Municipal CFO Series: Ronald Green, Houston

Ronald Green is the Houston City Chief Financial Officer and Controller. He received his BS and MBA degrees from the University of Houston. He also holds a law degree from Texas Southern University’s Thurgood Marshall School of Law. In addition to acting as Houston’s “Financial Watchdog,” he has earned recognition for his work on quality of life issues.

Houston voters just passed $2.7 billion in bonds to build Houston’s infrastructure. Can you talk about the positive and negative impacts that these bonds will have on the residents of Houston?

The total of $2.7 billion in bonds was for three different entities. It was approximately $1.9 billion for the school system. About $425 million for the City of Houston, and then there was another $450 million for the Houston Community College system.

The City’s was the only one that won’t require a tax increase, which is a good thing. But the school district and the community college district requires a tax increase. I don’t think that is necessarily a bad thing.

I think the public recognizes that they have to pay for infrastructure. At the end of the day, while it does entail a tax increase, I think people concentrated on what they would receive for that tax increase. We have to have better schools. Better schools make for better neighborhoods. We have to have an educated workforce. Training people at our community colleges will definitely help with that. I look at all of this optimistically.

Did the voters made the right choice?

I thought they did. As a citizen, I know that now is the time to do this. If we don’t, the cost of borrowing goes up. In addition, the cost of the construction on these projects will go up.

As a CFO, I believe we have to pay for what we want in order to build a better city. Infrastructure is a big issue for us. How do you manage crumbling infrastructure? We are a city that is probably in the 75th year of its infrastructure’s 50-year lifespan. So, we have lots of things that need to be replaced. We have got roads and bridges that need to be replaced as well as drainage issues.

And again, with these bonds that will be issued, the rates are about as low as they are going to go. Now is the time to build infrastructure.

How can cities finance infrastructure if they don’t have the influx of money that Houston will now have with the bonds?

I think each city has to assess its needs as well as the appetite of its voter. You have some cities that don’t have the needs that we have. Their population growth may be stagnant. According to the recent census, Houston’s population is expected to double over the next ten years. So, we have to build new roads and new bridges. We have to build new schools; we have to have a viable workforce that helps contribute to our economy.

You have a lot of cities who are afraid to go out and borrow money. Other cities should not be afraid to do this, although sometimes it gets a bad name. You need to know what your debt service model can handle. But, at the end of the day, know that you are building for the future because the longer you wait, the more expensive it is going to get.

Which ballot measure do you think will have the largest impact on the city of Houston, and which measure will give your constituents the largest return on their investment?

I’m a huge education proponent, so I really believe that the plan to build new schools in older neighborhoods will be beneficial. This is going to help build our communities. As younger families move back into the inner city and the urban core, they want to have public education options. So I think any investment related to education will benefit our city. Everything else flows from that.

Ultimately, although these bond initiatives called for tax increases, it shows optimism from the people of Houston. They think that the future is getting better and they want to build for it. I think that’s a great sign.

Feature photo: cc/Almond Butterscotch