[Special Called Budget And Fiscal Affairs on September 9, 2024.]
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GOOD MORNING EVERYONE, AND WELCOME TO THE MONDAY, SEPTEMBER 9TH, 2024 BUDGET AND FISCAL AFFAIRS MEETING.
I AM, UH, SALLY ALCORN, COUNCIL MEMBER AT LARGE POSITION FIVE.
I CALL THIS MEETING TO ORDER AND WOULD LIKE TO WELCOME ALL COUNCIL MEMBERS IN ATTENDANCE.
WE HAVE MAYOR PRO TEM, MARTHA CASTEX, TATUM VICE MAYOR, PRO TEM, AMY PECK.
WE HAVE MY VICE CHAIR, MARIO CASTILLO.
WE HAVE COUNCIL MEMBER TWILA CARTER.
WE HAVE COUNCIL MEMBER FRED FLICKINGER, COUNCIL MEMBER ABBY CAYMAN.
COUNCIL MEMBER JULIAN RAMIREZ.
COUNCIL MEMBER TIFFANY THOMAS AND STAFF FROM COUNCIL MEMBER JACKSON'S OFFICE.
COUNCIL MEMBER HUFFMAN'S OFFICE.
UH, WE HAVE JOAQUIN MARTINEZ, SORRY, COUNCIL MEMBER JOAQUIN MARTINEZ ALSO.
UM, SO GLAD TO HAVE SUCH GREAT ATTENDANCE HERE.
A LOT OF IMPORTANT PEOPLE TO, TO, UH, A LOT OF IMPORTANT PEOPLE.
AND A LOT OF IMPORTANT PRESENTATIONS HERE.
UM, OKAY, SO, AND ALSO STAFF IS, UM, WATCHING FROM COUNCIL MEMBER LETITIA PLUMMER'S OFFICE.
SO WE WILL START WITH THE MONTHLY FINANCIAL REPORT, UM, CONTROLLER, CHRIS HOLLINS.
UH, MEMBERS AND STAFF, UM, ON BEHALF OF, UH, MELISSA AND I, COULD WE GET THIS DESK LOWERED? JUST A TA WE FEEL LIKE KIDS AT THE, THE BIG TABLE RIGHT NOW.
I'M PLEASED TO PRESENT THE MONTHLY FINANCIAL REPORT FOR THE MONTH ENDING JULY 31ST, 2024.
IN THE GENERAL FUND, THE CONTROLLER'S OFFICE IS PROJECTING AN ENDING FUND BALANCE OF $307 MILLION FOR FISCAL YEAR 2025.
THIS IS $18.6 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT DUE TO A LOWER REVENUE PROJECTION.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY $117.3 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE AND PAY AS YOU GO IN RESERVE.
THE FFY 2025 BEGINNING FUND BALANCE IS $33.2 MILLION HIGHER THAN THE FY 2024 ENDING FUND BALANCE REPORTED IN THE JUNE 30TH, 2024 MOER.
THE INCREASE IS DUE TO A YEAR END TO YEAREND ADJUSTMENTS TO REVENUES AND EXPENDITURES THAT WILL NOT BE FINAL UNTIL THE FY 2024 FER IS PUBLISHED.
LATER THIS YEAR, WE'VE INCREASED OUR REVENUE PROJECTION BY EIGHT AND A HALF MILLION DOLLARS FROM OUR FY 2025 TRENDS REPORT.
THE DRIVERS OF THAT INCREASE ARE PROPERTY TAX REFLECTING AN INCREASE OF $6.3 MILLION DUE TO THE REVISED POPULATION ESTIMATE FOR THE CITY RECENTLY RE RELEASED BY THE CENSUS BUREAU, AS WELL AS THE SALE OF CAPITAL ASSETS, WHICH INCREASED BY $2.2 MILLION DUE TO THE HIGHER THAN ANTICIPATED LAND SALES.
OUR EXPENDITURE PROJECTION REMAINS UNCHANGED FROM THE FY 2025 ADOPTED BUDGET FOR OUR ENTERPRISE FUNDS WE'RE PROJECTING NO CHANGES FROM THE ADOPTED BUDGET.
AND FOR OUR COMMERCIAL PAPER AND BONDS, WE REMAIN WELL BELOW THE 20% THRESHOLD FOR UNH VARIABLE RATE DEBT WITHIN EACH OF THE CITY'S CREDITS.
MADAM CHAIR, SINCE MY LAST REPORT, OUR CITY WELCOME CHIEF NO DIAZ TO THE POSITION OF HPD CHIEF.
MY OFFICE LOOKS FORWARD TO WORKING WITH CHIEF DIAZ AND HIS LEADERSHIP TEAM ON OUR SHARED MISSION TO ENHANCE PUBLIC SAFETY AND TO CULTIVATE POSITIVE, MEANINGFUL RELATIONSHIPS WITH LAW ENFORCEMENT IN THE COMMUNITIES THAT THEY SERVE.
I'D ALSO LIKE TO THANK CHIEF LARRY SATTERWHITE FOR HIS LEADERSHIP AT HPD AND CONGRATULATE HIM ON HIS NEW POST AS DIRECTOR OF THE OFFICE OF PUBLIC SAFETY AND HOMELAND SECURITY.
IN ADDITION, I WANNA TAKE A BRIEF MOMENT TO ACKNOWLEDGE AND COMMEND THE EFFORTS BY MEMBERS OF THE CONTROLLER'S OFFICE, LEGAL AND THE FINANCE DEPARTMENT TO ENSURE THAT THE CITY MET ITS LEGAL OBLIGATIONS IN DISTRIBUTE, IN DISTRIBUTING SETTLEMENT CHECKS TO HOUSTON FIREFIGHTERS.
THOSE EFFORTS LED BY CITY TREASURER OF VERNON MIDDLETON LEWIS RESULTED IN A DISTRIBUTION OF MORE THAN 5,000 PRINTED CHECKS TO HOUSTON FIREFIGHTERS, RETIREES, AND THEIR FAMILIES.
MY APPRECIATION GOES TO ALL OF THOSE WHO INVOL, WHO WERE INVOLVED IN ENSURING THAT THE SUCCESS, UH, OF WHAT WAS TRULY A SIGNIFICANT UNDERTAKING AND AN ALL HANDS ON DECK EFFORT.
BEFORE I CLOSE MY OFFICE LOOKS FORWARD TO THE PRESENTATION ON THE FINANCIAL IMPLICATIONS OF THE CITY'S RESPONSES TO THE DIRETO STORM AND HURRICANE BARREL.
PRIOR TO BARREL'S LANDFALL, COUNCIL APPROVED THE TRANSFER OF $23 MILLION FROM THE BUDGET STABILIZATION FUND TO THE DISASTER RECOVERY FUND TO RESPOND TO THE IMMEDIATE NEEDS FROM THE DIRETO STORM.
THIS FOLLOWS THE USE OF NEARLY $200 MILLION IN FUND BALANCE RESERVES TO ADDRESS THE CITY'S BUDGET SHORTFALL.
NOW, THE CITY'S PREPARING FOR FUTURE DISASTERS WITHOUT THE RESERVES WE HAD HEADING INTO HURRICANE SEASON, AND
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THE ESTIMATED COST TO THE CITY OF RECOVERY, EVEN AFTER FEMA ASSISTANCE IS EXPECTED TO BE NORTH OF $50 MILLION.AS YOU'RE ALL AWARE, WE'RE PRAYING THAT HOUSTON IS ABLE TO AVOID THE WORST OF TROPICAL STORM FRANCINE IN COMING DAYS, AND WHAT HAS BEEN A ROUGH HURRICANE SEASON WILL CONTINUE THROUGH NOVEMBER.
AND SO THE QUESTION REMAINS ARE WE, WE, ARE WE READY BOTH FINANCIALLY AND OPERATIONALLY? THE TIME TO REPAIR THE ROOF IS WHEN THE SUN IS SHINING, AND WE OWE IT TO HOUSTONIANS TO BUILD A PLAN THAT GUIDES US THROUGH THESE CHALLENGES, BOTH SELF-IMPOSED AND BY ACT OF GOD.
THANK YOU VERY MUCH, CONTROLLER, AND I'D LIKE TO WELCOME COUNCIL MEMBER WILLIE DAVIS TO THE HORSESHOE AS WELL.
THIS IS THE ONE PLUS 11 FINANCIAL REPORT FOR THE PERIOD ENDING JULY 31ST, 2024.
PROJECTIONS ARE BASED ON ONE MONTH OF ACTUAL RESULTS AND 11 MONTHS OF PROJECTIONS.
SO FIRST I'LL JUST TOUCH BASE ON THE FISCAL YEAR 2024, UH, IN ACCORDANCE WITH GOVERNMENT ACCOUNTING STANDARDS FOR GOVERNMENTAL FUNDS.
THE FINAL REVENUES FOR FY 24 WILL INCLUDE REVENUES EARNED THROUGH JUNE, JUNE 30TH, ONLY IF THEY ARE COLLECTED BY THE END OF AUGUST.
UM, SO SINCE WE'VE, WE'VE REACHED THE END OF AUGUST, UM, DEPARTMENTS ARE CONTINUING TO BOOK THOSE ENTRIES, UM, UNTIL THE THE YEAR CLOSES.
SO EXPENDITURES THROUGH JUNE 30TH WILL INCLUDE SPENDING INCURRED ONLY BEFORE THE END OF JUNE, BUT AS I MENTIONED, THOSE EXPENDITURES CONTINUE TO BE RECORDED AS ACCRUALS.
UH, SO THAT PROCESS IS ONGOING AND ABOUT TO, TO COME TO AN END.
SO WHAT YOU SEE IN THE REPORT IS A CURRENT PRELIMINARY, UM, VIEW AT WHAT FY 24 IS GOING TO LOOK LIKE, UH, IN ADDITION TO THE REPORT FOR FY 25.
SO THE CURRENT PRELIMINARY UNDESIGNATED FUND BALANCE FOR THE GENERAL FUND FOR FY 24 IS 517 MILLION, WHICH IS APPROXIMATELY 31 MILLION HIGHER THAN OUR JUNE MOFA PROJECTION.
HOWEVER, PLEASE, UH, AS I NOTED, THESE RESULTS ARE NOT FINAL UNTIL, UH, ALL THOSE ENTRIES ARE BOOKED AND REALLY NOT UNTIL FINALIZATION AND PUBLICATION OF THE FY 24 ANNUAL COMPREHENSIVE FINANCIAL REPORT, WHICH TYPICALLY COMES IN DECEMBER.
SO MOVING ON TO FISCAL YEAR 25, UM, THIS IS THE FIRST MONTH THAT WE'RE REPORTING ON FOR THE NEW FISCAL YEAR.
OUR REVENUE PROJECTION AS THE CONTROLLER, UH, MENTIONED, IS $2.2 MILLION HIGHER THAN THE ADOPTED BUDGET, WHICH IS A REFLECTION OF HIGHER THAN ANTICIPATED LAND SALES.
UH, THIS WAS A PARCEL, UH, PORTION OF LEE ROAD, UM, THAT THE AIRPORT BOUGHT.
UH, THE COUNCIL APPROVED THIS ITEM BACK IN APRIL, APRIL 30TH.
OUR EXPENDITURE PROJECTION REMAINS AT BUDGET FOR FY 25, AND WE'RE CURRENTLY PROJECTING THE ENDING FUND BALANCE TO BE 325.6 MILLION, WHICH IS 2.2 MILLION HIGHER THAN THE ADOPTED BUDGET BECAUSE OF THE REVENUE FROM THE LAND SALE AND REPRESENTS 12.9% OF ESTIMATED EXPENDITURES, LESS DEBT SERVICE AND PAY AS YOU GO.
THAT FUND BALANCE IS 135.9 MILLION ABOVE THE TARGET OF HOLDING 7.5% OF EXPENDITURES, EXCLUDING DEBT AND PAY AS YOU GO.
TRANSFERS, LIKE THE CONTROLLER MENTIONED, THERE ARE NO PROJECTED FORECAST CHANGES FOR THE ENTERPRISE SPECIAL REVENUE OR OTHER FUNDS.
DIRECTOR DEBOWSKI, YOU MENTIONED THAT WE HAD HIGHER THAN ANTICIPATED LAND SALES AS PART OF THAT, UM, NUMBER, JUST FROM A POLICY PERSPECTIVE, JUST TO VERIFY, 'CAUSE CHAIR, IF I RECALL CORRECTLY, IN YEARS PAST, AND I'M NOT SAYING THIS IS WHAT HAS OCCURRED, BUT I JUST WANNA MAKE SURE THE RECORD'S CLEAR.
IN YEARS PAST WE HAD BEEN, UH, LEAVING THE PRACTICE OF ONE-OFF LAND CELLS TO MAKE UP FOR OUR REVENUE SHORTFALLS.
IS THAT CORRECT OR HAS THAT POLICY CHANGED? ARE WE SEEING AN UPTICK IN LAND SALES? I, I DON'T THINK WE'VE NECESSARILY SEEN AN UPTICK.
I THINK WE, WE BUDGET FOR A VERY SMALL AMOUNT OF RIGHT OF WAY SALES THROUGHOUT THE YEAR, A STANDARD COURSE, BUT INCLUDING THE FY 25 BUDGET IS NOT, THERE ARE NO SUBSTANTIAL ONE-TIME LAND SALES CONTEMPLATED.
SO THAT POLICY HAS NOT CHANGED.
UM, YOU MENTIONED MONEY THAT WE SPEND TO RECOVER.
UM, WE GET SOME REIMBURSEMENT FROM FEMA, BUT WE'VE OBVIOUSLY STILL SPENT SOME OF OUR REVENUES FROM OUR, UH, RECOVERY FUNDS.
WHAT'S BEEN DONE IN THE PAST AS WE'VE HAD THESE, UH, EVENTS, DO WE REPLENISH THE FUND RIGHT AWAY OR, OR WHAT HAS BEEN THE HISTORICAL PRACTICE WITH THAT
UM, SO THAT HAS BEEN THE HISTORICAL
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PRACTICE.OF COURSE, IF WE, UH, GET REVENUE IN SOONER AND WE CAN, UM, BUDGET TO MAKE THAT TRANSFER TO REPLENISH THE BUDGET STABILIZATION FUND SOONER, SEEK TO DO THAT.
BUT THAT'S THE HISTORICAL PRACTICE.
UM, CONTROLLER, YOU MENTIONED THE $6.3 MILLION, UM, INCREASE DUE TO, UM, PROPERTY TAX INCREASES FOR THE CITY'S POPULATION DIRECTOR.
IS THAT INCLUDED IN YOUR, UM, PROJECTION AS WELL? YES.
WAS THAT, IS THAT AN ADDITIONAL, UM, $6.3 MILLION ALSO IN YOURS? IT'S INCLUDED IN THE FY 25 BUDGETED AMOUNT.
UM, SO WE GOT THE, THAT WE GOT THAT INFORMATION AFTER THE TIME THE BUDGET WAS PROPOSED, UM, BUT BEFORE THE BUDGET WAS ADOPTED, SO WE INCLUDED IT IN THE ADOPTED BUDGET, AND IT MIGHT HAVE COME IN AFTER Y'ALL DID YOUR TRENDS REPORT.
I THINK THAT'S THE TIMING DIFFERENCE THE LAST WEEK OF MAY.
AND WHAT WAS IT, WHAT WAS THE POPULATION INCREASE? DO YOU REMEMBER? THERE WE GO.
AND I HAD LIKE TO WELCOME COUNCIL MEMBER ANNE HUFFMAN, WHO IS ONLINE DISTRICT G AND STEVEN JAMES WITH COUNCIL MEMBER EVAN SHIVA'S OFFICES HERE.
SO FOR THE FY 25, UM, THE INFLATION WAS 3.46% AND THE POPULATION WAS 0.49% FOR A TOTAL OF 3.95% TOTAL GROWTH.
REALLY QUICKLY, CONTROLLER YOU HAD DISCUSSED, UM, WE HAVE AN IMPORTANT ITEM COMING UP ON THE AGENDA RELATED TO THE FINANCIAL IMPACTS OF THE TWO STORMS WE EXPERIENCED.
I DON'T THINK YOU'LL BE PRESENTING DURING THAT.
IT'LL BE WITH THE DIRECTOR, BUT YOU HAD TOUCHED ON SOME OF THE, UM, FINANCIALS RELATED TO THAT.
WOULD YOU MIND JUST REPEATING WHAT YOU HAD SAID IN YOUR PRESENTATION AND IF YOU HAVE ANY QUESTIONS OR CONCERNS THAT YOU'LL BE LOOKING FORWARD TO LISTENING ABOUT SO THAT WE'RE AWARE? SURE.
AND I DON'T WANNA SPOIL THE DETAILS OF, OF THE REPORT THAT'S COMING UP FROM DIRECTOR DEBOWSKI, BUT, UM, FROM HER REPORT, UH, THE ESTIMATED OVERALL COST OF BARRELL AND DIRETO ALONE, UH, IS SOMEWHERE IN THE AROUND $210 MILLION.
THE EXPECTATION IS THAT FEMA WILL REIMBURSE 75% OF THAT.
AND SO THE CITY'S, UH, CHUNK OF THAT BURDEN, UH, I BELIEVE IS AROUND $52 MILLION, WHICH EXCEEDS THE 20 MILLION THAT WE CURRENT, WE AS STANDARD TO 25 THAT WE STANDARD ALLOCATE FOR RECOVERY.
THERE WERE $23 MILLION IS WHAT COUNCIL APPROVED TO TRANSFER OVER, UH, JUST A SHORT TIME AGO.
SEEING NO MORE, UM, COUNCIL MEMBERS IN THE QUEUE, WE WILL MOVE ON TO OUR NEXT PRESENTATION, UPCOMING FINANCIAL, WHICH IS THE UPCOMING FINANCIAL TRANSACTIONS.
OKAY, IF YOU COULD, UM, GO TO THE NEXT SLIDE, PLEASE.
SO TODAY I JUST HAVE ONE ITEM I WANTED TO UPDATE COUNSEL ON.
UM, AND THIS IS A PRESENTATION THAT WE'RE MAKING ON BEHALF OF THE FINANCE WORKING GROUP.
SO, UH, THERE'S A GROUP OF US, YOU HEAR ME, UM, TALK ABOUT IT.
YOU HEARD FROM DEPUTY, UH, DIRECTOR ALMA TAMARILLO, A COUPLE MAYBE LAST MONTH ACTUALLY ON UPCOMING FINANCIAL TRANSACTIONS.
UM, SO WE WILL BRING DEBT TRANSACTIONS TO THIS BODY FROM TIME TO TIME, UM, FOR UPDATES PRIOR TO COMING TO THE FULL COUNCIL FOR COUNCIL ACTION.
SO TODAY I WANTED TO JUST GIVE A BRIEF UPDATE ON THE UNITED, UM, SPECIAL FACILITY REVENUE BONDS, WHICH ARE FINANCING THE TERMINAL B IMPROVEMENTS.
UM, SO THE FIRST SLIDE JUST KIND OF GIVES A PROJECT UPDATE SOME OF THE MAJOR COMPONENTS OF THE PROJECT ITSELF, UH, WHICH I KNOW THE AIRPORT DIRECTOR WAS HERE, UM, WITH ME, I THINK IT WAS MARCH.
WE GAVE A MAYOR'S REPORT ON THE PROJECT AND HE, UM, GAVE AN UPDATE ON THE PROJECT ITSELF.
BUT THIS IS JUST TO REMIND THIS BODY WHAT'S INCLUDED.
UM, IN TERMS OF THE UPDATES FOR TERMINAL B, I'M GONNA FOCUS ON THE FINANCING PORTION OF THE PROJECT, UM, WHICH IS ON THE NEXT SLIDE.
SO, BACK IN NOVEMBER OF 2023, CITY COUNCIL APPROVED A MEMORANDUM OF AGREEMENT OR AN MOA BETWEEN THE CITY AND UNITED AIRLINES, UH, THAT LAYS OUT THE DESIRE AND SOME TERMS AROUND THIS PROJECT AND THE FINANCING.
UM, THE EXPANSION TERMINAL B IS GOING TO BE FINANCED WITH A COMBINATION OF SPECIAL FACILITY REVENUE BONDS AND GENERAL AIRPORT REVENUE BONDS.
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ANTICIPATED SIZE OF THE TRANS OF THE TRANSACTIONS IN TOTALITY IS $2.55 BILLION.UM, BREAKING THAT DOWN, THE SPECIAL FACILITY REVENUE BONDS, UH, WHICH THOSE BONDS ARE THE ONES THAT ARE PAYABLE FROM THE UNITED LEASE PAYMENTS ARE CAPPED AT 1.95 BILLION.
AND THE GENERAL AIRPORT REVENUE BONDS, WHICH ARE PAYABLE WITH, UH, THE HOUSTON AIRPORT SYSTEMS REVENUES ARE CAPPED AT 624 MILLION PER THAT MOA, AS I MENTIONED, THE SRBS ARE SOLELY SECURED FROM LEASE PAYMENTS FROM UNITED AIRLINES, AND THAT'S PART OF THE SPECIAL FACILITIES LEASE AGREEMENTS.
THOSE BONDS ARE NOT SECURED BY GENERAL AIRPORT REVENUES OR ANY OTHER REVENUES OF THE CITY.
SUBSEQUENT TO THE MOA GETTING APPROVED BY COUNCIL BACK IN NOVEMBER OF 23, UH, SEPARATE ITEM, UH, WHICH IS CALLED AN INDUCEMENT RESOLUTION, WAS APPROVED BY CITY COUNCIL IN MARCH OF 2024.
AND YOU MIGHT REMEMBER THAT THAT INDUCEMENT RESOLUTION ALLOWS UNITED TO BEGIN THE PROJECT TO BEGIN SPENDING THEIR MONEY AND STARTS THE CLOCK BY WHEN THAT FUNDING THAT UNITED USES TO START THE PROJECT CAN BE REIMBURSED BACK WITH THESE SPECIAL FACILITY BOND PROCEEDS.
SO RIGHT NOW WE'RE IN THE PROCESS WHERE WE'RE WORKING WITH UNITED TO MOVE THE TRANSACTION FORWARD.
UM, ONE OF THE ITEMS THAT WAS DISCUSSED, UM, AND IS COVERED IN THE MOA AND IN THE INDUCEMENT RESOLUTION, UM, TALKS ABOUT THE AMORTIZATION SCHEDULE.
SO THAT AMORTIZATION SCHEDULE, UH, WHICH IS GONNA SET THE DEBT SERVICE IS STILL BEING, UM, REVIEWED, AND WE'RE STILL WORKING ON THAT BETWEEN THE FINANCE WORKING GROUP, UH, AND UNITED AIRLINES.
AND LIKE I MENTIONED, THE FINANCE WORKING GROUP INCLUDES THE CONTROLLER'S OFFICE, THE FINANCE DEPARTMENT, THE AIRPORT SYSTEM, LEGAL, WE HAVE OUTSIDE FINANCIAL ADVISORS AND, UM, OUTSIDE BOND COUNSEL THAT, THAT HELP US MOVE THESE TRANSACTIONS FORWARD.
SO IN TERMS OF NEXT STEPS, WE DO ANTICIPATE THAT WE'RE GOING TO ISSUE THE SPECIAL FACILITY REVENUE BONDS IN ONE OR MORE SERIES WITH THE INITIAL ISSUANCE COMING IN THE WINTER OF 2024.
UM, SO SOMETIME BEFORE THE END OF THIS CALENDAR YEAR, THE ISSUANCE OF THE INITIAL TRANCHE OF THE BONDS WILL REQUIRE TWO SEPARATE COUNSEL ACTIONS.
UM, ONE WILL BE COUNSEL'S APPROVAL OF THE LEASE AGREEMENT, THERE'LL BE AN AMENDMENT TO THE LEASE AGREEMENT, AND THAT'S EXPECTED TO COME IN OCTOBER OF 2024.
AND THEN THE SECOND ITEM WILL BE COUNCIL APPROVAL OF THE TERMS OF THE BONDS, INCLUDING THE PRINCIPAL AMOUNT, UM, PROVISIONS, THE AMORTIZATION SCHEDULE, AND, UM, ACCORDINGLY, THE SALE OF THOSE BONDS IS EXPECTED TO BE IN, AS I MENTIONED, WINTER.
SO ON SLIDE FIVE, UM, THIS IS GONNA LOOK VERY FAMILIAR TO YOU.
THERE'S NOT TOO MUCH FILLED IN HERE BECAUSE THERE'S NO REFUNDING COMPONENT OF THE BOND SINCE IT'S NEW MONEY.
SO A LOT OF THOSE CATEGORIES YOU SEE AS NOT APPLICABLE THAT YOU TYPICALLY WOULD SEE IF IT WAS A REFUNDING FOR SAVINGS SINCE IT'S NEW MONEY.
UM, WE JUST FOCUS ON THE TOTAL PAR AMOUNT OF THE BONDS, WHICH IS 1.95 BILLION, NOT TO EXCEED AMOUNT, AS I MENTIONED, AND THE INTEREST RATE.
UM, OF COURSE, YOU KNOW, THERE'S EXPECTED MOVEMENTS IN THE INTEREST RATE HAPPENING BETWEEN NOW AND WHEN THE BONDS ARE ISSUED.
SO WE'RE LOOKING, UM, TO ACHIEVE A ESTIMATED, UM, WE CALL IT A TICK, TRUE INTEREST COST BETWEEN 5.5 AND 6%.
AND AGAIN, THOSE ITEMS WILL BE COMING, UM, TO APPROVAL TO THE CITY COUNCIL BODY IN OCTOBER.
THAT CONCLUDES MY PRESENTATION.
THANK YOU VERY MUCH, DIRECTOR.
IT'S GOOD TO GET AN UPDATE ON THIS, SUCH A LARGE NUMBER.
SO THANK YOU FOR BRINGING THIS COUNCIL MEMBER CAYMAN MAYOR PROTO MARTHA CASTEX TATUM.
FIRST, LET ME JUST SAY THAT I THINK TERMINAL B IS GOING TO BE EXTRAORDINARY.
UM, WE, WE'VE HAD THE TOUR, UM, WHILE IT'S BEING, UH, WORKED ON AND IT FURTHER AMPLIFIES THE CITY OF HOUSTON AS A GLOBAL HUB.
UM, SO I KNOW THERE ARE A LOT OF STEPS BEFORE WE GET TO COMPLETION, AND WE'VE GOT TO DEFINITELY TALK ABOUT THE FINANCES OF IT.
UM, MY QUESTION IS, WILL THE AMORTIZATION SCHEDULE BE COMPLETE BEFORE WE DO THE INITIAL ISSUANCE OF, UM, THE SPECIAL FACILITIES REVENUE BONDS? SO WE WILL DEFINITELY HAVE A, UH, IDEA OF WHAT THE AMORTIZATION SCHEDULE LOOKS LIKE IN TERMS OF WHAT YEARS THE PRINCIPAL PAYMENTS WILL BE BEFORE, UM, CITY COUNCIL APPROVES IT, AND WE CAN SHARE THE INFORMATION.
OF COURSE, AT THAT TIME, WE WON'T KNOW THE INTEREST RATE UNTIL WE DO THE PRICING.
SO CITY COUNCIL HAS TO AUTHORIZE US TO, UM, TO ISSUE THE BONDS, SO WE WON'T KNOW THE EXACT INTEREST RATE AT THAT TIME.
UM, THAT'S WHY I GIVE THAT RANGE ON THAT SLIDE.
BUT THE AMORTIZATION SCHEDULE THAT SHOWS THE PRINCIPAL ALL THE MATURITY DATES, YES, WE'LL HAVE THAT INFORMATION WHEN WE COME TO COUNCIL FOR APPROVAL.
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SO WE WILL MOVE ALONG TO THE NEXT PRESENTATION, WHICH IS THE OVERVIEW OF THE DISASTERS, THE FINANCIAL IMPLICATIONS OF DICHO AND HURRICANE BARREL.AND PLEASE INTRODUCE, UH, YES, YOU'LL BE JOINED.
SO JOINING ME IS ASSISTANT DIRECTOR ED, AND HE'S GOING TO, UM, TO HELP ME OUT WITH ALL THE FEMA STEPS.
UH, IF YOU GO TO THE NEXT SLIDE, PLEASE.
UM, SO TODAY WE'RE GONNA COVER, UM, A FEW TOPICS AND, UM, I, I KNOW YOU'RE ALL IN RECEIPT OF A LETTER FROM THE CITY CONTROLLER, UM, MAYBE FROM LAST WEEK OR THE WEEK BEFORE.
UM, SO PRIOR TO, UM, GETTING THAT LETTER, WE HAD BEEN WORKING WITH CHAIR ALCORN ON PUTTING TOGETHER THESE SLIDES.
UM, SO OUR GOAL IS THAT, YOU KNOW, THE INFORMATION THAT HE WAS ASKING FOR, UM, IS PRIMARILY COVERED IN THESE SLIDES, AND WE'LL BE ALSO RESPONDING TO THAT LETTER IN WRITING.
BUT, UM, JUST WANTED TO WALK YOU ALL THROUGH, UM, EVERYTHING AS WE SEE IT.
UM, SO TODAY WE'RE GONNA COVER THE FEMA REIMBURSEMENTS AND HOW THE PROCESS WORKS.
UM, WHAT SERVICES HAVE BEEN SUBMITTED FOR REIMBURSEMENT SO FAR? THE TOTALITY OF WHAT WE'RE PLANNING TO SUBMIT, UM, SO FAR WHAT HAS BEEN SPENT, UH, AND WHAT FUNDS HAVE BEEN USED, AND I THINK WE ALLUDED TO THOSE EARLIER IN THE MOFA CONVERSATION.
UH, WHAT'S THE STATUS OF THE BUDGET STABILIZATION FUND AND THE ANTICIPATED FINAL BILL, OR HOW MUCH WILL IT ALL COST? UM, AND THIS, UM, THIS PRESENTATION IS FOCUSED ON THE DERECHO AND BARREL.
WE HAVEN'T, OBVIOUSLY, WE KNOW THERE'S MORE BREWING OUT THERE.
UH, WE'RE STILL IN HURRICANE SEASON, AND CERTAINLY DISASTERS ARE NOT JUST LIMITED TO HURRICANE SEASON, UM, AS WE'VE SEEN IN THE PAST.
SO THIS IS A SNAPSHOT OF WHERE WE ARE WITH THOSE TWO DISASTERS AS OF TODAY.
OKAY, I'LL TURN IT OVER TO FA.
UM, LET ME BEGIN BY GIVING YOU GUYS A QUICK OVERVIEW OF THE TWO PROGRAMS YOU MAY HAVE HEARD ABOUT FROM FEMA.
ONE IS THE INDIVIDUAL ASSISTANCE PROGRAM, AND THE OTHER IS THE PUBLIC ASSISTANCE PROGRAM.
SO, INDIVIDUAL ASSISTANCE IS DIRECTED TOWARDS THE COMMUNITY.
WE DON'T DIRECTLY HANDLE THAT WITHIN THIS CITY OF HOUSTON.
FEMA HANDLES THAT DIRECTLY WITH, UH, OUR, UH, CONSTITUENTS AND, AND INDIVIDUALS WITHIN THE COMMUNITY.
THE PROGRAM THAT WE WORK ON AT THE CITY OF HOUSTON IS CALLED THE PUBLIC ASSISTANCE PROGRAM.
AND SO, JUST AS A A, A BRIEF OVERVIEW, WHAT WE'VE DONE IS WE'VE LISTED HERE THE DIFFERENT CATEGORIES OF WORK, UH, OR THE CATEGORIES THAT WE CAN CLAIM FOR REIMBURSEMENT FROM FEMA, WHICH BEGINS NUMBER ONE, WITH DEBRIS REMOVAL, WHICH IS THE CITYWIDE DEBRIS REMOVAL DUE TO THE DEBRIS THAT, UH, YOU KNOW, COMES ABOUT, UH, AS A RESULT, AS A RESULT OF THE DISASTER.
THE NEXT ONE, A LITTLE BIT MORE ESOTERIC, IS EMERGENCY PROTECTIVE MEASURES.
WHAT THAT MEANS IS THAT, UH, JUST THE IMMEDIATE NEEDS WORK THAT'S NEEDED TO ALLEVIATE THE, UH, THE DAMAGES.
SO TO GIVE YOU AN EXAMPLE, UH, AFTER A DISASTER, YOU MAY HAVE ROOF LEAKS.
SO PATCHING A, A ROOF WITH SOME TAR TO STOP THE ROOF LEAK WOULD BE CONSIDERED EMERGENCY PROTECTIVE MEASURES.
UH, ANOTHER THING WOULD BE SEARCH AND RE RESCUE OPERATIONS BY THE FIRE DEPARTMENT.
UH, THE DIFFERENT KINDS OF WORK, UH, PERFORMED BY POLICE OFFICERS.
ALL OF THAT FALLS WITHIN EMERGENCY WORK, UH, EMERGENCY PROTECTIVE MEASURES.
AND ON THE RIGHT SIDE, YOU'LL SEE PERMANENT WORK.
SO, PERMANENT WORK DEALS WITH PERMANENT DAMAGES TO OUR FACILITIES AND INFRASTRUCTURE.
SO THIS IS PRIMARILY GONNA BE DEPARTMENTS LIKE GSD, PUBLIC WORKS, UH, AIRPORT, UH, MAYBE, UH, PARKS AND RECREATION FOR ANY SORT OF FACILITIES OR BUILDINGS THAT THEY HAVE.
SO THIS INCLUDES ROADS AND BRIDGES, UH, WATER CONTROL FACILITIES, BUILDINGS, AND EQUIPMENT.
UH, OFTENTIMES WE DO SEE A LOT OF DAMAGES TO BUILDINGS DURING ANY FLOOD EVENT OR DURING, UH, ANY SORT OF, UH, WIND EVENT.
UH, UTILITIES IS PRIMARILY PUBLIC WORKS IN THE LAST CATEGORY, CATEGORY G UH, IT'S CALLED PARKS RECREATIONAL AND OTHER, IT'S KIND OF A CATCHALL.
SO WHAT DOESN'T FIT NEATLY INTO SOME OF THESE OTHER CATEGORIES, UH, FALLS WITHIN CATEGORY G, YOU KNOW, INCLUDING THINGS LIKE THE TRANQUILITY PARKING GARAGE THAT WAS DAMAGED AS A RESULT OF HURRICANE HARVEY SEVERAL YEARS AGO.
IN THE NEXT SLIDE, YOU'LL SEE A, A SNAKING CHART OF THE FEMA PUBLIC ASSISTANCE PROCESS.
NOW, I, I DO WANT YOU TO KEEP IN MIND THAT THIS IS A LONG, MULTI-YEAR PROCESS.
IT'S NOT SHORT, UNFORTUNATELY.
UM, THE, THE TWO BLUE HIGHLIGHTED ARROWS THAT YOU SEE, THAT'S ROUGHLY WHERE WE ARE AT RIGHT NOW FOR BOTH THE DERECHO AND HURRICANE UH, BARREL.
THE NEXT STEPS ARE THAT WE'RE GONNA START TO WORK ON SITE INSPECTIONS.
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TO GIVE YOU AN IDEA, DURING HURRICANE HARVEY SITE INSPECTIONS TOOK ABOUT A YEAR TO A YEAR AND A HALF TO COMPLETE.UH, AND THEN E-E-I-D-D-D, I'VE, YOU KNOW, I'VE LISTED OR WE'VE LISTED, UM, THE, THE, THE DEFINITIONS OR THE, THE, YOU KNOW, THE NAMES OF THESE, SOME OF THESE TERMS. ESSENTIALLY WHAT IT MEANS, THOUGH, IS THAT FEMA'S GONNA COME IN AND THEY WANT METICULOUS DETAILS ABOUT EVERY ASPECT OF THE DAMAGE.
SO, TO GIVE YOU AN EXAMPLE, IF IT WAS, YOU KNOW, IF THERE WAS, UH, DAMAGES TO THIS ROOM, LITERALLY IT MEANS GOING OUT WITH A MEASURING TAPE, GETTING EVERY INCH OF DAMAGE, LOOKING AT EVERY HOLE, UM, LOOKING AT EVERY, UH, EVERYTHING IN, IN, IN DETAIL.
UH, ESSENTIALLY NOW THAT'S WHERE A BULK OF THE TIME GETS SPENT IN THE FEMALE PUBLIC ASSISTANCE PROCESS.
THAT'S PRIMARILY GONNA BE FOR YOUR PERMANENT WORK.
UM, THAT'S, UM, THAT'S THE MULTI-YEAR PROCESS.
AT THE SAME TIME, THIS IS STILL CYCLICAL, UM, BECAUSE WE MAY GET TO ONE PART OF, UH, UM, THE, ONE OF THE MILESTONES AND THEN HAVE TO GO BACK TO, AND THEN, YOU KNOW, CONTINUE ON.
SO AGAIN, IT'S A MULTI-YEAR PROCESS.
UH, MOVING ON TO THE NEXT SLIDE.
SO, WHAT OUR GOAL IS, IS TO SUBMIT ALL COSTS.
NOW, THE, THE COMPLEXITY WITH THE FEMA PUBLIC ASSISTANCE PROCESS IS THAT FEMA LOOKS AT EVERY SINGLE DOCUMENT THAT'S OUT THERE, EVERY SINGLE TIME SHEET, EVERY SINGLE INVOICE.
UM, AGAIN, THAT'S WHAT ENDS UP TAKING A LONG TIME.
UM, IN REGARD TO THE SECOND BULLET, SO FOR DEBRIS REMOVAL AND EMERGENCY PROTECTIVE MEASURES, OUR TYPICAL TIMELINE ENDS UP TAKING ABOUT A YEAR, TWO, THREE YEARS TO COMPLETE THE PROCESS JUST FOR DEBRIS REMOVAL AND EMERGENCY PROTECTIVE MEASURES.
AGAIN, THE BULK OF IT BEING BECAUSE FEMA'S LOOKING AT EVERY SINGLE DOCUMENT THAT WE GENERATE, UM, AND IT'S A REIMBURSEMENT PROCESS.
SO FEMA WANTS TO SEE THAT WE'VE SPENT THE COST, WE'VE DONE IT IN A FEDERALLY COMPLIANT WAY, WHICH, YOU KNOW, OFTENTIMES YOU'LL SEE THINGS LIKE, UH, FEDERALLY COMPLIANT PROCUREMENT COME UP AS A TERM.
UH, AND, UH, SO THAT'S, THAT'S, YOU KNOW, A HIGH LEVEL OF, OF THAT PROCESS.
UH, THIS IS, WE PROBABLY ALREADY KNOW THIS, IS THAT FOR BOTH THE DERECHO AND HURRICANE BARREL, WE'RE ONLY ELIGIBLE FOR A FEDERAL SHARE OF 75% AND A LOCAL SHARE OF 25%.
UM, DIRECTOR DSKY, I THINK THE NEXT SLIDE IS YOURS.
SO BASED ON THAT 75%, UM, FEDERAL SHARE BREAKDOWN, YOU SEE AS OF AUGUST, 2024, UH, THESE ARE THE PRELIMINARY COST ESTIMATES THAT WE'RE LOOKING AT.
UH, WE BROKE IT DOWN BY CATEGORY.
YOU CAN SEE, AND AS YOU WOULD PROBABLY EXPECT, THE BULK OF THE DAMAGES IS IN THE DEBRIS REMOVAL CATEGORY.
SO ALL THE TREE BRANCHES, FENCES YOU SEE ON THE SIDE OF THE ROAD, THAT ALL FALLS UNDER DEBRIS REMOVAL.
UM, SO BETWEEN THE DERECHO AND BARREL TOGETHER, DEBRIS REMOVAL IS ABOUT $131 MILLION.
CATEGORY B, EMERGENCY PROTECTIVE MEASURES, AS FOIL MENTIONED, THAT INCLUDES THE FIRE OVERTIME, POLICE OVERTIME, SOLID WASTE OVERTIME, UM, AND THEN THOSE VERY, VERY, UH, DURING THE, THE PERIOD OF THE EMERGENCY, THOSE VERY, VERY URGENT.
UM, THINGS THAT NEED TO GET DEALT WITH, TOTALS ABOUT $35 MILLION FOR THE TWO DISASTERS.
AND THEN CATEGORY C THROUGH G PERMANENT WORK, UH, THAT'S ABOUT 44 40 $5 MILLION.
SO THE TOTAL COST ESTIMATE OF THE TWO DISASTERS TOGETHER, UM, RIGHT NOW IS $210 MILLION.
211 OF THAT, WE'RE EXPECTING FEMA TO REIMBURSE THE 75%, SO THEY WOULD REIMBURSE $158 MILLION AND LEAVING THE LOCAL SHARE, UH, APPROXIMATELY, UH, $52.7 MILLION.
UM, AS THE FOOTNOTE STATES, THESE ESTIMATES ARE FLUID AND THEY ARE SUBJECT TO CHANGE AS WE GO THROUGH THE, UM, THE FEMA PROCESS AND THE PROCESS WAS THE DEPARTMENTS TO DO THE DAMAGE ASSESSMENTS AND THE SITE ASSESSMENTS AS AL MENTIONED.
SO, IN TERMS OF WHAT WAS SUBMITTED, S FEMA, SO, UM, AND AL TOUCHED ON THIS, ON THIS SNAKING CHART, UM, VERY, VERY EARLY ON IN THE PROCESS, WE ARE REQUIRED TO SUBMIT, UM, INITIAL PROJECTIONS TO FEMA.
AND THEY DON'T HAVE TO BE, UM, PERFECT NUMBERS.
THEY HAVE TO BE, UM, NUMBERS THAT ARE BASED ON ESTIMATES THAT ARE DONE VERY, VERY QUICKLY AFTER THE STORM.
UM, SO ONCE YOU SUBMIT THOSE ESTIMATES, THAT'S WHAT STARTS THE PROCESS WITH FEMA TO TRY TO GET A PROJECT WORKSHEET MOVING OBLIGATED SO THAT WE CAN GET SOME, UM, ESPECIALLY IN, IN THIS CASE, WE SUBMITTED EXPEDITED PROJECT WORKSHEETS TO TRY TO GET
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SOME FUNDING FLOWING TO THE CITY AS QUICKLY AS POSSIBLE.UM, SO BASED ON WHAT WAS SUBMITTED IN THOSE EARLY DAYS, AND, AND YOU CAN SEE THAT THE PROJECTION THAT WAS SUBMITTED, UM, FOR DIRETO AND FOUR BARREL, THOSE ESTIMATES AT THE TIME ARE LOWER THAN WHAT THE CURRENT ESTIMATES STAND AT.
UM, SO I JUST WANTED TO POINT OUT THAT THE NUMBERS ON THE PREVIOUS SLIDE AND THESE NUMBERS ARE, ARE NOT GOING TO BE THE SAME, RIGHT? UM, AND LIKE I MENTIONED, THE NUMBERS ON THIS SLIDE IS JUST TO GET THE FUNDING FLOWING AND THE PROCESS STARTED.
SO BASED ON WHAT'S BEEN SUBMITTED, UM, AT THIS TIME AND THROUGH THE EXPEDITED PROJECT WORKSHEET PROCESS, UM, WE'RE ANTICIPATING THAT, UM, THE FEDERAL SHARE OF WHAT WAS INITIALLY SUBMITTED, UM, FOR THE DIRETO IS AROUND 12.5 MILLION.
AND, UM, THE FEDERAL SHARE OF WHAT WAS SUBMITTED, UM, FOR BARREL IS ABOUT 35 MILLION.
AND SO FAR YOU'VE SEEN THAT, UH, WE HAVE BEEN OBLIGATED FOR THE DI RETRO, WHICH IS, IT'S GOOD NEWS.
IT'S, YOU KNOW, WE'RE A STEP IN THE RIGHT DIRECTION, UH, FOR SOME OF THAT, FOR THE DEBRIS REMOVAL.
AND, UM, BASED ON THIS, AND BASED ON THESE ESTIMATES IS WHAT WE WOULD EVENTUALLY SEE AS HOPEFULLY SOME CASH FLOW COMING TO THE CITY TO ASSIST WITH INVOICE PAYMENT.
AND WE WILL GET INTO A LITTLE BIT MORE OF THE INFLOWS AND OUTFLOWS LATER ON IN THE PRESENTATION.
SO, SO FAR, WHAT HAS BEEN SPENT TO DATE, UM, LARGELY, UM, FOR THE DERECHO, UM, THE DEBRIS REMOVAL IS, ARE THE INVOICES THAT WE FOCUSED ON AND SPENT TO DATE.
UH, SO, SO FAR IN THE DEBRIS REMOVAL, WE HAVE PAID APPROXIMATELY $18 MILLION IN INVOICES.
AND THAT IS COMING FROM THE, FROM THE BUDGET STABILIZATION FUND THAT WAS TRANSFERRED TO THE DISASTER RECOVERY FUND.
UM, SO FAR FOR BARREL, THOSE INVOICES ARE STILL UNDER REVIEW AND NONE HAVE BEEN PAID YET, BUT WE HAVE RECEIVED INVOICES, UM, ON THE EMERGENCY WORK, AND THAT'S, THIS IS ON THE CAT B, THE EMERGENCY PROTECTIVE MEASURES.
THIS INCLUDES PAYROLL, EMERGENCY PURCHASE ORDERS.
UM, THE DERECHO 2.3 MILLION HAS BEEN SPENT, AND FOR BARREL, 13.9 MILLION HAS BEEN SPENT.
AND THE FUNDING SOURCE FOR THESE, UM, AS YOU NOTE, THE BUDGET STABILIZATION FUND IS NOT, UM, WE DON'T HAVE ENOUGH MONEY IN THE BUDGET STABILIZATION FUND TO COVER THE COST OF THE ESTIMATED COST OF THE DISASTER.
SO WHAT WE DO IS WE WORK THROUGH THE PROCESS IS WE TYPICALLY WOULD USE THE, EXCUSE ME, THE BUDGET STABILIZATION FUND AS SEED MONEY TO START THE PROCESS TO PAY THE INVOICES WHILE WE SEEK FEMA REIMBURSEMENT.
UM, AND TYPICALLY WHAT WE DO, AND, AND WE DID IT ALSO, UM, WITH HARVEY, I BELIEVE, UM, IS THAT OTHER ITEMS LIKE OVERTIME TYPICALLY WILL GET SPENT OUT OF A DEPARTMENT'S ALREADY BUDGETED FOR OPERATING BUDGET, AND THEN WE'LL SEEK VMA REIMBURSEMENT AS THOSE REIMBURSEMENTS COME.
WE DO THE ACCOUNTING ENTRIES TO ACCOUNT IT FOR IT AS A DISASTER EXPENSE.
SO THOSE EMERGENCY WORK, UH, WHERE YOU SEE THE RETRO 2.3 MILLION AND BARREL 13.9 MILLION SO FAR, THOSE ARE HITTING THE DEPARTMENT'S STANDARD REGULAR OPERATING BUDGET.
UM, AND AS I MENTIONED, ONCE WE GET THAT FEMA REVENUE RECEIVED, WE'LL, UH, WE'LL TAKE THAT IN, WE'LL DO THE ACCOUNTING TO, UH, MOVE THOSE EXPENSES INTO THE DISASTER FUNDS.
SO THIS, UM, NEXT SLIDE GIVES YOU A LOT MORE DETAIL ON THE INFLOWS AND THE OUTFLOWS AND WHERE ALL THIS MONEY IS COMING FROM.
UM, SO FOR THE TOTAL INFLOWS, AND THIS IS THE SORT OF THE SOURCES OF FUNDING THAT WE HAVE TO PAY FOR THE DISASTER, WE'VE BROKEN IT DOWN BY THE TWO DIFFERENT DISASTERS.
DR 47 81 IS THE DIRETO AND DR 47 98 IS BARREL.
UM, SO FOR THE COMBINED INFLOWS, I'M JUST GONNA FOCUS ON THE COMBINED COLUMN, UM, FOR SIMPLICITY PURPOSES FOR THE PRESENTATION, BUT YOU HAVE ALL THE DETAILS HERE.
UM, BUT EVENTUALLY THIS IS OUR TOTAL PROJECTION.
IT'S NOTHING YEAR TO DATE, RIGHT? SO WE HAVE NOT RECEIVED ANY FEMA REIMBURSEMENTS, AND WE HAVE NOT RECEIVED THE FEMA ADVANCE YET.
THESE ARE ESTIMATES THAT WE'RE HOPING, YOU KNOW, COME TO FRUITION BASED ON THE ESTIMATES WE HAVE.
SO IN THE TOTALITY OF THE PROGRAM COMBINED, WE'RE EXPECTING TO HAVE ABOUT $113.8 MILLION OF FEMA REIMBURSEMENT, NOT INCLUDING FEMA ADVANCE THAT WE HAVE ALREADY PUT IN THE REQUEST FOR.
SO WHEN WE TALK ABOUT A FEMA ADVANCE, IT'S THROUGH AN EXPEDITED PROJECT WORKSHEET PROCESS.
WE PUT IN THE REQUEST THROUGH FEMA.
WE HAVE TO WORK WITH OUR PARTNERS AT TEEM, THE TEXAS DIVISION OF EMERGENCY MANAGEMENT.
THE MONEY FLOWS THROUGH FEMA THROUGH TATUM TO US, AND IT, IT'S QUITE A PROCESS AS YOU CAN IMAGINE.
BUT WE ARE WORKING WITH OUR PARTNERS, UM, AT THE FEDERAL AND STATE LEVEL.
SO WE'RE HOPING TO GET ABOUT $44 MILLION OF FEMA ADVANCE VIA THE EXPEDITED PROJECT WORKSHEET PROCESS.
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AND AGAIN, WE HAVEN'T, TO DATE, WE HAVE NOT RECEIVED ANY OF THOSE FUNDS.UH, THE FUNDING SOURCE THAT WE DO HAVE THAT WE ALREADY DID MOVE IS THE BUDGET STABILIZATION FUND MONEY.
WE MOVED IT FROM THE BUDGET STABILIZATION FUND INTO THE DISASTER RECOVERY FUND, AND THAT'S WHAT WE'RE USING TO PAY THOSE INVOICES THAT WE DO HAVE FOR THE DEBRIS REMOVAL.
SO, IN TOTALITY, WITH THE 75% FEMA SHARE AND THE 75% IS THE TOTALITY OF THE FEMA REIMBURSEMENT IN THE ADVANCE PLUS THE BUDGET STABILIZATION FUND, WE EXPECT OUR SOURCES, OUR TOTAL INFLOWS OF FUNDING TO BE $181 MILLION.
IN TERMS OF THE OUTFLOWS, YOU SEE THAT, UM, THAT SAME COST ESTIMATE THAT I MENTIONED, WE HAVE IT BROKEN DOWN BY CATEGORY, BUT THE TOTAL, UH, DISASTER COST IS ABOUT 210 MILLION.
SO YOU CAN SEE THAT WE'RE SHORT BETWEEN THE TWO 10 MILLION AND THE 180 ALREADY.
AND THEN ONE THING WE KNOW WE HAVE TO DO, UM, UH, AS VICE CHAIR, UM, CASTILLO MENTIONED IN THE MOFA, UM, PRESENTATION, WE DO HAVE TO REPLENISH THAT BUDGET STABILIZATION FUND, SO THAT $23 MILLION NEEDS TO GO BACK.
UM, SO ONCE YOU ACCOUNT FOR THAT, OUR TOTAL OUTFLOWS FOR THESE TWO DISASTERS IS ESTIMATED TO BE 233.6 MILLION.
SO THAT'S WHERE YOU SEE WHEN THE CONTROLLER MENTIONED OUR LOCAL SHARE, ABOUT 42 MILLION, 52 MILLION, EXCUSE ME, THE NET ACTIVITY FOR THE DISASTER IS ABOUT 52, 52 0.6, 52.7 MILLION.
IN THE BOTTOM NOTE, YOU'LL SEE WE BROKE THAT DOWN.
HOW MUCH OF THE 52.7 MILLION IS GOING TO BE GENERAL FUND VERSUS NON-GENERAL FUND? UM, AS AL MENTIONED, THERE ARE, UM, COSTS RELATED TO THE UTILITY, THE AIRPORT, YOU KNOW, OTHER NON-GENERAL FUND FUNDING SOURCES, BUT THE BULK OF THE 52.7 MILLION IS GENERAL FUND RELATED AT 39.9 MILLION.
SO MOVING ON TO SLIDE 11, UM, THIS GIVES YOU THE BREAKDOWN OF HOW WE ARE, UM, PLANNING TO SPEND THE $23 MILLION THAT WAS TRANSFERRED FROM, FROM THE BUDGET STABILIZATION FUND, UM, PREDOMINANTLY GOING TO DEBRIS REMOVAL AND SOME GOING TO OUR PUBLIC ASSISTANCE CONSULTANT.
UM, THIS IS AN OUTSIDE FIRM THAT HELPS US SEEK FEMA REIMBURSEMENT.
AND ONE THING I WANNA NOTE ON THIS, UH, THE, THE TOTAL BUDGET STABILIZATION FUND WAS ABOUT 25.4 MILLION.
OF THAT, WE TRANSFERRED THE 23 MILLION.
SO THERE IS ABOUT 1.4 MILLION REMAINING IN THE BUDGET STABILIZATION FUND, UM, WHICH WE COULD TAP INTO.
BUT, UM, YOU CAN SEE IT'S, IT'S DEFINITELY NOT ENOUGH TO COVER ALL THOSE, UM, EXPENDITURES AND IN THE PROJECTED CASH FLOWS, LIKE YOU MENTIONED ON SLIDE 11.
SO GOING TO SLIDE 12, JUST TO, UM, CAP IT OFF, UM, THE MAXIMUM EXPECTED REIMBURSEMENT IS BASED ON THE FEDERAL SHARE AMOUNT OF 75%.
UM, SO OF THE $210 MILLION ESTIMATE FOR THE TWO DISASTERS, THE FEDERAL SHARE BEING ABOUT 158 MILLION, THE LOCAL SHARE IS ABOUT, UH, 53 MILLION THAT WE NEED TO COME UP WITH.
AND MR. SED, UM, COUNCIL MEMBER MARTINEZ, THANK YOU, CHAIRWOMAN, UM, DIRECTOR, I APPRECIATE THE, UH, REPORT AND IT'S BRINGING SOME CLARITY TO, UH, THE DELAYS IN, IN, UH, TREE TREE DEBRIS REMOVAL, ACTUALLY.
UM, SO I HAVE A COUPLE QUESTIONS SPECIFICALLY TO THAT.
UM, AT WHAT POINT DO WE TAP INTO THE BUDGET STABILIZATION FUND FOR DICHO, WHICH WAS IN MAY? AND THEN WHEN DID WE, WHEN DID WE TAP INTO IT FOR, UH, BARREL START THAT PROCESS, I SHOULD SAY? BECAUSE WE HAD, YOU KNOW, WE JUST RECENTLY GOT SOME OF THAT SO WE CAN CONTINUE PAYING CONTRACTS, BUT WHEN DID WE INITIALLY START THAT PROCESS? RIGHT? UM, I WOULD HAVE TO GO BACK AND PULL THE EXACT COUNCIL DATES, UM, BUT SHORTLY AFTER THE DISASTER, WHAT WE, WHAT WE, IN TERMS OF THE PROCESS, THERE'S A PROCESS TO EVEN GET APPROVED BY FEMA FOR PUBLIC ASSISTANCE.
SO TYPICALLY BEFORE WE MOVE THE BUDGET STABILIZATION FUND INTO THE DISASTER RECOVERY FUND, UH, THE DISASTER RECOVERY FUND IS A GRANT FUND.
AND SO WE WANNA BE SURE THAT WE'RE GOING TO BE, UM, I THINK WE ALL KNEW IT, RIGHT, BUT THAT WE WERE GONNA BE A FEMA ELIGIBLE, UM, DISASTER, UH, TO FULLY TRANSFER THAT FUNDING FROM BUDGET STABILIZATION TO THE DISASTER RECOVERY FUND.
IN TERMS OF WHEN DID THE WORK START, THOUGH, WE DON'T NECESSARILY WAIT FOR TO HEAR FROM FEMA, OR WE DON'T WAIT AT ALL.
I DON'T WANNA SAY NECESSARILY NOT DON'T WAIT AT ALL TO HEAR FROM FEMA BEFORE THE WORK STARTS.
UM, WHEN WE NEED TO ISSUE AN EMERGENCY PURCHASE ORDER, OUR STRATEGIC PROCUREMENT DIVISION IS, YOU KNOW, PRESENT AT THE, AT THE HEC CENTER AT OEM, UM, ISSUING THOSE EMERGENCY PURCHASE ORDERS SO THAT
[00:40:01]
THE DISASTER CONSULTANTS, UM, WHETHER IT BE FOR DEBRIS REMOVAL, UM, FOR FUEL, WHATEVER THE NEEDS MAY BE, UM, THAT THE DEPARTMENTS CAN, UM, GET WHAT THEY NEED AND, AND GET MOVING.AND, AND I, THAT'S WHAT I UNDERSTAND AS WELL, RIGHT? WE JUST GET STARTED, BUT I FEEL LIKE WE'VE, FOR SOME REASON, WHETHER IT IS IDENTIFYING LOCATIONS WHERE TREE DEBRIS REMOVAL SHOULD BE PLACED, UH, TO NO REIMBURSEMENT TO GO AHEAD AND PAY FOLKS OUT.
BECAUSE AS I MENTIONED TWO WEEKS AGO, UM, DURING MY POP OFF WAS, UH, TREE DEBRIS REMOVAL SPECIFICALLY FOR DISTRICT EYE, IT JUST SEEMED DEFINITELY DELAYED, MORE THAN EXPECTED.
UM, AND WE JUST, WE ARE STILL GOING THROUGH THAT FIRST PASS, EVEN THOUGH, QUOTE UNQUOTE, IT'S BEEN DONE.
UM, I'VE BEEN OUT IN THAT NEIGHBORHOOD AND THERE'S STILL A TREE DEBRIS THAT IS, IT'S BROWN, IT'S GRASS IS, IS, YOU KNOW, FOUR FEET HIGH RIGHT AROUND IT.
AND SO, UM, WHATEVER THAT THAT PROCESS LOOKS LIKE, UM, IF IT IS BECAUSE WE'RE WAITING FOR MONEY, UM, MY HOPE IS THAT WE SHOULD BE REIMBURSING THESE CONTRACTORS OR SET PAYING THESE CONTRACTORS AS QUICKLY AS POSSIBLE BECAUSE, UH, AS OF NOW, UH, AGAIN, YOU KNOW, FIRST PASS HASN'T BEEN DONE.
AND I JUST FEEL THAT, THAT THERE'S BEEN SOME, SOME GAPS IN THE, IN THE PROCESS FOR SOME REASON OR ANOTHER.
WHAT I CAN SAY IS ON THE INVOICING PROCESS, THE, THE PAYMENT OF THE INVOICES IS NOT, UM, STOPPING THE WORK FROM PROCEEDING.
WE DO HAVE TO, UM, OF COURSE, IN ORDER TO BE FEMA COMPLIANT, THE INVOICES NEED TO BE IN A CERTAIN FORMAT.
THAT'S A LOT OF WHAT OUR DISASTER CONSULTANTS HELP US, US WITH THOUGH.
WE HAVE, UM, WHAT'S CALLED DEBRIS HAULER CONTRACTS, AND THEN DEBRIS MONITOR CONTRACTS THAT CHECK AND MAKE SURE THAT THE, UH, THE DEBRIS PICKUP IS BEING DONE IN A FEMA COMPLIANT PROCESS.
HOWEVER, THAT HAPPENS IN PARALLEL WITH THE DEBRIS HAULERS DOING THEIR WORK.
UM, I KNOW THAT THE SOLID WASTE DIRECTOR, UM, HAS A DASHBOARD THAT HE CAN GO OVER WITH YOU IF HE HASN'T ALREADY, TO KIND OF SHOW YOU WHERE THE TRUCKS ARE IN THE DIFFERENT ZONES.
AND, UM, ON THE OPERATIONAL SIDE, JUST, JUST ONE MORE, SINCE YOU BROUGHT UP SOLID WASTE, I UNDERSTAND THAT WE ARE STILL IN THE PROCESS OF REALLY RIGHT SIZING THIS DEPARTMENT TO, TO A POINT WHERE THEY'RE ACTUALLY JUST PICKING UP REGULAR HEAVY TRASH ON SCHEDULE MM-HMM
SO I UNDERSTAND THAT THERE'S SOME SYSTEMS THAT, YOU KNOW, WE STILL NEED TO, YOU KNOW, PROVIDE SOME, YOU KNOW, WORK ON THOSE INEFFICIENCIES.
UM, THE DASHBOARD IS NOT WORKING, UM, FOR SURE.
UH, AND SO, UM, I JUST WANNA MAKE SURE THAT AS WE MOVE FORWARD, BECAUSE WE DO HAVE A TROPICAL STORM IN THE, IN, IN THE GULF AGAIN, AND, AND MIGHT HAVE TO GO THROUGH TREE DEBRIS, UH, TREE DEBRIS REMOVAL AGAIN.
AND SO WE JUST NEED TO MAKE SURE THAT THE, THE DEPARTMENTS, UH, ARE, ARE IN A POSITION TO BE READY TO, TO ANTICIPATE WHATEVER TREE DEBRIS.
AND IF WE DON'T GET, HAVE, WE DON'T HAVE TO HAVE THAT.
RIGHT? BUT AS LONG AS THOSE DOLLARS ARE THERE, THAT'S, THAT'S MY CONCERN BECAUSE, UM, AT THE END OF THE DAY, YOU KNOW, TO HAVE DICHO STILL HAVE DICHO, UM, TREE DEBRIS REMOVAL AS OF TWO, THREE WEEKS AGO IN DISTRICT, I, IT'S JUST, IT'S, IT'S DEFINITELY UNCALLED WAR.
SO THANK YOU MAYOR PROAM, CASTEX TATUM, THANK YOU, CHAIR.
UM, CAN YOU EXPLAIN AGAIN ABOUT THE LOCAL SHARE ON PAGE 10, UH, WHERE YOU SAID 39.9 MILLION COMES FROM THE GENERAL FUND, UM, BUT OUR COMBINED, UM, NET ACTIVITY, WE WOULD ACTUALLY NEED THE 52 MILLION.
AND THEN WHERE DO WE MAKE UP THAT DIFFERENCE? SURE.
WELL, I THINK THAT, UH, YOU'LL SEE SOME OPTIONS FOR THAT IN THE NEXT, UM, IN THE NEXT, UH, ITEM NUMBER FIVE.
SO THE 52 MILLION THAT WE NEED TO COME UP WITH, YOU KNOW, THAT TAKES INTO ACCOUNT THE FACT THAT WE HAVE ALREADY TAPPED INTO THE BUDGET STABILIZATION FUND TAKES INTO ACCOUNT THE FACT THAT WE'RE GONNA HAVE TO PAY BACK THE BUDGET STABILIZATION FUND.
UM, SO THAT $52 MILLION IS THE LOCAL SHARE THAT THE FEDERAL GOVERNMENT IS NOT GOING TO REIMBURSE US FOR.
UM, THE STATE DOESN'T HAVE A, UM, STATE CHAIR FOR THIS.
I KNOW DURING HARVEY, UM, THE STATE LEGISLATURE PASSED A LEGISLATIVE BILL THAT, UM, COVERED 75% OF OUR, IS THAT RIGHT? 75% OF OUR LOCAL SHARE, THEY HELPED THE STATE HELPED WITH THE LOCAL SHARE FOR HARVEY.
UM, THAT'S NOT CONTEMPLATED AT THIS TIME.
SO THIS 25%, THE 52.7 MILLION IS GOING TO HAVE TO COME FROM CITY FUNDS IN SOME FORM OR FASHION.
SO WHY WOULD THE STATE NOT OPT IN FOR PARTICIPATING WITH OUR LOCAL SHARE WHEN THEY DID DURING HARVEY, UM, FOR DERECHO AND BERYL? SO THAT'S, THAT'S NOT SOMETHING THAT'S NECESSARILY, UH, LIKE STATUTORY.
I MEAN, IN A WAY THAT THE FEMA PUBLIC ASSISTANCE PROGRAM IS THE MOMENT WE HAVE A DISASTER AND IT BECOMES PRESIDENTIALLY DECLARED, YOU KNOW, BY LAW OF FEMA DOES COME IN.
UH, AS FAR AS I'M AWARE, THERE'S NOTHING LIKE THAT, LIKE AN EQUIVALENT AT THE STATE LEVEL.
WHAT HAPPENED DURING HARVEY, FROM MY UNDERSTANDING,
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WAS MORE OF A ONE-OFF WHERE, YOU KNOW, THE GOVERNOR DID IT BECAUSE IT WAS SUCH A LARGE DISASTER, BUT IT'S NOT NECESSARILY SOMETHING THAT THE STATE WOULD DO ON, ON A NORMAL BASIS.SO IS THERE THE POTENTIAL FOR THE ASK? I BELIEVE WE PUT THE ASK OUT THERE.
I THINK WE, YEAH, BECAUSE I BELIEVE, AND YOU HAVE NOT BECAUSE YOU ASK NOT.
I THINK WE NEED TO MAKE THE ASK.
UM, NO, OUR GOVERNMENT RELATIONS TEAM DEFINITELY HAS BEEN TALKING TO THE STATE LEADER LEADERSHIP YEAH.
UM, ABOUT NOT JUST THIS, BUT DEFINITELY OTHER, UH, WAYS THAT THE STATE CAN SUPPORT US.
SO, UM, NO, I, I AGREE TOTALLY.
SO WE'VE GOTTA FIGURE OUT HOW TO MAKE UP THAT DIFFERENCE FOR OUR $52 MILLION LOCAL SHARE.
I'VE GOT A COUPLE QUESTIONS SPECIFICALLY REGARDING DREDGING OF THE SEDIMENT THAT WE GOT FROM THE RAIN EVENT IN MAY.
THAT WAS COMBINED WITH THE DIRE SHOW.
HAVE WE APPLIED FOR FUNDING TO DREDGE OUT THE SEDIMENT THAT INCURRED FROM THAT? SO THAT WOULD, IF THAT WAS ELIGIBLE, UH, I THINK THAT'S A CONVERSATION THAT'S GOING ON RIGHT NOW WITH FEMA, BUT IF THAT'S ELIGIBLE, THAT WOULD FALL UNDER CATEGORY A.
UM, I, I MAY HAVE TO DEFER THE QUESTION TO THE SOLID WASTE DEPARTMENT.
I MEAN, I DON'T, I DON'T HAVE A AN ANSWER FOR YOU, AND I THINK THAT'S SOMETHING WE CAN FIND OUT.
UM, BUT, UM, YOU KNOW, THAT'S, IT'S, THAT'S IF IT'S ELIGIBLE, THAT'S SOMETHING THAT, OKAY, BECAUSE I, I KNOW WE GOT QUITE A BIT OF FEMA FUNDING FROM THE HARVEY EVENT FOR HARVEY.
WE DID, YES, EXACTLY THE SAME THING.
AND, AND DURING THE MAY RAIN EVENT THAT WAS PUT IN WITH THE DERECHO AS A DISASTER, WE GOT A LOT OF SEDIMENT FROM THE SAN JA CENTER RIVER AND ALSO UPSTREAM FOR THE EAST FORK AS WELL.
IN FACT, I'D SENT, UH, OVER TO, UH, JOSH AND STEVEN DAVID, UH, IT WAS KIND OF FORTUITOUS THAT, UH, KSA WAS LOOKING TO DO SOME DREDGING OF THEIR OWN TO GIVE THEM ACCESS TO THE SAN CENTER RIVER FROM THE BOAT RAMP.
THEY DID A SURVEY, UM, IN PREPARATION OF THAT DREDGING RIGHT BEFORE THE EVENT.
THEY ALSO DID A SURVEY RIGHT AFTER THE EVENT, AND THERE WAS A SIGNIFICANT AMOUNT OF SEDIMENT THAT, THAT WAS ADDED DURING THAT.
AND I WOULD ALSO THINK THAT WE SHOULD BE ABLE TO USE THOSE TWO SURVEYS TO KIND OF EXTRAPOLATE FOR THE REST OF THE RIVER AND THE LAKE AS WELL.
OBVIOUSLY THAT WASN'T UNIQUE JUST TO THAT, THAT AREA THAT THEY WERE GONNA DO THE DREDGING AT.
SO WHATEVER YOU NEED FROM ME TO GET INFORMATION TO, YOU KNOW, HELP FACILITATE THAT, IT WOULD BE GREATLY APPRECIATED.
BUT WE'VE ABSOLUTELY GOTTA DO SOME DREDGING UP THERE.
UM, YOU KNOW, LET ME GET A LITTLE BIT MORE INFORMATION AND WE CAN GET YOU AN UPDATE.
THANK YOU MADAM CHAIR QUESTION.
THE FIRST ONE IS ON THE PUBLIC ASSISTANCE REIMBURSEMENT.
UM, ARE THERE ANY DOLLARS THAT'S OWED TO THE CITY OF HOUSTON FROM FEMA FOR PREVIOUS ONES NOW NOT INCLUDING DICHO AND, AND BURL? ARE THERE ANY DOLLARS SINCE THE PROCESS TAKES SEVERAL YEARS BASED ON, UH, YOU MADAM, AM I, UH, SIR.
SO IS THERE ANY DOLLARS THAT THEY OWE US PREVIOUSLY THAT HAS NOT YET BEEN PAID? UH, WE'RE STILL WORKING ON HURRICANE HARVEY, SIR.
I, I, I GATHERED THAT I, I WOULD BASED UPON FEMA, FEDERAL GOVERNMENT.
SO THERE ARE DOLLARS FROM, FROM HARVEY THAT WE HAVE NOT RECEIVED, CORRECT? THAT'S CORRECT.
SECOND QUESTION, MAYOR PRO TEM WAS ASKING ABOUT THE, UH, THE PROCESS OF DOLLARS THAT WE GOT DURING THE HARVEY FROM THE STATE LEVEL, AND IF THAT PROCESS IS, YOU KNOW, IN ACTION RIGHT NOW FROM MY, WITH OUR PRE, WITH OUR PERMANENT, UH, PRESENT ADMINISTRATION.
LET ME ASK, WAS THERE ANYTHING, WAS THERE AN APPLICATION THAT WAS USED THAT COULD BE USED AGAIN, OR IS IT THAT WE NEED TO GO TO THE LEGISLATURE, UH, OUR REPRESENTATIVE AND MAKE SURE TO THE GOVERNOR MAKE SURE THAT THAT'S IN PLACE PERMANENTLY MOVING FORWARD? UH, I THINK I HEARD ONE OF YOU SAY THAT YOU WERE EXPLAINING THAT THE HARVEY WAS SOMEWHAT DIFFERENT CIRCUMSTANCE.
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THROUGH A, A SENATE BILL.UM, SO THERE WAS A BILL THAT PASSED THE LEGISLATURE YES.
UM, DURING THE SESSION FOLLOWING HARVEY THAT AUTHORIZED THAT, UM, ASSISTANCE FOR PART OF THE LOCAL SHARE, RIGHT? MM-HMM
SO IT WOULD, IT WOULD, IT WOULD BE ADVANTAGEOUS TO US TO SEE IF SOMETHING IS DONE THAT THAT COULD BE A PERMANENT SITUATION GOING FORWARD FROM A STATE LEGISLATIVE PERSPECTIVE.
I HAVE A FEW QUESTIONS ON, ON THE PART THAT WE'RE DOING NOW, THE INVENTORY, UM, NOT SO MUCH THE DEBRIS REMOVAL, BUT ON THE BUILDINGS AND THINGS, DO WE DO THAT IN HOUSE? DO WE DO THE INVENTORY? DOES GSD GO TO EVERY BUILDING AND TAKE A PICTURE OF EVERY PIECE OF DAMAGE? OR DO WE HIRE SOMEBODY? I THINK IT'S A COMBINATION.
SO WHERE WE HAVE THE INTERNAL EXPERTISE, WE DO SEND OUR PROJECT MANAGERS AND DIFFERENT FOLKS OUT.
UH, IN, FOR SOME THINGS WE'LL HAVE TO HAVE CONSULTANTS OR CONTRACTORS, UM, WHETHER IT'S GSD OR ANY OTHER DEPARTMENT, LIKE PUBLIC WORKS OR AIRPORT.
SO I THINK I WOULD SAY IT'S A COMBINATION.
AND, UM, DIRECTOR DE BASQUE APPRECIATE YOUR EXPLANATION OF THE FEMA ADVANCE.
UM, WHEN, WHEN DO YOU EXPECT WE START GETTING SOME OF THAT? I WOULD SAY THAT THE FIRST PIECE, UM, RELATED TO THE DIRETO, UM, FEMA HAS APPROVED IT.
IT'S PENDING THE CHEATUM RIGHT NOW.
THE WAY I UNDERSTAND IT, WE'RE IN THE PART OF THE PROCESS WHERE, UM, THEY SUBMIT THINGS TO US CALLED RFIS, REQUEST FOR INFORMATION, AND WE RESPOND TO THEM.
DO YOU, DID THEY GIVE A TIMELINE? YEAH, SO FOR THE DURATION OF THE FIRST TRANCHE, THEY SAID IN APPROXIMATELY TWO TO THREE WEEKS, THEY SHOULD BE SUBMITTING IT.
UH, THAT'S FOR THE CATEGORY A FOR BARREL, IT'S GONNA TAKE A LITTLE BIT LONGER BECAUSE THE BARREL, UH, ADVANCE REQUEST WAS JUST OBLIGATED LATE LAST WEEK.
THAT'S WITH FEMA, AND THEN IT HAS TO FLOW DOWN TO TEEM, AND THEN WE HAVE TO WORK ON SATISFYING TEEMS RFIS.
AND LASTLY, THE, THE MONEY, THE OPERATION EMERGENCY OPS MONEY THAT'S BEING ABSORBED BY THE DEPARTMENTS? MM-HMM
AS WE GET REIMBURSED, I KNOW YOU, YOU MENTIONED IT GOES INTO THE, TO THE, UH, DISASTER FUND, BUT DOES IT THEN GO BACK TO THE DEPARTMENTS LIKE THAT 25%? WILL IT BE FUNNELED BACK TO THE DEPARTMENTS THAT ARE SPENDING IT? IT'LL BE, IT'LL BE REPLENISHED BASICALLY BACK TO THE DEPARTMENTS.
IT'LL MOVE THE EXPENDITURE FROM THE GENERAL FUND TO THE DISASTER FUND, FREEING UP THAT GENERAL FUND BUDGET.
UM, COUNCIL MEMBER MARTINEZ, THANK YOU, CHAIR.
AND JUST TO FOLLOW UP ON THAT QUESTION, UH, CHAIRWOMAN, UH, THE, WHEN IS THE REPORT GONNA COME TO US, LIKE POST HARVEY, WE HAD A REPORT ON WHAT THE IMPACTS WERE FOR FACILITIES.
UM, WHEN DO Y'ALL ANTICIPATE THAT REPORT BEING SHARED WITH US IN TERMS OF FACILITY DAMAGES, FACILITY JUST OVERALL MM-HMM
BECAUSE ALSO HOW MUCH TREAT DEBRIS WE PICKED UP AND, AND SO ON.
UM, I THINK ON THE FACILITY DAMAGES, IT'S, IT IS GONNA TAKE A WHILE.
I DON'T KNOW IF WE HAVE AN ESTIMATED TIME TO DO ALL THE DAMAGE ASSESSMENTS.
FACILITY, LIKE ACTUAL DAMAGES AND INFRASTRUCTURE DOES TAKE A WHILE.
UM, YOU KNOW, AS I WAS SAYING THAT IT'S JUST, IT'S A LONG-TERM PROCESS IN TERMS OF, UH, GETTING AN UNDERSTANDING FROM EITHER THE PROJECT MANAGERS OR ANY COMPANIES THAT, OR CONTRACTORS THAT THE CITY HIRES TO, TO GET A GOOD ESTIMATE.
YOU KNOW, SOMETIMES YOU'LL SEE ESTIMATES COMING OUT IN THE VERY BEGINNING PART OF A DISASTER, YOU KNOW, BY ITS VERY NATURE BECAUSE FOLKS, THAT'S MORE OF AN EYEBALL ESTIMATE.
AND SO IT'S GONNA BE, YOU KNOW, VERY ROUGH.
UH, I, I'VE SEEN ANYWHERE BETWEEN, YOU KNOW, IT COULD BE IN A, IN A SMALL BUILDING, THREE TO SIX MONTHS, IT, IT COULD BE MUCH LONGER AS WELL, UH, DEPENDING ON WHAT'S DAMAGED AND TO THE EX, THE EXTENT OF, UH, THE DAMAGE TO THAT ASSET.
IT COULD BE ABOUT TO, YOU KNOW, SIX MONTHS.
SO THE TIMELINE COULD BE SIX MONTHS ROUGHLY, UH, AT MINIMUM.
UH, AND THEN PROBABLY LONGER THAN THAT.
I THINK THAT'S FAIRLY ACCURATE.
AND I, I JUST SAY THAT BECAUSE, UM, I REMEMBER SITTING IN, UH, IN A MEETING, I THINK, UH, AT THAT TIME IT WAS GLORIA MORENO WHO WAS REPORT SHARING THAT REPORT WITH US.
AND IT, IT'S HELPFUL FOR US TO BE ABLE TO DIGEST THAT INFORMATION AND BE ABLE TO KIND OF SHARE THAT WITH THE COMMUNITY AS WELL.
UM, BECAUSE AGAIN, I THINK WHAT'S IMPORTANT, UH, FOR ME IS AS, AS MUCH INFORMATION CAN, THAT WE CAN SHARE WITH THE COMMUNITY, UH, UNDERSTANDING THE IMPACTS OF THESE WEATHER EVENTS, AND THEN OF COURSE, WHAT THE IMPACTS ARE TO OUR BUDGET, IT'S EASIER FOR THESE, UM, OTHER CONVERSATIONS THAT WE'LL BE HAVING IN THE NEXT, YOU KNOW, SIX TO EIGHT MONTHS.
UH, IT'S, IT'S HELPFUL FOR ME AS A COUNCIL MEMBER.
AND I AGREE THIS IS ALL VERY HELPFUL FOR US TO EXPLAIN TO, UM, THE COMMUNITIES THAT WE GO TO AND SPEAK ON A REGULAR BASIS ABOUT THE FINANCIAL IMPACTS OF THESE STORMS ON OUR, ON OUR BUDGET.
SO THANK YOU VERY MUCH FOR THE PRESENTATION.
I SEE NO MORE QUESTIONS IN THE QUEUE.
SO WE WILL MOVE ON TO AGENDA ITEM NUMBER FIVE, A DISCUSSION OF THE CITY OF HOUSTON'S REVENUE CAP AND ALSO THE STATE CAP AND ALL TAX INFORMATION.
DIRECTOR, DEBOWSKI, YOU ARE JUST ON FIRE TODAY,
UM, SO JUST BRIEFLY STARTING OFF, A LOT OF THESE SLIDES IN THE PRESENTATION
[00:55:01]
WILL LOOK FAMILIAR TO A LOT OF YOU.UM, SOME OF THEM, UH, ARE PART OF THE FIVE YEAR FORECAST PRESENTATION I GIVE AT THE TIME OF THE BUDGET.
UM, A LOT OF THEM, ESPECIALLY SOME OF THE BACKGROUND SLIDES WERE GIVEN, UM, WE WENT OVER THEM.
I KNOW YOU'RE ABSORBING A LOT OF INFORMATION AT THAT TIME.
BUT WHEN THE NEW COUNCIL MEMBERS COME IN IN DECEMBER, WE DO THE NEW COUNCIL MEMBER ORIENTATION.
UM, SO PART OF THAT IS THE, WE CALL IT FINANCIAL LITERACY.
SO SOME OF THESE SLIDES WERE COVERED AT THAT TIME.
SO I THINK, UM, AS WE ARE STARTING IN THE TRUTH AND TAXATION PROCESS, I THOUGHT IT WOULD BE A GOOD TIME TO GO OVER, UM, EXPLAINING SOME BACKGROUND ON WHAT IS THE REVENUE CAP, WHAT IS THE LOCAL CAP, WHAT IS THE STATE CAP.
UM, YOU KNOW, AS WE PREPARE TO MOVE FORWARD WITH THE, AS I MENTIONED, THE TRUTH AND TAXATION PROCESS IS THE PROCESS, UM, THAT WE HAVE TO FOLLOW IN STATE TAX CODE TO ADOPT OUR TAX RATE.
UM, MAJOR CAVEAT WITH THIS PRESENTATION, NONE OF THE TAX RATES YOU SEE IN HERE ARE, SHOULD BE CONSTRUED TO BE A PROPOSED TAX RATE FOR THE YEAR.
UM, WE HAVE DONE A VARIETY OF CALCULATIONS THAT ARE PRELIMINARY AND FOR DISCUSSION PURPOSES ONLY.
UM, WHEN WE GET TO THE POINT THAT WE WANT TO PROPOSE A TAX RATE, UM, YOU'LL SEE THAT IN THE FORM OF A SEPARATE REQUEST FOR COUNCIL ACTION.
UM, AND WE'LL BE SURE TO HAVE FOLLOW UP CONVERSATIONS WITH YOU, YOU, YOU KNOW, BEFORE WE GET TO THAT POINT OF WHAT THE PROPOSED TAX RATE IS GOING TO BE.
SO GOING ON TO THE FIRST SLIDE ON BACKGROUND, AND THESE ARE THE ONES THAT I SAID ARE PROBABLY GONNA LOOK AND SOUND, HOPEFULLY LOOK AND SOUND FAMILIAR.
UM, TO GIVE SOME BACKGROUND, UM, WE HAVE A LOCAL REVENUE CAP AND WE HAVE A STATE, UM, PROPERTY TAX CAP.
UM, ALL OF THESE CALCULATIONS WE HAVE TO COMPLETE ANNUALLY, UM, COMPARE THEM WITH EACH OTHER AND THEN COMPLY WITH THE LOWER OF ALL OF THESE CALCULATIONS.
SO THE FIRST, UM, SLIDE, THE FIRST COUPLE SLIDES FOCUSES ON THE LOCAL CAP.
SO THE LOCAL PROPERTY TAX CAP WAS ENACTED BY VOTERS VIA PROPOSITION ONE BACK IN 2004.
IT LIMITS THE CITY'S PROPERTY TAX REVENUES TO THE LOWER OF EITHER THE PRIOR YEARS CAP INCREASED BY POPULATION AND INFLATION, WHICH I MENTIONED EARLIER ON.
I THINK IT WAS IN THE MO MOFA REPORT OR THE PRIOR YEAR'S REVENUES INCREASED BY 4.5%.
PROP H THEN GOT ADDED ON BY VOTERS BACK IN 2006, AND THAT PERMITTED FOR THE ADDITIONAL COLLECTION OF $90 MILLION TO ANY BASE THAT IS USED TO CALCULATE THE REVENUE LIMITATIONS FOR PUBLIC SAFETY PURPOSES.
SO THAT PROP H $90 MILLION IS ADDED ON ONCE YOU DO THE PROP ONE CALCULATION.
IN OTHER WORDS, YOU DON'T GET TO GROW THE $90 MILLION BY CPI PLUS INFLATION OR FOUR POINT A HALF PERCENT.
THE 90 MILLION STAYS THE 90 MILLION EVERY YEAR.
SO SLIDE THREE, AND AGAIN, THIS IS ILLUSTRATIVE PURPOSES ONLY.
THERE'S A LOT OF NUMBERS ON HERE.
UM, BUT BASICALLY WE DO, AS I MENTIONED, WE DO THE TWO DIFFERENT CALCULATIONS.
UM, IN THE FIRST SUBSET OF BULLETS, WE TAKE THE, THE PRIOR YEAR IN THIS CASE, FY 20 FOURS PROPOSITION, ONE CAP OF 1.286 BILLION, UM, DOLLARS.
WE ADD THE INFLATION IN THE POPULATION, LIKE I MENTIONED.
UM, SOME OF THOSE NUMBERS DON'T COME OUT UNTIL, UM, SOMETIME BETWEEN THE PROPOSED BUDGET AND THE ADOPTED BUDGET.
SO THAT'S WHERE YOU SEE LIKE THE CONTROLLER MADE THE ADJUSTMENT, UM, JUST BECAUSE OF THE TIMING OF WHEN WE GET THOSE VALUES.
BUT FOR THIS YEAR, THE COMBINED, UM, INFLATION AND POPULATION TOTAL IS 3.95%.
SO YOU, UM, INFLATE THE PRIOR YEAR'S CAP AMOUNT BY THAT NUMBER.
AND THEN YOU ADD IN THE 90 MILLION FOR PROP AGE, AND YOU GET $1.4 BILLION, ROUGHLY 1.4, TWO 7 BILLION, AND SORRY, THESE NUMBERS ARE IN THOUSANDS.
THEN ON THE OTHER SIDE OF THE EQUATION, YOU HAVE TO TAKE THE PRIOR YEAR'S REVENUES AND INCREASE THOSE BY 4.5%.
YOU DO THAT AND THEN YOU ADD IN WHATEVER PORTION OF THE 90 MILLION, UM, BASED ON THAT CALCULATION AND COMPARE THOSE TWO NUMBERS.
SO BASED ON THAT, THE LESSER AMOUNT IS THE, UM, IS THE, WE'RE ON THE SIDE OF THE POPULATION AND INFLATION.
SO IT'S THE 1.427 BILLION IS WHAT WE, WE BUDGETED, UM, FOR THE FISCAL YEAR.
SO MOVING ON TO SLIDE FOUR, ZIP, ALL THAT'S NOT COMPLICATED ENOUGH.
WE HAVE TO DO ANOTHER SET OF CALCULATIONS TO COMPLY WITH THE STATE CAP CALCULATION.
SO YOU MIGHT HAVE REMEMBERED THERE WAS A LOT OF TALK BACK IN 2019 ABOUT SENATE BILL TWO THAT WAS ENACTED BY THE 86 LEGISLATURE.
UM, THAT BILL DID A LOT OF DIFFERENT THINGS.
UM, IT INCLUDED RENAMING SOME TERMS YOU MIGHT'VE USED TO HEAR THE EFFECTIVE TAX RATE, THE ROLLBACK TAX RATE.
NOW THOSE ARE CALLED THE NO NEW REVENUE TAX RATE AND THE VOTER APPROVAL RATE.
UM, IT ALSO, UH, CREATED A TRANSPARENCY
[01:00:01]
DATABASE WHERE MORE, MORE, MORE INFORMATION IS POSTED ON THE WEBSITES NOW AND AVAILABLE FOR THE PUBLIC TO SEE ELECTRONICALLY.UM, IT ALSO REDUCED THE NUMBER OF REQUIRED PUBLIC HEARINGS PER REQUIRED PER STATE LAW, AND IT ALSO EXPEDITED THE TIMELINE FOR ADOPTING THE TAX RATE.
SOME OF THE MOST IMPACTFUL CHANGES TO THE CITY, UM, AND TO OTHER TAXING JURISDICTIONS IS THAT IT REDUCED THE RATE, UM, REDUCED THE TAX RATE BASED ON, UM, PROPERTY VALUES THAT ARE SUBJECT TO AN APPEAL.
THAT WAS A BIG CHANGE WHEN SENATE BILL TWO GOT ENACTED.
UM, IT ALSO, THE ONE THAT YOU PROBABLY HEARD THE MOST TALK ABOUT IS IT REDUCED THE, THE MULTIPLIER FROM 8% TO 3.5%.
UM, AND I'LL GO A LITTLE BIT MORE INTO THAT MULTIPLIER ON THE, ON THE NEXT SLIDE.
SO THE TWO DIFFERENT CALCULATIONS ON THE STATE SIDE IS WE CALCULATE SOMETHING CALLED THE NNR, THE NO NEW REVENUE TAX RATE.
AND THIS IS THE EQUIVALENT OF WHAT USED TO BE CALLED THE EFFECTIVE TAX RATE.
SO THE NO NEW REVENUE TAX RATE IS THE TAX RATE THAT ALLOWS THE PUBLIC TO SEE THE RELATIONSHIP BETWEEN THE TAXES FOR THE PRIOR YEAR AND THE CURRENT YEAR, BUT ONLY BASED ON THE TAX RATE THAT WOULD PRODUCE THE SAME AMOUNT OF REVENUE IF APPLIED TO THE SAME PROPERTIES TAXED IN BOTH YEARS.
SO IT DOESN'T CONTEMPLATE ANY REVENUE DUE TO NEW VALUE.
AND THEN THE SECOND CALCULATION, THIS IS WHAT WE CALL THE STATE CAP, IS THE VOTER APPROVAL TAX RATE.
THIS IS THE MAXIMUM RATE ALLOWED BY LAW WITHOUT VOTER APPROVAL.
THIS CALCULATION SPLITS THE TAX RATE INTO TWO DIFFERENT COMPONENTS, AND THAT'S WHERE THE 3.5% OR 8% COMES IN.
IT SPLITS IT INTO COMPONENTS THAT RELATE TO YOUR MAINTENANCE AND OPERATIONS RATE AND A DEBT SERVICE TAX RATE.
SO, UNDER THE STATE LAW, UM, THE DEBT SERVICE TAX RATE IS JUST THE RATE NECESSARY TO MAKE DEBT SERVICE PAYMENTS.
THE M AND O RATE, HOWEVER, IS LAST YEAR'S MAINTENANCE AND OPERATION REVENUES THAT YOU COLLECTED INCREASED BY 3.5%.
IN THE CASE WHEN THERE'S A DECLARED DISASTER, THE STATE CALCULATION ALLOWS THAT MULTIPLIER TO GO UP TO 8%.
SO JUST TO SUM THINGS UP, WHEN WE CALCULATE THE VOTER APPROVAL RATE, WE HAVE TO COMPARE THAT RATE TO THE RATE THAT WOULD ALLOW US TO COLLECT THE PROP ONE AND H CAP AND DETERMINE WHICH OF THOSE RATES IS LOWER.
AND THAT'S THE RATE THAT WE COMPLY WITH.
SO, AS SOME BACKGROUND, AND THIS IS WHERE YOU'RE GONNA START TO SEE MORE FAMILIAR SLIDES THAT YOU SEE USUALLY AS PART OF THE FIVE-YEAR FORECAST AT THE TIME OF THE BUDGET.
THIS SLIDE, UM, SHOWS HISTORICALLY, WHERE HAS THE ADOPTED BUDGET, UH, BEEN COMPARED TO THE, THE CHARTER CAP.
UM, SO AS YOU CAN SEE, THE FULL IMPACT OF THE CAP IS SEEN HERE.
UM, THE, THE LOCAL CAP, WE HIT THE LOCAL CAP BACK IN FY 15 WHEN THE CITY STARTED LOWERING THE TAX RATE.
AND THE RATE HAS BEEN LOWERED NINE OUTTA THE LAST 10 YEARS.
UM, AND YOU CAN SEE THAT THE FULL IMPACT TO THE CAP IN TOTALITY.
UM, THE CITY HAS FOREGONE $2.2 BILLION IN REVENUE THAT IT COULD HAVE OTHERWISE COLLECTED OVER THAT PERIOD OF TIME, HAD THE TAX RATE REMAINED AT THE 63.88 CENTS.
SO IN, UM, IN FISCAL 24 ALONE, WHICH WE'RE JUST ABOUT TO CLOSE OUT THAT FISCAL YEAR, YOU SEE THAT THE FULL IMPACT OF THE CAP IN JUST IN THAT ONE YEAR ALONE WAS $400 MILLION.
SO, PUTTING IT INTO PERSPECTIVE, YOU KNOW, WHEN WE TALK ABOUT OUR STRUCTURAL BUDGET GAP, UM, OUR STRUCTURAL DEFICIT, REMEMBER, YOU KNOW, WE TALKED ABOUT OUR ESTIMATED, UM, OUR ESTIMATED GAP AT THE TIME IT WAS ABOUT $160 MILLION.
UM, BY THE TIME WE GOT TO THE ADOPTION OF THE BUDGET, I THINK WE DREW ABOUT, I'M NOT MISTAKEN, ABOUT 190, ABOUT $190 MILLION FROM FUND BALANCE FOR THE FY 25.
UM, SO IF WE HAD HAD THIS, YOU KNOW, ADDITIONAL $400 MILLION IN COLLECTION, YOU CAN SEE WE WOULD'VE GENERATED A SURPLUS AS OPPOSED TO DRAWING FROM THE FUND BALANCE.
SO ON SLIDE SEVEN, UM, WE JUST WANTED TO SHOW A COMPARISON OF THE, UH, PROPERTY TAX RATE COMPARISON TO OTHER CITIES IN TEXAS.
SO THESE FIGURES ARE BASED ON OUR TAX RATE THAT WAS ADOPTED LAST FALL, AND COMPARING IT TO THE TAX RATES IN THE OTHER CITIES AROUND THE STATE.
UM, YOU CAN SEE SAN ANTONIO'S TAX RATES AROUND 54 CENTS.
FORT WORTH 67 EL PASO AT 81, AND OUR TAX RATE IS 51.92 CENTS PER A HUNDRED DOLLARS EVALUATION.
SO WE WANTED TO TAKE THAT EXERCISE A LITTLE BIT FURTHER AND COMPARE THE CITY'S PROPERTY TAX RATE TO THE OTHER JURISDICTIONS,
[01:05:01]
AS WE MENTIONED IN THE PREVIOUS SLIDE.AND THEN YOU'VE HEARD ME TALK ABOUT BEFORE, UM, OTHER TAXING JURISDICTIONS ALSO HAVE OTHER SOURCES OF REVENUE THAT COME INTO THEIR GENERAL FUND FROM VARIOUS SOURCES.
UM, AS YOU ALL KNOW, WE, WE DON'T HAVE A GARBAGE FEE HERE, AND I'M NOT, I'M NOT HERE TODAY TO PROPOSE ONE.
THIS IS JUST FOR INFORMATIONAL PURPOSES.
UM, THESE CITIES THAT DO HAVE A GARBAGE FEE, UM, OTHER CITIES ALSO IN THE YELLOW SECTION, UM, THE GENERAL FUND TAKES A TRANSFER FROM A CITY OWNED WATER UTILITY.
UM, THE ORANGE SECTION REPRESENTS CITIES THAT TAKE A GENERAL FUND, UM, TRANSFER FROM A CITY OWNED ELECTRICITY, ELECTRIC, ELECTRIC UTILITY.
UM, AND WE BASICALLY TOOK THE AMOUNT OF REVENUE THAT COMES INTO THEIR GENERAL FUND AND TRANSLATED IT INTO WHAT AN EQUIVALENT TAX RATE WOULD BE HAD IT BEEN APPLIED, UH, TO THEIR PROPERTY TAX BASE.
AND WHEN YOU START LOOKING AT THE DIFFERENT TAXES AND FEES IN THOSE CITIES THAT SUPPORT THE GENERAL FUND, UM, YOU CAN SEE HOW THAT STACKS UP AGAINST HOUSTON WHO DOES NOT HAVE A GARBAGE FEE AND DOES NOT TAKE A TRANSFER FROM THE WATER OR ELECTRICITY UTILITY.
AND SO I THINK PART OF THIS SLIDE, WHAT'S IMPORTANT TO REMEMBER IS, YOU KNOW, EVEN THOUGH OUR PROPERTY TAX RATE IS LOWER, WE'RE ALSO DOING WITHOUT THESE OTHER SOURCES OF REVENUE AS WELL.
UM, AND IN THIS, YOU KNOW, DAY CERTAINLY, UM, CONSTITUENTS EXPECT AND DESERVE TO GET QUALITY SERVICES.
UM, AND YOU CAN SEE HOW WE COMPARE TO THE DIFFERENT REVENUES THAT THE, THAT THE OTHER CITIES BRING IN.
SO ONE OTHER, UH, THING WE THOUGHT WOULD BE INTERESTING TO LOOK AT IS WHAT THE AVERAGE HOMESTEAD TAXABLE VALUES ARE IN THESE OTHER CITIES.
AND TO COME UP WITH A, UM, A ROUGH ESTIMATE OF WHAT A ANNUAL TAX BILL FOR THE CITIES WOULD LOOK LIKE.
AND THIS EXCLUDES SCHOOL DISTRICT TAXES.
IT EXCLUDES COUNTY, RIGHT? THIS IS JUST FOCUSED ON THE CITIES ALONE AND APPLYING THEIR PROPERTY TAX RATES TO THEIR AVERAGE HOMESTEAD TAXABLE VALUES.
YOU CAN SEE THAT, FOR EXAMPLE, EVEN THOUGH AUSTIN'S TAX RATE IS LOWER THAN OURS AT 44 CENTS, YOU KNOW, THEIR TAXABLE VALUE IS HIGHER AT ABOUT $478,000 IS THEIR AVERAGE HOMESTEAD TAXABLE VALUE, BRINGING THEIR BILL TO ABOUT $2,100.
AND HOUSTON'S, UM, AVERAGE BILL ABOUT $1,600 FOR THE YEAR.
SO TRYING TO TIE THIS PRESENTATION TOGETHER WITH THE, UM, THE DISASTER COST ESTIMATES, UM, WE WANTED TO TAKE A LOOK AT, YOU KNOW, ONE, UM, DIFFERENT DIFFERENT WAYS, DIFFERENT SOLUTIONS TO HOW ARE WE GONNA COVER THESE COSTS.
UM, SO BASED ON THE PRELIMINARY ESTIMATE, UM, THAT WE GOT FROM THE APPRAISAL DISTRICT, UM, YOU KNOW, SO WE HAVE THREE DIFFERENT APPRAISAL DISTRICTS WE WORK WITH.
WE HAVE HARRIS COUNTY, APPRAISAL, DISTRICT, FORT BEND, AND MONTGOMERY COUNTY APPRAISAL DISTRICTS.
UM, OUR TAXABLE VALUE GREW AT ABOUT 3.85% OVER THE PRIOR YEAR.
UM, AND SO THAT'S THE, UH, WE'VE NOW RECEIVED THE CERTIFIED ROLE FROM OUR THREE APPRAISAL DISTRICTS, AND WE'VE STARTED TO CALCULATE THE TAX RATES, UM, BASED ON THAT ASSESSED VALUATION THAT WE'VE RECEIVED FROM THE APPRAISAL DISTRICTS.
UM, ONE THING THAT WE HAVE NOT TALKED ABOUT YET IS ON THE ALL THE PROP.
ONE, UM, BACKGROUND THAT I GAVE IS THAT PROP ONE DOES HAVE ADDITIONAL LANGUAGE IN IT THAT ALLOWS US TO, UM, INCREASE OUR REVENUES IN THE CASE OF A DECLARED DISASTER.
SO WE DID INVOKE THIS, UM, PROP ONE LANGUAGE TO COLLECT ADDITIONAL REVENUES FOR THE DISASTERS, UM, FOR THE MEMORIAL DAY FLOOD, THE TAX DAY FLOOD AND TROPICAL STORM IN MALDA.
UM, SO AS YOU SAW IN THE PREVIOUS SLIDES, UM, THE LOCAL SHARE OF THE DIRETO AND THE BARREL EXPENDITURE ESTIMATES ARE APPROXIMATELY $39 MILLION.
UM, AND IF YOU GO TO SLIDE 11, UM, THESE FIGURES TIE TO THE FIGURES IN THE OTHER SLIDE.
UM, IF YOU LOOK AT THE TOTAL ESTIMATE, THE TOTAL DISASTERS AT 210 MILLION THAT I PREVIOUSLY MENTIONED, UM, OF THAT, SO NOT LOOKING AT THE FEDERAL SHARE ON THIS SLIDE, RIGHT, JUST BREAKING DOWN BETWEEN THE TOTAL ESTIMATE AND HOW MUCH OF THAT IS GENERAL FUND.
YOU SEE THE, OF THE 210 MILLION, THE GENERAL FUND SHARE IS 1 59, AND THE 25% OF THAT IS THE 39.9 MILLION THAT I MENTIONED IN THE PREVIOUS PRESENTATION.
SO MOVING ON TO SLIDE 12, UM, SLIDE 12 GIVES YOU A VARIETY OF DIFFERENT TAX RATES, UM, THAT WE LOOKED AT THAT WE'VE CALCULATED USING A HOST OF DIFFERENT SCENARIOS.
UM, JUST LOOKING AT THE PRIOR YEAR TAX RATE, WHICH IS THE 51.919 THAT WE HAD LOOKED AT IN ALL THOSE SLIDES
[01:10:01]
PREVIOUS, THAT WAS THE TAX RATE FOR FISCAL YEAR 24.UM, BASED ON THE ASSESSED VALUATION THAT WE'VE RECEIVED FROM THE APPRAISAL DISTRICT, WE COULD BRING IN $1.38 BILLION OF REVENUE THAT WOULD LEAVE US ABOUT $45.6 MILLION SHORT OF OUR FY 25 BUDGET.
UM, SO THAT'S THE FIRST BAR THAT YOU SEE, THE NO NEW REVENUE TAX RATE.
UM, THAT'S, AGAIN, THAT'S THE RATE THAT WE HAVE TO CALCULATE PER THE STATE, UM, STATUTE.
THAT TAX RATE IS JUST SLIGHTLY UNDER THE CURRENT TAX RATE AND WOULD BRING IN ABOUT $62 MILLION BELOW THE BUDGETED AMOUNT OF REVENUE.
LOOKING AT WHAT A TAX RATE, UM, WOULD HAVE TO BE TO INCLUDE, UH, YOU KNOW, TO COLLECT THAT $39.9 MILLION, UM, TO COVER THE LOCAL SHARE OF THE DISASTER, THE TAX RATE WOULD NEED TO BE ABOUT 55 CENTS.
THAT'S THE FIRST GREEN BAR YOU SEE.
UH, IF WE JUST FOCUSED ON WHAT THE PROP ONE NH RATE WOULD BE WITHOUT THE DISASTER, THAT TAX RATE WOULD BE ABOUT 53.60 CENTS.
THE VOTER APPROVAL RATE, WHICH IS WHAT, UH, WE CALL THE STATE CAP, USING THE 3.5% MULTIPLIER, WOULD BE ABOUT 56 CENTS.
AND THE VOTER APPROVAL RATE, YOU KNOW, WE COULD, BECAUSE IT'S A DISASTER, THE STATE STATUTE ALLOWS YOU TO GO ALL THE WAY UP TO AN 8% MULTIPLIER.
SO JUST COMPARING ALL OF THESE RATES, UM, IF WE WERE TO SET A TAX RATE THAT WOULD ALLOW US TO COLLECT AND COVER THE LOCAL SHARE OF THE DISASTER, THAT $39.9 MILLION THAT I MENTIONED, UM, THAT RATE IS STILL WELL UNDER THE STATE, UM, TAX THE STATE CAP AT THE 3.5% AND, AND DEFINITELY UNDER THE STATE CAP AT THE 8%.
SO ON THE NEXT SLIDE, YOU CAN SEE THE COMPARISON BETWEEN THE LOCAL CAP AND THE STATE CAP NUMBERS.
UM, LOOKING BACK HISTORICALLY, I THINK WE'VE TALKED ABOUT IT, UM, AT THIS BODY MANY TIMES, IS THAT THE LOCAL CAP IS MORE RESTRICTIVE THAN THE STATE CAP.
UM, AS WE SEE, AND EVEN IN FISCAL 25, EVEN IF WE WERE TO INCLUDE THAT LOCAL SHARE OF DISASTER RELATED EXPENDITURES, IT'S STILL BELOW THE STATE CAPPED AMOUNT.
UM, SO HISTORICALLY YOU SEE IN FISCAL YEAR 21, THE LOCAL CAP WAS ABOUT $739,000 LESS THAN THE STATE CAP.
AND FISCAL 22 IS ABOUT $34 MILLION LESS.
IN 23, IT WAS ABOUT $29 MILLION LESS THAN THE STATE CAP.
AND IN FISCAL 24, ABOUT $11 MILLION LESS THAN THE STATE CAP.
UM, AND IN THIS YEAR, EVEN IF YOU INCLUDE THE, UM, 25% LOCAL SHARE FOR COVERING THE DISASTER, IT'S STILL ABOUT $33 MILLION BELOW THE STATE CAP.
SO SLIDE 14 GIVES YOU, UM, THOSE SAME RATES THAT YOU SAW TO SLIDES BACK ON SLIDE 12, JUST IN A, A DIFFERENT, UH, EASIER TO SEE FORMAT, I GUESS A BETTER VISUALIZATION WHERE YOU CAN SEE WHAT OUR CURRENT TAX RATE IS AT THE 51 CENTS.
UM, AND THEN THE OTHER TAX RATES ARE SHOWN THERE.
SO AS YOU CAN SEE, THE TWO BLUE SOLID BARRED TAX RATES, UM, WHICH ARE LOCAL CAP, UH, WITHOUT DISASTER REVENUES AND INCLUDING THE DISASTER REVENUES TO COVER THE 25% LOCAL SHARE ARE BOTH WELL UNDER THOSE TWO.
UM, STATE CAP AMOUNTS, THE VOTER APPROVAL RATE WITHOUT DISASTER AND VOTER APPROVAL RATE WITH DISASTER.
SO ON SLIDE 15, UM, LAYING OUT AND GOING LOOK, TALKING ABOUT THOSE SAME TAX RATES ON THE PREVIOUS SLIDE, UM, THERE'S DIFFERENT WAYS, RIGHT, THAT WE CAN COVER OUR COSTS AND THINK ABOUT THE BUDGETARY IMPACT OF THIS.
UM, SO YOU CAN SEE ON ROW A, UM, THAT TAX RATE, THE, THE SHADED BLUE BAR FROM THE PREVIOUS SLIDE.
IF WE USE THE CURRENT TAX RATE OF 51.99 CENTS, UM, THE REVENUE WE WOULD BRING IN WOULD BE ABOUT $46 MILLION BELOW THE BUDGET, NOT INCLUDING THE DISASTER EXPENDITURES.
UM, AND ONCE YOU ADD THOSE DISASTER EXPENDITURES IN WHICH, UH, THE LOCAL SHARES ABOUT, YOU KNOW, THE 39 MILLION I MENTIONED, WE WOULD NEED TO IDENTIFY IF WE SET THE TAX RATE AT 51 9 1 9, WE WOULD NEED TO IDENTIFY ABOUT $86 MILLION IN EXPENDITURE REDUCTIONS IN THE GENERAL FUND, UM, TO COVER THE COSTS NEEDED TO DEAL WITH THE, THE LOCAL SHARE OF THE DISASTER AND TO, TO FUND THE BUDGET.
LOOKING AT OPTION B, THE TAX RATE OF 53 6 4 8 CENTS, UM, THAT IS A CHANGE FROM THE CURRENT TAX RATE OF 1.70 CENTS WOULD ALLOW US TO COLLECT THE BUDGET AMOUNT OF REVENUE, BUT WE WOULD STILL NEED
[01:15:01]
TO FIND, UH, WE ROUNDED 39.9 MILLION TO 40 FOR THIS SLIDE PURPOSE TO COVER THAT 25% LOCAL SHARE OF DISASTER.UM, A TAX RATE OF 55 CENTS WOULD ALLOW US TO, UM, COLLECT OUR BUDGETED AMOUNT OF REVENUE AND COVER THE 25% LOCAL SHARE OF THE DISASTER.
AND THEN ROW D UH, THE 56.40 CENTS, THIS IS THE STATE CAP CALCULATION USING THE 3.5% MULTIPLIER.
UM, WE WOULD BE ABLE TO, YOU KNOW, THAT THAT TAX RATE WOULD ALLOW US TO BRING IN REVENUES THAT EXCEED OUR BUDGET, WOULD COVER THE LOCAL SHARE OF THE DISASTERS AND ACT AS ADDITIONAL CASH FLOW FOR DISASTER RECOVERY.
AND THAT IS SOMETHING THAT PROPOSITION ONE LANGUAGE DOES ALLOW.
THE PROPOSITION ONE LANGUAGE THAT TALKS ABOUT DISASTERS DOES NOT LIMIT THE ADDITIONAL COLLECTIONS TO THE LOCAL SHARE ONLY.
UM, IT, IT TALKS ABOUT WHATEVER, YOU KNOW, IF THERE'S A DECLARED DISASTER, YOU CAN BRING IN THOSE ADDITIONAL REVENUES.
SO AGAIN, SORRY, SORRY, CAN I, YES.
'CAUSE THAT WAS CONFUSING TO ME.
SO YEAH, WE, WE NORMALLY HAVE TO TAKE THE LOWER, YOU KNOW, THE, THE LOWER, WHICH IS ALWAYS OUR, OUR OUR 2004 LIMIT AS OPPOSED TO THE STATE ONE.
BUT THE DISASTER ALLOWS US TO USE THE STATE ONE.
WE STILL NEED TO COMPLY WITH THE STATE CAP AND THE LOCAL CAP, RIGHT? THE LOCAL CAP LANGUAGE PROP ONE ALLOWS YOU TO COLLECT ADDITIONAL REVENUES NEEDED TO RECOVER FROM A DISASTER.
IT DOESN'T MENTION THERE WAS NO STATE CAP, YOU KNOW, I MEAN, WE HAD, WE STILL HAD THE 8% RIGHT CAP OKAY.
EVEN BEFORE IT WENT DOWN TO THE 3.5%.
RIGHT? UM, BUT IT DOESN'T, THE PROP ONE LANGUAGE DOESN'T TELL YOU IT HAS TO BE THE LOCAL SHARE, OR IT CAN ONLY BE A CERTAIN PERCENTAGE OR A CERTAIN DOLLAR AMOUNT.
SO BASICALLY THAT, SO OF SUBSTANTIATE, SO BASIC, THESE A, B, C, D, E OPTIONS ARE AVAILABLE? YES.
YOU WE'RE NOT LIMITED TO THE PROP ONE AND H ONES, CORRECT? I THINK THE, OKAY, GO ON.
NO, NO, BUT YOU WERE RIGHT THERE WHERE I WAS COMPETING.
THAT'S A, THAT'S A GOOD CLARIFICATION BECAUSE OPTION C, THE 55 CENTS THAT ALLOWS US TO COVER THE 25% OF THE DISASTER COSTS, THAT LOCAL SHARE, THAT'S, THAT'S A CALCULATION, RIGHT? THE PROP ONE DOESN'T SAY YOU CAN ONLY COLLECT THE LOCAL SHARE.
IT WOULD ALLOW US TO COLLECT THE ENTIRE AMOUNT IF WE WANTED THE ENTIRE 50.
WHAT SLIDE WAS THAT ON? NOT THE WHOLE 200 MILLION.
'CAUSE THE ENTIRE 210 MILLION DOESN'T PERTAIN TO GENERAL FUND.
SOME OF IT PERTAINS TO THE UTILITY, LIKE WE MENTIONED, BUT UNDER PROP ONE, YOU COULD SET A RATE TO COLLECT THE ENTIRE $159 MILLION.
THIS IS JUST A, YOU KNOW, WE DID A CALCULATION TO SEE IF IT WAS JUST A LOCAL SHARE.
WHAT WOULD THE RATE BE? UM, SO GOING DOWN TO LINE E, THIS IS THE STATE CAP AMOUNT USING THE 8% MULTIPLIER AND THE TAX RATE WOULD BE, UH, 58 CENTS UNDER THAT SCENARIO AREA.
SO GOING ON TO SLIDE 16, UM, THIS GIVES A HISTORICAL VIEW AT WHAT THE HOMEOWNER RELIEF HAS BEEN SINCE THE START OF THE REVENUE CAP, UM, SINCE IT WAS HIT IN 2015.
UM, SO AS YOU CAN SEE, IF YOU LOOK AT THE, THE NOTE ON THE BOTTOM, UM, THIS ADDS UP WITH THE TOTAL TAX RELIEF TO THE AVERAGE HOMESTEAD WAS OVER THE COURSE OF THOSE YEARS, SINCE 2015, THE CUMULATIVE SAVINGS TO THE AVERAGE HOMESTEAD HAS BEEN, UH, $1,978, ABOUT $1,900.
UM, YOU CAN SEE IT'S BROKEN DOWN BY YEAR.
UH, LAST YEAR, FOR EXAMPLE, IN 2024, THE AVERAGE HOMESTEAD, UM, THEIR RELIEF TO THEIR TAX BILL WAS ABOUT $369 VERSUS WHAT, UH, THEIR TAX BILL WOULD'VE BEEN HAD THE TAX RATE BEEN THE 63.88 CENTS.
UM, JUST FOR ILLUSTRATION PURPOSES, AND WE CAN RUN THIS SCENARIO USING ANY OF THOSE RATES FROM THE PREVIOUS SLIDE, BUT, UM, THIS ILLUSTRATION USES THAT RATE OF THE 55 CENTS RATE, WHICH IS OPTION C UNDER THIS SCENARIO, UM, THE AVERAGE HOMESTEAD WOULD STILL SEE A REVENUE CAP TAX RELIEF OF ABOUT $280 IN THEIR BILL THIS YEAR, COMPARED TO WHAT THEIR BILL WOULD HAVE BEEN HAD THE TAX RATE BEEN THE 63.88 CENTS.
UM, SO YOU SEE THAT ON THE RIGHTMOST SLIDE.
SO AGAIN, JUST GOING TO THE VERY BOTTOM, THE LANGUAGE ON THE VERY BOTTOM, SINCE THE, SINCE THE BEGINNING OF US HITTING THE REVENUE CAP IN FY 15, THE TOTAL RELIEF IN TOTALITY, AND WHEN YOU ADD UP ALL THE YEARS TOGETHER FOR THE AVERAGE HOME IS ABOUT $1,900.
SLIDE 17 GIVES YOU A VIEW OF WHAT THE HISTORICAL PROPERTY TAX RATES HAVE BEEN.
AS I MENTIONED, WE'VE LOWERED THE RATE NINE OUT OF THE LAST 10 YEARS, UM, LOOKING,
[01:20:01]
UM, WITH THE FIRST GREEN ARROW, WHICH IS WHEN PROP ONE AND H THAT'S WHEN WE HIT THE TAX CAP AND WE LOWERED THE RATE FROM 63 8 7 5 TO 63 1 0 8.AND YOU CAN SEE IT'S LOWERED, UM, PRETTY CONSISTENTLY SINCE THEN, WITH THE EXCEPTION OF FY 19 WHEN IT WENT UP JUST SLIGHTLY.
UM, SO JUST FOR, YOU KNOW, ILLUSTRATION PURPOSES AND LOOKING AT HISTORICALLY WHERE THESE RATES FALL, UM, THE FY 25, AND AGAIN, THIS IS NOT A PROPOSED TAX RATE WITH OPTION C, WHICH IS THE, JUST ONE OF THE MANY SCENARIOS WE RAN.
UM, THAT TAX RATE IS ABOUT ON PAR WITH WHAT THE TAX RATE WAS, UM, IN FISCAL YEAR 22, IF YOU LOOK JUST THREE YEARS BACK.
SO NOW THAT WE'VE GONE OVER ALL THESE DIFFERENT SCENARIOS AND OPTIONS, UM, GOING BACK TO THE TIMELINE FOR THE PROCESS.
SO, UM, WE RECEIVED THE CERTIFIED ESTIMATE FROM THE APPRAISAL DISTRICTS BACK AT THE END OF JULY.
UM, RECEIVING THAT CERTIFIED ESTIMATE STARTS THE PROCESS FOR US TO CALCULATE THE TAX RATE.
SO BACK ON AUGUST 14TH, WE TOOK THE FIRST RCA TO CITY COUNCIL, WHICH WAS, UM, SUBMITTING THAT ESTIMATED ROLE AND ADOPTING AN ANTICIPATED COLLECTION RATE BASED ON WHAT THE HARRIS COUNTY TAX OFFICE INFORMATION THEY'VE PROVIDED US AND APPOINTING THE DESIGNATED OFFICERS IN THE FINANCE DEPARTMENT TO PERFORM THE CALCULATIONS.
UH, THE FOLLOWING WEEK WE TOOK RCA NUMBER TWO WAS THE SECOND RCA, AND AT THAT POINT WE SUBMITTED THE NO NEW REVENUE AND VOTER APPROVAL RATES, UM, BASED ON THOSE CERTIFIED ESTIMATES THAT WE GOT BACK IN JULY.
UM, AND THESE ARE CALCULATIONS THAT WE HAVE TO PERFORM IN ACCORDANCE WITH THE STATE LAW.
SO THEN AT THE END OF AUGUST, WE RECEIVED THE CERTIFIED ROLE FROM THE THREE APPRAISAL DISTRICTS AND WHAT WERE, UH, WHAT WE DID THEN WITH THAT APPRAISAL ROLE AS WE UPDATED ALL OF THESE CALCULATIONS BASED ON THAT CERTIFIED ROLE.
UM, AND SO OVER THE NEXT COUPLE WEEKS, OUR PLAN IS, AND THIS IS A TENTATIVE TIMELINE, DEFINITELY SUBJECT TO CHANGE, WE'RE PLANNING TO BRING OUR NEXT RCA TO COUNCIL IN A COUPLE WEEKS ON SEPTEMBER 25TH TO FORMALLY PROPOSE A TAX RATE AND THEN SUBMIT THE NO NEW REVENUE TAX RATE AND THE VOTER APPROVAL RATES THAT WE HAVE IN HERE.
UM, THOSE HAVE TO ALSO BE, UH, INCLUDED IN THAT RCA AND, UM, THAT RCA WILL NOT, NO TAX RATES WILL BE ADOPTED ON THAT DAY.
THAT RCA NUMBER THREE IS TO PROPOSE THE RATES AND TO SET A PUBLIC HEARING, UM, SO THAT THE PUBLIC HAS A CHANCE TO COME IN AND, UM, TALK AND ASK QUESTIONS ABOUT THE TAX RATE.
UM, SO A COUPLE DAYS FOLLOWING THAT COUNCIL MEETING, THE NOTICE WILL BE PLACED IN THE HOUSTON CHRONICLE, WHICH WILL LAY OUT WHAT THE PROPOSED TAX RATE IS AND WHAT THE STATE, UM, CALCULATIONS FOR THEIR TAX RATES ARE.
WE PUBLISH THAT NOT JUST IN THE CHRONICLE, BUT WE RUN, UH, WE RUN IT ON HTV AND IT'S ALSO ON THE CITY'S WEBSITE.
AND THEN, UM, THE PLAN WOULD BE TO HAVE THE PUBLIC HEARING ON OCTOBER 9TH, UM, AND ALSO TAKE ACTION THAT DAY TO ADOPT THE TAX RATE AND THE DEADLINE.
I KNOW WE HAVE TBD HERE BECAUSE WHEN WE WERE FINALIZING THE PRESENTATION, WE HADN'T QUITE GOTTEN ALL THE INFORMATION, BUT, UM, THE DEADLINE TO ADOPT THE TAX RATE IS 60 DAYS, UM, FOLLOWING THE CERTIFIED ROLE.
SO THAT'S THE CURRENT TIMELINE.
LIKE I MENTIONED, IT'S A DRAFT AND SUBJECT TO CHANGE, BUT, UH, THOSE ARE THE DATES.
AND THE LAST DAY WE HAVE, AS I MENTIONED, TO GET THE TAX RATE ADOPTED IS OCTOBER 28TH BASED ON THE 60 DAY, UH, LAID OUT IN STATE LAW.
THAT CONCLUDES MY PRESENTATION, MELISSA.
THIS IS A LOT OF DENSE INFORMATION AND I WILL BE CARRYING THIS AROUND ALL OVER TOWN.
AND I, I DEFINITELY, SO I REALLY, REALLY APPRECIATE THE HARD WORK ON THIS, UH, MAYOR PRO TEM CASTEX TATUM, JUST IF I COULD HAVE IT, ONE POINT OF PERSONAL PRIVILEGE.
I, UH, I WANTED TO THANK MY, MY TEAM BEHIND ME THAT DID ALL THESE CALCULATIONS.
IT'S A LOT OF SCENARIO RUNNING AND A LOT OF DIFFERENT OPTIONS, SO, UM, I APPRECIATE ALL THEIR HARD WORK.
AND I'M FOREVER ASKING ABOUT THESE CALCULATIONS, SO REALLY APPRECIATE HAVING 'EM.
THIS IS A LOT OF INFORMATION, UH, ON PAGE EIGHT, UH, WHERE YOU LAID OUT THE DIFFERENCES, UM, OF THE TRANSFER FROM WATER AND UTILITY AND GARBAGE FEE FOR THE OTHER CITIES.
UM, HU HOUSTON DEFINITELY DOESN'T HAVE THE GARBAGE FEE.
[01:25:01]
THE WATER AND UTILITY? WHAT, WHAT OPTIONS DO WE HAVE FOR ANY TYPE OF TRANSFER FEE? MM-HMMSO WE DON'T, THE CITY OF HOUSTON DOES NOT OWN AN ELECTRICITY UTILITY.
SO THE ORANGE BAR, I MEAN, I KNOW WE DON'T OWN IT, BUT I'M JUST SAYING WHAT'S OUR OPTIONS FOR A TRANSFER MM-HMM
DO, ARE THERE ANY CITIES THAT DON'T OWN UTILITIES BUT STILL GET A FEE FROM THE SERVICES? MM-HMM
SO WE DO GET AN ELECTRICITY FRANCHISE FEE, RIGHT? NOT FROM A CITY OWNED UTILITY.
I THINK ON THE WATER UTILITY IS ONE WHERE THE OTHER CITIES ARE, UM, HAVE THAT AVAILABLE TO THEM THAT WE HAVE NOT DONE HISTORICALLY.
UH, SO WE OWN OUR WATER UTILITY AND IT'S SOMETHING THAT IS, IT'S AVAILABLE TO US.
IT'S A, IT WOULD BE A PROCESS TO GO THROUGH IT.
UM, BUT IT'S DEFINITELY POSSIBLE AND IT'S, IT'S AN OPTION THAT'S ON THE TABLE WAS SOMETHING THAT I TOUCHED VERY BRIEFLY ON DURING THE FIVE YEAR FORECAST, UM, AT THE TIME OF THE BUDGET.
SO IT'S DEFINITELY, IT IS AN OPTION.
UM, I'D BE CURIOUS TO EXPLORE WHAT THAT, I MEAN, I, I COULD IMAGINE THAT THERE'S SOME PROS AND CONS AND THERE'S SOME GIVE AND TAKE, AND THEN, YOU KNOW, WILL WE BE MAKING A SITUATION WORSE FOR ONE AREA TO TRY TO MAKE IT BETTER FOR THE OTHER? UH, AND THEN MY OTHER QUESTION IS, I REALLY WANT PEOPLE TO UNDERSTAND THE CORRELATION OF THE APPRAISAL DISTRICT ROLE.
HOW DO WE COMMUNICATE THIS INFORMATION TO THE AVERAGE HOUSTONIAN WHO, IF WE PICK ONE OF THESE DECISIONS, WILL SAY, OH, THE CITY IS RAISING MY TAX TAX RATE, UM, SO THAT THE AVERAGE HOUSTONIAN WILL UNDERSTAND THAT WE HAVE ALL THESE DEMANDS FOR SERVICES AND PEOPLE DESERVE TO HAVE THE SERVICES, BUT THEN WE ALSO HAVE TO PAY FOR THE SERVICES.
UM, I THINK THAT SLIDE 17 IS ONE THAT WE TALK ABOUT AND LOOK AT A LOT, UM, THAT THE CITY HAS HAD TO LIVE WITH THE LOCAL TAX CAP, YOU KNOW, SINCE IT TOOK, I MEAN, IT TOOK EFFECT, VOTERS VOTED IN IN 2004, BUT WE STARTED BUDGETING AT THE CAP AND HIT THE CAP IN 2015.
UM, BECAUSE WE'VE HAD TAXABLE VALUE GROWTH.
UM, WHEN WE GET THOSE CERTIFIED VALUES IN EVERY YEAR, AND WE KNOW WHAT OUR CAPPED AMOUNT OF REVENUE IS, OUR ALLOWED ALLOWABLE AMOUNT OF REVENUE THAT WE CAN BRING IN, THAT PERCENTAGE INCREASE THAT YOU SEE YEAR OVER YEAR HAS PALED IN COMPARISON TO THE TAXABLE VALUE GROWTH THAT WE'VE SEEN ON THE ROLL.
AND THAT'S RESULTED IN US HAVING TO DECREASE THE TAX RATE OVER TIME.
SO I THINK HISTORICALLY, WHEN YOU, WHEN YOU START LOOKING AT HOW THE TAX RATE HAS COMPARED, THE, THE RESIDENTS HAVE SEEN THE BENEFIT OF HAVING A LOWER PROPERTY TAX BILL, BUT THE FLIP SIDE OF THAT IS THE IMPACT TO CITY SERVICES, RIGHT? I THINK WE ALL KNOW IT, WE HEAR IT.
I PEOPLE WANT MORE DONE WITH THEIR, UM, GARBAGE COLLECTION.
THEY WANNA HAVE PUBLIC SAFETY AS A PRIORITY WITH THE MORE OFFICERS.
UM, YOU KNOW, THE, WE SAW THE, THE LACK OF HAVING A CONTRACT WITH THE FIRE DEPARTMENT FOR SO MANY YEARS.
SO THERE'S A PROS AND CONS, YOU KNOW, THERE'S BOTH SIDES OF THE SAME COIN WITH THE, YES, YOU'VE HAD A LOWER BILL, BUT YOUR SERVICES HAVE BEEN IMPACTED AS WELL.
I GUESS THE, WHAT I'M REALLY LOOKING FOR IS, I DON'T KNOW WHO, WHO WORKS WITH THE APPRAISAL DISTRICT.
UM, SO THAT, I MEAN, THERE'S ONE CHART WHERE THE, THE APPRAISAL ROLLS WENT UP SO HIGH AND WE HAD TO LOWER MM-HMM
AND THEN NOW I, I, WHAT I'M LOOKING FOR IS HOW DO WE INCREMENTALLY DO THIS INSTEAD OF THE DRASTIC INCREASES IN THE APPRAISAL ROLES THAT MAKE US DRASTICALLY HAVE TO REDUCE MM-HMM
I MEAN, THOSE DRASTIC CHANGES MAKE US HAVE TO HAVE REAL IMPACTS.
AND I THINK, UM, YOU KNOW, A BIG PIECE TO THAT IS THE, IS THE REFUNDS.
YOU SEE, YOU KNOW, WHEN THE APPRAISAL DISTRICTS HAVE A SUCH A HIGH TAXABLE VALUE GROWTH, PEOPLE ARE PROTESTING THEIR BILLS AND GETTING REFUNDS, AND WE HA WE
[01:30:01]
CALL IT VALUE LOSS.WE MAKE A CERTAIN ASSUMPTION ABOUT VALUE LOSS WHEN WE CALCULATE OUR TAX RATE, HOW MUCH OFF OF THE CERTIFIED ROLE IS GOING TO BE LOST THROUGH, UM, UH, PROTESTS, YOU KNOW, UM, WHEN PEOPLE ULTIMATELY SETTLE THEIR BILL.
AND LAST YEAR WE SAW HISTORICALLY HIGH VALUE LOSS, UM, AT ABOUT $6 BILLION OF OUR TOTAL ROLE.
UM, THAT'S HIGHER THAN, THAN WE'VE EVER SEEN.
UM, AND SO I THINK THAT WE CERTAINLY CAN HAVE THAT CONVERSATION.
WE CAN, YOU KNOW, WORK IN PARTNERSHIP WITH THE APPRAISAL DISTRICT, BUT THEY DO FUNCTION INDEPENDENTLY OF THE CITY.
UM, SO I THINK IT HAS TO BE, YOU KNOW, ENGAGING, ENGAGING OUR PARTNERS IN THOSE THREE.
AND I DON'T WANNA JUST FOCUS ON HCA, RIGHT? BECAUSE WE DO HAVE THREE DIFFERENT APPRAISAL DISTRICTS THAT WE WORK WITH.
UM, HC OF COURSE IS THE BULK OF OUR, OF OUR ROLE.
UM, BUT ENGAGING THOSE STAKEHOLDERS, AND WE CERTAINLY DO, YOU KNOW, AT, AT OUR LEVEL, HAVE CONVERSATIONS WITH THEM ABOUT, YOU KNOW, WHAT THE IMPACT OF THIS IS IN TERMS OF OUR RATE SETTING.
UM, BUT THEY'RE, YOU KNOW, THEY, THEY FUNCTION INDEPENDENTLY OF THE CITY.
I CAN PUT YOU BACK IN, UM, COUNCIL MEMBER MARTINEZ.
I'M GONNA START BACKWARDS, UH, FROM SLIDE 18.
UH, WHEN YOU'RE SPEAKING TO THE PUBLIC HEARING, AND THIS IS KIND OF A PIGGYBACKING OFF OF COUNT MAYOR PRO, TE CASSIUS TATUM, UM, WE'LL HAVE THOSE PUBLIC HEARINGS, BUT WILL, IS THERE A POSSIBILITY TO HAVE YOU ALL ALSO COME OUT TO THE COMMUNITY TO HAVE THIS, UM, EDUCATED CONVERSATION WITH THEM? BECAUSE AGAIN, FOLKS DON'T REALIZE THAT WE'VE DECREASED THE, YOU KNOW, THE TAX RATE.
ALL THEY SAY IS, MY TAXES ARE GOING UP.
AND I HAVE THIS CONVERSATION, I HAD IT THIS PAST WEEKEND WITH TWO DIFFERENT SUPER NEIGHBORHOOD AND A CIVIC CLUB, UM, UNAPOLOGETICALLY, THIS IS WHERE WE ARE.
WE'VE LOWERED IT FROM 63 TO NOW 51.
DON'T, DON'T TAKE AWAY DEBT SERVICES THAT WE HAVE AS WELL.
UH, SO NOW WE'RE LIKE AT 30 SOMETHING, 31 30 2 CENTS THAT WE'RE WORKING WITH MM-HMM
AND SO, YOU KNOW, I KNOW WE HAD, UH, BUDGET WORKSHOPS THAT WERE OUT IN THE COMMUNITY, BUT I THINK THIS CONVERSATION SHOULD BE SIMILAR TO A BUDGET WORKSHOP MM-HMM
UH, OUT IN THE COMMUNITY, WHICH I, YOU KNOW, OUR CHAIRWOMAN AND, AND VICE CHAIR, UH, LED ON.
I'M NOT SAYING THAT Y'ALL HAVE TO DO THIS, DO THIS, HAPPY TO DO IT.
UM, BUT I WOULD, I WOULD, UH, HOPE THAT WE COULD HAVE, YOU KNOW, FOUR DIFFERENT PARTS OF THE CITY, UH, HAVING THIS CONVERSATION, UH, BECAUSE IT'S AN IMPORTANT ONE.
UM, AND THEN TO MOVE ON TO, UH, SLIDE 17, UH, PRIOR TO OUR SEVEN POST REVENUE CAP, WE'RE AT 66 AND 95 TO 2000, AND WE DECREASED IT MM-HMM
UM, WHY WERE WE, WHY WERE WE DECREASING IT AT THAT TIME PRIOR TO OUR OWN SELF-IMPOSED REVENUE CAP? YEAH, I, I WASN'T HERE THEN, BUT MY UNDERSTANDING IS THAT, UM, BASED ON WHAT THE ESTIMATE OF THE TAXABLE VALUE WAS GOING TO BE, UM, WE WERE BUDGETING THE AMOUNT OF PROPERTY TAX REVENUE THAT WE NEEDED AND MADE ADJUSTMENTS TO THE RATE ACCORDINGLY.
SO THOSE ARE GOOD CONVERSATIONS TO HAVE WITH THE COMMUNITY.
SLIDE 16, IT SHOWS WHAT WE'VE BEEN, UH, GIVING FOLKS THEIR SAVINGS.
UH, IT WAS 14, $13 AND 2015, AND NOW IT'S ABOUT $280 MM-HMM
UM, HAVING THAT, UH, AGAIN IN DEBT CONVERSATIONS THAT, YOU KNOW, AT ONE POINT WE'RE, WE'RE GIVING YOU BACK OR TO, YOU KNOW, FOR LACK OF BETTER WORDS, $13, NOW WE'RE GIVING YOU $280, UM, TO HELP WITH THAT CONVERSATION.
IT'D BE GREAT TO SAY, WHAT DOES THOSE SERVICES COST WHEN IT COMES TO TRASH FIRE, YOU KNOW, X, Y, AND Z AND WHAT THAT WOULD COST.
SO IF IT'S GONNA MEAN THAT INSTEAD OF $280 BEING SAVED, I CAN SAVE $250, BUT I'M STILL HAVING A SAVING, I THINK THOSE CONVERSATIONS ARE IMPORTANT TO HAVE AS WELL.
UM, AND THEN THE LAST ONE, UM, THE, IN ORDER TO GO AHEAD AND, UH, MOVE FORWARD WITH THE, UM, AND I'M TRYING TO FIND THE SLIDE HERE.
IT IS, UH, PROP, PROP ONE PLUS H TAX RATE WITH DISASTER.
WE CAN DO THAT ALL INTERNALLY WITHOUT GOING BACK TO THE VOTERS.
UM, AND SO WE COULD DO UP TO 58 CENTS TO THE A HUNDRED DOLLARS WITHOUT GOING BACK TO THE VOTERS.
UM, HOW MANY TIMES HAVE WE DONE THE DISASTER, UH, THAT REIMBURSEMENT OR THAT, THAT, UH, THAT PART OF THE, UH, PROPOSITION? UH, WE'VE DONE IT THREE TIMES.
WE DID IT FOR MEMORIAL DAY, FOR TAX DAY, AND FOR TROPICAL STORM AMELDA.
AND, AND I SAY THAT BECAUSE WE'VE HAD MULTIPLE DISASTERS THROUGHOUT THE LAST NINE YEARS, UM, AND I KNOW IT'S A HARD CONVERSATION AS A BODY TO HAVE THAT SAY, HEY, DURING THIS TIME WE'RE GONNA, UH, YOU KNOW, INCREASE THE TAX RATE.
UM, MY HOPE IS THAT WE COULD, YOU KNOW, STAND TALL AND SAY, THIS IS WHAT WE HAVE, WHERE WE ARE, UM, THESE ARE THE INEFFICIENCIES.
OF COURSE, WE HAVE AUDITS THAT SHOULD BE COMING IN SOON.
UH, BUT AT THE END OF THE DAY, REALLY HAVE A, A REAL HONEST AND TRANSPARENT CONVERSATION ABOUT WHERE OUR TAX RATE SHOULD BE MOVING FORWARD.
SO I APPRECIATE THE GREAT PRESENTATION.
[01:35:01]
I THINK WE NEED TO HAVE SOME, UH, SOCIAL MEDIA IMAGES THAT ARE JUST EASILY READABLE, AND THEN WE CAN START SHARING THAT WITH FOLKS AS WELL, UH, TO START, UH, MAKING SURE THAT THE COMMUNITY BECOMES MORE EDUCATED ABOUT THIS CONVERSATION TOO.AND I THINK, UM, YOU KNOW, I DEFINITELY SUPPORT THE IDEA, UM, YOU KNOW, AND WOULD DEFINITELY LOOK TO LEADERSHIP AND GUIDANCE ON, UM, GOING OUT TO THE COMMUNITY.
AND I THINK THAT'S PART OF, UM, YOU KNOW, WHY I WANTED TO HAVE THIS PRESENTATION AND GO OVER, I KNOW IT'S A LOT OF NUMBERS, BUT TO TRY TO GO OVER ALL THE DETAILS AND GET AS MUCH OF THE FACTS OUT THERE AND TO GIVE US A LITTLE BIT OF TIME BETWEEN NOW AND, UM, AND LIKE I MENTIONED ON THE TIMELINE, THESE ARE TENTATIVE DATES.
WE KNOW THAT THE FINAL DATE BY WHICH WE HAVE TO ADOPT THE TAX RATE IS OCTOBER 28TH.
SO WE DO HAVE SOME TIME AND, UM, YOU KNOW, AS SOON AS WE GOT THE CERTIFIED ROLE INFORMATION IN, UM, YOU KNOW, CALCULATING THESE NUMBERS AND COMING TO THIS BODY, WANTING TO SHARE THIS INFORMATION.
SO I THINK WITH THE TIMELINE, YOU KNOW, WE CAN CERTAINLY ACCOMMODATE SOME ADDITIONAL ENGAGEMENT AND EDUCATION, UM, OUT WITH THE CONSTITUENTS.
SO I'D APPRECIATE THAT AS WELL.
STILL TRYING TO OBSERVE EVERYTHING AND THANK YOU, DIRECTOR.
UM, WE'VE LOST 2.2 BILLION SINCE FY 2015 WHEN THE CAP WENT INTO EFFECT.
UM, THERE WAS A COMPARISON CHART THAT YOU SHOWED.
UM, DID WE DO A SIMILAR COMPARISON OF WHAT WE, THIS WOULD LOOK LIKE IN TERMS OF EARNINGS OR NOT EARNINGS, BUT LESS LOSS IF WE WERE SOLELY FALLING UNDER THE STATE CAP.
SO, BUT FOR PROPOSITION ONE PLUS H, DO WE HAVE COMPARISONS? RIGHT? WE HAVE THE COMPARISON OF THE 2.2 BILLION MM-HMM
AS IT RELATES TO PROP ONE, BUT DO WE HAVE, WHAT WOULD BE MITIGATED IF THERE WAS UNIFORMITY WITHOUT THE BETTON COURT AMENDMENT SOLELY FALLING UNDER THE STATE'S CAPS? THE CLOSEST COMPARISON I THINK WE HAVE HERE IS THE SLIDE THAT HAS THE BLUE AND THE GREEN BARS SIDE BY SIDE.
UM, SO ON THIS ONE YOU CAN SEE, AND IT'S, THIS IS, I WOULD SAY THE CLOSEST COMPARISON WE HAVE TO THAT, THAT IF WE HAD ADOPTED THE STATE CAPPED AMOUNT AND JUST LIVED ON THE SAME PLAYING FIELD WITH THE OTHER JURISDICTIONS IN THE STATE, UM, AND FY 21, WE COULD HAVE COLLECTED AN ADDITIONAL 739,000 AND FY 22, ABOUT 35 MILLION AND FY 23, 29 0.7 MILLION AND SO ON.
I THINK THERE IS A LITTLE MORE, UM, THERE'S A BIT OF A COMPLICATING FACTOR, I GUESS, WHEN IT COMES TO STATING, CALCULATING, BECAUSE THE STATE CAP BUILDS OFF OF YOUR PRIOR YEAR, WHAT YOU'VE COLLECTED.
OUR STATE CAP THIS YEAR IS AUTOMATICALLY LOWER THAN IT OTHERWISE WOULD HAVE BEEN HAD WE ONLY GONE BY THE STATE CAP AND NOT THE LOCAL CA LAST YEAR.
SO I WOULD SAY THAT THE IMPACT OF IT ACTUALLY IS LARGER AND WHAT WE COULD HAVE COLLECTED.
IT KIND OF BUILDS ON ITSELF FROM YEAR TO YEAR, IF THAT, IF THAT MAKES SENSE.
AND, UH, MADAM CHAIR, THANK YOU FOR THE CLARIFICATION ON THE DISASTER DECLARATION.
I'M ASSUMING THOSE ARE FEDERALLY DECLARED DISASTERS, OR CAN IT JUST BE A STATE DECLARED DISASTER? I'LL HAVE TO GET THE EXACT LANGUAGE TO YOU.
BUT THAT, I DIDN'T KNOW THAT THAT WAS INCLUDED IN PROP ONE.
WE DID NOT USE THAT DURING THE WINTER STORM OR AMELDA AND OTHERS THAT WE HAVE EXPERIENCED SINCE THE LAST TIME WE UTILIZED THIS TOOL.
BUT WE WERE RECEIVING THE FEDERAL INFLUX OF DOLLARS DURING THAT TIME AS WELL.
SO WE USED IT, WE USED THIS, UM, ADDITIONAL, UM, COLLECTIONS FOR TAX DAY MEMORIAL DAY ANNA AMELDA, BUT FOR YURI AND HARVEY, WE DIDN'T, I THINK WITH HARVEY WE SAW, UM, WE GOT A HUNDRED PERCENT FEDERAL SHARE ON SOME OF OUR CATEGORIES.
AND WITH THAT, UM, FEMA ALSO ADVANCED US VERY QUICKLY AFTER THAT STORM.
UM, SO WE WERE IN A DIFFERENT PLACE.
AND ALSO TIMING WISE, RIGHT? HARVEY HAPPENED AT THE VERY END OF AUGUST, AND BETWEEN THE TIME HARVEY HAPPENED AND THE TIME WE STARTED CALCULATING OUR TAX RATES, WE DIDN'T HAVE AS SOLID OF ESTIMATES AS WE HAVE.
UM, UNFORTUNATELY, THE TIMING OF ADOPTING THE TAX RATE, YOU, IT'S GOTTA BE 60 DAYS AFTER YOU GET THE CERTIFIED ROLE.
UM, SO DEPENDING ON, IN A YEAR WHEN YOU HAVE A DISASTER, YOU MAY HAVE MORE OR LESS INFORMATION, BUT WE HAVE MORE OF A REIMBURSEMENT RATE, AND NOW WE'RE DEALING WITH THIS GAP THAT WE HAVE MM-HMM
UM, WITH WHAT WE ARE ABLE, AND THIS MAY BE MORE A QUESTION FOR LEGAL, BUT
[01:40:01]
WITH WHAT WE ARE ABLE TO RECOUP, I'M ASSUMING THAT'S RE REIMBURSEMENT FOR DISASTER RELATED, UH, IMPACTS.WHAT IS THAT DEFINED AS? BECAUSE AS WE USE THAT, THOSE DOLLARS, HOW ARE WE BUILDING TO PREVENT THE NEXT THING FROM HAPPENING? SO HAVING A DEFINITION OF WHAT WE ARE LEGALLY ALLOWED TO USE THOSE DOLLARS FOR, 'CAUSE WE WANNA BE GOOD, UH, TRUSTED CARRIERS OF THOSE DOLLARS.
BUT THAT WOULD BE VERY HELPFUL.
UM, WELL, AND I THINK THAT'S A, THAT'S A GREAT POINT.
I THINK HISTORICALLY THE WAY WE'VE HANDLED IT IS BASED ON THE DISASTER COST ESTIMATES THAT YOU, THAT YOU SAW ON SLIDE, I THINK IT WAS SLIDE 11 THAT TIES TO THE PREVIOUS PRESENTATION.
BUT, UM, YOU KNOW, YOU SAYING THAT MAKES ME THINK ABOUT, UM, YOU KNOW, COULD THERE BE SOMETHING LIKE, FOR EXAMPLE, GENERATORS RIGHT? OR TO PREPARE FOR ANOTHER DISASTER.
IS THERE A, HOW DOES THE LANGUAGE READ? CERTAINLY WE HAVE ROOM UNDER THE STATE CALCULATION BECAUSE WE ARE SO FAR BELOW THE STATE CAP, UM, THAT WE COULD DEFINITELY TAKE A LOOK AT THAT.
AND I, I BELIEVE WHAT YOU SAID THOUGH WAS WE COULD RECOUP THE FULL AMOUNT MM-HMM
UM, SO JUST WHAT THAT CAN GO TOWARD GO TOWARDS WHILE STILL BEING RESPONSIBLE STEWARDS OF THOSE DOLLARS.
LASTLY, MADAM CHAIR AGAIN, AND PROBABLY A QUESTION FOR LEGAL, BUT IN MY OPINION, A LOT OF THE COSTS THAT WE EXPERIENCED FROM THE DERECHO AND FROM THE, UH, FROM HURRICANE BARREL WERE RELATED TO PRIVATE SIDE, UTILITY SIDE MALFEASANCE.
AND ARE WE EXPLORING, UM, HOW WE DEAL WITH THAT FROM A LEGAL PERSPECTIVE? BECAUSE A LOT OF THE COSTS THAT WE MAY NOW HAVE TO FOOT THE BILL FOR, WERE NOT CREATED BY THE CITY.
AND WHAT DOES THAT LOOK LIKE IN TERMS OF LITIGATION AND HOLDING THOSE RESPONSIBLE? I KNOW THAT UTILITIES ARE DOING SOME OF WHAT THEY NEED TO DO, BUT WE INCURRED A HELL OF A LOT OF COSTS AND RESIDENTS INCURRED A HELL OF A LOT OF COSTS FROM THAT.
SO WHAT'S BEING DONE TO ADDRESS THE MALFEASANCE IN TERMS OF THE COST OF THIS? UNDERSTOOD.
AND WE'LL FOLLOW UP WITH LEGAL ON THAT.
THE TAX ROLL THAT WE JUST GOT, HOW DID THAT COMPARE TO LAST YEAR'S? SO OUR INCREASE IS ABOUT THREE POINT, IS IT 3.8, 3.8% INCREASE COMPARED TO THE PRIOR YEAR.
DID COMMERCIAL FARE THE, THE SAME AS RESIDENTIAL? I MEAN, I UNDERSTAND THERE WAS A LOT OF HAND WRINGING OVER THE DOWNTOWN OFFICE SPACE AND WHAT THAT WAS GONNA DO.
DID THEY GET A BREAKDOWN? I MIGHT HAVE TO FOLLOW UP WITH YOU ON THE BREAKDOWN.
UM, WHEN WE FIRST HIT THE CAP IN 2015, THE THE VOTER APPROVED CAP.
OVER THAT COURSE OF TIME, WHAT HAVE THE TOTAL CITY REVENUE DONE? I MEAN, OBVIOUSLY PROPERTY TAX IS ONLY ONE COMPONENT.
I'M CURIOUS WHAT THE CITY'S TOTAL REVENUE IS DONE OVER THAT SAME TIME PERIOD.
TOTAL GENERAL FUND REVENUE? YES.
DO WE KNOW BY HOW MUCH? NOT OFF THE TOP OF MY HEAD.
I DIDN'T BRING THE WHOLE FIVE YEAR FORECAST WITH ME.
IF YOU CAN GET THAT TO ME, I'D, I'D APPRECIATE IT.
CERTAINLY WE'VE SEEN GROWTH IN SALES TAX AND WE, THROUGHOUT THIS CONVERSATION, I DON'T MEAN TO SAY THAT WE HAVE NOT SEEN INCREASE IN PROPERTY TAX REVENUE YEAR OVER YEAR.
WE HAVE SEEN INCREASE, BUT THAT INCREASE IS DEFINITELY MUTED BY THE REV CAP.
UM, THANK YOU DIRECTOR FOR A VERY EXTENSIVE, UH, PRESENTATION AND INFORMATION.
AND CONSIDERING THE FACT OF A TAX, YOU KNOW, UH, INCREASE ON THIS CAP, UH, THAT'S BEFORE US, AS WE DO KNOW THAT THERE'S A LOT OF, UM, SERVICES THAT HAS TO BE MET.
UH, IT IT PERTAINS TO OUR CITY AND IT'S SOMETHING WE GOING TO HAVE TO REALLY, REALLY DIG DEEP IN AND LOOKING AT.
LAST POINT I WANNA MAKE, UH, BEFORE, UH, GOING FURTHER AND THEN THAT'LL BE DONE IS THAT UNDER THE PROPERTY TAX, WE HAVE TO ALSO CONSIDER THE FACT THAT HARRIS COUNTY IS ALREADY PROPOSING A INCREASED PROPERTY TAX FOR YEAR 24, 25 MM-HMM
UM, AND THEY'RE GOING TO, THEY'RE LOOKING AT ABOUT AN 8%, UM, INCREASE WITHOUT THE VOTER'S APPROVAL.
AND, UM, THAT, THAT ULTIMATELY WILL AFFECT THE CITY
[01:45:01]
AS WELL, FROM MY PURVIEW, UM, IN THAT TAX CAP THAT THEY'RE GOING TO DO.UH, THERE'S KIND OF A LOOPHOLE AROUND STATE LAW THAT ALLOWS THEM TO DO THAT.
SO CONSIDERING THAT WITH INFLATION, UM, UH, YOU KNOW, WE HAD A, WHAT, A 400 MILLION, IF I'M LOOKING AT IT, RIGHT ON MM-HMM
IT WAS A $400 MILLION, UM, DROP FOR US.
UM, IS THAT WHAT WE LOST, OR, I MEAN THAT IN OTHER WORDS RIGHT.
WAS CALCULATED OUT IN COMPARISON TO OTHER CITIES IN THE STATE IN, IN COST THAT WE CONCURRED WAS $400 MILLION.
$400 MILLION IS THE AMOUNT OF REVENUE THAT THE CITY WAS NOT ABLE TO COLLECT BECAUSE OF THE CAP.
THAT BECAUSE OF THE CAP, WE, WE WERE NOT ABLE TO OBTAIN THAT $400 MILLION YES.
WOULD'VE BEEN ADDED TO THE GENERAL BUDGET.
I I, I JUST WANT TO THANK YOU AGAIN FOR THESE NUMBERS IN DISCUSSION OF THIS, BECAUSE WE, YOU, YOU GAVE A COMPARISON WHERE OTHER CITIES HAVE FEES MM-HMM
LET YOU KNOW, GARBAGE FEES, AND WE DO, DO NOT MM-HMM
BUT THERE ARE OTHER FACTORS, I THINK THE POINT THAT WAS MADE OTHER FACTORS IN TERMS OF EXPENDITURES THAT WE CONCURRED MM-HMM
BUT I, I REALLY, REALLY DO APPRECIATE YOUR PRESENTATION.
VERY GOOD INFORMATION TO GO FORWARD TO THINK ABOUT.
JUST, UM, JUST IN REFERENCE TO WHAT YOU MENTIONED ABOUT THE COUNTY, UM, IF YOU LOOK ON SLIDE 14, AND OF COURSE THESE ARE OUR NUMBERS, NOT THEIRS, BUT THE EQUIVALENT CALCULATION OF WHAT THE FLOOD CONTROL DISTRICT AND WHAT I UNDERSTAND THE COUNTY IS LOOKING AT WOULD BE THE EQUIVALENT OF THE RIGHTMOST BAR ON SLIDE 14.
SO THAT'S LIKE YOU MENTIONED, THE MAXIMUM THAT CAN, UH, THAT COULD BE GONE UP TO, YEAH.
UM, THE OPTIONS TO COVER THE SHORTFALL AND DISASTER COSTS, BECAUSE THIS IS, TO ME REALLY WHAT, WHAT WE NEED TO PAY A LOT OF ATTENTION TO.
UM, WE ALL ARE, WE'VE BEEN FOCUSING ON THE DISASTER TODAY, BUT OF COURSE, WE ALL KNOW ALL OF THE OTHER NEEDS OF THE CITY, THE FIREFIGHTER DEAL.
UM, THE, THERE ARE RELIANCE ON OUR, ON OUR RESERVES, THE END OF THE ARPA MONEY, UH, THE SHORTFALLS THAT ARE PROJECTED WITHIN THE FOUR FIVE YEAR FORECAST THAT THE FINANCE DIRECTOR PUT FORTH, UM, IN DURING THE BUDGET SEASON.
UM, YOU KNOW, WE, WE, AND WE, WE'VE GOT A LOT OF GOOD EFFORTS GOING ON NOW WITH ERNST AND YOUNG AND, AND PERMITTING AND DIFFERENT, DIFFERENT OPERATIONAL ANALYSES THAT ARE GOING ON.
AND THERE ARE SAVINGS TO BE HAD FOR SURE.
AND WE SCRUBBED THE BUDGET AS MUCH AS WE COULD AND CAME UP WITH ABOUT $11 MILLION.
IF WE'RE TALKING ABOUT ADDITIONAL CUTS AND THE, WE'VE GOT SOMETHING LIKE THE LIBRARY BUDGET, THE SOLID WASTE BUDGET.
I MEAN, THOSE ARE THE TYPES OF CUTS THAT ARE, ARE GONNA BE REQUIRED AT THAT 51 CENT RATE.
SO, I MEAN, I THINK IT'S REALLY IMPORTANT THAT WE LOOK AT THESE OPTIONS BECAUSE THIS IS THE OPPORTUNITY.
THIS, THIS IS THE OPPORTUNITY WHERE WE CAN RAISE ADDITIONAL REVENUES TO COVER SOME OF THE EXPENSES THAT ARE GREETING US IN THE FUTURE.
SO, UM, THAT'S MY 2 CENTS, UH, ON THIS.
BUT, UM, APPRECIATE, UH, YOUR, ALL THE GOOD WORK OF THE FINANCE DEPARTMENT ON THIS.
I DO THINK COUNCIL MEMBER MAR MARTINEZ BROUGHT UP A GOOD IDEA.
MAYBE ONE OF THESE PUBLIC HEARINGS THAT WE DO, WE DO DO OUT IN THE PUBLIC, UM, WHERE PEOPLE HAVE MORE OPPORTUNITY IN THE EVENING TO COME AND FULLY UNDERSTAND THIS.
NOBODY LIKES TO RAISE A TAX RATE.
WE'VE BEEN LOWERING IT FOR 10 YEARS, BUT WE'VE ALSO BEEN HEARING, UM, THE COMPLAINTS ABOUT CITY SERVICES, UM, IN DECLINE FOR, FOR SEVERAL YEARS.
SO, UM, THANK YOU VERY MUCH AND I LOOK FORWARD TO FURTHER DISCUSSION ON THIS.
AND THANK YOU ALL SO MUCH FOR, UM, ATTENDING TODAY.
I ALMOST LIKE VIOLATED EVERY, YOU KNOW, SINGLE LAW HERE.
UM, DOUG SMITH, I HAVE ONE MORE THING WHO HAS BEEN SITTING HERE SO DILIGENTLY AND WE MIGHT HAVE MORE PUBLIC COMMENTERS AS WELL, CHARLES BLAINE AS WELL.
I JUST WANTED MY PUBLIC COMMENT.
THAT'S ALL I WAS CONCERNED WITH.
UH, BUT, UH, POINT COUNTERPOINT STARTS NOW.
I JUST WANTED TO, SINCE IT IS A LOT OF DENSE INFORMATION AND I, I KNOW I WENT KIND OF FAST, ANY OF THE, ANYONE, ANY COUNCIL MEMBERS OR YOUR STAFF, IF, UM, YOU WOULD LIKE SOME MORE INDIVIDUAL BRIEFINGS OR QUESTIONS, FOLLOW UP QUESTIONS, DEFINITELY.
[01:50:01]
GIVE ME A, GIVE ME A CALL.I'M HAPPY TO MEET WITH ANY OF YOU.
AND I REALLY ENCOURAGE YOU TO DO THAT IF YOU HAVEN'T.
'CAUSE SHE CAN REALLY BREAK IT DOWN, UM, IN A, IN A ONE-ON-ONE, THE, THE QUESTIONS THAT COME UP AND CERTAINLY THE QUESTIONS THAT THE PUBLIC HAS.
AND, AND, AND COUNCIL MEMBER FLICKINGER BROUGHT UP A GOOD POINT.
I MEAN, WE'RE NOT JUST TALKING ABOUT PROPERTY TAXES.
WE HAVE BEEN ABLE TO INCREASE REVENUE OVER TIME.
THIS IS SIMPLY A DISCUSSION OF, OF OF WHAT, WHAT HAS BEEN KIND OF MUTED THAT WE, WE, WE HAVEN'T BEEN ABLE TO, TO COLLECT, BUT IT'S SAVINGS TO, TO HOMEOWNERS, WHICH WE ALSO VALUE.
SO ANYWAY, DOUG SMITH, YOU'RE UP.
FIRST OF ALL, I'M GLAD THIS MEETING IS ON MONDAY RATHER THAN TUESDAY WHEN I HAVE A LUNCH MEETING, SO I COULD STAY FOR THE WHOLE THING BECAUSE IT'S BEEN A REALLY IMPORTANT MEETING WITH FANTASTIC ANALYSIS OF EVERYTHING FROM THE AIRPORT TO THE DISASTER TO THE TAX CAP.
UH, AND I'M GLAD I COULD STAY FOR THE WHOLE THING.
BUT I DO HAVE SOME QUESTIONS ON, ON THE, UH, THIRD SLIDE OF THE TAX CAP CALCULATION.
I SEE A FIGURE, UH, WHERE IT'S $67 MILLION.
SO THE $90 MILLION MUST BE ADJUSTED EACH YEAR BASED ON USAGE.
I HAVE NEVER SEEN THAT BEFORE.
AND I WOULD LIKE TO UNDERSTAND, UH, WHAT IS GOING ON.
'CAUSE IT SEEMS LIKE WE ALWAYS JUST ADD $90 MILLION THAT THAT WAS ACTUALLY A MEASURE DURING, UM, BILL WHITE'S TERM WHEN HE PUT THAT ON THE BALLOT.
AND VOTERS APPROVED AN ADDITIONAL $90 MILLION FOR PUBLIC SAFETY.
BUT ON SLIDE THREE, IT SHOWS A FIGURE CALLED USAGE AND IT'S ONLY $67 MILLION.
THAT WAS THE, UH, IF, IF I'M CORRECT, MELISSA, I THINK THAT'S THE ADJUSTMENT TO THE $90 MILLION BASED ON THAT RATE.
BUT I'VE NEVER SEEN THAT IN THE TEXT.
AND I CAN GET, I CAN GET SOME MORE, UM, INFORMATION ON THAT.
AND ALSO, UM, DIRECTOR BKI, I, I THINK IT'D BE GREAT.
THIS, UH, THIS CALCULATION THAT YOU DID FOR OUR CAP, IF YOU CAN DO A SIMILAR ONE FOR THE, THE STATE ONE WHERE YOU'RE ACTUALLY USING NUMBERS, IS IT TOO, YEAH, THAT'D BE GREAT TO HAVE AS WELL.
UH, AND THEN, UH, REGARDING THE DISASTER, YOU TALK ABOUT THE FACT YOU NEED $52 MILLION OF CITY MONEY TO COVER IT.
YOU'RE ALSO, HOW DO YOU COVER THE DELAY IN THE RECEIPT OF FEMA FUNDS? 'CAUSE IT SOUNDS LIKE IT'S YEARS AND YEARS.
HOW ARE YOU GONNA COVER THAT? AND I, I DID NOT HEAR THAT.
AND THEN FINALLY, IF YOU GO BACK TO THE MONTHLY FINANCIAL REPORT, I THINK I'VE MENTIONED THIS BEFORE ON PAGE NINE, YOU LOOK AT ESTIMATED FUND BALANCES IN SOME OF THE FUNDS, D-D-S-R-F, UH, HEALTH, AND LET ME SEE, OH, THE, THE, THE BIG ONE IS, UH, MAINTENANCE AND RENEWAL.
THEY'RE SHOWING HUGE BA NOT HUGE, BUT LARGE BALANCES AT THE END OF THE YEAR.
AND WHEN THERE'S SO MUCH THAT NEEDS TO BE DONE IN ALL OF THOSE AREAS, D-D-S-R-F MAINTENANCE, WHY IS THERE SUCH A LARGE BALANCE? WHY AREN'T THEY USING THE MONEY THAT THEY'RE ALLOTTED? GOOD, GOOD QUESTIONS.
AND WE WILL GET THOSE ANSWERED.
WE WANNA BE SPENDING THAT MONEY.
SO YEAH, WE WILL, A LOT OF TIMES IT'S A TIMING SITUATION.
BUT, BUT I AGREE WITH YOU AND I'VE ASKED ABOUT THAT BEFORE AND WE'LL, WE'LL FOLLOW UP WITH YOU ON THAT.
THANK YOU, DOUG, FOR YOUR PATIENCE AND FOR YOUR DILIGENCE IN, IN KEEPING US ON OUR TOES HERE.
UM, CHARLES BLA, GOOD MORNING.
YOU GUYS HAVE BEEN HERE A LONG TIME.
UM, I KNOW WE HEARD A LOT ABOUT THE IMPACT THAT THE WINDSTORM AND THE HURRICANE HAD ON CITY OF HOUSTON FINANCES, BUT I ALSO WANTED TO JUST SPEAK TO THE TAXPAYER FOR A SECOND.
TAXPAYERS HAVE TO HAVE HAD TO DEAL WITH A LOT.
THEY'VE HAD TO EMPTY OUT THEIR REFRIGERATORS AND RESTOCK.
THEY'VE HAD TO THROW OUT MEDICATION, DEAL WITH, YOU KNOW, REPAIRING HOMES, WINDSTORM, INSURANCE RATES, ALL THAT.
UM, AND THANK YOU, UH, COUNCIL MEMBER DAVIS FOR BRINGING UP THE COUNTY BECAUSE I THINK AS THE BODY THAT IS THE, THE ECONOMIC DRIVER OF THE REGION, IT'S IMPORTANT TO LOOK AT THE REGION.
AND THIS YEAR, 2024, WE HAD THE $650 MILLION BOND THAT, THAT THIS BODY APPROVED THE COUNTY 8% TAX INCREASE, $60 AVERAGE HOMEOWNER INCREASE COMING FROM THE FLOOD CONTROL DISTRICT.
UM, A TWO AND A HALF BILLION DOLLARS FLOOD BOND THAT WE APPROVED LAST NOVEMBER, A FOUR AND A HALF BILLION DOLLAR HISD BOND THAT MIGHT BE APPROVED THIS NOVEMBER.
UM, AGAIN, HOMEOWNER INSURANCE RATES ARE UP, CENTER POINT, COSTS ARE UP.
AND I UNDERSTAND THAT MOST OF THAT IS NOT YOU GUYS, YOU REALLY DON'T HAVE CONTROL OVER A LOT OF IT, BUT YOU DO HAVE CONTROL OVER A LITTLE PIECE OF IT.
AND IF POSSIBLE, TO NOT ADD TO THAT BURDEN, UM, I KNOW THE TAXPAYERS WOULD BE VERY GRATEFUL.
AND THE LAST THING I'LL SAY IS, YOU KNOW, A LOT OF TIMES WHEN WE TALK ABOUT THE REVENUE CAP, WE OFTEN SPEAK OF IT NEGATIVELY AND TALK ABOUT HOW MUCH THE CITY CAN'T COLLECT AND HOW MUCH WE'RE LETTING TAXPAYERS KEEP.
BUT REALLY IT'S HOW MUCH THEY SAVED.
I MEAN, I THINK IT'S A POSITIVE AND I REALLY WISH WE COULD JUST CHANGE THE LANGUAGE AND TALK ABOUT IT THAT WAY, BECAUSE I THINK LETTING TAXPAYERS KEEP THAT IN THEIR POCKETS, IT'S DEEPLY IMPORTANT.
[01:55:01]
AND I KNOW THAT I CAN SPEAK FOR MYSELF AND OTHER TAXERS THAT WE DEFINITELY APPRECIATE BEING ABLE TO KEEP IT IN OUR POCKET.UM, AND I'M GONNA BE INTERESTED IN SEEING HOW THIS CONVERSATION GOES FROM HERE.
AND, AND I AGREE, AND I DID ADD THAT IN.
IT'S, IT'S SAVINGS TO THE HOMEOWNER AS WELL.
BUT, UM, YOU KNOW, ALL, ALL GOOD POINTS AND WE ARE ALL, WE ALL FEEL IT, WE ALL FEEL THESE INSURANCE RATES.
BUT I'LL ALSO SAY THAT WE ARE NEVER THE ONES, YOU KNOW, THE COUNTY DOES IT, THE SCHOOL DISTRICT, YOU KNOW, WE ARE, WE ARE, WE ARE NEVER.
SO, UM, YOU KNOW, CONSTRICTED BY THIS.
AND, AND IF YOU LOOK AT YOUR TAX BILL, YOU CAN SEE THAT WE'RE, WE'RE ON THE LOWER END OF THESE, OF THESE OTHER ENTITIES.
I KNOW IT DOESN'T, THE TAXPAYERS DON'T CARE WHERE THE MONEY'S COMING FROM.
IT'S JUST COMING OUTTA THEIR POCKET AND THEY DON'T LIKE IT.
UH, YOU LISTED A NUMBER OF THINGS THAT YOU KNOW WERE INCREASING.
DID YOU HAPPEN TO BRING A WHITEBOARD,
MAYBE NEXT TIME I'LL BRING COUNCIL MEMBER DAVIS.
THANK YOU, CHARLES, FOR THOSE POINTS.
BECAUSE I WAS THINKING JUST AS YOU WERE THINKING, THE SAME WITH DOUG.
WE, WE GOTTA LOOK AT THE MONEY WE HAVE NOT COLLECTED THAT FEMA HAS NOT GIVEN BACK TO THE CITY.
AND PLUS THE FACT WE HAVE TO LOOK AT THE, THE OTHER ENTITIES THAT AFFECT THE CITY AS A WHOLE, COUNTY INFLATION.
AND SO, UM, I WOULD, YOU KNOW, THAT WE NEED THOSE SERVICES.
EVERYBODY THROWS IT UNDER PUBLIC SERVICES, IS WHAT THE COUNTY'S SAYING.
WE DON'T WANT TO DO A TAX INCREASE BECAUSE THERE'S DEMAND FOR MORE PUBLIC SERVICES.
BUT WE CERTAINLY HAVE TO TAKE INTO CONSIDERATION OF THAT.
AND, UH, THANK, THANK YOU FOR THOSE POINTS AND I HOPE AND PRAY THAT GOING FORWARD, THAT, UH, YOU WOULD CERTAINLY REMIND US HEAD CITY COUNCIL OF THAT BECAUSE PEOPLE LOOK AT THE CITY, UH, YOU KNOW, IN, IN THAT RESPECT.
AND, UH, SENIOR CITIZENS, PROPERTY TAX HOLDERS, I MEAN, YOU KNOW, YOU KNOW, THE INFLATION RATE ABOVE EVERYBODY'S INCOME, YOU KNOW, AND THE, AND THE ABILITY TO TO PURCHASE THINGS.
SO THANK YOU FOR YOUR PRESENTATION.
I REALLY APOLOGIZE FOR SKIPPING PUBLIC COMMENT EARLIER.
NOW WE ARE OFFICIALLY AS ADJOURNED.