Update on Officer Hoskins-Brown Status

We have an update from one of our readers!

"Inquiring Mind May 31, 2016 at 9:02 AM

The status hearing set a trial date of September 11, 2017. Meanwhile the city's motion to dismiss has been partially granted, but mostly dismissed. The claim of defamation has been dismissed due to the statute of limitations, however both the City and Chief had their claims of qualified immunity denied."

Recognition of Electric Grid Cyberattack Possibilities and Effects

The The Hill.com has an excellent article describing the effects of cyberattacks on the country's electric grid. The utility industry gives lip service to the threat and say they are prepared. They have spare transformers and mutual aid pacts among the different utilities. They refuse to acknowledge that with a wide-spread electric outage there will be no fuel to transport spare transformers and unaffected utilities will not send teams of people and spare parts away from their area if they believe they will be attacked next.

There are also tens of thousands of Supervisory Control and Data Acquisition (SCADA) systems embedded in the electric grid that are susceptible to cyberattack and it is extremely doubtful that the utilities have sufficient spares.

The federal government as a whole is also woefully unprepared! As pointed out in an earlier post, the military is taking steps to protect their electronic systems, such as moving command and control back into Cheyenne Mountain, and to build and protect off-grid electric generating systems.

It is time for Texas and it's utilities to harden the electric grid against all attacks, from cyber to EMP and physical attacks.

Sidebar - Another Threat to Citizens

It came to my personal attention over the past several weeks that the U.S. Government has mandated that prime money market funds have to be invested in government bonds, at least that is the interpretation of the legal staff at my mutual fund company!

In 2014, the Securities and Exchange Commission passed a rule requiring prime money market funds to move from a stable $1 per share net asset value to a floating net asset value. It also allowed fund boards to lower redemption "gates" and fees in times of market stress. That means money market fund managers will have the ability to suspend redemptions to allow for orderly liquidation of fund assets. In other words, who knows when you can get your money from a money market fund!

Of course these new rules are just intended to increase fund liquidity and to protect investors. HA!

The real reason is likely that money market funds are one of the main obstacles to the Federal Reserve imposing Negative Interest Rates(NIRP). Rather than invest in securities or other assets that would decline in value in a NIRP environment, people would leave their funds in prime money market accounts.

Schwab is also forcing cash out of money market funds and into Treasuries. (Schwab)

This is all part of the war on cash, a concentrated effort by the U.S. Government, the Federal Reserve and the financial industry to eliminate the use of cash in American society. Of course we are told we don't need cash and only criminals and drug dealers use cash. HA HA! Therefore, they tell us it is in our best interest to get rid of cash in the U.S. economy. Here is another commentators description of how cash is being demonized. (Mark St Cyr)

Grant Williams, who spoke at the Mauldin Strategic Investment Conference this past week warns why physical cash is being eliminated. (Mauldin Conference)

Citizens need to be prepared to resist the elimination of cash from our society and it makes it extremely easy for the government to track and control your life. When the government needs funds to pay on the national debt, they can just take 10% or 20% of the funds from your electronic bank account and there will be no recourse.

Be alert and on guard!

Georgetown and Texas Need To Be Aware of "The Invasion"

Georgetown and all of Texas is being invaded by non-Americans intent on destroying our way of life. They come illegally across our southern border, and our Federal Government is bringing them in through the unauthorized refugee process. There are many so called church sponsored charities that are paid millions of dollars to settle the so called refugees among us.

There are 9 main major refugee resettlement organizations (Volags from “Voluntary Agency”) with approximately 450 affiliated organizations throughout the country; many are run by former refugees. Below are the 9 Volags that operate today:

US Conference of Catholic Bishops (USCCB)
Lutheran Immigrant Aid Society (LIRS)
International Rescue Committee (IRC)
World Relief Corporation
Immigrant and Refugee Services of America (IRSA)
Hebrew Immigrant Aid Society (HIAS)
Church World Service (CWS)
Domestic and Foreign Missionary Service of the Episcopal Church of the USA
Ethiopian Community Development Center (ECDC)

Europe is being overrun with immigrants that are sucking the lifeblood out of their economies, destroying their culture and institutions, perpetrating crimes on the citizens and their government is doing nothing to protect them.

The German society and culture is being destroyed before our very eyes. Here is a translated article from a German citizen describing what has happened to her and her country. (50-year-old-german-woman-rages-i-have-lost-all-my-trust-state) 

"Never, absolutely never did I think that I would lose all my trust in the State. It’s unbearable that I am afraid of the future. Preferably I’d just like to leave. But I feel too old to leave Europe.

What country would even take me anymore? I am not a shameless African that just seats himself in a refugee boat. I would properly apply to the respective immigration authority. But my chances are close to zero. I am – like most Europeans – damned to impotence as I see this invasion happen.

The Euro is a complete nightmare. The illegal immigration is a complete nightmare. But the single largest outrage is the political correctness which disables us from criticizing these immense breaches of law."

Here is a description of what is happening in Amarillo, TX.(Texas & Other Cities)

Texas should withdraw from the refugee program just like Alabama, Alaska, Colorado and Kansas.

10 million self-driving cars will be on the road by 2020

Here are some of the key takeaways from the report:(Business Insider)

• Self-driving cars are not some futuristic auto technology; in fact there are already cars with self-driving features on the road.  We define the self-driving car as any car with features that allow it to accelerate, brake, and steer a car's course with limited or no driver interaction.
• We divide the self-driving car into two different types: semi-autonomous and fully autonomous. A fully autonomous vehicle can drive from point A to point B and encounter the entire range of on-road scenarios without needing any interaction from the driver. These will debut  in 2019.
• By the end of the forecast period, we expect there will be nearly 10 million cars with one of our defined self-driving car features. 
• Fully autonomous cars are further divided into user-operated and driverless vehicles. Because of regulatory and insurance questions, user-operated fully autonomous cars will come to market within the next five years, while driverless cars will remain a long ways off.
• The biggest benefits of self-driving cars are that they will help to make roads safer and people's lives easier. In the UK, KPMG estimates that self-driving cars will lead to 2,500 fewer deaths between 2014 and 2030.
• But the barriers to self-driving cars remain significant. Costs need to come down and regulations need to be clarified around certain self-driving car features before the vehicles fully take off among mainstream consumers. 

City Considers Public Transportation Options

In November 2014, the City of Georgetown and Capital Metro entered into an agreement to complete a Transit Development Plan (TDP), as required by Capital Metro’s Service Expansion Policy.

The Transit Development Plan (TDP) provides a framework for the development of a fixed route bus system that serves transit needs within the city limits and connects to existing and future regional transit options.

The City Council is working toward establishing a permanent city bus route system in conjunction with Capital Metro to provide public transportation on a reliable schedule. Here are the proposed routes:

Council should remain flexible with respect to public transportation! Be able to change rapidly as circumstances change without large sunk costs. There are very large and rapid changes coming to how we get around in this country.

Here is one prognosticator's view of the near future.(Clean Disruption) I do not necessarily agree with everything he predicts, but, it is indicative of the potential for rapid change.

The outcome of the technology driven Clean Disruption is that by 2030:
• All new vehicles will be electric.
• All new vehicles will be autonomous (self-driving).
• Oil will be obsolete
• Coal, natural gas and nuclear will be obsolete
• 80+ per cent of parking spaces will be obsolete.
• Individual car ownership will be obsolete.
• All new energy will be provided by solar (and wind)

Our neighbors to the South are experiencing a backlash as they have banned the operation of ride sharing without onerous bureaucratic regulations. (Black Market Ride Sharing in Austin)

And finally, the military is getting into autonomous vehicles on public roads! (Army Tests Autonomous Vehicles on Public Roads)

The council needs to be very cautious about spending money on depreciable assets or entering into long-term expensive contracts that lock the city into old inefficient transportation solutions. 

Texas Municipal Retirement System Performance Update

The City of Georgetown enrolls their employees in the Texas Municipal Retirement System (TMRS) to manage the investments and disburse the retiree's benefits after retirement.

The City and the employees both contribute funds every pay period to transfer to TMRS for investment. The amount disbursed depends on complicated formulas for each retiree and on the contributions and the earnings of the investments.  If there is a shortfall in required funding to meet the pension obligations, the City is required to make up the shortage. Thus, it is important that the investments earn the maximum amount while maintaining an acceptable level of risk.

TMRS has assumed that the investments earn 7% annually.  If the investments earn less, the City has to increase their contribution. The investments actually lost money in 2015 as shown in the table.

The net assets of the pension trust declined by about $19 Million dollars in 2015.

TMRS has reduced their assumed rate of return to 6.75% for 2016, but, that is likely still too optimistic and will probably be reduced in the future to a more realistic rate.

The pension trust fund is still well funded with respect to the obligations, but, the trends seem to be going in the wrong direction.

Georgetown's Population Growth and the Budget

The newest population estimates for Georgetown from the Census Bureau show that as of July 2015, Georgetown's population reached 63,716 persons, a 7.8% increase over the prior year. The rate of population increase should be established over a multi-year period to get a more realistic number.  The following chart is for a 10 year period.

This of course will be used by some to advocate for a significantly higher city budget. But, the Texas Public Policy Foundation has successfully argued with the Texas legislature that the state budget should not grow faster than population growth plus inflation. (TPPF)  That same metric logically applies to all government budgets in Texas, including the City of Georgetown.

Here is the chart for inflation growth:

Thus we see that the City Council should hold budget growth to population growth, 4.9% plus inflation, 1.8%, for a total for 6.7%.

It will be a challenge for the council to stay below, or at this metric, but, it is incumbent on the citizens of Georgetown to let their council representatives know this is one measure by which they will be graded by the voters.

More MUD Stuff!

The first item on the legislative agenda at tonight's city council meeting is the formation of another in-city Municipal Utility District (MUD). (Agenda)

SUBJECT: Consideration and possible action to approve a Resolution of the City of Georgetown, Texas consenting to Williamson County Municipal Utility District No. 34(Shadow Canyon Development) consisting of 278.21 Acres (+/-) in the Isaac Donagan and Joseph Thompson Surveys, located at 2951 HWY 29 -- Sofia Nelson, CNU-A, Planning Director

ITEM SUMMARY: Background: 278 Georgetown, Inc. is the owner of approximately 278.21 acres of property located adjacent to the Wolf Ranch Development and situated entirely within the City of Georgetown. The property is proposed to be developed as approximately 591 single family homes with an average home and lot price of $385,000. In conjunction with the MUD request this application has a corresponding PUD Zoning Request that outlines the development standards this development will be subject to should the MUD be approved. Financial Summary The developer is proposing the following financial In-City MUD terms: Estimated Bonded Indebtedness: $19,925,000 MUD Tax Rate: $0.6660 per $100.00 (Based on an average home and lot price of $385,000 the average home owner in this subdivision will pay approximately $2,541.00 annually in MUD taxes) Combined Tax Rate: Williamson County $ 0.442 GISD $ 1.398 City of Georgetown $ 0.434 Wm Cnty FM/RD $ 0.040 MUD $ 0.660 Combined Total $ 2.974 At a tax rate of $2.974 per $100 valuation, the average home costing $385,000 in the proposed development will pay over $11,000 per year in property taxes, almost $1,000 per month for the privilege of "owning" the property! Over the life of the MUD bonds, assuming no additional bonds are issued, the home owner will pay an additional $63,525 in taxes. Draw your own conclusions about whether or not the creation of MUDs by developers and the city is appropriate! Again, it seems like future generations are being taxed to satisfy today's consumer.

What is Up With In-City Municipal Utility Districts (MUDs)?

Also on the workshop agenda today (Agenda) is the creation of another in-city MUD. The location is the land between I-35 and the Georgetown airport.

The developer's reason for requesting the formation of a MUD follows:

"Due to today’s booming economic conditions, the costs of developing a mixed use community measuring up to the standards of potential home buyers and the City outweigh the financial benefits. Therefore, Trio has recently entered into discussions with City Staff regarding the creation of an “In-City” municipal utility district to be named Williamson County Municipal Utility District No. 35 to encompass the Land and designed to reimburse a portion of the costs of applicable utility facilities, roads and park/recreational facilities allowed by the District."

This sound like it is uneconomical to develop the land privately, unless part of the cost can be pushed off on the future buyers of the individual properties in the development through the issuance of 25 year bonds. If that is the case, perhaps this is not the best plan for this property. This seems to be another example of "mortgage the future" to satisfy today's "wants".

As part of the submission to the city for the workshop, the developer has included a extensive draft traffic impact study that should be of interest to all those who live around the airport, especially Berry Creek. It can be viewed at the above link.

Keep in mind that MUDs are separate taxing authorities and can issue bonds and fees with city approval to build the infrastructure.

Proposed Financial Terms
 Maximum Amount of Bonds to be Issued – $45,175,000
 Maximum Maturity of Bonds – 25 years from date of issuance
 Facilities Bonds may be issued to finance: Water, Wastewater, Storm  Drainage, Roads, Recreational Facilities, and Refunding Bonds
 District Only Tax Rate (Projected) - $0.516
 City Tax Rate - $0.434
 Total maximum tax rate, City and District - $0.95

These rates will be in addition to Williamson County and school taxes for the homes and businesses within the MUD.

Workforce Housing Planning at Council Workshop

The City Council is holding a workshop to provide direction to city staff tomorrow, May 24. The objectives identified are as follows:

Develop a program through which workforce housing developers can receive incentives to provide new units.

Determine suitable multifamily zoning locations with sufficient services and land use compatibility for an appropriate mix of housing types within the city.

The staff is proposing the following three work elements:

Revise Housing Tax Credit resolution process – Establish deadline for the Competitive applications – Require public/neighborhood outreach – Application criteria: 

Update Housing Element – New demographic information – Calculate updated housing deficit – Update Workforce Multifamily Locations Study – Public input

Feasibility of Housing Tools – Provide analysis on strategies already in use nationally and in Texas. – Timeline: • Spring 2017 start, study complete Fall 2017 13
 • Examples:
 • Housing Trust Fund
 • Community Land Trust
 • Local bond issue
 • Requirements for workforce housing with special development approvals (i.e. MUDs, PIDs, PUDs, TIRZ).

Citizens of Georgetown need to be involved by participating in all opportunities for public input during the planning process.  It is too late to change the specific location and/or other characteristics of a project at the time construction is slated to begin. The policy and planning needs to be impacted in the early stages before people and organizations have made significant investments of time and resources.

Among the products produced by the city staff are maps showing where they recommended workforce housing be constructed. Landowners, citizens and business owners need to be cognizant of these maps and recommendations before the city council approves them in order to effect any changes.

Georgetown ISD Non-Committal on Obama Shower-Locker Room Guidelines

Georgetown ISD says they are reviewing the federal guidelines that would allow students to use the showers, locker rooms and bathrooms of the gender they feel themselves to be. Wilcosun

The district indicates they have received no requests from transgender students to use the facilities of their choice.

It is disheartening that Georgetown ISD has NOT categorically rejected the Obama Education Department guidelines, even though the Governor and Lt. Governor have both vowed to fight the imposition of the guidelines on Texas schools and students. Gov Abbott

It's time for the Georgetown school administration to fully embrace and back the Texas state leadership on this issue!

The Big News for Today

The big news for today is that Georgetown was the fastest growing city in the United States through July 1, 2015 for cities with populations greater than 50,000. Georgetown Growth

Georgetown grew 7.8% to 63,721 persons. We will surely hear this repeatedly over the budget season as the city justifies increasing the city budget through tax revenue and bond borrowings.

Has Georgetown Discovered a New Law of Economics?

The Georgetown Reporter, a publication inserted along with customers utility bills describes the "tiered water rates" that are in effect in Georgetown.

They describe that water usage of 0-10,000 gallons costs $1.75 per thousand gallons, and usage of 11,000-20,000 gallons costs $2.40 per thousand gallons and so on for higher usage levels.

Then they say, "These variable rates are reflective of the increased costs associated with higher demand".

It is commonly accepted in economics and accounting that the cost per unit of anything provided decreases or at worst remains constant as the number of units delivered increases. Since the fixed costs of providing water remain fixed up to the capacity of the equipment, the cost per gallon will decrease, while the variable cost per gallon may remain constant or decline.

As demand exceeds the capacity of existing plant and equipment, new plant and equipment has to be procured. Those costs are fixed, not variable.

The real reason behind the tiered water pricing is to encourage conservation and discourage the wasteful use of water by making those who waste water pay additional for that privilege. It also penalizes those who have legitimate requirements for using more water.

The setting of water rates is a complex political process that attempts to allocate costs "fairly", but, if the variable costs associated with demand includes fixed costs for new plant and equipment, then the city needs to acknowledge that fact by changing the terminology they use because the use of variable rates implies variable costs associated with water delivery.

Collins Amendment to Derail Lee's Amendment to Defund AFFH!

RINO Republicans are at it again!! Republican Senator Susan Collins of Maine offers an amendment to the Affirmative Fair Housing funding bill that does nothing but pull the wool over constituents eyes. It still allows HUD to use financial coercion to force their wishes onto local zoning boards. Read the entire story here: Link

Contact Senators Cornyn and Cruz and tell them to support Senator Lee's defund amendment!

Are Property Taxes a "Wealth Tax" on the (Mostly) Non-Wealthy?

Property taxes play a large role in funding cities, schools and counties in Texas. The tax revenue taken from property owners increases every year at rates exceeding increases in income for the average citizen.

"Property tax is not based on consumption or income, but on the presumed wealth and income of property owners. In effect, property taxes are a wealth tax: if you can afford a house, you can afford property taxes".Link

The Governor and Lt Governor have charged the legislature to examine ways in which the local governments can be funded without relying on property taxes.

Even though Texas law allows seniors and select others to freeze their property taxes, if their taxing government so allows, it only applies to your principal home. The taxes on other property that citizens may own are subject to annual increases based on property values determined by non-elected officials and on the perceived needs of the taxing authority.

Clearly some hard limits need to be placed on property tax growth, or as some advocate, property taxes should be completely eliminated.

Politicians like to brag that they have not increased the tax rate, but, they have extracted more tax revenue from property owners as the property valuations are increased, even though the property owner's income has not increased. The elected officials need to focus on total tax revenue, not just tax rate, as total taxes paid is what is important to the property owner. 

Nebraska Bans Civil Asset Forfeiture without Criminal Conviction

Nebraska just passed and the Governor signed into law a bill that outlaws civil asset forfeiture unless a criminal conviction has been secured.Link

"The newly signed law provides sweeping reforms. First and foremost, Nebraska now requires a criminal conviction to forfeit property. The accused must be convicted of an offense involving illegal drugs, child pornography or illegal gambling to lose their cash, vehicles, firearms or real estate".
Texas needs to pass similar legislation in the next session to protect citizens from overzealous law enforcement organizations that get to keep cash and other property under current civil asset forfeiture law.

Stopping the Affirmatively Furthering Fair Housing (AFFH) Regulation

Senator Mike Lee has proposed an amendment that would defund President Obama’s overreaching and coercive Affirmatively Furthering Fair Housing (AFFH) regulation. The amendment is expected to reach the Senate floor this week. Link

AFFH allows unaccountable federal bureaucrats to take charge of your local government. It’s not too strong to say that over the long term, AFFH spells the effective end of local government in America and a shift to a federally controlled “regionalist” system instead.

"UPDATE: The left is lobbying hard against the Lee Amendment. AFFH supporters are trying to persuade Senators that defunding Obama’s new rule, which federalizes the core functions of local government and turns localities into helpless satellites of nearby megacities, is nothing but a bit of new guidance showing them how to fulfill their existing obligations under the Fair Housing Act of 1968. They are even claiming that the Lee Amendment would gut the 1968 Act". 

Of course this is just BS as the Fair Housing Act was not "gutted" before this proposed regulation. It has worked fine for the last 50 years.

Now is the time to contact Senators Cornyn and Cruz to tell them to support Senator Lee's amendment! The overreach of the Obama administration needs to stop NOW!

Electric Grid is a Serious But Fixable Issue

Senator Bob Hall has succinctly described the issue and established that solutions are available.Link

"The summit addressed a very real threat to the Texan way of life. While the failure of Washington to step up and protect against the EMP threat is bad news for our nation, the State of Texas remains in a unique position to act. Unlike the other 47 continental states, the grid in Texas is essentially a stand-alone system contained within its borders. Therefore, the Texas Legislature does not have to wait on Congress — and the Texas power companies do not have to wait on the power companies in other states — to secure our electrical grid and protect our people."

The City of Georgetown needs to understand the threat to it's citizens and take steps to help secure the Texas state grid and the local distribution system which is owned and operated by the city.

Williams Drive Corridor Study

The city is about to begin a study with the Capital Area Metropolitan Planning Organization(CAMPO) focused on Williams Drive from I-35 westward to Jim Hogg road. Here is the map:

The study is broken down into two distinct areas; the first is outlined in red and centers around I-35. The desire is to connect this area with downtown where people can walk and bike to get around.

The second area of study runs along Williams Drive from Austin Avenue to Jim Hogg Road. Again, the city wants to develop bus stops, bike lanes and sidewalks along Williams Drive.

The city says they are going to have public involvement in the development of the plans, including business owners, property owners and residents.

Looking out 30 to 40 years it is apparent that Williams Drive will be the "major road" serving the growth of the city. Looking at the city map, Georgetown is restricted where it can expand and grow. Round Rock is to the south, Weir limits growth to the east and Jarrell limits growth to the north. Liberty Hill and Leander limit growth to the west. The only area open for long term growth is northwest along Williams Drive.

Planning for Williams Drive should be for a divided road with six traffic lanes with limited left turns. Such roads are not compatible with bicycles, so bike lanes should not be part of the plan. Again, parking on Williams Drive should not be allowed.

There are plans for a week long public design meeting in late summer for the citizens of Georgetown to provide their input. Be sure to attend and voice your views!

Is This The Answer to Austin's Low/No Income Housing Problem?

Julian Castro, Secretary of HUD, is rolling out a new HUD program nationwide that was tried in Dallas with disastrous results for the suburban neighborhoods. HUD will require all new developments to build affordable housing which HUD will then subsidize with super large vouchers to entice low/no income people from central cities to the suburbs.

Here is the money quote from an article in the New York Post:Link

"Although HUD’s “demonstration project” may have improved the lives of some who moved, it’s ended up harming the lives of many of their new neighbors. And now Castro wants to roll it out nationwide. Soon he will give Section 8 recipients money to afford rent wherever they choose and if they don’t want to move, he’ll make them an offer they can’t refuse".

Georgetown better be "on guard" or else we will become a dumping ground for those low/no income individuals escaping the high cost of housing in Austin.

Keep HUD out of Georgetown with all their mandates, rules and regulations so that the local citizens and their government guide the development of the city.

City to Discuss Employee Compensation & Benefits

The city council will hold a workshop at 3 pm, 5/10/2016, at city hall to hear staff presentations on employee compensation and benefits for FY-17.

The first part focuses on employee compensation and uses the same old flawed methodology as used in prior years. That is, compare Georgetown employee salaries with those in other central Texas communities and with select cities state wide. This methodology results in a continuous ratcheting up of salaries as each city does exactly the same thing! Cities all raise their salaries which results in all cities raising their salaries ad infinitum without regard to changes in productivity or services rendered.

There are other methods available for determining the fair compensation levels for city employees that the city should investigate to get out of the current trap of constantly raising salaries.

The only benefit covered in the presentation is the city self insured health program. The program is less than 2 years old, so, no long term trends are observable. In the short term it seems to be working to save the city money, however, the presentation is only about finances and there is little information about the number of employees covered and the severity of the claims compared to national averages.

The staff is investigating the feasibility of establishing a city clinic for employees; establishing an employee health intervention program: and purchasing health monitoring software.  Staff is also investigating the cost of providing dental coverage.

The major issue NOT discussed as part of employee benefits is the city retirement program. Hopefully this will be discussed in a later workshop.

At some point in the budget cycle it seems it would be prudent to examine the cost of all employee compensation and benefits. For example, how much does vacation time cost? How much does lost time due to medical or other reasons cost? Where is the overtime cost booked and how much is it and what are the long term trends?

John Hesser Reelected to City Council

John Hesser won reelection as city councilman for District 3. The overall vote totals were 821 for Hesser and 497 for Boydstun. The winning percentage was 62.29% to 37.71%.

Hesser handily won precinct 394 in Sun City and precinct 305 near Ford elementary school. However, he lost precinct 371, 56 votes to 59 votes. Precinct 305 is along Williams Drive behind the strip mall next to the city swimming pool.

Councilmen Fought and Gonzales were reappointed to their positions since there were no opponents.

Private Equity Funds are High Risk for Pension Funds Also

The last blog post incorrectly said hedge funds and private equity funds were equal, but, as stated in the comments, they are not. They are similar in many respects including high risk with high fees.

Yves Smith of the NakedCapitalism blog has the following to say about private equity funds today (NakedCapitalism): "But the desperation measure of these long-term investors is to chase returns, risk be damned. And with hedge fund coming more and more into disfavor, private equity is an even hotter ticket than before".

"In other words, this movie is unlikely to have a happy ending as far as investors and the taxpayers who backstop them are concerned. But don’t buy the story that no one could have seen this coming".

So, it would seem that TMRS would be well advised to invest in private equity with much caution as it is the municipal employees money that they are investing.

More Evidence That Hedge Funds are Toxic in Retirement Funds

There is more evidence that hedge funds are toxic to the health of retirement funds.(Link) "For a troubling indication that the pain for hedge funds is only just starting, Chris Ailman, who runs investments at the $187 billion California State Teachers’ Retirement System, or CALSTRS, said in a Bloomberg Television interview from the Milken conference that the hedge fund industry’s two-and-twenty fee model is “broken” and “off the table” for large institutional investors."

The Texas Municipal Retirement System (TMRS) continues to increase it's investments in private equity, also known as hedge funds. They currently have $11.7 Million invested with a goal if increasing that amount by 100X.

TMRS has other investments using hedge fund manages such as Blackstone and BlackRock.

TMRS and Georgetown need to learn from the experiences of others!