[Budget and Fiscal Affairs on April 4, 2023.]
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IT IS 10 O'CLOCK ON TUESDAY, APRIL 4TH.
WELCOME TO THIS MORNING'S BUDGET AND FISCAL AFFAIRS COMMITTEE MEETING.
I'D LIKE TO CALL THIS MEETING TO ORDER.
I'D LIKE TO WELCOME ALL COUNCIL MEMBERS IN ATTENDANCE.
WE ARE JOINED BY VICE CHAIR EDWARD POLLARD, COUNCIL MEMBER DAVID ROBINSON.
COUNCIL MEMBER MICHAEL KOSH, STAFF FROM COUNCIL MEMBER CARLOS CIRO'S, OFFICE, DISTRICT H STAFF FROM VICE MAYOR PRO TEM MARTHA CASTEX TATUM'S OFFICE DISTRICT K STAFF FROM MICHAEL KNOX'S OFFICE AT LARGE POSITION ONE STAFF FROM COUNCIL MEMBER LETICIA PLUMMER AT LARGE POSITION FOUR.
AND COUNCIL MEMBER SALLY ALCORN, POSITION FIVE AT LARGE.
IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO SPEAK THIS MORNING AND PARTICIPATE IN THE PUBLIC COMMENT SECTION, THERE IS A SIGNUP SHEET AT THE TABLE TO YOUR RIGHT.
MY LEFT, MY STAFF MEMBER WILL BE MONITORING THE PUBLIC SPEAKER'S LIST AS WE ARE APPROACHING BUDGET SEASON.
AS OF TODAY, THE BUDGET WORKSHOP HAS BEEN FINALIZED.
THERE ARE PRINTED COPIES AROUND THE HORSESHOE AND AT THE SIGNUP SHEET IN THE FRONT.
THE SCHEDULE WILL ALSO BE DISTRIBUTED VIA EMAIL AFTER THIS MEETING, AND POSTED ON THE BFA WEBSITE BY THE CLOSE OF BUSINESS TODAY, TUESDAY THE FOURTH.
I WANNA THANK ALL OF THE CITY DEPARTMENT DIRECTORS AND CHIEFS FOR THEIR ASSISTANCE AND THEIR FEEDBACK IN HELPING TO FINALIZE THE BUDGET WORKSHOP SCHEDULE.
I'D LIKE TO ALSO ACKNOWLEDGE COUNCIL MEMBER ED POLLARD, VICE CHAIR OF BFA FOR ANY OPENING REMARKS OR COMMENTS THIS MORNING.
WE HAVE A NUMBER OF PRESENTATIONS TODAY, AS A RESULT WOULD BE TAKING QUESTIONS AT THE CONCLUSION OF EACH PRESENTATION.
EACH COUNCIL MEMBER WILL HAVE TWO MINUTES TO SPEAK AND PER USUAL COMMITTEE RULES.
AT THIS TIME, I'D LIKE TO WELCOME DEPUTY CONTROLLER, UM, SHANNON NOBLES AND DIRECTOR WILL JONES TO PROVIDE THE MONTHLY FINANCIAL REPORT.
GOOD MORNING DIRECTOR, NOBLES, AND GOOD MORNING DIRECTOR WILL JONES.
I'M THE CHIEF DEPUTY CONTROLLER OF THE CONTROLLER'S OFFICE.
UH, CONTROLLER BROWN IS OUT OF TOWN FOR A GOVERNMENT ACCOUNTING STANDARD BOARDS ADVISORY COMMITTEE.
I'M PLEASED TO PRESENT THE MONTHLY FINANCIAL REPORT FOR THE MONTH ENDED FEBRUARY 28TH, UH, 2023 IN HIS PLACE.
AND THE GENERAL FUND, THE CONTROLLER'S OFFICE IS PROJECTING AN ENDING FUND BALANCE OF 327.3 MILLION FOR FY 2023.
THIS IS 44.5 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT.
THE DIFFERENCE IS DUE TO A 44.5 MILLION LOWER REVENUE PROJECTION THAN THE FINANCE DEPARTMENT.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY 152 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE AND PAY AS YOU GO IN RESERVE.
OUR REVENUE PROJECTIONS DECREASED BY 4.3 MILLION FROM THE JANUARY, 2023 REPORT.
THIS DECREASE IS DUE PRIMARILY TO LOWER THAN ANTICIPATED IN A GOVERNMENTAL REVENUES THAT ARE THE RESULT OF A 3.8 MILLION DECREASE IN MUNICIPAL SERVICES FEES TS EXPENDITURE ESTIMATES INCREASED BY 3 MILLION COMPARED TO THE JANUARY, 2023 REPORT PRIMARILY AS FOLLOWS, ELECTRICITY CHARGEBACKS INCREASED IN VARIOUS DEPARTMENTS BY 4.1 MILLION.
SECURITY AND FACILITY MAINTENANCE INCREASED IN GENERAL SERVICES BY 1.7 MILLION.
HEALTH BENEFIT SAVINGS IN VARIOUS DEPARTMENTS RESULTED IN A 3.3 MILLION DECREASE MEDICAL SUPPLY COST INCREASED BY 325,000 IN THE ENTERPRISE FUNDS.
THE AVIATION OPERATING FUND REVENUES INCREASED BY 39.1 MILLION, PRIMARILY DUE TO HIGHER PASSENGER VOLUME, WHICH RESULTED IN A 34.1 MILLION INCREASE IN CONCESSION PARKING AND OTHER REVENUES.
IN ADDITION, HIGHER INTEREST RATES RESULTED IN A 5 MILLION INCREASE IN INTEREST.
INCOME EXPENDITURES INCREASED BY 39.1 MILLION, PRIMARILY DUE TO A 31 POINT MILLION INCREASE IN SYSTEM IMPROVEMENT TRANSFERS AND
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A 6.6 MILLION INCREASE IN PERSONNEL COST.CONVENTION AND ENTERTAINMENT REVENUES INCREASED BY 390,000 DUE TO HIGHER THAN ANTICIPATED PARKING REVENUES AND INTEREST INCOME COMBINED UTILITY SYSTEM REVENUES INCREASED BY 612,000 DUE TO THE SALE OF LAND EXPENDITURES DECREASED BY 5.8 MILLION DUE TO DELAYS IN HIRING AND PURCHASING, AS WELL AS A LOWER DEBT SERVICE TRANSFER FOR ALLENS CREEK DEBT OBLIGATIONS.
STORM WATER FUND EXPENDITURES DECREASED BY 9.9 MILLION DUE TO DELAYS IN HIRING AND PURCHASING THE DEDICATED DRAINAGE AND STREET RENEWAL ADV VALOREM BOND EXP FUND EXPENDITURES DECREASED BY 8.8 MILLION DUE TO DELAYS IN PURCHASING CAPITAL EQUIPMENT.
THE DEDICATED DRAINAGE AND STREET RENEWAL METRO FUND REVENUES DECREASED BY 4.6 MILLION DUE TO LOWER REIMBURSEMENTS FOR METRO EXPENDITURES.
DECREASED BY 6.3 MILLION DUE TO DELAYS IN HIRING AND DELAYS IN CONTRACT IMPLEMENTATIONS RELATED TO THE METRO GENERAL MOBILITY PROGRAM.
THE DEDICATED DRAINAGE AND STREET RENEWAL DRAINAGE FUND REVENUES INCREASED BY 2.3 MILLION, PRIMARILY DUE TO AN INCREASE IN DRAINAGE CHARGE REVENUES FOR COMMERCIAL PAPER AND BONDS.
THE CITY'S PRACTICE HAS BEEN TO MAINTAIN NO MORE THAN 20% OF THE TOTAL OUTSTANDING DEBT FOR EACH TYPE OF DEBT IN A VARIABLE RATE STRUCTURE.
AS OF FEBRUARY 28TH, 2023, THE RATIO OF UNH VARIABLE RATE DEBT FOR EACH TYPE OF OUTSTANDING DEBT WAS GENERAL OBLIGATION 6.82% COMBINED UTILITY SYSTEMS, 0% AVIATION 8.12%, CONVENTION AND ENTERTAINMENT 4.0%.
UH, THIS IS THE A PLUS FOUR FINANCIAL REPORT FOR THE PERIOD ENDING FEBRUARY 28TH, 2023.
PROJECTIONS ARE BASED ON EIGHT MONTHS OF ACTUAL RESULTS AND FOUR MONTHS OF PROJECTION FOR THE GENERAL FUND.
OUR REVENUE PROJECTION IS 52.5 MILLION HIGHER THAN THE ADOPTED BUDGET, AND 3.3 MILLION LOWER THAN LAST MONTH.
THE VARIANCE FROM PRIOR MONTH'S PROJECTIONS PRIMARILY DUE TO 3.8 MILLION, DECREASE IN INTER INTERGOVERNMENTAL, PRIMARILY DUE TO LOWER THAN ANTICIPATED, UH, TERRORIST OMMUNITY SERVICE FEE, 358,000 DECREASE IN DIRECT INTER FUND SERVICES DUE TO LOWER CHARGEBACK FOR PLANNING SERVICES.
534,000 INCREASE IN MISCELLANEOUS, PRIMARILY DUE TO HIGH REVENUE FOR TAKE HOME VEHICLES AND REIMBURSEMENTS FOR FIREFIGHTER REDEPLOYMENT REVENUES, AND 470,000 INCREASE IN MUNICIPAL COURT FINES AND FORFEITS DUE TO HIGHER THAN ANTICIPATED MOVING VIOLATION FEES ON THE EXPENDITURE SIDE FOR GENERAL FUND, UH, PROJECTION IS 29 MILLION HIGHER THAN THE ADOPTED BUDGET AND 3 MILLION HIGHER THAN LAST MONTH.
THE VARIANCE FROM LAST MONTH PROJECTION IS DUE TO A 4.1 MILLION INCREASE IN VARIOUS DEPARTMENTS TO REFLECT HIGHER ELECTRICITY COSTS 1.7 MILLION IN GENERAL SERVICES DEPARTMENT TO REFLECT, UH, COST RELATED TO SECURITY AND JANITORIAL CONTRACT.
MINIMUM WAGE INCREASE 325,000 INCREASE IN FIRE TO REFLECT HIGHER, UH, MEDICAL SUPPLY MARKET PRICES AND 3.3 MILLION DECREASE IN VARIOUS DEPARTMENTS TO REFLECT SAVINGS AND HEALTH BENEFITS.
UM, WE ARE CURRENTLY PROJECTING THE ENDING FUND BALANCE OF 372.1 MILLION, WHICH IS 6.3 MILLION LOWER THAN PRIOR MONTH, AND 15.9% OF ESTIMATED EXPENDITURES, LESS DEBT SERVICE AND PAY AS YOU GO.
THE FUND BALANCE IS 196.8 MILLION ABOVE THE TARGET AT 7.5% OF EXPENDITURES, EXCLUDING DEBT SERVICE AND PAY AS YOU GO.
WE AGREE WITH THE CONTROLLER ON THE ENTERPRISE FUNDS.
SO I'LL MOVE ON TO THE SPECIAL FUNDS.
UM, AND THE HEALTH BENEFITS FUND REVENUES DECREASED BY 14.6 MILLION, MAINLY DUE TO PLAN TIER CHANGES IN LOWER ENROLLMENT EXPENDITURES DECREASED BY 15.5 MILLION DUE TO LOWER THAN ANTICIPATED CLAIMS. AND THE WORKERS' COMPENSATION FUND REVENUES AND EXPENDITURES DECREASED BY 6.3 MILLION DUE TO A LOWER THAN ANTICIPATED CLAIMS. THE ASSET FORFEITURE FUND REVENUES INCREASED BY 1.2 MILLION DUE TO HIGHER THAN ANTICIPATED CONFISCATIONS IN THE AUTO DEALERS FUND.
REVENUES INCREASED BY 2.7 MILLION DUE TO HIGHER THAN ANTICIPATED IMPOUNDED VEHICLES OF MISCELLANEOUS REVENUES FOR TOWING FEES FOR THE BARK FUND EXPENDITURES DECREASED BY 755,000 DUE TO SAVINGS AND PERSONNEL SUPPLIES AND SERVICES.
UH, BUILDING INSPECTION FUND REVENUES INCREASED BY 4.4 MILLION DUE TO HIGHER THAN ANTICIPATED PERMIT ACTIVITIES AND EXPENDITURES DECREASED BY 1.2 MILLION DUE TO, UH, DUE TO DELAYS IN VEHICLE PURCHASES AND PERSONNEL SAVINGS.
THE CABLE TV FUND REVENUES DECREASED BY 644,000 DUE TO PUBLIC, UH, EDUCATION, GOVERNMENT CONTRIBUTIONS, EXPENDITURES DECREASED BY 505,000 MAINLY DUE TO SAVINGS AND PERSONNEL
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AND, UH, PERSONNEL AND SERVICES.UM, FOR THE HOUSTON EMERGENCY CENTER FUND, REVENUES DECREASED BY 1.1 MILLION DUE TO LOWER THAN ANTICIPATED REIMBURSEMENTS FOR 9 1 1 STAFF.
UH, AND EXPENDITURES DECREASED BY 2.9 MILLION DUE TO PERSONNEL SAVINGS ON THE LOCAL TRUANCY PREVENTION AND DIVERSION FUND.
EXPENDITURES DECREASED BY 610,000 DUE TO GRANT FUNDED PERSONNEL TRANSFER TO GENERAL FUND AS A RESULT OF A REDUCTION IN GRANT FUNDING.
AND THE MRR FUND EXPENDITURES INCREASED BY 1.7 MILLION DUE TO HIGHER THAN ANTICIPATED FACILITY.
UH, MAINTENANCE SERVICES AND POLICE SPECIAL SERVICE FUND EXPENDITURES DECREASED BY 1.5 MILLION DUE TO SAVINGS AND SUPPLIES AND SERVICES.
UM, NOW THE FOLLOWING FUNDS REFLECT A DECREASE, UH, UH, IN EXPENDITURES, MAINLY DUE TO PERSONNEL SAVINGS.
SO THEY'LL BE IN THE PARK HOUSTON SPECIAL REVENUE FUND OF 1.1 MILLION, THE PLANNING AND DEVELOPMENT SPECIAL REVENUE FUND OF 3.2 MILLION AND ESSENTIAL PUBLIC HEALTH SERVICES FUND OF 4.3 MILLION.
I'D LIKE TO WELCOME COUNCIL MEMBER AMY PECK FROM DISTRICT A COUNCIL MEMBER MARY NAN HUFFMAN FROM DISTRICT G AND STAFF FROM TARSA JACKSON, DISTRICT B OFFICE.
FIRST QUESTION COMES FROM COUNCIL MEMBER MICHAEL KOSH.
THANK YOU VERY MUCH FOR BEING HERE TODAY.
UH, WHEN THE BANKS STARTED FAILING IN, IN SILICON VALLEY IN IN, UH, CALIFORNIA, I STARTED GETTING CALLS, UH, TO ABOUT HOW, HOW CAN WE MAKE SURE THAT OUR MONEY HERE IS SAFE IN THE CITY.
UH, I'VE LEARNED THAT WE, WE PUT OUR MONEY IN CHASE BANK AND THEY SAY THAT WE'RE, YOU'RE ONLY GUARANTEED UP TO 250,000, BUT WE HAVE MILLIONS, HUNDREDS OF MILLIONS IN OUR ACCOUNTS.
UH, CAN YOU EXPLAIN WHAT WE DO TO PROTECT THE FACT THAT WE HAVE OUR MONEY THAT'S IN THE BANK FOR THE CITY POINT OF ORDER? CHAIR
I MEAN, IT'S, IT'S PART OF THE, THE FISCAL POSITION OF THE CITY OF HOUSTON.
MY COMMENT WOULD BE IF CHASE BANK FAILS, THEN WE'RE ALL DOOMED.
SO, UM, I'M NOT SURE IF EITHER YOU, WELL, I HAVE A FEW COMMENTS THAT I CAN ADD TO THAT.
NUMBER ONE, I CAN SAY, YOU KNOW, THAT JP MORGAN CHASE IS THE LARGEST BANK IN, IN THE US AND SO WE FEEL CONFIDENT THAT THE MONEY IS SAFELY AND SECURE FOR THE CITY OF HOUSTON.
I WOULD ALSO LIKE TO ADD, UM, JUST AS OF MID-MARCH 2023, THE CITY'S DAILY, DAILY CASH IS BELOW 14 MILLION OUTSIDE OF PAYROLL, WHICH OCCURS BIWEEKLY.
SIMILARLY, THE CITY'S MONEY MARKET ACCOUNT IS SAFE AS THE ASSET ALLOCATION IS BACKED BY GOVERNMENT FUNDING AND REPO.
AND THE CITY ALSO HAS A COLLATERALIZED, FEDERALLY BACKED FEDERAL HOME LOAN BANK LINE OF CREDIT, TOTALING 35 MILLION WITH JP MORGAN CHASE.
UH, I, I'VE BEEN ON THE OPEN FINANCE APP AND, AND IT SEEMS TO BE RELATIVELY EASY TO, TO WORK THROUGH.
I HAVEN'T, UH, DONE A LOT OF RESEARCH ON IT, BUT ENOUGH THAT I CAN SEE HOW IT WORKS.
AND SO, UH, WILL THERE BE ANY, ANY TRAINING OR ANY TYPE OF, UH, ONLINE TRAINING THAT WE COULD GET ON TO, TO ANSWER MAYBE SOME QUESTIONS? YEAH, IT, IT ACTUALLY SHOULD BE UP NOW.
SO FOR EACH OF THE MODULE FOR OPEN BUDGET, OPEN, UH, PAYROLL AND OPEN CHECKBOOK, THERE'S A INSTRUCTIONAL VIDEO ONLINE THAT WE'LL WALK YOU THROUGH.
HOW, HOW TO USE THE, THE, THE WEBSITE, RIGHT? SO IT'S UP NOW.
THERE IS A TUTORIAL THAT HAS BEEN UP FOR A WHILE THAT YOU CAN ACCESS AND ACTUALLY IT WALKS THROUGH YOU HOW TO USE AND IMPLEMENT THE SYSTEM.
SO, UH, IF YOU NEED A LINK TO THAT, WE'LL SEND YOU A LINK TO THE ABSOLUTELY.
AND ALSO, UH, WHO DOES OUR, UH, ANNUAL AUDIT OF THE CITY OF HOUSTON OUTSIDE FIRM? I THINK THAT WAS MCCONNELL JONES.
THANK YOU CHAIR, AND THANKS FOR THE REPORTS.
LOOKS LIKE WE'RE STILL HOLDING STRONG WITH STRONG SALES TAX RECEIPTS.
UM, I DO HAVE A COUPLE COMMENTS AND SOMETHING I WANTED TO ASK YOU ABOUT, UM, MR. JONES, ABOUT, I'VE ASKED MANY TIMES AND BROUGHT UP THAT WE KIND OF OVER BUDGET ON HEALTH BENEFITS.
I MEAN, EACH DEPARTMENT PUTS IN A NUMBER.
WE ALWAYS COME IN SEVERAL MILLIONS DOLLARS LOWER, AND YOU MADE A COMMENT AT A RECENT MEETING THAT YOU THINK THAT'S GONNA START LEVELING OUT.
WE'RE GONNA BE CLOSER TO WHAT WE'RE PROJECTED, BUT THEN AGAIN, THIS, THIS MONTH MM-HMM
WE'RE SEEING, UH, LOWER $15 MILLION LOWER IN, IN HEALTH BENEFIT EXPENDITURES.
I JUST, I, I, I THINK WE ARE PUTTING THAT MONEY TOWARDS HEALTH BENEFITS.
THE CITY IS, THE EMPLOYEES ARE, AND IF WE'RE GONNA OVER BUDGET THERE, IF WE'RE GONNA HAVE A SURPLUS, RATHER THAN PUTTING THAT BACK JUST WHEREVER IT GOES TO THE DEPARTMENTS, PERHAPS IT SHOULD BE SAVED IN A HEALTH BENEFITS TRUST, A OP P TRUST OR SOMETHING TOWARDS THE HEALTH BENEFITS LONG-TERM LIABILITY.
SO I'D JUST LIKE TO GET YOUR ASK ABOUT WHETHER
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YOU SEE A CONTINUED DECREASES IN THAT, AND WHETHER YOU THINK WE'RE GONNA HIT THE $427 MILLION MARK MM-HMMUH, AT THE END OF THE YEAR WITH, WITH, UH, OUR HEALTH BENEFITS.
AND SO WE ARE EXPLORING, YOU KNOW, OPTIONS FOR TRUST FUNDING AND WHAT, AND HOW THAT WOULD LOOK WHEN IT COMES TO THE HEALTH BENEFITS FUND.
UM, IT, IT IS, IT'S A CHALLENGE BECAUSE IT IS TIED TO PERSONNEL.
SO WHEN, WHEN THEY ARE ESTIMATING WHAT THOSE, UH, ANTICIPATED COSTS WILL BE, THEY'RE LOOKING AT RIGHT.
MAYBE WHERE THE PERSONNEL IS GONNA GO.
AND, AND WE TEND TO HAVE QUITE A BIT OF, OF VACANCY SAVINGS.
SO WHEN YOU HAVE LOWER, UH, PERSONNEL HEAD COUNT, THAT THAT REFLECTS AND LOWER, UH, REVENUE GOING TO THE HEALTH BENEFIT BITS FUND AND LOWER CLAIMS. SO, UM, BUT ALSO IN THE HEALTH BENEFITS FUND, THEY ARE REQUIRED TO MEET, THEY HAVE THEIR OWN FUND BALANCE REQUIREMENT THAT THEY HAVE TO MEET.
SO WE HAVE TO FIRST LOOK AT THAT TO MAKE SURE WE'RE MEETING THAT REQUIREMENT.
AND WHAT IS THAT? IS THAT A PERCENTAGE OF, UM, IT, IT'S, IT'S A, IT'S A FORMULA.
IT'S BASED ON, UM, THE AVERAGE THREE MONTH IN CLAIMS. YEAH.
THERE'S A, A SPECIFIC FORMULA IN THE FINANCIAL POLICIES.
WE'RE NOT, WE'RE NOT TRYING TO OVER BUDGET, IT'S JUST THAT IT'S HARD TO PREDICT SOMETIMES.
LIKE WE, WE WANT TO FILL ALL THOSE POSITIONS.
AND SO WHEN WE ANTICIPATE THOSE POSITIONS BEING FILLED, WE ANTICIPATE THEM GETTING HEALTH BENEFITS.
BUT WHEN THAT DOESN'T HAPPEN, THAT'S WHY YOU SEE THE, THOSE SAVINGS.
I, I DON'T MIND THAT THERE'S A SURPLUS.
I JUST LIKE THAT SURPLUS TO GO TOWARDS HEALTH BENEFITS.
SO AS WE PREPARE FOR BUDGET SEASON, THAT'S A GREAT QUESTION.
YOU CAN JOIN ME IN MY AMENDMENT THAT I'VE OFFERED FOR 10 YEARS IN A ROW, AND THAT IS PUTTING MONEY INTO A OPE TRUST ACCOUNT FOR OTHER POST-EMPLOYMENT BENEFITS.
AND THE PROJECTIONS WE'RE HEARING IS A, I THINK IT'S 150 MILLION OVER THE 7.5, AND I'M NOT SURE WHAT THE CITY'S WE'RE, WE'RE 196 RIGHT NOW.
WHAT'S THAT? 196 MILLION ABOVE.
SO 150 TO $200 MILLION IN EXCESS OF 7.5, THAT'S FREE REQUIRED.
SO IF YOU PLACE 50 MILLION OR WHATEVER THAT FIGURE IS IN THE OPEP TRUST ACCOUNT, THAT'S A GREAT START.
USING THE MONEY WISELY TO MAKE SURE THAT WE ATTACKED OUR LIABILITIES, ESPECIALLY OUR LONG TERM DEBT LIABILITIES.
AND, AND IF I MAY, THE, IT'S NOT JUST FROM FUND BALANCE THAT MONEY, I THINK ANY EXCESS IN THIS, IN OUR HEALTH BENEFITS FUND THAT EMPLOYEES, I MEAN, I'M AN EMPLOYEE.
I'M PUTTING THAT MONEY TOWARDS HEALTH BENEFITS.
I DON'T WANT IT JUST GOING BACK TO THE DEPARTMENT, MY PART, GOING BACK TO THE DEPARTMENT TO DO WITH WHATEVER, THAT SHOULD STAY IN THE HEALTH BENEFITS FIELD.
SO TO COVER MY RETIREE HEALTH BENEFITS ONE DAY, UM, I'D FEEL BETTER ABOUT THAT.
SO THAT'S JUST MORE TO THE, TO THE TRUST.
SO SIGN UP FOR MY, UH, THE DAVE MET MARTIN ANNUAL COUNT ME IN AMENDMENT TO THE BUDGET PROCESS.
I'D LIKE TO WELCOME COUNCIL MEMBER ABBY CAYMAN, DISTRICT C STAFF, STAFF FROM COUNCIL MEMBER CAROLYN EVANS SHABAZZ, DISTRICT D, AND ALSO WE HAVE BEEN JOINED BY LETITIA PLUMMER AT LARGE POSITION FOUR.
SO, THANK YOU, UH, VICE CHAIR ED POLLARD.
AND THANK YOU BOTH FOR YOUR PRESENTATIONS.
DIRECTOR JONES, WHEN YOU'LL SAY YOU'RE EXPLORING OPTIONS WITH THE, UH, LOOKING AT A HEALTH BENEFIT FUND, WHAT, WHAT GOES INTO THAT? ELABORATE ON WHAT EXPLORING MEANS? YEAH.
SO WE, WE ARE LOOKING AT A TRUST FUND AND SEEING WHAT LEVEL OF CONTRIBUTION WOULD BE REQUIRED, WHAT REASONABLE CAN, CAN THE CITY AFFORD.
UM, WE GOTTA LOOK AT ALL THE FUNDS, ALL OF THE, YOU KNOW, WHERE, WHERE ARE WE LOOKING AT OUR LIABILITY NOW AND WHAT OPTIONS, LIKE I SAID, THAT'S REASONABLE FOR THE CITY TO BE ABLE TO AFFORD, GIVEN SOME OF THE LIMITATIONS THAT WE HAVE TO SHOW WHERE WE CAN REDUCE THAT LIABILITY IN THE OUT YEAR.
SO THERE'S SEVERAL DIFFERENT LAYERS TO IT, AND WE'RE, WE'RE EXPLORING AND LOOKING AT THOSE OPTIONS AS TO HOW WE CAN FUND THAT.
UM, AND THAT, LIKE I SAID, IT GOES ACROSS ALL FUNDS, NOT JUST GENERAL FUND, LOOKING AT THE ENTERPRISE FUNDS, SPECIAL FUNDS, AND TO SEE WHERE THE CITY CAN AFFORD TO, UH, CONTRIBUTE TO A TRUST FUND.
AND AS YOU'RE EXPLORING, WHAT, WHAT TYPE OF TIMELINE, UH, DO YOU ALL HAVE TO MAKE A DETERMINATION ON WHAT THE OPTIONS COULD BE? UM, I MEAN, I'M HOPING BY THE END OF THE FISCAL YEAR WE CAN, WE CAN RECENTLY SEE WHAT, WHAT THE CITY CAN AFFORD AND, AND SOME RECOMMENDATIONS.
STAFF FROM C**S MEMBER MICHAEL KNOX'S OFFICE.
UH, JUST A QUICK QUESTION REGARDING THE FINAL FOUR WE HAD HERE.
WHEN WILL THE CITY REALIZE THOSE HOTEL TAXES AND SALES TAXES WHEN WE ACTUALLY SEE THOSE NUMBERS? COUPLE OF MONTHS.
AND WAS, WERE THOSE NUMBERS BAKED INTO YOUR FORECAST PREVIOUSLY? YEAH, SO WE DON'T BAKE THEM INTO THE FORECAST.
SO THE, THE SALES TAX, I WANNA SAY IS TWO A TWO MONTH LAG.
SO WE SHOULD SEE AROUND MAY OR SO, UM, THE, THE, THE IMPACTS OF THE FINAL FOUR.
UH, KEEP IN MIND SALES TAX HAS BEEN KIND OF ABNORMAL FOR THE PAST 15 MONTHS OR SO, WHERE WE'VE BEEN SEEING DOUBLE DIGIT GROWTH.
UM, SO WE, I'M HOPING IT'LL STILL BE DOUBLE DIGIT GROWTH, BUT IT'D BE DIFFICULT TO SAY THAT WAS EXACTLY TIED TO FINAL FOUR.
BUT WE KNOW, UH, WE HAD A LOT OF PEOPLE IN TOWN SPENDING MONEY.
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SO IT IS DEFINITELY GONNA BE, WE'RE GONNA SEE A, A, A IMPACT OF THE FINAL FOUR.WE'LL KNOW FOR SURE UNTIL PROBABLY ABOUT EIGHT.
IS IT THE SAME FOR THE HOTEL? APPROXIMATELY TWO MONTHS? RIGHT? I BELIEVE THEY, THEY HAVE THE SAME LAG.
I'M NOT A HUNDRED PERCENT SURE ON THAT.
COUNCIL MEMBER MICHAEL KUBOSH.
I, I KNOW THAT I'M GETTING A LOT OF CALLS ABOUT THE INCREASE IN THE WATER BILL.
NOW MY QUESTION'S NOT ABOUT THAT.
IT'S ABOUT THE FACT THAT THE LETTER SAID THAT THERE WAS A 1% GROWTH IN THE CITY.
HOW, HOW DO WE MEASURE THAT GROWTH WITHOUT THE CENSUS EACH, YOU KNOW, THE CENSUS IS ONCE EVERY 10 YEARS.
HOW DO WE JUSTIFY THE GROWTH BEING 1%? YEAH, I BELIEVE THE, THE CENSUS PUT, THEY PUT OUT NUMBERS EVERY YEAR.
AND I BELIEVE THE PLANNING DEPARTMENT ALSO DOES AN ANNUAL REVIEW USING INFORMATION, UH, FROM THE US CENSUS BUREAU, THAT I BELIEVE THAT THAT'S TIED TO HOW THEY DETERMINE THE, THE, THAT PERCENTAGE.
JUST MORE OF A COMMENT, UM, ON SOME OF THESE FUNDS THAT, WHERE THEY SEE WHERE THERE'S DELAYS IN EITHER PURCHASES OR PERSONNEL SAVINGS, RIGHT? I MEAN, THE BUILDING INSPECTION FUND, I MEAN, WE'RE GETTING MAJOR INCREASES THERE WITH HIGHER PERMIT ACTIVITIES.
CAN'T GET THE PEOPLE, CANNOT GET THE PEOPLE TO DEAL WITH IT.
ALSO, PLANNING AND DEVELOPMENT SPECIAL REVENUE FUND BY 3.2 MILLION IN PERSONNEL SAVINGS.
SO THAT HAS A DIRECT IMPACT ON, ON CITY SERVICES.
I'M JUST MAKING A COMMENT ALSO IN SOME OF THE DRAINAGE AND STORM WATER FUNDS.
IT SEEMS LIKE A LOT OF PERSONNEL SAVINGS THAT I DON'T, I DON'T WANNA SEE PERSONNEL SAVINGS IN THESE AREAS.
AND IF WE CAN'T GET THE PERSONNEL IN CONTRACT OUT, I MEAN, I, I DON'T KNOW WHAT THE ANSWER IS, BUT THESE ARE SERVICES THAT NEED TO IMPROVE.
AND, YOU KNOW, WE KEEP SEEING, UH, SAVINGS WHEN WE'VE GOT A BIG FUND BALANCE.
I MEAN, I DON'T WANT ANY SAVINGS IN THESE AREAS.
I KNOW NOTHING YOU GUYS CAN DO ABOUT IT, BUT JUST SAYING THAT OUT INTO THE UNIVERSE, UH, WHATEVER WE CAN DO AS COUNCIL MEMBERS TO, TO IMPROVE, YOU KNOW, WHETHER HIRING, COMPENSATION, HR, WHATEVER TIME IT TAKES TO HIRE SOMEBODY AT THE CITY, WHATEVER THAT IS, UM, WE NEED TO REALLY EXPLORE THAT.
'CAUSE THESE ARE AREAS PEOPLE WANNA SEE, DRAINAGE PROJECTS, THEY WANNA US STREET PROJECTS, THEY WANNA SEE PERMITS GO FASTER.
YEAH, NO, I WILL JUST ADD THOUGH, THAT IT'S STILL A VERY HIGHLY COMPETITIVE ECONOMY.
IT'S EVEN FROM, FROM MY OWN DEPARTMENT.
THERE'S SILVER BULLET TO THIS, RIGHT.
AND I KNOW COMPANIES ACROSS, NOT JUST CITIES, BUT EVERYBODY'S HAVING PROBLEM HIRING, BUT RIGHT.
UH, YOU KNOW, JUST SOMETHING TO THINK ABOUT MY COLLEAGUES.
AND JUST A REMINDER, IN OUR MAY BFA, WE WILL GET INTO, WELL, IT'S ACTUALLY APRIL 24TH.
APRIL 24TH, THE COMPENSATION STUDY THAT WILL BE PRESENTED.
I KNOW WE HAVE A, I THINK A JOB FAIR COMING UP IN MAY.
SO I MEAN, HR HAS BEEN GREAT WORKING WITH DEPARTMENTS, TRYING TO COME UP WITH DIFFERENT STRATEGIES, BUT IT'S EXTREMELY COMPETITIVE.
UM, FIRST OFF, THANK YOU ALL FOR THE PRESENTATION AND ALL THE DILIGENCE.
AND AS YOU MENTIONED, RIGHT AS WE GET INTO MAY, Y'ALL ARE GONNA BE MORE AND MORE BUSY, UH, BECAUSE IT WAS BROUGHT UP.
I JUST, IF YOU'RE ABLE TO CLARIFY THIS FOR US AGAIN, SO THAT THE FACTS ARE STRAIGHT, 'CAUSE WATER RATES WERE BROUGHT UP, UM, THE CITY OF HOUSTON CANNOT LEGALLY, UH, PROFIT OFF OF WATER RATE INCREASES.
IT CAN ONLY BE USED SPECIFICALLY FOR RECOUPMENT OF THE WATER EXPENSES THAT THE CITY HAS INCURRED.
IT'S A SIMPLE FLAT REIMBURSEMENT, SO TO SPEAK.
I DON'T, I DON'T EVEN KNOW IF YOU COULD CONSIDER IT FLAT, GIVEN THAT THE COST THAT WE ARE PAYING IS ACTUALLY HIGHER THAN THE INCREASE THAT OF, OF THE, THE WATER RATE.
SO WHAT YOU'RE SAYING IS, I JUST, I WANNA MAKE SURE I UNDERSTAND IT.
YES, THE RATES HAVE INCREASED, BUT WE'RE NOT EVEN RECEIVING BACK WHAT WE ARE EXPENDING AS IT RELATES TO WATER AT THIS POINT.
WHEN YOU LOOK AT THE, THE CHEMICAL COSTS AND THE THINGS LIKE THAT, IT'S, WE, WE ARE PAYING MORE DEFINITELY THAN WHAT THE, THE INCREASE IS GONNA BE.
UM, IF YOU READ THE PRESS RELEASE THAT WAS SENT BY, UM, HPW HOUSTON PUBLIC WORKS, IT SAYS THAT CITY ORDINANCE REQUIRES CERTAIN AUTOMATIC ANNUAL ADJUSTMENTS TO THE WATER AND WASTEWATER RATES BASED ON INFLATIONARY INDEXES.
THE ONE YEAR INFLATIONARY INDEX AS DETERMINED BY THE FEDERAL GOVERNMENT FOR OUR AREA IS 8.2% TO DIRECTOR JONES'S POINT.
EVERY MEETING THAT WE GO TO, WE SEE AN ENORMOUS INCREASE IN THE CHEMICALS THAT GO TOWARDS TREATING OUR WATER AND OUR WASTEWATER.
THE CITY OF HOUSTON POPULATION, AS MENTIONED BY A COUNCIL MEMBER, KUBOSH, INCREASED BY 1%.
SO THE INFLATIONARY INDEX OF 8.2, WHEN COMBINED WITH THE POPULATION
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INCREASE OF 1% RESULTS IN THE AUTOMATIC ANNUAL WATER AND WASTEWATER RATE INCREASE OF 9.2, 8.2 PLUS ONE ON APRIL 1ST, 2023.SO, IN, IN, JUST TO RECLAIM A MOMENT IN MY TIME ON TOP OF THAT, I DON'T KNOW IF WE CAN ANSWER IT NOW, BUT I HAD SUBMITTED TESTIMONY AT THE LEGISLATURE RELATING TO THE, UM, FISCAL IMPACTS THAT WE HAVE SEEN BECAUSE OF DROUGHT, RIGHT.
ALL OF THE WATER MAIN BREAKS AND THE MILLIONS OF GALLONS OF WATER THAT THE CITY OF HOUSTON HAS LOST AS A RESULT OF THIS.
AND I'M NOT EVEN CLEAR IF THAT IS ABLE TO BE TECHNICALLY REIMBURSED.
IS THAT BAKED, IS THAT PART OF THE COST THAT WE'RE INCURRING, OR IS THAT IN ADDITION TO, IN TERMS OF HOW WE CALCULATE THAT? YEAH, I MEAN, I'M NOT A HUNDRED PERCENT SURE, BUT, UH, GIVEN THE, THE NUMBER OF WATER MAIN BREAKS WE'VE HAD, UM, I, I DON'T THINK THAT'S GONNA BE ABLE TO, TO COVER IT
I, I BELIEVE THE REPORT FROM PUBLIC WORKS SAID THAT 16% OF THE WATER THAT WE PURIFY, THAT WE PUMP OUT GETS, UH, POURED OUT DUE TO WATER LEAKS BY THAT 16%.
THAT'S A HUGE NUMBER, AND I, I HATE TO SEE THAT.
AND THE ONLY OTHER QUESTION I HAVE IS WHEN WILL THE, UH, MCCONNELL JONES, UH, UH, UH, AUDIT BE RELEASED? UH, IT'S, IT'S BEEN RELEASED.
THE, THE ANNUAL AUDIT, THE ANNUAL, WHEN WAS THE NEXT ONE TO BE RELEASED? WELL, IT'LL BE FOR NEXT, NEXT YEAR.
WE JUST RELEASED, UH, THE FY 22 ANNUAL COMPREHENSIVE FINANCIAL REPORT BACK IN NOVEMBER OR DECEMBER.
UM, SO THEN WE WILL GOT, WE GOT ANOTHER WHOLE YEAR.
IT'LL COME UP, IT'LL COME UP THIS NOVEMBER AND DECEMBER.
YEAH, FOR, FOR THIS FISCAL YEAR.
BELIEVE IT OR NOT, I HAVE SOME QUESTIONS RELATED TO THE MONTHLY FINANCIAL REPORT.
IN, IN, IN THERE, THE, THE, A COUPLE OF THINGS THAT I NEED SOME CLARIFICATION ON.
31, ALMOST 32 MILLION INCREASE IN SYSTEM IMPROVEMENT TRANSFERS.
WHAT EXACTLY IS THAT? OH, THAT'S IN THE AIRPORT.
SO, SO WHEN YOU, WHEN YOU LOOK AT THE AIRPORT, WE'VE SEEN A LOT OF, WHEN YOU LOOK AT THE INCREASE IN REVENUE AND INCREASE IN EXPENDITURES IS DIRECTLY RELATED TO, UH, THE EMPLOYMENTS GOING UP A SIGNIFICANT AMOUNT.
SO WHEN GOING INTO THIS FISCAL YEAR, I DON'T EVEN THINK THEY ANTICIPATED THAT THE AIRPORTS WOULD BOUNCE BACK AS, AS, AS WELL AS THEY DID.
AND THE SYSTEM DEBT SERVICE TRANSFER.
SO WHEN YOUR REVENUE GOES UP OR YOUR EXPENDITURES, THAT, THAT'S THAT BALANCING ACCOUNT, BECAUSE THEY, THEY DON'T REALLY KEEP A FUND BALANCE.
SO THAT GOES TO THEIR, I WANNA SAY THEIR CAPITAL FUND, BUT IT'S A, IT'S A TRANSFER, IT'S LIKE AN INTERNAL, UH, ACCOUNTING MECHANISM WITHIN THE AIRPORT, BUT IT'S ALL DIRECTLY RELATED TO HIGHER REVENUE AND, UH, IN, IN THE AIRPORT.
AND ON THE METRO SIDE, METRO FUND REVENUES DECREASED BY FOUR AND A HALF, 4.6 MILLION DUE TO LOW REIMBURSEMENTS FROM METRO.
IS THAT RELATED TO, UH, LESS PEOPLE USING METRO OR EXACTLY.
HOW DO WE GET THAT, THAT MONEY ON THE REVENUE SIDE? I HAVE TO GET BACK TO YOU ON THAT ONE.
SO AT THIS TIME, I'D LIKE TO WELCOME DEPUTY DIRECTOR MELISSA DEBOWSKI TO PROVIDE A PRESENTATION ON THE CITY OF HOUSTON'S UPCOMING FINANCIAL TRA TRANSACTIONS.
SO WITH RISE IN INTEREST RATES COMING, DO YOU THINK IT'LL BE A CHALLENGE NOT COMING HERE? GOOD MORNING.
UM, MY NAME IS MELISSA DKI AND I'M HERE THIS MORNING TO PRESENT ON THE UPCOMING FINANCIAL TRANSACTIONS ON BEHALF OF THE FINANCE WORKING GROUP.
SO ON THE NEXT SLIDE, WE HAVE THREE TRANSACTIONS WE'RE GONNA TALK ABOUT TODAY.
UM, ONE IS RELATED TO THE COMBINED UTILITY SYSTEM, ONE RELATED TO THE GENERAL OBLIGATION CREDIT, AND ONE RELATED TO THE HOUSTON AIRPORT SYSTEM.
SO ON SLIDE THREE, UH, THIS GIVES YOU A SNAPSHOT OF THE COMBINED UTILITY SYSTEMS VARIABLE RATE EXPOSURE.
UM, AS, UH, DEPUTY CONTROLLER NOBLE'S MENTIONED, UM, THE COMBINED UTILITY SYSTEM CURRENTLY, UH, HAS, UH, 0% OUTSTANDING ON THEIR VARIABLE RATE, UM, LINES.
UM, THAT'S NOT, UM, PART OF A SWAP ARRANGEMENT.
SO WE'RE GONNA TALK TODAY ABOUT THE 2004 B FOURS, UH, WHICH ARE A SERIES OF VARIABLE RATE DEMAND BONDS.
OH, ON SLIDE FOUR, UM, THE SERIES 2004 B FOUR ARE, UM, TAX EXEMPT VARIABLE RATE DEMAND BONDS, UH, WHICH ARE LONG-TERM BONDS THAT HAVE A, UM, VARIABLE RATE THAT GETS REMARKETED ON A WEEKLY BASIS TO RESET THE RATE.
UM, IN ORDER FOR THESE, UH, BONDS TO BE MARKETABLE TO INVESTORS, THEY REQUIRE
[00:30:01]
A, UH, LIQUIDITY FACILITY PROVIDED BY A HIGHLY RATED BANK TO BACK THEM.UM, THE UNDERLYING BANK FACILITY THAT'S SUPPORTING THIS SERIES IS EXPIRING IN JUNE, AND SO THE CITY HAS TO REPLACE IT WITH A NEW FACILITY.
UH, SO ON SLIDE FIVE, WE RELEASED A REQUEST FOR TERM SHEETS, UM, TO OUR QUALIFIED POOL OF BANKS, UH, TO GIVE US SOME PROPOSALS ON REPLACING THAT, UM, UNDERLYING FACILITY.
UH, WE REVIEWED THOSE PROPOSALS AND WE HAVE, UM, SELECTED JP MORGAN, UM, AS THE BANK TO ASSIST US WITH THE LIQUIDITY FACILITY BACKING THIS SERIES.
UH, SO OUR PLAN IS TO BRING IN RCA TO COUNCIL FOR APPROVAL IN SPRING OF THIS YEAR.
SO MOVING ON TO THE NEXT ITEM RELATED TO THE GO BONDS.
UM, ON SLIDE SIX, UM, SO THE GENERAL OBLIGATION BONDS ARE THE, UH, PUBLIC IMPROVEMENT BONDS THAT SUPPORT THE CAPITAL IMPROVEMENT PROGRAM, UH, FOR THE GENERAL FUND RELATED DEPARTMENTS LIKE POLICE, FIRE PARKS, SOLID WASTE HEALTH, UM, HOUSING, ET CETERA.
UM, AND IN ORDER TO IMPLEMENT THOSE CAPITAL IMPROVEMENT PLANS, UM, FOR THOSE DEPARTMENTS, UH, THE CITY UTILIZES COMMERCIAL PAPER, UH, WHICH GIVES US A SHORT TERM METHOD OF ACCESSING CASH TO PAY INVOICES ON THOSE CIP PROJECTS.
UM, ONCE THE COMMERCIAL PAPER, UM, IS EXPENDED TO FUND THOSE PROJECTS, AND WE HAVE A, A CERTAIN AMOUNT OUTSTANDING, WE FIX OUT THAT, UM, VARIABLE RATE COMMERCIAL PAPER INTO LONG-TERM FIXED RATE BONDS.
UM, SO THIS TRANSACTION THAT WE'RE CONTEMPLATING IS THE, JUST OUR STANDARD REFUNDING OF THOSE COMMERCIAL PAPER NOTES THAT ARE CURRENTLY OUTSTANDING.
UM, AND WE'RE ANTICIPATING THE SIZE TO BE APPROXIMATELY 200 MILLION FOR THIS TRANSACTION.
SO ON SLIDE SEVEN, THIS GIVES YOU A BREAKDOWN OF THE COMMERCIAL PAPER THAT WE ARE ANTICIPATING TO REFUNDING.
UM, AND THESE NUMBERS ARE PRELIMINARY AT THIS POINT, WE'LL CONTINUE TO, UM, MONITOR AND IF ANY, UM, YOU KNOW, IF THERE'S INCREASED EXPENDITURES BETWEEN NOW AND THE TIME OF THE BOND TRANSACTION, WE'LL, WE'LL SIZE THE TRANSACTION ACCORDINGLY.
UM, SO THESE ARE ESTIMATES AT THIS POINT, SO WE'RE ANTICIPATING THAT, UM, OF THE 200 MILLION, APPROXIMATELY 158 MILLION, UM, WOULD BE, UM, REFUNDED COMMERCIAL PAPER FROM SERIES G AND H, WHICH FUND, UM, CAPITAL PROJECTS AND ABOUT 42 MILLION, UM, RELATED TO EQUIPMENT.
SO ON SLIDE EIGHT, AS FAR AS NEXT STEPS, UM, CHRIS, YOU MENTIONED THE, UM, THE RISING INTEREST RATE ENVIRONMENT THAT WE'RE IN.
UM, SO AT THIS POINT, WE DON'T ANTICIPATE ANY, UM, POTENTIAL CANDIDATES OF OUT, UH, CURRENTLY OUTSTANDING FIXED RATE DEBT FOR REFUNDING.
UM, JUST BECAUSE WE'VE, UM, WE'VE, WE'VE HAD A LOT OF REFUNDINGS THAT WE'VE DONE OVER THE LAST COUPLE OF YEARS, AND WITH RISING INTEREST RATES, WE DON'T SEE ANY CANDIDATES RIGHT NOW, BUT WE'LL KEEP OUR EYE ON THAT.
AND OF COURSE, IF ANYTHING, UM, BECOMES AVAILABLE FOR A REFUNDING OPPORTUNITY, WE'LL CONSIDER THAT AS PART OF THE TRANSACTION.
UM, SO IN TERMS OF, UM, TIMING, WE EXPECT TO BRING THIS ITEM TO COUNCIL SOMETIME IN THE SUMMER.
AND ON SLIDE NINE, THIS IS A STANDARD FORMAT THAT WE SHOW FOR ALL OF OUR BOND TRANSACTIONS.
AS I MENTIONED, IT'S ABOUT 200 MILLION IN SIZE AT THIS POINT.
UM, IT'LL BE BACKED BY AVALOR TAXES.
UM, WE'RE EXPECTING AT THIS POINT, UM, WHAT WE'RE SEEING IN THE MARKET THAT OUR INTEREST RATE WOULD BE AROUND 3.6%.
AND LIKE I MENTIONED, COMING TO COUNCIL IN SUMMER AND HOPEFULLY PRICING AND CLOSING IN THE FALL.
SO MOVING ON TO THE LAST ITEM ON THE AGENDA FOR, UM, FOR THIS PRESENTATION, THIS IS RELATED TO THE HOUSTON AIRPORT SYSTEMS, UM, BONDS.
SO WE'RE CONTEMPLATING A BOND ISSUANCE SERIES, UM, 2023.
UM, AND, UM, SIMILAR TO ON THE GENERAL OBLIGATION SIDE, UM, THE AIRPORT USES COMMERCIAL PAPER AS WELL.
UM, SO THEY'VE BEEN USING COMMERCIAL PAPER TO, UM, PAY INVOICES ON THEIR CAPITAL PROJECTS.
UM, AND, UH, CURRENTLY WE'RE CONTEMPLATING, WE'RE REFUNDING THAT COMMERCIAL PAPER AND THEN ALSO ISSUING A PROJECT FUND, UM, TO CONTINUE THE FINANCING OF THE I TRIPP PROJECT.
UH, SO THE TOTAL SIZE OF THE TRANSACTION IS APPROXIMATELY, UH, 625 MILLION, WHICH WOULD INCLUDE THAT COMMERCIAL PAPER TAKEOUT AND THE PROJECT FUND.
SO ON SLIDE 11, UM, AS FAR AS THE NEXT STEPS, AGAIN, WE'RE GONNA CONTINUE TO MONITOR, UM, ANY OUTSTANDING DEBT TO, TO IDENTIFY ANY CANDIDATES FOR SAVINGS.
UM, AND WE'RE HOPING TO BRING IN RCA TO COUNCIL IN APRIL THIS MONTH.
AND THEN AGAIN WITH THE SAME FORMAT FOR THIS TRANSACTION ON SLIDE 12.
UM, AS I MENTIONED, UH, 625 MILLION IN SIZE.
UM, THE, THE REVENUE SOURCE FOR PAYING THE DEBT AND, UM, THIS, THE SECURING THE DEBT WILL BE THE NET GENERAL AIRPORT REVENUES.
AT THIS POINT, WE, UM, EXPECT THAT THE INTEREST COSTS WOULD BE AROUND 4.6%.
UM, AGAIN, COMING TO COUNCIL SOMETIME THIS MONTH, AND WE
[00:35:01]
HOPE TO PRICE IN MAY AND CLOSE THE TRANSACTION IN JUNE.THAT CONCLUDES MY PRESENTATION.
DIRECTOR DEBOWSKI, THERE ARE NO COUNCIL MEMBERS IN QUEUE.
SO THE GENERAL OBLIGATION AT 200, MAYBE GOING UP A LITTLE BIT, JUST CHECK ON INTEREST RATES AND SEE WHAT THE MARKET'S DICTATING.
HOUSTON AIRPORT SYSTEM AT 6 25, WHAT WAS THE CUS, THE COMBINED UTILITIES SYSTEM? UM, SO THAT ONE, IT'S NOT NEW DEBT THAT WE'RE ISSUING, IT'S A REFI, RIGHT? IT'S, YEAH, IT'S REPLACING THE LIQUIDITY FACILITY THAT SUPPORTS THE, THE LONG TERM BONDS, BUT IT'S, UM, THE, THE SIZE IT'S OUTSTANDING ON THE 2004 B FOUR IS 75 MILLION.
COUNCIL MEMBER, UH, STAFF FROM COUNCIL MEMBER MICHAEL KNOX'S OFFICE.
FOLLOWING UP ON THE CHAIRMAN'S QUESTION ON SLIDE NINE AND SLIDE 12 WITH THE TRUE INTEREST COST MM-HMM
AS A POINT OF REFERENCE, WHAT WOULD THOSE COSTS TYPICALLY, LIKE TWO YEARS AGO, WHAT WOULD THEY HAVE BEEN? OH, DEFINITELY LESS.
UM, GOSH, I WOULD SAY AROUND FOR THE GO, MAYBE AROUND 2%.
WE, WE CAN SEND YOU WHAT WE GOT ON THE, ON THOSE LAST TRANSACTIONS ABOUT 2%.
THERE ARE NO OTHER COUNCIL MEMBERS IN QUEUE.
OUR NEXT AGENDA ITEM, I'D LIKE TO WELCOME CITY OF HOUSTON'S DIRECTOR OF ADMINISTRATIVE AND REGULATORY AFFAIRS TO, UH, PROVIDE A PRESENTATION ON THE 88TH TEXAS LEGISLATURE UTILITY REGULATION.
BILL, WELCOME DIRECTOR, TINA PAAS.
THANK YOU SO MUCH FOR ALLOWING ME TO SPEAK TO YOU THIS MORNING ABOUT SOME REALLY SIGNIFICANT UTILITY RELATED BILLS THAT ARE MOVING IN AUSTIN DURING THIS SESSION.
CAN WE START WITH THE FIRST SLIDE? OKAY, NEXT SLIDE.
SO THERE ARE LITERALLY DOZENS OF UTILITY BILLS MOVING THIS SESSION.
I'M SURE THAT YOU HEARD ABOUT IT WHEN YOU MADE YOUR TRIP TO TO AUSTIN YESTERDAY.
I'VE PUT THE ONES THAT ARE MOST PROBLEMATIC IN RED, BUT PRETTY MUCH ANYTHING ON THIS SLIDE WE ARE OPPOSING.
AND THERE ARE SEVERAL OTHER WE'RE OPPOSING.
SO WE TRIAGE AND PICK THE WORST OF THE WORST.
YOUR PACKETS INCLUDE WRITEUPS ON EACH OF THOSE FIVE, BUT WE ALSO HAVE ANALYSES AND TEST THEM TESTIMONY ON SEVERAL OF THE OTHERS THAT WE'RE HAPPY TO PROVIDE IF YOU NEED THEM.
SO, SENATE BILL 10 15, AND ITS COMPANION HOUSE BILL 30 43 ARE AMONG THE WORST OF THE WORST UTILITY BILLS THIS SESSION.
SO WE'RE GONNA CAMP OUT HERE FOR A MINUTE.
THESE ARE THE DOUBLE YOUR MONEY, DOUBLE YOUR FUND BILLS.
THEY PROPOSE CHANGES THROUGH THE UTILITY PERIODIC RATE ADJUSTMENT MECHANISM, COMMONLY REFERRED TO AS THE DCRF.
THE DCRF IS AN EXPEDITED MECHANISM THAT ALLOWS UTILITIES TO RECOVER CAPITAL INVESTMENT COSTS, PLUS A RATE OF RETURN, WHICH IS RECOVERABLE FROM RATE PAYERS WITHIN ABOUT FOUR MONTHS OF FILING.
WHY DO WE OPPOSE IT? FIRST AND FOREMOST, BECAUSE THEY COMPLETELY ELIMINATE MUNICIPAL ORIGINAL JURISDICTION AND THEY TAKE ACTION MUNICIPAL ORIGINAL JURISDICTION TO REVIEW AND TAKE ACTION ON THESE BILLS.
AND SECONDLY, THIS IS THE DOUBLE YOUR MONEY PIECE.
THE LEGISLATION ALLOWS THE UTILITY TO FILE TWO OF THESE EACH YEAR INSTEAD OF JUST ONE, WHICH IS WHAT'S CURRENTLY ALLOWED UNDER THE LAW.
THE REASONING BEHIND THIS IS A LITTLE CONFUSING.
THE BILL SPONSOR SAYS THAT THIS WILL AVOID STICKER SHOCK FOR RATE PAYERS BECAUSE INSTEAD OF GETTING AN ANNUAL BIG INCREASE AROUND THIS TIME EACH YEAR, THEY'LL GET TWO ANNUAL BIG INCREASES A YEAR.
AND THEN THE BILL WOULD ALSO REMOVE THE CURRENT PROHIBITION AGAINST HAVING ANY OTHER RATE PROCEEDINGS GOING AT THE SAME TIME THAT THESE ARE FILED.
SO YES, I SUPPOSE YOU AVOID STICKER SHOT BY HAVING MULTIPLE RATE INCREASES A YEAR FOR RATE PAYERS.
INTERESTINGLY, ALTHOUGH UTILITIES ARE NOT GONNA BE ABLE TO FILE MORE OF THESE, THE LEVEL OF REVIEW IS GONNA GO DOWN AUTOMATICALLY TO ENSURE THAT NOTHING IS GOING TO KEEP RATE PAYERS FROM HAVING TO PAY THIS ALMOST IMMEDIATELY.
THE BILL SAYS CITIES ABSOLUTELY CANNOT REVIEW THESE, AND THE PUBLIC UTILITY COMMISSION DOESN'T HAVE TO.
THEY MAY, BUT THEY DON'T HAVE TO.
IN FACT, THE ONLY THING THAT THESE BILLS REQUIRE IS THAT THESE FILINGS HAVE A UTILITY EMPLOYEE SIGN ATTESTING THAT THE INFORMATION IS TRUE AND CORRECT IN THE FILING.
AND EVEN THOUGH NO REGULATORY AUTHORITY MUST REVIEW THESE COSTS TO ENSURE THAT THEY'RE PRUDENT OR REASONABLE, THE COMMISSION IS REQUIRED TO TAKE ACTION ON THEM WITHIN 60 DAYS OF THE FILING.
UTILITIES AND THOSE LEGISLATORS WHO SUPPORT THIS BILL SAY THAT IT'S GOING TO MAKE THE PROCESS MORE EFFICIENT AND LESS COSTLY.
WELL, THAT DEPENDS ON HOW YOU DEFINE MORE EFFICIENT AND LESS COSTLY.
YES, A BIG RUBBER STAMP IS PROBABLY CHEAPER THAN LITIGATION, AND IF EFFICIENT MEANS FASTER, THEN YES, IT'S MORE EFFICIENT.
BUT IF EFFICIENT MEANS BALANCING THE INTEREST
[00:40:01]
OF ENSURING THAT YOU HAVE GOOD, RELIABLE ELECTRIC INFRASTRUCTURE, WHILE ALSO PROTECTING RATE PAYERS FROM BEARING ALL OF THOSE COSTS, OTHERWISE KNOWN AS BALANCING INTEREST, WHICH IS WHAT REGULATION IS ABOUT, THEN KNOW THIS BILL IS ANYTHING BUT EFFICIENT.AND FINALLY, WHY ARE WE SO OPPOSED TO THIS BILL? WELL, THERE HAVE BEEN FIVE OF THESE D CRFS IN THE HOUSTON AREA SINCE 2018.
THEY WOULD'VE COST RATE PAYERS ABOUT $238 MILLION.
THANKS IN LARGE PART TO MUNICIPAL MUNICIPAL INTERVENTION, MAINLY FROM HOUSTON.
APPROXIMATELY $80 MILLION OF THAT AMOUNT WAS DISALLOWED SINCE 2018.
SO IF THESE TWO BILLS PASS, THERE'S GONNA BE NO PRUDENCE REVIEW.
THERE WILL BE NO SCRUTINY OF COSTS, NO OPPOSITION TO A HUNDRED PERCENT OF THESE COSTS BEING CHARGED BACK TO RATE PAYERS.
EVEN THE LEGISLATORS THAT ARE SPONSORING THIS DO NOT REALIZE THAT THEY'LL BE PAYING THOSE HIGHER BILLS TOO.
IN FACT, TRUTH BE TOLD, THE ONLY ONES IN TEXAS WHO WILL BENEFIT FROM THESE TWO BILLS PASSING ARE THE UTILITY COMPANIES AND THE UTILITY SHAREHOLDERS.
SENATE BILL 10 16 AND HB 27 13 ARE UTILITY EMPLOYEE COMPENSATION BILLS.
WE OPPOSE THESE BILLS FOR THREE REASONS.
FIRST, FOR THE FIRST TIME IN TEXAS AND ALMOST EVERY OTHER STATE IN THE UNION, UTILITY RATES CHARGE TO CUSTOMERS WOULD INCLUDE FINANCIAL INCENTIVES PAID TO UTILITY EMPLOYEES THAT ARE BASED ON HOW WELL THE COMPANY DOES FINANCIALLY.
THIS HAS TRADITIONALLY BEEN DISALLOWED IN ANY RATE, PROCEEDING FOR ANY UTILITY.
KAMAN EXPLAINED, EVEN FOR THE CITY OF HOUSTON, WE'RE ONLY ALLOWED TO RECOVER WHAT IT ACTUALLY COSTS TO SERVE THOSE CUSTOMERS.
BUT NOW WE'RE ACTUALLY GOING TO BE PROVIDING FINANCIAL INCENTIVES BASED ON HOW WELL THEY DO IN RATE CASES THAT RATE PAYERS GET TO PAY FOR.
THE SECOND REASON WE OPPOSE THIS IS BECAUSE THEY'RE USING MARKET-BASED SURVEYS TO DETERMINE WHAT THIS EMPLOYEE COMPENSATION SHOULD BE.
THESE ARE MARKET-BASED SURVEYS BASED ON WHAT FORTUNE 500 COMPANIES PAY.
NOW, THIS WOULD BE LIKE, LIKE SAYING THAT WHAT CITY EMPLOYEES SHOULD BE PAID IS BASED ON WHAT FORTUNE 500 COMPANIES PAY THEIR EMPLOYEES.
BECAUSE UTILITIES, VERY MUCH LIKE THE CITY OF HOUSTON, HAVE A CERTAIN RETURN THAT'S PAID BY CUSTOMERS.
JUST LIKE OURS IS PAID BY TAXPAYERS.
THEY ARE A LOWER RISK ENTITY, THEY'RE NOT A TRUE PRIVATELY OWNED COMPANY.
AND THE THIRD AND FINAL REASON THAT WE OPPOSE THESE IS THAT THEY CREATE A LEGAL PRESUMPTION THAT THESE FINANCIAL INCENTIVES ARE REASONABLE AND NECESSARY.
SENATE BILL 1212 AND HOUSE BILL 27 93 RELATE TO GIVING UTILITIES THE ABILITY TO RECOVER COSTS ASSOCIATED WITH INTERCONNECTING DISTRIBUTOR ENERGY RESOURCES.
NOW, AS A POLICY MATTER, WE DON'T OPPOSE THIS TYPE OF BILL.
THE REASON WE OPPOSE THESE TWO SPECIFICALLY IS BECAUSE THEY CREATE THE LEGAL PRESUMPTION THAT ANY EXPENSE THE UTILITY SUBMITS IN THIS SPACE IS BOTH PRUDENT AND REASONABLE.
SO WE OBJECT TO THE LEGAL PRESUMPTION.
IF THAT PRESUMPTION WERE REMOVED, WE LIKELY WOULDN'T BE OPPOSING THIS NEXT SLIDE.
NOW, SENATE BILL 1291 HAS THE POTENTIAL TO BE THE WORST OF ANY OF THESE BILLS.
IT WOULD ACTUALLY REPLACE 10 15 AND 30 43 AS OUR LEAST FAVORITE BECAUSE THIS BILL WHERE IT DOESN'T OVERTLY PREEMPT ANY OF OUR AUTHORITY, IT DOES IT SUBTLY.
WHAT IT DOES IS IT TAKES AWAY THE ABILITY UNDER THE LAW FOR US TO BE REIMBURSED FOR OUR PART PARTICIPATION IN ELECTRIC AND GAS REGULATION.
IT LEAVES NO FUNDING MECHANISM TO ALLOW US TO EXERCISE OUR OWN ORIGINAL JURISDICTION BY REVIEWING RATE CASES OR LITIGATING IN THE INTEREST OF OUR RATE PAYERS.
AS I MENTIONED ON AN EARLIER SLIDE, THROUGHOUT THE HISTORY OF THE CITY, EVEN IN THOSE LAST FIVE DCRF CASES, WE SAVED RATE PAYERS MORE THAN $80 MILLION IN THE HISTORY OF THE CITY'S PARTION PARTICIPATION.
IT'S BEEN HUNDREDS OF MILLIONS OF DOLLARS.
THIS BILL WOULD TAKE THAT AWAY FROM US IN ANY ELECTRIC OR GAS RATE PROCEEDING.
SO WE OPPOSE IT RIGHT NOW, IT DOESN'T HAVE A COMPANION, IT'S NOT MOVING.
WE HAVE PREPARED TESTIMONY IN THE EVENT THAT IT DOES.
AND SO THIS JUST LISTS OTHER BILLS THAT WE CONSIDER BAD.
THIS SLIDE ON THE NEXT SLIDE WILL DO THAT.
I'VE PROVIDED WRITE-UPS FOR EACH OF THEM HERE.
THESE ARE BRIEF, BUT WE ALSO HAVE TESTIMONY THAT WE CAN PROVIDE TO YOU.
WE HAPPEN TO BE IN AUSTIN, AND YOU WANNA SPEAK TO ANY LEGISLATORS ABOUT THESE.
AND THE NEXT SLIDE INCLUDES THE REST OF THOSE BILLS.
NOW, I KNOW THIS IS A PRETTY ESOTERIC SUBJECT.
IT'S NOT EXCITING, AND THIS WAS A LOT TO COVER IN JUST A FEW MINUTES.
SO IF YOU HAVE ANY QUESTIONS OR YOU REQUIRE AN, UH, AN INDIVIDUAL BRIEFING, I'M HAPPY TO DO THAT.
AS SOME OF THESE BILLS MOVE TO HEARING, I HOPE THAT YOU WILL COME TO AUSTIN WITH US AND TESTIFY AGAINST THEM AND MEET WITH LEGISLATORS HONORABLE TO HONORABLE, TO EXPLAIN TO THEM THAT THIS, THIS HAS A VERY, VERY REAL IMPACT, NOT ONLY ON THE CITIZENS OF HOUSTON, BUT ALL OVER TEXAS, INCLUDING THE LEGISLATORS THEMSELVES.
THIS IS GONNA AFFECT NOT JUST HOMEOWNERS, BUT ALSO SMALL BUSINESS OWNERS AND LARGE BUSINESS OWNERS.
I THANK YOU FOR VERY MUCH FOR YOUR ATTENTION, AND I'LL TAKE ANY OF YOUR QUESTIONS.
UM, AND WHILE IT MAY BE A LITTLE ESOTERIC AND IN THE WEEDS, UM, I THINK THE IMPLICATIONS FOR RESIDENTS DAY TO DAY, UM, WE'RE SEEING PLAY OUT, FOR EXAMPLE, I KNOW WE WERE STRONG OPPONENTS
[00:45:01]
TO PRIOR, UH, BILLS THAT BASICALLY TOOK AWAY THE CITY'S ABILITY TO NEGOTIATE WHERE UTILITY POLES GO.RIGHT? AND WE'RE SEEING THAT PLAY OUT NOW.
I'M SURE MANY OF YOU HAVE SEEN THE PICTURES OF THESE MONSTROSITIES GOING UP IN FRONT OF SINGLE, UH, FAMILY RESIDENTS IN BUNGALOWS AND HISTORIC AREAS LIKE MONTROSE WITH NO NOTIFICATION.
UM, AND AGAIN, THAT IS SOMETHING WE OPPOSED AND NOW WE'RE SEEING THE IMPACTS OF THAT.
UH, WHEN IT COMES TO THE FIRST, UH, SET OF BILLS, YOU SAID SB 10 15, UM, AND HOUSE BILL, I THINK THE COMPANION'S 3 43.
UM, BASICALLY WHAT YOU'RE SAYING IS IT'S REMOVING THE ABILITY OF THE CITY TO INTERVENE.
IS THAT CORRECT? IT'S, IT'S A REMOVING OUR ORIGINAL JURISDICTION.
AND SO THEY, THERE IS AN AMENDMENT THAT SENATOR KING HAS OFFERED THAT IT WOULD ALLOW US TO PARTICIPATE AT THE COMMISSION LEVEL, BUT THAT'S NOT ORIGINAL JURISDICTION.
SO WE DON'T GET CONCURRENT REVIEW WHEN THAT'S FILED.
AND WE REALLY BA BASICALLY DON'T HAVE A STICK ANYMORE.
AND, AND WE HAVE BEEN SUCCESSFUL UNDER THE CURRENT MODEL AND SAVING OVER APPROXIMATELY $80 MILLION FOR RESIDENTS.
NOT FOR THE CITY, FOR RESIDENTS.
ONE OF THE CONCERNS I HAVE WITH THESE, AND UH, A FEW OF US WERE ACTUALLY IN AUSTIN, UM, YESTERDAY ON SOME OF THESE BILLS IS THE OTHER PREEMPTION ITEMS, WHICH I KNOW WE'LL GET TO.
BUT I THINK THEY PLAY A ROLE BECAUSE SOME OF IT WOULD ACTUALLY GUT THE CITY'S ABILITY TO HAVE A GOVERNMENT RELATIONS TEAM OR TO PAY FOR, UM, ADDITIONAL FOLKS TO GO UP IN TERMS OF LOBBYING.
SO LET'S SAY WE'RE ABLE TO HAVE A SEAT, UM, AT THE COMMISSION, EVEN THOUGH IT'S NOT ORIGINAL JURISDICTION, IF THESE OTHER BILLS PASS, WE WILL NOT BE ABLE TO PAY TO HAVE PEOPLE UP THERE TO EVEN VOICE OUR OPINION ON THAT.
UM, ARE YOU FAMILIAR WITH THOSE BILLS? I AM.
AND WHAT, WHAT ARE YOUR THOUGHTS ON THOSE? THOSE ARE, THERE'S WAY WORSE THAN THIS.
AND SO WHEN YOU HEAR FROM, FROM ASSISTANT CITY ATTORNEY, CHAUVIN, SHE'S GONNA GO THROUGH THOSE.
THOSE ARE, THOSE ARE NUCLEAR, RIGHT? BUT, AND THEY'LL HAVE IMPLICATIONS ON THIS.
THEY'LL, EVEN IF WE HAVE THIS, YOU KNOW, AMENDMENT, EVEN IF WE SUCCEED ON THESE YES.
AND IT PASSES, THEN WE STILL DON'T EVEN HAVE A VOICE ON THIS BECAUSE WE CAN'T GET ANYONE UP THERE.
COMES FROM MEMBER MICHAEL KOSH, IT APPEARS, UH, THANK YOU FOR COMING AND, AND I THINK, UH, THANK YOU FOR YOUR EXPLANATION OF THESE BILLS AND WHY WE SHOULD BE CONCERNED ABOUT THEM.
I'M TRYING TO UNDERSTAND WHY SENATOR KING GOT INVOLVED IN THIS.
I MEAN, HE WAS A JUSTICE OF THE PEACE.
HE, HE'S PROMOTED ALMOST ALL THESE, UH, OR HE'S FILED ALMOST ALL THESE, AND HE'S UP AROUND FORT WORTH, I THINK UP IN THE NORTH.
UH, I DON'T, I DON'T THINK THAT HE'S, I DON'T THINK THAT HE HAS ANY ILL INTENTIONS.
UH, I THINK THAT ALL OF US TRY TO MAKE DECISIONS BASED ON THE INFORMATION THAT'S IN FRONT OF US.
AND THE INFORMATION THAT WAS IN FRONT OF HIM WAS WE HAD THIS WINTER STORM URI HAPPEN AND IT WAS TERRIBLE.
AND WE NEED TO DO EVERYTHING THAT WE CAN TO SUPPORT THE GRID.
AND WHAT HE WAS TOLD WAS THE FASTER THAT WE CAN GET RECOVERY FOR UTILITY COMPANIES, THE MORE WE'LL BE ABLE TO MAKE THE GRID RELIABLE.
BUT WINTER STORM URI WASN'T EVEN AN EVENT THAT HAD ANYTHING TO DO WITH THE DISTRIBUTION SYSTEM.
THE DISTRIBUTION SYSTEM HELD UP.
THESE ARE ALL DISTRIBUTION ASSETS.
SO LET'S TALK ABOUT NOT SETTING UP A CAPACITY MODEL FOR GENERATION.
INSTEAD OF TALKING ABOUT DISTRIBUTION, IT, THEY CONFUSE ELECTED OFFICIALS WITH, WITH A 15 OR 20 MINUTE CONVERSATION.
AND, AND I REALLY DON'T THINK HE HAS ANY ILL INTENTIONS AT ALL.
AND I THINK HE'S TRYING TO WORK WITH PEOPLE.
UH, I JUST DON'T THINK THAT HE'S BEEN GIVEN ALL OF THE FACTS.
AND THAT'S ONE OF THE REASONS THAT WE'RE HOPING THAT YOU WILL HELP US BY GOING UP TO TALK TO THEM.
THE OTHER THING IS, IS THAT, UH, UH, SENATE BILL, UH, 1291, WHEN YOU ADDRESS THAT, THAT THAT WOULD TAKE AWAY OUR ABILITY TO BE REIMBURSED FOR LEGAL FEES BY CHALLENGING IT.
IS THAT, IS THAT CORRECT? CORRECT.
UNDER THE STATUTES RIGHT NOW, MUNICIPALITIES AND THE UTILITY ARE BOTH REIMBURSED FOR THEIR LEGAL FEES ON THESE RATE CASES.
AND SO, WE'LL, YOU NOTICE THAT THE BILL WOULD TAKE AWAY OUR REIMBURSEMENT, BUT NOT THE UTILITY REIMBURSEMENT.
IF YOU LOOK AT THE LAST GAS RATE CASE, WE, WE SPENT $1.3 MILLION DEFENDING IT SIZABLE AMOUNT.
IF THE UTILITY WAS REALLY INTERESTED IN HAVING THESE BILLS MOVE FORWARD TO CUT RAY CASE EXPENSES, THEN THEY WOULD LIMIT THEIR EXPENSES TO OURS.
SO, SO WE, WE SPENT 1.3 MILLION, BUT WE SAVED THE CITIZENS AND OURSELVES.
SO WE PROBABLY STILL HAVE TO DO IT, EVEN THOUGH WE'RE NOT GONNA GET REIMBURSED.
I WOULD IMAGINE IT, IT DEPENDS ON THE CITY'S BUDGET AT THAT POINT.
IT'LL BE ENTIRELY A GENERAL FUND CONCERN.
THANK YOU VERY MUCH FOR YOUR PRESENTATION.
AND THANK YOU DIRECTOR FOR THE PRESENTATION ON THE PRUDENT AND REASONABLE.
AND YOU SAID IF THAT PART WAS, TAKE THE LEGAL PRESUMPTION THAT, THAT THESE EXPENSES ARE PRUDENT AND REASONABLE, THEN, THEN THAT
[00:50:01]
WOULD BE, YOU'D BE OKAY WITH THAT? YEAH, IT'S, IT'S, THAT'S THE ONE ON DISTRIBUTED ENERGY RESOURCES.AND, AND THAT, THAT'S MY QUESTION.
SO, SO I'VE, YOU KNOW, WE'VE ALL SEEN THESE RIGHT CASES, THEY GET ON THE AGENDA THAT YOU GO BACK, WE HIRE THE LAWYER, HE GOES TO THE PUC, THINGS GET WORKED OUT, THE RATE GOES DOWN.
I MEAN, IT'S ALL PRETTY PERFUNCTORY.
IT SEEMS TO BE A, A A, A MATTER OF COURSE.
SO IF THAT'S TAKEN AWAY, OUR ABILITY TO HIRE THE LAWYER, GO IN FRONT OF THE PUC, THE, THE UTILITY STILL HAS, DOES IT STILL HAVE TO PROVE ITS PRUDENT AND REASONABLE COSTS AT ALL? IS IT A RUBBER, IT'S JUST A RUBBER STAMP BY THE PUC? HOW DOES, HOW WOULD IT WORK IF THIS WAS TO PASS? SO ON 10 15 AND 30 43, THEY'RE ACTUALLY TAKING AWAY ANY PRUDENCE REVIEW.
IT SAYS THAT THE, THE COMMISSION MAY REVIEW IT, THE CITY ABSOLUTELY CANNOT, BUT THE COMMISSION MAY.
UM, AND I THINK THAT SENATOR KING HAS OFFERED AMENDMENTS WHERE INTERVENERS COULD EVEN INTERVENE AT THE COMMISSION.
BUT THERE IS NO LEVEL OF ACUTE REVIEW THAT IS REQUIRED.
I, I WAS SERIOUS WHEN I SAID THE ONLY REQUIREMENT IN THE LAW IS THAT A UTILITY EMPLOYEE HAS TO SIGN IT ATTESTING THAT IT'S TRUE.
SO THE PRUDENT AND REASONABLE IS JUST, WOULD JUST BE BASED ON THAT.
THAT THESE ARE, THESE ARE THE COSTS THAT ARE INCURRED.
IT ELIMINATES THE PRUDENT STANDARD.
SO WHAT DID THE, WHAT DID THESE BILLS LOOK LIKE WHEN THEY CAME OUT OF SENATE? WHAT WAS THE NUMBER? WAS IT, HOW DID IT, IT CAME OUT OF SENATE WITH A, WITH A NUMBER TO GO TO COMMITTEE OR TO GO TO INTO THE BUDGET.
WHAT DID IT PASS BY TO MOVE IT FORWARD? BECAUSE THAT'S A GOOD WAY OF TELLING IF THESE THINGS ARE GONNA DIE OR IF THEY'RE GONNA MOVE.
OH, FOR INSTANCE, UM, THE FIREFIGHTER, UM, PAY, I THINK IT'S 26 0.
AND THAT PROBABLY HAS A VERY STRONG CHANCE OF PASSING THIS ONE ON THE, THE 10 15.
SO 10 15, I, I DO NOT KNOW THAT.
I DO KNOW THAT IT'S, UM, GONE TO IN THE ENGROSSED VERSION.
SO AT THIS POINT, WE ARE SPEAKING TO REPRESENTATIVE SPILLER IN THE HOUSE SIDE TO TRY TO GET AMENDMENTS TO 30 43.
DID Y'ALL, DID ANYBODY HEAR ANYTHING YESTERDAY ON YOUR TRAVELS? WHAT WERE THE NUMBERS COMING OUT OF SENATE? SO, 'CAUSE I LOOK AT THIS AS IN A LITTLE BIT DIFFERENT WAY.
SO IT'S A FUNCTION, THEIR PERIODIC RATE ADJUSTMENT'S GONNA BE A FUNCTION OF TWO VARIABLES, CORRECT? MM-HMM
ONE IS THE CAPITAL INVESTMENT COSTS OF CENTER POINT YES.
INTO THEIR PRODUCT THAT THEY PROVIDE.
AND THEN THE RATE OF RETURN ISN'T THE RATE OF RETURN DETERMINED BY THE PUC.
SO THE RATE OF RETURN IS DETERMINED IN A BASE RATES PROCEEDING.
UM, WHICH IS, WHICH HAPPENS EVERY FIVE YEARS.
AND WHEN WE HIRE, UH, ALTON, AS A MATTER OF FACT, ALTON IS HERE.
SO HE GO, SOME OF THAT HIRE YOU TO ARGUE O SIDE, THEY HIRE SOMEONE ELSE, AND THEN THE PUC PICKS THAT RATE OF RETURN.
SO IT'S REALLY A FUNCTION OF CAPITAL IMPROVEMENTS AND RATE OF RETURN.
AND OUR PROBLEM WITH THAT IS, I MEAN, WE WANT CAPITAL IMPROVEMENTS IN AN ORDER.
THIS IS, I'M, I'M LOOKING AT IT FROM A COMPANY STANDPOINT AND TELL ME WHERE I'M GOING WRONG DOWN THIS.
WE WANT A COMPANY TO HAVE STRONG CAPITAL IMPROVEMENTS THAT ARE ASSETS FOR US.
AND THEN THE RATE OF RETURN, WE HAVE NOTHING TO DO WITH IT.
WE'RE GONNA ARGUE WITH MR. HALL AND THEY'RE GONNA ARGUE, AND THE PUBLIC UTILITY COMMISSION IS GOING TO COME BACK WITH AN, WITH A RATE OF RETURN.
AND THE WAY I LOOKED AT IT, YOU'VE BEATEN THEIR PANTS OFF THE LAST COUPLE YEARS TIMES.
SO WHEN YOU DO THAT, THAT SOUNDS LIKE A, THEIR PANTS ARE OFF.
YOU WANNA COME UP AS AN IS IT ALL, IS IT ALL RIGHT, SIR? IF HE AS AN ACCOUNTANT, I LOOK AT CAPITAL IMPROVEMENT, I GET IT.
RATE OF RETURN DETERMINED BY PUC.
SO I'M TRYING TO FIGURE OUT WHAT'S WRONG WITH THIS OTHER THAN COMING BACK TWICE A YEAR.
UH, WHAT'S WRONG WITH THIS ONE IS WE PUT ON A LOT OF EVIDENCE, LET'S TALK ABOUT THIS MOST RECENT DCRF, THAT WHERE THERE HASN'T BEEN A FINAL ORDER YET.
OUR, OUR LOCAL UTILITY WENT OUT AND ACQUIRED $200 MILLION WORTH OF MOBILE GENERATION.
UH, IT WAS KIND OF A KNEE JERK REACTION AFTER WINTER STORM URI.
AND THAT $200 MILLION WE PUT ON EVIDENCE, THEY PUT ON EVIDENCE, IT WENT TO THE STATE OFFICE OF ADMINISTRATIVE HEARINGS, INDEPENDENT ADMINISTRATIVE BODY, BODY WITH THE JUDGE.
THE JUDGE LOOKED AT ALL THE EVIDENCE, CAME BACK WITH A, WITH A PROPOSAL FOR DECISION THAT SAID ALL OF IT SHOULD BE DISALLOWED BASED ON THE EVIDENCE.
SO A, A AS, AND IT WAS CAPITAL INVESTMENT AND THERE WAS A RATE OF RETURN ATTACHED TO IT, BUT THE EVIDENCE SAID IT WASN'T A PRUDENT INVESTMENT AND YOU SHOULDN'T HAVE DONE IT.
RIGHT? I MEAN, IF I WAS CREATING A BILL, THIS WAS ME.
I DON'T WANT, I'LL GO TO COUNCIL MEMBER CAYMAN, WHEN MY BILL EXPIRES, I WOULD BE ATTACKING THE COMPANY, NOT FROM THEIR CAPITAL IMPROVEMENTS, NOT FROM THE RATE OF RETURN ON THEIR EXECUTIVE
[00:55:01]
COMPENSATION, WHICH FOR THE SECOND YEAR IN A ROW, THEIR CEO IS AT $38 MILLION A YEAR.THE NEXT CLOSEST CEO WAS, I BELIEVE CONOCO PHILLIPS AT 28 MILLION.
THAT'S A 60% INCREASE BETWEEN NUMBER ONE AND NUMBER TWO.
SO $38 MILLION IS PRETTY DARN GOOD.
SO IF YOU WANT THE MONEY, LOOK AT IT FROM THAT PERSPECTIVE.
UM, YOU KNOW, WE'RE TALKING A LOT ABOUT THESE BILLS AND I AGREE WITH THE IMPORTANCE OF HARDENING OUR GRID.
RIGHT? AND INCLUDING, I KNOW THAT THERE'S ONE BILL WHERE THEY'RE SEEKING SOME REIMBURSEMENT FOR, UM, POWER GENERATION, RIGHT? WHEN LINE UTILITIES DO FAIL, THE ABILITY TO DO THAT.
AND I THINK THAT THAT'S IMPORTANT.
SO I DO WANNA THANK, UM, CENTER POINT AND OTHERS FOR LOOKING AT THOSE HARDENING PERSPECTIVES BECAUSE THEY DESERVE SOME, THEY DESERVE KUDOS FOR THAT.
BUT ONE THING, AND I DON'T KNOW IF IT'S IN THE LIST OF THE OTHER BILLS THAT WEREN'T SPECIFICALLY MENTIONED BUT LISTED THERE, UH, WHEN WE WERE IN AUSTIN, IT WAS ALSO BROUGHT UP, THERE'S A, A BILL, UM, RELATED TO, UH, LET'S SAY INTERNET PROVIDERS.
SO, AND I LIKE STREAMING PROVIDERS.
SO THE HULUS, THE, UM, DISNEY PLUSES, THINGS LIKE THAT, THAT ARE PIGGYBACKING ON UTILITIES, BUT NOT HAVING TO PAY THE FEES THAT OTHER UTILITIES ARE PAYING.
UM, CAN YOU TALK, YOU KNOW, I, I SPOKE WITH ONE REP WHEN I RAN INTO HIM IN THE HALLWAY.
UM, AND HE SAID, WELL, THEY'RE NOT DOING ANY HARM.
THEY, THEY'RE JUST, YOU KNOW, PIGGYBACKING ON IT, BUT IT'S NOT MAKING ANY, ANY DIFFERENCE ONE WAY OR ANOTHER.
CAN YOU SPEAK TO THAT? BECAUSE I DON'T THINK THAT THAT'S RIGHT.
MY UNDERSTANDING IS, UM, SOMETIMES THEY ARE TEARING UP THE STREETS AND PUTTING IN NEW LINES.
UH, CAN YOU TALK A LITTLE BIT ABOUT THAT BILL? BECAUSE AGAIN, THERE'S ANOTHER COST, I THINK, TO THE CITY WITH THAT THAT'S GOING UNNOTICED OR NOT SPOKEN ABOUT A LOT THERE.
AS A MATTER OF FACT, UM, THERE'S A STORY THAT'S BREWING IT'S LIKELY TO AIR EITHER TONIGHT OR LATER THIS WEEK, AND IT'S ABOUT A LOT OF DAMAGE THAT'S BEING DONE IN KINGWOOD WHERE YOU HAVE THE CABLE COMPANY COMING IN AND THE ELECTRIC COMPANY AND DIG YOU UP HOLDS.
AND THERE'S VERY LITTLE THAT WE CAN ACTUALLY DO ABOUT THAT UNDER THE STATE LAW.
THEY'RE JUST LEAVING WIRES AND, AND A MESS BEHIND.
AND WHO ULTIMATELY PAYS THAT COST? WELL, THEY CLAIM WITH THIS BILL THAT, OH, THESE ARE ALL STREAMING SERVICES.
THEY'RE NOT USING ALL OF THOSE LINES, BUT THEY ARE, THEY'RE USING THAT BACKBONE AND THEY ARE PART OF THE REASON THAT IT'S GETTING TORN UP.
AND WHY ARE THEY PART OF THE REASON THAT THEY'RE GETTING TORN UP? I THINK THAT WAS THE DISCONNECT I WAS HEARING IN AUSTIN WITH SOME FOLKS BECAUSE THEY ARE USING THAT BACKBONE.
IT'S HAVING, IT'S, IT'S COMCAST SELLING THOSE STREAMING SERVICES.
WHAT WILL HAPPEN IS COMCAST DIGS UP THINGS ALL THE TIME AND, AND I'M COMCAST'S BIGGEST FAN, SO I'M NOT CRITICIZING THEM, BUT THEY DIG UP THINGS ALL THE TIME.
THEY WILL NOW STILL SELL THESE STREAMING SERVICES IF THIS BILL PASSES.
THEY'RE STILL USING THE RIGHT OF WAY, BUT THEY'RE NO LONGER PAYING THE CITY ANY FRANCHISE FEES FOR USING THE RIGHT OF WAY.
SO THEY'RE NOT, THEY'RE NOT PAYING ANY COST OF PROVIDING THAT SERVICE BECAUSE INTERNET SERVICES UNDER THIS BILL, STREAMING SERVICES WOULD BE EXEMPT.
SO THAT FRANCHISE FEE THAT YOU'RE GETTING ON CABLE AND TELEPHONE RIGHT NOW WOULD END UP GOING AWAY AS WELL.
AND NOW YOU HAVE PEOPLE'S YARDS TORN UP AND STREETS TORN UP THAT DON'T HAVE TO BE REPAIRED BECAUSE NOW WE LOSE ANY JURISDICTION TO DO ANYTHING ABOUT IT.
SO WE ARE IN FACT INCURRING COSTS BECAUSE THEY ARE GETTING TORN UP.
AND WE'RE NOT ABLE, LET'S SAY, TO GO IN TO REPAIR 'EM.
SO SB 10 15 CAME OUTTA COMMITTEE 11 ZERO.
HB 30 43 HAS NOT GONE TO COMMITTEE YET.
COUNCIL MEMBER SALLY ALCORN ON THE REIMBURSEMENT.
SO LIKE, ON ON THE EXAMPLE CENTER POINT PAID 7 MILLION, WE PAID 1.3 MILLION.
THE REIMBURSEMENTS FROM RATE PAYERS, THOSE GO TO CUSTOMER RATES.
SO THAT'S, IS THAT BUILT INTO THE, I MEAN, HA HA IS THAT SOMEHOW BUILT INTO THE RATE INCREASE? YES.
SO THEY WOULD, THAT THE 7 MILLION WOULD GET PASSED ALONG TO THE RATE PAYERS, BUT THE 1.3 WOULD NOT, NO, IT WOULD ALL, ALL RATE CASE EXPENSES ARE.
SO WHAT, WHAT THE PUC ASKED US TO DO YEARS AGO WAS, INSTEAD OF EACH, YOU KNOW, US, THE CITY OF DALLAS, EVERYBODY GOING IN AND, AND ATTACKING ALL OF THE ISSUES IN ORDER TO SAVE THE RATE PAYERS MONEY, THEY SAID, OKAY, UH, CITY OF HOUSTON, YOU'RE GONNA TAKE RATE OF RETURN, UM, CITY OF DALLAS, YOU'RE GONNA TAKE DEPRECIATION.
AND WE SPLIT UP ALL THE ISSUES AMONG THE CITIES AND WE TRY TO KEEP RATE CASE EXPENSES DOWN.
SO LIKE THE, THE D CRFS WHERE WE SAVE THE RATE PAYERS $80 MILLION BETWEEN ALL THE CITIES THAT WERE INVOLVED IN THAT PROCEEDING, WE SPENT $500,000.
DIRECTOR PAEZ, NO OTHER COUNCIL MEMBERS IN QUEUE.
WE'LL GO TO THE NEXT SUBJECT, WHICH IS I'D LIKE TO WELCOME SUZANNE CHAUVIN, GENERAL LITIGATION SECTION, CHIEF CITY OF HOUSTON LEGAL TO PROVIDE
[01:00:01]
A PRESENTATION ON THE 88TH TEXAS LEGISLATURE SUPER PREEMPTION.BILL, THANK YOU FOR YOUR WORK, MR. HALL.
GOOD MORNING COUNSEL MEMBERS, MY NAME IS SUZANNE CHAUVIN.
I'M THE CHIEF OF THE GENERAL LITIGATION SECTION OF THE CITY OF HOUSTON, LEGAL DEPARTMENT, CITY ATTORNEY MICHELLE IS CURRENTLY IN AUSTIN, ATTENDING THE SENATE BUSINESS AND COMMERCE COMMITTEE HEARING IN THE TEXAS LEGISLATURE COMMITTEE.
IS HEARING TESTIMONY TODAY ON SENATE BILL EIGHT 14, THE SUPER PREEMPTION BILL THAT I'M HERE TO TALK TO YOU ABOUT.
UH, ONE OF OUR ATTORNEYS, COLLIN PETTY, IS AN EXPERT IN PREEMPTION LAW, AND SHE IS TESTIFYING BEFORE THE SENATE COMMITTEE ON THAT BILL.
HOUSE BILL 2127 AND SENATE BILL EIGHT 14 PURPORT TO PREEMPT A FIELD OF REGULATION THAT IS OCCUPIED BY THE PROVISION OF ANY OF THE FOLLOWING CODES, THE AGRICULTURE CODE, THE BUSINESS AND COMMERCE CODE, THE FINANCE CODE, THE INSURANCE CODE, THE LABOR CODE, THE NATURAL RESOURCES CODE, THE OCCUPATIONS CODE, AND THE PROPERTY CODE.
THESE BILLS ADD A NEW CAUSE OF ACTION TO CIVIL, UH, UNDER THE CIVIL PRACTICES AND REMEDIES CODE TO ANYONE WHO HAS SUSTAINED AN INJURY.
IN FACT, IN INCLUDING GOVERNMENTAL ENTITIES AND INDIVIDUALS CAN SUE LOCAL GOVERNMENTS SEEKING PREEMPTION.
THE VENUE IS IN THE TARGETS COUNTY OR THE ADJACENT COUNTY AND CANNOT BE MOVED WITHOUT CONSENT.
SO IN OTHER WORDS, THE CITY OF HOUSTON COULD BE SUED IN FORT BEND COUNTY, UH, MONTGOMERY COUNTY, ANY OF THE ADJOINING COUNTIES.
UH, THE CAUSE OF ACTION IMPOSES LIABILITY FOR VIOLATING THE NEW PREEMPTION PROVISIONS.
THE REMEDIES ARE COMPENSATORY DAMAGES THAT IS COSTS AND ATTORNEY'S FEES FOR DEFENDING AGAINST THE LAWSUIT, AGAINST THE LAW, DECLARATORY AND INJUNCTIVE RELIEF AND COSTS AND FEES FOR BRINGING THE ACTION.
THE STATE GOVERNMENT COULD RECOVER FEES AND COSTS WHEN CITIES SEEK JUDICIAL CLARIFICATION OF THEIR OWN RIGHTS.
IN OTHER WORDS, IF THE CITY OF HOUSTON SUED TO DECLARE WHAT IT RIGHTS ARE, ITS RIGHT TO ENACT FOR THIS BODY TO ENACT A, UH, AN ORDINANCE TO WE SUE FOR A DECLARATION, THE STATE COULD RECOVER, UH, FEES AND COSTS.
IT WAIVES THE CITY'S GOVERNMENTAL IMMUNITY.
AND FOR INDIVIDUALS, UH, ANY GOVERNMENT OFFICIAL CITY EMPLOYEE, UH, IT ELIMINATES OFFICIAL AND QUALIFIED IMMUNITY AS ANY DEFENSE, WE BELIEVE THESE BILLS ARE UNCONSTITUTIONAL.
THE PURPORTED FIELD PREEMPTION VIOLATES THE TEXAS CONSTITUTION'S HOME RULE PROVISION THAT REQUIRES A PREEMPTIVE CONFLICT AND AUTHORIZES LOCAL INNOVATION.
WE BELIEVE IT MISAPPLY FEDERAL FIELD PREEMPTION DOCTRINE THAT IS NOT SUPPORTED UNDER THE TEXAS CONSTITUTION.
WE ALSO BELIEVE IT ATTEMPTS TO TURN HOME RULE CITIES SUCH AS THE CITY OF HOUSTON INTO GENERAL LAW CITIES BY REQUIRING EXPRESS LEGISLATIVE AUTHORIZATION FOR ALL LOCAL REGULATION IN DESIGNATED AREAS.
IT PARTIALLY REPEALS HOME RULE, WHICH CAN ONLY BE ACCOMPLISHED IN OUR OPINION BY A CONSTITUTIONAL AMENDMENT, NOT BY A SIMPLE STATUTE.
WE ALSO BELIEVE THESE BILLS ARE UNCONSTITUTIONALLY VAGUE.
THE MEANINGLESS, VAGUE LANGUAGE THAT SAYS ANYTHING WITHIN THESE CODES IS PREEMPTED UNDER FIELD PREEMPTION MAKES IT IMPOSSIBLE FOR CITIES LIKE HOUSTON TO KNOW WHICH LOCAL LOCAL REGULATIONS ARE PREEMPTED.
THE UNCONSTITUTIONALLY VAGUE LANGUAGE RENDERS THE STATUTE UNWORKABLE AND UNENFORCEABLE.
THE VAGUE LANGUAGE ALSO CREATES A SUBSTANTIAL CHILLING EFFECT ON EVEN PERMISSIBLE LOCAL REGULATION.
WE BELIEVE THESE BILLS WILL CAUSE A LITIGATION EXPLOSION.
IT WILL ENCOURAGE AND SUBSIDIZE EXPENSIVE LITIGATION AGAINST CITIES AS CITIES, TAXPAYERS, AND THE COURTS STRUGGLE TO DETERMINE THE SCOPE OF THE BILL'S IMPRECISE, UH, EXPRESS PREEMPTION, AND AGAIN, THAT CITIES ARE FINANCIALLY PENALIZED FOR SUING TO DECLARE THEIR OWN RIGHTS.
[01:05:05]
WE ALSO BELIEVE THAT THESE BILLS PUNITIVE LITIGATION PROVISIONS WILL CHILL LOCAL REGULATION BY THIS BODY, WHAT THE AUTHORS DESCRIBE AS A LIVING DOCUMENT.AND THEY HAVE REFUSED TO IDENTIFY SPECIFICALLY WHICH TYPES OF, OF ORDINANCES WILL AND WILL NOT BE, UH, PREEMPTED THE EXPANSIVE STANDING TO ANYONE, THE WAIVER OF IMMUNITY OR LOCAL OFFICIALS AND THE CITY AND ATTORNEY'S FEES PROVISIONS WILL CHILL AND PUNISH, EVEN PERMISSIBLE LOCAL REGULATION BY ENCOURAGING THE FILING OF LAWSUITS BY ALMOST ANYONE IN, IN ADJACENT COUNTIES.
THESE BILLS, DISRUPTION OF EXISTING FEDERALISM WILL EXACERBATE EVEN EXPECTED LITIGATION INCREASE.
STATE STATUTES THEMSELVES MAY BE PREEMPTED BY FEDERAL LAW OR EFFECTIVELY PREEMPTED BY FEDERAL LAW, WHICH AUTHORIZES LOCAL CO-REGULATION, FOR EXAMPLE, FLOODING ORDINANCES, UH, LEADING TO MORE CONFUSION AND LITIGATION.
WE ALSO BELIEVE THAT THESE BILLS WILL BE CONFUSING TO BUSINESSES BECAUSE THEY WILL NOT KNOW WHICH LOCAL LAWS THEY MUST OBEY AS IT EXISTS.
NOW, THE QUESTION, THE FIRST QUESTION IS, IS THE LOCAL REGULATION EXPRESSLY PREEMPTED BY STATE LAW? IN OTHER WORDS, DOES THE STATUTE SPECIFICALLY SAY THAT IT WILL PREEMPT CONFLICTING LOCAL REGULATION ALSO UNDER CURRENT LAW? THE NEXT INQUIRY IS, IS THE LOCAL REGULATION IMPLIEDLY PREEMPTED BY STATE LAW? THIS WILL ADD NEW QUESTIONS.
FOR EXAMPLE, IS THE LOCAL REGULATION EXPRESSLY AUTHORIZED BY ANOTHER STATE STATUTE? AS WITH GENERAL LAW CITIES, IS THE LOCAL REGULATION PREEMPTED BECAUSE IT FALLS IN A FIELD OF REGULATION THAT IS OCCUPIED BY A PROVISION OF THIS CODE? HOW BROADLY, IN OTHER WORDS, UH, DO THE, ARE THE CODES PREEMPTED? DOES FEDERAL LAW PREEMPT STATE LAW PURPORTEDLY PREEMPTING SOME STATE LAW OR FIELD? IN OTHER WORDS, AT THE TOP OF THE PYRAMID, DOES FEDERAL LAW PREEMPT THIS STATE OR STATE REGULATION? DOES FEDERAL LAW EXPRESSLY AUTHORIZE LOCAL CO-REGULATION? AS WITH FLOODING, ORDINANCES HAS OR WILL THE STATE STEP IN TO ASSUME SERVICES OR PROTECTIONS LOST TO PREEMPTION? NEXT SLIDE, PLEASE.
WE BELIEVE, OR WILLING OR ABLE TO PROVIDE SERVICES OR LOST TO PREEMPTION.
THE BILLS WE BELIEVE WILL CREATE CHAOS, ECONOMIC UNCERTAINTY, AND A REGULATORY BA VACUUM REGARDING WHAT LOCAL LAWS MAY BE ENFORCED, WHICH NEED TO BE OBEYED, WHAT LAW LOCAL LAWS MAY, WHAT LOCAL FEES MAY BE COLLECTED AND WHICH MAY NOT.
WHAT NEEDLESS EXPENSES MAY BE IMPOSED ON CITIES OR WILL NEED TO BE ASSUMED BY THE STATE WHAT LEGAL AND FINANCIAL PROTECTIONS FOR LOCAL RESIDENTS AND GOVERNMENTS MAY BE LOST IN THE STATE WILL NEED TO ASSUME.
FOR EXAMPLE, UM, MANY OF YOU MAY HAVE READ THE ARTICLE RECENTLY IN TEXAS MONTHLY ABOUT PAYDAY LENDING ORDINANCES THAT MAY BE PREEMPTED UNDER THIS LAW.
CITY OF HOUSTON HAS ONE SUCH ORDINANCE, WHETHER THE STATE CAN OR WILL FILL GAPS IN FUNDING SERVICES OR PROTECTIONS CREATED BY THE BILL'S PREEMPTION PROVISIONS.
AND THANK YOU FOR THE PRESENTATION.
UM, YOU KNOW, I, I FIND THIS BILL RELATIVELY WELL.
IT IS IRONIC, RIGHT? WE HAVE THE SUPREMACY CLAUSE AND PREEMPTION UNDER FEDERAL LAW, BUT STATES CONNECT WHERE FEDERAL LAW DOES NOT, RIGHT? AND THE SAME HAS ALWAYS BEEN APPLIED FROM THE LOCAL LEVEL AS IT RELATES TO THE STATE.
WE HAVE, I, BECAUSE WE JUST BLIMPED OVER IT.
YOU SAID WE HAVE, I THINK, UH, 1, 2, 3, 4, 5, 6, 7, 8 AREAS WHERE OF ENTIRE SEGMENTS OF CODE THAT IF THAT WE LITERALLY COULD NOT DO ANYTHING ON.
BUT ARE THERE SPECIFIC EXAMPLES?
[01:10:01]
FOR EXAMPLE, SINCE WE'RE IN THE FINANCE COMMITTEE, IT SAYS NOT JUST AG AGRICULTURE CODE, BUT BUSINESS AND COMMERCE CODE ARE THE FINANCE CODE.DO WE HAVE ANY EXAMPLES OF WHERE THE CITY HAS ACTED IN THOSE CO YOU KNOW, IT, IT'S DIFFICULT TO IDENTI IDENTIFY SPECIFICALLY BECAUSE THE, THE STATUTE IS SO VAGUE.
HOWEVER, THINGS THAT WE HAVE DISCUSSED THAT MAY BE UP FOR DEBATE AND DISPUTE, UM, AGRICULTURE CODE, WHICH RELATES TO, UH, ANIMALS, WILL THIS AFFECT OUR, UM, UH, THIS BODY'S RECENT ORDINANCE, UH, REGARDING SALES FROM PUPPY MILLS.
UM, WILL THIS, UM, AFFECT THE PAYDAY LENDING ORDINANCE? WILL THIS AFFECT, UH, THE, UH, THIS BODY'S FAIRLY RECENTLY ENACTED FLOODPLAIN ORDINANCE, AND THAT'S ONE WHERE ACTUALLY THE FEDERAL, UM, STATUTES GET IMPLICATED AS WELL, BECAUSE THE FLOODPLAIN ORDINANCE IS RELATED TO, UM, REQUIREMENTS OF FEMA AND FEMA EXPRESSLY TELLS LOCAL MUNICIPALITIES THAT, YOU KNOW, ENACT YOUR RE REGULATIONS IF YOU WANT FUNDING FEDERAL FUNDING, ENACT YOUR REGULATIONS SO THAT, UM, NEW DEVELOPMENTS ARE NOT BUILT, UM, WITHIN THE FLOODPLAIN.
WILL THAT BE EFFECTIVE? AND I'M ASSUMING, I MEAN, I'M LOOKING AT LABOR CODE, THIS BODY PASSED PAID PARENTAL LEAVE AND HAS INCREASED OUR, UM, YOU KNOW, 15 AND UP ACROSS THE BOARD IN TERMS OF PAY.
ARE THERE IMPLICATIONS FOR THOSE? THERE ARE ABSOLUTELY IMPLICATIONS FOR THAT, EVEN THOUGH THE CITY WAS ACTING AS AN EMPLOYER WHEN IT DID.
SO, IT DOES NOT APPLY BROADLY TO OTHER PRIVATE SECTORS COMPANIES, FOR EXAMPLE, WITHIN THE CITY OF HOUSTON.
BUT IT IS AN ORDINANCE AND ARGUABLY DOES VIOLATE DOES GET INTO, UH, UM, REGULATIONS THAT ARE ALREADY OCCUPIED BY THE LABOR CODE.
AND SO ARE WE ASSUMING, IS THERE LANGUAGE RELATED TO WHETHER OR NOT THIS IS RETROACTIVE, THEREBY NULLIFYING ACTIONS THAT THE CITY HAS PREVIOUSLY TAKEN? UM, THERE, I DON'T BELIEVE THAT IT IS NECESSARILY RETROACTIVE.
HOWEVER, IT CAN BE CHALLENGED AND IT DOES, DEPENDING ON WHEN THE BILL IS PASSED, AND IT COULD TAKE EFFECT IMMEDIATELY IF IT'S PASSED BY TWO THIRDS OR IT WOULD TAKE EFFECT IN SEPTEMBER.
SO ALL OF THAT WOULD BE SUBJECT TO LITIGATION.
AND I JUST HAVE ONE MORE QUESTION.
UM, SO IT'S UNCLEAR ABOUT THE RETROACTIVE NATURE OF IT, BUT ONE OF THE THINGS THAT WE TALKED ABOUT RELATED TO BOARDING HOMES WHEN WE WERE UP AT THE LEGISLATURE AND THE DANGERS THAT WE'RE SEEING WITH SOME OF THESE THAT ARE IN VIOLATION OF CITY CODE AND HPD RELIES ON THEM TO ENFORCE FOR THE SAFETY OF OUR SENIORS.
HOW OFTEN DOES THE LEGISLATURE MEET? EVERY TWO YEARS, EVERY OTHER YEAR.
SO IN ORDER TO ENACT SOMETHING THAT THE CITY MAY NEED, WE WOULD HAVE TO, WITH NO MONEY POTENTIALLY TO LOBBY, WE WOULD HAVE TO GO TO AUSTIN TO HAVE THEM REACT TO SOMETHING TWO YEARS, POTENTIALLY DOWN THE ROAD WHEN WE HAVE AN EMERGENCY THAT WE'RE DEALING WITH DAY TO DAY HERE IN HOUSTON.
AND YOU ACTUALLY BROUGHT UP ANOTHER, UH, ISSUE THAT, UM, THAT I AM CONCERNED WITH, UM, BECAUSE CITY OFFICIALS CAN BE SUED, UH, UNDER THIS, UH, BILL.
WHAT HAPPENS WHEN A HOUSTON POLICE OFFICER ISSUES A CITATION, UH, RELATING TO A, UH, AN ORDINANCE THAT IS ARGUABLY, UH, UH, IMPLICATED BY THIS BILL? THEY LOSE, AS WE KNOW, UNDER THE BILL, THEY LOSE THEIR GOVERNMENTAL IMMUNITY AND THEY LOSE THEIR ABILITY TO DEFEND BASED ON, UM, QUALIFIED IMMUNITY AS WELL UNDER THE STATUTE.
THE, UM, HP 2127 JUST VOTED FAVORABLY OUT OF COMMITTEE WITH NO PUBLIC VOTE YET.
AND SB 81 IS BEING HEARD THIS MORNING AT STATE AFFAIRS COMMITTEE 1 14 81 14.
MY BAD COMES MEMBER MICHAEL KOSH.
THANK YOU FOR YOUR GOOD EXPLANATION OF THIS.
UH, I LOOKED AND SAW THERE'S 40 SOMETHING, UH, STATE REPS THAT SAY THEY CO-AUTHORED THIS THING.
WHAT'S WHAT'S THE GENESIS BEHIND THAT? UM, WHAT'S, WHAT'S CREATING THAT, UH, I'M SORRY, COUNCIL MEMBER.
I DO NOT KNOW THE ANSWER TO THAT.
UM, I WELL, IF YOU DID, MAYBE WE COULD GET, WE COULD, WE COULD DIG DOWN TO FIGURE OUT WHY.
I MEAN, I LOOKED AT THE LIST OF NAMES.
MY, I I MEAN, I KNOW A LOT OF THOSE PEOPLE.
UH, THE OTHER THING, IS IT O ON YOUR PAGE? UH, WELL, IT'S THE ONE THAT SAYS, UM, UH, ADJACENT COUNTIES.
UH, THE, WHAT YOU MEAN TO TELL ME SOMEBODY IN ADJACENT COUNTY, UH, CAN FILE, OR ARE YOU
[01:15:01]
TALKING ABOUT IT WOULD BE MOVED TO AN ADJACENT COUNTY.IT, THE ACTION COULD BE BROUGHT IN AN ADJACENT COUNTY.
AND AS YOU KNOW, THERE ARE CITIZENS OF THE CITY OF HOUSTON, UH, IN ADJACENT COUNTIES.
AND IT IS ANYBODY THAT, UM, AND THERE ARE PORTIONS OF HOUSTON, UH, WITHIN ADJACENT COUNTIES, AND IT IS ANYBODY THAT BELIEVES THAT THEY HAVE BEEN HARMED BY THIS ORDINANCE.
I WILL SAY, BELIEVE IT OR NOT, THAT THE FACT THAT IT IS ONLY IN ADJACENT COUNTIES IS A CHANGE.
ORIGINALLY, AS THE BILL WAS WRITTEN, UH, THE CITY COULD BE SUED ANYWHERE IN TEXAS.
THIS TIME I'D LIKE TO WELCOME CITY OF HOUSTON FIRE CHIEF SAMUEL PENA TO PROVIDE A PRESENTATION ON THE 88TH TEXAS LEGISLATURE BINDING ARBITRATION BILL, WHICH CAME OUT OF SENATE COMMITTEE 29 TO ZERO WITH TWO SENATORS ABSENT 29 TO ZERO.
COMMITTEE MEMBERS, UM, FOR THE RECORD, MY NAME IS SAM PEN.
I'M THE FIRE CHIEF OF THE CITY OF HOUSTON, AND I WANNA THANK YOU AND THE COMMITTEE FOR ALLOWING ME THE OPPORTUNITY TO PRESENT AND DISCUSS THIS, UH, LEGISLATION GOING THROUGH THE PROCESS IN AUSTIN.
CAN WE BRING UP THE PRESENTATION, PLEASE? NEXT SLIDE, PLEASE.
SO, SENATE BILL 7 36 IS, UH, IS CAREFULLY CRAFTED TO AFFECT ONLY THE CITY OF HOUSTON, AND IT REQUIRES BINDING ARBITRATION PROCESS.
WHEN THE COLLECTIVE BARGAINING REACHES AN IMPASSE, UH, IT DELEGATES TO AN ARBITRATOR THE AUTHORITY TO, TO, UH, FIX TO A DEGREE, REALLY THE COST OF GOVERNMENT.
IF THIS BILL BECOMES LAW, IT'LL TAKE EFFECT IN THE CITY'S UPCOMING FISCAL YEAR 2024, AND IT'LL BRING, ESSENTIALLY THE, THE STATE INTO LOCAL NEGOTIATIONS.
AS IT PERTAINS TO FIREFIGHTERS ONLY.
THE MAIN POINTS OF THE BILL ARE LISTED HERE, UH, IN THIS SLIDE.
AND ONE ASPECT THAT, UH, I DID NOT SEE IN THE TEXT OF THE BILL ARE THE ESTABLISHED PARAMETERS OR STANDARDS THAT THE ARBITERS MUST ABIDE BY IN RENDERING THEIR DECISIONS.
OTHER LOCAL GOVERNMENTS WITH COMPULSORY ARBITRATION FOR FIREFIGHTERS SUCH AS AUSTIN AND SAN ANTONIO, DO SET A, UH, THEY SET A LIST OF STANDARDS FOR THE, FOR THE ARBITRATORS.
SO, BINDING ARBITRATION IS A QUASI COURT WHERE A PANEL OF ARBITERS WHO HAVE, UH, REALLY NO EXPERTISE ON HOUSTON'S BUDGETING OR FIDUCIARY RESPONSIBILITY TO THE CITIZENS OF HOUSTON.
THEY HEAR ARGUMENTS FROM THE CITY AND THE FIREFIGHTER REPRESENTATIVES ON PAID DISPUTES OR LOCAL LABOR CONTRACTS, UH, AND OTHER COLLECTIVE BARGAINING ISSUES.
AND AFTER HEARING THE ARGUMENTS, THE ARBITERS TYPICALLY TRY TO FIND A MIDDLE GROUND BETWEEN THE TWO PARTIES, OR IN SOME CASES, THEY COMPLETELY SIDE WITH ONE SIDE, UH, OR ANOTHER, WHOEVER'S MAKING THE, THE MORE COMPELLING ARGUMENT.
THE RISK FOR SEEING HERE IN HOUSTON IS THAT ARBITRATORS REALLY TAKE THE ISSUES AWAY FROM THE FIREFIGHTERS AND THE CITY, UM, WITH THE FISCAL LIMITATIONS, ANY PANEL DECISION THAT OBLIGATES THE CITY TO PAY ABOVE WHAT WHAT IT CAN AFFORD MEANS.
ONE OF TWO THINGS, RAISING TAXES OR CUTTING SERVICES.
ON THE OTHER HAND, IT COULD FORCE FIREFIGHTERS TO LOSE ITEMS OR BENEFITS THAT THEY DID NOT INTEND TO, TO CHANGE BASED ON A DECISION RENDERED BY AN UNACCOUNTABLE ARBITER.
UM, REALLY THERE'S NO DOUBT THAT THERE'S NO DOUBT THAT THE FIREFIGHTERS NEED A, A CONTRACT.
UM, I NEED THEM TO HAVE A CONTRACT.
IT, UH, REALLY IS VERY, VERY, UH, DIFFICULT TO MANAGE WITHOUT THE PARAMETERS BEING SET IN IN A DOCUMENT.
AND WE'VE BEEN WITHOUT THAT CONTRACT SINCE 2017.
STILL, I THINK THAT THE COLLECTIVE BARGAINING PROCESS IS THE RIGHT WAY TO GO.
UH, SO AS I MENTIONED, THE VOTERS IN SAN ANTONIO AND AUSTIN APPROVED COMPULSORY BINDING ARBITRATION FOLLOWING A, AN IMPASSE FOR COLLECTIVE BARGAINING FOR FIREFIGHTERS IN THOSE CITIES.
THEY HAVE SET CERTAIN CRITERIA THAT ARBITERS HAVE TO CONSIDER WHEN THEY RENDER THEIR, THEIR DECISION.
THIS IS SOMETHING THAT, UH, AGAIN, WE DID NOT FIND IN THE TEXT OF SENATE BILL 7 36 SAN ANTONIO WENT TO BINDING ARBITRATION AFTER THEY REACHED IMPASSE ON THIS LAST CONTRACT NEGOTIATIONS, AUSTIN IS, UH, IN NEGOTIATIONS NOW, AND I THINK THEY'RE HEADED TOWARDS IMPASSE AND, AND ARBITRATION AS WELL.
UM, IMPORTANTLY, SAN ANTONIO AND AUSTIN DON'T CONSIDER THE PRIVATE SECTOR AS, UH, AS
[01:20:01]
A COM, UM, COMPARABLE.INSTEAD, THEY CONSIDER THE PRIVATE SECTOR INCOMPARABLE CITIES.
THEY CONSIDER THE FINANCIAL IMPACT ON THE CITY'S TAXPAYERS AND FINANCES.
AND THIS IS CRITERIA THAT IS REALLY ABSENT FROM THE TEXT OF SENATE BILL 7 36.
THE ARBITRATION CRITERIA FOR THOSE CITIES, UH, AGAIN, COMPARE PUBLIC TO PUBLIC SEC SECTOR.
THEY, UH, TAKE INTO ACCOUNT REVENUES AVAILABLE TO, UH, AND CONTRACTUAL OBLIGATIONS OF THE CITY, AND THE IMPACT OF ANY ARBITRATION RULING ON THE TAXPAYER IN THE CITY, THE HISTORY OF COLLECTIVE BARGAINING AGREEMENTS AND NEGOTIATIONS BETWEEN THE PARTIES.
THEY TAKE INTO CONSIDERATION COST OF LIVING AND EMPLOYEE MORALE.
IN ADDITION TO THAT, THEY CAN CONSIDER ANYTHING, UH, OTHER THAT, THAT, UH, THE ARBITERS IN THEIR OPINION IS RELEVANT TO THE, TO THE ISSUES THAT WERE PRESENTED.
AS I MENTIONED, THE FIREFIGHTERS HAVE BEEN WORKING WITHOUT A CONTRACT SINCE 2017.
UH, SINCE THAT TIME, THE CITY AND FIREFIGHTERS HAVE BEEN STUCK IN IN COURT, UH, ON THE IMPASSE ISSUE AND PROPOSITION B.
THIS, UH, CHART HERE SHOWS A HIGH LEVEL TIMELINE OF THE HISTORY, UH, SINCE SINCE 2014.
AT THIS TIME, THE IMPASSE LAWSUIT AND THE, AND THE PROPOSITION B HAVE BEEN HEARD BY THE SUPREME COURT, AND THEY'VE RENDERED THEIR DECISION.
AND WHAT THEY'VE DONE IS THEY'VE ESSENTIALLY SENT BACK THE IMPASSE LITIGATION TO THE TRIAL COURT FOR, FOR LITIGATION.
IN MY OPINION, THE COURT AND STAYING IN COURT IS NOT THE, IS NOT THE QUICKEST FIX, AND IT'S NOT THE MOST EFFICIENT.
AND THE OUTCOMES OF ANY COURT DECISION IN THE FUTURE ARE GONNA BE UNKNOWN.
UM, I'M NOT, I DON'T WANNA SPECULATE ABOUT HOW THIS WILL IMPACT ANY DECISION WILL IMPACT THE FIRE DEPARTMENT, BUT I DO KNOW THAT AT ANY FINANCIAL BURDEN THAT FORCES A CUT IN MY BUDGET AND THE FIRE DEPARTMENT'S BUDGET IS GONNA FORCE, UH, STRUCTURAL CHANGES.
I DO KNOW THAT WE'VE, WE'VE EXPERIENCED THAT WITH PROPOSITION B IN 2019, AND WE HAVE VERY LITTLE LATITUDE IN OUR BUDGET TO DO ANYTHING ELSE THAT DOES NOT AFFECT PERSONNEL.
AND WHEN I CUT PERSONNEL, IT AFFECTS SERVICES AND IT AFFECTS THE QUALITY OF LIFE FOR, FOR OUR FIREFIGHTERS AS WELL.
RIGHT NOW, WE'RE ABOUT 275 FIREFIGHTERS SHORT OF OUR OPTIMAL STAFFING LEVEL.
UM, PRIMARILY WE GOT IN THIS HOLE IN 2019 AFTER WE CANCELED FOUR ACADEMY CLASSES FOR PROPOSITION B.
UM, THAT YEAR WE, WE MISSED OUR RECRUITMENT TARGET BY ABOUT 280, SO WE'RE ATTEMPTING TO CLIMB OUT OF THAT HOLE.
THE MAYOR HAS APPROVED THE $5,000 INCENTIVE PAY FOR, FOR CADETS.
HE'S ALSO RAISED THE, THE SALARY FOR CADETS BY ABOUT 25% A COUPLE YEARS AGO.
UM, AND IN ADDITION TO THAT, HE'S APPROVED AN 18% AND COUNCIL HAS, HAS APPROVED AN 18% PAY RAISE FOR OR FIREFIGHTERS, UH, ACROSS THE BOARD.
ALL THESE THINGS ARE DONE TO IMPROVE THE RETENTION AND THE RECRUITMENT, BUT IT'S GONNA REALLY TAKE US YEARS TO GET OUTTA THE HOLE THAT, UH, THAT WE'RE IN RIGHT NOW.
MOST IMPORTANTLY, UM, IT'S IMPORTANT FOR THIS ISSUE TO BE RESOLVED BECAUSE WE HAVE SOME SIGNIFICANT, SIGNIFICANT HEADWINDS AHEAD OF US WITH THE, WE HAVE A RISING SERVICE DEMAND, WE HAVE A RISING COST IN DOING BUSINESS.
AND REALLY, WE'VE HEARD THE PRESENTATIONS, UH, THE TWO PRESENTATIONS BEFORE WE HAVE AN UNCERTAIN FINANCIAL FUTURE.
INTERNALLY, THERE ARE DIFFERENT CHALLENGES THAT, UH, OTHER THAN THE, JUST THE PAY RAISES, UM, THAT WE HAVE TO CONTEND WITH HEALTH AND WELLNESS ISSUES, CANCER ISSUES, MENTAL HEALTH CONCERNS, THOSE ARE ALL CRITICAL COMPONENTS OF, OF THAT WE NEED TO ADDRESS FOR OUR PERSONNEL.
THE CONCERNS ARE THAT THEY'RE MORE THAN PAY RAISES, BUT IT ALL TAKES MONEY.
MONEY IS, UH, THAT IS CRITICAL TO FUND EVERYTHING ELSE THAT I NEED TO RUN THIS ORGANIZATION.
UM, WE SHOULD ALL BE CONCERNED THAT AN ARBITRATOR'S PANEL DECISION THAT IS BEYOND THE ABILITY OF THE CITY TO PAY COULD RESULT IN CROWDING OUT A LOT OF THE OBLIGATIONS THAT WE HAVE TO SUPPORT FIREFIGHTERS AND GIVE 'EM THE TOOLS AND THE EQUIPMENT TO, TO DO THEIR JOB.
OVER THE LAST SIX YEARS, WE'VE BEEN WORKING HARD TO DIG OURSELVES OUT OF THE HOLE THAT WAS CREATED BY HISTORICAL UNDERINVESTMENT IN PROGRAMS AND FLEET REPLACEMENT AND EQUIPMENT IN TRAINING.
AND WE'VE BEEN MAKING SOME HEADWAY, AS YOU CAN SEE IN THIS CHART.
UM, OVER THE LAST SIX YEARS, WE'VE REPLACED OVER 50% OF THE APPARATUS, UH, ON THE, ON THE DEPARTMENT.
BUT WE ARE SEEING A SIGNIFICANT COST ESCALATION IN THE THINGS THAT THEY NEED, UM, TO FUNCTION.
AS YOU CAN SEE, AN AERIAL APPARATUS THAT, UH, WOULD COST ME JUST THREE YEARS AGO IN 2020 COST ME $947,000.
IN FISCAL YEAR 23, WE PAID $1.4 MILLION FOR THAT.
AND THE ESTIMATED COST FOR FISCAL YEAR 2024 IS $1.6 MILLION PER UNIT.
[01:25:01]
70 OVER 70% INCREASE IN THE COST OF APPARATUS PER APPARATUS.WE SEE THE SAME THING IN THE FIRE ENGINES.
UM, BUT THE SAME COST ESCALATION IS, IS BEING FELT IN OTHER SERVICES AND COMMODITIES, UH, PERSONAL PROTECTIVE EQUIPMENT, HELMETS, PHARMACEUTICALS, LADDER TESTING, UH, EVERYTHING ELSE THAT WE NEED FOR, FOR THE ORGANIZATION.
AND THESE ARE REALLY ABSOLUTES THAT OUR FIREFIGHTERS NEED TO DO THEIR JOB.
ANYTHING, ANYTHING THAT COULD HAMSTRING THE CITY'S ABILITY TO CONTROL ITS FINANCES IS GONNA IMPACT THE FUTURE, UH, OF SERVICE DELIVERY.
IT'S GONNA IMPACT THE QUALITY OF LIFE FOR OUR RESIDENTS AND OUR FIREFIGHTERS AS WELL.
SO IT'S, UH, IT'S CRITICAL THAT WE RETAIN THE, UM, THE ABILITY TO, TO DICTATE OUR FINANCIAL FUTURE.
OVER THE LAST SIX YEARS, AS I MENTIONED, THE, THE CONTRACT AND THE FINANCES HAVE BEEN TAKING CENTER STAGE, UH, FOR, FOR OUR DEPARTMENT.
UM, AND IT IS A PRIORITY FOR US TO GET THOSE ITEMS ADDRESSED.
AS I MENTIONED, WE DO NEED A CONTRACT.
WORKING WITHOUT A CONTRACT IS, IS NOT GOOD FOR THE THIRD LARGEST MUNICIPAL FIRE DEPARTMENT IN THE COUNTRY.
WE NEED TO HAVE THAT ADDRESSED, BUT IT'S ALSO IMPORTANT TO ACKNOWLEDGE THAT THE, THERE ARE OTHER NEEDS THAT THE DEPARTMENT NEEDS THAT SERVE OUR COMMUNITY.
UM, WE HAVE MADE SOME SIGNIFICANT INVESTMENTS IN SPITE OF, OF EVERYTHING ELSE THAT'S GOING ON IN THE CRITICAL AREAS.
AS YOU CAN SEE, THESE ARE THE LIST OF INVESTMENTS, UH, WHEN IT COMES TO, TO PAY INCREASES THAT ARE MUCH NEEDED.
18% WAS OFFERED AND HAS BEEN GIVEN BY, BY THIS, UH, BY THIS ADMINISTRATION INVESTING, UH, HEAVILY IN THE HEALTH AND SAFETY ASPECTS OF OUR PERSONNEL.
THAT'S ALSO SOMETHING THAT, UH, THAT WE'VE DONE OVER THE LAST SIX YEARS.
WE'VE ADDED SOME AMBULANCE CAPACITY.
WE'VE ADDED FIVE PEAK TIME UNITS AND ONE HAZMAT UNIT TO THE SYSTEM.
BUT THE SERVICE DEMAND HAS INCREASED SIGNIFICANTLY, UH, 17 TO 20% OVER THE LAST SEVEN YEARS.
AND WE NEED TO ADD MORE UNITS, MORE AMBULANCE TO THE SYSTEM THAT IS A COST ITEM.
AND OF COURSE, WE'VE RECEIVED ACCREDITATION AND, AND, UH, ISO RATING OF CLASS ONE.
SO, LOOK, THIS IS ALL WORK THAT, UH, AND FROM THE COMMITMENT AND THE SUPPORT OF THIS ADMINISTRATION, BUT ALSO THE HARD WORK OF THE MEN AND WOMEN OF THE HOUSTON FIRE DEPARTMENT, UM, THEY DESERVE, UM, TO BE TAKEN CARE OF.
THEY DO, THEY DO AN OUTSTANDING JOB.
WE WE'RE JUST AT THE HEELS OF, OF A MONTH LONG OF RODEO, AND THEY DID A FANTASTIC JOB IN PROVIDING FOR SECURITY AND THE PUBLIC SAFETY IN THE FINAL FOUR.
AND, UM, AGAIN, THEY SHOW UP EACH AND EVERY DAY COMMITTED TO, TO SERVE THIS COMMUNITY.
UH, THEY DESERVE A CONTRACT, BUT I THINK THAT THE COLLECTIVE BARGAINING, UH, ROUTE IS THE BEST.
WHEN WE CEDE THE CONTROL TO THIRD PARTY AND ARBITRATOR, THEN THE CITY AND THE FIREFIGHTERS LOSE CONTROL OF THAT PROCESS AND EVERYTHING IS AT RISK.
SO, UM, NEXT, NEXT SLIDE, PLEASE.
AND WE'LL GO TO QUESTIONS FROM COUNCIL MEMBERS.
START WITH OUR PUBLIC SAFETY COMMITTEE.
THANK YOU, CHAIR AND CHIEF, THANK YOU FOR THE PRESENTATION.
I KNOW THERE'S BEEN A LOT IN THE HEADLINES RECENTLY, RIGHT? WITH THE, UM, THE SUPREME COURT DECISION.
UH, I APPRECIATE THE TIMELINE ALSO BECAUSE THIS, THIS ISSUE THAT WE'RE DEALING WITH NOW THAT'S SOMEWHAT COMING TO A HEAD MM-HMM
UH, PREDATES NOT ONLY MANY OF US ON COUNCIL, I WOULD SAY ALL OF US ON COUNCIL AT THIS POINT, BUT ALSO PREDATES MAYOR TURNER COMING INTO OFFICE.
UM, BASED ON THE TIMELINE, HOWEVER WE NEED TO DEAL WITH IT.
UM, I, I DO WANNA THANK YOUR OFFICE, AND I KNOW YOUR, A LOT OF YOUR EXECUTIVE COMMAND IS HERE AS WELL, UM, FOR PUTTING THE PRIORITY ON FIREFIGHTER SAFETY MM-HMM
AND ALL OF THE INITIATIVES THAT ARE COMING FORWARD AND THE INVESTMENTS COMING FORWARD TO MAKE SURE THAT THEIR HEALTH AND WELLBEING, UM, IS AT THE FOREFRONT OF A LOT OF THIS.
UH, WE WERE JUST AT, UH, COUNCIL MEMBER PECK AND I, UH, JOINED, UH, CHIEF WEST FOR, UH, THE INDUCTION C OR THE MM-HMM
THE CEREMONY THE OTHER WEEK, UH, FOR THE NEW CADETS, THE SWEARING IN, EXCUSE ME.
AND THERE WAS ONE, UH, YOUNG MAN WHO ACTUALLY MOVED HERE FROM NEW YORK SPECIFICALLY TO COME WORK FOR THE HOUSTON FIRE DEPARTMENT, AND WE ASKED HIM WHY, AND HE SAID, BECAUSE OF THE, UM, CALIBER OF OUR DEPARTMENT HERE IN HOUSTON MM-HMM
SO I, I WANT TO, I DON'T HAVE PERMISSION TO SAY HIS NAME PUBLICLY, BUT, UH, I, I DO WANNA HIGHLIGHT THOSE ARE THE TYPES OF, UM, CADETS COMING IN.
AND WE NEED MORE, WE NEED TO SEE MORE OF THAT.
THE, YOU POINTED OUT THE CRITERIA THAT OTHER CITIES HAVE LAID OUT FOR BINDING ARBITRATION.
IS IT, UM, WOULD IT HAVE BEEN HELPFUL IN SB 7 36 TO HAVE HAD THAT CRITERIA LAID OUT, FOR EXAMPLE, THE WAY THAT SAN
[01:30:01]
ANTONIO AND AUSTIN HAVE IT? WELL, I DON'T KNOW THAT IF IT WOULD BE HELPFUL OR NOT.I I DO KNOW THAT IT'S, THAT IT'S, UH, NOT PRESENT IN THE TEXT OF THE BILL.
AND AGAIN, THE, THE RISK FOR BOTH THE CITY AND THE FIREFIGHTERS IS THAT WITHOUT SETTING CERTAIN PARAMETERS, THEN ANYTHING IS, IS ON THE TABLE.
AND, UM, SOMETIMES THERE ARE UNINTENDED CONSEQUENCES TO THAT.
AND, UM, DO WE, YOU MAY NOT BE ABLE TO, YOU CAN PUT ME BACK IN THE QUEUE IF YOU NEED.
JUST A QUICK FOLLOW UP TO THAT.
SO, SAN ANTONIO, YOU BRING A GOOD POINT.
SAN ANTONIO USED A THREE PANEL ARBITRATION PROCESS, AND FROM WHAT I'M BEING TOLD, IT WORKED FAIRLY WELL.
ANY COMMENT? UM, I DON'T WANNA PUT YOU IN A TOUGH SPOT.
ALL I, WELL, ALL I KNOW IS, IS WHAT I'VE READ AS FAR AS THE IMPACT OF THE SAN ANTONIO RULING.
I KNOW THAT THE FIREFIGHTERS DID LOSE CERTAIN THINGS THAT THEY DIDN'T INTEND TO LOSE.
UM, AND, YOU KNOW, AGAIN, THIS IS, THERE'S JUST SO MUCH RISK.
YOU'RE, YOU'RE ESSENTIALLY, YOU KNOW, ASKING THE, BOTH THE CITY AND THE FIREFIGHTERS TO GO ON A BLIND DATE WITH THREE, UH, VISITING ARBITRATORS, EVERY CONTRACT NEGOTIATION, YOU DON'T KNOW WHAT YOU'RE GONNA GET.
AND, AND SO, YOU KNOW, IF, IF THE, SOMEHOW THERE NEEDS TO BE AN END GAME TO THE COLLECTIVE BARGAINING, THE IMPASSE ISSUE, UM, YOU KNOW, IF THE ARBITRATION, AND IT'S IMPORTANT TO POINT OUT THAT THERE ARE SIGNATURES THAT HAVE BEEN GATHERED TO PUT THIS ITEM FOR THE VOTERS, UH, IN THE NEXT ELECTION.
AND, AND SO, AND THE VOTERS SHOULD HAVE A CHOICE, BECAUSE AT THAT POINT, UM, ESPECIALLY IF, IF IT'S NOT IN THE VOTERS, AND IF IT'S THIS PROCESS IS BORN OUT OF THE COLLECTIVE BARGAINING PROCESS, THEN BOTH CITY OR LABOR AND MANAGEMENT HAVE THE OPPORTUNITY TO CONTRIBUTE TO THE RULES THAT THEY'RE GONNA BE PLAYING BY WHEN THEY GO TO ARBITRATION.
UM, AND WHEN YOU SET CERTAIN PARAMETERS, YOU HAVE A LITTLE BIT MORE CONTROL, UH, AS FAR AS THE OUTCOME, BECAUSE AS I MENTIONED, PAY IS WHAT THE FIREFIGHTERS NEED, UH, AND THEY NEED A CONTRACT.
BUT IN ADDITION TO THAT, ALL THE OTHER THINGS THAT, THAT, UH, MUST BE FUNDED TO RUN THE FIRE DEPARTMENT, THE PRICE ESCALATION ON THOSE THINGS, COUNCIL MEMBER IS, IS ASTRONOMICAL.
UM, AS I MENTIONED, JUST WE HAVE 88, UH, ENGINES AND 38 LADDER COMPANIES.
WE'VE SEEN AN ALMOST 70% PRICE ESCALATION FROM 2020 TO WHAT WE'RE EXPECTED TO PAY IN 2024.
AND, UH, IT'S NOT GONNA, IT'S NOT GONNA STOP.
AND, AND THAT'S JUST ON ONE ITEM.
SO WE HAVE TO HAVE THE ABILITY TO, TO FUND THE DEPARTMENT AND DIRECT RESOURCES, LIMITED RESOURCES TO ADDRESS THOSE, ALL THOSE NEEDS.
UM, AND WITHOUT THESE PARAMETERS, WITHOUT THE STANDARDS, IT'S A, IT'S A CRAP SHOOT.
UH, I APPRECIATE, UH, YOUR TESTIMONY HERE TODAY.
UH, I'VE BEEN IN ARBITRATION BEFORE, AND WHEN IT WAS OVER, NOBODY WAS HAPPY.
AND, AND THE ARBITRATOR, THAT'S GOOD.
SAID, WELL, THAT'S HOW IT'S SUPPOSED TO BE, RIGHT? THAT
YEAH, THOSE ARE TWO DIFFERENT, UH, ISSUES.
COUNCIL MEMBER, THE RESOURCE MANAGEMENT IS A MANAGEMENT TOOL THAT IS USED WHEN WE FALL BELOW A CERTAIN NUMBER OF AVAILABLE AMBULANCE RESOURCES, UH, THAT KICKS IN CERTAIN ADMINISTRATIVE, UH, CHANGES, FOR EXAMPLE.
AND, AND I, THE REASON I, I KNOW SO MUCH ABOUT IT WAS ON SEPTEMBER THE FIRST YEAH.
MY BROTHER WAS IN A, A FACILITY, UH, AN ONCOLOGY FACILITY, AND HE, HE CODED MM-HMM
AND, UH, HE, HE BASICALLY DIED WITHOUT A HEART RATE OR RESPIRATION FOR THREE, ABOUT THREE MINUTES.
AND, AND THE NEAREST, UH, UH, THE NEAREST TRUCK TO COME FIRETRUCK, I MEAN, THE AMBULANCE WAS, WAS SENT DISPATCHED FROM KINGWOOD, AND HE WAS IN CITY CENTER.
I MEAN, THAT'S ABOUT 30, 40 MILES AWAY.
I I JUST, UH, I'M CONCERNED ABOUT IT.
HE, HE EVENTUALLY MADE IT, YOU KNOW, HE WAS NEAR THE HOSPITAL AND THEY EVENTUALLY GOT HIM THERE, BUT, UH, AND THEY REVIVED HIM.
BUT I, I WOULD, I THINK IT'S REAL CRITICAL THAT, THAT WE HAVE, UH, UH, THE RESOURCES FOR OUR EMS. I MEAN, WITHOUT HIM, I MEAN, HE WOULD'VE BEEN GONE FOR SURE.
BUT, UH, AND I APPRECIATE, UH, EVERYONE THAT'S IN THE FIRE DEPARTMENT FROM THE TOP TO THE BOTTOM.
I'M GLAD YOU'RE YOUR BROTHER'S DOING OKAY.
I, I, I AM FAMILIAR WITH THAT, WITH THAT INCIDENT.
UM, YOU KNOW, WE DID HAVE PARAMEDICS ON THE, ON THE ENGINE, AND THE FIRST AMBULANCE THAT WAS THERE WAS ABLE TO TRANSPORT.
SO I'M GLAD THAT HE'S DOING WELL.
UH, I'M JUST TRYING TO UNDERSTAND WHAT HAPPENS NOW ON THE PART OF THE LAWSUIT ABOUT, UH, COLLECTIVE BARGAINING.
THAT'S THE, THE, IT EITHER GOES
[01:35:01]
BACK TO THE TRIAL COURT.THAT GOES BACK TO THE TRIAL COURT.
THERE'S ALSO AN THE EFFORT CERTAINLY BY THE, THE BILL, AND THEN THERE'S ALSO A PETITION SITUATION.
SO THIS KIND OF ALL HAPPENS CONCURRENTLY.
THE, UH, THE ARBITRARY OR THE IMPASSE OR COLLECTIVE BARGAINING, UH, CASE HAS BEEN SENT BACK DOWN TO THE TRIAL COURT.
THAT STILL HAS TO BE LITIGATED.
THAT'S GONNA BE, THAT'S NOT A QUICK FIX.
UM, I IMAGINE THAT IF ANY PARTY IS UNHAPPY, IT COULD BE APPEALED.
SO THAT'S ANOTHER, UH, EXTENSION TO THE PROCESS.
SO AGAIN, IN MY OPINION, THAT IS NOT THE QUICKEST WAY TO GET FIREFIGHTERS WHAT THEY NEED, WHICH IS A CONTRACT, A SOLID CONTRACT.
UM, AND THERE IS A PETITION TO PUT THE ARBITRATION ISSUE BEFORE THE VOTERS OF HOUSTON, UM, NEXT ELECTION.
BUT THERE'S ALWAYS THE, THE, THE PARTIES CAN, CAN GO TO COLLECT OR, OR DOES THAT HAVE TO BE LITIGATED OR THERE'S ALWAYS AN OPTION TO DO COLLECTIVE BARGAINING NOW, SO, SO I DON'T BELIEVE THAT THERE IS ANYTHING STOPPING.
THAT WAS MY QUESTION FROM GOING TO THE TABLE AND COLLECTIVELY BARGAIN TO ADDRESS ALL THE ISSUES.
UM, AND SHORT CIRCUIT, BECAUSE IN THE END, COUNCIL MEMBER, EVEN AFTER THE LITIGATION, THEY SET THE RATE FOR ONE YEAR, AND THEN THEY HAVE TO BE RIGHT BACK AT THE TABLE.
THE THOUGHT OF THE COURT ALL EVER AGAIN IS, IT IS NOT APPEALING.
WE'VE BEEN, WE'VE BEEN AT IT FOR THE LAST SIX YEARS AND IT, IT HASN'T GOTTEN THEM ONE THING.
SO NOTHING, NONE OF THIS PRECLUDES A COLLECTIVE BARGAINING SITUATION RIGHT.
NOW, I, I WANT TO, UH, LOOK, I'M NOT AN ATTORNEY.
BUT I HAVE ASKED THAT QUESTION AND, AND THE RESPONSE I'VE, I'VE RECEIVED FROM, FROM CITY LEGAL IS THAT THERE IS NOTHING THAT PREVENTS THE PARTIES FROM SITTING AT THE TABLE AND ADDRESSING THE ISSUE THROUGH COLLECTIVE BARGAIN.
UM, AND I'M, I'M GOING BACK, YOU KNOW, AGAIN, TO THE TIMELINE, AND I THINK Y'ALL INCLUDED AS EXHIBITS NOTICES TO COLLECTIVELY BARGAIN IN 20 18, 20 19, 20 20 MM-HMM
UM, BUT DESPITE, AND WITH SOME OF THAT, FOR EXAMPLE, UH, BACK IN 2014, AND AGAIN, I KNOW THAT THAT'S BEFORE OUR TIME, BUT ALSO BEFORE MAYOR TURNER'S TIME, UM, THERE WAS A PROPOSAL BY THIS OF A 4% PAY INCREASE THAT WAS REJECTED.
UM, FAST FORWARD TO 2017, A 9.5% PAY INCREASE THAT WAS REJECTED.
AND AGAIN, WITH BOTH OF THOSE IMPASSE DECLARED, WHICH IS WHEN BINDING ARBITRA ARBITRATION WOULD TAKE PLACE.
UM, BUT THEN YOU HAD MENTIONED, AND I, YOU KNOW, HAVEN'T SEEN A LOT OF COVERAGE ON THIS, SO I WANNA BRING IT BACK UP ON COUNSEL.
REGARDLESS OF EVERYTHING THAT'S BEEN HAPPENING IN THE COURTS AND BEHIND THE SCENES THAT WE ARE NOT INVOLVED IN MM-HMM
UM, WE DID APPROVE I 18% PAY INCREASE ACROSS THE BOARD.
OVER THE NEXT, UH, THREE YEARS.
CAN YOU JUST TALK A LITTLE BIT MORE ABOUT THAT IN DETAIL AND HOW WE CAME UP WITH THAT 18%? UH, ABSOLUTELY.
SO, SO IT WAS AT 18%, UM, ACROSS THE BOARD PAY RATES FOR ALL FIREFIGHTERS STARTING IN FISCAL YEAR 22.
SO 22, THEY GOT 6%, 23, THEY GOT 6%, AND 6% IS, UH, HAS, WILL BE ALLOCATED FOR THIS FISCAL YEAR, COMING FISCAL YEAR.
UM, THE FUNDS, THE SEED MONEY ESSENTIALLY CAME FROM THE ARPA FUNDS.
UM, BUT AGAIN, YOU KNOW, IT'S, IT'S, IT GIVES THE CITY A THREE YEAR RUNWAY TO BUILD IN THOSE OBLIGATIONS INTO, INTO THE BUDGET.
UM, CERTAINLY NOT WHERE WE NEED TO BE.
WE WILL KNOW FOR SURE AFTER THE COMP STUDY COMES OUT, AND I BELIEVE IT'S THIS MONTH, UH, MR. CHAIRMAN, BUT, UM, THE 18% WAS BASED ON THE LAST COMP STUDY THAT WAS DONE, AND THOSE WERE AT 2018 RATES.
AND SO, BUT ANYTHING THAT MOVES US FORWARD IS GONNA BE A PLUS BECAUSE WE, THE MORE THEY GO WITHOUT, UH, ACCEPTING A PAY RAISE, UM, THE FURTHER BEHIND WE FALL IN THE MARKET AND THE LESS COMPETITIVE WE BECOME AS AN ORGANIZATION.
AND THAT HAS A DOMINO EFFECT ON, YOU KNOW, STAFFING, ON SERVICE DELIVERY, ON, ON WORKLOAD.
ALL THOSE THINGS ARE AFFECTED WHEN WE DON'T HAVE THE ADEQUATE STAFFING THAT WE NEED.
AND THERE'S NO, I THINK YOU'RE REFERRING TO THE STUDY, BUT I'M ASSUMING THAT I SAW A CHART WHEN WE WERE PASSING IT, COMPARING US TO OTHER CITIES YES.
AND TRYING TO BRING THAT UP TO SAN ANTONIO.
UM, AUSTIN, DALLAS, ET CETERA.
THAT'S WHAT YOU'RE REFERRING TO, CORRECT? THAT'S CORRECT.
IN TERMS OF HOW WE CALCULATED THAT? THAT'S CORRECT.
COUNCIL MEMBER LETITIA PLUMMER.
AND THANK YOU FOR THE PRESENTATION.
IF THIS, IF THIS PARTICULAR BILL GOES THROUGH, WOULD DO WE HAVE THE OPPORTUNITY TO COME BACK TO AGREE TO COLLECTIVE BARGAINING? YEAH.
SO THIS IS, THIS ARBITRATION BILL WILL KICK IN, THE MANDATORY ARBITRATION WILL WILL KICK IN AFTER THE COLLECTIVE BARGAINING PROCESS, UH,
[01:40:01]
FALLS APART AND WE REACH IMP IMPACT IMPASSE.SO IT'S NOT, THIS DOESN'T, UH, SUPERSEDE IT.
THAT'S, THAT IS THE END POINT IF WE REACH IMPASSE BETWEEN, UH, LABOR AND MANAGEMENT.
AND HOW LONG, I MEAN, IS THERE A TIME PERIOD BETWEEN THAT HAPPENING? YES.
IF THEY DON'T REACH AN AGREEMENT BY THE 61ST DAY FROM WHEN COLLECTIVE BARGAINING STARTS, THEN UH, THEY HAVE REACHED IMPACT UNLESS THE PARTIES AGREE TO EXTEND.
SO YOU CAN EXTEND BY STATUTE BY FOR, UH, 15 DAYS PAST THE 61ST DAY.
UH, IF YOU ARE STILL BARGAINING, IF NOT, THEN EITHER PARTY CAN DECLARE IMPASSE, AND THEN THIS WOULD BE THE NEXT STEP IF THIS, UH, THIS BILL BECOMES LAW.
AND BOTH PARTIES HAVE TO AGREE TO THE EXTENSION AND BOTH PARTIES HAVE TO AGREE TO THE INDEPENDENT ARBITRATOR.
SO BOTH PARTIES HAVE TO AGREE TO EXTEND THAT IS CORRECT.
UM, AND THAT WAS THE CASE HERE.
THE CITY OFFERED, UM, OR YOU KNOW, REQUESTED AN EXTENSION OF 15 DAYS AND IT WAS NOT, UH, ACCEPTED.
SO IT WENT TO IMPASSE FOR THE ARBITRATION SELECTION, THE WAY THE BILL IS WRITTEN, LABOR PICKS CHOOSES ONE ARBITRATOR MANAGEMENT, OR THE CITY, UH, CHOOSES ONE, AND THEN THEY BOTH GET TOGETHER AND CHOOSE A THIRD.
THERE COULD BE, THERE COULD BE AN IMPASSE ON THE SELECTION OF THE THIRD ARBITRATOR
I KNOW, UM, WE, I JUST RECEIVED AN EMAIL ABOUT A, AN ARBITRATION RULING ON A, ON A DISCIPLINARY CASE.
AND, AND AGAIN, WE DON'T ALWAYS GET WHAT WE WOULD LIKE TO SEE, UM, EVEN ON CASES THAT WOULD SEEM TO BE SLAM DUNK, RIGHT? MM-HMM
AND THE COLLECTIVE BARGAINING PROCESS COULD START TOMORROW IF BOTH PARTIES AGREE THAT WE NEED TO START IT IN SPITE OF PROP B IN SPITE OF SENATE BILL, WHATEVER IT IS, 7 37 36, 7 36.
AND, UH, YOU KNOW, AS, AS IS POINTED OUT IN THE TIMELINE, THE, UH, THE ASSOCIATION BY STATUTE, THEY HAVE TO REQUEST COLLECTIVE BARGAINING AT LEAST 120 DAYS BEFORE THE END OF THE FISCAL YEAR.
THEY DID SO IN 20 18, 20 19 AND 2020, UM, THE CITY REPLIED SAYING, INVITING THEM BACK TO COLLECTIVE BARGAINING TO THE TABLE.
BUT, UH, BUT WE GOT NO RESPONSE OR THEY GOT NO RESPONSE.
I DON'T HAVE CONFIRMATION THAT THAT COLLECTIVE BARGAINING WAS REQUESTED FOR 21 AND 22.
I, I, I DIDN'T FIND ANY, ANYTHING.
THAT DOESN'T MEAN THAT THEY DIDN'T HAPPEN
UM, I MEAN, I THINK THE MAYOR HAS BEEN CLEAR IN SAYING THAT HE IS WILLING TO SIT BACK AT THE TABLE AND, AND COLLECTIVELY BARGAIN THIS ISSUE.
I CERTAINLY NEED THAT TO HAPPEN SOONER THAN LATER.
AND THANK YOU FOR YOUR, UH, PRESENTATION CHIEF.
UM, WHEN THE ARBITERS ARE, UH, DETERMINED AND APPROVED, YOU WERE SPEAKING ABOUT HOW THE DETERMINATION ON WHAT THE ARBITER, UM, EVENTUALLY HOLDS IS ONLY GONNA BE FOR ONE YEAR.
WHAT IS THE TIMELINE WITHIN THAT PROCESS, UM, TO WHEN THAT ONE YEAR STARTS? BECAUSE THERE'S GONNA BE A TIMELINE FOR, UM, TO PICK THE TWO ARBITERS, AND THEN THOSE TWO ARBITERS PICK A THIRD ARBITER THAT AR THAT THIRD ARBITER, HERE'S THE, THE ISSUES, AND THEN THAT THIRD ARBITER WILL MAKE A RULING.
IS WHEN HE MAKES THE RULING, WHEN THE YEAR STARTS, OR WHEN DOES THE YEAR START AND DOES PICKING THE ARBITERS, UM, COULD PICKING THE ARBITERS GO INTO THAT ONE YEAR TIMEFRAME, WHICH MAKES IT EVEN A SHORTER PERIOD OF TIME OR A LONGER PERIOD OF TIME TO GET A FINAL RULING? YEAH, I KNOW, I UNDERSTAND WHAT YOU'RE, WHAT YOU'RE ASKING.
DOES THE, THE TIME SPENT TO SELECT THE ARBITERS CUT INTO THAT ONE YEAR TIMELINE? UM, I'M NOT SURE.
COUNCIL MEMBER, I'M NOT SURE HOW THAT WORKS.
I'M NOT SURE IF IT'S ONE YEAR FROM WHEN THEY MAKE THEIR DECISION.
'CAUSE THEY'RE ESSENTIALLY WRITING YOUR CONTRACT, UH, DEPENDING ON WHAT ISSUES OR WHAT ITEMS ARE UNRESOLVED THAT THEY BRING TO THE ARBITRATION.
UM, YOU KNOW, THERE HAVE BEEN SOME, SOME MUNICIPALITIES WHERE THEY ESSENTIALLY ALL THE ARTICLES IN THE CONTRACT ARE, ARE AT, UH, UM, THEY HAVEN'T AGREED ON ANY OF THEM.
AND SO THEY ESSENTIALLY WROTE THAT THAT CONTRACT.
SO I DON'T KNOW WHEN THE TIMELINE STARTS, IS WHEN THEY DO THE RULING OR WHEN IMPASSE AND IS, IS, UH, YEAH.
AND I, AND I BRING THAT POINT BECAUSE MANY TIMES ULTIMATELY WE WANT TO GET THE FIREFIGHTERS PAID, RIGHT.
BUT THROUGH LITIGATION OR ARBITRATION, WHENEVER YOU GO THROUGH, UH, THIS LEGAL PROCESS, THE TIMELINES CAN BE SO LENGTHY THAT IT JUST PROLONGS THE INEVITABLE.
[01:45:01]
AND WHEN YOU PROLONG THINGS SO MUCH THROUGH THE LEGAL PROCESS, I MEAN, NOTHING ULTIMATELY GETS DONE.AND THEN IF THE, IF IT, IF THE, IF IT KICKS BACK TO NOW WE'VE HIT OUR YEAR, THEN WE HAVE TO START THE WHOLE PROCESS ALL OVER AGAIN AND NOTHING REALLY EVER GETS ACCOMPLISHED.
UM, AND, AND HERE'S THE THING IS THAT THERE IS NO, UH, MAX NUMBER OF TIMES YOU CAN GO TO ARBITRATION.
SO AFTER THE, THEY SET THEIR CONTRACT, IT GOES A YEAR, UM, THEY GO BACK TO COLLECTIVE BARGAINING FOR THE REST OF IT, THEY CAN END UP RIGHT BACK IN IMPASSE AND ANOTHER ARBITRATION.
SO, UM, YEAH, I, AGAIN, I THINK THAT, UH, THAT SITTING AT THE TABLE IS, IS WHERE WE CAN ENSURE THAT, UH, WE HAVE CONTROL OF THE PROCESS.
IF WE LEAVE IT TO THE JUDGES, SO TO SPEAK, UM, THEN, THEN IT COULD BE SOMETHING THAT YOU DON'T EXPECT.
THERE ARE NO OTHER COUNCIL MEMBERS IN QUEUE.
WE APPRECIATE YOUR STAFF, YOUR EXECUTIVE STAFF THAT'S WITH YOU TODAY AND AS WELL AS THE OTHERS.
MORE IMPORTANTLY, WE DO APPRECIATE THE MEN AND WOMEN OF THE HOUSTON FIRE DEPARTMENT, SIR.
WE HAVE ONE PUBLIC SPEAKER AND THAT IS MR. DOUG SMITH,
ALLERGIES REALLY GOT ME THIS YEAR, SO REALLY BAD.
THAT'S WHY I WASN'T HERE LAST MONTH.
UM, BUT I WAS AT CONS, UH, LAST TUESDAY, AND FOUR OF YOU THAT ARE REALLY IMPORTANT TO ME.
WERE NOT HERE, AND I DON'T KNOW WHETHER YOU WATCHED THE PRESENTATION, BUT WHAT I TALKED ABOUT HAS, I THINK, REALLY SEVERE FINANCIAL IMPLICATIONS.
AND THAT'S WHY I WANTED TO COME BACK, WANTED TO COME BACK TODAY, UM, EARLY IN FEBRUARY, THE MAYOR SAID THAT HE WANTED TO PUT A, WHAT IS THAT? PUT THEM IN THE BACK.
EARLY IN FEBRUARY, THE MAYOR SAID HE WANTED TO PUT A, A PAUSE TO PRIVATE FACILITY CORPORATION DEALS.
AND, UH, THE HOUSING AUTHORITY HAD A MEETING IN LATE FEBRUARY, AND THEY, IF I UNDERSTAND THEIR AGENDA CORRECTLY, APPROVED 17 MORE DEALS.
AND I WENT TO THAT MEETING AND TOLD THEM THE MAYOR WANTED TO PUT A PAUSE ON THESE, AND I, THEY PAID NO ATTENTION TO ME, WHICH IS TYPICAL.
AND THEN THEY PROCEEDED IN MARCH, IF I READ IT CORRECTLY, TO APPROVE ANOTHER 32 DEALS.
SO THAT'S A TOTAL OF 49 DEALS, UH, THAT THEY'VE APPROVED SINCE THE MAYOR SAID HE WANTED TO PUT AN IMPASSE ON IT.
AND BY MY CALCULATION, THAT AMOUNTS TO ABOUT $2 BILLION WORTH OF TAXABLE PROPERTY.
THAT'S NOT GONNA BE ON THE CITY'S TAX ROLLS.
UH, IN ADDITION TO THE OTHER, PROBABLY AT LEAST $5 BILLION.
UH, THAT'S FROM PREVIOUS DEALS THAT THEY'VE DONE.
AND I QUESTION WHETHER THESE DEALS REALLY ARE DOING WHAT THEY'RE SUPPOSED TO DO.
AND I JUST WANTED YOU ALL THAT WEREN'T HERE LAST WEEK TO HEAR WHAT I HAD TO SAY.
AND WHAT BOTHERS ME IS THE MAYOR DID SEND A LETTER FINALLY TO THE HOUSING AUTHORITY, AND HE TALKS ABOUT 14 NEW DEALS, UH, THAT HE WANTED TO PUT ON PAUSE.
I DON'T KNOW HOW HE CAME UP WITH HIS NUMBER BASED ON WHAT I SAW, UH, IN THE AGENDAS.
I THINK THAT'S SOMETHING THAT NEEDS TO BE LOOKED AT.
AND HE ALSO PUT SAID THAT THERE ARE 10 PROJECTS THAT WERE ALREADY IN.
WHAT ARE THOSE 10 PROJECTS AND HOW, HOW WERE THEY DETERMINED? UH, I THINK THERE ARE QUESTION.
I THINK THAT THERE ARE 30, EXCUSE ME, 49 DEALS THAT WERE APPROVED AFTER THE MAYOR SAID HE WANTED TO PUT A PAUSE TO IT.
AND I THINK MORE, UH, STUDY HAS TO BE DONE TO THIS BECAUSE AS I SAID, WE'RE TALKING ABOUT BILLIONS OF DOLLARS, UH, WORTH OF PROPERTY TAX.
AND THAT'S TODAY'S BILLION OF DOLLARS.
AND EACH YEAR THAT AMOUNT INCREASES WITH, UH, APPRAISAL VALUE INCREASES AND THINGS LIKE THAT.
SO THAT'S WHAT I WANTED TO SHARE IN CASE YOU DIDN'T HEAR ME LAST WEEK.
AND I DID NOT HEAR YOU BECAUSE I WAS ONE OF THE FOUR COUNCIL MEMBERS AS YES.
I WAS IN WASHINGTON, DC ALONG WITH COUNCIL MEMBER DAVID ROBINSON.
AND, UH, I THINK WHAT YOU'LL SEE, THAT'S WHY WE LEFT THE AGENDA VERY LIGHT.
I'M NOT SURE IF THE MEETING WAS AN HOUR OR THREE HOURS, BUT THE AGENDA WAS VERY LIGHT BECAUSE WE DID NOT, WE KNEW THAT COUNCIL MEMBER POLLARD, MYSELF AND ROBINSON, I FORGOT WHO ELSE WE'RE GONNA BE MISSING.
UH, COUNCIL, MY COUNCIL MEMBER WASN'T HERE.
UH, TIFFANY WAS NOT HERE, SO THAT'S RIGHT.
SHE WAS IN WASHINGTON DC AS WELL.
SO, UM, YOU KNOW, WHAT YOU'RE SEEING RIGHT NOW IS WE'RE IN THE MIDDLE OF SOME TOUGH DECISIONS BEING MADE, NOT ONLY WITH THE FEDERAL GOVERNMENT, BUT WITH THE STATE GOVERNMENT.
AND WHEN WE HAVE THE OPPORTUNITY TO GO TO AUSTIN OR DC TO AFFECT THE OUTCOME OF THOSE PIECES OF LEGISLATION,
[01:50:01]
BY ALL MEANS, THAT'S OUR RESPONSIBILITY AS COUNCIL MEMBERS.NOT ONLY TO THE DISTRICT WE REPRESENT, BUT THE CITY THAT WE SERVE.
AND I KNOW THAT THE FOUR OF US THAT WERE MISSING, WERE DOING THAT EXACT SAME THING.
AND I WOULDN'T BE SURPRISED IF ONE OF US GETS A CALL THIS AFTERNOON AND WE HAVE TO MISS TOMORROW'S MEETING.
AND, UH, THAT'S JUST THE NATURE OF THE BEAST BECAUSE RIGHT NOW IN THIS STATE, THEY'RE MOVING VERY RAPIDLY.
AND, UM, THE OUTCOME OF SOME OF OUR REALLY IMPORTANT PROJECTS ARE IN LIMBO IN AUSTIN, TEXAS RIGHT NOW.
SO WHEN WE CAN GO THERE, UH, WHICH I DID LA TWO WEEKS AGO, UH, THAT'S GOOD USE OF OUR TIME.
SO WE'RE APOLOGIZED FOR NOT BEING HERE.
BUT, UM, YOU HEARD WHAT I HAD TO SAY.
AND THAT'S WHAT WAS IMPORTANT TO ME, AND I UNDERSTAND WHY YOU WERE NOT HERE.
UH, AND I JUST, I'M GLAD I HAD THIS CHANCE TO REPEAT WHAT I SAID LAST WEEK.
ALWAYS, UH, WANT TO HEAR YOUR INPUT BECAUSE YOU'RE PROBABLY ONE OF ONE THAT ALWAYS COMES THROUGH OUR MEETINGS AND ATTENDS EVERY BUDGET COMMITTEE MEETING.
WELL, WHICH WILL START IN A COUPLE WEEKS IF I COULD.
I GOT THE SCHEDULE AND I'M REALLY GLAD TO SEE THAT YOU HAVE AN HOUR ALLOTTED FOR EACH DEPARTMENT.
I'D LIKE TO TAKE CREDIT, BUT JESSICA DID THE, AND, AND DUSTIN DID THE ENTIRE, UH, AGENDA.
ANY OTHER COMMENTS COMES VICE CHAIR, POLLER.
SORRY, ED, THANK YOU CHAIR, AND THANK YOU DOUG, FOR COMING.
UH, HAVE YOU BEEN TRACKING ANY OF THE, THE BILLS OF THE DISCUSSIONS AT THE STATE LEVEL REGARDING THE PFCS? I KNOW THAT, UH, UH, MANO, DILIA IS SUBMITTING A BILL TO DO AWAY WITH PCS OR, UH, REIGNING THEM IN.
I DON'T KNOW WHAT THE BILL SAYS, BUT YEAH, I, I I THINK IT'S NOT TO COMPLETELY DO AWAY WITH THEM, BUT TO LOOK AT, UH, UH, CERTAIN SPECIFICS WITHIN THE LEGISLATION TO SEE WHAT CAN BE TIGHTENED.
UM, BUT I WANTED TO SEE, GET YOUR THOUGHTS ON THAT AS WELL.
'CAUSE I'M, I'M GONNA, I'M GONNA TRY TO START, UM, SPOTLIGHTING THAT PARTICULAR, UH, BILL AS WELL.
WELL, YEAH, THERE'S NO, FROM WHAT I CAN SEE, THERE'S NO ACCOUNTABILITY TO ANY OF THESE DEALS AS TO ARE THEY PROVIDING THE AFFORDABLE HOUSING THAT THEY'RE SUPPOSED TO PROVIDE.
UH, THAT'S WHAT BOTHERS ME AS MUCH AS ANYTHING ELSE.
AND HOPEFULLY THE BILL WILL DO SOMETHING IN THAT REGARD.
COUNCIL MEMBER, LETITIA PLUMMER.
THANK YOU SO MUCH, CHAIR, AND THANK YOU DOUG FOR ALWAYS BEING HERE.
IN YOUR MIND, WHAT IS THE, WHAT IS THE, THE BEST BALANCE? HOW, WHAT PERCENTAGE DO YOU BELIEVE OF THOSE PARTICULAR DEALS OF AFFORDABLE HOUSING? SHOULD IT BE VERSUS MARKET RATE? LIKE FROM A, FROM A TAX ROLL PERSPECTIVE? I MEAN, SHOULD IT BE 20% AFFORDABLE HOUSING? YOU KNOW, JUST HAVE YOU THOUGHT ABOUT THAT AT ALL? NO, I, I REALLY HAVE NOT THOUGHT ABOUT THAT.
UH, BUT MY, AS I SAID, MY CONCERN IS THESE DEALS ARE SUPPOSED TO HAVE A PORTION FOR WORKER, WORKER RATE HOUSING, AND I DON'T THINK THERE'S ANY PROOF THAT THEY'RE ACTUALLY DOING THAT.
THAT'S A BIG CONCERN THAT I, SO, SO IF WE DO HAVE IT, WE NEED TO HAVE SOME TYPE OF OVERSEER TO MAKE SURE THAT WE ARE AUDITS.
AND JUST A REMINDER, THE BUDGET MEETINGS ARE SCHEDULED TO BEGIN ON WEDNESDAY, MAY 17TH AND RUN THROUGH THURSDAY, MAY 25TH.
ONCE AGAIN ON THE CITY OF HOUSTON.
BUDGET WORKSHOPS WEDNESDAY THE 17TH OF MAY THROUGH THURSDAY, THE 25TH OF MAY, AND THESE CAN BE FOUND ON THE COMMITTEE BFA WEBSITE.
PLEASE NOTE THAT THE NEXT REGULARLY SCHEDULED BUDGET AND FISCAL AFFAIRS COMMITTEE MEETING WILL BE ON APRIL 25TH AT 10:00 AM WHERE WE'LL HAVE A PRES PRESENTATION ON THE CITY'S COMPENSATION STUDY.
THERE ARE ANY OTHER COMMENTS FROM COUNCIL MEMBERS.