[Budget and Fiscal Affairs ]
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GOOD MORNING EVERYONE.I AM MAYOR PRO TEM DAVE MARTIN, AND I CALL THE CITY OF HOUSTON BUDGET AND FISCAL AFFAIRS COMMITTEE.
TODAY IS TUESDAY, AUGUST 30TH, 2022.
IT IS 10:01 AM I'D LIKE TO WELCOME ALL COUNCIL MEMBERS IN ATTENDANCE.
COUNCIL MEMBER TARSHA JACKSON, VICE CHAIR EDWARD J. POLLARD, AND STAFF FROM COUNCIL MEMBER ABBY CAYMAN'S, OFFICE IN DISTRICT C MIKE KNOX'S OFFICE IN POSITION NUMBER ONE AT LARGE, DAVID ROBINSON'S OFFICE, POSITION TWO AT LARGE AND LETITIA PLUMMER, POSITION THREE AT LARGE.
IF THERE ARE ANY MEMBERS OF THE PUBLIC WHO ARE HERE IN PERSON AND WOULD LIKE TO PARTICIPATE IN PUBLIC COMMENT, THERE IS A SIGNUP SHEET AT THE FRONT TABLE TO MY LEFT.
TO YOUR RIGHT, MY STAFF MEMBER MICHAEL, WILL BE MONITORING THE PUBLIC SPEAKER'S LIST.
AND WELCOME TO COUNCIL MEMBER SALLY ALCORN AT LARGE POSITION FIVE COUNCIL MEMBERS AND STAFF.
PLEASE HOLD YOUR QUESTIONS UNTIL THE END OF ALL THE PRESENTATIONS.
AT THIS TIME, I'D LIKE TO WELCOME THE ESTEEM CONTROLLER, CHRISTOPHER BROWN, AND INTERIM DIRECTOR WILLIAM JONES TO PROVIDE THE MONTHLY FINANCIAL REPORT CONTROLLER BROWN.
I'M PLEASED TO PRESENT THE MONTHLY FINANCIAL REPORT FOR THE PERIOD ENDING JULY 31ST, 2022.
IN THE GENERAL FUND, THE CONTROLLER'S OFFICE IS PROJECTING ENDING FUND BALANCE OF 287.2 MILLION FOR FY 23.
THIS IS 57.7 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY 114 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% IN RESERVES.
WE HAVE DECREASED OUR REVENUE PROJECTION BY 8.1 MILLION FROM OUR FY 2023 TRENDS REPORT PUBLISHED IN MAY, 2022.
UH, THE ESTIMATED PROPERTY TAX REVENUE DECREASED BY 8.1 MILLION, AND THAT WAS DUE TO A 0.71% DECREASE IN THE POPULATION.
NOW THAT WE HAVE THE ACTUAL POPULATION, UH, CENSUS NUMBERS, THE MAJOR DIFFERENCES BETWEEN OUR REVENUE PROJECTION AND THAT OF FINANCE DEPARTMENT ARE AS FOLLOWS.
INDUSTRIAL ASSESSMENTS ARE LOWER BY 2.4 MILLION.
SALES TAXES LOWER BY 46.9 MILLION AS WE'RE USING OUR FY 23 TRENDS NUMBER AS THE BASIS.
OTHER TAXES ARE LOWER BY 743,000.
ELECTRIC FRANCHISE IS LOWER BY 980,000.
TELEPHONE FRANCHISE IS LOWER BY 795,000.
CHARGES FOR SERVICES ARE LOWER BY 2.3 MILLION.
MUNICIPAL COURTS, FINES AND FORFEITS ARE LOWER BY 664,000.
INTEREST INCOME FROM CASH AND INVESTMENTS IS LOWER BY 1.7 MILLION.
AND FINALLY, MISCELLANEOUS AND OTHER INCOME ARE LOWER BY 754,000.
UH, EXPENDITURE ESTIMATES IN THE GENERAL FUND ARE UNCHANGED FROM THE FY 2023 TRENDS REPORT.
AND IF YOU LOOK AT THE ENTERPRISE FUNDS, WE ARE PROJECTING, UH, NO CHANGES IN ANY OF OUR ENTERPRISE FUNDS.
FINALLY, THE COMMERCIAL PAPER AND BONDS, ALL OF OUR VARIABLE RATE DEBT IS WELL BELOW THE 20% THRESHOLD.
THANK YOU, CONTROLLER GROUND, MR. JONES.
UH, GOOD MORNING, MAYOR PORT TIM COUNSEL.
UM, THIS IS THE ONE PLUS 11 FINANCIAL REPORT FOR THE PERIOD ENDING JULY 31ST, 2022.
PROJECTIONS ARE BASED ON ONE MONTH OF ACTUAL RESULTS AND 11 MONTHS OF PROJECTIONS.
UM, I'LL START OUT BY COVERING FISCAL YEAR 2022 IN ACCORDANCE WITH GOVERNMENT ACCOUNTING STANDARDS FOR GOVERNMENTAL FUNDS.
THE FINAL REVENUES FOR FY 22 WILL INCLUDE REVENUES EARNED THROUGH JUNE 30TH, ONLY IF THEY'RE COLLECTED BY THE END OF AUGUST.
EXPENDITURES THROUGH JUNE 30 WILL INCLUDE SPENDING INCURRED BEFORE THE END OF JUNE.
THESE EXPENSES CONTINUE TO BE RECORDED AS ACTUALS TO FISCAL YEAR 22 UNTIL AUGUST 31ST.
THE, THE CURRENT PRELIMINARY AND DESIGNATED FUND BALANCE FOR THE GENERAL FUND IS 352.6 MILLION FOR FY 22.
UH, THIS IS APPROXIMATELY 7.8 MILLION HIGHER THAN WHAT WE PROJECTED LAST MONTH FOR JUNE.
UH, FOR THE JUNE MO FAR, UH, THE RESULTS ARE NOT FINAL UNTIL THE PUBLICATION OF THE FY 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT.
SO MOVING ON TO FISCAL YEAR 23, BOTH OUR REVENUE AND EXPENDITURE PROJECTIONS REMAIN AT BUDGET.
WE'RE CURRENTLY PROJECTING THE ENDING FUND BALANCE OF 344.8 MILLION, WHICH IS 40.8 MILLION HIGHER THAN THE ADOPTED BUDGET, AND 14.9% OF ESTIMATED
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EXPENDITURES LIST DEBT SERVICE AND PAY AS YOU GO.THE FUND BALANCE IS 171.7 MILLION ABOVE THE TARGETED 7.5% OF EXPENDITURES LIST DEBT SERVICE AND PAYGO, UM, LIKE TO CONTROLLER, WE'RE PROJECTING NO FORECAST CHANGES IN THE ENTERPRISE FUNDS, SPECIAL FUNDS, AND, UM, THE OTHER FUNDS.
UM, AND THAT CONCLUDES MY REPORT.
I'D LIKE TO WELCOME COUNCIL MEMBER AMY PECK FROM DISTRICT A WHO JOINED US COUNCIL AND COUNCIL MEMBER ABBY CAYMAN FROM DISTRICT C.
WE'LL NOW TAKE COUNCIL MEMBER QUESTIONS.
UH, EACH WILL RECEIVE TWO MINUTES PER THE NORMAL COMMITTEE MOVE, UH, MINUTES.
AND WE'LL START WITH VICE CHAIR EDWARD J. POLLARD.
THANK YOU CHAIR, AND GOOD MORNING TO EVERYONE.
UH, THANK YOU FOR YOUR PRESENTATIONS.
FIRST QUESTION IS FOR THE CONTROLLER.
UM, YOU MENTIONED THAT THE DIFFERENCE BETWEEN YOUR REPORT AND THE FINANCE DEPARTMENT, UM, A BIG DIFFERENCE IS THE 46 MILLION IN SALES TAXES BASED ON THE TRENDS REPORT.
CAN YOU ELABORATE A LITTLE BIT MORE ON, UH, THOSE PROJECTIONS AND WHAT YOU'RE BASING IT OFF OF WHEN IT COMES TO THE TRENDS REPORT? YEAH.
UM, SO, YOU KNOW, IT'S BEEN A DIFFICULT PROCESS FIRST AND FOREMOST, UH, ESTIMATING SALES TAX.
WE'VE GOT A, YOU KNOW, REALLY VOLATILE MARKET OUT THERE, UH, IN REGARDS TO THE EFFECTS FROM COVID.
UM, SO WE SAW, UH, OUR RECORD NUMBER, UH, UH, INCREASE IN SALES REVENUE LAST YEAR.
UH, AND AS YOU ALL RECALL, WHEN WE PRESENTED OUR TRENDS, WE ESTIMATED THAT ESSENTIALLY, UH, WE WERE GONNA SEE A TAPERING OFF, UM, APPROXIMATELY, UH, 4.7% REDUCTION, UH, THIS YEAR.
AND, UH, THAT NUMBER, UH, WAS 760 MILLION.
UH, AND THAT WAS OUR INTERNAL ANALYSIS THAT WE DID THAT ARRIVED AT THAT NUMBER.
UM, WE, WE ALSO, AND I KNOW FINANCE AS WELL AS OUR OFFICE, UH, LOOKS AT SOME, UH, EXTERNAL, UH, ADVISORS, UH, ECONOMISTS TO GET, UH, ESTIMATES.
AND, UH, MIKE LOFTON IS ONE OF THE PEOPLE THAT, UH, THE CITY HAS BEEN ENGAGED WITH FOR MANY YEARS.
UM, SO HE ALSO, UH, SET HIS, UH, BASELINE FOR FY 23 AT THE 750 TO 760 MILLION.
UM, THE, THE CONTROLLER'S OFFICE IS ALWAYS GONNA BE MORE CONSERVATIVE 'CAUSE WE HAVE TO CERTIFY THE AVAILABILITY OF FUNDS.
UM, THIS IS ESSENTIALLY THE, YOU KNOW, SECOND MONTH, UH, OR FIRST MONTH OF THE FISCAL YEAR THAT WE'RE REPORTING ON.
UM, SO AS WE HAVE SEEN IN PRACTICE THROUGHOUT THE YEAR, WE'LL BE ADJUSTING THOSE NUMBERS.
BUT WHAT WE WANNA DO IS WE WANNA SEE, UH, SOME RECEIPTS COMING IN BECAUSE WE HAD SUCH A, YOU KNOW, INCREASE FROM LAST YEAR.
UM, STATISTICALLY THE PROBABILITY IT'S JUST NOT GONNA CONTINUE AT, YOU KNOW, 18 20% INCREASE YEAR OVER YEAR.
SO, UH, AGAIN, OUR, OUR NUMBER IS MORE CAUTIOUSLY OPTIMISTIC.
I THINK THIS HAS BEEN A PRACTICE OVER THE YEARS.
UH, I THINK, UH, IN PAST YEARS WE'VE HAD AS MUCH AS $70 MILLION DIFFERENCE IN SALES TAX.
SO THIS ONE IS LESS THAN IT HAS BEEN HISTORICALLY.
BUT I WOULD ESTIMATE AS WE START TO SEE SOME OF THESE NUMBERS, YOU KNOW, WE'LL MOVE UP FINANCIAL MOVE DOWN OR VICE VERSA.
AND, UH, AS WE GET TO THE END OF THE FISCAL YEAR, WE'LL END UP CLOSER.
I KNOW THIS BUDGET, UH, THE 23 BUDGET INCLUDED 160 MILLION RIGHT, OF THE ARPA FUNDS.
SO IS THAT STILL THE, THE AMOUNT OF ARPA FUNDS BEING USED? IS THAT, DO YOU ANTICIPATE INCREASES IN THAT? OR, AND ALSO WHAT, UM, WHAT'S BEING DRAWN? I KNOW WE'VE DONE A COUPLE THINGS WITH FUND BALANCE.
ONE THING FOR, FOR, UM, THE SWAT PROGRAM.
UH, SO TWO QUESTIONS ARE, AND IF THERE YOU ANTICIPATE CHANGES JUST FOR OPERATING FROM ARPA AND WHAT FROM FUND BALANCE, UM, IS ANTICIPATED OR HAS ALREADY HAPPENED? OKAY, SO FOR, I'LL START WITH THE SWAT 'CAUSE THAT WAS FY 22.
SO IN JUNE WE DID INCREASE AND AND TRANSFER THE 20 MILLION.
UM, AND YOU ARE CORRECT, IT IS 160 MILLION RIGHT NOW FOR THE REVENUE LOSS.
UM, THAT COULD CHANGE, COULD GO HIGHER, COULD GO.
SO, UH, RIGHT NOW IS NOT, NOT ANTICIPATED TO CHANGE, BUT IT COULD CHANGE BECAUSE WE ARE WELL BELOW THE CAP BASED ON WHAT WE COULD COLLECT FOR, FOR REVENUE LOSS.
UM, BUT ONE 60 RIGHT NOW IS WHERE IT'S GONNA BE.
AND THEN I HAVE HEARD THE, UH, ADMINISTRATION MENTION, UH, OPERATING FUNDS FOR BARK, UM, ANTICIPATED TO BE DRAWN FROM FUND BALANCE.
SO WE DID, SO IF YOU LOOK AT THE PROPOSED BUDGET FROM, UH, TO THE ADOPTED BUDGET, WE DID INCREASE, I WANT TO SAY IN TOTAL 7 MILLION OR SO THAT WAS DRAWN FROM FUND BALANCE.
SO WE DID MAKE THAT ADJUSTMENT FOR THE BARK INCREASE.
SO THAT'S ALREADY REFLECTED IN THE ADOPTED BUDGET.
SO WE WON'T HAVE TO PULL IT FROM FUND BALANCE THIS YEAR.
WE ALREADY DID IT GOING FROM THE PROPOSED TO THE ADOPTED.
IS THAT WHAT YOU'RE TALKING ABOUT FROM THAT, FROM THE, THAT WAS ALREADY PART OF THE ADOPTED BUDGET? YEAH.
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FROM THE COUNCIL AMENDMENT, RIGHT? YES, THAT'S ALREADY INCLUDED IN THE ADOPTED BUDGET.JUST A POINT OF CLARIFICATION, ARPA FUNDS THAT WE HAVE, WE DIVIDED THEM BECAUSE OUR FISCAL YEAR IS JULY TO JUNE.
WE HAD THE ABILITY TO USE THEM OVER TWO OF OUR FISCAL YEARS SINCE WE HAVE TO COMPLETE IT.
UM, THEY'RE NOT INCLUDED IN FUND BALANCE, CORRECT? NO, I MEAN, IT'S PART OF OUR, OUR GENERAL FUND REVENUE.
UM, SO YEAH, IT'S JUST A PART OF OUR GENERAL FUND IN CONTROLLER BROWN.
THE MOST HATED FIVE LETTERS I KNOW OF ARE SWAPS, INTEREST RATES CREEPING UP A LITTLE BIT.
BUT LAST MONTH YOU TALKED A LITTLE BIT ABOUT MAYBE US TRANSITIONING AWAY FROM THE SWAPS AND GETTING OUTTA THAT ANY, YEAH, WE HAVE, UH, TWO DIFFERENT, UH, SWAP POSITIONS IN OUR COMBINED UTILITY SYSTEM.
UM, YOU KNOW, ONE OF THOSE IS LOOKING A LITTLE BIT, UH, CLOSER TO ZERO, FAIR VALUE.
IT'S WORKING ITS WAY AS WE SEE INTEREST RATES CONTINUE TO RISE.
UH, IT'S MOVING IN OUR DIRECTION.
SO WE, WE'VE ENGAGED WITH OUR, UM, FINANCIAL ADVISOR AND LEGAL AND, AND ALSO TALKED WITH, UH, CUS ABOUT PREPARING FOR THE OPPORTUNITY SHOULD THE MARKET PRESENT ITSELF TO BE ABLE TO EXIT OUT ONE OF THOSE.
I THINK, UH, IF NOT BOTH, IF, IF WE'RE LUCKY, BUT I AGREE WITH YOU, IT'S A, YOU KNOW, UM, AN ADDED BURDEN ON THE CITY, UH, FINANCIALLY WHEN THOSE MOVE AGAINST US FROM A NEGATIVE FEAR OF VALUE.
SO WE, WE'D BE IN OUR BEST INTEREST IF WE CAN GET TO ZERO, IF WE CAN GET OUT OF THEM.
UH, THIS QUESTION IS FOR DIRECTOR JONES.
UM, IN YOUR PRESENTATION YOU STATED THAT WE ARE PROJECTING THAT THE ENDING FUND BALANCE OF 344.8 MILLION IS 40.8 MILLION HIGHER THAN THE ADOPTED BUDGET.
AND WE ADOPTED THE BUDGET JUST A COUPLE MONTHS AGO.
SO WHAT GOES INTO YOU ALL'S CALCULATIONS WHEN MAKING THE PROJECTIONS THAT STILL SEE US GO ABOVE WHERE WE JUST PROJECTED JUST TWO MONTHS AGO.
AND SO YOU ADOPTED IT IN JUNE, BUT WE BUILT THE BUDGET IN MARCH, SO WE HAD ANOTHER WHOLE QUARTER LEFT.
SO AS THE CONTROLLER STATED, THE SALES TAX WAS VERY DIFFICULT TO PROJ TO PROJECT, SO IT ENDED UP GOING HIGHER THAN WHAT WE HAD ANTICIPATED.
SO IT'S PRIMARILY THE HIGHER SALES TAX THAN WE ANTICIPATED BACK IN MARCH.
ALRIGHT, SO THERE ARE NO OTHER COUNCIL MEMBERS IN QUEUE.
I'LL ASK A COUPLE OF QUESTIONS THAT WERE SENT TO US IN ADVANCE OF THIS MEETING FROM THE PUBLIC.
UH, FIRST ONE IS ON PAGE FOUR OF THE MONTHLY FINANCIAL REPORT.
PROJECTED 22 END IN FUND BALANCE IS 8 MILLION HIGHER THAN THE PROJECTED END IN FUND BALANCE FOR 2023.
BUDGET INCLUDES 160 MILLION IN ARPA FUNDS, WHICH WE JUST TALKED ABOUT.
SINCE THE FUND BALANCE IS DECREASING, DOES THAT MEAN THAT ALL THE FUNDS ARE BEING USED TO COVER ONGOING EXPENSES? I THINK I KNOW THE ANSWER TO THAT, BUT I'LL LET YOU WELL, UM, SO ON THAT, ON THAT QUESTION, THE COMPARISON, AGAIN, IT IS KIND OF GOES IN LINE WITH WHAT I WAS EXPLAINING TO CUSTOMER POLLARD.
WHEN WE BUILT THE BUDGET BACK IN MARCH, THE ANTICIPATED ENDING FUND BALANCE WAS 304 MILLION.
NOW THAT FUND BALANCE IS 345 MILLION.
SO FROM A PROJECTION STANDPOINT, IT ACTUALLY INCREASED 40 MILLION.
WE JUST, YOU KNOW, WE JUST KIND OF ENDED OR PRELIMINARY ENDED, UH, FISCAL YEAR 22, WHICH HAPPENED TO BE HIGHER.
UM, SO AGAIN, WHEN WE BUILT THE BUDGET, IT WAS IN MARCH, SO IT'S ACTUALLY HIGHER.
THAT COMPARISON IS NOT, UH, QUITE A FAIR COMPARISON TO SHOW THAT THE FUND BALANCE IS DECREASING.
AND AS I STATED WITH ARPA, IT IS A PART OF OUR GENERAL FUND REVENUE TO REPLACE, YOU KNOW, REVENUE THAT WAS LOST.
UM, SO IT IS INCLUDED IN OUR, OUR, OUR GENERAL FUND REVENUE.
WHEN SCHOOL DISTRICT PROPERTY TAX RATES ARE BEING DISCUSSED AT MEETINGS THAT ARE HAPPENING ALL OVER THE CITY, UM, WHEN WILL THE PROPOSED PROPERTY TAX RATES FOR THE CITY BE AVAILABLE? BEFORE YOU ANSWER THAT, I WOULD INVITE EVERYONE TO LOOK AT SCHOOL DISTRICT TAX RATES BECAUSE WE HAVE DECREASED THE TAX RATE FOR EIGHT OUT OF THE LAST NINE YEARS.
AND SCHOOL DISTRICTS HAVE, THERE ARE MORE, THERE IS MORE MONEY IN THE FUND BALANCES OF SCHOOL DISTRICTS IN THE STATE OF TEXAS THAN THE ENTIRE STATE TEXAS BUDGET FOR FISCAL YEAR 2023.
THAT'S A INTERESTING NUMBER BECAUSE OF THE INFLUX OF MONEY.
BUT IT SEEMS LIKE WE, BEING THE CITY, GIVE AWAY A LOT OF OUR MONEY TO THE SCHOOL DISTRICTS.
AND MY PUSHBACK HAS ALWAYS BEEN LOOK AT WHAT THEY HAVE IN FUND BALANCE AND EXAMINE THAT BEFORE WE BEGIN DUELING OUT MILLIONS AND MILLIONS OF, OF DOLLARS TO OUR SCHOOL DISTRICTS BECAUSE THEY RECEIVED A LARGE AMOUNT OF MONEY IN CO AND IN ARPA FROM THE STATE OF TEXAS.
AND THEY SHOULD BE USING THAT TO EDUCATE KIDS.
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TO THE QUESTION, WAS PROPERTY TAX RATES FOR THE CITY? WHEN WILL THEY BE AVAILABLE? SO WE EXPECT TO GET THE FINAL ROLL BY TOMORROW.UM, AND THE PER OUR SCHEDULE, WE WILL BRING IT TO COUNCIL AROUND SEPTEMBER 14TH FOR THE PROPOSED TAX RATE.
AND THEN, UH, LAST MONTH THERE WAS SOME QUESTIONS RELATED TO TS AND WE DIDN'T GET THE ANSWER.
MAYBE WE WILL RECIRCULATE THAT BACK TO YOU OFFICE.
YES, I WILL DISTRIBUTE, I SAW THE, THE EMAIL.
SO ON THAT, UH, THE TS DEBT, WE DO HAVE THAT.
SO I'LL SEND IT TO, TO JESSICA AND WE CAN DISTRIBUTE TO THE COUNCIL.
SO ANY OTHER FINAL COMMENTS BEFORE YOU DO? UM, I KNOW MR. JONES, IT'S BEEN A COUPLE OF MONTHS.
I'VE WORKED WITH YOU FOR 10 YEARS AND I'VE ALWAYS ADMIRED YOUR FINANCIAL ACUMEN.
I THINK YOU DO A GREAT JOB DAY IN AND DAY OUT, AND I CAN'T WAIT TO VOTE ON YOU FOR THE PERMANENT POSITION.
I THINK YOU DO A PHENOMENAL JOB FOR US AS WELL AS CONTROLLER BROWN THAT'S ALWAYS BEEN ON TOP OF THINGS AND GIVING US GOOD RECOMMENDATIONS AND ADVICE AND COUNSEL.
SO BEFORE WE LEAVE THE MEETING, THERE ARE NO OTHER, WE HAVE TO COME BACK TO COUNCIL MEMBER, UH, ALCORN, BUT ANY LAST MINUTE COMMENTS THAT YOU GUYS WOULD LIKE TO MAKE? NO, I MEAN, I APPRECIATE THAT
UM, WELL WE'VE GOT THE, UH, UH, OUTCOME BASED BUDGETING YES.
IF YOU COULD JUST, UM, ELABORATE A LITTLE BIT MORE.
YEAH, THANK YOU FOR BRINGING THAT UP.
SO TOMORROW, UM, WE'LL BE ASKING COUNCIL TO VOTE ON PHASE TWO OF OUR OUTCOME BASED BUDGET, WHICH WILL BE THE, THE BUSINESS TRANSFORMATION PHASE.
UM, SO THIS TO ME IS THE MOST IMPORTANT PHASE.
UM, SO THE PHASE THREE, JUST TO BE CLEAR, WILL BE THE ACTUAL SYSTEM.
SO THIS BUSINESS PROCESS CHANGE WILL, IT'LL BE A YEAR LONG ENGAGEMENT WHERE WE GO THROUGH AND REVAMP OUR ENTIRE BUDGETING PROCESS.
WE'RE GONNA HOLD, UH, WORKSHOPS WITH ALL DEPARTMENTS.
WE'RE GOING TO WORK ON PERFORMANCE MEASURES.
IT'S GONNA IN INCLUDE BOTH OPERATING AND CAPITAL.
UM, AND SO WITH THE ANTICIPATION OF INCORPORATING THOSE ELEMENTS IN OUR FY 24 BUDGET, BUT ALSO BUILDING THE DOCUMENTS, THE REQUIREMENTS WE NEED FOR WHENEVER IT'S TIME TO GET A SYSTEM.
UM, SO YEAH, I'M LOOKING FORWARD TO YOU GUYS SUPPORTING THIS ITEM.
IT'S A, IT'S BEEN A, A LONG TIME COMING.
UM, SO JUST LET ME KNOW IF YOU HAVE ANY QUESTIONS ON AND HAPPY TO SIT WITH YOU, TALK WITH YOU ABOUT IT.
UM, BUT YEAH, THANK YOU FOR BRINGING THAT UP.
AND I, I HOPE WHEN YOU ARE, UM, WORKING WITH THE DEPARTMENTS ON THE PERFORMANCE MEASURES THAT YOU'LL INCLUDE COUNCIL MEMBERS BECAUSE THAT OFTEN, I THINK THAT SOME OF THE PERFORMANCE MEASURES ARE NOT REALLY WHAT, UM, WHAT IS A GOOD MEASUREMENT AS FOR THE PUBLIC, YOU KNOW, TO SEE, YEAH, THEY CARE ABOUT DIFFERENT THINGS THAN MAYBE THE DEPARTMENTS DOES.
AND I WANNA MAKE SURE IT DOESN'T INCORPORATE.
SO MY LAST QUESTION WOULD BE, UH, OVER THE LAST COUPLE OF DAYS, COUNCIL MEMBER ROBINSON AND I WERE TOGETHER WITH, UH, STATE COMPTROLLER, UH, GLENN HAGAR, AND WE TALKED ABOUT THE AVAILABLE FUNDS THAT THE STATE OF TEXAS HAS, MUCH LIKE THE CITY OF HOUSTON, THEY'VE BEEN THE BENEFICIARY OF INCREASED SALES TAX REVENUE, UH, THE PRICE OF OIL FOR THE STATE OF TEXAS.
THEY GET A LOT OF MONEY FROM THAT, AND THEY ARE SITTING ON A GREAT DEAL OF CASH.
SO OUR COMMENTS TO CONTROLLER HAGER OR COMPTROLLER HAGAR WE'RE ABOUT THE CITY OF HOUSTON PROJECTS AND THEIR ABILITY TO MAYBE HELP US WITH THOSE IN THE YEAR OF INCREASED FUNDING.
SO DIRECTOR JONES, AS WE SIT ON OVER A HUNDRED MILLION DOLLARS IN SURPLUS ABOVE AND BEYOND THE 7.5, ARE THERE ANY DISCUSSIONS WITHIN THE CITY TO USE SOME OF THAT CAPITAL TOWARDS PROJECTS THAT WE HEAR EVERY DAY? I KNOW COUNCIL MEMBER PECK WOULD LOVE TO GET A COUPLE OF PROJECTS DONE.
I WOULD LOVE TO GET A COUPLE PROJECTS DONE.
COUNCIL MEMBERS CAME IN AND POLLED SO WITH 107 14 MILLION A HUNDRED AND COUNCIL MEMBER JACKSON.
BUT YOU'VE DONE A PRETTY GOOD JOB OF GETTING YOUR PROJECT, SO I'LL LEAVE YOU AND, UH, AND COUNCIL MEMBER PECK OUT OF THIS ONE FOR NOW.
UH, BUT FROM 114 ALL THE WAY TO CLOSE TO 130 MILLION OVER AND ABOVE THE 7.5, I ALWAYS TELL PEOPLE AS, AS TAXPAYERS, I DON'T WANT YOU TO PUT MY MONEY IN A SAVINGS ACCOUNT.
I WANT YOU TO PUT MY MONEY TO USE, FIX MY STREETS, DO MY PROJECTS, GIVE ME ANOTHER DAMN STRUCTURE ON LAKE HOUSTON.
ARE THERE ANY CONVERSATIONS HAPPENING TODAY ABOUT WHAT DO WE DO IF WE END THE FISCAL YEAR WITH THAT MASSIVE AMOUNT OF CASH? YES, WE ARE, WE ARE LOOKING INTO THAT.
AND I KNOW YOU, YOU'VE HEARD THE MAYOR MENTION SOME OF HIS PRIORITIES LIKE ILLEGAL DUMPING AND A LOT WITH SOLID WASTE AND PUBLIC SAFETY.
UM, SO YES, I, I DO, I DO RECOGNIZE THAT WE HAVE A VERY, VERY HEALTHY FUND BALANCE AND, AND MY POSITION, UM, I I I ALWAYS CAUTION, WE GOTTA BE CAREFUL, UM, LIKE TO NOT USE SO MUCH OF THAT ON RECURRING COSTS AS WE WE DO, WE GOTTA LOOK DOWN THE ROAD TOO.
BUT YEAH, THERE ARE DEFINITELY SOME PRIORITY PROJECTS THAT WE, WE ARE LOOKING AT TO USE SOME OF THAT FUND BALANCE, BUT ALSO BEING MINDFUL OF THE FUTURE AS WELL.
COUNCIL MEMBER ED POLLARD, THANK YOU, CHAIR.
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YOUR COMMENTS, UM, YOU WOULD, IT WOULD SEEM AS IF THE HEALTHY FUND BALANCE IS SOMETHING THAT WILL GIVE US A SOMEWHAT OF A SAFETY NET, UM, A COUPLE YEARS DOWN THE LINE WHEN WE NO LONGER HAVE THE ARPA DOLLARS.UM, AND THEN IF THERE ARE ANY OTHER LIABILITIES OUT THERE THAT THE CITY MAY HAVE TO, UH, INCUR OR PAY.
UM, AND SO IT WOULD SEEM LIKE IT WOULD BE MAYBE A GOOD STRATEGY TO STACK THAT AS HIGH AS WE CAN OVER THE NEXT YEAR OR TWO SO THAT WHEN THE ARPA DOLLARS ARE GONE AND NOW WE HAVE TO FACE ALL OF THE SERVICES AND CHALLENGES OF THE CITY THAT WE HAVE A LITTLE BIT THERE TO WORK WITH.
UM, BECAUSE I CAN FORESEE ONCE THOSE FEDERAL DOLLARS LEAVE THAT, UH, WE'RE GONNA BE BACK TO BUSINESS AS USUAL AND, UH, SERVICES INCREASE, PEOPLE, INCREASE, UH, PROJECTS COST MORE.
AND IF WE DON'T HAVE THE APPROPRIATE AMOUNT OF MONEY THERE, ESPECIALLY WITH SOME OF THE OUTSTANDING LIABILITIES THAT MAY COME OUR WAY, UM, THEN WE'LL BE IN A TOUGH SITUATION.
SO I'M, I'M A PROPONENT OF TRYING TO AT LEAST OVER THE NEXT YEAR OR TWO, STACK THAT AS MUCH AS WE CAN WHILE WE HAVE THOSE ARPA DOLLARS THAT WE CAN, UH, UTILIZE OVER THE NEXT YEAR OR TWO AND THEN GO FROM THERE WITH THE, WITH THE FUND BALANCE DOLLARS, UH, THAT WE HAVE IN THE GENERAL FUND.
I THINK THAT'S BEEN CONTROL OF GROUNDS DIALOGUE FOR THE LAST COUPLE OF MONTHS IS ALONG THOSE LINES.
YEAH, I WOULD SAY, YOU KNOW, WE DO, AS YOU ALL HAVE HEARD ME SAY OVER AND OVER, WE HAVE A STRUCTURALLY IMBALANCED BUDGET INTO COUNCIL MEMBER ALCORN'S COMMENTS EARLIER AND THE AFFIRMATION OF DIRECTOR JONES $160 MILLION OF ARPA MONEY WAS USED TO BALANCE THE BUDGET THIS YEAR.
SO I, I CONCUR WITH COUNCIL MEMBER POLLARD IS, YOU KNOW, TRY AND BUILD THAT FUND BALANCE UP AS MUCH AS POSSIBLE, UM, BECAUSE EVENTUALLY THAT RUNS DOWN, THE FEDERAL MONEY RUNS OUT AND THEN WE HAVE TO GO OUT AND FIGURE OUT WHERE WE'RE GONNA GET 160 AND I THINK THAT NUMBER WILL BE MORE LIKE 250 MILLION.
UM, AND UNFORTUNATELY, AS WE ALL KNOW, IT ENDS UP IN CUTS AND MOSTLY TO PERSONNEL.
SO THAT'S A CHALLENGE, UH, GOING FORWARD.
A GOOD PLACE TO PUT THAT WOULD BE THE CREATION OF, OF FUNDS INTO OUR OB OP E TRUST ACCOUNT THAT WE'VE BEEN TALKING ABOUT FOR THE LAST COUPLE OF YEARS.
ANY OTHER QUESTIONS FROM COUNCIL MEMBERS? AND IF I CAN JUST ADD, UM, ON TOP OF WHAT COUNCIL MEMBER PAUL WAS SAYING.
YEAH, AND WE HAVE BEEN INTENTIONAL WITH BUILDING UP FUND BALANCE EVERY YEAR.
UM, YOU KNOW, BEING CAREFUL WITH HOW WE SPEND AND TRYING TO FIND EFFICIENCIES.
SO WE'VE BEEN INTENTIONALLY BUILDING UP FUND BALANCE, YOU KNOW, THIS YEAR, THIS PAST YEAR, LIKE I SAID, WE, WE SAW RECORDS SALES TAX, UM, WHICH GREATLY CONTRIBUTED TO OUR FUND BALANCE.
SO, UM, THAT, THAT HAS BEEN THE PLAN AND WILL BE THE PLAN TO TRY AND, AND BUILD THAT UP AS HIGH AS POSSIBLE.
UH, BUT AT THE SAME TIME, WE, WE DO RECOGNIZE THAT THERE ARE GONNA BE SOME PRIORITY COMMUNITY PROJECTS THAT WE HAVE TO, TO FUND, LIKE, LIKE I MENTIONED, ILLEGAL DUMPING, UM, AND WITH OUR SOLID WASTE DEPARTMENT.
SO THERE WILL BE THOSE SITUATIONS WHERE WE HAVE TO TAP INTO THAT FUND BALANCE.
BUT AGAIN, IT'S ALWAYS OUR, OUR INTENTION TO BUILD THAT UP AS HIGH AS POSSIBLE.
SO BEFORE WE GO TO PUBLIC SPEAKERS, I'LL ASK ANOTHER QUESTION THAT CAME FROM THE PUBLIC REAL QUICK, AND THEN I'LL GO TO PUBLIC SPEAKERS.
UH, ON PAGES EIGHT AND NINE OF THE MONTHLY REPORT, UH, THE DRAINAGE CHARGE IS A HUNDRED MILLION, ROUGHLY 101 MILLION.
BUDGETED REVENUE IS 113 FOR AN AVAILABLE REVENUE OF 214 MILLION.
WHY IS THE EXPENSE BUDGET FOR 23 ONLY 113 MILLION? SO YOU HAVE AVAILABLE TWO 14 Y IS THE BUDGET ONLY ONE 13 PART A AND THEN THE METRO IS NEGATIVE, BUT BUDGETED REVENUES ARE 85 MILLION AND EXPENSES ARE BUDGETED AT 86 MILLION.
WHY IS THE FUND RUNNING A NEGATIVE BALANCE ON THE D-D-S-R-F METRO? OKAY.
SO, ON, ON THE DRAINAGE, IT'S, IT'S SIMILAR TO WHAT I EXPLAINED, THAT WE BUILD THE BUDGET IN MARCH EVEN THOUGH IT'S ADOPTED IN JUNE.
SO WHEN WE BUILT THE BUDGET IN MARCH, THEY WERE STILL EXPECTING, YOU KNOW, TO, YOU KNOW, TO CERTAIN PROJECTS TO HAPPEN.
SO IF THAT DIDN'T HAPPEN, THEN THAT FUND BALANCE WILL ROLL OVER TO THE NEXT FISCAL YEAR.
SO JUST BECAUSE THE FUND BALANCE IS HIGHER DOESN'T MEAN THE EXPENSE WOULD AUTOMATICALLY BE, YOU KNOW, WILL MATCH THAT.
SO AS WE GO THROUGH THIS FISCAL YEAR, UM, IF ANY OF THOSE CARRY OVER PROJECTS, WE, WE MAY HAVE TO PULL IT FROM FUND BALANCE, WHICH WOULD INCREASE, UM, THE FY 23 BUDGET.
BUT IT'S, IT'S MORE SO OF A TIMING FROM WHEN WE DO THE BUDGET UNTIL, YOU KNOW, THE ACTUAL AT THE END OF THE YEAR, WHICH WILL IMPACT THE FUND BALANCE FROM WHERE WE EXPECTED IT TO BE.
UM, AND THEN ON, ON THE METRO, UM, IT KIND OF TIES IN WHAT I, WHAT MY OPENING STATEMENT ABOUT THE CURRENT FISCAL YEAR STILL BEING OPEN.
SO IT, IT LOOKS NEGATIVE NOW, BUT IF YOU WERE TO LOOK AT IT TODAY, IT'S NOT NEGATIVE BECAUSE WE, WE'VE GOTTEN THAT REIMBURSEMENT IN, SO IT'S JUST A TIMING THING SINCE THE PERIOD IS STILL OPEN.
AND MY COMMENT TO THAT WOULD BE, THAT'S WHY I ENJOY WORKING WITH YOU SO
[00:25:01]
MUCH BECAUSE I THINK WE THINK ALIKE ON THAT THIS IS OUR FIRST MONTH OF 12 MONTHS COMING DOWN THE ROAD.WE HAVE 11 MORE MONTHS, THE FIRST COUPLE OF MONTHS.
BUDGETS ALWAYS CONTAIN FLUID DOLLARS LIKE THAT, THAT WE'RE LOOKING AT EXPENSES COMING IN, BUT NO PAYMENT GOING OUT, ET CETERA, ET CETERA.
UH, COUNCIL MEMBER SALLY ALCORN.
DIDN'T WE USED TO GET MORE IN, IN D-D-S-R-F METRO AND WASN'T THAT LIKE A HUNDRED MILLION A YEAR THAT WE GOT? WHY, WHY HAS THAT GONE DOWN? UH, I WOULD HAVE TO CHECK.
UM, AND MAYBE IT LOOKS THAT WAY 'CAUSE IT WAS, YOU KNOW, BEFORE IT WAS ONE FUND AND NOW IT'S SEPARATED, BUT I WOULD HAVE TO DOUBLE CHECK WITH.
AT THIS TIME I'D LIKE TO WELCOME MR. DOUG SMITH WHO HAS QUESTIONS REGARDING THE MONTH MONTHLY FINANCIAL REPORT AS OUR CONTROLLER AND FINANCE DIRECTOR ENTER EXIT STAGE.
MR. SMITH, IT'S GOOD TO SEE YOU.
ANY OTHER PUBLIC SPEAKERS THAT WOULD LIKE TO ADDRESS THE COUNCIL? UH, PLEASE SIGN UP AND COME FORWARD.
DOUG, YOU CAN COME TO THE FRONT.
YEAH, YOU ASKED ALMOST ALL OF MY QUESTIONS, SO I DON'T, AND THAT, AND I APPRECIATE THAT.
BUT I DO HAVE ONE QUESTION LEFT, UH, REGARDING THE, UM, FACT THAT WE HAVEN'T ISSUED ANY BONDS FOR STREETS, BRIDGES AND TRAFFIC FOR OVER, UH, 16 YEARS SINCE 2006.
AND I'D LIKE TO KNOW WHAT THE CURRENT BALANCE IS OF THOSE BONDS AND WHEN CAN THE D-D-S-R-F FUNDS START BEING USED FOR OTHER PURPOSES? THAT'S ONE QUESTION.
AND I ALSO WANNA GO BACK TO YOUR COMMENT ABOUT SCHOOL DISTRICT TAXES.
UH, I WILL BE AT MY SCHOOL DISTRICT TONIGHT AND I WOULD, I'M HAPPY TO REPORT THAT THEY ARE REDUCING THEIR TAX RATE BY 4.60 CENTS THIS YEAR.
GIVEN THE FACT THAT APPRAISALS WENT UP 15%.
SO, BUT ANYWAY, THE QUESTION ABOUT D-D-S-R-F AND STREETS AND BALOG.
AND IF I, IF I, MAYBE I'LL TAKE A SHOT AT IT AND I'LL LOOK FOR WILL FOR, UH, UH, AFFIRMATION.
UM, SINCE WE DO PAY AS YOU GO, WE DON'T DO BONDS ON THESE PROGRAMS ANYMORE.
IS THAT A CORRECT ANSWER? WILL? THAT'S RIGHT.
SO EVERYTHING WE DO IS CASH IN CASH OUT FOR D-D-S-R-F.
WE MADE A DECISION, THE VOTERS MADE A DECISION THAT WE WOULD NOT ISSUE ANY MORE BONDS AND FALL FURTHER AND FURTHER INTO DEBT, UH, BY GOING DOWN THE PATH OF, UH, RECEIVING MONEY, UH, THROUGH BOND ALLOCATIONS AND NOT DOING A VERY GOOD JOB OF PAYING 'EM OFF.
SO THE DECISION WAS MADE BY THE VOTERS TO PAY AS YOU GO.
SO MONEY IN MONEY OUT FOR PROJECTS, YOU'LL NOT SEE ANY MORE BONDS UNTIL THE NEXT COUNCIL BODY VOTES, UH, AND THE PUBLIC VOTES TO START ISSUING BONDS, WHICH I DOUBT WILL HAPPEN.
SO WILL, IS THAT RIGHT? YES, SIR.
WILL GIVES THE AFFIRMATION, SO THANK YOU.
DDS RF FUNDS ARE BEING USED TO PAY OFF EXISTING BONDS.
AND MY QUESTION IS HOW MUCH IS LEFT OF THOSE BONDS? WE'LL CHECK ON THAT AND GIVE YOU AN ANSWER, BUT YEAH, THERE IS STILL MONEY IN THE DEBT BASED ON PREVIOUS 2016.
I'LL GO TO COUNCIL MEMBER SALLY ALCORN.
SHE MAY KNOW THE ANSWER TO THAT.
WELL, I DON'T KNOW HOW MUCH IS LEFT, BUT I DO KNOW WE'VE PAID OFF $1.5 BILLION.
UM, SINCE, SINCE, UH, REBUILD HOUSTON.
AND IT'S NOT LIKE WE'RE ONLY USING THAT D-D-S-R-F-A VALOREM TO PAY OFF DEBT.
I WE'RE JUST DOING IT TO THE EXTENT OF DEBT SERVICE, BUT WE'RE STILL USING SOME OF THAT MONEY FOR PROJECTS.
ANY OTHER PUBLIC SPEAKERS WOULD LIKE TO ADDRESS? COUNCIL SEEING NONE.
BEFORE WE ADJOURN, PLEASE NOTE THAT THE NEXT REGULARLY SCHEDULED BUDGET AND FISCAL AFFAIRS COMMITTEE WILL BE ON OCTOBER 4TH AT TWO O'CLOCK.
IF THERE ARE NO OTHER COUNCIL MEMBER QUESTIONS OR COMMENTS, THIS MEETING IS ADJOURNED.