Face-Off: City and Pension Fund At Odds Again

The fight over how much money the City of Houston will contribute to the Municipal Employees Pension System has gotten nasty again, with serious tension between Mayor Bill White's administration and the pension's executive director. But as Houston Public Radio's Jack Williams reports, both sides say they're still confident an agreement can be reached.

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This is really nothing new, a battle between the city and the pension board. It's happened before, most recently in 2004 when a similar fight erupted between city hall and the pension's executive director David Long. At issue is how much the city should contribute to the municipal pension fund. Mayor White has proposed $75 million this next fiscal year. Long says the figure should be more like $109 million. White, who doesn't hide his disdain for Long, says he hasn't been accountable to employees or the city.

"He has done what he could in order to exclude representatives of the public that are put on there by city council and by the mayor from any discussions concerning his compensation or for that matter how to bring the assets and liabilities together."

The pension's so-called unfunded liability is the biggest issue, what employees are promised when they retire versus what the pension fund can pay. That unfunded liability is around $1 billion, but has shrunk because the pension fund has done well and increased contributions from the city under a 2004 agreement that is now expiring. White says there is no pension crisis.

"There is plenty of time between now and the adoption of the budget to reach an agreement with the pension board. There is plenty of time. The thing that is time consuming is to talk about some of the concepts that are involved and to run some of the numbers and that work has been going on for quite some time."

As for Long, he says he doesn't quite understand why he's under personal attack and says the city should be more concerned about solving the pension issue than taking shots at him.

"We have an agreement from 2004. We ought to be talking about that agreement and the effects that agreement has on where we're at today and how we work together to try to come up with something that can take a lot of the stress out of city employees lives."

Both sides are still far apart. Long says the city is obligated under state law to pay an amount equal to about 25-percent of employees salaries into the pension. The city has countered with a proposed 16-percent contribution.

"We understand that the money that we receive to pay for the pensions of municipal employees comes from the city. We understand that they have budget constraints. It just boils down to a matter of priorities within the city."

The new budget takes effect July 1st and both sides say they're optimistic they'll come to an agreement before that.

Bio photo of Jack Williams

Jack Williams

Director of News Programming

News Director Jack Williams has been with Houston Public Radio since August of 2000. He's also a reporter and anchor for Houston Public Radio's local All Things Considered segments...