Houston Bond Rating Downgraded

[Lowbrow]

March 4, 2005, 3:44PM

Houston bond rating downgraded

By JOE STINEBAKER

Copyright 2005 Houston Chronicle

LINK

A major bond-rating agency lowered Houston's bond rating today, noting the city's "large unfunded pension liabilities" and voter approval last year of a revenue cap.

Fitch Ratings downgraded the rating on the city's general obligation bonds to AA- from AA, which could make it more expensive for the city to borrow money in the future. Fitch continued to rate the city's rating outlook as "stable."

Governmental entities usually can expect to pay higher interest rates when their bond ratings decline. The ratings are important to local governments, which sell bonds to raise money for large projects or expensive debts. A lower rating makes a government's bonds less desirable and, as a result, the government must pay higher interest.

Fitch said in a news release today that the downgrade is partly because of increasing liabilities in the municipal employees pension fund, as well as in the police officers and firefighters pension funds. In addition, voters' approval of the Proposition 1 tax cap last year may "challenge the city's ability to adequately fund programs serving a growing population and service area," the agency said.

Proposition 1, proposed by Houston Mayor Bill White, was approved with 64 percent of the vote in November. It limits annual increases in the city's property tax revenue and water and sewer rates to the combined total of Houston's population growth and inflation, with property tax revenue increases capped at 4.5 percent. It also increases homestead exemptions for seniors and the disabled.

White supported the proposal largely to head off the opposing Proposition 2, which would have capped annual increases in almost all city revenue to the combined rates of population growth and inflation.

Proposition 2 passed with fewer votes, and the city contends that means only Proposition 1 will take effect. Proposition 2 backers are challenging that assertion in court.

joe.stinebaker@chron.com

[musicman]

Fitch Ratings downgraded the rating on the city's general obligation bonds to AA- from AA, which could make it more expensive for the city to borrow money in the future. Fitch continued to rate the city's rating outlook as "stable."

Governmental entities usually can expect to pay higher interest rates when their bond ratings decline. The ratings are important to local governments, which sell bonds to raise money for large projects or expensive debts. A lower rating makes a government's bonds less desirable and, as a result, the government must pay higher interest.

Fitch said in a news release today that the downgrade is partly because of increasing liabilities in the municipal employees pension fund, as well as in the police officers and firefighters pension funds. In addition, voters' approval of the Proposition 1 tax cap last year may "challenge the city's ability to adequately fund programs serving a growing population and service area," the agency said.

White supported the proposal largely to head off the opposing Proposition 2, which would have capped annual increases in almost all city revenue to the combined rates of population growth and inflation.

<{POST_SNAPBACK}>

We put a businessman in charge and look what we have. He quite frankly hasn't been too successful in implementing his "fixes" Traffic is still horrible, bond ratings going down..... My most recent favorite was that he was installing basketball courts in the park near Toyota center to attract children. The only people that are there now are homeless people and he church food carts that feed them meals. How many children LIVE in the vicinity of Toyota Center???? RIDICULOUS

[Trophy Property]

We put a businessman in charge and look what we have.  He quite frankly hasn't been too successful in implementing his "fixes"  Traffic is still horrible, bond ratings going down.....  My most recent favorite was that he was installing basketball courts in the park near Toyota center to attract children.  The only people that are there now are homeless people and he church food carts that feed them meals.  How many children LIVE in the vicinity of Toyota Center????  RIDICULOUS

<{POST_SNAPBACK}>

How do you suppose he is suppose to fix traffic within the first year of being mayor. I know he promised to fix all the lights and while his administration has made an effort the lights seem to get knocked out of whack pretty quickly. I was told that the equipment is outdated and is not programmed very well.

I am not sure why having a business man running the city is any worse than say a lawyer or a career politician. I voted for the man and think he is doing a way better job than Brown ever did.

[Lowbrow]

We put a businessman in charge and look what we have.  He quite frankly hasn't been too successful in implementing his "fixes"  Traffic is still horrible, bond ratings going down.....  My most recent favorite was that he was installing basketball courts in the park near Toyota center to attract children.  The only people that are there now are homeless people and he church food carts that feed them meals.  How many children LIVE in the vicinity of Toyota Center????  RIDICULOUS

<{POST_SNAPBACK}>

Yeah that plan for innercity courts has been in the pipe for awhile. They were supposed to work out a deal to move the homeless elsewhere.. I'm assuming that didn't happen?

[musicman]

How do you suppose he is suppose to fix traffic within the first year of being mayor.    I know he promised to fix all the lights and while his administration has made an effort the lights seem to get knocked out of whack pretty quickly.  I was told that the equipment is outdated and is not programmed very well. 

I am not sure why having a business man running the city is any worse than say a lawyer or a career politician.    I voted for the man and think he is doing a way better job than Brown ever did.

<{POST_SNAPBACK}>

ANYONE is better than Brown.

I remember in the 90's and even 80's, the traffic lights downtown were synch'd and were like that...until Lee Brown's administration. All they did was set the timing so that the lights changed at the same time. Much of that OLD hardware was doing the job. Currently the lights are on 20 sec cycles (east/west) and 30sec(north/south) or are supposed to be. There was an article in a recent Chronicle where citizens were complaining that the sync'd signals are no longer in synch. City Council asked all of us to call 311.

I felt really bad for mr. white when he started pushing the safe clear program. People were asking him repeatedly if the drivers had background checks to which he responded yes. Maybe he was misinformed. However to say yes repeatedly and then the fiasco that resulted (drivers on probation, assault convictions, etc) made him look Brown-esque.

I personally just wish we'd stick with the basics instead of creating new programs. Let's fix the potholes!

[musicman]

Yeah that plan for innercity courts has been in the pipe for awhile. They were supposed to work out a deal to move the homeless elsewhere.. I'm assuming that didn't happen?

<{POST_SNAPBACK}>

supposedly it is a done deal cause i know a resident of that little apartment across the street.

[kjb434]

Houston has one of the most modern traffic signal systems in the US if not the world. It may be only surpassed by Manhattan in New York City, but ours was based on the same system. It is true that traffic signals can become unsync over time. But it is easy to fix. I can tell the the changes in the traffic signals under Mayor Whites Admin. is much better. The concept he proposed for the signal was a way to improve traffic without spending much money.

I have programed several traffic signals back in Louisiana on my internship at the LaDOT. It's not hard at all. Louisiana has been installing many of the same systems Houston has. It's fastly becoming a stanard.

The city needs to cut back silly social programs by putting in more oversight. The current water rates for the city provide it revenue at 4 times the amount needed to fund their operations and maintenance. This includes the rehabilitating old water plants. The extra money that is being taken in is just being spent elsewhere. This city doesn't have a revenue problem, it has a spending problem.

It may take someone who has the balls to cut wasteful programs no matter what a silly poll says and the scare the news media may make of it.

Another area Houston is starting to fix is commercial property taxes. The city hasn't been enforcing this for years and commercial property owners haven't been paying. The is a potential for millions of dollars in revenue. As soon as this gets fully address, we can see some of our revenue problems lessen

Houston bond may have been lowered, but is not on the same low levels as several other large cities like Cleveland, Detroit and Philadephia.

[musicman]

Houston has one of the most modern traffic signal systems in the US if not the world.  It may be only surpassed by Manhattan in New York City, but ours was based on the same system.  It is true that traffic signals can become unsync over time.  But it is easy to fix.  I can tell the the changes in the traffic signals under Mayor Whites Admin. is much better.  The concept he proposed for the signal was a way to improve traffic without spending much money.

<{POST_SNAPBACK}>

I'm not a believer yet. I met with the head of traffic and engineer for METRO after complaints to city council. We met at Main and richmond/wheeler where the train crosses by Sears. the light at that intersection was changing so quickly that vehicles were not able to cross the intersection causing traffic jams.

This was in june of last year. on the phone he said that the problem was corrected the previous march. I stated that it wasn't corrected and challenged him to meet me. When he saw what i was talking about it was quite funny. To traverse one block it took 15 mins cause of the poor light cycling.

He told me that the design of the intersection gave the train priority. however during rush hr there are so many trains that the traffic never has a chance to move. i told him that the east/west vehicular traffic should have priority cause most of the cross streets in midtown are now closed and are forced to use this intersection causing a net increase in traffic through this intersection.

he said the problem was subsequently fixed, but quite frankly am NEVER there in the afternoons cause i work in the burbs.

Another bad stretch of light timing is on san jacinto between binz and 59. i'm on this stretch fairly often and there is no evidence of any light synchronization. I need to get some pics of this and send to city council.

The engineering work behind the light rail system was a disaster for traffic flow in houston. The east/west access for the area north of the museum and south of 59 was destroyed. most vehicles are forced to use southmore.

putting the pedestrian area in the downtown pedestrian square (don't remember proper name) was a nice idea. but last time i was down there, the area smelled like urine. This is not conducive to pedestrian traffic. i personally would ahve just let main continue through those 2-3 blocks which would improve traffic flow instead of having it zig-zag to san jacinto.

[LTAWACS]

We put a businessman in charge and look what we have.  He quite frankly hasn't been too successful in implementing his "fixes"  Traffic is still horrible, bond ratings going down.....  My most recent favorite was that he was installing basketball courts in the park near Toyota center to attract children.  The only people that are there now are homeless people and he church food carts that feed them meals.  How many children LIVE in the vicinity of Toyota Center????  RIDICULOUS

<{POST_SNAPBACK}>

I've been telling you guys we have a bunch of bafoons in city hall right now... ALL of them are incapable, incompetent, ignorant, moronic, corrupt, foolish, and generally idiots. Come on. Just look at them. ALL of them. Where did they go to school? Why do things take so LONG? Why can't they F****NG fix the money problems? What the hell are those clowns doing in there?

[musicman]

I've been telling you guys we have a bunch of bafoons in city hall right now... ALL of them are incapable, incompetent, ignorant, moronic, corrupt, foolish, and generally idiots. Come on. Just look at them. ALL of them. Where did they go to school? Why do things take so LONG? Why can't they F****NG fix the money problems? What the hell are those clowns doing in there?

<{POST_SNAPBACK}>

My friend who supports the mayor keeps telling me, don't worry, everything will be all White.

[LTAWACS]

My friend who supports the mayor keeps telling me, don't worry, everything will be all White.

<{POST_SNAPBACK}>

Scary...