approval in the spring of 2017 and must rely on the state elected officials to help the City cross the finish line. This novel approach to pension reform could serve as a model for other city pension systems, and City Hall is ready to institute this reform for the benefit of the municipal and public safety workers who keep Houston's communities functioning and safe.

[1] The City's three pension systems' unfunded liability is calculated as approximately $5.6 billion for official accounting purposes. This figure assumes the prior assumptions of 8% and 8.5% in investment returns.
[2]Under the pension reform plan, the City now assumes more realistic returns of 7% and recognizes all past market losses, which amount to new calculations that increase the unfunded pension liability to approximately $7.8 billion. However, for official accounting purposes, the unfunded liability is approximately $5.6 billion.
INTERNATIONAL SPOTLIGHT: South Africa Trade Delegation
 
While the City must address its imminent challenges, it must also simultaneously build connections and facilitate solutions to create a future Houstonians deserve. To that end, from October 28th through November 6th, Council Member Edwards joined Mayor Turner and a delegation of elected officials and local business leaders on a trade mission to South Africa. The purpose of this trade mission was to build stronger relationships with South African governmental and business leaders to increase business and trade opportunities, participate in the World Energy Cities Partnerships (WECP) conference, secure support for Houston's bid for the prestigious World Petroleum Congress, and initiate conversations to secure a direct flight between South Africa and Houston. While traveling to South Africa, the delegation also was able to meet with dignitaries from Dubai in the United Arab Emirates.  

The trade mission was a tremendous success in achieving the purposes above, and the delegation had a great time connecting with leaders ranging from the First Lady of South Africa, Madam Ngema Zuma, to the CEO and executives from Siemens of South Africa. While on the trade mission, Council Member Edwards had the opportunity to lead delegation meetings with the Ministers of Trade and Industry, as well as Energy. These discussions revealed many synergies and potential business opportunities between South Africa and Houston, and likely will lead to business prospects that will be mutually beneficial to the Houston economy, as well as the South African economy. In addition, Council Member Edwards had several separate meetings to discuss equitable expansion of technology and innovation opportunities, and she was able to tour Workshop 17 (a tech co-working collaborative in Cape Town). Based on those visits, she has already begun to explore possibilities for the equitable expansion of technology and innovation opportunities in Houston. Overall, Council Member Edwards was proud to represent the City of Houston across South Africa, and looks forward to the growth of the seeds planted on this trade mission. Mission accomplished!
 
 

Take the Plan Houston Resident Survey Today!

The deadline to complete the Plan Houston resident survey has been extended through Friday, December 16th!

If you haven't already done so, please take two minutes to visit www.PlanHouston.org and make your voice heard about the issues most important to you.

Remember, your feedback may lead to Plan Houston initiatives that may be included in next year's City budget, so take the survey today!
OPPORTUNITIES FOR COMMUNITY: Let's Give Thanks During the Holidays!
 
Over the Thanksgiving holiday, Council Member Edwards joined Mayor Turner and her colleagues to feed the formerly homeless Houstonians who now reside at New Hope Housing's Rittenhouse complex. Council Member Edwards also joined Mayor Turner, Congresswoman Sheila Jackson Lee, and Congressman Al Green at the George R. Brown Convention Center to feed those in need at the annual Thanksgiving Big Super Feast. While the recipients of these meals were grateful, Council Member Edwards was even more thankful to be able to give to those in need.
 
 
If you are interested in volunteering for the Christmas Eve Big Super Feast at George R. Brown Convention Center, please call City Wide Club of Clubs at (713) 752-2582. The event will be held at 10:00 am on December 24th.
 
Holiday volunteers are also welcome and needed at the Interfaith Ministries' Meals on Wheels for Greater Houston and DePelchin Children's Center. Meals on Wheels needs drivers to deliver meals to homebound senior citizens, and also requires donations of dog food for their aniMeals on Wheels program. December is a particularly difficult time for seniors, and aniMeals helps them feel less compelled to share their limited resources with their four-legged friends. Visit www.imgh.org to sign up for volunteer training and learn how to donate.
 
DePelchin Children's Center seeks volunteers for their annual Holiday Project to help sort and pack gifts for adopted and foster children and their families. Sign up for shifts at their Memorial Campus Donation Station (200 Sandman Street) using this link , or contact Julie Myers at jmyers1@depelchin.org with questions.
 
Help spread some cheer this holiday season!