FOR IMMEDIATE RELEASE Contact: Jerad Najvar
Hearing Wednesday as City of Houston Seeks to Avoid Depositions of Its Employees Regarding Pension Bond Lawsuit
HOUSTON, TEX.—On Wednesday, June 13, at 3:30 pm in the Harris County District Courthouse, the district court will hold a hearing to consider the City of Houston’s attempt to avoid producing key witnesses to answer questions regarding the billion dollar bond measure from November 2017 that has been challenged as materially misleading to the voters.
Concerned Houston taxpayer James Noteware filed a lawsuit in December challenging the City’s use of deceptive language on the November ballot with regard to Proposition A, which asked voters to approve a billion dollars in additional city debt for the Mayor’s pension plan. The lawsuit argues that the ballot was materially misleading because, while it correctly disclosed that the City would issue the pension bonds and levy taxes to pay for them, it conveniently omitted the fact that those taxes would not be subject to the default limits in the city charter, including the limit on the annual growth of property taxes. This effectively created a massive exception to the charter limits without telling voters. Although the bonds have been issued, Noteware’s lawsuit, if successful, will protect the property tax cap and nullify the City’s authority to tax outside of the cap or other charter limits.
Noteware has subpoenaed two witnesses from the City of Houston to discuss issues related to the lawsuit. One is Melissa Dubowski, a high level employee of the city finance department whom the City itself actually put forward as a witness in an earlier hearing in the case, when it wanted her to testify about why the pension deal had to close without delay before the end of 2017. Documents produced in discovery now reveal that the City actually had three more months to finish the deal under its contracts with the pensions, but the City shoveled all the money out the door and has now used that fact to argue that the case is moot. Now that Noteware wants to ask his own questions of this witness rather than relying solely on the self-serving affidavit the City drafted for her, the City suddenly claims her testimony is not relevant.
Documents also now reveal the disconcerting fact that Mayor Turner all along has planned to use city utility fees to pay a portion of the costs of the bonds. This may explain how Mayor Turner was able to campaign on the claim that “no new taxes” would be required to pay the bonds off, which accumulate to approximately $1.8 billion with accrued interest through 2047: if utility fees are not technically a “tax,” then perhaps the Mayor’s “no new taxes” claim was technically accurate while being materially deceptive. The failure to tell voters that they would be hit on their utility fees as well as their property taxes is another reason why the November ballot was materially deceptive. Noteware has requested the City to produce a witness who can explain what authority the City has—if any—to use utility and other such enterprise or special fund revenues to pay the bonds. The City’s official response to the Court claims unabashedly that they have such authority, and they did not have to tell the voters about such plans at the time of the vote.
The hearing details are as follows, and Noteware and counsel will be available for questions afterward:
Wednesday, June 13 at 3:30 p.m.
Ct. at Law No. 2 133rd District Courtroom ( Fifth Eleventh Floor)
Houston, TX 77002
The case is Noteware v. Turner, No. 2017-83251, presided over by visiting judge Mark Morefield of Liberty County.
Jerad Najvar specializes in litigation and appeals in election and constitutional matters, and is founder of Najvar Law Firm, PLLC in Houston. He secured a federal-court judgment in 2014 striking down Houston’s former campaign “blackout period,” which prohibited candidates from fundraising until the last nine months before an election.