City wins bond appeal

The Texas 1st Court of Appeals has struck down an appeal from a Houston businessman who contested the city’s 2017 pension bond referendum, appearing to end the legal challenge that began almost a year and a half ago.

Mayor Sylvester Turner’s office had denied former housing director James Noteware’s claim that the mayor misled voters into approving the $1 billion bond sale with a “materially misleading ballot description.”

Noteware claimed that the election authorized the city to pay off the bonds by levying a tax that exceeds its voter-imposed revenue cap.

A state district judge last year dismissed Noteware’s claim without ruling on his motion for summary judgment in the case.

In the ruling, the judge agreed with the city’s argument that the court lacked jurisdiction because Texas Attorney General Ken Paxton had issued an opinion approving and validating the bonds, while Noteware’s claim “depends on contingent or hypothetical facts.”

The city also certified to Paxton’s office that the bonds would be paid in compliance with the city’s revenue cap.

The state appellate court on Tuesday affirmed the district court’s judgment dismissing Noteware’s suit.

The city used the bond sale to issue funds to its police and municipal employee funds, cementing Turner’s pension reform package. Noteware sued the city before it completed the bond sale, yet a state district judge allowed the transaction to go through amid the lawsuit.

Turner has highlighted pension reform early in his re-election campaign and appears likely to make it a centerpiece of his bid for a second term. The mayor said at his State of the City address Monday that the city’s unfunded pension liability has been cut in half, to about $4 billion, and the city is set to fully fund its annual pension costs in the fiscal year ending June 30.