[Budget and Fiscal Affairs on July 30, 2024.]
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GOOD MORNING EVERYONE, AND WELCOME TO THE TUESDAY, JULY 30TH, 2024 BUDGET AND FISCAL AFFAIRS COMMITTEE.
I AM SALLY ALCORN, CHAIR OF THIS COMMITTEE, AND I AM JOINED BY MY VICE CHAIR, MARIO CASTILLO.
COUNCIL MEMBER TWILA CARTER, STAFF FROM COUNCIL MEMBER ED POLLARD'S, OFFICE.
COUNCIL MEMBER JOAQUIN MARTINEZ, VICE MAYOR PRO TEM AMY PECK, MAYOR PRO TEM MARTHA CASTEX TATUM, COUNCIL MEMBER JULIAN RAMIREZ.
COUNCIL MEMBER MARY NAN HUFFMAN AND STAFF FROM COUNCIL MEMBER FRED FLICKINGER OFFICE.
WE ALSO HAVE ABBY CAYMAN ONLINE.
UM, IT, UH, WE OFFER THE OPTION TO PARTICIPATE VIA VIDEO CONFERENCE OR IN PERSON.
UM, AS PRESIDING OFFICER OF THE COMMITTEE, I'M PHYSICALLY PRESENT IN THE CHAMBER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5 51 0.127 OF THE TEXAS GOVERNMENT CODE APPLICABLE TO A GOVERNMENTAL BODY THAT EXTENDS INTO THREE OR MORE COUNTIES.
ALL OTHER COMMITTEE MEMBERS HAVE THE OPTION TO PARTICIPATE IN PERSON OR VIRTUALLY VIA MICROSOFT TEAMS. WE HAVE A VERY FULL AGENDA, SO WE WILL GET RIGHT INTO IT.
I WILL START, UM, WITH THE QUARTERLY FINANCIAL REPORT.
CHRIS HOLLINS WILL BE REPORTING FROM THE CITY CONTROLLER'S OFFICE AND PAULA LI LICHEN FROM THE INTERIM DIRECT DUTY DIRECTOR OF THE FINANCE DEPARTMENT, WILL PRESENT ON BEHALF OF THE FINANCE DEPARTMENT.
UM, CONTROLLER OF THE FLOOR IS YOURS.
UH, MEMBERS OF COUNCIL AND STAFF.
I'M PLEASED TO PRESENT THE MONTHLY FINANCIAL REPORT, UH, FOR THE PERIOD ENDING JUNE 30TH, 2024.
THE CONTROLLER'S OFFICE IS PROJECTING AN ENDING FUND BALANCE OF $483.4 MILLION FOR FISCAL YEAR 2024.
THIS IS $2.2 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT DUE TO A LOWER REVENUE PROJECTION THAN FINANCE.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY $297.8 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE AND PAY AS YOU GO AND RESERVE.
OUR REVENUE PROJECTION INCREASED BY $7.4 MILLION FROM THE MAY, 2024 MONTHLY FINANCIAL REPORT.
THE MAIN DRIVERS OF THIS IN, OF THIS INCREASE ARE AS FOLLOWS.
INDUSTRIAL ASSESSMENTS INCREASED BY $3.3 MILLION DUE TO HIGHER THAN ANTICIPATED TAXABLE VALUATIONS LICENSES AND PERMITS INCREASED BY $1.4 MILLION, PRIMARILY DUE TO HIGHER THAN ANTICIPATED SPECIAL FIRE PERMITS, FOOD DEALER PERMITS AND BURGLAR ALARM PERMITS.
INTEREST INCOME INCREASED BY $1.2 MILLION DUE TO HIGHER THAN ANTICIPATED EARNINGS ON DEPOSIT INVESTMENTS AND TRANSFERS FROM OTHER FUNDS DECREASED BY $1.9 MILLION DUE TO LOWER THAN ANTICIPATED TRANSFERS FROM THE PARK HOUSTON FUND.
OUR EXPENDITURE PROJECTION DECREASED BY $9.8 MILLION FROM THE MAY, 2024 REPORT DUE TO YEAREND SAVINGS IN PERSONNEL SUPPLIES AND SERVICE COSTS.
MOVING OVER TO ENTERPRISE FUNDS IN THE AVIATION OPERATING FUND, OPERATING REVENUES INCREASED BY $8 MILLION DUE TO HIGHER THAN ANTICIPATED GARAGE PARKING REVENUES, GROUND RENTAL FEES AND CONCESSIONS.
OPERATING EXPENSES INCREASED BY $8.8 MILLION DUE TO HIGHER THAN ANTICIPATED SUPPLIES AND SERVICE COSTS.
NON-OPERATING REVENUES INCREASED BY $10.9 MILLION DUE TO HIGHER THAN ANTICIPATED INTEREST INCOME AND OPERATING TRANSFERS FROM THE REVENUE FUND TO THE AIRPORT IMPROVEMENT FUND INCREASED BY $10 MILLION IN THE COMBINED UTILITY SYSTEM FUND.
OPERATING REVENUES DECREASED BY $77.2 MILLION DUE TO A DECREASE IN WATER AND SEWER REVENUES, WHICH IS BASED ON IMPLEMENTATION OF THE NEW WATER BILL IMPROVEMENT PLAN.
OPERATING EXPENDITURES DECREASED BY $111.1 MILLION DUE TO CONTRACT IMPLEMENTATION.
DELAYS AND SAVINGS IN PERSONNEL AND SUPPLIES.
NON-OPERATING REVENUES INCREASED BY $14.1 MILLION DUE TO HIGHER INTEREST INCOME AND OPERATING TRANSFERS DECREASED BY $26.2 MILLION DUE TO LOWER THAN ANTICIPATED DEBT SERVICE TRANSFER, LESS TRANSFER TO THE STORMWATER FUND AND DELAYS IN EQUIPMENT PURCHASES FOR THE DEDICATED DRAINAGE AND STREET RENEWAL FUND.
A VALOR EXPENDITURES DECREASED BY $32.9 MILLION, PRIMARILY DUE TO LESS TRANSFER TO CAPITAL PROJECTS AND DELAYS IN VEHICLE PURCHASES IN THE DRAINAGE AND STREET RENEWAL FUND.
DRAINAGE CHARGE REVENUES INCREASED BY $3.1 MILLION DUE TO HIGHER THAN ANTICIPATED DRAINAGE CHARGE REVENUE AND HIGHER THAN ANTICIPATED INTEREST INCOME EXPENDITURES DECREASED BY $49.7 MILLION DUE TO LESS TRANSFER TO CAPITAL PROJECTS AND LOWER THAN ANTICIPATED CLAIMS AND JUDGMENT IN THE DEDICATED, IN THE DEDICATED DRAINAGE
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AND STREET RENEWAL FUND.METRO EXPENDITURES DECREASED BY $5.8 MILLION DUE TO LOWER THAN ANTICIPATED SPENDING ON PERSONNEL AND SERVICES AND LESS TRANSFER TO DEBT SERVICE IN THE STORMWATER FUND.
REVENUES DECREASED BY $12.1 MILLION, PRIMARILY DUE TO LESS TRANSFER FROM THE COMBINED UTILITY SYSTEM.
EXPENDITURES DECREASED BY $13.8 MILLION DUE TO DELAYS IN VEHICLE PURCHASES AND INFRASTRUCTURE MAINTENANCE SERVICES.
FOR OUR 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 JUNE 30TH, 2024, THE RATIO OF UNH VARIABLE RATE DEBT FOR EACH TYPE OF OUTSTANDING DEBT WAS WELL BELOW THAT THRESHOLD.
MOVING TO OUR QUARTERLY INVESTMENT REPORT, AS OF JUNE 30TH, 2024, THE CITY HAD $5.74 BILLION INVESTED IN OUR GENERAL INVESTMENT POOL.
THE CHARACTER OF THIS POOL IS OUT OF A SHORT TERM BOND FUND THAT HOLDS INVESTMENTS OF VERY HIGH CREDIT QUALITY.
REVIEWED THIS POOL AND ASSIGNED THIS POOL ITS HIGHEST RATING.
AAA, OUR INVESTMENT STRATEGY IS TO MATCH ASSETS AND LIABILITIES FOR A TIME PERIOD OF ONE YEAR INTO THE FUTURE AND TO EXERCISE DISCRETION FOR THE BALANCE OF REMAINING FUNDS.
INVESTMENTS ARE $87 MILLION HIGHER THAN LAST YEAR, LARGELY ATTRIBUTABLE TO THE COMMERCIAL PAPER ISSUANCES WITHIN THE COMBINED UTILITY SYSTEM.
THE GENERAL INVESTMENT POOL WAS YIELDING 3.778%, WHICH IS UP FROM 3.572% IN THE PREVIOUS QUARTER.
IN ADDITION TO THE GENERAL INVESTMENT POOL, WE HAVE TWO SMALL INVESTMENT POOLS THAT TOTAL ABOUT $16 MILLION.
THOSE POOLS EXIST TO COMPLY WITH TAX REQUIREMENTS OF THE FEDERAL GOVERNMENT.
A DETAILED LISTING OF ALL THE SECURITIES OWNED BY THE CITY APPEARS AT THE BACK OF YOUR INVESTMENT REPORT.
MOVING TO OUR QUARTERLY SWAP REPORT, THE WRITTEN SWAP REPORT THAT APPEARS IN THE MOER OFFERS A COMPREHENSIVE DESCRIPTION OF OUR TWO SWAP POSITIONS.
THE CITY HAD A NET PAID FOR THE 12 MONTH FISCAL YEAR ENDED JUNE 30TH, 2024 OF $14.6 MILLION FOR ITS SWAPS.
THE FAIR VALUE FOR BOTH COMBINED SWAPS AS OF JUNE 30TH, 2024 WAS NEGATIVE $69.5 MILLION, WHICH IS AN IMPROVEMENT OF APPROXIMATELY $16.8 MILLION OVER THE PREVIOUS QUARTER.
BOTH OF THE CITY SWAPS ARE TRENDING IN A POSITIVE DIRECTION.
UH, AS WE'VE DISCUSSED BEFORE, THE CITY SWAPS ARE FAIRLY COMPLEX.
AND IF YOU HAVE QUESTIONS REGARDING THAT REPORT, PLEASE CONTACT MY OFFICE, MADAM CHAIR.
UH, IF YOU'D ALLOW ME A BRIEF MOMENT OF PERSONAL PRIVILEGE.
UH, LAST WEEK WE LEARNED OF FIRE CHIEF SAM PENA'S DEPARTURE FROM THE CITY.
FOLLOWING YEARS OF DEDICATED SERVICE TO OUR COMMUNITY, CHIEF PENA HAS LED THE HOUSTON FIRE DEPARTMENT THROUGH TRYING TIMES, AND THROUGH EACH STEP, HE'S DEMONSTRATED A STANDARD OF SERVICE SELDOM SEEN IN LOCAL GOVERNMENT.
AND SO ON BEHALF OF THE MORE THAN 2 MILLION HOUSTONIANS WHO CALLED THE CITY HOME, I EXTEND MY APPRECIATION TO CHIEF PENA AND WISH HIM THE VERY, VERY BEST.
WE WELCOME THOMAS MUNOZ TO THE ROLE AND WE LOOK FORWARD TO WORKING WITH HIM AND HIS LEADERSHIP TEAM TO ADVANCE THE MISSION OF HFD IN PROTECTING THE WELLBEING AND THE SAFETY OF HOUSTONIANS.
I ALSO WANNA TAKE THIS MOMENT TO ACKNOWLEDGE THE PASSING OF OUR CONGRESSWOMAN SHEILA JACKSON LEE.
I FOR THE LAST SEVERAL DAYS, OUR CITY, OUR STATE, OUR NATION AND MEMBERS FROM THROUGHOUT THE GLOBAL COMMUNITY HAVE MOURNED THE PASSING OF THE CONGRESSWOMAN, KNOWN FOR HER FORCEFUL AND UNCOMPROMISING APPROACH TO SERVING HER CONSTITUENTS.
THE WOMAN AND THE LEADER WHO I CAME TO KNOW OVER THE PAST SEVERAL YEARS, SIMPLY UNDERSTOOD THE URGENCY OF HER SERVICE, AND SHE GOT RESULTS BECAUSE OF SHEILA JACKSON LEE.
THOSE SERVING TIME FOR NONVIOLENT DRUG OFFENSES GOT A SHOT AT REDEMPTION BECAUSE OF SHEILA JACKSON LEE.
VICTIMS OF DOMESTIC VIOLENCE ACROSS OUR COUNTRY KNOW THAT THEY'RE NOT ALONE.
BECAUSE OF SHEILA JACKSON LEE PROGRESS HAS BEEN MADE IN ELEVATING THE DISCUSSION ABOUT INTERACTIONS BETWEEN LAW ENFORCEMENT AND THE COMMUNITIES THAT THEY SERVE.
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WITH MORE THAN 30 YEARS OF SERVICE TO THE HOUSTON COMMUNITY AS A JUDGE, AS A MEMBER OF THIS HONORABLE COUNCIL AND AS THE REPRESENTATIVE FOR TEXAS 18TH CONGRESSIONAL DISTRICT, THE CONGRESSWOMAN'S CONTRIBUTIONS HAVE TOUCHED THE LIVES OF MILLIONS AND UNDOUBTEDLY WILL CONTINUE TO BENEFIT THE LIVES OF GENERATIONS TO COME.TO ELWIN, ERICA AND JASON, THE ENTIRETY OF THE JACKSON LEE FAMILIES KNOW THAT A GRATEFUL CITY AND NATION ARE WITH YOU NOW AND IN THE DAYS OF AHEAD.
AND ON BEHALF OF THE OFFICE OF THE CITY CONTROLLER, WE PRAY THAT YOU FIND COMFORT KNOWING THAT THE CONGRESSWOMAN'S LEGACY WAS TRULY LARGER THAN LIFE.
FINALLY, CHAIR, UH, SINCE MY LAST REPORT, OUR TREASURY DIVISION LED BY VERNON MIDDLETON LEWIS COMPLETED THE MARKETING PRICING AND SALE OF $734 MILLION IN GENERAL OBLIGATION REFUNDING BONDS.
AS YOU ALL KNOW, $650 MILLION OF THOSE PROCEEDS ARE BEING USED TO COMPENSATE HOUSTON FIREFIGHTERS.
BASED ON THE DEAL THAT THIS COUNCIL APPROVED LAST MONTH, I'D LIKE TO THANK OUR TREASURY TEAM AS WELL AS DIRECTOR DEBOWSKI AND THE FINANCE WORKING GROUP FOR THEIR COMMITMENT AND DEDICATION AND COMPLETING THIS TRANSACTION.
THE BONDS USED TO FINANCE THE FIREFIGHTER AGREEMENT ARE SET TO FULLY MATURE ON MARCH 3RD, 2051, WITH A TOTAL COST OF $1.35 BILLION.
AND AS YOU KNOW, THIS ARRANGEMENT WAS APPROVED WITH NO CORRESPONDING PLAN FOR HOW TO PAY FOR IT.
PREDICTABLY, RATINGS AGENCIES HAVE NOT RESPONDED POSITIVELY.
EARLIER THIS MONTH, STANDARD AND POORS REVISED ITS RATING OUTLOOK FOR THE CITY'S GENERAL OBLIGATION DEBT FROM STABLE TO NEGATIVE.
AND WHILE THIS IS NOT A CREDIT RATING DOWNGRADE YET A NEGATIVE OUTLOOK ALERTS MARKET PARTICIPANTS TO ANTICIPATED FINANCIAL HEADWINDS AND AN ISSUER'S ABILITY OR LACK THEREOF TO REPAY EXISTING DEBT.
IN THIS CASE, S AND P NOTED THAT ITS NEGATIVE OUTLOOK REFLECTS AT LEAST A ONE IN THREE CHANCE THAT THEY COULD DOWNGRADE THE CITY'S DEBT.
BASED ON ONE, THE FACT THAT WE ARE SPENDING DOWN OUR RESERVES TWO ANTICIPATED BUDGET SHORTFALLS RELATED TO INCREASED DEBT SERVICE AND SALARY INCREASES, AND THREE NO ARTICULATED PLAN TO RAISE REVENUE.
WE NEED TO RECOGNIZE THAT THIS IS A PROBLEM, AND I WANNA BE CLEAR, IT'S NOT THE FIREFIGHTER'S FAULT THAT WE'RE IN THIS SITUATION.
UH, THEY ARE WELL WITHIN THEIR RIGHTS TO SEEK BETTER COMPENSATION FOR THEIR MEMBERS, AND I'VE MADE MY POSITION CLEAR THAT WE HAVE TO MAKE EMPLOYEE PAY COMPETITIVE FOR THE CITY OF HOUSTON TO ATTRACT AND RETAIN TALENT.
THE PROBLEM IS THAT THERE'S NO PLAN IN PLACE TO PAY FOR THIS STUFF, AND THE MARKETS ARE BEGINNING TO DEMAND A GREATER STANDARD OF FISCAL RESPONSIBILITY.
WE OWE IT TO HOUSTONIANS TO TAKE THE STEPS NECESSARY TO PUT THE CITY ON A STRONGER AND MORE SUSTAINABLE FINANCIAL FOOTING.
MADAM CHAIR, THAT CONCLUDES MY REPORT.
THANK YOU VERY MUCH, CONTROLLER MS. LIP ANDAN.
THIS IS THE 12 PLUS ZERO FINANCIAL REPORT FOR THE PERIOD ENDING JUNE 30TH, 2024.
FISCAL YEAR 2024 PROJECTION ARE BASED ON 12 MONTHS OF ACTUAL RESULTS.
HOWEVER, INVOICES FOR GOODS AND SERVICES PROVIDED IN FFY 2024 DO CONTINUE TO COME IN.
THESE EXPENSES CONTINUE TO BE RECORDED AS ACCRUED TO THE FISCAL YEAR 2024 UNTIL AUGUST 31ST.
SO THE RESULTS ARE NOT FINAL UNTIL THE PUBLICATIONS OF THE FY 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT.
NEXT MONTH, WE WILL BEGIN PRESENTING THE MONTHLY FINANCIAL REPORT FOR FISCAL YEAR 2025.
AT THE TIME OF THE FISCAL YEAR 2025, ADOPTED BUDGET FORMULATION, THE BEGINNING FUND BALANCE WAS ESTIMATED TO BE 468 MILLION.
IN THIS, UH, 12 PLUS ZERO FINANCIAL REPORT, WE ARE CURRENTLY PROJECTING THAT THIS BALANCE WILL BE 486 MILLION, AN INCREASE OF 18 MILLION FOR GENERAL FUND.
OUR REVENUE PROJECTION IS 50.5 MILLION HIGHER THAN THE ADOPTED BUDGET, AND 1.8 MILLION LOWER THAN PAMAN PROJECTION IS MAINLY DUE TO THE FOLLOWING.
2 MILLION DECREASE IN TRANSFER FROM OTHER FUND DUE TO LOWER THAN ANTICIPATED TRANSFER FROM PARK HOUSTON FUND.
1 MILLION DECREASE IN MISCELLANEOUS DUE TO LOWER THAN ANTICIPATED RECOVERY AND REFUND FOR STANDBY FEES.
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DECREASE IN OTHER TAXES DUE TO LOWER THAN ANTICIPATED MIXED BARRIERS.TAX RECEIPT, 428,000 DECREASE IN SALE OF CAPITAL ASSET TO REFLECT LOWER THAN ANTICIPATED LAND SALES.
1.1 MILLION INCREASE IN LICENSE AND PERMITS MAINLY DUE TO HIGHER THAN ANTICIPATED SPECIAL FIREARM PERMITS AND LIQUOR LICENSE.
986,000 INCREASE IN CHARGES FOR SERVICES, MAINLY DUE TO HIGHER THAN ANTICIPATED AMBULANCE FEES.
AND 319,000 INCREASE INTEREST DUE TO HIGHER THAN ANTICIPATED EARNING.
OUR EXPENDITURE PROJECTION IS 32.6 MILLION HIGHER THAN ADOPTED BUDGET AND 9.8 MILLION LOWER THAN PAMAN.
THE VARIANCE FROM PAMAN PROJECTION IS DUE TO YEAR END SAVING IN PERSONNEL SUPPLY SERVICES AND WE ARE CURRENTLY PROJECTING THE ENDING FUND BALANCE OF 485.6 MILLION, WHICH IS 8 MILLION HIGHER THAN THE ADOPTED BUDGET.
AND 19.6 OF ESTIMATE EXPENDITURE LISTED SERVICE AND PAY AS YOU GO.
THE FUND BALANCE IS 300 MILLION ABOVE THE TARGET, SEVEN AND A HALF PERCENT OF EXPENDITURE EXCLUDING DEBT.
WE AGREE WITH THE CONTROLLER PROJECTIONS FOR THE ENTERPRISE FUND AND I'M GONNA GO OVER, UH, SOME OF THE HIGHLIGHT FOR SPECIAL REVENUE FUND FOR HEALTH BENEFIT FUND REVENUE DECREASE BY 11.8 MILLION DUE TO LOWER ENROLLMENT.
NON-OPERATING REVENUE INCREASE BY 710,000 DUE TO HIGHER THAN ANTICIPATED INTEREST ON POOL INVESTMENT EXPENDITURE, DECREASE BY 11.7 MILLION DUE TO LOWER CLAIMS. PROPERTY AND CASUALTY FUND REVENUE AND EXPENDITURE DECREASE BY 8.1 MILLION DUE TO LOWER THAN ANTICIPATED COSTS FOR LEGAL SERVICES AND INSURANCE PREMIUMS AS WELL AS PERSONNEL SAVING WORKER COMPENSATION FUND OPERATING REVENUE AND EXPENDITURE DECREASE BY 2.4 MILLION DUE TO LOWER THAN ANTICIPATED CLAIMS ASSET FOR FEATURE FUND EXPENDITURE DECREASED BY 2.4 MILLION DUE TO PERSONNEL SAVING AND DELAY IN COMPUTER EQUIPMENT PURCHASE AUTO DEALER SPECIAL REVENUE FUND EXPENDITURE DECREASED BY 2.9 MILLION DUE TO DELAY IN VEHICLE PURCHASE.
ESSENTIAL PUBLIC HEALTH FUND EXPENDITURE DECREASED BY 2.4 MILLION DUE TO SAVING IN PERSONNEL AND SERVICES.
SPECIAL REVENUE FUND EXPENDITURE DECREASED BY 1.3 MILLION DUE TO SAVING IN SERVICES AND DELAY IN EQUIPMENT PURCHASE.
HOUSTON EMERGENCY CENTER EXPENDITURE DECREASE BY 1.8 MILLION.
PRIMARY DUE TO PERSONNEL SAVING MAINTENANCE, RENEWABLE AND REPLACEMENT FUND EXPENDITURE DECREASED BY 3 MILLION DUE TO SAVING IN PERSONNEL SUPPLY AND SERVICES FOR PARKS SPECIAL REVENUE FUND EXPENDITURE DECREASED BY 1.2 MILLION DUE TO PERSONNEL SAVING SUPPLY AND SERVICES FOR PARK HOUSTON.
SPECIAL REVENUE FUND EXPENDITURE DECREASED BY 2 MILLION DUE TO LOWER TRANSFER TO GENERAL FUND FOR POLICE.
SPECIAL REVENUE FUND EXPENDITURE DECREASED BY 1.1 MILLION AS WELL AS SPECIAL WASTE TRANSPORTATION AND INSPECTION FUND.
THE EXPENDITURE DECREASED BY 2.4 MILLION.
THOSE ARE MAINLY DUE TO PERSONNEL AND SERVICES SAVING.
AND, UH, TO UPDATE ON THE HOUSTON ECONOMY.
SO FOR THE EMPLOYMENT, ACCORDING TO BUREAU OF LABOR STATISTIC, THE PRELIMINARY TOTAL NON-FARM EMPLOYMENT IN HOUSTON, THE WOODLAND SUGARLAND METROPOLITAN'S STATISTICAL AREA STOOD AT 3.45 MILLION.
IN MAY, 2024, THIS IS UP APPROXIMATELY 0.5% COMPARED TO PAMAN.
AND THEN WHEN COMPARED TO THE SAME PERIOD LAST YEAR, NON-FARM EMPLOYMENT IS UP ABOUT 0.7%.
THE PRELIMINARY UNEMPLOYMENT RATE FOR THE MONTH OF MAY, 2024 WAS 4% COMPARED TO PAMAN OF 3.8%.
AND AS COMPARED TO MAY, 2023, THE UNEMPLOYMENT RATE WAS 4.4% FOR ENERGY SECTOR, THE AVERAGE OIL PRICE OF 79.77 FOR THE MONTH OF JUNE, 2024 WAS 0.3% LOWER THAN PRIOR MONTH.
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OF $80 COMPARING FROM THE SAME PERIOD LAST YEAR, THE PRICE HAS INCREASED BY 13.6%.FOR THE AVERAGE OIL COW OF 486 FOR THE MONTH OF JUNE, 2024 WAS 2.2% LOWER THAN PIMAN COW AND COMPARING YEAR OVER YEAR FOR THE MONTH OF JUNE, DECREASE BY 11.8% FOR THE HOME SALE.
THE LATEST REPORT PREPARED BY THE HOUSTON ASSOCIATION OF REALTOR FOR THE MONTH OF JUNE, 2024, SHOWED THE TOTAL SINGLE FAMILY HOME SALE OF 7,718.
THAT WAS ABOUT 11.6% LOWER COMPARED TO THE JUNE, 2023 OF 8,729.
THE MEDIAN PRICE INCREASED BY 0.7% TO 345,500, AND THE AVERAGE PRICE INCREASED BY 0.8% TO 432 POINT $432,090.
AND THAT IS, UH, CONCLUDE MY REPORT.
I WOULD LIKE TO WELCOME COUNCIL MEMBER LETITIA PLUMMER TO THE HORSESHOE.
WE ALSO HAVE BEEN JOINED BY STAFF FROM COUNCIL MEMBER TARSHA JACKSON'S OFFICE.
YA UM, STEVEN IN DISTRICT D, STEVEN JAMES, AND DISTRICT D IS HERE.
AND WE HAVE ISAAC WITH COUNCIL MEMBER TIFFANY THOMAS'S OFFICE HERE WHO HAS JOINED US.
I'D LIKE THE QUARTERLY REPORTS 'CAUSE YOU GET SO MUCH MORE INFORMATION.
UM, A COUPLE THINGS I WANTED TO ASK.
UH, THE INTEREST RATE THAT WE WERE ABLE TO GET ON THE REFUNDING BONDS WAS WHAT? SO, UH, BASED ON THE, SO THERE'S, THERE'S DIFFERENT TERMS OF THE BONDS, RIGHT? SOME ARE ONE YEAR, SOME ARE 27 YEAR, AND THEY, THEY BURIED THROUGHOUT.
IF I COULD GET A SPECIFIC, I THINK, I THINK I A I THINK IT WAS SOMETHING AROUND 4.3 IS WHAT THE FINANCE DIRECTOR, WE, WE WERE PROJECTING AROUND 4.5 AND IT WAS SOMEWHERE AROUND 4.3.
IS THAT, DOES THAT SOUND RIGHT? THAT'S CORRECT.
SOMEBODY SAID FROM THE BACK WILL JONES, YOU'RE ON TOP OF IT FOR THE WIN.
UM, BUT YEAH, AS WE, YOU KNOW, WHEN WE FIRST GOT THE HIGH LEVEL NOTES BACK IN, YOU KNOW, MARCH ABOUT THESE, UH, THESE BONDS THAT WE WERE GONNA BE ISSUING, MY OFFICE ESTIMATED THAT THESE WOULD COST SOMEWHERE BETWEEN 1.1 AND $1.3 BILLION.
UH, THE ACTUAL COST CAME OUT LARGELY BECAUSE, UM, MANY OF THE BONDS ARE WEIGHTED TO BE TOWARDS THE BACKEND.
AND THE LONGER TERM OF 24, 27 YEARS, UM, THE TOTAL PRICE WILL NOW BE $1.35 BILLION.
SO ABOVE THE HIGH END OF THE ESTIMATED RANGE THAT WE HAD A FEW MONTHS AGO.
AND ONE MORE QUESTION, PAUL, YOU MIGHT BE ABLE TO HELP, UM, ON THE, THE, UH, STORMS. I KNOW WE DID $23 MILLION OUT OF OUR, UH, OUT OF OUR BUDGET STABILIZATION FUND, UM, THAT WE'VE TRANSFERRED AND, AND I'M SURE WE'RE WAY PAST THAT AMOUNT, UM, WAITING ON REIMBURSEMENTS.
UM, CAN YOU GIVE US KIND OF A LITTLE BIT OF AN UPDATE ON, UH, HOW WE ARE FARING ON THE, UH, STORM RECOVERY EXPENDITURES? OKAY, SO REGARDING THE BUDGET STABILIZATION FUND, RIGHT, 23 MILLION WAS ALREADY TRANSFERRED IN, UH, EARLY, UH, JULY FOR FY 25.
AND, UH, RIGHT NOW THE BUDGET STABILIZATION FUND, WE HAVE ABOUT 1.4 MILLION IN THE, AND WITH THE STATUS OF THE DISASTER REPORT, RIGHT? SO RIGHT NOW THE ESTIMATE COST FOR THE MAY STORM IS ABOUT 43 MILLION AND THE HURRICANE ROAD IS ABOUT 150 MILLION.
I SEE NO COUNCIL MEMBERS IN THE QUEUE.
I DO WANNA WELCOME COUNCIL MEMBER TARSHA JACKSON TO THE HORSESHOE.
THANKS FOR JOINING US AND THANK YOU VERY MUCH FOR YOUR PRESENTATIONS AND WE WILL SEE YOU AGAIN TOMORROW MORNING.
WELL, I THINK YOU'RE STILL STUCK WITH ME FOR A LITTLE LONGER.
OH, I'M STUCK WITH, THAT'S RIGHT.
WE'RE STUCK WITH THE CONTROLLER.
THE CONTROLLER IS GOING TO GO OVER THE HOMEOWNER'S ASSISTANCE PROGRAM PERFORMANCE AUDIT.
SO AS A RESULT OF COUNCIL MEMBER, VICE MAYOR PROAM PECK'S BUDGET AMENDMENT, WE ARE BRINGING ALL OF THESE PERFORMANCE AUDITS THAT ARE CONDUCTED BY THE CONTROLLER'S OFFICE TO THE BUDGET FISCAL AFFAIRS COMMITTEE, SO WE CAN MAKE SURE THAT WE'RE ACTUALLY DOING SOMETHING TO FOLLOW THROUGH ON ALL.
AND I HAVE, I, I HAVE READ THIS, I READ THIS THIS MORNING AND IT LOOKS LIKE THE HOUSING DEPARTMENT IS ON MOST OF THESE FINDINGS ALREADY, UM, RESOLVING A LOT OF IT.
BUT, UM, CONTROLLER, IF YOU WOULDN'T MIND WALKING US THROUGH, UM, WHAT YOUR TEAM DID, OR IT WAS ACTUALLY YOUR TEAM BEFORE, BEFORE RIGHT.
THIS WAS CONCLUDED AT THE END OF, UH, LAST YEAR, BUT THE FLOOR IS YOURS AGAIN.
UM, SO AGAIN, THIS, THIS AUDIT THAT WE'RE GONNA TALK ABOUT TODAY, UH, IS IN RELATION TO THE HOUSING DEPARTMENT'S HOMEOWNER ASSISTANCE PROGRAM.
UH, BEFORE JUMPING IN, I KNOW THAT WE HAD, UH,
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SOME FANTASTIC MEMBERS OF OUR AUDIT TEAM, UH, WHO DID THIS WORK.AND SO IF THEY'RE HERE, I WOULD LIKE TO HAVE THEM BE ACKNOWLEDGED.
LOOKS LIKE THEY MIGHT STILL BE WORKING.
UH, AND I ALSO WANT TO THANK, UH, THANK THE HOUSING DEPARTMENT STAFF, UH, FOR THEIR COOPERATION AND SUPPORT THROUGHOUT THIS PROCESS.
IF WE CAN JUMP FORWARD A SLIDE, UH, SO WE'LL TALK ABOUT THE BACKGROUND AND THE OBJECTIVES FOR THIS AUDIT.
WE'LL ALSO SHARE OUR FINDINGS AND OUR RECOMMENDATIONS, UH, AND THEN WE'LL TALK ABOUT THE CONTINUED CHALLENGES FACING HOUSING AND, AND IN FACT THE, THE CITY ACROSS THE BOARD.
SO, UH, FOR THOSE WHO AREN'T AWARE, THE HOMEOWNER'S ASSISTANCE PROGRAM WAS A PROGRAM THAT WAS PUT IN PLACE, UH, TO HELP THOSE WHO WERE IMPACTED BY HURRICANE HARVEY.
UH, THE HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT PROGRAM, UH, ULTIMATELY ASSISTED 731 HOMEOWNERS IN REPAIRING AND REBUILDING DAMAGING HOMES, UH, DAMAGED HOMES, UH, IN SOME CASES THAT THAT WORK WAS FUNDED DIRECTLY.
AND IN OTHER CASES, UH, WORK THAT HAD ALREADY BEEN DONE, UH, TO REHABILITATE THESE HOMES BY HOMEOWNERS, UH, WAS, WAS REIMBURSED BY THE CITY.
UH, THE BUDGET FOR THE PROGRAM WAS MORE THAN $69 MILLION, AND THAT WAS FUNDED, UH, THROUGH HUD THROUGH A COMMUNITY DEVELOPMENT BLOCK GRANT.
AND, UH, THIS AUDIT, WHICH WAS LAUNCHED, UH, LAST FISCAL YEAR, UH, AND IN FACT LAST CALENDAR YEAR, UH, UNDER CONTROLLER BROWN, WAS INTENDED TO VERIFY THAT HOPE FUNDS WERE EXPENDED IN A WAY THAT WAS LEGAL AND OF COURSE, EFFICIENTLY HAVING THE GREATEST POSSIBLE IMPACT.
UH, SO THERE WERE FOUR FINDINGS FROM THIS AUDIT, AND, UH, THE FIRST TWO WERE IN RELATION TO BOTH TIMELY REQUESTS FOR REIMBURSEMENT, UH, AS WELL AS ACCURATE AND COMPLETE REQUESTS FOR REIMBURSEMENT.
AND SO THE WAY THAT, THE WAY THAT THIS PROJECT WAS SET UP, UM, WAS THAT THE CITY WOULD EXPEND FUNDS AND THEN WOULD, UH, SUBMIT REIMBURSEMENT REQUESTS TO THE STATE.
UH, HOWEVER, THERE WERE SOME LIMITATIONS.
UM, ONE OF THEM BEING THAT REIMBURSEMENT REQUESTS SHOULD BE SUBMITTED WITHIN 90 DAYS OF, UH, THE EXPENDITURE.
UH, WE TOOK A, A SAMPLE, A REPRESENTATIVE SAMPLE OF 57 REIMBURSEMENT REQUESTS, AND WE, UH, ANALYZE THOSE FOR TIMELINESS AS WELL AS ACCURACY.
UH, AND OF THOSE 57 REIMBURSEMENT REQUESTS, 24 OF THEM, OR 42% OF THE TOTAL, UH, WAS SUBMITTED LATE.
UH, AND THOSE 24 THAT WERE SUBMITTED LATE REPRESENTED $4 MILLION IN REIMBURSEMENT REQUESTS.
UM, OF THOSE LATE SUBMISSIONS, NINE OF THEM WERE ULTIMATELY REJECTED BY THE STATE BECAUSE OF THEIR TARDINESS.
UH, AND THAT COST THE CITY THAT COST THE CITY ROUGHLY $2.5 MILLION.
UH, SIMILARLY IN THAT SAME EXACT SAMPLE SET, SO WE HAD 24 THAT WERE LATE, UM, OF THOSE THAT WERE ON TIME OF AN ADDITIONAL 14, UH, HAD ERRORS.
AND EVERY SINGLE ONE OF THOSE 14, UH, SUBMISSIONS THAT THAT HAD, UH, YOU KNOW, ERRORS WITHIN THOSE SUBMISSIONS WERE EITHER REJECTED OR WITHDRAWN ULTIMATELY.
AND THOSE SUBMISSIONS WERE WORTH $6 MILLION.
SO SIMPLY BETWEEN LATE AND ERRONEOUS SUBMISSIONS FOR REIMBURSEMENT IN THIS PROGRAM, UH, THE CITY LOST EIGHT AND A HALF MILLION DOLLARS, UM, IN REIMBURSEMENT REVENUE.
UM, NOW YOU MAY RECALL THAT, UH, IN, IN MY REQUESTS FOR ADDITIONAL STAFF TO DO AUDIT WORK THAT COULD UNCOVER THESE TYPES OF, OF INEFFICIENCIES AND CHALLENGES, UM, MY ENTIRE BUDGET FOR AUDIT, AND I DON'T WANNA SAY MINE, THE CITY OF HOUSTON'S ENTIRE BUDGET FOR AUDIT IS IN THE RANGE OF $2 MILLION.
UM, AND FOR 800,000, WE COULD INCREASE THE NUMBER OF AUDITORS AND THE NUMBER OF FUNCTIONS, UH, THAT ARE FOCUSED ON THINGS LIKE GRANTS.
RIGHT NOW, WE DON'T HAVE A PARTICULAR GRANT AUDIT FUNCTION WITHIN MY OFFICE.
UM, OBVIOUSLY THIS PART, THIS THIS SINGULAR AUDIT DID FOCUS ON, ON GRANT DOLLARS,
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BUT WE COULD HAVE SOMEONE WHO'S DOING THAT 24 7 AND WE DON'T.UM, AND SO THAT'S, THAT'S A CHOICE THAT HAS BEEN MADE, UM, THAT WE'RE GONNA CONTINUE TO TALK ABOUT AND HOPE THAT YOU CAN MAKE A DIFFERENT CHOICE, UH, IN THE FUTURE.
SO AGAIN, ON JUST ON THIS PROGRAM ALONE, UM, IN THE 20 22, 20 23 TIMEFRAME, UH, EIGHT AND A HALF MILLION DOLLARS LOST BASED ON LATE AND ERRONEOUS SUBMISSIONS.
NEXT PAGE, UH, THERE WERE TWO ADDITIONAL FINDINGS.
UH, ONE WAS ABOUT DATA ACCESS, UM, AND THE OTHER ONE WAS ABOUT COMPLIANCE WITH THE GRANT.
SO, UH, THE FIRST ONE WAS THAT WE FOUND INSUFFICIENT SEGREGATION AND MONITORING OF USER ACCESS, UH, TO PROVIDE ADEQUATE PROTECTION OF SENSITIVE DATA.
WHAT THIS MEANS AT THE END OF THE DAY IS THAT THERE WERE A NUMBER OF PEOPLE WHO HAD ACCESS TO DATA THAT THEY DIDN'T NEED TO DO THEIR JOBS.
NOW WE DIDN'T FIND ANY NEGATIVE OUTCOME OF THAT, BUT JUST IN TERMS OF BEST PRACTICE, UM, THIS TYPE OF SENSITIVE DATA, YOU WANNA MAKE SURE THAT THOSE WHO HAVE ACCESS AND NEED THAT ACCESS TO DO THEIR WORK, UM, AND OTHERWISE THAT WE KEEP IT SEQUESTERED FOR, FOR SECURITY PURPOSES.
UM, WE ALSO FOUND THAT THERE WAS NO DOCUMENTATION THAT THOSE WHO EITHER LEFT THE DEPARTMENT, LEFT THE PROGRAM, OR LEFT THE CITY, UM, WERE REMOVED FROM, FROM THAT USER ACCESS.
AGAIN, NO FINDINGS THAT ANYTHING HAPPENED BECAUSE OF THAT.
SO, YOU KNOW, WE DON'T KNOW OF ANY CONSEQUENCES, BUT THE RISK WAS THERE.
SO THAT WAS FINDING NUMBER THREE.
AND THEN FINALLY FINDING NUMBER FOUR, UM, IT'S A COMPLIANCE REQUIREMENT OF THIS GRANT THAT THERE ARE PROCESSES TO, UH, RESPOND TO COMPLAINTS IN A SPEEDY MANNER.
UM, NUMBER ONE, YOU NEED TO RESPOND, UH, IN WRITING TO ALL COMPLAINTS WITHIN 15 BUSINESS DAYS.
AND THEN YOU NEED TO RECONCILE A PROCESS FOR APPEALS WITHIN 30 DAYS.
UM, THOSE, UH, THOSE CONTROLS DID NOT EXIST, UH, WITHIN THIS PROGRAM.
AND SO THAT WAS OUR FOURTH FINDING THAT WE IDENTIFIED.
SO OUR RECOMMENDATIONS, YOU KNOW, WE HAD A PRETTY STRAIGHTFORWARD RECOMMENDATION FOR, UH, FOR EACH FINDING, UH, FOR FINDING ONE ON TIMELY SUBMISSIONS, PUT A PROCESS IN PLACE, UH, THAT DOCUMENTS AND EXECUTES ACTIONS TO MAKE SURE THAT THESE TYPES OF SUBMISSIONS ARE PUT FORWARD IN A TIMELY MANNER.
UH, NUMBER TWO, SIMILARLY MAKE SURE THAT THERE'S A PROCESS IN PLACE FOR REVIEW AND QUALITY CONTROL SO THAT THESE REQUESTS ARE COMPLETE AND THAT THEY'RE ACCURATE.
UH, NUMBER THREE, UPDATE THE USER ACCESS POLICY WITHIN HOUSING, UH, AND COMMUNITY DEVELOPMENT, UH, AND THE ACCOMPANYING PROCEDURES TO ENSURE THAT THERE IS PERIODIC MONITORING OF USER ACCESS FOR, FOR THESE TYPES OF SENSITIVE DATA.
AND THEN FINALLY, TO DEVELOP, DOCUMENT AND IMPLEMENT A PLAN, UM, AND A METHOD TO TRACK AND RECONCILE RESPONSES TO APPLICABLE COMPLAINTS AND APPEALS.
UM, SO THE, THE HOPE PROGRAM, UH, YOU KNOW, HAS NOW CONCLUDED, BUT DESPITE THE FACT THAT THAT PROGRAM, UH, HAS REACHED ITS CONCLUSION, THESE RECOMMENDATIONS CAN BE APPLIED, UH, BROADLY, THERE ARE ANY NUMBER OF PROGRAMS WHERE THESE TYPES OF SUBMISSIONS, UH, NEED TO BE COMPLETE AND ACCURATE.
UH, THERE ARE ANY NUMBER OF PROGRAMS THAT HAVE, UH, DATA ACCESS ISSUES LIKE THESE AND WHERE CONTROLS NEED TO BE IN PLACE, UH, TO MAKE SURE THAT WE'RE DOTTING OUR I'S AND CROSSING OUR T'S.
UM, FOR EXAMPLE, UH, WE FOUND OUTSIDE OF THIS AUDIT THAT HOUSING, UH, MISSED TWO PAYMENTS IN 2023 AND ANOTHER PAYMENT IN 2022, UH, TO HUD, THOSE PAYMENTS THAT WERE MISSED TOTALED ROUGHLY $800,000.
AND, UH, AND THEY WERE TECHNICALLY DEFAULTS.
NOW BECAUSE WE HAD CDBG MONEY, UM, IN RESERVE THAT COULD HAVE COVERED THOSE PAYMENTS.
YOU KNOW, WE, WE WERE ABLE TO ESCAPE PENALTY IN THESE SITUATIONS.
BUT IN OTHER CASES, AND YOU KNOW THIS IN YOUR PERSONAL LIFE FROM PAYING YOUR MORTGAGE, UH, BUT ALSO, YOU KNOW, PARTICULARLY IN AMONGST MAJOR ORGANIZATIONS AND BIG FINANCIAL TRANSACTIONS, WHEN YOU DEFAULT, UH, THAT COULD LEAD TO SOME VERY SERIOUS CONSEQUENCES, WHETHER IT'S LITIGATION, WHETHER IT'S A DECREASE IN OUR CITY'S, UH, CREDIT RATING, WHICH WE'VE TALKED ABOUT, UH, JUST EARLIER IN MY REPORT.
UM, OR IN SOMETIMES THAT TRIGGERS THE ENTIRE AMOUNT OF THE LOAN TO BE DUE AND PAYABLE IMMEDIATELY, WHICH WITH, YOU KNOW, OUR CURRENT CASH FLOW ISSUES AND SO ON, THAT'S NOT SOMETHING THAT WE WANNA BRING UPON OURSELVES.
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CONTROLS CAN BE PUT IN PLACE, UH, YOU KNOW, IN A NUMBER OF DIFFERENT, DIFFERENT SITUATIONS.IN FACT, AS IT RELATES TO, UH, THE EXAMPLE OF THESE DEBT SERVICE PAYMENTS, OUR RECOMMENDATION IS THAT THAT DEBT SERVICE, LIKE MOST OF THE CITY'S DEBT SERVICE, BE BROUGHT INTO THE CONTROLLER'S OFFICE SO THAT, YOU KNOW, OUR FOLKS ARE MONITORING THAT AND FOCUSED ON MAKING THOSE PAYMENTS ON TIME.
IT'S WHAT WE DO EVERY SINGLE DAY.
UM, AND SO WE WOULD THINK IT'S IN THE CITY'S BEST INTEREST TO BRING THAT DEBT SERVICE OVER, UH, TO THE COMP CONTROLLER'S OFFICE, AND WE'VE OFFERED THAT TO THE ADMINISTRATION.
UH, THAT CONCLUDES MY PRESENTATION HERE, AND I'M HAPPY TO TAKE, UH, ANY QUESTIONS THAT YOU MIGHT HAVE.
HATE HEARING ABOUT ANY LOSS OF FUNDING AND, AND THERE'S SURE TO BE MORE DISASTER MONEY COMING OUR WAY.
SO I'M SURE LOTS OF THE RECOMMENDATIONS, UM, IN THIS REPORT WILL HELP US IN THE FUTURE.
I WILL GO FIRST TO VICE MAYOR PRO TEM, AMY PECK, THANK YOU CHAIR.
THANK YOU CONTROLLER FOR THE PRESENTATION, AND THANKS CHAIR FOR BRINGING THIS FORWARD.
UM, SO YOU SAID THAT YOU TOOK A REPRESENTATIVE SAMPLE OF, UM, THIS WHOLE PROGRAM, SO THE $8.5 MILLION THAT WE LOST IN REIMBURSEMENT, IT COULD POTENTIALLY ACTUALLY BE MORE THAN THAT? UH, YES.
UM, AND ARE WE GOING TO LOOK INTO THAT FURTHER TO SEE HOW MUCH MORE THAT MAY HAVE BEEN? IT'S NOT FURTHER, OR IS THERE AN EASY WAY TO TELL THAT WITHOUT, LIKE GOING THROUGH A WHOLE NOTHER AUDIT? I THINK THERE IS A, A LESS RIGOROUS WAY THAT WE COULD, UM, THAT WE COULD ANALYZE THAT AND, AND REACH A, A ROUGHLY ACCURATE FIGURE.
UM, AND SO THIS WAS CDBG MONEY THAT WE WERE, THAT WAS SPENT BY THE CITY THAT THEN WE WERE SUPPOSED TO GET REIMBURSED BACK AS CDBG MONEY, IS THAT CORRECT? I'M SORRY, LEMME JUST GET THIS NOTE DOWN SO I CAN NO PROBLEM.
SO IT WAS CDBG MONEY THAT WE SPENT FROM THE CITY THAT WE WERE SUPPOSED TO GET REIMBURSED BACK AS CDBG FUNDING.
IS THAT CORRECT? OR WAS ANY GENERAL FUND MONEY USED ON THIS, UH, THAT WE DIDN'T REIMBURSED? LET ME DOUBLE CHECK ON THE FUND.
THAT WAS THE ORIGINAL SOURCE, BUT YOU'RE CORRECT THAT ULTIMATELY THIS WAS SUPPOSED TO BE COVERED THROUGH CDBG, UH, MONEY.
AND, UM, IN THE CASE OF THE, THE MISSED PAYMENTS, WHICH WERE NOT PART OF THE AUDIT, THAT WAS CDBG, UM, ON THE FUNDS THAT WERE COVERED BY THIS AUDIT, LET ME CIRCLE BACK TO YOU ON, YOU KNOW, WHERE THAT, WHICH FUND, YOU KNOW, TOOK ON THAT LOSS.
OKAY, BUT I, BUT I'M, I'M REASONABLY CERTAIN IT WAS CDBG, BUT LET ME CONFIRM THAT FOR YOU.
BECAUSE I'M CURIOUS NOW THAT, YOU KNOW, IF WE WERE EXPECTING THIS MONEY BACK IN ANY FORM, WHETHER IT WAS SOME GENERAL FUND OR CDBG DISASTER RECOVERY, SURELY THAT MONEY WAS PLANNED AT SOME POINT FOR SOMETHING ELSE.
AND SO NOW I'M WONDERING, SINCE WE DIDN'T GET THIS REIMBURSEMENT, WHAT OTHER PROJECT OR SOMETHING PROBABLY WASN'T FUNDED NOW BECAUSE WE DIDN'T GET THAT MONEY BACK, SO, NO, ABSOLUTELY.
AND YOU COULD THINK OF ANY NUMBER OF POSITIVE USES FOR EIGHT AND A HALF MILLION DOLLARS.
SO WE ALSO KNOW OUTSIDE THE SCOPE OF THIS AUDIT ABOUT THE $45 MILLION THAT WE WERE NOT ABLE TO EXPEND IN A TIMELY FASHION AND ESSENTIALLY FORFEIT.
SO THAT'S NOT PART OF THIS AUDIT, BUT IT'S JUST ANOTHER EXAMPLE OF NOT HAVING THE PROCESSES IN PLACE TO APPROPRIATELY DEPLOY FUNDS AND THEN OF COURSE, BE REIMBURSED FOR THEM.
UH, VICE MAYOR PRO TEM, I BELIEVE IT'S, UH, COMMUNITY DEVELOPMENT BLOCK GRANT, DISASTER RECOVERY, 17 FUNDS THAT FUNDED THAT HOPE PROGRAM.
UM, MAYOR PRO TEM CASTEX TATUM.
UM, MY QUESTION, UM, CONTROLLER HOLLANDS DURING BUDGET CYCLE, I KNOW YOU, UM, MADE AN ASK FOR SOME ADDITIONAL DOLLARS FOR MORE STAFF, UM, AND PART OF OUR CONCERN WAS THE NUMBER OF VACANCIES, AND WE TALKED ABOUT THIS, THAT YOU WERE WAITING TO HIRE, UM, SOMEONE IN YOUR OFFICE THAT WOULD THEN MAKE THE ADDITIONAL HIRES OF THE TEAM, UM, HAVE THOSE VACANCIES BEEN FILLED? ARE WE CLOSER TO FILLING THOSE VACANCIES? BECAUSE I DO WANT, UM, US TO BE ABLE TO REVISIT, UM, THAT ACT.
AND, UM, AND I TOLD Y'ALL THAT WE, WE WOULD WORK IN STEPS AND THAT I WOULD COME TO YOU QUITE ASSERTIVELY AT THE, AT THE APPROPRIATE TIME.
UM, WE ARE STILL TRYING TO HIRE A CITY AUDITOR.
UM, THE OTHER THING THAT WASN'T APPROVED IN THE BUDGET PROCESS WAS INCREASING THE SALARY FOR THE CITY AUDITOR.
AND SO, UH, IF YOU WERE TO GO TO OUR CITY WEBSITE RIGHT NOW AND LOOK AT THAT JOB POSTING, THE, THE SALARY RANGE IS NOT AT THE RANGE THAT IT SHOULD BE, AND THAT, THAT I THINK WOULD ATTRACT MORE CANDIDATES, WE'RE STILL AGGRESSIVELY SEARCHING, I'M MAKING CALLS TO AUDIT FIRMS ON A, YOU KNOW, WEEKLY BASIS, CHECKING BACK IN.
ARE THERE ANY OTHER FOLKS WHO MIGHT APPLY? UH, WE HAVE A COUPLE OF CALLS AND INTERVIEWS COMING UP,
[00:40:01]
AND SO WE WANNA GET THE CITY AUDITOR IN PLACE AS AS SOON AS POSSIBLE.UM, BUT WE'RE STILL NOT AT A PLACE WHERE I'M EVEN ALLOWED TO PAY THAT PERSON, UM, WHAT THEY SHOULD BE PAID.
AND SO THAT'S, UM, I WON'T BLAME THAT FULLY.
THIS, IT'S A, IT IS A TOUGH MARKET FOR TALENT, RIGHT? AND SO, UM, BUT I THINK THAT'S ALSO ONE OF THE FACTORS.
AND THEN MY OTHER QUESTION WAS WHEN YOU TALKED ABOUT, UM, THE APPROPRIATE CONTROLS AND HAVING THE DEBT SERVICE GOING FORWARD, UM, THROUGH THE CONTROLLER'S OFFICE.
TELL ME NOW HOW THAT IS CURRENTLY WORKED.
UM, SO, SO AS OF THIS MOMENT AND GOING BACK TO 23 AND 22, UM, THERE ARE, THERE ARE RARE INSTANCES, UM, BUT THERE ARE A NUMBER OF THEM IN WHICH THE DEPARTMENT REMAINS RESPONSIBLE FOR ITS OWN DEBT SERVICE ON OUR BONDS.
SO WE JUST TALKED ABOUT THE FIREFIGHTER BONDS AND SO ON.
THOSE BILLS COME STRAIGHT, YOU KNOW, TO OUR OFFICE AND, AND WE PAY THOSE.
AND AGAIN, WE HAVE THESE PROCESSES IN PLACE TO WHERE WE DO NOT MISS PAYMENTS.
UM, IF THEY'RE OUT IN DEPARTMENTS, WE DON'T HAVE ANY OVERSIGHT OF IT.
IT'S JUST LIKE ANY OTHER VENDOR PAYMENT AND WE WAIT FOR THE REQUEST TO COME AND IT GETS PROCESSED.
SO THERE'S NOT A SIMULTANEOUS REVIEW OF THAT.
I ALWAYS THOUGHT THAT EACH DEPART, ALTHOUGH DEPARTMENTS MAY PAY THEIR OWN, UM, BILLS, BUT THE CONTROLLER'S OFFICE WAS SIMULTANEOUSLY REVIEWING TO MAKE SURE THOSE BILLS WERE BEING PAID ON TIME.
SO, UH, YOU KNOW, IN THIS CASE, EACH OF THESE THREE INSTANCES WE WERE ALERTED AFTER THE FACT.
SO WHAT IS YOUR SUGGESTION FOR THIS ONE? UH, OUR, OUR TEAM SUGGESTION, UH, OUR CITY TREASURER'S SUGGESTION IS TO BRING THAT RESPONSIBILITY FULLY OVER TO THE CONTROLLER'S OFFICE.
AND IN THE SAME WAY THAT WE ADDRESS OUR MONTHLY, YOU KNOW, BOND PAYMENTS, YOU KNOW, ACROSS THE BOARD THAT THIS IS HANDLED IN THAT SAME EXACT PROCESS.
AND SO THOSE BILLS, YOU KNOW, ALWAYS GET PAID ON TIME.
DO WE HAVE ANY OPPOSITION TO THAT SUGGESTIONS? SO FAR? I HEARD, I HAVEN'T HEARD ANY OPPOSITION.
I THINK IT'S, WE'RE STILL IN CONVERSATION WITH THE ADMINISTRATION ON THAT.
I DO WANNA WELCOME COUNCIL MEMBER WILLIE DAVIS TO THE HORSESHOE.
UM, NEXT, UH, WE'LL HEAR FROM COUNCIL MEMBER TWILA CARTER.
AND, AND THANK YOU UHLER HOLLANDS FOR YOUR, YOUR, UH, REPORT.
SO JUST TO SUM THIS UP, OUT OF THE 57, THE, THE, THE SAMPLE THAT YOU TOOK, 67% HAD ERRORS OR WERE LATE 38 OF THE 57? THAT'S CORRECT.
SO SIX, YEAH, SO 67%, WHICH, UH, IF YOUR OVERALL BUDGET WAS 69 MILLION AND THE LOSS ON 50 OR, OR I GUESS 67% OF THOSE 57, 38 OF THEM WAS 8.5 MILLION.
SEEMS TO BE A PRETTY SIGNIFICANT IN, UM, ACCOUNTS RECEIVABLE PROBLEM HERE, JUST ACROSS THE BOARD, UH, IN BILLING AND, AND MONITORING THIS.
HOW ARE THE DEADLINES TRACKED? YOU KNOW, WHEN YOU, WHEN YOU LOOK AT THIS COMBINED WITH OTHER MISSED DEADLINES, I CAN ONLY IMAGINE THE FRUSTRATION FROM THE HOME, YOU KNOW, THE, THE HOMEOWNER'S SIDE THAT'S TRYING TO SEEK HELP AND, AND GOING THROUGH THIS PROCESS.
AND WE'RE TALKING ABOUT 2017, CORRECT? WELL, 2017, OBVIOUSLY THE HARVEY STORM TOOK PLACE.
UH, THESE REIMBURSEMENT REQUESTS WERE IN THE RANGE OF, UH, 21 AND 22 AND 23.
SO I, I MEAN, I WOULD, IT WOULD BE INTERESTING TO KNOW, YOU KNOW, WHERE ARE THESE, YOU KNOW, LIKE AS FAR AS THE OVERALL APPLICANTS, WHERE DOES THAT STAND? OR ARE ALL APPLICATIONS IF EVERYTHING CLOSED OUT, YOU SAID, YOU KNOW, WE'RE AT THE END, BUT WHERE DO WE STAND? WHAT'S LEFT? WHAT, WHAT ARE WE DOING? RIGHT.
SO THE, THE PROGRAM CONCLUDED, UH, ULTIMATELY WE WERE ABLE TO SU THE CITY WAS ABLE TO SUPPORT 731 HOMEOWNERS.
UM, THE, YOU KNOW, WHAT COULD HAVE BEEN, UH, REMAINS, UH, AN OPEN QUESTION.
SO HOW MANY OF WE WERE ABLE TO SUPPORT 731? I WONDER HOW MANY WERE REJECTED OR LOST, OR, I MEAN, LIKE, WHAT WAS THE OVERALL NUMBER OF APPLICANTS, I GUESS WOULD BE A GOOD QUESTION.
HAPPY TO LOOK INTO THAT AND CIRCLE BACK.
UM, COUNCIL MEMBER DAVIS, MADAM CHAIR, THANK YOU SO MUCH FOR, UH, THE, UH, RECOGNIZING, I, I WANT TO, UM, GO BACK A LITTLE BIT.
I HAD A COUPLE OF THINGS, UH, BROTHER CONTROLLER, AND THAT WAS ONE REGARDING THE, UH, WITH MAYOR PRO TEM TAYLOR WAS ASKING CONCERNING YOUR ASK ON AUDITORS MM-HMM
UM, AND I WANT TO GO BACK TO THAT.
'CAUSE WHEN THAT WAS PRESENTED, IT WAS A CONCERN BECAUSE INADEQUATELY
[00:45:01]
TO DO WHAT NEED TO BE DONE OUT OF THE OFFICE, IT WOULD BE, YOU KNOW, ADVANTAGEOUS THAT YOU HAVE THE PEOPLE TO EQUIP YOU TO DO IT.SO IF I, IF I REMEMBER THE ASK WAS FIRST A AUDITOR AND THE, THE, THE SALARY OF THAT AUDITOR TO INCREASE THE, THE SALARY OF THE CITY AUDITOR WHO IS RIGHT, THE DIRECTOR OF THE ENTIRE AUDIT DIVISION.
NOW, HOW MANY, HOW MANY AUDITORS WOULD THAT NEED TO SATISFY THAT, UH, THE POSITIONS AND THE ERRORS? AND YOU'RE TALKING ABOUT SOME OF THE CHALLENGES.
WHAT, WHAT, HOW MANY WOULD YOU NEED TO DO THAT? UM, SO THE PLAN THAT WE PUT FORWARD, WE, WE CURRENTLY HAVE 17.
THE PLAN THAT WE PUT FORWARD, UH, WOULD HAVE US INCREASE TO 28 OVER THE COURSE OF TWO YEARS.
UH, AND SO WE WERE ASKING FOR AN ADDITIONAL SIX FTES IN YEAR ONE, WHICH IS THIS CURRENT FISCAL YEAR THAT WE'RE IN.
UM, AND THEN ANOTHER FIVE, UH, IN THE FOLLOWING YEAR.
SO, SO HOW MANY DO WE PRESENTLY THAT YOU HAVE NOW? WE HAVE 17 APPROVED, AS WAS NOTED WITHIN THE PERFORMANCE DIVISION IN PARTICULAR, THERE ARE A COUPLE, WHICH IS A NEW DIVISION.
UH, THERE ARE A COUPLE OF VACANCIES.
AND WE WE'RE, WHILE WE'RE REVIEWING APPLICATIONS FOR THOSE, WE ALSO WANNA BE INTENTIONAL IN ALLOWING THE NEW CITY AUDITOR TO RUN HIS OR HER PROGRAM IN THE WAY THAT, THAT THEY SEEM FIT.
AND SO, UM, AND SO WE'RE, WE'RE PRIORITIZING TRYING TO MAKE THAT VERY IMPORTANT HIRE AND THEN HAVING THE NEW CITY AUDITOR, UH, MAKE THOSE CRITICAL DECISIONS ON HIRES WITHIN, UH, THE PERFORMANCE DIVISION.
AND WITH GOING FORWARD WITH THE ISSUES THAT COUNCIL AND THE MAYOR HAS TO DEAL WITH REGARDING THE BUDGETS THAT WE ARE DEALING WITH MM-HMM
HOW MANY DID YOU LOSE WHEN YOU CAME IN? HOW MANY AUDITORS? WAS THERE A LOSS WHEN YOU CAME IN? WAS THERE A REDUCTION? NO, THERE WAS AN EXISTING VACANCY, UM, IN THE SORT OF PREVIOUSLY EXISTING AUDIT DIVISION.
UM, AS YOU MAY RECALL, IN DECEMBER OF 2023.
SO IT WAS BEFORE MANY OF US, INCLUDING MYSELF, WERE IN OUR CURRENT POSITIONS.
UM, THE PERFORMANCE DIVISION WAS, WAS CREATED, AND SO WE STARTED OFF ON DAY ONE WITH, I WANNA SAY, UH, SIX OR SEVEN VACANCIES.
UH, WE FILLED A NUMBER OF THOSE.
UM, AND THERE REMAIN A COUPLE MORE TO FILL.
I'LL, I'LL, I'LL GET BACK IN THE QUEUE.
UH, CONTROLLER, WHEN WE START TALKING ABOUT, UM, THIS LOSS OF FUNDS, MY QUESTION IS, DO Y'ALL KNOW HOW MANY, UM, FROM HOUSING DEPARTMENT ACTUALLY WORK ON THIS PROCESS TO RECOUP THESE DOLLARS? WHAT'S THE NUMBER OF STAFFING? I DON'T KNOW OFF THE TOP OF MY HEAD.
I COULD, UH, DIG INTO THAT FOR YOU.
AND, AND I, I THINK WHAT, UM, THE INTENTION IS THAT IF THEY FALL UNDER THIS, THIS, UH, ROLE FUNDS UNDER YOUR OFFICE, WOULD YOU NEED TO HIRE STAFF OR WOULD THOSE HOUSING STAFFERS, UH, FALL UNDER YOU TO, TO MANAGE THIS? SO WE, IN NO WORLD WOULD WE MANAGE HOUSING STAFFERS,
UM, WE, FOR THIS PARTI PARTICULAR TO BE CLEAR YEAH.
THIS PROCESS, UM, AS IT RELATES TO THE AUDITED PROGRAM.
UM, WE ARE NOT, UM, SAYING THAT WE SHOULD TAKE OVER REIMBURSEMENT REQUESTS, UM, FOR ANY PROGRAM.
WHAT WE ARE REFERRING TO IS SEPARATELY OUTSIDE OF THIS AUDIT, UH, WE'VE IDENTIFIED, UH, MISSED DEBT PAYMENTS.
AND SO WE WOULD SIMPLY TAKE OVER THE ADMINISTRATION OF THAT DEBT SERVICE.
UH, WE COULD DO THAT WITH MY TEAM, MIGHT BE MAD AT ME.
WE COULD DO THAT WITH NO ADDITIONAL RESOURCES, UM, AND SIMPLY MANAGE WITH OUR EXISTING TEAM TO COVER THOSE PAYMENTS.
WHAT IS, SO WHAT DOES THAT LOOK LIKE, RIGHT? IF, IF YOU'RE, YOU'RE SAYING YOU'RE, YOU DON'T NEED ADDITIONAL STAFF, BUT I'M ASSUMING IT'S GONNA, IT'S GONNA TAKE SOME TIME, RIGHT? IT'S, YOU'RE, IT'S NOT WORK THAT, IT'S NOT THIS EXTRA WORK THAT JUST CAN COME ONTO THEIR PLATE.
WHAT, WHAT DOES THAT ACTUALLY LOOK LIKE? AGAIN, I MIGHT BE MAKING SOME ENEMIES BEHIND ME, BUT I THINK IT'D BE RELATIVELY SIMPLE.
COUNCIL MEMBER, UM, YOU KNOW, THESE ARE REGULAR PAYMENTS.
IT'S JUST LIKE SAYING, YOU KNOW, AGAIN, SOMEONE WOULD PAY YOUR MORTGAGE PAYMENTS FOR YOU ON, ON YOUR HOME.
YOU, YOU HAVE 'EM, THE BILLS, THEY KNOW WHEN THE DUE DATE IS, THEY KNOW WHAT THE PAYMENT SCHEDULE IS, AND THEY JUST MAKE SURE IT HAPPENS FROM THERE ON NOW AND, AND TO THE AUDIT.
UM, HOW WOULD Y'ALL PARTICIPATE IN MAKING SURE THAT, THAT THEY'RE IN COMPLIANCE IN THOSE, IN THOSE ASPECTS AS WELL? OR WOULD Y'ALL BE ABLE TO HELP WITH SOME OF THAT ASPECT AS IT RELATES TO THE AUDIT FINDINGS? YEAH,
[00:50:01]
UH, I MEAN, THE TYPICAL PROCESS IS FOR US TO RELAY THOSE FINDINGS.UM, THE, THE DIRECTOR WOULD TAKE A LOOK AT THOSE, OR PART OF THE DEPARTMENT HEAD WOULD TAKE A LOOK AT THOSE AND EITHER AGREE OR DISAGREE, AND THEN THERE WOULD BE A PLAN IN PLACE TO, TO ADDRESS THOSE.
AND THEN IN SOME REASONABLE TIMEFRAME, WE WOULD FOLLOW UP, CHECK BACK IN AND, AND, UM, MAKE AN ASSESSMENT OF IF THE APPROPRIATE STEPS HAD BEEN TAKEN TO ADDRESS THE FINDING.
AND SO, WE'LL, WE'LL FOLLOW THAT PROCESS.
SO, BECAUSE IT'S INTERESTING HOW, YOU KNOW, WE'VE ONLY GOT 54 OR 57 OF THE, YOU KNOW, THAT SAMPLE AND, YOU KNOW, INTERESTED TO KNOW WHAT THAT LARGER NUMBER IS, AS COUNCILLOR CARTER MENTIONED, UM, THE NINE THAT WERE REJECTED, WHY THEY WERE REJECTED.
UM, AND I'LL JUST CLOSE WITH THIS.
UH, IF, IF IT'S STAFFING ON THE HOUSING SIDE AS WELL, THAT THEY MIGHT BE NEEDING MORE STAFFING, UM, THAT NEEDS TO BE BROUGHT TO OUR ATTENTION AS WELL.
BUT, UM, FOLKS SPENDING TIME TO APPLY OR, YOU KNOW, HAVING THESE APPLICATIONS DONE AND THEN TO BE REJECTED, YOU KNOW, THERE SHOULD BE A BETTER, A CLEAR VISION OF OF WHO CAN OR CANNOT BE APPLYING TO THESE, THESE TYPES OF FUNDING.
SO WE WILL, UM, YOU KNOW, I'VE NOTED THESE, THESE REQUESTS THAT WE WILL LOOK INTO, TRY AND ESTIMATE SORT OF THE BROADER, UH, IMPACT OUTSIDE OF OUR SAMPLE, AS WELL AS, UM, LOOKING INTO, YOU KNOW, NUMBER OF APPLICANTS AND, AND SO ON AND SO FORTH.
THIS IS THE VERY REASON WE'RE BRINGING THESE TWO COMMITTEES.
SO IT HIGHLIGHTS WHAT'S GOING ON.
YOU CAN READ IN THE FULL REPORT, THE MANAGEMENT RESPONSES, KIND OF HOUSING'S RESPONSE TO EACH OF THESE FINDINGS.
AND THEN IT'S, IT'S INCUMBENT ON US AS A COUNCIL TO MAKE SURE THAT THOSE, WHETHER IT'S THROUGH THE HOUSING COMMITTEE OR, OR BACK AT A BFA OR HOWEVER, TO MAKE SURE THAT, THAT WE'RE FOLLOWING, WE'RE MAKE THAT YOU, YOU ARE CHECKING TO MAKE SURE THESE MANAGEMENT RESPONSES ARE BEING FOLLOWED THROUGH ON THAT WE'RE ALL SATISFIED THAT THIS KIND OF THING'S NOT GONNA HAPPEN AGAIN.
SO I VERY MUCH APPRECIATE I GOTTA MOVE THIS MEETING, MEETING ALONG.
VERY MUCH APPRECIATE YOUR, YOUR TIME HERE TODAY AND THE GOOD WORK OF YOUR AUDIT TEAM.
UM, THANK YOU CONTROLLER HOLLINS.
WE WILL NEXT BRING UP, UM, WE WILL HAVE OUR UPCOMING FINANCIAL TRANSACTIONS, ALMA ELLO, DIVISION MANAGER FINANCE DEPARTMENT.
UM, MY NAME IS ALMA TAM AND I'M GOING TO BE PRESENTING THE UPCOMING FINANCIAL TRANSACTIONS ON BEHALF OF THE, UH, CITY'S FINANCE WORKING TEAM.
SO THE AGENDA FOR TODAY, UM, WE HAVE TWO ITEMS. UM, ONE IS, UH, AN ITEM FOR THE GENERAL OBLIGATION CREDIT AND THE, AND WE HAVE TWO ITEMS FOR THE COMBINED UTILITY SYSTEM.
SO ON SLIDE THREE, UM, THE TRANSACTION RELATED TO THE GENERAL OBLIGATION CREDIT IS THE TAX AND REVENUE ANTICIPATION NOTES, UM, SERIES 2024.
AND THE CITY SELLS, UH, TAX REVENUE ANTICIPATION NOTES, UM, TO HELP US MANAGE OUR CASH THROUGHOUT THE FISCAL YEAR.
UM, AND THIS IS MAINLY BECAUSE OF THE MISTIMING BETWEEN THE CITY'S EXPENDITURES THAT OCCUR RELATIVELY, UM, EVEN THROUGHOUT THE YEAR AND THE REVENUE RECEIPT.
UM, THE MAIN, UH, REVENUE IS THE PROPERTY TAX.
AND, UH, THAT TYPICALLY, TYPICALLY COMES IN IN DECEMBER, UM, JANUARY AND FEBRUARY.
UM, IN, UH, NOVEMBER, DECEMBER, WE USUALLY GET A LOW POINT IN CASH.
AND SO WITHOUT THE, UM, TAX REVENUE ANTICIPATION NOTES, UM, WE WOULD SEE A SHORTFALL IN CASH.
SO, UM, WE TYPICALLY ISSUE A TRANCE, UH, TO FILL THIS SHORTFALL.
UM, AND THEN WE PAY IT BACK AT THE END OF THE FISCAL YEAR ACCOUNT ON SLIDE FOUR.
UM, WHAT WE DO IS WE ASK COUNSEL, UM, UH, IN ADDITION TO THE TRANS, UM, WE ALSO ASK FOR THE ABILITY TO ISSUE A SUPPLEMENTAL TRANS.
UM, AND THIS IS, UM, JUST IN CASE THE INITIAL BORROWING, UM, DOESN'T COVER THE SHORTFALL OR IF WE HAVE ANY UNEXPECTED EXPENDITURES.
AND THE LAST TIME THAT WE HAD A SUPPLEMENTAL TRANCE WAS, UM, BACK IN FISCAL YEAR 2009, UH, DURING HURRICANE IKE.
SO FOR THE NEXT STEPS, UM, WE'RE CURRENTLY RUNNING THE CASH FLOW ANALYSIS TO DETERMINE THE SIZING OF THE TRANCE, AND THEN WE'LL PRESENT, UH, FOR COUNCIL AUTHORIZATION, UM, IN AUGUST.
AND AT THAT TIME, WE'LL GIVE THE SIZING.
UM, WE ANTICIPATE A COMPETITIVE SALE IN, UM, EARLY OCTOBER.
AND AT THAT TIME, THE CONTROLLER, UH, WILL COME INTO COUNCIL CHAMBERS AND HE'LL ANNOUNCE THE RESULTS OF THE SALE AND THE WINNING BIDS.
UM, AND THEN WE PLAN TO CLOSE, UM, IN, UH, LATE OCTOBER.
[00:55:01]
SO ON SLIDE SIX, MOVING ON, UM, MOVING AWAY FROM THE GENERAL OBLIGATION CREDIT.UH, THIS IS A SUMMARY OF THE COMBINED UTILITY SYSTEM VARIABLE RATE EXPOSURE, AND THEY'RE GROUPED INTO, UH, TWO, UH, DIFFERENT SECTIONS, THE COMMERCIAL PAPER SERIES AND THE VARIABLE RATE DEMAND BONDS.
UM, TODAY WE'RE GONNA TALK ABOUT THE HIGHLIGHTED ROW ABOVE THE 2004 B FIVE SERIES, WHICH IS A HUNDRED MILLION IN SIZE.
UM, UBS IS EXITING THE MUNICIPAL FINANCE BUSINESS, AND THEY WISH TO, UM, EXIT THE CONTRACT PRIOR TO THE EXPIRATION.
UM, SO THE FINANCE WORKING GROUP HAS RECOMMENDED THAT WE MOVE FORWARD WITH THIS REPLACEMENT.
UM, SO A LITTLE BIT OF BACKGROUND, UM, UH, VDBS THEIR LONG-TERM, UM, BONDS THAT HAVE A VARIABLE RATE THAT GETS, UH, REMARKETED ON A WEEKLY BASIS TO RESET THAT RATE.
UM, IN ORDER FOR THE BOND TO BE MARKETABLE TO INVESTORS, UM, THEY REQUIRE A LIQUID, A LIQUIDITY FACILITY PROVIDED BY A HIGHLY RATED BANK TO BACK THEM.
UM, SO THE FINANCE WORKING GROUP HAS PUT TOGETHER A REQUEST FOR TERM SHEET, AND WE PUT THAT OUT TO THE POOL OF THE BANKS, UM, THAT PROVIDE US LIQUIDITY, AND WE ASK FOR THOSE PROPOSALS FROM THOSE QUALIFIED FINANCIAL INSTITUTIONS.
UM, AND WE EXPECT TO RE, UH, RECEIVE THE RESPONSES, UM, NEXT MONTH IN, IN AUGUST.
UM, AND SO ONCE THE FINANCE WORKING GROUP MAKES THE SELECTION, WE'LL BRING THE ITEM, UH, TO COUNCIL, UM, IN THE FALL OF 2024.
SO THE NEXT ITEM FOR CUS IS THE, UM, LOAN APPLICATION TO THE TEXAS WATER DEPARTMENT BOARD, UH, TWDB, UM, THAT ADMINISTERS THE, THE STATE AND WATER IMPLEMENTATION FUND, UH, OF TEXAS SWIFT.
UM, AND THIS, UH, THEY PROVIDE, UH, BELOW MARKET, UM, UH, LOW INTEREST RATE LOANS.
UM, AND SO THIS LOAN IS FOR THE CONSTRUCTION OF THE B TWO PIPELINE, WHICH WILL PROVIDE REDUNDANCY AND INCREASED CAPACITY TO THE B ONE PIPELINE.
UM, UH, THIS LINE, CURRENT PIPELINE CURRENTLY SUPPLIES RAW WATER TO THE EAST, UH, WATER PURIFICATION PLANT AND TO INDUSTRIAL USERS.
UM, THE COASTAL WATER AUTHORITY APPLIED FOR A 320 MILLION, UH, MULTI-YEAR FINANCING, UM, FROM THE TWDB.
AND, UH, THE DEBT SERVICE WILL BE PAID FROM THE COMBINED UTILITY SYSTEM.
UM, THE NEXT STEPS IS, UM, THE, UH, THE LOAN HAS BEEN APPROVED.
UM, AND SO IN AUGUST, UM, UH, CITY COUNCIL WILL BE ASKED TO APPROVE THE SUPPLEMENT TO THE PROJECTS CONTRACT AUTHORIZING THE COASTAL WATER AUTHORITY TO UNDERTAKE THE B TWO PROJECT, AND ALSO ISSUE A SERIES OF BONDS PERTAINING TO THE PROJECT.
THE INITIAL LOAN WILL BE ABOUT 25 MILLION, AND, UM, IT'S EXPECTED TO CLOSE IN THE FALL OF 2024, AND THE CONSTRUCTION IS EXPECTED TO BEGIN IN APRIL OF 2026 AND COMPLETE IT BY 2029.
AND THIS CONCLUDES THE PRESENTATION.
THANK YOU VERY MUCH, MS. TAMELA.
YOU WERE VERY THOROUGH AND NOBODY HAS ANY QUESTIONS.
SO WE'RE GONNA MOVE RIGHT ALONG.
WE LOOK FORWARD TO SEEING THOSE, UM, ITEMS COME TO THE COUNCIL AGENDA.
UM, I NOW WELCOME RAH HOT HUCK, UM, WITH THE CITY LEGAL DEPARTMENT, UM, TO GIVE US A OVERVIEW OF THE DELINQUENT TAX COLLECTION CONTRACT.
UH, AND BEFORE I, UH, BEGIN, UH, I WANT TO, UH, RECOGNIZE THE FIRMS WHO ARE HERE.
UM, THEY PROVIDE SERVICES FOR US THAT WE DO NOT HAVE THE EXPERTISE IN-HOUSE, IN THE LEGAL DEPARTMENT TO PERFORM.
OKAY, SO 2014 IS WHEN THE CITY BEGAN THE CURRENT DUAL VENDOR APPROACH TO DELINQUENT TAX COLLECTIONS.
UH, A PORTION OF THE CITY'S DELINQUENT AVALOR TAX ACCOUNTS ARE COLLECTED BY LINEBARGER, GOGGIN, BLAIR, AND SAMPSON, LLP.
AND THE REMAINDER ARE COLLECTED BY A JOINT VENTURE OF PURDUE, BRANDON, FIELDER, COLLINS, AND MOTT, LLP AND GREENBURG, TROY, LLP.
SO THE ACCOUNTS ARE DIVIDED AMONG THE TWO VENDORS BASED ON THE OVERLAPPING SCHOOL DISTRICT, EACH PIECE OF PROPERTY OVERLAPS AT LEAST ONE SCHOOL DISTRICT AND USUALLY ONLY ONE.
SO AT A CERTAIN POINT, AN ADMINISTRATIVE DECISION WAS MADE TO SEPARATE THE CITY INTO THESE OVERLAPPING AREAS FOR ACCOUNT ASSIGNMENT PURPOSES.
[01:00:01]
ACTUALLY, I THINK WE'RE ON THE RIGHT SLIDE.IF YOU COULD GO BACK TO THREE.
SO HERE IS THE, UH, THE CURRENT BREAKDOWN.
UM, AND AS YOU CAN SEE, THE MAIN TRANCHE OF ACCOUNTS RESIDES WITHIN HISD, UM, AND THAT'S ROUGHLY 75%, 76%.
UH, SO THE, THE QUESTION BEFORE YOU TOMORROW AT CITY COUNCIL IS WHETHER TO REASSIGN ACCOUNTS WITHIN ALDE, ISD TO PURDUE, AND ALDINE CONSTITUTES ROUGHLY SOMEWHERE BETWEEN FIVE AND 6%.
SO CURRENTLY THE BREAKDOWN IS ROUGHLY 85% LINEBARGER, 15% PURDUE.
IF YOU ALL DECIDE, UH, TO REASSIGN AUDITING, THE BREAKDOWN WOULD ROUGHLY BE 80% LINEBARGER, 20% PURDUE.
AND I'LL ALSO NOTE, I I DIDN'T PUT THIS ON THE SLIDE, UM, FOR, UH, SPACE PURPOSES, BUT THERE'S ALSO SMALLER PORTIONS AS, AS WELL, WHICH ARE SUBJECT TO REASSIGNMENT.
I THINK THIS QUESTION CAME UP AT COUNCIL LAST WEEK, UM, UPON WHICH LINEBARGER COLLECTS.
SO THOSE ARE HUFFMAN, NEW KANEY, SPRING DEER PARK, KATY, SHELDON, TOMBALL, GOOSE CREEK, CHANNELVIEW, CROSBY, LAPORTE, AND WALLER.
AND SO, UH, IN TOTALITY, I THINK THAT COMES OUT TO ABOUT ROUGHLY 1%.
UM, SO AGAIN, THOUGH, I WANNA UNDERSCORE THE POINT THAT THE, THE ITEM BEFORE YOU TOMORROW IS ALDE, WHICH IS ABOUT FIVE TO 6%.
SO THIS IS THE, UH, THE HISTORICAL BREAKDOWN OF REASSIGNMENTS.
AGAIN, AS I SAID, UH, WE INSTITUTED THIS APPROACH BACK IN 2014 UNDER THE FORMER CITY ATTORNEY DAVID FELDMAN.
UM, AS YOU CAN SEE, WE HAVE ONLY EVER REASSIGNED ACCOUNTS TO PURDUE.
2019 WAS WHEN THE CURRENT CONTRACT WHICH IS IN PLACE WAS EXECUTED.
I'LL, I'LL SPEAK ON THAT ON A, ON A LATER SLIDE, BUT, UM, IT, THE ORIGINAL TERM OF THE 2019 CONTRACT WAS, UH, SET TO EXPIRE IN 2022.
UH, WE THEN RENEWED IT AND THEN, UH, CITY COUNCIL APPROVED A ONE YEAR RENEWAL.
SO, UH, THAT IS SET TO EXPIRE, UH, JUNE OF 2025.
AND THAT'S A SEPARATE ISSUE AS WELL THAT WE CAN DISCUSS.
BUT THE 20, 20 19 IS, IS WHEN THE CURRENT CONTRACT WENT INTO PLACE IN SLIDE FIVE, PLEASE.
2019, AS I SAID, IS WHEN THE CITY EXECUTED THE CURRENT CONTRACT WITH THE TWO VENDORS, THE PRIMARY CHANGES PERTAIN TO REASSIGNMENT OF ACCOUNTS.
SO FIRST WE STANDARDIZE THE METRIC FOR REASSIGNMENT ELIGIBILITY, AND I'LL DISCUSS THAT FURTHER ON THE NEXT SLIDE.
AND SECONDLY, THE PROCESS ITSELF HAS CHANGED.
UH, SO PREVIOUSLY UNDER THE ORIGINAL CONTRACT, THERE WAS A THREE MEMBER COMMITTEE WITH REPRESENTATIVES FROM LEGAL FINANCE AND THE MAYOR'S OFFICE, AND THE RECOMMENDATION CAME FROM THERE UNDER THE CURRENT CONTRACT.
THE RE THE RECOMMENDATION FOR REASSIGNMENT OF ACCOUNTS IS MADE BY THE CITY ATTORNEY, AND IT'S THEN SUBJECT TO CITY COUNCIL APPROVAL.
AND THIS IS THE, UH, THE ELIGIBILITY METRIC UNDER THE CONTRACT.
AND I'VE SIMPLIFIED THIS FROM THE LEGALESE THAT'S, UH, USED IN THE CONTRACT.
BUT, UH, WHAT WE ARE LOOKING AT IS THE SEVEN MONTH PERIOD FROM JULY ONE TO JANUARY 31 OVER THE TOTAL BALANCE AVAILABLE TO EACH RESPECTIVE FIRM.
SO JUST TO GIVE YOU AN EXAMPLE, UM, IF WE'RE TALKING ABOUT 2024, WHICH WE ARE FOR PURPOSES OF THE NUMERATOR, WHAT YOU'RE LOOKING AT IS, UH, THE SEVEN MONTH PERIOD FROM JULY 1ST, 2023 THROUGH JANUARY 31ST, 2024.
AND THEN THAT DENOMINATOR IS EVERYTHING THAT'S AVAILABLE TO COLLECT FOR EACH RESPECTIVE FIRM.
UM, AND I'LL, I'LL PAUSE HERE BECAUSE I WANT TO EXPLAIN THE SIGNIFICANCE OF SEVEN MONTHS.
I THINK YOU MIGHT BE WONDERING, WELL, WHY SEVEN MONTHS? WHY NOT 12 MONTHS? UM, I THINK THAT DECISION, AND, AND I'LL SAY I, I WASN'T, UH, ADMINISTERING THE CONTRACT BACK IN 2019, BUT I THINK THE DECISION AT THAT TIME WAS TO TIE IT TO TIMING IN THE TAX CODE, UH, WITH RESPECT TO WHEN THE ACCOUNTS TURNED OVER.
SO, UH, APRIL 1ST IN UNDER THE TAX CODE IS WHEN, UH, UH, PERSONAL PROPERTY BECOMES SUBJECT TO SUIT, AND THEN REAL PROPERTY BECOMES SUBJECT TO SUIT ON JULY 1ST.
AND SO TYPICALLY REASSIGNMENT UNDER THE CONTRACT IS MADE ON APRIL 1ST.
SO I THINK WHAT THEY WANTED TO DO WAS STANDARDIZE A FORM TO, UH, FOR PURPOSES OF COMPARISON, RIGHT? SO IF YOU, THEORETICALLY IF YOU HAD A REASSIGNMENT OF ACCOUNTS MID-YEAR, THEN YOU WOULD BE COMPARING, UH, PERFORMANCE, UH, BASED ON A DIFFERENT POOL OF
[01:05:01]
ACCOUNTS.SO I THINK THAT WAS THE THINKING.
UM, BUT AGAIN, THIS IS THE, UH, THE PERFORMANCE, THE ELIGIBILITY METRIC UNDER THE CONTRACT ITSELF.
IT'S, SO, IT'S THAT SEVEN MONTH PERIOD.
UM, AND I'LL NOTE AS WELL, UH, AND I'VE SPOKEN TO A FEW OF YOU IN YOUR OFFICES ABOUT THIS.
UH, ONE OF THE REASONS THIS CONTRACT IS DIFFICULT TO ADMINISTER, UH, IS THAT THERE IS SO MUCH DATA AVAILABLE FROM THE HARRIS COUNTY TAX OFFICE.
UM, THERE, THERE'S REALLY NO SHORTAGE OF WAYS TO LOOK AT THIS.
I MEAN, THIS IS ONE METRIC THAT'S PRESCRIBED EXPRESSLY IN THE CONTRACT, BUT THE FIRMS WHO ARE ABOUT TO PRESENT TO YOU, THEY'RE GOING TO PRESENT TO YOU OTHER DATA.
AND I'LL SAY THAT IT ALL HAS VALUE.
UM, THERE IS, UH, YOU CAN LOOK AT IT BY THE FULL 12 MONTHS.
YOU CAN CONSIDER PENALTIES AND INTERESTS.
YOU CAN LOOK AT HOW LONG EACH ACCOUNT HAS BEEN DELINQUENT.
UH, YOU CAN LOOK AT IT BY THE SIZE OF THE ACCOUNT.
SO THERE IS, UH, NO SHORTAGE OF DATA, DATA THAT IS PUBLICLY AVAILABLE FROM THE HARRIS COUNTY TAX OFFICE.
UM, BUT I THINK FOR OUR PURPOSES, WHAT I WANT TO EMPHASIZE, UH, FOR THIS GROUP IS THAT, UH, THE FIRST PRONG OF REASSIGNMENT ELIGIBILITY UNDER THE CONTRACT REVOLVES AROUND PERFORMANCE UNDER THIS METRIC HERE ON THIS SLIDE.
SO, HERE IS, UH, THE YEAR BY YEAR COMPARISON DATING BACK TO 2020.
AND, UH, THE NUMBERS ARE SELF-REPORTED BY THE FIRMS, BUT THE SOURCE DATA IS THE SAME UNDER THE CONTRACT.
IT'S FROM HARRIS COUNTY, AND THERE IS, THERE IS A SLIGHT, A BIT OF, UH, SLIGHT AMOUNT OF VARIANCE, BUT IT'S TYPICALLY JUST LIMITED TO LIMITED TO A 10TH OF A PERCENTAGE POINT OR SO.
UM, 2023, THERE WAS A DISPUTE THAT I HAVEN'T BEEN ABLE TO GET, UH, RESOLVED.
UH, WE USED TO HAVE A ANALYST IN THE LEGAL DEPARTMENT, UH, WHO USED TO HANDLE THIS, BUT WE DIDN'T, UH, REFILL THAT POSITION.
BUT IN, IN BOTH INSTANCES, THE FIRMS ARE IN AGREEMENT THAT, UH, PURDUE, UH, CAME OUT HIGHER UNDER THE METRIC.
UH, SO AGAIN, SO FOR, FOR PURPOSES OF TOMORROW'S VOTE, IT'S THE 2020 FIGURE, UH, 2024 FIGURE, WHICH IS AT ISSUE.
AND SO THAT'S THE, UH, THE PURDUE AT 17.2% AND LINEBARGER AT 15.6%.
AND SO, AGAIN, THAT IS THE, UH, THE PREVIOUS SLIDE, THE SEVEN MONTH OVER THE, THE TOTALITY.
AND, UH, BE BEFORE, UH, BEFORE I TAKE QUESTIONS.
UM, ONE POINT I I WANTED TO RAISE, UM, I THINK THIS HAS COME UP AS WELL, IS THAT, UH, THE FIRMS ARE COMPENSATED, UH, UNDER THE CONTRACT, UH, PURSUANT TO THE TAX CODE CHAPTER 33.
SO THERE'S A 20% PENALTY THAT ATTACHES AT CERTAIN POINTS IN THE YEAR.
SO APRIL 1ST FOR PERSONAL PROPERTY, UH, JULY 1ST FOR, UH, REAL PROPERTY.
AND SO, UH, JUST WANNA UNDERSCORE THIS POINT THAT, UH, THEY'RE NOT PAID FROM BASE TAX OR REVENUE FROM THE CITY.
THIS IS A PENALTY THAT THE TAXPAYER ITSELF IS PAYING.
I THINK THERE'S ANOTHER PROVISION 33 0 8, UH, FOR, UH, SOME OTHER UNIQUE CIRCUMSTANCES.
UM, AND, UH, THE OTHER POINT AGAIN, IS THAT WHAT, WHAT WE'RE DISCUSSING TODAY IS, UH, THE, THE, THE, THE IDEA OF REASSIGNMENT OF ACCOUNTS FOR 2024.
UM, BUT THERE IS THE BROADER QUESTION, AND CHAIR, YOU AND I HAVE DISCUSSED THIS, UM, OF THE CONTRACT ITSELF.
UH, AND AGAIN, THIS IS SET TO EXPIRE, UH, JUNE 30TH, I THINK THE 30TH, IT'S JUNE OF 2025.
UH, AND SO I THINK, UH, CHAIR, YOU WANTED TO HAVE A MORE ROBUST DISCUSSION REGARDING, YOU KNOW, THE MERITS OF THE APPROACH AND WHAT THE CITY SHOULD DO.
SO, UM, I'VE, UH, LIMITED THIS, UH, THIS PRESENTATION TO JUST THE QUESTION OF REASSIGNMENT, BUT I THINK, UH, YOU KNOW, I THINK THAT'S A DISCUSSION YOU'D LIKE TO HAVE AS WELL.
I WILL GO FIRST TO MAYOR PRO TEM MARTHA CASTEX.
TATUM FOR, HAD A COUPLE OF QUESTIONS.
UM, ON PAGE, ON SLIDE FIVE, YOU HAD, UH, YOU SAID THAT WE USED TO HAVE A THREE MEMBER COMMITTEE, AND THEN IT MOVED TO THE CITY ATTORNEY MAKING THE SUGGESTION BASED, AND THEN IT WOULD BE SUBJECT TO COUNCIL APPROVAL.
UM, SO IF THE CITY ATTORNEY IS MAKING THE RECOMMENDATION NOW, SUBJECT TO COUNCIL APPROVAL, DID THE CITY ATTORNEY MAKE A REASSIGNMENT, UM, SUGGESTION FOR THIS YEAR? SO, SO I THINK THE, UH, THE DESIRE OF THE ADMINISTRATION IS TO PUT THIS, UH, IN FRONT OF THIS BODY AND COUNSEL TO MAKE THAT FINAL OUTCOME.
I DUNNO, THAT'S, SO DID THE CITY ATTORNEY MAKE AN A SUGGESTION THAT THAT'S BASICALLY THE, THE, THE SUGGESTION TO PUT IT ON THE COUNCIL AGENDA? THE SUGGESTION IS TO
[01:10:01]
JUST LET US MAKE THE SUGGESTION.AND THEN MY, MY, MY SECOND QUESTION IS, I NOTICED THAT WE HAD REASSIGNMENT MOST OF THE YEARS, BUT WE DIDN'T HAVE REASSIGNMENT IN 2018 OR 2019.
WE DIDN'T HAVE IT IN 20 21, 22, 23, OR, AND, AND NOW WE'RE AT 24.
WAS THERE A PARTICULAR REASON WE DIDN'T HAVE REASSIGNMENTS IN THOSE, UM, OTHER YEARS? SO I THINK, UM, IN LOOKING BACK AT NOTES, I THINK IN THE YEARS PRIOR TO 2019, UM, IT, IT REALLY HINGED ON THE FACT THAT THERE WERE DISPARATE SOURCES OF DATA.
I THINK THERE WAS SOME FRUSTRATION ON THE PART OF THE COMMITTEE.
UH, AND THAT WAS PART OF THE, UH, THE IMPETUS TO MOVE TO A, UH, YOU KNOW, UH, A STANDARDIZED METRIC FOR ELIGIBILITY.
UM, THAT'S KIND OF WHAT I GLEANED.
I, I, I DIDN'T ADMINISTER THIS CONTRACT AND I WASN'T ABLE TO SEE ANYTHING DETERMINATIVE IN THOSE YEARS.
NOW, AS FAR AS 20, LET'S SEE, 20, 21 THROUGH 2023, THAT WAS THE DECISION OF THE TURNER ADMINISTRATION.
UM, IN 2021, THAT WAS TIED LARGELY TO COVID.
UM, IT WAS A SORT OF A, AN ACCURATE BELIEF THAT FOLKS WERE STRUGGLING AT THAT TIME, ECONOMICALLY.
AND SO, UH, THE, THE DECISION, THE ORDER WAS GIVEN TO THE FIRMS TO SORT OF TREAD CAREFULLY, UM, NOT AS AGGRESSIVELY AS THEY NORMALLY WOULD.
AND SO, UM, IT WAS, UH, SORT OF COMMUNICATED THAT REASSIGNMENT WOULD NOT BE APPROPRIATE IN THAT YEAR, GIVEN THE FACT THAT THEY WERE TOLD TO, UH, HOLD OFF A BIT.
UM, AND AS FAR AS 2022 AND 2023, I, I THINK REALLY, UM, ALL I'M AWARE OF IS THAT THAT WAS, UH, THE DESIRE OF, UH, THE TURNER ADMINISTRATION TO, TO, TO SORT OF LET THE CONTRACT PLAY OUT.
AND THEN THE OTHER QUESTION I HAD, IF, UM, COLLECTION PERCENTAGES WERE HIGHER WITH ONE PARTICULAR GROUP, YOU CAN, YOU CAN PUT ME IN, GO AHEAD.
IN THE, UM, DURING REASSIGNMENT, HAVE WE, UM, IF OUR GOAL IS TO COLLECT MORE, UH, AND WE ARE LOOKING AT TWO VENDORS, UM, SHOULD WE NOT BE REASSIGNING BASED ON THE COLLECTION PERCENTAGES? I MEAN, WE'VE ALL BEEN TALKING ABOUT THE CITY GET, COLLECTING MORE MONEY, MAKING SURE THAT WE ARE LOOKING, UM, AT OUR BUDGETS WITH A FINE TOOTH COMB, MAKING SURE THAT EVERY ROCK IS BEING TURNED OVER.
UM, THIS LOOKS LIKE AN OPPORTUNITY FOR US TO COLLECT MORE REVENUE FOR THE CITY.
UH, IT, AM I, AM I LOOKING AT THIS WRONG, OR WOULD WE NOT BE PRUDENT IN MAKING SURE THAT THE, THE GROUP THAT IS COLLECTING THE MOST REVENUE WOULD HAVE ADDITIONAL ASSIGNMENTS? YEAH, NO, I THINK THAT'S PERFECTLY VALID.
I MEAN, I THINK, UH, THERE'S OBVIOUSLY COUNTER ARGUMENTS TO THAT.
I'LL LET, UH, LINEBARGER ARTICULATE THOSE ON THEIR OWN.
UM, AND I DON'T KNOW IF THERE'S BEEN OTHER COMMUNICATIONS, BUT I THINK THE, UH, THE PREVAILING, UH, COUNTER THEORY TO WHAT YOU JUST ARTICULATED IS, UH, THAT POSSIBLY, UH, THE NATURE OF EACH FIRM'S, UH, PORTFOLIO IS NOT EQUAL.
UM, AND, AND SO I'LL, I'LL LET THE FIRMS ARTICULATE THOSE ARGUMENTS, BUT I THINK THAT, UM, ESSENTIALLY I THINK THE ARGUMENT IS THAT IT'S NOT AS CLEAR CUT AS EQUATING A CAUSATION WITH CORRELATION.
THAT ESSENTIALLY THAT IF YOU ASSIGN ALL THE ACCOUNTS TO THE, THE FIRM THAT HAS OUTPERFORMED THAT, THAT WOULD NECESSARILY, UH, RESULT IN HIGHER COLLECTIONS.
I THINK THAT'S, THAT'S THE COUNTER ARGUMENT.
SO I THINK THAT'S, THAT'S WHAT'S BEFORE YOU ALL, THAT'S WHAT YOU'VE LEFT TO, TO US TO DECIDE.
AND, AND I, I WOULD SAY THAT'S WHAT WE HAVE LEFT FOR THE FIRMS TO ARGUE AFTER ME.
UH, SO I SEE MYSELF AS SORT OF FRAMING WHAT THE ISSUE IS HERE, AND I THINK THEY'RE GOING, THEY'RE GOING TO MAKE THEIR ARGUMENTS TO YOU AS TO WHY THEY SHOULD, UH, WHY PURDUE SHOULD BE ELIGIBLE.
ONLY PURDUE IS ELIGIBLE, RIGHT HERE, LINEBARGER IS NOT ELIGIBLE.
BUT I THINK, UH, LINEBARGER, UH, ARGUMENT IS GOING TO BE THAT FOR OTHER, LET'S, LET'S LEAVE THAT TO THE FIRMS, PLEASE.
AND, AND, AND ULTIMATELY THE REASON YOU'RE SITTING BEFORE US IS TO TALK TO US ABOUT THE CONTRACT.
AND THE ONLY, THE ONLY METRIC MENTIONED IN THE CONTRACT IS THE ONE YOU HAD.
THE ONLY METRIC THAT IS IN THE CONTRACT IS THIS ONE.
AND THOSE WERE THE NUMBERS THAT YOU, YOU PUT ON THE OTHER SLIDES.
SO BASED ON THAT METRIC, WE STILL HAVE, UM, PURDUE OUTPERFORMING, CORRECT? CORRECT.
AND THANK YOU VERY MUCH FOR THE INFORMATION.
SLIDE FOUR TALKS ABOUT HISTORY OF REASSIGNMENTS.
SO YOU MENTIONED IN YOUR REMARKS,
[01:15:01]
UH, REASSIGNMENTS TYPICALLY OCCURRING IN APRIL.UM, WHEN WE DID HAVE YEARS THAT WE DID REASSIGNMENTS, DID ANY OF THESE OCCUR OUTSIDE OF APRIL? I'M NOT AWARE OF IT EVER OCCURRING OUTSIDE OF APRIL.
IN, IN THE FILES THAT I'VE LOOKED AT, UH, TYPICALLY, UH, UNDER THE CONTRACT, IT'S, UH, MARCH 15TH THAT THE CITY ATTORNEY NEEDS TO GIVE A NOTICE.
UM, AND THEN IT, UH, IT TURNS OVER ON APRIL.
UM, BUT FROM THE RESEARCH THAT I'VE DONE, UH, THE CITY HASN'T EXACTLY RELINQUISHED ANY LEGAL RIGHTS, UH, TO THE TAXES IF THERE IS A LATER, UM, A LATER REASSIGNMENT.
UM, SO, BUT I THINK HISTORICALLY IT HAS BEEN BY APRIL 1ST.
AND SO IF WE VOTE TO REASSIGN TOMORROW, WOULD THAT GO INTO EFFECT IMMEDIATELY? YES, IT WOULD.
AND SO DO YOU, DO YOU KNOW WHAT IMPACT, IF ANY OF THAT WOULD HAVE ON COLLECTIONS TO SWITCH, UH, TO REASSIGN, I SHOULD SAY, SORT OF IN, DURING THE DURATION OF THE CONTRACT? YEAH, I ACTUALLY, I, I'D NEED TO LOOK INTO THAT.
UM, THAT'S SOMETHING I'D BE INTERESTED IN LEARNING MORE ABOUT.
AND THEN ON THE COLLECTION METRIC, UM, WHERE WE HAVE THE PERCENTAGES BROKEN DOWN, DO WE HAVE THAT PER JURISDICTION AS WELL? OR IS JUST, IS THAT JUST THE TOTAL AGGREGATE? DO SO YOU MEAN, UM, PER SCHOOL DISTRICT? OKAY.
SO I, SO ESSENTIALLY, THEORETICALLY, HISD YOU WOULD HAVE YEAH, I, I, I'M SURE THAT CAN, THAT CAN BE, UH, THAT CAN PULL THAT.
UM, BUT I, I'M SURE THAT CAN BE PULLED IF, IF YOU NEED THAT.
I, I, AND THIS IS AGGREGATE, I THINK IT WOULD BE HELPFUL.
YOU KNOW, IF YOU, YOU TALKED A LITTLE BIT ABOUT JUST DIFFERENT COMPOSITIONS OF JURISDICTIONS, UH, TO SEE WHAT THAT RATE LOOKS LIKE, UH, WOULD, UH, BE HELPFUL FOR ME.
THANK YOU, COUNCIL MEMBER PLUMMER.
AND THANK YOU FOR YOUR PRESENTATION.
AND IF I HAVE TO GET BACK IN QUEUE, I WILL.
UM, SO ON THIS, IT SAYS REVISED ASSESSMENT PROCESS.
IT SAYS CITY ATTORNEY RECOMMENDATION AND SUBJECT TO CITY APPROVAL.
DOESN'T THAT MEAN THAT THE CITY ATTORNEY'S OFFICE HAS TO GIVE US SOME LEVEL OF RECOMMENDATION? IT DOESN'T SAY, OR, I, I THINK PUTTING IT ON THE AGENDA ITSELF IS THE RECOMMENDATION.
I MEAN, YOU CAN'T, YOU CAN'T MOVE FORWARD WITHOUT REASSIGNMENT, WITHOUT THAT RECOMMENDATION.
UH, THE MAYOR UNDER THE PROCEDURAL RULES, THE MAYOR CONTROLS THE AGENDA.
SO THAT'S SORT OF THE WAY THAT I LOOK AT IT.
UM, ULTIMATELY WHAT I KNOW IS THAT THE DESIRE OF THE ADMINISTRATION IS FOR THIS BODY TO DECIDE ON THIS.
AND THEN YOU GO A LITTLE, CAN YOU TELL ME THE TIME DATES BETWEEN ON, FOR, FOR WHAT WE'RE TALKING ABOUT RIGHT NOW IN 2024? YEAH.
WHAT ARE THE DATES AGAIN, DID YOU SAY? YEAH, SO IF YOU WANT TO GO BACK TO THAT SLIDE.
SO IT'S, IT'S, I THINK IT'S, YEAH, IT'S, UH, THAT ONE, UH, SLIDE FIVE.
SO IT'S GONNA OVER, IT'S GONNA BE A LITTLE BIT OF 23.
SO, SO WHAT WE'RE LOOKING AT, AGAIN, THIS IS PRONG ONE FOR, UH, ELIGIBILITY.
UM, SO FOR 2024, AND TYPICALLY UNDER THE CONTRACT, THIS SHOULD HAVE BEEN DONE BY MARCH 15TH.
BUT, UM, FOR 2024, UH, WHAT YOU'RE LOOKING AT IS, UH, THE PERIOD OF JULY 1ST, 2023 THROUGH JANUARY 31ST, 2024.
AND THEN THE DENOMINATOR IS THE, THE, THE UNIVERSE THAT'S AVAILABLE TO THAT FIRM.
UH, SO AGAIN, IT'S A SEVEN MONTH, UH, PERIOD AND IT ALWAYS OVERLAPS BETWEEN TWO YEARS.
UM, IS THERE A REASON WHY WE, SINCE WE COULD HAVE MADE A CHANGE BY THE 15TH, IS THERE A REASON WHY WE DIDN'T MAKE THE CHANGE THEN? UH, I, I DON'T HAVE THE ANSWER TO THAT.
I, IT'S BEEN TAGGED AND TAGGED AND TAGGED.
UM, AND IF WE DO DECIDE TO REASSIGN MIDSTREAM, DO THE RESIDENTS, WHAT, WHAT'S, WHAT'S THE PROMISE TO THE RESIDENTS? ARE THEY GONNA GET TWO DIFFERENT, HOW ARE THE RESIDENTS GONNA KNOW THAT THEIR COLLECTION VENDOR HAS CHANGED? ARE THEY GONNA GET TWO DIFFERENT, UH, I, I WOULD NEED TO LOOK INTO THE MECHANICS OF THAT.
'CAUSE THAT COULD BE A LITTLE CONFUSING.
TO, TO THE, YOU KNOW, ON TO THE END USER.
I WOULD NEED TO LOOK INTO THE MECHANICS OF THAT.
AND THEN YOU MENTIONED THERE ARE MULTIPLE METRICS THAT WE HAVE TO TAKE INTO ACCOUNT, AND I KNOW THERE ARE TONS OF THEM.
JUST FOR ME PERSONALLY, I'M THINKING ABOUT SOCIOECONOMIC PERCENTAGES AND, AND, AND STANDARDS.
DO YOU KNOW WHAT THE AVERAGE HOUSEHOLD INCOME WOULD BE FOR H FOR THE VENDORS FOR ONE VERSUS THE OTHER? YEAH.
I, I DON'T HAVE THAT, BUT THAT CAN BE PULLED AS WELL.
UH, AND I ANTICIPATE THAT PROBABLY WILL BE PRESENTED, UH, IN ONE OF THE FOLLOWING.
I MEAN, I'M, I'M SORRY, RAMIREZ, YOU'RE NEXT.
[01:20:01]
UH, THANK YOU MADAM CHAIR AND RAHAD, THANK YOU FOR YOUR PRESENTATION AND FOR MEETING WITH US A FEW WEEKS AGO TO HELPING US BETTER UNDERSTAND THIS.SO, UH, I TAKE IT YOU'VE HAD ACCESS TO BOTH PRESENTATIONS FROM THE LAW FIRMS? UH, I DO NOT, NO.
UM, WELL, UH, LEMME JUST ASK YOU, THERE'S A SLIDE IN LINEBARGER PRESENTATION TITLED SERVICES PROVIDED, THE CITY OF HOUSTON.
THERE ARE THREE BULLET POINTS.
THE FIRST BULLET POINT IS SERVICE PROVIDED HEALTH AND SAFETY LIEN AND OTHER LIEN COLLECTIONS.
WOULD THAT BE PART OF THIS CONTRACT THAT WE'RE TALKING ABOUT? IT, IT, I BELIEVE THAT WAS IN A, I BELIEVE THAT WAS AN AMENDMENT TO THIS CONTRACT.
SO I WILL SAY THAT LINEBARGER DOES PROVIDE OTHER SERVICES UNDER THE CONTRACT THAT PURDUE DOES NOT.
UH, ONE OF THEM ALONG WITH THAT IS, UH, THEY PERFORM, UH, VENDOR CHECKS FOR, UH, DELINQUENCY ANYTIME, UH, AS YOU KNOW, UNDER THE CITY'S CODE, ANYTIME THERE'S A CONTRACT WITH A VENDOR ON THE AGENDA, UH, LINEBARGER PROVIDES THAT SERVICE.
UM, SO THERE ARE SOME SERVICES THAT ARE, UH, OKAY.
AND THAT WAS THE OTHER BULLET POINT I WAS GONNA ASK YOU ABOUT.
BUT, BUT THOSE TWO, THE SERVICES MENTIONED, THOSE TWO BULLET POINT POINTS ARE NOT PART OF THIS CONTRACT WE'RE CONSIDERING.
IS THAT RIGHT? SO THE, UH, THE, THE CLEAR REPORT IS UNDER THE, UNDER THIS CONTRACT.
AND I BELIEVE THE, THE FIRST ONE THAT YOU HAD MENTIONED, I WOULD NEED TO CHECK ON THAT.
BUT, UH, THE CLEAR REPORT IS UNDER THIS CONTRACT CLEAR REPORT? UH, YEAH.
THE, WHAT IS THAT? UH, THE VENDOR CHECK.
SO AS PART OF THIS, IT'S PART OF THIS CONTRACT? CONTRACT? YEAH.
IT'S, IT'S A SERVICE THAT'S PERFORMED UNDER THIS CONTRACT.
UM, UNDER THE ORIGINAL CONTRACT, I BELIEVE THAT WAS DONE BY BOTH FOR, BY BOTH FIRMS OR IT WAS ALTERNATED, UM, BUT UNDER THIS CONTRACT AS PERFORMED JUST BY LINEBARGER.
BUT AS IT RELATES TO TAX COLLECTION, THE STATISTICS, UH, SUBMITTED BY, BY EACH FIRM SHOW THAT, UH, PURDUE'S, UH, COLLECTION PERCENTAGES HIGHER.
IS THAT CORRECT? UH, PURSUANT TO THE METRIC, YES.
THAT'S ALL COUNCIL MEMBER JACKSON.
UM, AND THANK YOU FOR THE PRESENTATION.
UM, JUST TRYING TO UNDERSTAND, SO BASICALLY THE REASSIGNMENT IS BASED UPON THEIR PERFORMANCE, RIGHT? AND OF COURSE, INCOME LEVELS IS VERY IMPORTANT.
'CAUSE AS I'M LOOKING AT, UM, THE, UM, THE, THE ACCOUNTS, THE MAIN ACCOUNTS, YOU HAVE MANY ACCOUNTS IN THE SUBURBS, AND THEN YOU HAVE THE CITY OF HOUSTON.
AND I KNOW IN MY DISTRICT, WE HAVE A LOT OF FOLKS WITH DELINQUENT TAXES.
AND SO, UM, JUST TRYING TO UNDERSTAND, IS THERE SOME TYPE OF, I MEAN, AND WITH THE NUMBERS, THERE'S DISPARITIES WITHIN, YOU KNOW, THE POPULATION THAT THEY HAVE.
AND SO HOW ARE WE DECIDING, UM, I GUESS, YOU KNOW, YOU HAVE PURDUE WITH 17.2% IN LINEBERGER WITH 15.6%, BUT IT'S HARD TO SAY, YOU KNOW, WHAT THEIR PERFORMANCE IS BECAUSE BASED UPON, UM, THE POPULATION THAT THEY HAVE.
AND SO WHEN WILL WE HAVE THAT PARTICULAR 'CAUSE I CAN'T MAKE A DECISION UNLESS I KNOW FOR SURE, BECAUSE IF YOU GIVING ME A POPULATION THAT I CAN'T COLLECT FROM, BUT THEN YOU HAVE THIS GROUP THAT HAS A POPULATION THAT IS EASY TO COLLECT BECAUSE THESE FOLKS HAVE THE INCOME TO PAY THEIR TAXES.
UM, I JUST THINK IT'S NOT, IT'S NOT A BALANCE THERE.
SO, SO I REALLY DO NEED ADDITIONAL INFORMATION ON WHAT MATRIXES YOU USE TO DECIDE THAT YOU WANT TO TRANSFER, UM, THIS, THESE ACCOUNTS TO PURDUE, AT LEAST THE ALDEN ACCOUNT, BECAUSE EVEN IF WE TRANSFER SCIFI, AND I'M JUST THINKING, AND THEY JUST STUCK WITH HI HOUSTON, THEN OF COURSE IT'S GONNA BE REALLY DIFFICULT TO, UM, UM, COLLECT TAXES.
IF YOU DON'T KNOW THE POPULATION, IF I'M THINKING ABOUT MY DISTRICT, THEY PROBABLY HAVE A CHALLENGE COLLECTING THOSE TAXES.
UM, AND THANK YOU FOR THE PRESENTATION AND WALKING US THROUGH ALL OF THIS.
UH, VERY QUICKLY, CAN YOU REITERATE OR EXPLAIN THE BENEFITS OF HAVING, UM, A MULTIPLE VENDOR APPROACH TO THESE TYPES, UH, TO THIS TYPE OF WORK? AND DO YOU KNOW WHETHER OR NOT THE LEGAL DEPARTMENT IS PLANNING TO KEEP THIS APPROACH MOVING FORWARD? YEAH, SO I'LL TAKE THE, THE, THE SECOND QUESTION FIRST.
I THINK THE CHAIR WANTS TO EXPLORE THAT IN DEPTH HERE, UH, UH, IN FRONT OF THIS COMMITTEE.
SO THE LEGAL DEPARTMENT HASN'T TAKEN A POSITION ON THAT.
I THINK WE WANNA LOOK AT THE PROS AND CONS.
OBVIOUSLY, AS YOU ALL KNOW, HARRIS COUNTY, UH, HAS TAKEN THIS IN-HOUSE.
SO I THINK THAT'S A DISCUSSION THAT, UH, THIS BODY WILL CONTINUE TO HAVE AS WE APPROACH JUNE 30TH, 2025.
UM, THAT'S, THAT'S, THAT'S THE, THE BROADER MACRO QUESTION.
AS FAR AS, UM, THE MERITS OF THE APPROACH, I MEAN, I, I WILL SAY THAT, UH, IF YOU LOOK AT THE HISTORICAL COLLECTIONS,
[01:25:01]
UH, ONCE WE ADOPTED IN 2014, IT HAS BEEN ADVANTAGEOUS.UM, I THINK OBVIOUSLY IT, IT'S GOOD TO HAVE TWO VENDORS IN THE SENSE THAT IF, YOU KNOW, IF YOU HAVE ISSUES WITH ONE OF THEM GOING OFF, THE OTHER CAN THEORETICALLY PICK UP.
UM, BUT, UH, YOU KNOW, AS FAR AS LOOKING AT THE, YOU KNOW, THE FINANCIAL EVALUATION AND DRAWING ANY CORRELATION, I'D PROBABLY WANNA SIT DOWN WITH FINANCE AND SEE IF THERE'S ANY TRENDS, UM, THAT WE CAN IDENTIFY.
BUT REALLY, THE, THE BIGGER QUESTION OF WHETHER THE CITY WANTS TO CONTINUE THIS OR IF THEY WANT TO GO TO ONE SOLE, UH, LAW FIRM, I THINK THAT'S A BROADER QUESTION THAT WE SHOULD, UH, YOU KNOW, CONTINUE DISCUSSING OVER THE NEXT FEW MONTHS.
UM, BASED UPON DEFINITELY LOOKING AT AREAS AND WAYS BY WHICH WE GAIN MORE DOLLARS BASED ON BUDGET, UM, WHICH IS A NECESSITY FOR US RIGHT NOW.
BUT I ALSO HAVE THE QUESTION AS TO DURING THE 21, 22, 23 YEAR, THERE WAS NO REASSIGNMENT BY THE PREVIOUS ADMINISTRATION FROM THE ATTORNEY'S OFFICE.
WHY DO YOU HAVE A, YEAH, SO I THINK IT WAS 2020 IS, UH, WHEN COVID, UH, WAS IT 2020? YEAH.
UH, SO 2021, THAT WAS THE FIRST YEAR POST COVID.
AND I THINK THE THINKING WAS, UH, GIVEN THE FACT THAT, UH, THE FIRMS WERE GIVEN THOSE, UH, THOSE DIRECTIONS TO TREAD MORE CAREFULLY, IT WAS COMMUNICATED THAT REASSIGNMENT WOULD NOT BE APPROPRIATE IN THAT YEAR AS FAR AS 2022 AND 2023.
I, I DON'T, UNFORTUNATELY, I DON'T HAVE MUCH MORE COLOR ON IT THAN THAT.
IT WAS JUST SIMPLY THAT WAS A DECISION BY THE TURNER ADMINISTRATION TO NOT, UH, PROCEED.
AND, AND I DON'T KNOW IF PART OF THAT WAS DRIVEN BY THE FACT THAT IT WAS KNOWN THAT THE CONTRACT WAS GOING TO EXPIRE IN 2022.
UM, SO UNFORTUNATELY I DON'T HAVE MORE COLOR, UH, INTO, INTO THAT PIECE.
IS, IS THAT SOMETHING THAT WOULD HELP US TO SOLIDIFY THAT? I MEAN, I KNOW THAT IN SOME PROCESSES SOME THINGS WERE TAGGED, I'M SURE, DURING THE PROCESS? I THINK SO.
I, I WILL SAY THAT, UH, IN THOSE YEARS, IF MEMORY SERVES, I DON'T THINK THIS EVEN MADE IT ONTO THE AGENDA.
SO, YEAH, I, I THINK IT, UH, IT JUST DIDN'T PROCEED.
I, I CAN TELL YOU THAT 2021 WAS EXPRESSLY DUE TO COVID.
I, UM, I REMEMBER MY PREDECESSOR, UH, GIVING THAT, UH, UH, MAKING THAT COMMUNICATION TO THE FIRMS TO TREAD CAREFULLY.
AND OBVIOUSLY, I MEAN, I THINK WE'D ALL AGREE THAT'S GOOD POLICY.
UM, BUT AS FAR AS 2022 AND 2023, I THINK, UH, I THINK THAT WAS JUST THE DECISION.
SO THE CONTRACT WAS EXPIRED IN 22? YES.
SO THE, THE CONTRACT, UH, WAS SET TO EXPIRE IN 2022.
IT WAS RENEWED FOR TWO, UH, TWO ONE YEAR TERMS. AND THEN, UH, CITY COUNCIL RENEWED IT IN JUNE.
UH, SO IT'S NOW GOING TO EXPIRE IN 2025.
AND THAT'S, THAT'S ONE OF THE REASONS WE'RE HAVING THIS MEETING.
WE HAVEN'T REALLY DUG INTO THIS.
WE DID BACK WHEN, UM, IN THE PARKER ADMINISTRATION IS WHEN THIS, THIS SITUATION STARTED.
THEN WE PASSED A CONTRACT A FEW YEARS AGO, AND IT REALLY, WE REALLY HAVEN'T HAD AN IN-DEPTH LOOK AT THIS.
SO APPRECIATE ALL OF YOUR QUESTIONS AND ALL OF YOUR WORK ON THIS.
UM, COUNCIL MEMBER MARTINEZ, THANK YOU, CHAIRWOMAN.
UH, AND JUST TO GET A VERY COMPLEX CONVERSATION THAT WE'RE HAVING, BUT JUST TO GET A GOOD UNDERSTANDING OF THE COLLECTIONS, UM, FOR EACH OF THESE, UH, UH, ORGANIZATIONS WHEN WE START SPEAKING ON EXEMPTION, AND IS THAT PART OF THE COLLECTION THAT THEY HAVE TO BRING IN, BUT THEY CAN'T NOW BECAUSE IT'S AN EXEMPTION? WHAT IS THAT? YEAH, SO, UH, YOU'LL LOOK AT, FOR LINEBARGER, I THINK IT'S MOST RECENTLY, LIKE 56% IS SUBJECT TO EXEMPTIONS, LIKE OVER 65.
AND THEN THERE'S, UH, UH, ENVIRONMENTAL, UH, CONTAMINATED SITES THAT CAN'T BE, UH, SOLD.
SO I THINK THEY, THEY'LL PROBABLY PRESENT SOME OF THAT, BUT THAT IS PART OF THIS PROCESS.
SO THAT THE, WOULD THAT IMPACT THE AMOUNT, THE PERCENTAGE THAT THEY CAN THEORETICAL? THEORETICALLY, YES, IT WOULD.
UM, AND AGAIN, JUST TRYING TO REALLY GAIN A GREATER UNDERSTANDING.
AND THEN, UM, WE HAVE FOR 20 24, 17 15, UM, COULD EACH OF THOSE BE AT 25 OR 30 OR 40 OR 80%? UH, I'M SORRY.
I LIKE, COULD WE, COULD THEY ACTUALLY BE MORE PERCENTAGES BEING BROUGHT IN? UH, THEORETICALLY, YEAH.
UH, SO WHAT'S THE ACTUAL PERCENTAGE GOAL THAT WE'RE LOOKING FOR THEN? IF, IF, IF THEY HAVE VARYING PERCENTAGES ANNUALLY, RIGHT.
UM, AS SOME OF 'EM AS HIGH AS 25, POSSIBLY TO AS LOW AS 14, UM, WHAT IS THAT ACTUAL GOAL? YEAH.
AND SO, AND JUST A REMINDER THAT THIS IS THE, THE SEVEN MONTH FIGURE.
SO THE GOAL IS TIED TO THE 12 MONTH AGREEMENT YEAR.
AND SO I'LL, I'LL GET THAT FOR YOU AS WELL.
IT JUST PAINTS A BETTER PICTURE, RIGHT? YEAH.
UH, I, I WANNA MAKE SURE THAT AS WE'RE TALKING ABOUT, UH, THE, THESE ACCOUNTS AND IT'S APPLES TO APPLES,
[01:30:01]
UM, MAKE SURE THAT, THAT, UH, WE'RE NOT SETTING SOMEONE, ANOTHER ORGANIZATION UP TO FAIL.UH, BECAUSE IF THEY GET SOME OF THESE THAT HAVE MORE EXEMPTIONS, POSSIBLY, THEN THEY WON'T BE BRINGING IN THE SAME AMOUNT OF MONEY AS WELL.
SO YEAH, I, I THINK THAT'S ONE OF THE ARGUMENTS THAT'S THERE.
DO YOU KNOW HOW MANY, THE PERCENTAGE OF AGED ACCOUNTS THAT EACH FIRM HAS? YEAH, THAT'S, THAT'S AVAILABLE, UH, FROM THE TAX OFFICE AS WELL.
I DON'T HAVE THAT WITH ME, BUT WE CAN, WE CAN GET THAT, AND I THINK SOME OF THE FIRMS MIGHT HAVE THAT, SOME OF THAT INFORMATION.
BECAUSE AS ACCOUNTS AGE, IT'S ALSO MORE DIFFICULT TO COLLECT.
THAT'S, THAT'S ONE OF THE ARGUMENTS.
I REALLY APPRECIATE YOUR, UM, WORK ON THIS.
WE WILL NEXT, UM, BRING UP, UM, LOBAR, LINEBARGER GO AND BLAIR AND SAMPSON TAX COLLECTION PROCESS AND REPORTING.
WE HAVE TANYA ERICKSON, WOOD CAPITAL PARTNER, TREY STONE, CAPITAL PARTNER, PATRICK SHEA, ACCOUNTING MANAGER, AND IT MIGHT BE SOMEBODY ELSE, UM, TO PRESENT.
I WANNA SAY TO BOTH FIRMS. UM, WE ARE SO GRATEFUL FOR YOUR WORK,
YOU BRING IN MONEY TO THE CITY, AND WE THANK YOU FOR WHAT YOU DO.
YOU PROVIDE A VERY VALUABLE SERVICE TO THE CITY.
UH, THE QUESTION STARTED ARISING WHEN THIS CAME UP FOR A ONE YEAR EXTENSION.
LIKE I SAID, WE HAVEN'T HAD A LOOK AT THIS CONTRACT IN A LONG TIME.
THERE'S A, A LOT TO CONSIDER, AND I APPRECIATE BOTH OF YOU BEING HERE.
IT'S A LITTLE UNUSUAL THAT WE HAVE BOTH FIRMS HERE, BUT THIS IS WHAT THE ADMINISTRATION WANTED AND WHAT I WANTED.
SO WE'RE GONNA HEAR FROM BOTH OF YOU.
IT IS NOT MEANT TO BE A FIGHT BETWEEN YOU.
UM, I'D APPRECIATE YOUR JUST, UH, CONCENTRATING ON YOUR PRESENTATION.
UM, YOU KNOW, YOU, THE, THE NEXT GROUP HAS THE ADVANTAGE OF HER HEARING YOUR PRESENTATION, BUT I'M GONNA ASK THEM TO ONLY CONCENTRATE ON THEIR PRESENTATION.
THIS ISN'T A COURTHOUSE, THIS ISN'T A DEBATE STAGE.
THIS IS JUST PROVIDING INFORMATION ON, ON WHAT YOU DO AS A VERY VALUABLE SERVICE TO THIS CITY.
SO I THANK YOU VERY MUCH FOR PARTICIPATING.
AND THE FLOOR IS YOURS, AND I AM GONNA CUT YOU OFF IN ABOUT 10 MINUTES.
SO, YOU KNOW, I MAY TALK TOO MUCH.
10 TO 15, I MIGHT SLIDE TO 15.
MY NAME IS TANYA ERICKSON WOOD.
NEXT TO MY RIGHT IS PATRICK SHEA.
AND THEN ALSO PAT, UH, PARTNER TREY.
UM, SOME OF THIS HAVE, HAS BEEN REITERATED A BIT EARLIER.
UM, THERE IS A PROVISION IN THE AGREEMENT THAT WAS JANUARY ONE OF 23 TO JUNE 30TH OF 24, THAT ON OR BEFORE MARCH 15TH, IF THERE IS GONNA BE A REASSIGNMENT OR ASSIGNMENT OF ACCOUNTS, IT IS TO TAKE PLACE.
AND AS Y'ALL MENTIONED, UM, IT WAS APPROVED BY THE, THE CONTRACT FOR JULY ONE OF 24 TO JUNE 30TH OF 25 IS CURRENTLY IN PLACE.
UM, SO, UM, IN MY PRESENTATION, OUR PRESENTATION, UM, THIS AGAIN WAS TOUCHED UPON A LITTLE BIT, UH, UNDER THE TERMS OF OUR CURRENT AGREEMENT.
UH, WE PROVIDE, UH, UH, PARTICULAR SERVICE AREAS.
ONE IS THE HEALTH AND SAFETY LIEN AND OTHER LIEN COLLECTIONS.
UH, SOME PEOPLE CALL 'EM THE NU NUISANCE OF BASEMENT SERVICES.
UH, SECOND AREA IS THE TAX STATUS RESEARCH ACCORDING TO THE CITY'S ORDINANCE.
AND THEN LASTLY, THE BULK OF WHAT WE DO IS OUR PROPERTY TAX COLLECTIONS.
SO I WANT TO TOUCH UPON REAL QUICK ON THE SERVICES PROVIDED TO THE CITY OF HOUSTON FOR THE HEALTH AND SAFETY LIENS.
UM, YOU, YOU MAY KNOW THEM, UH, IN TERMINOLOGY, BUT WHAT THEY ARE, BASICALLY, THERE'S VARIOUS PROPERTIES THROUGHOUT THE CITY OF HOUSTON THAT NEEDS SOME WORK ON THEM.
AND THE CITY GOES THERE TO PERFORM THAT WORK.
IT CAN BE LOT MOWING, WEED, CLEAN UP, DEMOLITION, ALL THESE SORT OF THINGS.
UM, OUR FIRM YEARS AGO DEVELOPED A SOFTWARE SYSTEM AND DATABASE THAT ACTUALLY HOLDS THOSE RECORDS AND HELP MANAGE THOSE RECORDS FOR THE CITY OF HOUSTON WHEN ANYTIME THESE SERVICES ARE PERFORMED.
UH, WHAT WE ALSO DO IS IN ORDER FOR THE CITY TO EVEN GET A LIEN ON THE PARTICULAR PROPERTY, WHICH IS TRULY YOUR ENFORCEMENT POWER, WE GENERATE THE NOTICE OF LIEN DOCUMENTS, AND THEN WE FILE 'EM BOTH WITH THE HARRIS COUNTY CLERK'S OFFICE AND THE FORT BEND COUNTY CLERK'S OFFICE.
'CAUSE AS YOU KNOW, THE CITY OF HOUSTON ALSO FALL FALLS IN FORT BEND COUNTY.
WE ALSO GENERATE MONTHLY BILLS FOR THESE PARTICULAR SERVICES THAT ARE OCCURRING TO TRY AND GET COLLECTION EFFORTS AND THAT SORT OF THING FOR THE, FROM THE PARTICULAR PROPERTY OWNERS.
UM, AND THEN WE ALSO RECEIVE IN POST PAYMENTS, UM, AS A CAVEAT, WHEN WE DO FILE OUR DELINQUENT TAX LAWSUITS IN THAT END OF THE WORLD, UM, WE DO INCLUDE THE CITY OF HOUSTON SPECIAL ASSESSMENT LIENS IN OUR, UH, LITIGATION THAT WE FILE ON BEHALF OF THE CITY.
SO WE TRY AND MAKE COLLECTION EFFORTS THROUGH THAT AS WELL.
UM, THESE SERVICES ARE NO COST TO THE CITY WHATSOEVER.
UM, OUR STAFFING, OUR TRANSFERRED, ANYTHING LIKE THAT, JUST THE MAINTENANCE AND UPKEEP OF THE DATABASE ITSELF, THERE IS NO COST TO THE CITY FOR THAT.
UH, THIS PARTICULAR SERVICE AREA SINCE JULY OF 2019,
[01:35:01]
AND THAT, THAT WAS KIND OF THAT BULK CONTRACT THAT STARTED BACK THEN TO DATE OF JUNE OF 2024, UM, UH, IS YIELDED $12.1 MILLION TO THE CITY OF HOUSTON FOR COLLECTION OF THOSE PARTICULAR AMOUNTS.THE NEXT AREA IS, UH, LIKE WAS MENTIONED, OUR TAX STATUS RESEARCH FOR ANY POTENTIAL VENDORS FOR THE CITY OF HOUSTON.
OF COURSE, THE ORDINANCE BASICALLY STATES IF YOU'RE GONNA BE A VENDOR WITH THE CITY OF HOUSTON, OR EVEN IF YOU'RE GONNA HOLD CERTAIN OFFICES IN THE CITY OF HOUSTON WITH ON BOARDS OR COMMISSIONS, YOU CANNOT HOLD TAX OWE TAXES TO THE CITY OF HOUSTON.
AND SO, UM, WHEN WE DO THESE DIFFERENT SEARCH AREAS, EITHER THROUGH THE AGENDA ITEMS, TROLLERS, UM, TROLLERS LOG, OR, UH, THE SPECIAL INSURANCE INSTANCES, WHAT WE DO IS WE RESEARCH APPRAISAL DISTRICT TAX RECORDS.
WE HAVE TO OFTEN DO ADDITIONAL RESEARCH, AS YOU CAN IMAGINE, BECAUSE THE NAME THAT'S GONNA BE THE VENDOR MAY NOT BE THE NAME THAT MATCHES UP ON THE PROPERTY TAX ROLL.
THESE PROPERTY TAX ROLL ARE LIVE THINGS, AND THEY DON'T NECESSARILY MATCH UP PERFECTLY.
THE RECORDS ARE NOT ALWAYS PERFECT, OKAY? IT'S A LOT FOR THESE, THE APPRAISAL DISTRICT AND TAX OFFICES TO HANDLE, TO TELL YOU THE TRUTH.
AGAIN, THIS IS ANOTHER SERVICE AREA WHERE WE DO NOT CHARGE ANYTHING FOR THE CITY OF HOUSTON TO HANDLE THAT FOR THEM.
LASTLY, AND THE BULK OF OUR SERVICES AND THESE SERVICES, AS MENTIONED BY THE CITY ATTORNEY'S OFFICE, UH, AGAIN, BEGAN JULY ONE OF THIS YEAR AND WILL END JUNE 30TH, 2025 ACCORDING TO THE TERMS OF THE AGREEMENT.
JUST KIND OF AS A GENERAL BACKGROUND, BECAUSE WE WERE TALKING A LITTLE ABOUT TIMING AND THIS SORT OF THING.
UM, SO MOST PROPERTY TAX ACCOUNTS, THE TAX OFFICE IS GONNA SEND THAT MAILING AT THE END OF THE YEAR, AND THEN THAT ACCOUNT WILL HAVE A FEBRUARY ONE DELINQUENCY DATE.
SO RIGHT NOW, TAX YEAR 23 FOR THE BULK OF THE ACCOUNTS DUE TO THE CITY OF HOUSTON, THE DELINQUENCY DATE IS FEBRUARY 1ST, 2024.
OKAY? BUT THEN THERE IS WHAT'S CALLED AN EARLY TURNOVER OF TANGIBLE PERSONAL PROPERTY ACCOUNTS.
THAT'S THE 60TH DAY AFTER THE DELINQUENCY DATE, AND BY THE CALCULATION FOR 23, THAT'S APRIL 1ST, 2024.
SO WE'VE ALREADY STARTED COLLECTION EFFORTS FOR TAX YEAR 23 FOR OUR ASSIGNED ACCOUNTS FOR TANGIBLE PERSONAL PROPERTY ACCOUNTS.
LASTLY, THE REAL PROPERTY ACCOUNTS, AND, UH, FOLKS HAVE MENTIONED THIS AS WELL.
UH, THAT TURNOVER DATE IS JULY ONE.
SO FOR TAX YEAR 2023, WE HAVE ALREADY BEGAN COLLECTION EFFORTS FOR TAX YEAR 23 FOR ANY OF THE ACCOUNTS THAT HAVE BEEN ASSIGNED TO US.
UM, I'M, I'M FOCUSING ON 23, BUT THE REALITY IS WE'RE COLLECTING ALL TAX YEARS, ANY PRIOR TAX YEAR THAT BECOMES DELINQUENT, THAT GETS TURNED OVER TO US FOR OUR ASSIGNED ACCOUNTS.
WE'RE COLLECTING IT ON A MONTHLY BASIS, YEARLY BASIS, ET CETERA.
AND THE REALITY IS THAT, UH, EVERYTHING IS NOT GONNA GET COLLECTED IN 12 MONTHS.
YOU KNOW, THAT'S WHAT WE ALL FACE.
IT'S, IT'S A VERY COMPLEX INDUSTRY.
AND THERE, THERE'S A LOT OF THINGS TO CONSIDER.
SOME OF OUR COLLECTION TOOLS, JUST TO ORIENT YOU WHEN WE DO GET THE ACCOUNTS, IS WE DO, UH, MAILINGS.
WE TYPICALLY, UH, DO MAILINGS AT LEAST NINE TIMES OUTTA THE YEAR, NINE MONTHS.
UH, WE DO COORDINATE IT WITH THE HARRIS COUNTY TAX OFFICE BECAUSE WE DON'T WANNA MAIL IN THE MONTH THAT THE BIG NOTICES ARE GOING OUT.
THAT CREATES CONFUSION FOR THE PROPERTY OWNERS.
UM, THE TAX OFFICE WILL BE SLAMMED ALREADY, QUITE HONESTLY, FOR PHONE CALLS, ET CETERA.
SO WE TRY AND BALANCE THAT OUT.
WE DO HAVE A SEPARATE CONTACT CENTER THAT WE MAKE OUTGOING AND INCOMING, UH, AND HANDLE INCOMING PHONE CALLS.
AND OF COURSE, WE HANDLE AND FILE DELINQUENT TAX LITIGATION, UH, DELINQUENT TAX LAWSUITS, UH, FROM BEGINNING TO END TO THE POINT OF JUDGMENT.
UH, THAT'S PRIMARILY FOR REAL PROPERTY.
WE ALSO DO PERSONAL PROPERTY ACCOUNTS FOR PERSONAL PROPERTY ACCOUNTS.
THERE'S A DIFFERENT COURT MECHANISM, WHICH ARE TAX WARRANTS.
AND SO WE'LL ASK FOR A TAX WARRANT ON PERSONAL PROPERTY, UH, ACCOUNTS, AND THEN WE'LL PURSUE COLLECTIONS THAT WAY.
UM, THROUGHOUT THIS WHOLE PROCESS, WE ARE WORKING WITH THE PROPERTY OWNERS TO HELP EDUCATE 'EM, HELP THEM PAY THEIR TAXES THROUGH PAYMENT AGREEMENTS.
IF THEY NEED, UH, INFORMATION FROM THE APPRAISAL DISTRICT, WE TRY AND MOVE THEM OVER THERE SO THEY CAN HELP THEM.
WE'RE IN A VERY COMPLEX INDUSTRY, DESPITE THE MATERIALS THAT ARE AVAILABLE ON THE COMPTROLLER'S WEBSITES, THE APPRAISAL DISTRICT, TAX OFFICE WEBSITES, IT'S HARD TO UNDERSTAND, TO BE PERFECTLY HONEST.
SO WE REALLY TRY AND HELP THE PROPERTY OWNERS AND ANY OF OUR CLIENTS IN THE CITY OF HOUSTON TO BETTER UNDERSTAND THE PROCESS, TO HELP THEM PAY THEIR TAXES.
WHEN WE GET INTO, UH, JUDGMENT BEING TAKEN, WE DO POST PROPERTIES FOR FORECLOSURE SALES.
UH, THIS IS ANOTHER MEETING BY WHICH WE COLLECT DOLLARS FOR THE CITY OF HOUSTON THROUGH FORECLOSING THE CITY OF HOUSTON'S, UH, TAX LIENS, UH, SINCE AROUND 2000, OUR LAW FIRM HAS HELPED, UH, UH, MANAGE AND FACILITATE THE
[01:40:01]
INTERLOCAL AGREEMENT BETWEEN THE CITY OF HOUSTON, HARRIS COUNTY, AND THE HOUSTON INDEPENDENT SCHOOL DISTRICT RELATED TO THEIR PROPERTY TAX SALES.UH, WE, WE GATHER A BUNCH OF INFORMATION.
WE DO, UH, PICTURES, VISITS TO THE PROPERTY, THE WHOLE NINE YARDS TO HELP THE DELEGATES FROM THOSE ENTITIES TO MAKE THE DECISION ON THE ACTUAL TIES FOR THE SALES.
UM, LASTLY, WHAT WE DO IS WE HAVE A WHOLE SEPARATE BANKRUPTCY DEPARTMENT WHERE THEY HANDLE AND FILE ANY OF THE CLAIMS ON BEHALF OF THE CITY OF HOUSTON TO COLLECT BANKRUPTCY NUMBERS, AMOUNTS DUE.
WE DID PROVIDE SOME EXAMPLES AND SOME DATA OF OUR COLLECTION TOOLS, IMPLEMENTATION AND COLLECTION STATISTICS FOR, UH, JULY, 2019 THROUGH JUNE, UH, 2024.
UM, AS YOU CAN SEE FOR MAILINGS, UH, WE MAIL FOR REAL AND PERSONAL PROPERTY ACCOUNTS.
UM, WE'VE MAILED OVER 222,000, UH, ACCOUNT ON ACCOUNTS AND, UH, PERSONAL PROPERTY, 383,000.
UM, AS I MENTIONED EARLIER, IF YOU LOOK AT THE LITIGATION STATISTIC, UM, ON A NUMBER OF THE SUITS, UH, WE ALSO FILED OVER $4 MILLION FOR SPECIAL ASSESSMENT LIENS FOR THE CITY OF HOUSTON.
THAT'S WHERE WE KIND OF INTEGRATE THAT IN.
AND, UM, JUST POINTING OUT OUR BANKRUPTCY, UH, CLAIMS, FOR EXAMPLE, UM, OF THE CLAIMS THAT WE FILED DURING THAT PERIOD, 594 OF 'EM WERE, UH, PAID AND OVER $11.3 MILLION WAS PAID TO THE CITY OF HOUSTON.
SO, UM, OUR NEXT AREA THAT WE WANTED TO TALK ABOUT, WHICH HAS KIND OF BEEN MENTIONED IS, IS WHAT WE DEEM UNCOLLECTIBLE ACCOUNTS IN ANY, UH, IN OUR PORTFOLIO OF ACCOUNTS, WE ARE GOING TO COME ACROSS ACCOUNTS THAT WE CANNOT COLLECT.
UM, AND YES, THIS DOES IMPACT NUMBERS, OKAY? IT'S, IT, IT, THESE ARE ACCOUNTS THAT WE CANNOT GET TO IN ANY SHAPE, FORM, OR FASHION.
SOME EXAMPLES INCLUDE, UH, HOMESTEADS WITH 65 OR OVER HOMESTEADS WITH A DISABILITY HOMESTEADS WITH DISABLED VETERANS.
AND IT'S NOT JUST THE PERSON WHO HELD THAT EXEMPTION.
THIS CAN CONTINUE ON TO SURVIVING SPOUSES.
SO THAT COUNT CAN BE LOCKED UP THROUGH THE LIFETIME OF THE SURVIVING SPOUSE.
UM, WE ALSO, UH, RELIGIOUS EXEMPTIONS, UM, TOTAL EXEMPTIONS, THESE SORT OF THINGS.
AND THEN LASTLY, THERE'S A SUBSET OF ACCOUNTS WHERE THEY STILL HAVE, UM, APPEALS OR PROTESTS OR OTHERWISE AT THE APPRAISAL DISTRICT.
AND THOSE ACCOUNTS ARE NOT CONSIDERED DELINQUENT YET.
AND, AND QUITE FRANKLY, WE WANT THE PROPERTY OWNER TO BE SETTLED UP.
AND ARE Y'ALL OKAY WITH EVERYTHING? Y'ALL ARE IN AGREEMENT? THEN LET'S MAKE THE COLLECTION EFFORT.
UM, JUST AS AN EXAMPLE OF THE IMPACT OF THOSE EXEMPT ACCOUNTS, THE CITY OF HOUSTON'S TOP 10 ACCOUNTS THAT, THAT ARE OWED IN OUR PORTFOLIO OF ACCOUNTS ARE ALL 65 AND OVER, AND IT'S OVER A MILLION DOLLARS.
WE CANNOT PURSUE COLLECTION ON THOSE ACCOUNTS.
OTHER FACTORS, WHICH SOME HAVE BEEN TO, UH, TOUCHED UPON IN PREVIOUS DISCUSSION IS THE PORTFOLIO OF ACCOUNTS.
THESE ARE OTHER THINGS THAT CAN AFFECT YOUR COLLECTION EFFORTS IN ANY OF THESE PORTFOLIOS.
ONE IS, UH, THE COMPOSITION OF THE ACCOUNTS.
UH, THE COMPTROLLER HAS DIFFERENT STATE CLASS CODES TO DESIGNATE THE ACCOUNTS, AND IT CAN BE VACANT, LAND, HOMES, COMMERCIAL, INDUSTRIAL, ALL THESE SORT OF THINGS.
AS YOU CAN IMAGINE, UH, THROUGHOUT ANY TAXING UNIT IN TEXAS, UH, SOME TAXING UNITS HAVE A DIFFERENT COMPOSITION THAN OTHER TAXING UNITS IN THAT COMPOSITION, YOU HAVE PROPERTY OWNERS THAT MAY BE NOT AS, UH, ECONOMICALLY CHALLENGED TO PAY AS COMPARED TO OTHER TYPE OF PROPERTY OWNERS.
AND IT IS A, IT IS A FACT THAT THAT DOES AFFECT YOUR COLLECTION NUMBERS AND YOUR DATA.
ALSO, LIKE I TOUCHED UPON, I MEAN, THERE'S SO MUCH DATA THAT IS MANAGED FROM THE APPRAISAL DISTRICT AND THE, THE HARRIS COUNTY TAX OFFICE OR ANY TAX OFFICER APPRAISAL DISTRICT.
UM, YOU'RE ONLY AS GOOD AS YOUR DATA.
THAT'S WHY EVERY MONTH THERE'S CORRECTIONS AND SUPPLEMENT ROLES, ET CETERA, THAT GOES TO THE TAX OFFICE.
IT'S, IT IS A CHANGING TAX ROLE.
THAT ALSO CAN AFFECT YOUR, UH, TAX COLLECTION NUMBERS.
UH, WE DID, UH, JUST THIS IS THE JULY 1, 23 THROUGH JUNE 30TH, 2024.
COMPOSITION OF THE ROLES AS IT RELATES TO UNCOLLECTIBLE ACCOUNTS, UH, VERSUS WHAT WE WOULD CALL COLLECTIBLE ACCOUNTS.
UH, THE UNCOLLECTIBLE CATEGORY IS COMPRISED OF THE DIFFERENT SUBJECT AREAS THAT I JUST MENTIONED.
AS YOU CAN SEE, UH, THERE'S ABOUT A 10% DIFFERENCE IN THE PORTFOLIO OF ACCOUNTS THAT ARE UNCOLLECTIBLE BETWEEN THE TWO LAW FIRMS. I KNOW THE CITY ATTORNEY'S OFFICE HAD ALREADY, UH, TALKED ABOUT
[01:45:01]
THE, UM, CONTRACT TERMS, UH, WITH RESPECT TO THIS SEVEN MONTH PERIOD.UM, UH, THIS IS A REPRESENTATION OF IT FOR JULY 23 THROUGH JANUARY, 2024.
UH, THIS IS THE, UH, CALCULATIONS ACCORDING TO THE TERMS IN THE PARTICULAR AGREEMENT.
AS YOU CAN SEE FROM THOSE STATISTICS, WE DID COLLECT 83% OF THE TOTAL TAX ONLY THAT WAS COLLECTED, WHICH EQUATED TO $11.2 MILLION.
NOW, YOUR LAST SLIDE IS WHAT WE BELIEVE TO BE THE MOST ACCURATE REPRESENTATION OF PERFORMANCE AND COLLECTED DOLLARS IN REVENUE TO THE CITY, CONSIDERING SOME OF THE FACTORS THAT WE TALKED ABOUT IN TERMS OF UNCOLLECTIBILITY OF ACCOUNTS AND THIS SORT OF THING.
SO, UM, IF YOU TAKE, UH, THE COLLECTIONS OUT TO A 12 MONTH PERIOD, AND, AND WE'RE, WE'RE CALLING THAT BECAUSE OF THE CONTRACT TERM, BUT PLEASE KNOW, THERE ARE VERY DIFFICULT ACCOUNTS TO COLLECT THAT CAN TAKE LONGER THAN THAT THROUGH THE PROCESS TO ACTUALLY COLLECT.
UM, SOME OF THEM IS JUST THE COURT SYSTEM.
SOME OF THEM IS THE DIFFICULTY OF THE ACCOUNT, LIKE ENVIRONMENTAL PROPERTY WAS MENTIONED EARLIER AND THAT SORT OF THING.
BUT IF, IF YOU TAKE YOUR DATA OUT TO A 12 MONTH PERIOD, YOU ADD PENALTY AND INTEREST ON THE 12 MONTH PERIOD, BASICALLY YOU'RE ADDING THE FIVE ADDITIONAL MONTHS OF TAX LEVY AND YOU'RE REMOVING YOUR UNCOLLECTIBLE, UH, BALANCES.
UH, WHAT YOU END UP WITH, FIRST OF ALL, IS THERE'S AN ADDITIONAL 11.5, ALMOST 11.6 OF REVENUE TO THE CITY, UM, THAT WE COLLECTED ON BEHALF OF THE CITY.
AND THEN SECONDLY, IF YOU START TALKING ABOUT THE PERCENTAGE DIFFERENCE OF COLLECTIONS IS LESS THAN HALF A PERCENT.
SO, UM, I KNOW WE'RE TRYING THIS TALKING.
YOU'RE LIKE 14 MINUTES, WAY TO GO.
THANK YOU, CHAIR, AND THANK YOU FOR THE PRESENTATION.
UM, DID I SEE AGED ACCOUNTS YOUR PERCENTAGE OF AGING ON HERE? I DON'T, NO.
WE DO NOT HAVE THE AGED ACCOUNTS.
THAT IS DATA THAT CAN BE MADE AVAILABLE.
I THINK THAT'S IMPORTANT TOO, BECAUSE AS ACCOUNTS AGE, IT IS MORE CHALLENGING TO COLLECT.
SO I WOULD LOVE TO HAVE THAT INFORMATION, PLEASE.
AND, AND JUST AS A COMMENT, OFTENTIMES WHAT WE SEE ON THE AGED ACCOUNT, IT CAN BE VACANT PROPERTY AND THIS SORT OF THING.
SOME PEOPLE DON'T EVEN KNOW THEY OWN THE PROPERTY, WHICH, WHICH, WHEN WE DO THE TITLE SEARCHES AND SUCH FOR OUR, UH, LITIGATION, IT HELPS FLUSH THAT OUT.
UH, BUT YES, UH, AGED ACCOUNTS DO MATTER AND, AND THERE IS A STATUTE OF LIMITATIONS ON REAL PROPERTY TAXES.
IT'S 20 YEARS UNLESS THE JUDGMENT'S BEEN ENTERED AND SECURES IT.
AND FOR PERSONAL PROPERTY, IT'S 10 YEARS.
AND THEN THE OTHER QUESTION IS, DO YOU HAVE A BREAKDOWN OF WHAT THE SOCIOECONOMIC, UM, NOT STANDARD, BUT THE SOCIOECONOMIC POSITION, I GUESS, OF YOUR, OF YOUR ACCOUNTS? DO YOU KNOW WHAT THE AVERAGE HOUSEHOLD INCOME IS OR WE DO NOT.
DO YOU, DO YOU HAVE THAT DATA THOUGH? WE DON'T HAVE THAT DATA.
UH, SOMETIMES WHAT YOU CAN DO IS, IS DETERMINE COLLECTION PERCENTAGES WITHIN PARTICULAR AREAS.
Y YOU KNOW WHAT I MEAN? BUT WE DON'T KEEP ANYTHING WITH RESPECT TO THAT.
AND THE REASON I'M ASKING THAT QUESTION IS JUST KIND OF TO, TO COUNCILOR JACKSON'S POINT, AND THEN, YOU KNOW, MY POINT EARLIER, I THINK THAT IT DOES CREATE A CHALLENGE IF YOU HAVE A LARGER SUBSET OF ACCOUNTS THAT, UM, AND OF COURSE, ALL THIS IS AVERAGES, RIGHT? BUT IF YOU HAVE A HIGHER SUBSET OF FOLKS THAT JUST CAN'T AFFORD TO PAY IT, CORRECT.
DOES THAT BRING DOWN YOUR AVERAGES? YES.
SO THAT'S THE, I JUST, THIS IS THE THING, AND, AND I'M LIKE, YOU KNOW, THE CHAIR, I, THIS IS NOT, THIS IS NOT A COMPETITION BETWEEN ANYONE.
IT'S JUST MAKING SURE THAT WHEN YOU PUT A PERCENTAGE RATE OF ONE OVER THE OTHER, YOU, WE GOTTA MAKE SURE THAT WE'RE LOOKING AT IT FAIRLY.
AND IF YOU LOOK AT A OFFICE THAT HAS MEDICARE MEDICAID PERCENTAGES VERSUS A PRIVATE PRACTICE PERCENTAGE, YOU REALLY CAN'T COMPARE BECAUSE MEDICAID PRACTICES, REIMBURSEMENTS LOWER, ET CETERA.
IT'S JUST HARD TO, SO THAT'S KIND OF THE PERSPECTIVE I'M LOOKING AT.
I JUST WANNA MAKE SURE WHEN WE MAKE THIS DECISION, SINCE WE'RE MAKING IT PRIOR TO THE, YOU KNOW, THE, THE EXPIRATION OF THE CONTRACT YEAR, THEY'RE REALLY LOOKING AT THIS FROM AN APPLES TO APPLES PERSPECTIVE.
WE WISH THAT EXISTED
I, I KNOW IT'S ING, BUT I THINK TO SAY THAT, THINK IT'S OUR JOB SINCE NOW THE ONUS IS FALLING ON COUNCIL TO MAKE THIS DECISION.
UM, AND I HAVE A WHOLE ANOTHER CONVERSATION ON THAT PIECE.
BUT SINCE WE'RE HAVING TO MAKE THE DECISION, IT'S ON US, AND WE HAVE TO MAKE SURE THAT WE COLLECT, BECAUSE WE'RE OBVIOUSLY IN A TOUGH SPACE, YOU KNOW, FINANCIALLY.
SO THIS IS A REALLY IMPORTANT PIECE, BUT BY THE SAME TOKEN, WE HAVE TO MAKE SURE THAT, SO THAT'S MY AND THE LAST QUICK, UM, QUESTION, THE OTHER ADDED VALUE SERVICES, IS THERE A NUMBER ON THAT, THAT YOU DON'T CHARGE A CITY? UH, WE DID PUT IN THE PRESENTATION FOR, UM, THE, UH, FOR EXAMPLE, THE HEALTH AND
[01:50:01]
SAFETY LIENS IN A YEAR'S TIME.UH, WE DID PUT ITEMIZATION STAFF IS ABOUT 120,000.
THAT'S NOT, YEAH, I MEAN, THE, UH, I'M SORRY.
THE DATA MA MAINTENANCE, WHICH, YOU KNOW, THIS IS A REPEAT YEAR AFTER YEAR MM-HMM
AND THIS IS THIS YEAR'S COST, IF YOU WILL.
BUT THAT'S ONLY ONE ITEM, THOUGH.
UH, IT, IT ALSO, WE HAVE THREE FULL-TIME STAFF.
WE HAVE THE, ALL THE MAILING COSTS, WE INCUR THIS SORT OF THING.
UHHUH,
I WANNA MAKE SURE THAT THE NUMBERS THAT, UM, WE HAVE ARE THE SAME PERCENTAGES THAT, UM, FROM WHAT I UNDERSTAND WERE SELF-REPORTED, UM, BY YOUR ORGANIZATION.
SO IN, UH, 2021, UH, WE HAD A 16.42% IN 20 22, 14 0.9%.
IN 2023, THERE WAS SOME, UH, DISPUTES, UH, BY, BY A SMALL PERCENTAGE.
UM, BUT THERE WAS A 25.28% IN 2023, AND THEN A 20.2%.
AND THEN IN 20 24, 17 0.2%, UH, THIS IS THE FIRST THAT WE'VE SEEN OF THOSE PARTICULAR, UM, PERCENTAGES.
SO WE WOULD GO BACK TO OUR OFFICE AND DOUBLE CHECK WHAT WAS REPORTED.
BECAUSE ON OUR NOTE, IT SAYS THIS WAS SELF-REPORTED BY LINEBARGER.
IF THESE WERE THE PERCENTAGES INCLUDED IN OUR REPORT THAT WE GIVE TO THE CITY ON A MONTHLY BASIS, THEN YES, THAT WOULD BE THEM.
AND AS I RECALL, RAHA DID SAY THAT THESE WERE, AS OF THE SEVEN MONTHS, THEY'RE NOT AS OF THE FULL YEAR, SEVEN MONTHS.
AND THAT'S HOW WE CALCULATED BASED ON THE CONTRACT WITH THE SEVEN MONTHS, THE CONTRACT TERMS, CORRECT.
AND THEN 80% OF THE ACCOUNTS ARE WITH YOUR ORGANIZATION AND 20% WITH THE OTHER, WHICH IF, IF THEY'RE REASSIGNED, THERE WOULD STILL BE 80% AT YOUR ORGANIZATION, IS THAT CORRECT? ACCORDING TO HIS DATA, YES.
THANK YOU FOR YOUR INFORMATION.
WHAT? FOR THE WORK THAT YOU DO.
THANK YOU MADAM CHAIR, AND THANK Y'ALL FOR BEING HERE.
AND, UH, MS. WOOD, JUST A COUPLE QUESTIONS.
UH, IN YOUR PRESENTATION, I THINK IT'S SLIDE NUMBER NINE, YOU HAVE PERCENT UNCOLLECTIBLE, AND THAT'S A TOTAL FIGURE FOR ALL ACCOUNTS, I WOULD ASSUME, IN ALL THE DISTRICTS.
WHAT WOULD BE THE UNCOLLECTIBLE PERCENTAGE ACCORDING TO LINEBARGER? FOR ALDE, WE WOULD HAVE TO, UH, DO THE BREAKDOWN OF THAT ACCOUNT.
WE WOULD HAVE TO DIG INTO THE DATA TO DO THE BREAKDOWN OF IT.
SO, SO YOU DON'T HAVE THAT WITH YOU? NO, WE DO NOT.
IT COULD BE FAR LESS THAN 19%, IS THAT RIGHT? UH, WELL, IT COULD BE.
IT JUST DEPENDS UPON THE PORTFOLIO OF THE ACCOUNTS AND WHAT THE DATA REVEALS.
AND, UM, HISTORY OF REASSIGNMENT, SO THIS WOULD BE IN RAJA'S PRESENTATION.
UH, DO YOU HAVE THAT? I HAVE ITS PRESENTATION, YES.
SO 2016 PASADENA AND A LEAF WERE REASSIGNED.
UM, 2017 FORT BENINA PARK WERE REASSIGNED, THEN TWO IN 2020, KLEIN, UH, DID, DID LINEBERG EVER TRY TO GET THOSE BACK AFTER THE REASSIGNMENTS? I, I DO NOT KNOW.
AND I JUST WANNA PIGGYBACK ON, UM, COUNCIL MEMBER P PALMER'S, UM, COMMENT.
UM, SHE ASKED ABOUT SOCIAL ECONOMICS, HOWEVER, DO YOU BREAK IT DOWN BY ZIP CODE OR GIVEN THE FACT THAT YOU HAVE ALL OF THE CITY OF HOUSTON AND WE OPERATE OFF OF DISTRICTS, IS THERE A WAY TO BREAK IT DOWN BY DISTRICT? BECAUSE IF WE HAVE DISTRICTS, WE KIND OF HAVE A SENSE OF WHAT'S HAPPENING IN THOSE PARTICULAR DISTRICTS.
SO IS THERE A WAY TO MAKE THAT HAPPEN OR DO YOU HAVE THAT ALREADY? I, I, I THINK WE WOULD, IT CAN BE BROKE DOWN BY ZIP CODE.
UM, BUT WE'RE TALKING EXTREMELY LARGE DATA FILES MM-HMM
SO IT WOULD TAKE QUITE A BIT OF TIME TO DO IT.
'CAUSE DISTRICTS, I THINK I WOULD HAVE TO SEE ALL THE DATA THAT'S IN THE, UH, DELINQUENT TAX ROLL FILE THAT WE GET.
SO IT'S POSSIBLE, BUT WITHOUT KNOWING ALL OF THE HEADERS THAT'S AVAILABLE, I COULDN'T TELL YOU AT THIS MOMENT.
I, I MEAN, IN, IN SOME WAYS THE ZIP CODES THAT ARE IN YOUR DISTRICT WOULD NEED TO BE DETERMINED.
AND THEN THE CIIS ADDRESSES BY ZIP CODE, NOT MAILING CIIS ADDRESS.
I MEAN, I'M THINKING MAYBE THAT MM-HMM
COULD POSSIBLY, AND MIND YOU, THIS DATA WOULD'VE TO BE DONE FOR NOT ONLY THE TURNOVER, BUT FOR EACH MONTH'S COLLECTION.
SO YOU WOULD HAVE TO RUN THAT AGAINST ALL OF THOSE.
THANKS CA UH, VICE CHAIR CASTILLO.
AND THANK YOU FOR THE INFORMATION YOU MENTIONED, UH, IN YOUR REMARKS ABOUT COLLECTING,
[01:55:01]
UM, FOR PAST TAX YEARS AND CURRENT TAX YEARS.IS THAT REFLECTED IN THE COLLECTION RATES THAT WE SEE FOR THE TAX YEAR YOU COLLECTED IN? OR HOW IS THAT REFLECTED IN THE DATA THAT WE GET? ALL THE DATA YOU HAVE IS FOR ALL TAX YEARS.
SO WHEN WE, WHEN WE SEE THE SLIDE, UH, THAT HAD 2020 THROUGH 2024, AND THE TWO, UH, COLLECTION RATES AS YOU COLLECT FOR A 2021 IN 2023 IS, IS THAT REF, IS THAT UPDATED AFTER THE FACT? SO WE SEE TAX RATE COLLECTIONS THAT REFLECT WHEN YOU COLLECT IN 2024 FOR AN ACCOUNT THAT WAS DELINQUENT PRIOR TO THAT YEAR.
UM, IF I'M TRYING TO UNDERSTAND YOUR QUESTION, UH, TYPICALLY WHAT HAPPENS IS, UH, WHEN MONIES ARE POSTED TO AN ACCOUNT AT THE TAX OFFICE, THEY'RE POSTING IT TO A PARTICULAR YEAR AS OF AN EFFECTIVE DATE.
AND SO COLLECTED DOLLARS CAN BE RAN BY TAX YEAR.
AND SO FOR EXAMPLE, WE MAY HAVE COLLECTED THIS MONTH A TAX YEAR IN 2018, THAT WAS 2018 OR THIS MONTH BECAUSE WE NOW HAVE THE 2023 TURNOVER, WE COLLECTED 2023.
SO IT'S REALLY THE DEEP, THE DEEP DIVE IN THE DATA.
BUT IT IS, IT IS REFLECTED IN YOUR COLLECTION RATES.
UH, QUESTION, DO YOU KNOW WHETHER OR NOT THERE, THE ADMINISTRATION PLAN TO HAVE MANY VENDORS IF THEY HAVE, WHAT IF THE ADMINISTRATION PLAN TO HAVE MORE VENDORS IN THE YEAR 2020? I, I, I DO NOT KNOW.
I KNOW THAT, UM, OUR FIRMS, BOTH FIRMS, UH, AGREED TO A AGREEMENT, UM, A, A COUPLE, TWO MONTHS AGO.
UM, THAT WAS FOR THIS JULY ONE OF 24 THROUGH JUNE 30TH OF 25 A TERM.
UM, SO I'M ONLY AWARE OF OUR FIRM AND THE OTHER FIRM.
LAST QUESTION, UM, PERTAINING, I KNOW YOU IN YOUR PRESENTATION AND THANK YOU FOR IT.
UH, A LOT OF THE SERVICES YOU PROVIDE DIFFERENT, UM, IN, UH, THE OTHER ORGANIZATION, THE FIRM, UH, IS THERE A COST TO THE CITY FOR THOSE ADDITIONAL SERVICES THAT YOU NO, NO.
THE SPECIAL ASSESSMENT LIEN SERVICES THAT WE PROVIDE FOR THE, UM, WE'D MOW AND LOCK CLEANUP.
WE DON'T BILL THE CITY ANYTHING FOR THAT.
AND THEN ALSO THE VOTER VERIFICATION.
WE DON'T BILL THE CITY FOR ANYTHING OF THAT.
UH, SO RIGHT NOW YOUR QUESTION IS, IS ALDEN, UM, AND SPEAKING TO WHAT COUNCIL MEMBER CASTILLO WAS, UH, WAS ALLUDING TO AS FAR AS DELINQUENT ACCOUNTS MM-HMM
IF THAT WERE TO CHANGE, WOULD THOSE DELINQUENT ACCOUNTS PAST YEARS, ALL FALL UNDER PURDUE NOW AND THEN THEY'D BE CHARGED WITH MAKING SURE THOSE, THOSE DELINQUENT ACCOUNTS? YES.
WHEN YOU HAVE AN ACCOUNT ASSIGNED TO YOU, ANYTHING AND EVERYTHING ABOUT THAT ACCOUNT IS, IS YOURS.
MEANING ANY CURRENT YEAR OR PRIOR YEARS OR ANYTHING, YOU CAN'T BIFURCATE AN ACCOUNT BY TAX YEAR.
AND, AND, AND, UH, I THINK, UH, COUNCILLOR RAMIREZ WAS SPEAKING TO THIS AS WELL.
UM, DO Y'ALL KNOW WHAT, WHAT THAT NUMBER IS? UM, AS FAR AS WHAT, WHAT THAT, UH, PERCENTAGE AND I'M LOOKING AT, LEMME SEE THE UNCOLLECTIBLE THAT THAT IS FOR ING RIGHT NOW.
THEIR ROUGH TURNOVER FOR 2023 IS ABOUT 2.7 MILLION FOR, UH, DOLLARS BEING TURNED OVER FOR JUST TAX YEAR 2023.
AND IT'S JUST OVER 5 MILLION FOR THEIR DELINQUENT TAX ROLE.
BUT AS TO WHAT PORTION OF THAT IS UNCOLLECTIBLE, THAT WOULD HAVE TO BE, IF WE COULD DETERMINE IT, WE COULD RUN THE NUMBERS FOR IT AND GIVE IT TO YOU.
BUT WE DON'T HAVE IT AT THIS MOMENT.
I SEE NOBODY ELSE IN THE QUEUE REALLY APPRECIATE YOUR PRESENTATION AND ANSWERING ALL OF OUR QUESTIONS.
AND AGAIN, FOR YOUR GOOD WORK FOR THE CITY OF HOUSTON.
NEXT UP WE WILL HAVE PURDUE, BRANDON, FIELDER, COLLINS, AND MOTT TAX COLLECTION PROCESS AND REPORTING, UM, PRESENTED BY MIKE DARLOW PARTNER.
OOH, THAT'S A LOT OF INFORMATION YOU GUYS ARE HEARING.
I THOUGHT IT'D BE AN ADVANTAGE TO GO LAST, BUT NOW I, I'M NOT QUITE SO SURE ABOUT THAT.
THANK YOU FOR THE OPPORTUNITY TO BE HERE TODAY.
USUALLY AS A LAWYER I LIKE TO STAND AND TALK, BUT I'LL SIT SINCE EVERYBODY ELSE IS, IS SITTING THIS MORNING AND TRY TO GIVE YOU SOME INFORMATION.
AND THERE'S A WHOLE LOT OF QUESTIONS I WANTED TO, I HAVE ANSWERS FOR A LOT OF THE QUESTIONS YOU ASKED.
SO I'LL TRY TO GET THROUGH MY PRESENTATION AND THEN HOPEFULLY Y'ALL, I'LL BE ABLE TO ANSWER SOME OF THE QUESTIONS YOU'VE ASKED AND MAYBE BRING A LITTLE CLARITY TO IT.
IF I GO TO THE NEXT SLIDE, I WANNA PUT THIS IN PERSPECTIVE FOR YOU.
[02:00:01]
LET IT SINK IN FOR A MINUTE.THAT IS WHAT THE CITY'S DELINQUENT TAX ROLL IS.
BASE TAX ONLY FOR ALL YEARS AS OF JULY ONE, BASED ON THE HARRIS COUNTY TAX OFFICE REPORT.
NEXT, WHY ARE WE HERE? OBVIOUSLY, WE'RE HERE TO GET MORE MONEY FOR THE CITY.
YOU'VE HEARD IT ALLUDED TO THAT BACK SEVERAL YEARS AGO.
IN FACT, IT WAS IN 2012, THE CITY HAD A, A INTERNAL COMMITTEE, THE FINANCE DEPARTMENT THAT DID AN IN-DEPTH REVIEW OF ALL THE REVENUE SOURCES TO THE CITY AND TRIED TO TAKE A LOOK AT WHAT WAS GOING ON.
WHAT COULD THEY DO BETTER TO BRING IN ADDITIONAL REVENUE FOR THE CITY.
ONE OF THE RESULTS OF THAT, UH, REPORT WAS TO CREATE A CHAMPION CHALLENGER MODEL IN THE COLLECTION OF DELINQUENT TAXES.
SO AS PART OF THAT, AND AGAIN, YOU'VE, YOU'VE HEARD THIS, THERE WAS A CRITERIA CREATED AND, AND THIS IS NOT THE CRITERIA WHEN THE CONTRACT WAS FIRST CREATED BACK IN 2012, BUT THE CONTRACT THAT WE'RE UNDER TODAY FOR 2019, THE CRITERIA TO CONSIDER, UH, REALLOCATING ACCOUNTS IS STATED TOWARD THE BOTTOM OF THIS SLIDE.
AND LEMME JUST READ IT REAL QUICK.
TO BE ELIGIBLE FOR ADDITIONAL COLLECTION AREAS OR REASSIGNED ACCOUNTS, THE CONTRACTOR'S AGGREGATE COLLECTION PERCENTAGE IS DEFINED BELOW, MUST EXCEED THAT OF ANY OTHER TAX COLLECTION SERVICE PROVIDER FOR THE THEN CURRENT AGREEMENT YEAR THROUGH JANUARY 31.
THAT'S IN SECTION F OF THAT PARTICULAR CONTRACT.
THE CITY ATTORNEY'S OFFICE SHOWED YOU THE MATHEMATICAL CALCULATION.
AND AS I'M GONNA SHOW YOU IN A MOMENT, PURDUE IS CONSISTENTLY OUTPERFORMED LINEBARGER.
OUR METHODOLOGY, WHICH IS TO COLLECT IT NOW AND HAVE A PERSONAL APPROACH TO DEALING WITH YOUR TAXPAYERS, IS A SUPERIOR METHOD.
AGAIN, LOOKING AT THE SEVEN MONTH PERIOD UNDER THE CONTRACTUALLY REQUIRED PORTION OF THE, UH, CALCULATION.
THIS AGAIN, IS JULY THROUGH JANUARY OF EACH CYCLE AND USING THE, UH, THE LAST CYCLE THAT WAS MENTIONED, JULY 1, 23 THROUGH JANUARY OF 24, PURDUE OUTPERFORMED LINEBARGER.
IF YOU GO BACK THE FOUR PREVIOUS YEARS, PURDUE ALSO OUTPERFORMED LINEBARGER.
ARGUABLY, IN EACH OF THOSE YEARS, WE WERE ELIGIBLE TO BE CONSIDERED TO GET ADDITIONAL ACCOUNTS.
IF YOU EXTRAPOLATE THAT BEYOND THE ALL YEARS COLLECTIONS TO THE FIRST YEAR COLLECTION FOR THAT SAME SEVEN MONTH PERIOD, ANOTHER WAY TO CUT THE NUMBERS UP AND LOOK AT WHAT'S GOING ON, YOU WILL SEE THAT IN EACH OF THOSE SEVEN MONTH CYCLES, PURDUE OUTPERFORMED ITS COMPETITION.
MOVING ON, YOU'VE HEARD A LITTLE BIT ABOUT 12 MONTH CYCLES.
PEOPLE MADE REFERENCE TO IT EARLIER.
AGAIN, IT'S JULY THROUGH JUNE.
THE FIRST YEAR OF OUR CONTRACT WAS JULY, 2014 THROUGH JUNE OF 15, AND IT INVOLVED THE 2013 TAX YEAR.
IF YOU MOVE FORWARD THROUGH EACH CYCLE OF THE FIRST YEAR COLLECTION, SO THE FIRST 12 MONTHS TO COLLECT A PARTICULAR TAX YEAR, YOU'LL SEE THAT PURDUE OUTPERFORMED ITS COMPETITION.
NOW, THIS IS NOT A REQUIRED METRICS IN THE CONTRACT, BUT IT'S FURTHER EVIDENCE OF THE FACT THAT PURDUE IS DOING THE JOB THAT YOU WANT DONE AND IS ARGUABLY WINNING THE CHAMPION CHALLENGER MODEL AND IS ELIGIBLE FOR MORE ACCOUNTS.
LET'S LOOK AT IT ON THE NEXT SLIDE.
IN THE ALL YEARS COLLECTION CYCLE EACH YEAR, EXCEPT FOR ONE, PURDUE OUTPERFORMED ITS COMPETITION.
IN FACT, SINCE THE INCEPTION OF THE CONTRACT, IF THE CITY WOULD'VE HAD ROUGHLY AN ADDITIONAL $12 MILLION OF REVENUE IF IT HAD BEEN, IF WE HAD THE WHOLE CITY AND IT WAS COLLECTED AT OUR AVERAGE COLLECTION RATE, THAT'S A LOT OF GENERATORS.
THAT'S A LOT OF EXTRA MONEY THAT POTENTIALLY THE CITY COULD HAVE.
SO LET'S TALK ABOUT THE REASSIGNMENTS SLIDE EIGHT.
AND YOU'VE SEEN ONE DEPICTION OF IT, UH, FROM THE CITY ATTORNEY.
THAT GIVES YOU A SENSE BY YEAR HOW MUCH WAS OWED TO THE CITY IN TOTAL, HOW MUCH WAS DIVIDED BETWEEN EACH FIRM AND THE YEARS OF WHICH WE WERE GIVEN ACCOUNTS.
THE YEARS THERE WERE NO ASSIGNMENT.
UH, AND YOU CAN SEE BASICALLY NO REASSIGNMENT THE LAST FOUR YEARS AND ONLY ONCE IN THE LAST EIGHT, EVEN THOUGH ARGUABLY IN EACH OF THOSE YEARS, WE ARE ELIGIBLE TO BE CONSIDERED FOR ADDITIONAL ACCOUNTS.
YOU'VE BEEN TALKING A LOT ABOUT, WELL, WHAT IS THIS DOLLAR? WHAT IS THAT DOLLAR? THIS SLIDE SAYS WHAT WE CURRENTLY HAVE, IT BREAKS IT DOWN BY THE A HUNDRED MILLION DOLLARS BY SCHOOL DISTRICT.
AND THE BLUE YOU CAN SEE IS THE PURDUE ACCOUNTS.
AND IF YOU TOTAL ALL OF THAT UP, IF YOU
[02:05:01]
DECIDED TO MAKE NO CHANGE AND JUST LEFT IT AS IS, WE WOULD HAVE 14.5% OF THE DELINQUENT TAX ROLL TO COLLECT LINEBERGER WOULD HAVE THE REMAINING AMOUNT.THIS NEXT SLIDE WILL GET YOU MORE MONEY.
THIS IS IF YOU GIVE US THE ALDE PORTION OF THE ROLE, AND IT IS AN ADDITIONAL $5.6 MILLION OF BASE TAX FOR ALL YOURS THROUGH 23.
AND THAT WOULD THEN GIVE US ROUGHLY 20% OF THE PORTFOLIO TO COLLECT.
IF YOU WANNA MAXIMIZE YOUR RETURN, SLIDE 11 WOULD SHOW YOU GIVE US EVERYTHING EXCEPT THE HISD PORTION OF THE CITY OF HOUSTON, AND WE WOULD HAVE ROUGHLY 23% OF THE TAX ROLL TO COLLECT.
SO WHO ARE WE ON SLIDE 12? JUST TO GIVE YOU A QUICK LITTLE OVERVIEW, PURDUE BRANDON HAS BEEN IN BUSINESS FOR 54 YEARS, HARD TO BELIEVE, BUT I'VE BEEN PRACTICING LAW 41 YEARS NOW DOING DELINQUENT TAX WORK.
DON'T ASK ME HOW I GOT INTO THE BUSINESS, BUT I DID.
UH, AND AND IT'S A, IT'S A JOB THAT HAS A LOT OF PERSONAL FULFILLMENT BECAUSE WE'RE HELPING PEOPLE GET THROUGH A MATTER THAT THEY DON'T WANT TO BE INVOLVED IN, AND THEY'D LIKE THE QUICKEST SOFTEST RESOLUTION TO THEIR PROBLEM.
I HAVE WITH ME A COUPLE OF MY PARTNERS AND PEOPLE, JASON BAILEY, WHO IS IN CHARGE OF OUR HARRIS COUNTY, UH, LITIGATION IS ALSO THE, THE CHAIRMAN OF OUR LAW FIRM MANAGING MANAGEMENT COMMITTEE, OLIA GONZALEZ, WHO ALSO WORKS ON OUR HARRIS COUNTY ACCOUNTS AND ALSO WORKS MANY OF THE SCHOOL DISTRICTS THAT OVERLAP WITH THE CITY OF HOUSTON.
UH, AND THEN I HAVE ROLAND GARCIA, SHAREHOLDER WITH GREENBURG TROUT, UH, ROLAND ASSIST IN THE ADMINISTRATION OF THE CONTRACT.
AND FOR THOSE OF YOU FAMILIAR WITH THE LEGAL WORLD, GREENBERG TROUT IS ONE OF THE LARGEST LAW FIRMS IN THE WORLD.
I HAVE SOME OTHER MEMBERS OF OUR TEAM HERE VERY QUICKLY.
DONNIE ROSEMAN, WHO'S BEEN PRACTICING LAW 50 YEARS.
DONNY'S BEEN INVOLVED WITH ME FROM THE INCEPTION OF THIS CONTRACT TO ALL THE MANY MEETINGS AND PRESENTATIONS THAT WE HAVE DONE OVER MORE THAN 10 YEARS.
UH, DAMIEN MIDDLETON, AN ASSOCIATE WITH OUR FIRM THAT GOES TO COURT ON YOUR BEHALF, UH, DOWN AT HARRIS COUNTY COURTHOUSE, UH, AND DONNA FILE, WHO IS OUR COLLECTION MANAGER AND DOES A LOT OF THE DATA ANALYTICS FOR US AND HELP MAKE ALL THESE WONDERFUL CHARTS FOR YOU TODAY.
SO WHERE ARE WE ON NUMBER 13? YOU'LL SEE IN THE BLUE ALL THE SCHOOL DISTRICTS, PURDUE BRANDON CURRENTLY REPRESENTS IN THE HARRIS COUNTY AREA.
WE JUST LIMITED IT PRIMARILY TO HARRIS COUNTY.
UH, AND THEN LET'S LOOK AT THE NEXT SLIDE, WHICH SHOWS YOU, YOU WERE ASKING A QUESTION ABOUT THE CITY OF HOUSTON AND SORT OF HOW IT OVERLAPS WITH VARIOUS AREAS.
I THINK SLIDE 14 GIVES YOU A LITTLE BIT OF A DEPICTION OF THE, THE GREEN PART IS ALL THE CITY OF HOUSTON.
AS YOU CAN SEE OVER THE YEARS, IF Y'ALL HAVE ANNEXED AND DONE DIFFERENT THINGS OUT, YOU HAVE LITTLE SLIVERS THAT GO OUT HERE AND THERE.
UH, BUT THIS GIVES YOU A SENSE OF THE MAJORITY, OF COURSE, OVERLAPS WITH HOUSTON ISD AND WHERE THE, UH, REMAINING, UH, CITY IS AND HOW IT OVERLAPS WITH MANY OF THE SCHOOL DISTRICTS THAT WE HAVE.
AND I SHOULD POINT OUT THAT ON THAT, ON THE SLIDE BEFORE, IF I GO BACK TO SLIDE, UH, NINE VERY QUICKLY, THE MAJORITY OF THE SCHOOL DISTRICTS THAT ARE CURRENTLY ASSIGNED TO LINEBARGER ARE PURDUE BRAND AND DELINQUENT TAX COLLECTION CONTRACT CLIENTS.
IF YOU LOOK AT, UH, IF YOU LOOK AT SLIDE 13, SO HOW DO WE DO IT? WE HAVE A CUSTOMIZED COLLECTION PROGRAM.
WE BELIEVE IN A ONE-ON-ONE APPROACH WITH YOUR TAXPAYERS.
YOU CAN SEND OUT ALL THE LETTERS YOU WANT.
AT THE END OF THE DAY, YOU'RE DEALING WITH A PROPERTY OWNER THAT PROBABLY OWES OTHER DEBT BESIDES YOURS.
AND SO WHEN THEY GET THEIR MAIL EVERY DAY, YOU'RE JUST ONE IN A STACK OF THINGS.
SO HOW DO YOU GET THAT TO A HIGHER PRIORITY? WE BELIEVE YOU GET THERE BY TALKING TO SOMEBODY, BY WORKING WITH THEM, BY DOING PAYMENT AGREEMENTS.
FROM THE MOMENT WE MAKE FIRST CONTACT UNTIL THE MOMENT BEFORE WE POTENTIALLY SELL A PIECE OF PROPERTY, AN OPPORTUNITY EXISTS FOR THE PROPERTY OWNER TO MAKE AN ARRANGEMENT TO PAY THE TAXES THAT ARE OWED TO THE CITY.
IF WE HAVE TO FILE A SUIT, WE HAVE A SUITE OF LITIGATION SERVICES ON SUITE SIX, ON SLIDE 16.
UH, WE ALSO HAVE A FULL BANKRUPTCY DEPARTMENT HANDLE ANY CASES IN THE UNITED STATES THAT INVOLVE BANKRUPTCY.
AND IN SLIDE 17, WE ALSO DO TAX SALES.
WE INVITE YOU, IF YOU'VE NEVER GONE TO OUR WEBSITE AT WWW.PBM.COM/TAX SALES, YOU CAN SEE THE INFORMATION WE POST EACH MONTH, MONTHLY.
WE SEND A LISTING TO THE CITY ATTORNEY'S OFFICE ON THE PROPERTIES THAT WE'RE GOING TO BE SELLING, AND THEN AFTER THE SALE, WE SEND THEM A FOLLOW UP SO THEY KNOW THE RESULTS OF ALL THE TAX SALES WE'RE PERFORMING THAT INVOLVE PROPERTY INVOLVING THE CITY OF HOUSTON.
ALONG WITH ALL THIS ON SLIDE 1818, I THINK IT'S IMPORTANT TO MENTION THAT OUR DATA IS MAINTAINED IN A SECURE ENVIRONMENT
[02:10:02]
WITH EVERYTHING YOU READ AND HEAR EVERY DAY ABOUT COMPANIES GETTING HACKED.I THINK, KNOCK ON WOOD HADN'T HAPPENED TO US.
WE SPEND A LOT OF MONEY ON FIREWALLS AND DATA SECURITY.
UH, AND SO YOU DON'T HAVE TO WORRY ABOUT THE INTEGRITY OF YOUR DATA.
PURDUE BRANDON CREATED A MISSION STATEMENT ON SLIDE 19, MISSION AND VISION STATEMENT, WHICH SORT OF GUIDES WHAT WE DO.
OUR VISION STATEMENT, WHICH WE THINK ALIGNS WITH THE CITY OF HOUSTON, IS TO ENSURE THAT EVERY COMMUNITY HAS THE RESOURCES TO PROSPER.
AND THAT GOES ALONG WITH OUR CORE VALUES ON SLIDE 19, ON SLIDE 2020, WHICH SORT OF FORMS THE BACKBONE OF WHAT WE DO AND TIES BACK INTO EVERYTHING THAT I'VE BEEN TALKING ABOUT THIS MORNING ABOUT HOW WE WANNA WORK WITH YOUR TAXPAYERS.
AND ON SLIDE 21, VERY QUICKLY, WHAT'S BEFORE YOU TODAY IS SIMPLY IS PURDUE ELIGIBLE TO HAVE ACCOUNTS REASSIGNED TO IT? UM, YOU KNOW, YOU CAN TALK ABOUT ECONOMIC ISSUES AND WHAT'S HAPPENING IN AREAS, AND I WILL TELL YOU THAT A LEAF PART OF THE CITY, PASADENA, PART OF THE CITY, GALENA PARK OF THE CITY IS AS ECONOMICALLY CHALLENGED AND HAS PEOPLE THAT LIVE THERE THAT ARE AS DISADVANTAGED AS ANYWHERE IN HOUSTON.
ISD IF YOU WANT TO TALK ABOUT PERCENTAGES, OBVIOUSLY HOUSTON ISD IS A BIGGER POT.
THERE'S LITERALLY GOING TO BE MORE, BUT THE IDEA THAT, THAT WE'RE SOMEHOW MAYBE NOT CAPABLE OF DEALING WITH THOSE TYPE OF PEOPLE WOULD NOT BE A CORRECT ONE TO WALK AWAY WITH.
TODAY WE DEAL WITH ALL TYPES OF PEOPLE.
WE HAVE THE SAME CHALLENGES IN DEALING WITH OVER 65 EXEMPTIONS WITH PROPERTY THAT HAS ENVIRONMENTAL ISSUES.
ALL THOSE THINGS GO INTO THE CALCULUS AND THEY'RE ALL PART OF THE CALCULATION TO DETERMINE WHAT THE RESULTS ARE THAT WE'RE PROVIDING TO YOU.
AT THE END OF THE DAY WITH PURDUE, BRANDON, THERE'S NO EXCUSES, JUST RESULTS.
AND SO IN SUMMARY, YOU NEED MORE MONEY.
IF YOU, IF WHEN WE'VE BEEN GIVEN MORE ACCOUNTS, WE'VE SHOWN THAT WE WILL COLLECT MORE MONEY, WE'D ASK THAT YOU REASSIGN AT A MINIMUM ALL DEAN.
WE PREFER THAT YOU REASSIGN ALL THE REASSIGN ALL THE ACCOUNTS EXCEPT FOR, UH, HISD TO PURDUE, AND WE'LL GET YOU THAT ADDITIONAL REVENUE THAT YOU NEED.
I'LL BE HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE.
THANK YOU VERY MUCH FOR YOUR PRESENTATION.
VICE MAYOR PRO TEM CASTEX TATUM.
UM, MY QUESTION IS, UM, I'M LOOKING AT THE NUMBERS THAT WERE GIVEN TO US THAT WERE SELF-REPORTED, UM, BY YOUR GROUP IN 2021.
YOU, UH, REPORTED 18.9% IN 20 22, 18 0.4% IN 2023, UH, 25.28%, AND THEN THERE WAS A 20.2%, AND THEN AGAIN IN 20 24, 17 0.2%.
ARE THOSE, UH, CORRECT NUMBERS THAT YOUR ORGANIZATION HAS REPORTED BASED ON WHAT HAS BEEN DEFINED UNDER THE CONTRACT? UH, YES.
THE ONLY, THE ONLY EXCEPTION I THINK WHEN YOU MENTIONED THE, UH, AND I DON'T KNOW IF YOU'RE LOOKING AT MY PRESENTATION OR THE CITY ATTORNEY'S PRESENTATION, WERE THAT ONE YEAR AND, UH, JULY 22 THROUGH JANUARY OF 23, WHERE THERE'S A, A DIFFERENCE IN THE CALCULATION.
UH, WE CALCULATE IT, WE THINK THE CORRECT WAY, WHICH IS BASED OFF OF, UH, JUST THE BASED, EVERYTHING'S BASED ON BASE TAX, BUT WHAT WAS ACTUALLY, UH, OWED AND WHAT WAS COLLECTED.
THE VARIANCE IS THE SAME, WHETHER IT'S OUR CALCULATION OR THE LINE BAR CALCULATION WHERE WE WERE BASICALLY FIVE POINTS AHEAD.
THANK YOU FOR THAT INFORMATION.
UM, THIS IS MORE OF A COMMENT.
UH, I MAY BE MISSING SOMETHING HERE, BUT IN THE BUSINESS WORLD, YOU LOOK AT WHO PRODUCES WHO PERFORMS BEST, AND THERE'S A LINE ON YOUR SLIDE ON 21, IF HISD IS SO HARD TO COLLECT, TO ASSIGN HISD TO PURDUE, IF I WAS IN CHARGE OF THE CIRCUS, I'D FLIP BOTH OF YOU AND, AND GIVE YOU HISD AND GIVE, YOU KNOW, JUST CHANGE 'EM AND, AND SEE WHAT THAT LOOKS LIKE.
BECAUSE UNDERSTANDING THAT, YOU KNOW, IT HAS TO DO WITH, YOU KNOW, SOCIOECONOMIC AREAS AND THE DISADVANTAGES, BUT JUST, YOU KNOW, SHUFFLE THE DECK AND FLIP 'EM OVER AND SEE WHO WINS.
LIKE AN EXTENSION OF THE CONTRACT.
THAT'S NOT ON THAT, NOT ON TABLE.
COUNCIL MEMBER, UM, COUNCIL MEMBER PLUMMER.
I, I'M JUST THANK YOU FOR PRE YOUR PRESENTATION.
UM, JUST KIND OF SAME QUESTIONS.
DO YOU KNOW IN YOUR, UM, IN YOUR PORTFOLIO HOW, WHAT YOUR PERCENTAGE OF AGED ACCOUNTS IS? WELL, OKAY, SO WHEN YOU SAY AGED ACCOUNTS, BY, BY WAY OF EXAMPLE, THAT A HUNDRED MILLION DOLLARS THAT I TALKED
[02:15:01]
ABOUT MM-HMM.ROUGHLY 51 MILLION OF IT REPRESENTS UNPAID 2023 TAXES.
THE BALANCE ROUGHLY 49 MILLION REPRESENTS 2022 AND ALL PRIOR YEARS, BACK 20 YEARS.
SO IF, IF THAT'S WHAT YOU'RE ASKING ABOUT HOW, HOW IT AGES, YES.
OBVIOUSLY THE OLDER IT IS, THE HARDER IT IS TO COLLECT.
RIGHT? AND THE IDEA IS TO, YOU WANT TO GET ON IT RIGHT AWAY AND TRY TO COLLECT IT, RIGHT? SO, SO DO YOU KNOW WHAT YOUR PERCENTAGE IS, YOUR SPECIFIC PERCENTAGES OF HOW MANY AGE ACCOUNTS YOU HAVE IN YOUR PORTFOLIO? AND YOU CAN GET THAT BACK TO ME.
I MEAN, I DON'T EXPECT YOU TO PULL IT FROM YOUR
UM, GENERALLY, GENERALLY SPEAKING, AT THIS TIME OF THE YEAR MM-HMM
FOR MANY OF OUR CLIENTS, THE CURRENT TAX YEAR REPRESENTS ROUGHLY 50% OF THE DELINQUENT TAX ROLL WE WOULD HAVE.
SO THE BALANCE WOULD BE WHAT YOU WOULD LABEL AS AGED ACCOUNTS.
NOW, WITHIN THAT STRATA, THERE ARE OBVIOUSLY DIFFERENT LEVELS OF AGING THAT ARE, THAT ARE OCCURRING AS, AS THEY'VE TAKEN LONGER, AS WAS SAID BY MY FRIEND, SOME OF THIS LITIGATION TAKES TIME TO PROCESS.
THESE ARE NOT ALWAYS COLLECTED RIGHT AWAY.
YOU DO HAVE DEFERRALS THAT CAN PROVIDE AN AGING TO AN ACCOUNT.
YOU MAY HAVE UNCOLLECTIBLE ACCOUNTS THAT, YOU KNOW, THE BUSINESS ISN'T THERE, BUT BY LAW YOU CANNOT REMOVE THEM FROM THE TAX ROLL UNTIL THEY'RE 10 YEARS OLD.
SO YOU'RE GONNA HAVE A MULTITUDE OF THINGS THAT ARE GONNA ADD INTO WHY AN ACCOUNT IS AGED.
AND THEN I KNOW YOU, YOU KNOW, WE'VE TALKED ABOUT THE SOCIOECONOMIC PIECE OF INFORMATION AND YOU KNOW, I DO UNDERSTAND THAT ALDEN AND PASADENA ALL HAVE CHALLENGES.
UM, DO YOU KNOW WHAT YOUR AVERAGE HOUSEHOLD INCOME IS OR SOCIOECONOMIC POSITION IS IN YOUR ACCOUNTS THAT YOU CURRENTLY HAVE? N NOT IN AN AGGREGATE.
IT'S NOT SOMETHING THAT WE OKAY.
AND THEN DO YOU AGREE WITH THE EXEMPTION PERCENTAGE THAT LEINBERGER HAD PUT, PUT, PUT ON THEIR PRESENTATION? THERE WAS A SIDE BY SIDE ON THEIR PRESENTATION, UH, PUT IN TERMS OF PERCENTAGE OF EXEMPTIONS AND UNCOLLECTIBLE AMOUNTS.
NOT ONLY JUST EXEMPTIONS, BUT I, I'M, I'M NOT SURE THAT I CAN, I'D HAVE TO LOOK AT THE SURE, NO PROBLEM.
'CAUSE YOU KNOW, THERE'S A DIFFERENCE BETWEEN YOU CAN'T COLLECT IT BECAUSE IT'S IN A DEFERRAL VERSUS IT'S UNCOLLECTIBLE BECAUSE THE BUSINESS IS NO LONGER THERE, BUT YOU CAN'T WRITE IT OFF OR THAT THERE MAY BE AN ENVIRONMENTAL ISSUE ON A PIECE OF PROPERTY.
AND SO, YOU KNOW, THE LAST THING WE WANT TO DO IS FORECLOSE ON A PIECE OF PROPERTY AND HAVE IT GO INTO THE NAME OF THE CITY OF HOUSTON.
THAT, THAT WOULDN'T BENEFIT ANYBODY.
AND, UM, MAYBE THIS IS A QUESTION FOR THE, UM, CITY ATTORNEY OR MAYBE THEY CAN ASK, UM, I HADN'T LOOKED AT THE, UH, UH, ACTUALLY IT'S PROBABLY IN THE, UM, THE BACKGROUND INFORMATION.
HOW ARE THESE FIRMS PAID? UM, IS IT A PERCENTAGE OF WHAT THEY COLLECT? YEAH, IT'S 20.
WE COLLECT WHATEVER THEY COLLECT, WHATEVER OUR TAXES AND PENALTIES AND INTEREST COMES TO THE CITY, UM, THAT THEY TACK ON 20%, WHICH AS OF JULY 1ST, WHEN YOU GET, WHEN YOU GET A A, YOUR LATE MEMO, UM, YOU GET 20% ADDED TO YOUR, SO THE TAXPAYERS PAY.
UM, THANK YOU FOR YOUR PRESENTATION, ACTUALLY.
I I WANTED TO JUST ASK THE QUESTION, CONCERN THE REASSIGNMENTS, YOU KNOW, UH, ACCORDING TO THAT SHOULDN'T HAVE BEEN DONE LIKE MARCH 15TH.
IT WAS PRIOR TO MARCH 15TH IN THE PER, SINCE I'M LOOKING IN THE PERFECT WORLD, IT WOULD'VE BEEN, BUT IT WASN'T, BUT IT WOULD NOT INHIBIT US FROM MOVING FORWARD TODAY IF COUNSEL DECIDES TO REASSIGN, WE WOULD JUST GET TO WORK THE NEXT DAY.
WELL, BOTH, BOTH CONTRACTS WERE SIGNED.
YOU SIGNED THE CONTRACTS, THE FIRMS TO, TO WITH, WITH NO CHANGES TO THE ASSIGNMENTS, CORRECT? YOU DIDN'T HAVE ANYTHING? WELL, NO, THE, THE, THE, THE PRIMARY CONTRACT HAS REMAINED IN PLACE.
THE, THE OPPORTUNITY FOR ASSIGNMENTS EXIST EACH YEAR, AND TRADITIONALLY, AS THE CITY ATTORNEY'S OFFICE MENTIONED, IT'S DONE IN THE, IN THE LATE WINTER, EARLY SPRING, SO THAT YOU JUMP OFF AT, YOU KNOW, BEGINNING IN APRIL ONE ON PERSONAL PROPERTY, ET CETERA.
BUT THERE'S NOTHING IN THE CONTRACT THAT PROHIBITS A LATER ASSIGNMENT THAN WHAT'S PROPOSED TO BE IN THE CONTRACT.
I, I HOPE THAT ANSWERED YOUR QUESTION.
AND IT WAS APPROVED BY CITY COUNCIL.
IT WAS APPROVED BY, BASED ON WHAT WHAT Y'ALL BASICALLY APPROVED AT YOUR MEETING LAST MONTH WAS YOU JUST EXTENDED THE TERMS OF THE EXISTING CONTRACT, WHICH GOES BACK TO 2019.
SO YOU'RE WORKING UNDER THAT CURRENT CONTRACT.
ANOTHER, THE LAST QUESTION I WANT TO ASK, I I ABOUT THE SERVICES, THE PROVIDED SERVICES, YOU KNOW, SOME OF THE SERVICES THAT'S PROVIDED IN TERMS OF, OF, UH, WHAT BENEFITS THE
[02:20:01]
TAX PAYER, UH, SOME OF THOSE SERVICES.AND THAT'S A DIFFERENCE BETWEEN THE FIRMS IN TERMS OF WHAT PURDUE PROVIDES VERSUS WHAT LOBAR PROVIDES IS THERE, WELL, IT, IT, LET ME SAY THAT, THAT THOSE, THOSE OTHER SERVICES THEY PROVIDE HAVE NOTHING TO DO WITH THE REASSIGNMENT UNDER THE CONTRACT.
HAVING SAID THAT, LET ME JUST SAY THAT THAT'S THE CONTRACT THEY NEGOTIATED.
UH, THE HISTORY GOES BACK THAT FOR MANY, MANY YEARS, UH, THE LINEBARGER AND ITS PREDECESSOR BEFORE THAT HAD THE CITY OF HOUSTON AND THAT LIEN PROJECT THAT THEY DO, UH, WAS PART OF THEIR CONTRACT MANY, MANY YEARS AGO.
I WILL TELL YOU THAT WITH REGARD TO PURDUE BRANDON, UM, WHEN WE DO OUR COLLECTION WORK THROUGH OUR TITLE RESEARCH, IF WE IDENTIFY THAT THE CITY HAS FILED A LIEN ON A PIECE OF PROPERTY, THAT IS ONE THAT'S UNDER OUR CHARGE TO COLLECT, WE INCLUDE THAT LIEN IN OUR LAWSUIT AND, AND WE COLLECT IT FOR YOU.
UM, MAYOR PRO TEM, NOT FOR HIM.
ARE, ARE YOU FINISHED? COUNCIL MEMBER DAVIS? I DIDN'T MEAN TO CUT YOU OFF.
FOR WHOMEVER YOU'D LIKE TO ASK A QUESTION, I'D LIKE TO ASK THE CITY ATTORNEY A QUESTION.
THANK YOU VERY MUCH FOR YOUR PRESENTATION AND FOR THE GOOD WORK YOUR FIRM DOES FOR THE CITY.
UH, AND MY QUESTION IS, I I'M REALLY TRYING TO SEE, A COUPLE OF PEOPLE HAVE SAID THAT, UM, WE REALLY LOOKING FOR APPLES TO APPLES.
I I DON'T SEE A WAY WHERE WE CAN REALLY LOOK AT APPLES TO APPLES UNLESS WE WERE SPLITTING UP INDIVIDUAL DISTRICTS AND DIVIDING THEM BETWEEN THE TWO GROUPS.
UM, IS THERE A WAY FOR US TO HAVE APPLES TO APPLES? I MEAN, BECAUSE WHAT I, WHAT I SEE IS THE SELF-REPORTED PERCENTAGES, AND THEN I ALSO SEE, UM, THAT ONE GROUP COULD POTENTIALLY HAVE 80% OF THE ACCOUNTS AND ONE GROUP COULD POTENTIALLY HAVE 20% OF THE ACCOUNTS.
HOW, HOW WOULD WE EVER GET TO AN APPLES TO APPLES? I'M NOT SURE THAT THERE'S A WAY TO DO THAT JUST BY THE NATURE OF THIS.
I THINK THAT'S, UH, THE DISCUSSION THAT, UH, THAT'S THE COMMENT THAT'S BEEN MADE FOR SEVERAL YEARS, EVEN DATING BACK PRIOR TO THE 2019 CONTRACT.
SO I, I'M NOT SURE HOW THAT'S, UH, ACHIEVABLE.
AND THEN THE OTHER QUESTION THAT'S JUST KIND OF LINGERING IS, WHAT WAS THE REASON FROM GOING FROM THAT THREE MEMBER, UM, COMMITTEE TO ALLOWING THE CITY ATTORNEY TO DETERMINE WHICH, WHICH GROUP WAS, UH, THE RECOMMENDATION? YEAH, I THINK, UH, JUST HAVING, UH, ONE SINGULAR RECOMMENDATION.
UH, I, I WAS, I DIDN'T ADMINISTER THE CONTRACT AT THAT POINT, BUT, UM, JUST LOOKING BACK ON NOTES, I, I THINK THAT WAS THE, THE THOUGHT PROCESS.
UM, CHAIR LOOKING, UM, THAT WE ARE CONSIDERING AND LOOKING TO COLLECT THE MOST REVENUE FOR THE CITY.
UM, I DON'T SEE HOW WE CAN REALLY GET TO AN APPLES TO APPLES COMPARISON.
UM, AGAIN, ONE GROUP IS GOING TO HAVE THE LION'S SHARE OF THE COLLECTIONS.
UH, WHEN I LOOK AT THE SELF-REPORTED PERCENTAGES, UM, IT SEEMS THAT ONE GROUP HAS SELF-REPORTED A HIGHER COLLECTION OF PERCENTAGES.
UM, I LIKE TO MOVE TO ADVANCE THIS TO A FULL VOTE OF THE COUNCIL, UM, AND INCLUDE THE REASSIGNMENT OF AL DEAN, UH, CY HUFFMAN, NEW KANEY, AND SPRING TO PURDUE.
SECOND, WE HAVE A MOTION AND A SECOND ON THE TABLE, AND I'LL DO A ROLL CALL VOTE UNLESS THERE'S ANY DISCUSSION ON THE MOTION.
THIS WILL BE TO ADVANCE THE ITEM, UM, AS AMENDED.
WE'RE AMENDING IT TO ADD, IF YOU WANNA REPEAT THOSE SCHOOL DISTRICTS, ALDEN SFA, WHICH IS 1.8% HUFFMAN, WHICH IS A 0.2% NEW KANEY, WHICH IS A 0.1% IN SPRING, WHICH IS ALSO A 0.1%, UH, DISCUSSION.
AND CHAIR, I, I STILL FEEL LIKE IT'S CHALLENGING TO DO THAT.
I DON'T FEEL LIKE WE HAVE ALL OF THE INFORMATION.
I I REALLY DON'T, I MEAN, I UNDERSTAND WHAT WE'RE DOING.
IT'S JUST I'M, I'M FEELING VERY, UM, CONFLICTED BECAUSE I THINK THAT WE'RE MAKING A DECISION BASED ON SPECIFIC SCHOOL DISTRICTS, BUT WE'RE NOT LOOKING AT ANY OF THE METRICS, NOR ARE WE, NOR WERE WE ABLE TO GET THE INFORMATION TODAY IN DISCUSSION FOR THOSE.
SO, I MEAN, OBVIOUSLY BEEN SECONDED, YOU KNOW, WE WILL, BUT I JUST WANTED TO JUST MENTION, I I UNDERSTAND WHAT YOU'RE SAYING AND THAT I THINK BECAUSE THERE IS
[02:25:01]
SO MUCH INFORMATION, THAT IS WHY WE HAVE THAT METRIC IN THE CONTRACT.THEY KNEW WHEN THEY DID THIS CONTRACT, THIS WAS GONNA BE REALLY HARD TO QUANTIFY.
SO THAT'S WHY THERE IS A, AND I'M JUST LOOKING AT THE CONTRACT FROM THE VERY BEGINNING OF THIS.
I HAVE LOOKED AT THE CONTRACT, WHAT IT SAYS, AND THE SELF-REPORTING.
WHEN WE SAY, OH, YEAH, THAT'S GREAT, THAT'S WHAT YOU DID.
I MEAN, IT'S VERIFIED BY THE HARRIS COUNTY TAX RULES.
SO I, I HEAR WHAT YOU'RE SAYING.
I BELIEVE THERE'S A LOT OF NUANCE TO THIS, AND I THINK THAT'S ALL GOOD FOR FURTHER DISCUSSION WHEN WE'RE BRINGING BACK THE FULL CONTRACTS.
UM, YOU KNOW, INSTEAD OF THIS ONE YEAR EXTENSION.
BUT I DO BELIEVE THAT THAT ONE METRIC THAT'S IN THE, IN THE CONTRACT IS THERE FOR THAT VERY REASON.
AND AGAIN, THE BULK OF THE, OF THE ACCOUNTS DO GO TO ONE FIRM.
SO, AND FOR A WHILE THERE WAS A, THERE WAS REA ASSIGNMENTS DONE, AND, AND THEN THEY JUST STOPPED.
AND THAT'S WHAT ALARMED ME AND THAT'S WHAT STARTED THE WHOLE CONVERSATION.
SO THANK YOU FOR YOUR COMMENTS.
THAT'S WHY WHEN THINGS GET TOO COMPLEX, I JUST GO RIGHT BACK TO THE CONTRACT.
UM, COUNCIL MEMBER, JACK, UH, PECK, VICE MAYOR, PRO TEM PECK, THANK YOU, CHAIR.
AND I WAS GONNA SAY SOMETHING SIMILAR TO YOU THAT THE FORMULA IN THE CONTRACT, I THINK IS WHAT WE NEED TO BE LOOKING AT.
THERE'S A LOT OF OTHER, UM, THINGS I THINK GOING FORWARD THAT WE CAN REALLY GET INTO THE WEEDS ABOUT, MAYBE FOR FUTURE CONTRACTS.
BUT RIGHT NOW THERE'S A FORMULA IN THE CONTRACT, AND I THINK THAT'S WHAT WE NEED TO STICK WITH FOR RIGHT NOW.
THANK YOU, COUNCIL MEMBER JACKSON.
AND ALSO, I JUST WANTED TO ADD AT ONE, MY PREVIOUS QUESTION ABOUT LIKE, UM, YOU GOT HISD AND ALL THESE OTHER AREAS.
I KNOW THAT WE HAVE LOW INCOME PEOPLE IN OTHER AREAS.
IN FACT, ALDEN IS IN DISTRICT B.
AND SO I JUST WANTED TO GET CLARITY ON, UM, HOW ARE WE MAKING THIS DECISION OR WHY ARE WE, UM, TRANSFERRING, UM, ONE FIRM TO ACCOUNTS TO ANOTHER FIRM? AND SO I JUST WANTED TO GET CLARITY, BUT I'M OKAY WITH, UM, MOVING, YOU KNOW, HISD, WELL, ALDEN, ISD TO THE OTHER FIRM.
IT, I JUST WANT, I WANT TO MAKE SURE THAT THANK, I WAS CLEAR AND I THINK WE'RE ALL INTERESTED IN THE ECONOMIC DATA, AND THAT CAN BE SOMETHING WE WORK ON.
UM, VICE CHAIR CASTILLO, THANK YOU CHAIR, UH, TO YOUR COMMENT ABOUT LOOKING AT, UH, THE CONTRACT ITSELF AS IT MOVES FORWARD, WHEN IT COMES UP FOR RENEWAL, YOU KNOW, IS THAT SOMETHING THAT WOULD BE DONE IN THIS COMMITTEE IF WE WERE LOOKING AT THE METRICS AND IF THERE WERE MORE METRICS WE COULD INCLUDE TO GET A COMPREHENSIVE VIEW, WOULD THAT BE DONE THROUGH BFF? I'D BE HAPPY TO TAKE THAT.
I'D BE HAPPY FOR US TO TAKE THAT ON.
I'D BE HAPPY FOR THAT, FOR US TO TAKE THAT ON WITH THE LEGAL DEPARTMENT.
UM, AND I BELIEVE, OH, COUNCIL MEMBER MARTINEZ.
UM, AND JUST FOR CLARIFICATION, CAN YOU LIST THE NAME OF THE ACCOUNTS THAT YOU, YOU REFER TO? UH, I'LL LET THE MAYOR PRO TEM, UM, REPEAT HER MOTION, UH, ALDEN SFA, WHICH IS 1.8% HUFFMAN, WHICH IS 0.2% NEW KANEY, WHICH IS 0.1%, AND SPRING, WHICH IS 0.1%.
YOU KNOW, ONE OF THE QUESTIONS THAT WAS ASKED, UM, IS, IS WHAT DOES THOSE INDIVIDUAL ACCOUNTS LOOK LIKE? UH, IT'S THIS SOMETHING THAT WE CAN BRING IN, ESPECIALLY SINCE THEY'RE COLLECTING, YOU KNOW, CONSISTENTLY MAYBE IN ANOTHER, YOU KNOW, THREE TO SIX MONTHS AND SAY, WHERE, WHERE ARE YOU AT? BECAUSE IF, IF THE, THE ARGUMENT IS, AND I UNDERSTAND WHAT COUNCIL MEMBER JACK IS SAYING, YOU KNOW, THERE'S, THERE'S DIFFERENT PARTS OF THE COUNTY THAT, UM, MIGHT BE A BIT MORE DIFFICULT.
THERE MIGHT BE EXEMPTIONS, YOU KNOW, IF WE'RE GONNA MAKE A, A VERY, UH, UM, YOU KNOW, IF WE'RE GONNA MAKE A DECISION IN THE NEXT COMING YEAR WITH THE CONTRACT, I'D LIKE TO HAVE A MORE IN-DEPTH CONVERSATION.
AND THEN, YOU KNOW, IT'LL ESSENTIALLY PUT TO THE TEST, YOU KNOW, IS IT MORE DIFFICULT? YOU KNOW, I, I THINK THAT'S, I THINK THAT'S VERY WORTHWHILE.
SO I, YOU KNOW, I, I, I HEAR THE ARGUMENTS REGARDING THE DIFFICULTY, APPLES TO APPLES AND, AND SO FORTH.
BUT, YOU KNOW, THE, THE POINT I COME BACK TO IS THAT WE HAVE TWO, UH, SOPHISTICATED BUSINESS PARTIES HERE WHO READ THE CONTRACT, AGREED TO IT, AND, AND SIGNED IT, AND KNOWING THAT THIS WOULD BE THE PROCEDURE OR SOMETHING SIMILAR, UH, BY WHICH, UH, CHANGES WOULD BE MADE IF IT WAS CALLED UPON IN THE CONTRACT.
AND SO THAT'S, THAT'S MY THOUGHT, AND THAT THAT'S WHAT I WANT TO SAY.
AND THANK YOU ALL, UM, PARTICIPANTS.
AND WE'LL GO AHEAD AND TAKE A WORLD CALL VOTE.
I'LL LET JORDAN CALL OUT THE NAMES.
AND, AND AGAIN, THIS IS THE, THE MOTION TO ADVANCE, TO ADVANCE TO CITY COUNCIL FOR A FULL COUNCIL, ADVANCE COUNCIL VOTE, ADVANCE THOSE SCHOOL DISTRICTS THAT WERE READ EARLIER TO FULL CITY COUNCIL FOR A VOTE TOMORROW.
CAN I, UH, SO THE, THAT WOULD NEED TO GO AFTER TOMORROW AT THE EARLIEST NEXT WEEK FOR OPEN MEETING? AT OPEN MEETING AT, OKAY.
[02:30:01]
TOMORROW, BUT YEAH.BUT THE MAYOR PRO TEM ASKED AT THE LAST MEETING, SHE ASKED THIS VERY QUESTION.
I ASKED THIS, THE CITY ATTORNEY SAID, YES, IT COULD BE AMENDED.
IT CAN BE AMENDED, BUT IT JUST CAN'T BE TOMORROW FOR OPEN MEETINGS AFTER.
SO AL DEAN WILL GO TOMORROW AND AN AMENDMENT WILL BE BROUGHT FORTH THE VERY NEXT WEEK IF THIS PASSES.
I'M NOT FORCING ANY VOTES IF THIS PASSES IT'S BREAK.
BUT ANYWAY, WE'LL GET BACK TO THAT.
SO WE UNDERSTAND, WE ALL UNDERSTAND THAT LEGAL HAS TO DROP SOME PAPERS TO, TO ADD THE ADDITIONAL, BUT WE WERE TOLD AS A BODY THAT, THAT IT WAS AMENDABLE.
SO, UM, WE'LL, UH, I THINK EVERYBODY UNDERSTANDS WHERE WE ARE.
COUNCIL MEMBER PLUM, I HAVE A REAL QUICK QUESTION, AND I FORGOT TO ASK IT WHEN THE OTHERS WERE REPRESENTING, BUT WHAT HAPPENS? SO WE CHANGE ALDE TOMORROW.
HOW DO PEOPLE KNOW THAT THINGS HAVE CHANGED? ARE THEY GONNA GET TO, WHAT'S THE END USER? WHAT DOES THAT PIECE LOOK LIKE? UH, YES, THAT THOSE, THOSE WILL BE TRANSFERRED AND THAT IS UP FOR THE FIRM AND I, UH, TO, TO DETERMINE HOW THAT'S, UM, THEY'LL NOW BE TAKING OVER THOSE ALDE ACCOUNTS.
BUT ARE WE GONNA KNOW, I MEAN, 'CAUSE WE'RE GONNA GET PHONE CALLS, SO ARE WE GONNA KNOW, WELL, NOT ME SPECIFICALLY, BUT THE DISTRICTS ARE GONNA PROBABLY GET PHONE CALLS.
ARE WE GONNA, ARE WE GONNA KNOW HOW THAT'S GONNA HAPPEN? I, I WOULD ASSUME THAT IF YOU ARE DELINQUENT, YOU ARE IN CONVERSATION WITH THE ORGANIZATION THAT IS WORKING WITH YOU TO COLLECT THOSE TAXES.
I, IN THE SIX YEARS THAT I'VE BEEN ON COUNCIL, I'VE NEVER RECEIVED A CALL FROM A RESIDENT ABOUT THE COLLECTION OF THEIR TAXES.
I KNOW, BUT WE ALSO HAVEN'T HAD ROBUST CONVERSATIONS ABOUT THIS.
SO WE'RE REALLY BRINGING THIS TO THE FOREFRONT.
SO I'M NOT SAYING THAT WE'RE, THEY'RE GONNA BLOW OUR PHONES UP ABOUT THIS.
I'M JUST SAYING IF THERE IT WERE TO COME UP, WHAT DO WE, YOU KNOW, HOW DO WE SUPPORT OR SAY WHAT THAT LOOKS LIKE? I'M JUST, I WOULD ASSUME THAT WE WOULD REFER THE CONSTITUENT OR THE END USER TO THE COMPANY THAT SENT THEM THE LETTER FOR THE COLLECTION, BECAUSE THAT WOULD BE A PRIVATE MATTER BETWEEN BETWEEN RIGHT.
THE PERSON THAT OWES THE TAXES AND THE PERSON COLLECTING THE TAXES.
AND WE CAN DEFINITELY MAKE SURE, UM, BECAUSE I KNOW WE WANNA MAKE SURE THAT THE, THE RESIDENTS AREN'T CONFUSED AND THEY KNOW, I MEAN, AND THERE ARE LOTS OF SCAMS OUT THERE.
PEOPLE ARE CONFUSED ABOUT ALL TYPES OF MAIL THAT THEY RECEIVED THAT WE CAN, UM, I THINK IT, IT COULD BE HELPFUL IF WE GOT A, MAYBE A SAMPLE OF WHAT THAT LOOKED LIKE SO WE COULD BE PREPARED IF SOMEONE CALLED US, UM, WITH THAT CONCERN.
BUT IT IS A, A PRIVATE MATTER OF COLLECTION BETWEEN A HOMEOWNER AND THE COLLECTION AGENCIES.
BUT IT DOES HELP US TO KNOW WHAT THAT LOOKS LIKE SO THAT WE CAN ADVISE OUR CONSTITUENTS IF THEY DO CALL US WITH THOSE TYPES OF CONCERNS.
WE JUST NEED, WE NEED TO UNDERSTAND WHAT THE PROCESS IS GONNA BE.
AND I'M SURE THAT THEY'LL WORK WITH US ON GETTING US THAT INFORMATION.
OKAY, LET'S GO AHEAD AND, UM, CALL THE ROLE CHAIR.
HUFFMAN, I DON'T THINK SHE'S ONLINE.
THANK YOU VERY MUCH EVERYONE FOR PARTICIPATING.
UM, APPRECIATE ALL OF THE HARD WORK THAT WENT INTO THIS AND, UM, THIS MEETING IS ADJOURNED.