City Controller Annise Parker has announced the successful refinancing of $400 million of city pension obligations. Today's transaction reduces annual interest payments by $7.5 million a year for the next several years and allows the city to pay off these pension obligations two years earlier. The deal includes the pay off of a $300 million promissory note to the Houston Municipal Employees Pension System for which the city's Convention Center Hotel had been used as collateral.

“This is similar to refinancing your mortgage,” said Controller Parker. “We were paying 8.5 percent interest. Now we'll be paying 6.29 percent, for an overall savings of more than 2 percent.”

Controller Parker believes this is an affordable and pragmatic direction for removing the convention center hotel from the pension structure. “Not only are we saving taxpayers money, we are locking in a schedule of payments that puts the pension system on better financial footing and ensures the city meets its responsibility to its current and future retirees,” said Parker.

Over the last five years Mayor White has taken numerous steps to improve the financial structure of the city's pension obligations, greatly reducing an unfunded liability Inherited from the previous administration. He has also worked to build the city's cash reserves through strict fiscal management and disciplined budgets. As a result, Houston continues to be in much better financial condition than other cities as we weather this recession.

###