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GOOD MORNING, TUESDAY, OCTOBER 29TH, 2024.[Joint Committee on Budget and Fiscal Affairs and Economic Development on October 29, 2024.]
JOINT BUDGET AND FISCAL AFFAIRS AND ECONOMIC DEVELOPMENT COMMITTEE.I AM SALLY ALCORN, CHAIR OF THE CITY'S BUDGET AND FISCAL AFFAIRS COMMITTEE, JOINED BY MY FRIEND AND MAYOR PRO TIM MARTHA CASTEX TATUM, WHO CHAIRS THE ECONOMIC DEVELOPMENT COMMITTEE.
IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO PARTICIPATE IN PUBLIC COMMENT, THERE'S A SIGN IN SHEET AT THE FRONT TABLE.
THERE HAS BEEN A CHANGE TO THE PRESENTERS FOR TODAY, SINCE IT WAS FIRST, UM, SINCE THE AGENDA WAS DONE.
THE QUARTERLY FINANCIAL REPORT WILL BE PRESENTED BY CONTROLLER'S, OFFICE FINANCIAL REPORTING DIRECTOR, WILL JONES, UM, REUNITED WITH, UH, FINANCE DIRECTOR MELISSA DEBOWSKI, UP AT THE PODIUM.
FIRST, THE QUARTERLY INVESTMENT REPORT AND SWAT REPORTS WILL NOW BE PRESENTED BY THE CONTROLLER'S, OFFICE CITY, UM, TREASURY DIRECTOR VERNON MIDDLETON LEWIS, AND THEN WE WILL MOVE ON TO THE OBO PRESENTATIONS.
AND, UM, THE MAYOR PRO TEM WILL TAKE OVER AS CHAIR THEN.
SO LET'S GET, UM, STARTED RIGHT AWAY.
THERE WAS A LITTLE BIT OF, UM, FOR SOME REASON SOME PEOPLE THOUGHT THIS MEETING, UM, WAS IN THE ANNEX, SO WE MIGHT BE JOINED A LITTLE BIT LATER.
THERE WERE SOME PEOPLE OVER THERE LOOKING FOR A MEETING.
UM, BUT I'D LIKE TO WELCOME MY VICE CHAIR COUNCIL MEMBER MARIO CASTILLO.
WE HAVE STAFF FROM COUNCIL MEMBER CAROLYN, EVAN SHABAZZ'S OFFICE FROM COUNCIL MEMBER POLLARD'S OFFICE.
WE HAVE, UH, WE HAVE, UH, MY FELLOW AMENDMENT WRITER, UH, COUNCIL MEMBER JOAQUIN MARTINEZ.
WE HAVE VICE MAYOR PRO TEM AMY PECK.
WE HAVE STAFF FROM COUNCIL MEMBER G, STAFF FROM COUNCIL MEMBER B, STAFF FROM COUNCIL MEMBER C, AND, UM, COUNCIL MEMBER FRED FLICKINGER, DISTRICT E AND COUNCIL MEMBER WILLIE DAVIS AT LARGE TWO.
SO WELCOME ALL, AND WE WILL GET STARTED.
UM, WILL AND MELISSA COME ON UP AND, AND IN THE, IN THE WRITTEN VERSION, GUYS, I NOTICED THAT THE CONTROLLER'S LE LETTER GOT, WAS LEFT OUT INADVERTENTLY.
THE CONTROLLER'S LETTER IS ONLINE.
UM, SO, WE'LL, I'M SURE YOU'LL BE READING FROM THAT LETTER, SO WE'LL HEAR IT NOW.
ALRIGHT, GOOD MORNING, MADAM CHAIR.
UH, VICE CHAIR, UH, COUNSEL AND STAFF.
UM, I'M PLEASED TO PRESENT THE QUARTERLY FINANCIAL REPORT FOR THE PERIOD ENDED SEPTEMBER 30TH, 2024.
SO IN OUR GENERAL FUND, IN THE CONTROLLER'S OFFICE, UH, WE'RE PROJECTING AN ENDING FUND BALANCE OF 251.9 MILLION FOR FY 25.
THIS IS 64.8 MILLION LOWER THAN THE PROJECTION FOR THE FINANCE DEPARTMENT.
THE DIFFERENCE IS DUE TO A LOWER REVENUE PROJECTION THAN THE FINANCE DEPARTMENT.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY 61.2 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE AND PEGO.
THE FY 25 BEGINNING FUND BALANCE IS 35.6 MILLION HIGHER THAN THE FY UH, 24 ENDING, UM, FUND BALANCE REPORTED IN THE JUNE 30TH, 2024 MONTHLY FINANCIAL REPORT.
THE INCREASE IS DUE TO YEAREND ADJUSTMENTS TO REVENUES AND EXPENDITURES THAT WILL NOT BE FINAL UNTIL THE COMPLETION OF THE FY 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR REVENUE.
WE HAVE DECREASED OUR REVENUE PROJECTION BY 46.1 MILLION FROM PRIOR MONTH'S REPORT TO REFLECT THE RECENTLY ADOPTED, UH, TAX RATE.
UM, FOR THE EXPENDITURES, UH, WE HAVE INCREASED THE PROJECTION BY 4.1 MILLION FROM PRIOR MONTH'S REPORT AS FOLLOWS, AN INCREASE OF 3.5 MILLION IN THE GENERAL GOVERNMENT TO REFLECT FUNDING FOR THE HOUSING NAVIGATION CENTER'S OPERATIONS, AND AN INCREASE OF 0.6 MILLION IN A RA TO REFLECT THE TRANSFER TO BAR SPECIAL REVENUE FOR SPAYED NEUTER SURGERIES.
UM, SO MOVING ON TO THE ENTERPRISE FUNDS, UH, WE MADE THE FOLLOWING ADJUSTMENTS AND THE COMBINED UTILITY SYSTEM FUND OPERATING REVENUES DECREASED BY 159 MILLION, PRIMARILY DUE TO THE IMPLEMENTATION OF THE RECENT WATER BILL REFORMS. OPERATING EXPENSES INCREASED BY 14.1 MILLION DUE TO HIGHER THAN ANTICIPATED CLAIMS AND JUDGEMENTS, AND THE OPERATING TRANSFERS DECREASED BY 14.1 MILLION DUE TO LOWER TRANSFERS TO CAPITAL PROJECTS.
MOVING ON TO THE DEDICATED DRAINAGE STREET RENEWAL FUND, THE AT VALOREM TAX TOTAL REVENUES INCREASED BY 1 MILLION DUE TO HIGHER THAN ANTICIPATED INTEREST ON POOLED INVESTMENTS.
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NO CHANGES, UH, FROM THE PREVIOUS MONTH'S REPORT IN AVIATION C AND E, UM, STORM WATER ON THE OTHER D-D-S-R-F FUNDS.SO FOR OUR COMMERCIAL PAPER AND BONDS, THE CITY'S PRACTICE HAS BEEN TO MAINTAIN NO MORE THAN 20% OF THE TOTAL OUTSTANDING DEBT FOR EACH TYPE OF DEBT IN A VARIABLE RATE STRUCTURE.
AS OF SEPTEMBER 30TH, 2024, UH, THE RATIO OF UNHEDGED VARIABLE RATE DEBT FOR EACH TYPE OF OUTSTANDING DEBT WAS BELOW THAT THRESHOLD.
THIS IS THE THREE PLUS NINE FINANCIAL REPORT FOR THE PERIOD ENDING SEPTEMBER 30TH, 2024.
FISCAL YEAR 25 PROJECTIONS ARE BASED ON THREE MONTHS OF ACTUAL RESULTS AND NINE MONTHS OF PROJECTIONS.
OUR REVENUE PROJECTION IS 3.1 MILLION HIGHER THAN THE ADOPTED BUDGET, AND REMAINS UNCHANGED FROM THE PRIOR MONTH.
WE'RE NOT MAKING CHANGES TO THE REVENUES IN THIS REPORT.
UM, SPECIFICALLY RELATED TO THE PROPERTY TAX ESTIMATE, UH, WE WILL BE LOOKING TO ADJUST THAT ESTIMATE IN THE FOLLOWING MONTH REPORTING PERIOD, UH, WHICH IS GONNA BE THE PERIOD FOR THE OCTOBER REPORTING, SINCE THAT WAS WHEN THE TAX RATE WAS ADOPTED.
SO ALTHOUGH IT'S NOT IN THIS REPORT ON OUR PROJECTIONS, IT WILL BE FORTHCOMING.
UM, FIRST SALES TAX PERFORMANCE, UM, NO CHANGES TO SALES TAX FOR THIS MONTH.
UM, BUT JUST FOR INFORMATION, THE SALES TAX RECEIPTS FOR THE MONTH OF AUGUST WERE 73.1 MILLION, WHICH IS ABOUT 1% HIGHER THAN THE SAME PERIOD LAST YEAR, AND IS ABOUT 2.3% HIGHER THAN WE BUDGETED FOR THAT PERIOD.
SO TO MEET THE CURRENT ESTIMATE, UM, OF 893 MILLION, THE REMAINING PERIODS WOULD NEED TO COME IN ABOUT 1% ABOVE THE PRIOR YEAR.
SO WE'RE ON TRACK WITH SALES TAX SO FAR, BUT WE'LL MONITOR AND PROVIDE YOU UPDATES MONTHLY.
ON THE EXPENDITURE SIDE, OUR PROJECTION IS 12.2 MILLION HIGHER THAN THE ADOPTED BUDGET, AND 4.1 MILLION HIGHER THAN THE PRIOR MONTH.
THE VARIANCE FROM THE PRIOR MONTH PROJECTIONS ARE DUE TO AS, UM, AS THE CONTROLLER'S OFFICE MENTIONED, 3.5 MILLION INCREASE IN GENERAL GOVERNMENT TO REFLECT THE HOUSING NAVIGATION CENTER OPERATIONS AND A 500 AND, UM, $63,000 INCREASE IN A RA DEPARTMENT FOR THE TRANSFER TO BARK FOR SPAY AND NEUTER, UH, SERVICES.
BASED ON THAT, WE'RE CURRENTLY PROJECTING THE ENDING FUND BALANCE OF 316.7 MILLION, WHICH IS ABOUT 4 MILLION LOWER THAN THE PRIOR MONTH, AND REPRESENTS 12.5% OF ESTIMATED EXPENDITURES, LESS DEBT SERVICE AND PAY AS YOU GO.
THAT FUND BALANCE REPRESENTS 126 MILLION ABOVE THE TARGET OF 7.5% OF EXPENDITURES, EXCLUDING DEBT SERVICE, UH, FOR THE ENTERPRISE FUNDS.
THE COMBINED UTILITY SYSTEM OPERATING REVENUES DECREASED BY $159 MILLION DUE TO THE DECREASE IN WATER AND SEWER REVENUES.
UM, AND THAT'S RELATED TO THE, UM, THE WATER BILLING RELIEF PROGRAM, UM, THAT I BELIEVE THE HOUSTON PUBLIC WORKS WILL BE GIVING A, AN UPDATE ON THE OPERATIONAL SIDE OF THAT PROGRAM, UM, IN THE COMING WEEKS AND MONTHS.
UM, ALSO FOR THE COMBINED UTILITY SYSTEM, THE OPERATING EXPENDITURES INCREASED BY 14.1 MILLION DUE TO HIGHER THAN ANTICIPATED CLAIMS AND JUDGMENTS.
UM, FOR THE D-D-S-R-F AD VALOREM FUND REVENUE INCREASED BY 1 MILLION DUE TO HIGHER THAN ANTICIPATED INTEREST ON POOLED INVESTMENTS, UM, FOR THE SPECIAL REVENUE FUNDS FOR BARK, UM, IN LINE WITH THE INCREASED TRANSFER FROM GENERAL FUND REVENUE INTO THE BARK SPECIAL FUND INCREASED BY 563,000 FOR THOSE SPAY AND NEUTER SERVICES.
UM, SINCE IT'S A QUARTERLY REPORT, I'LL, UH, GIVE SOME HIGHLIGHTS ON THE LOCAL ECONOMY, UH, FOR THE EMPLOYMENT.
ACCORDING TO THE BUREAU OF LABOR STATISTICS, THE PRELIMINARY NON-FARM EMPLOYMENT FOR THE HOUSTON WOODLAND SUGARLAND METROPOLITAN AREA, UH, WAS 3.4 MILLION IN AUGUST OF 24, WHICH IS UP APPROXIMATELY 0.7% FROM THE PRIOR MONTH WHEN COMPARED TO THE SAME PERIOD LAST YEAR.
THE EMPLOYMENT IS DOWN BY 0.4%, AND THE PRELIMINARY UNEMPLOYMENT RATE FOR THE MONTH OF AUGUST WAS 4.7%, UH, WHICH COMPARES TO THE PRIOR MONTH AT 4.9% A YEAR AGO IN AUGUST OF 2023, THE UNEMPLOYMENT RATE WAS 4.9%, SO WE'RE RELATIVELY UNCHANGED IN THEIR ENERGY SECTOR.
THE AVERAGE OIL PRICE WAS $70 PER BARREL FOR THE MONTH OF SEPTEMBER, WHICH WAS 8% LOWER THAN THE PRIOR MONTH'S PRICE OF $76.
COMPARING THAT TO THE SAME PERIOD LAST YEAR, THAT'S A DECREASE OF ABOUT 21.5% FOR HOME SALES.
THE LATEST REPORT PREPARED BY THE HOUSTON ASSOCIATION OF REALTORS FOR THE MONTH OF SEPTEMBER SHOWS THAT THE TOTAL SINGLE FAMILY HOME SALES, UH, WAS 6,973, WHICH IS ABOUT 1.7% HIGHER THAN THE SAME PERIOD IN THE PREVIOUS YEAR.
THE MEDIAN PRICE INCREASED BY ABOUT 1%, AND SINGLE FAM SINGLE FAMILY HOME INVENTORY REACHED, UM, ABOUT A FOUR MONTH SUPPLY, UH, WHICH IS AN INCREASE OF ABOUT ONE MONTH FROM, UH, YEAR OVER YEAR.
UM, TO PROVIDE YOU AN UPDATE ON THE DISASTER FINANCES, UM, WE GAVE A PACKET OF PAPERS AND I SENT A EMAIL TO MEMO, UM, AROUND
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TO COUNCIL MEMBERS LAST NIGHT.SO I WANTED TO FOLLOW UP ON THE PRESENTATION THAT I MADE TOGETHER, UM, WITH ASSISTANT DIRECTOR FAZEL FROM FA ED FROM MY TEAM BACK IN SEPTEMBER.
UM, JUST RELATED TO THE DISASTER ESTIMATES, UM, INCLUDED IN THAT PACKET.
WE PROVIDED A COPY OF THE SLIDES FROM THE SEPTEMBER MEETING JUST FOR YOUR REFERENCE.
UH, THE OVERALL COST ESTIMATE FOR THE DISASTER REMAINS THE SAME AT $210 MILLION.
BACK IN THAT PRESENTATION IN SEPTEMBER.
WE DISCUSSED THAT THE CITY HAD RECEIVED PROJECT OBLIGATIONS FROM FEMA FOR THE CATEGORY A CATEGORIES FOR BOTH, UH, THE DERECHO AND THE BARREL DISASTERS.
AND AGAIN, THAT'S JUST FOR CATEGORY A AT THAT TIME.
UM, SUBSEQUENT TO THAT, WE HAD MANY CONVERSATIONS, UH, WITH THE STATE LEVEL, INCLUDING WITH THE TEXAS DEPARTMENT OF EMERGENCY MANAGEMENT, UH, WHO IS OUR LIAISON WITH THE STATE FOR ALL THINGS DISASTER FINANCING RELATED.
UH, THOSE MEETINGS LED UP TO THE ANNOUNCEMENT FROM THE GOVERNOR ON THE STATE ASSISTANCE THAT WE, UH, WE LEARNED ABOUT IN THE LAST COUPLE WEEKS.
IN THOSE CONVERSATIONS WITH THE TEXAS DEPARTMENT OF EMERGENCY MANAGEMENT, WE LEARNED THAT THE CITY OF HOUSTON WAS THE FIRST AND AT THAT POINT, THE ONLY JURISDICTION FOR THE DIRETO IN THE BARREL TO RECEIVE, UM, THOSE FEMA PROJECT OBLIGATIONS, UM, FOR THOSE CATEGORY A COSTS.
SO THAT PUT US IN LINE TO RECEIVE THE FEDERAL ASSISTANCE MORE QUICKLY.
AND I WANNA PAUSE ON THAT MOMENT TO THANK, UM, DEPUTY DIRECTOR RASHID AND HIS TEAM FOR ALL THEIR HARD AND RAPID WORK ON THAT.
IT'S A, IT'S A LOT OF WORK COLLABORATING, COLLABORATING WITH THE STATE LEVEL, BUT ALSO WITH ALL THE OTHER DEPARTMENTS AT THE CITY TO GET THEIR COST ESTIMATES AND GET ALL THE DOCUMENTATION IN TO, TO PUSH FORWARD FOR THOSE PROJECT OBLIGATIONS.
UH, THIS ALSO REQUIRED, LIKE I MENTIONED, VERY CLOSE COLLABORATION WITH DIRECTOR WOLF FALK AND HIS TEAM IN THE SOLID WASTE DEPARTMENT, UH, TO GET ALL THOSE FEDERALLY REQUIRED DOCUMENTATIONS TOGETHER AND SUBMITTED TIMELY SINCE WE WERE ABLE TO GET THOSE PROJECT OBLIGATIONS QUICKLY.
UM, SINCE THE LAST COMMITTEE MEETING, WE HAVE RECEIVED, UM, EXPEDITED FUNDING FROM, UM, OUR FEDERAL PARTNERS THROUGH THE STATE IN THE AMOUNT OF $48 MILLION FOR THE DEBRIS REMOVAL.
UH, THAT WAS AS OF THE PERIOD ENDING SEPTEMBER 30TH.
UM, AS OF SEPTEMBER 30TH PERIOD, UM, WE USED $35 MILLION OF THAT ADVANCED FUNDING TO PAY INVOICES FOR WORK THAT WAS ALREADY COMPLETED, PRIMARILY FOR THE DIRETO STORM.
UM, GOING FORWARD, WE'RE GONNA BE COLLABORATING WITH THE STATE, UM, IN LINE WITH THE PRESS RELEASE THAT THE GOVERNOR'S OFFICE PUT OUT.
WE'RE GONNA BE COLLABORATING WITH THE STATE TO PROVIDE THE STATE DOCUMENTATION IN ADVANCE OF US, UM, IN ORDER TO, IN ORDER TO GET MORE ADVANCED FUNDING GOING.
UM, SO THE STATE IS GONNA BE USING A-T-C-E-Q SOLID WASTE FUND TO PROVIDE CASH FLOW TO NOT JUST THE CITY, BUT OTHER JURISDICTIONS THAT WERE IMPACTED BY THE STORMS TO HELP US, UH, GET ADVANCED FUNDING TO PAY FOR THOSE DEBRIS, UH, DEBRIS RELATED INVOICES.
SO THAT STATE SUPPORT WILL ALSO COVER THE LOCAL SHARE.
AND IF YOU, UM, USING THE FIGURES THAT'S IN THE, THE SLIDE DECK FROM THE PREVIOUS MONTH'S PRESENTATION, THE LOCAL SHARE OF THE DEBRIS REMOVAL IS ESTIMATED TO BE APPROXIMATELY $33 MILLION, UM, THAT THE STATE IS GOING TO HELP US UNCOVER ON THOSE INVOICES.
UM, SO IN ADDITION TO, UM, DEPUTY DIRECTOR REEF RASHID'S TEAM AND DIRECTOR WILLOCK AND HIS TEAM, I ALSO NEED TO RECOGNIZE THE REST OF THE FINANCE DEPARTMENT.
UM, MY CHIEF OF STAFF WILL BRYANT, UH, THE CHIEF PROCUREMENT OFFICER, JED GREENFIELD, UH, PAULA LICHEN ALBA, AND MY TEAM.
UH, WE HAVE SPENT A LOT OF TIME ENGAGING WITH THE OTHER DEPARTMENTS, WITH THE STATE, UM, TO GET THIS FUNDING FLOWING.
AND IT, IT HAS BEEN A, A HEAVY LIFT, BUT, UM, I THINK WE HAVE A REALLY GOOD PROCESS IN PLACE TO STREAMLINE THIS.
SO I WANNA THANK THEM FOR ALL THEIR HARD WORK.
UM, SO MOVING OFF THE DISASTER, I JUST WANNA GIVE A VERY BRIEF UPDATE ON THE ERNST AND YOUNG STUDY.
UM, WE HAVE BEEN, UH, GIVEN AN INITIAL BRIEFING BY ERNST AND YOUNG ON THE FOUR WORK STREAMS THAT THEY'VE BEEN WORKING ON.
UH, WE'VE GIVEN THEM SOME INITIAL FEEDBACK ON SOME OF, UH, WHAT THEY HAVE, UM, YOU KNOW, UH, COMING FORWARD WITH SOME INITIAL RECOMMENDATIONS.
SO FAR, UH, WE, AGAIN, THAT'S THE FIRST READOUT OF THIS PROCESS.
THEY HAVE NOT YET, UM, GIVEN US THE FINAL DELIVERABLES.
SO AS WE AWAIT THOSE FINAL DELIVERABLES, WHICH SHOULD COME IN THE NEXT FEW WEEKS, UM, AT THAT POINT, THE ADMINISTRATION WILL BE REVIEWING, WE'LL BE WORKING WITH THE DEPARTMENT DIRECTORS, AND, UM, THE PLAN IS TO PRESENT TO THIS BODY BEFORE THE END OF THE YEAR.
THOSE FINAL, UH, REPORTS AND RECOMMENDATIONS FROM RNS AND YOUNG.
UM, MR. JONES, YOU, YOU'VE INDICATED THAT YOU GUYS HAVE GONE AHEAD AND ADJUSTED YOUR REVENUES DOWN YES.
BECAUSE OF THE, OF THE TAX RATE CHANGE.
SO, COLLEAGUES, IF YOU'LL REMEMBER, STAYING AT 51%, 51 CENTS WAS A DEPARTURE FROM WHAT WE'VE BEEN DOING FOR THE LAST 10 YEARS.
WE DID NOT FOLLOW THE EXACT, UM, CALCULATIONS AS WE'VE ALWAYS DONE, BECAUSE THIS YEAR, BECAUSE VALUATIONS WERE LOWER AT ABOUT 3.5%, WHEN YOU COMPARE
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IT TO THE YEAR BEFORE, THEY WERE 13%, IT WOULD'VE AT, BY FOLLOWING OUR PROP ONE, UH, LOCALLY IMPOSED REVENUE CAP, WOULD'VE BEEN THAT ONE YEAR.LIKE WE ALWAYS SAY, WE LOWERED TAXES NINE OUT OF 10 YEARS, ONE YEAR WE HAD TO LIFT IT A LITTLE BIT.
SO HAD WE DONE THAT, HAD WE LIFTED AT THE 1.70 CENTS, WE WOULD NOT HAVE TO REDUCE OUR REVENUE PROJECTION.
THAT'S, THAT'S WHAT HAPPENED THERE.
AND IT SOUNDS LIKE DIRECTOR, YOU'RE GONNA BE MAKING THAT ADJUSTMENT NEXT, NEXT MONTH.
UM, IT ON THE DEBRIS STUFF, GREAT WORK, ARIF, EVERYBODY.
I KNOW THAT, I KNOW ALL THE STEPS THAT ARE INVOLVED.
THANK YOU SO MUCH FOR GETTING ALL THAT MONEY FLOWING FASTER.
THE STATE MONEY WILL COVER THE $33 MILLION OF LOCAL SHARE FOR DEBRIS, CORRECT? UM, IT WON'T COVER THE, I GUESS ABOUT, I'M TALKING JUST ABOUT THE GENERAL FUND.
THERE ARE ABOUT $8 MILLION IN, UH, I THINK, UM, IT WOULD BE CATEGORY A AND B STUFF.
THAT WILL BE OUR SHARE, CORRECT? IT, IT'S ABOUT 7 MILLION.
IS THE REMAINDER OF OUR LOCAL SHARE FOR THE GENERAL FUND.
SO AGAIN, THAT WILL CATEGORY PROBABLY COME FROM RESERVES OR, OR WHATEVER.
AND THANKS FOR THE UPDATE ON THE, ON THE, UH, ON THE ERNST AND YOUNG THING.
UM, ON THE HA, YOU KNOW, ON THE MEDIAN, I LOOKED AT THE MEDIAN, AN AVERAGE HOUSE PRICES, AND I REMEMBER WHEN WE WERE GOING THROUGH THE TAX RATE DISCUSSION, WE KEPT USING THE $300,000 MM-HMM
IS IT, I MEAN, WHAT ARE WE, WHAT ARE WE PROJECT ON? DO WE PROJECT ON MEDIAN? DO WE PROJECT ON AVERAGE? HOW DO WE FIGURE OUT WHAT, WHAT HOUSE PRICE TO USE? BECAUSE I KNOW THAT THAT IS FLUCTUATES.
SO THE $320,000, UM, AVERAGE PRICE THAT WE TALKED ABOUT AT THE TIME OF THE TAX RATE IS BASED ON, UM, A PERSON THAT HAS A RESIDENTIAL HOMESTEAD EXEMPTION.
SO THAT 320,000 IS THEIR TAXABLE VALUE ONCE YOU INCLUDE THAT, ONCE YOU INCLUDE THE 20% EXEMPTION.
UM, COLLEAGUES, I'M NOT SEEING ANYONE IN THE QUEUE.
Y'ALL DID A GREAT JOB THIS MONTH.
UM, SO THANK YOU VERY MUCH FOR YOUR PRESENTATION.
WE'LL MOVE ON TO THE QUARTERLY INVESTMENT REPORT.
VERNON LEWIS, WELCOME TO THE HOT SEAT.
TELL US HOW YOU'RE INVESTING THAT $5.6 BILLION WORTH OF MONEY.
SORRY, WILL, I'M NOT SIX FOUR.
WELL, GOOD MORNING, MADAM CHAIR, VICE CHAIR AND COUNCIL MEMBER AND STAFF.
I'M PLEASED TO PRESENT THEIR QUARTERLY INVESTMENT IN SWAT REPORT.
AS OF SEPTEMBER 30TH, 2024, THE CITY HAD $5.6 BILLION INVESTED IN OUR GENERAL INVESTMENT POOL.
THE CHARACTER OF THIS POOL IS AT THE SHORT TERM BOND FUND THAT HOLDS INVESTMENT OF HIGH CREDIT QUALITY FISH WRITTEN REVIEW.
THIS POOL AND ASSIGN THE POOL IS HIGHEST RATING.
AAA INVESTMENTS ARE 84 MILLION HIGHER THAN LAST YEAR.
AND THIS IS PRIMARILY ATTRIBUTED TO THE COMMERCIAL PAPER ISSUANCE FOR COMBINED UTILITY SYSTEM.
THE GENERAL INVESTMENT POOL WAS YIELDING 3.738%, WHICH IS DOWN FROM 3.778% YIELD PRIOR QUARTER.
NOW, TURNING MY ATTENTION TO THE QUARTERLY SWAP REPORT, THE CITY HAS A NEGATIVE RECEIPT FOR THE THREE MONTH PERIOD ENDING TH SEPTEMBER 30TH, 2024, FROM A SWAP OF 2.283 MILLION.
FAIR VALUE OF THE SWAP AS OF SEPTEMBER 30TH, 2024, WAS A NEGATIVE 94.69 MILLION WAS APPROXIMATELY NINE POINT 19 MILLION MORE THAN LAST QUARTER.
THE CITY SWAPS ARE VERY HIGHLY COMPLEX.
IF YOU HAVE ANY QUESTIONS REGARDING THIS REPORT, PLEASE DO NOT HESITATE TO CONTACT MY OFFICE.
THANK YOU SO COMPLEX THAT WE DON'T HAVE ANY QUESTIONS.
ANYBODY THE SWAPS OR THE INVESTMENTS? OKAY.
IN LIGHT OF PUBLIC SPEAKERS, OH, WE DO HAVE TWO PUBLIC SPEAKERS.
UM, DOUG SMITH OR DOMINIC MAZAK.
THESE ARE TWO ON THE FINANCE STUFF.
SO WE'LL GO AHEAD AND TAKE THOSE PUBLIC SPEAKERS NOW.
WHICH BUS DID YOU RIDE TODAY, DOMINIC? THAT, WHICH BUS? WHICH BUS DID YOU RIDE TODAY? OH, GET TO THAT.
OH, I DROVE OVER TO, UH, NORTH SEVEN, KICKED TO 1 0 80 ON
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THE NORTH FREEWAY.AND THIS DOES HAVE SOMETHING TO DO WITH METRO, BELIEVE IT OR NOT.
I THINK I BROUGHT THIS UP BEFORE, BUT I THINK THIS IS THE APPROPRIATE COMMITTEE TO BRING THIS UP.
I'M NOT TALKING ABOUT GENERAL ABILITY, AND I'M NOT TALKING ABOUT THE CITY BUYING CUE CARDS FOR THEIR EMPLOYEES.
THAT'S, UH, THAT'S A GOOD THING.
I'M TALKING ABOUT USING CUE CARDS WITHIN THE OPERATIONS OF CITY COUNCIL, OF, OF THE VARIOUS DEPARTMENTS.
AND MY THING IS, AND SALLY, YOU ON FRIDAYS IS VERY STRICT ABOUT USING THE CARPOOLS FOR, YOU KNOW, YOU HAVE TO EITHER HAVE BE GOING TO TWO SEPARATE PLACES, OR IT'S GOTTA BE TWO OR MORE PEOPLE IN THE CAR BEFORE YOU WOULD PERMIT SOMEBODY TO USE A VEHICLE, UH, FROM YOUR OFFICE.
I THINK WE NEED TO LOOK AT SOMETHING ELSE, NOT JUST HAVING POOLED CARS, POOLED CUE CARDS WITH A CUE CARD.
UM, UH, A PERSON HERE IN THE CAMP THAT WORKS HERE IN CITY OF HOUSTON CAN GO ANYWHERE IN THREE HOURS FOR A DOLLAR 25.
THERE IS NO WAY YOU CAN DO THAT EVEN, UH, CARPOOLING WITH A CITY VEHICLE.
AND I THINK THERE'S SOME PLACES LIKE, OKAY, I'LL TAKE YOU.
SUPPOSE YOU WANTED TO GO FROM HERE TO HGAC.
YOU ARE A MEMBER OF THE C REPRESENTATIVE ON PPC.
YOU COULD, INSTEAD OF, I KNOW YOU, YOU SHOULD WALK OR TAKE YOUR BIKE THERE, BUT SUPPOSE YOU WERE STARTING FROM HERE.
YOU COULD GO TO THE RED LINE, GO TO GO TO WHEELER, TAKE THE 25 OVER ROUND TRIP IS A, WOULD BE TWO, $2 AND 50 CENTS.
THERE'S NO WAY YOU COULD DRIVE A CITY VEHICLE FOR THAT.
AND I THINK, AND I'M GONNA SAY SINCE YOU'RE INTO THIS, THANK YOU.
MAYBE YOU CAN, AND I KNOW, I DON'T KNOW IF THE LARGE PEOPLE MEMBERS HAVE ACCESS TO, UM, A POOL OF FUNDS, LIKE THE LETTERS, UH, PEOPLE HAVE, UH, UH, A BUDGET THAT THEY CAN SPEND, MAYBE BUY SOME CUE CARDS AND, AND TEST IT.
THAT YOU'RE AN ACCOUNTANT, SEEMS LIKE YOU'RE AN ACCOUNTANT.
SEE IF WE, YOU CAN GET SOME SAVINGS IN YOUR PARTICULAR, UH, NUMBER FIVE, BY TAKING METRO VERSUS USING CITY VEHICLES.
AND MY THING IS, WHEN THE PUBLIC, THE PEOPLE ON SEA START SEEING THE HORSESHOE AND THE STAFF AT THE, WITH THE HORSESHOE AND THE CITY START RIDING METRO, I THINK THE THING IS, WAIT A MINUTE.
IF THE HORSESHOE CAN RIDE METRO, MAYBE I CAN RIDE METRO.
AND I THINK ALSO TOO, WITH THAT, YOU CAN BE GREEN.
YOU CAN SAVE GREEN BY BEING GREEN, AND MARIO SAYS, YOU'RE MINE TOO.
IF YOU WANT, IF WE COULD, IF YOU WANNA TALK TO ME ABOUT, ABOUT THIS, MAYBE MARIO'S MY DIRECT, UH, COUNCIL MEMBER, WE CAN NEED TO TALK ABOUT THIS.
MAYBE YOU SEEM LIKE YOU'RE A PROT TRANSIT PERSON.
AND YOU, IF YOU'RE, UH, CHIEF OF STAFF, LET'S GET THIS GOING.
NO, THAT'S WORTHWHILE DISCUSSION.
UM, BUSES CHEAPER THAN THE POOLED VEHICLES, METRO PASSES AND METRO.
WE DO GIVE OUT METRO PASSES TO PEOPLE THAT COMMUTE, BUT GOOD POINT.
AND WE LOOK INTO THAT FURTHER.
UM, DOUG SMITH IS OUR NEXT SPEAKER.
UH, AT THE RISK OF WEARING OUT MY WELCOME ON A PARTICULAR TOPIC I JUST WANT TO POINT OUT ON PAGE ONE OF THE FINANCE DIRECTOR'S REPORT, UH, THE ADOPTED BUDGET FOR PROPERTY TAXES IS 1,000,000,427.
THE AUDIT UNAUDITED PRELIMINARY FOR LAST YEAR IS 1,000,003 65.
THAT'S A $42 MILLION INCREASE THIS YEAR.
SO WE DON'T HAVE A PROPERTY TAX CAP.
AND AS YOU REFER TO THIS, IF YOU WOULD, UH, TAKE THAT IN MIND, I WOULD APPRECIATE IT.
THEN ON THE FINANCE, MAJOR VARIANCES FROM ADOPTED BUDGET, UH, THIS IS MINOR, BUT I HAD ASKED FOR THIS AT ANOTHER COMMITTEE MEETING AND I DIDN'T GET IT ON THE INCREASE IN GENERAL GOVERNMENT TO REFLECT FUNDING FOR THE HOUSING NAVIGATION CENTER, THREE AND A HALF MILLION DOLLARS.
IF YOU COULD GET A BREAKDOWN OF THAT THREE AND A HALF MILLION DOLLARS, I WOULD APPRECIATE IT.
AND THEN ON THE ARPA, LOCAL FISCAL RECOVERY FUND, IT'S ON PAGE 13.
I'M NOT SURE WHETHER THAT'S THE SAME PAGE, UH, THAT YOU HAVE IN THEIR, YOUR REPORT, BUT, UH, THEY SHOW THE HUGE, THE BIGGEST AMOUNT FOR THAT WAS $472 MILLION IN A TOPIC CALLED REVENUE REPLACEMENT.
I KNOW THESE FUNDS ARE GOING TO HAVE TO BE, UH, VERY DETAILED ORIENTED BY THE, UH, GOVERNMENT.
AND WE DID NOT, I'VE SAID THIS BEFORE AT MEETINGS.
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IN REVENUE.IF YOU LOOK AT THE REVENUE STARTING IN 2019, BEFORE COVID ALL THE WAY THROUGH 2023, THERE WAS MAYBE A $20 MILLION DROP IN REVENUE.
SO HOW YOU CAN JUSTIFY $400 MILLION FOR REVENUE REPLACEMENT, UH, WHEN IT DIDN'T REALLY HAPPEN, WILL BE INTERESTING TO SEE, UH, HOW THE GOVERNMENT DEALS WITH THAT.
AND FINALLY, ON THE STORMWATER FUND, THERE'S A CATEGORY TRANSFER OUT DISCRETIONARY DEBT.
UH, I DON'T KNOW WHAT THAT IS.
AND IF I COULD FIND OUT, UH, THAT WOULD BE INTERESTING.
AND THOSE ARE ALL THE COMMENTS THAT I HAVE.
'CAUSE SOME OF MY OTHER COMMENTS LIKE RE RELATED TO PROPERTY TAX, UH, AND THE $159 MILLION WERE A, UH, ANSWERED.
AND WE, AND WE'VE GOT THOSE QUESTIONS DOWN AND WE'LL GET YOU BACK.
NOW, I, I ALWAYS LOOKED AT THE REVENUE REPLACEMENT AS KIND OF A, I I, I UNDERSTAND WHAT YOU'RE SAYING, BUT WE USED THAT FOR OPERATING EXPENSES AND BUILT UP OUR FUND BALANCE.
I MEAN, THAT'S BASICALLY WHAT WE DID.
THAT'S WHY WE HAVE SUCH A HIGH FUND BALANCE.
I THINK HAD WE USED THE FUND BALANCE, YOU KNOW, WE, WE WOULDN'T HAVE USED THE, YOU KNOW, IT'S, IT WAS KIND OF A WASH.
I MEAN, IT WAS, IT WOULD, IT HELPED US BUILD UP THE FUND BALANCE.
HOPEFULLY THE GOVERNMENT WILL AGREE WITH THAT.
BUT I, BUT I UNDERSTAND WHAT YOU'RE SAYING AND WE'LL, AND ON THE DEBT, ON THE REBUILD, WE, WE'LL GET YOU AN ANSWER ON THAT.
AND, UM, AND APPRECIATE YOUR COMMENTS.
WE KNOW, I KNOW THAT THE, THE TAX REVENUE GROWS EVERY YEAR.
I, I AM CAREFUL TO SAY THAT WE LOWER THE TAX RATE, NOT THE TAXES.
UM, WE WERE IN AT A, AT A TOWN HALL MEETING LAST NIGHT, CHAIRED BY THE MAYOR PRO TEM.
AND, AND, UM, THERE WERE PEOPLE THERE SAYING, YOU KNOW, IT WAS IN THE FORT BEND, HOUSTON AREA.
AND THEY'RE SAYING, WELL, YOU KNOW, IT SEEMS LIKE ON ONE SIDE OF ONE, ONE AREA, THE ROADS ARE LOOKING BAD, AND THE CURBS AND THE MEDIANS ARE OVERGROWN.
THEN YOU GO OVER TO MISSOURI CITY AND IT'S ALL NICE AND BEAUTIFUL AND EVERYTHING'S TRIMMED UP.
AND I REAL QUICK LOOKED ON MY PHONE, THEIR TAX RATE IS 57 CENTS PER A HUNDRED DOLLARS VALUATION WITH SIMILAR PROPERTY VALUES.
SO AT SOME, AT SOME POINT, IT'S MATH.
UM, BUT, BUT I UNDERSTAND WHAT YOU'RE SAYING.
WE DO TAKE IN, WE, OUR VALUATIONS GROW.
BUT AS YOU'LL SEE, LAST YEAR THEY DIDN'T GROW THAT MUCH.
THEY ONLY GROW, GREW THREE AND A HALF PERCENT.
SO, UM, THANK YOU AS ALWAYS FOR YOUR COMMENTS.
AND, AND YOU, WE, YOU NEVER WEAR OUT YOUR WELCOME.
I ALWAYS TELL YOU THAT DOUG
AND, AND I WILL, UM, NOW, UH, IN THIS MONEY DISCUSSION, UM, YOU'RE GONNA BE HEARING ABOUT A POSSIBLE WAY TO BRING SOME ADDITIONAL REVENUE TO THE CITY.
AND I WILL TURN IT OVER TO MAYOR PRO TEM MARTHA CASTEX.
YOU CAN SAY THAT, UH, WE ARE READY FOR DIRECTOR HORDE, UM, YOUR PRESENTATION.
SO IF YOU AND YOUR TEAM WANT TO JOIN US AT THE PODIUM, UH, MEMBERS OF, UH, OUR AUDIENCE TODAY, WE WILL BE TALKING ABOUT THE OBO CERTIFICATION REVENUE OPTIONS.
WE DO HAVE A PRESENTATION TODAY, SO WE ARE LOOKING FORWARD TO HEARING FROM YOU, UH, DIRECTOR HORDE AND ALSO, UM, OUR CERTIFICATION AND DESIGNATIONS, DIVISION MANAGER, VANESSA APOL LETSON, DID I SAY YOUR LAST NAME RIGHT? ALON ALON LETSON.
THANK YOU VERY MUCH, UH, FOR BEING HERE TODAY.
UH, IF YOU ARE READY, WE ARE READY FOR YOUR PRESENTATION VERY QUICKLY.
WE'VE BEEN JOINED BY, UM, AND, AND COUNCIL MEMBER RAMIREZ AND COUNCIL MEMBER TIFFANY THOMAS ARE ONLINE.
GOOD MORNING, UH, CHAIR LADY AND THE VICE CHAIR AND ALL OF THE, UM, COUNCIL MEMBERS AND YOUR STAFF.
I APPRECIATE THE OPPORTUNITY TO SPEAK TO YOU ON BEHALF OF THE OFFICE OF BUSINESS OPPORTUNITY.
UH, WE WERE ASKED BY, UM, COUNCIL MEMBER ALCORN TO COME UP WITH A BUDGET AMENDMENT, UM, THAT WOULD ALLOW FOR OUR OFFICE TO COLLECT REVENUE.
UM, TRADITIONALLY, UM, JUST A LITTLE BACKGROUND, THE OFFICE HAS NEVER COLLECTED REVENUE ON THE, UH, SERVICES THAT WE PROVIDE.
UH, WE PROCESS THE APPLICATIONS FOR CERTIFICATION.
UM, AND SO WE'VE COME UP WITH SOME, UM, NUMBERS FOR YOU ALL.
SO IF YOU, UM, INDULGE US, UM, NEXT SLIDE.
SO OF COURSE, WE ALWAYS START OUT WITH WHAT OUR VISION IS, WHICH IS TO ELIMINATE THE SYSTEMATIC BARRIERS TO PROSPERITY AND ECONOMIC OPPORTUNITY IN THE GREATER HOUSTON REGION.
UM, WE ALSO HAVE HERE FOR YOU BRIEFLY THE NUMBER OF CERTIFICATIONS THAT WE CURRENTLY HAVE IN EACH OF THE DESIGNATIONS.
WE HAVE THE MBE CERTIFICATION.
WE HAVE OVER FOUR THOUSAND FOUR THOUSAND ONE HUNDRED AND SIXTY FIVE, UH, WOMEN OWNED BUSINESS DESIGNATION, UM, SORRY, CERTIFICATION.
WE HAVE 2,457, CURRENTLY SMALL BUSINESS
[00:30:01]
CERTIFICATIONS.WE CURRENTLY HAVE OVER 2000 PERSONS WITH DISABILITIES.
WE HAVE 143, UH, THE FEDERAL PROGRAM, THE DISADVANTAGED BUSINESS ENTERPRISES.
WE HAVE A LITTLE OVER 1000 CERTIFICATIONS IN THE AIRPORT CONCESSIONS AREA.
UM, DISADVANTAGED BUSINESS ENTERPRISE.
AND THEN OUR, UM, HUB PROGRAM, WHICH IS A STATE PROGRAM FOR WHICH WE ALSO CERTIFY.
WE HAVE 1,328, OUR LGBT BUSINESS ENTERPRISE CERTIFICATION THAT WE ALSO, UM, DISPLAY IN OUR DIRECTORY.
WE HAVE 22 OF THOSE IN HER HOUSTON FIRST, WHICH IS THE LOCAL PREFERENCE.
SO AS YOU CAN SEE, WE HAVE NEARLY, ALMOST 6,000 CERTIFIED FIRMS IN OUR DIRECTORY BETWEEN ALL OF THE CERTIFICATION TYPES.
UM, WE HAVE VARIOUS AGENCIES THAT UTILIZE OUR CERTIFICATIONS.
SO ACROSS THE CITY AND THE AREA, WE HAVE THE METRO THAT UTILIZES THE, THE CERTIFICATION.
HARRIS HEALTH, HOUSTON FIRST, UH, TDOT, HOUSTON HOUSING AUTHORITY, FORT BEND, I-S-D-H-C-C, HARRIS COUNTY, UM, HISD, PORT OF HOUSTON, UM, AND THE VARIOUS COUNTIES.
YOU CAN ALSO SEE, UM, AS WE PRESENTED LAST WEEK, THAT WE ALSO HAVE OUR COUNTIES THAT WE CERTIFY FOR.
SO WE ARE THE REGIONAL CERTIFIER FOR THIS AREA.
WE CERTIFY FOR 10 COUNTIES, INCLUDING HARRIS COUNTY, AUSTIN, BRAZORIA, CHAMBERS, FORT BEND, GALVESTON, LIBERTY, MONTGOMERY, SAN JACINTO, AND WALLER.
THE CERTIFICATION PROCESS, UH, IT SAYS FOLLOW.
WHEN AN APPLICATION REACHES OUR OFFICE, IT GOES THROUGH WHAT'S CALLED INTAKE.
THE INTAKE TEAM IS COMPRISED OF TWO, UH, CITY OF HOUSTON FULL-TIME, UH, EMPLOYEES WHO WILL SCREEN THOSE APPLICATIONS AND MAKE SURE THAT THE DOCUMENTS NEEDED TO PROCESS IS ATTACHED.
ONCE THE DOCUMENT, I'M SORRY, AN APPLICATION IS AT 80% COMPLETE, IT IS, UH, ASSIGNED TO A BUSINESS DEVELOPMENT COORDINATOR OR A CERTIFICATION SPECIALIST.
UH, THAT CERTIFICATION SPECIALIST WILL COLLECT THE BALANCE OF THOSE DOCUMENTS, BUT IT'S ALSO THERE TO, UH, ANALYZE EACH DOCUMENT TO MAKE SURE THAT THE, UH, APPLICANT MEETS THE PROGRAM'S REQUIREMENT, WHETHER IT IS THE FEDERAL PROGRAM OR THE LOCAL PROGRAM.
RIGHT NOW WE HAVE A TOTAL OF SIX FULL-TIME BDCS.
UH, YOU GUYS DO SEE THAT WE HAVE A B, D, C ON MILITARY LEAVE THAT MAKES SEVEN.
WE DID LOSE A B, D, C TO THE PORT OF HOUSTON.
AND THEN WE HAVE A B, D, C THAT IS PROCESSING HIGHER HOUSTON FIRST.
UH, SO SIX WOULD BE DOING CERTIFICATION ONLY.
UH, ONCE THOSE SIX, TURN THOSE CERTIFICATION APPLICATIONS OVER, UH, AT COMPLETENESS, THAT WOULD MAKE THEIR RECOMMENDATION ON WHETHER THE APPLICANT MEETS THE PROGRAM'S REQUIREMENT.
IT GOES TO COMMITTEE AND THE COMMITTEE WILL RENDER THE DECISION.
SO, UM, REVOLVING AROUND THIS DISCUSSION IS THE, ARE THE THINGS THAT IMPACT OUR TIMELINE.
AND SO, AS WE ARE AWARE, THERE IS A CERTIFICATION BACKLOG.
WE HAVE OVER 600, NEARLY 700 CERTIFICATIONS IN OUR QUEUE RIGHT NOW.
UM, THAT THESE EIGHT OR NINE PEOPLE PROCESS, AND WE HAVE ABOUT 77 IN OUR COMMITTEE.
UM, THE HIGH VOLUMES, AS YOU CAN SEE IN THE, IN THE, UH, SLIDE, ACTUALLY INCREASED EVERY YEAR.
SO FY 23, WE HAD ABOUT 800 TO 10 NEW CERTIFICATION APPLICATIONS, WHICH WAS A 9% INCREASE FROM 2022.
UM, FY 24, WE HAD 911, WHICH WAS A 12.35% INCREASE FROM FY 23.
IN ADDITION TO NEW CERTIFICATIONS, THERE'S ALSO A RENEWAL PROCESS THAT OCCURS.
AND SO DURING THE RENEWAL PROCESS, WE HAVE THOSE 5,000, NEARLY 6,000 FIRMS THAT WE HAVE CERTIFIED.
WE HAVE TO ENSURE THAT THEY REMAIN, THE OWNERSHIP REMAINS THE SAME, THE FUNCTIONAL MISSION IS THE SAME.
AND SO AN FY 24, WE COMPLETED 2,586 RENEWALS, WHICH WAS A 55% INCREASE FROM FY 23.
AND THAT'S BECAUSE OF THE NUMBER OF FIRMS THAT WERE ADDED TO THE DIRECTORY.
UM, I WANTED TO ALSO COVER ADDITIONAL BDC REQUESTS.
SO A BDC CAN BE ASKED AT ANY TIME, UM, TO EXPAND A CERTIFICATION.
AND SO YOU MAY BE CERTIFIED IN TWO NAYS CODES AND YOU COME BACK AND YOU SAY, HEY, I THINK I WANNA ADD FIVE MORE NAYS CODES.
I'VE EXPANDED MY BUSINESS, I'M DOING SOMETHING NEW.
WE DO GO THROUGH THE PROCESS TO EXPAND THEM.
THAT TAKES AWAY FROM THEIR WORK, AND THEY GO RIGHT IN AND DO THAT BECAUSE THAT'S, IT'S NOT SIMPLE, BUT IT'S SOMETHING THAT WE WANNA GET PROCESSED FAIRLY QUICKLY.
UM, CHANGES IN CIRCUMSTANCES, CHANGES IN OWNERSHIP.
THEY MAY HAVE ADDED AN OWNER, CHANGED AN OWNER, CHANGED THEIR PERCENTAGE OF OWNERSHIP, UM, BEEN
[00:35:01]
BOUGHT OUT, SOLD OUT.ALL OF THOSE THINGS HAVE TO COME BACK THROUGH THE PROCESS TO ENSURE THAT WE ARE STILL CERTIFYING THE CORRECT M-B-E-W-B AND SBE.
UM, MANAGEMENT AND CONTROL MAY CHANGE.
UM, A SPOUSE DIES, UM, A BUSINESS, SOMEONE RETIRES.
UM, WE HAVE TO REASSESS THE PERCENTAGE OF OWNERSHIP.
AND THEN ALSO GENERAL INQUIRIES.
UM, MEANING SOMEONE THINKS YOU'RE NOT CERTIFIED, UM, I BELIEVE THAT THIS IS NOT A WBE OR THIS IS NOT AN MBE.
AND SO WE DO GO BACK AND WE, UH, PROCESS THOSE.
UM, COUNCIL MEMBER FLICKINGER, IN OUR LAST PRESENTATION, YOU ASKED HOW MANY OF THOSE WE'VE DONE.
AND OVER THE LAST THREE YEARS WE'VE DONE, WE'VE HAD 35 OF THOSE TYPE OF COMPLAINTS.
AND WE'VE DEIFIED 25 OF THE 35.
THE OTHER THING IMPACTING OUR STAFF, UH, UH, BACKLOG IS SALARIES.
UH, WE ARE A CONSTANT REVOLVING DOOR.
UM, WE HAVE A TURNOVER RATE OF LAST YEAR OF 35%.
I ALSO SENT THAT INFORMATION OVER TO YOU ALL THIS MORNING OF THE TURNOVER RATE OVER THE LAST THREE, FOUR YEARS.
UM, THE CITY OF HOUSTON SALARY FOR OUR STAFF STARTS AT 51,000.
THE PORT OF HOUSTON SALARY START AT 70,000.
AND THE STATE TEXAS HUB STARTS AT 81 5.
SO WE DO A LOT OF TRAINING, BUT AS SOON AS SOMEONE LEAVES THAT, UM, AS YOU CAN SEE FROM THE SLIDE PREVIOUSLY, THOSE CERTAIN, THOSE APPLICATIONS HAVE TO BE REDISTRIBUTED AND THUS IT ADDS TO THE BACKLOG.
UM, OUR AVERAGE STAY, UH, RECENTLY HAS BEEN ABOUT TWO TO THREE YEARS BEFORE PEOPLE EITHER GO TO ANOTHER CITY DEPARTMENT WHERE THEY CAN MAKE CONSIDERABLY MORE DOING THE SAME WORK, UM, AS A COMPLIANCE OFFICER FOR A SPECIFIC DEPARTMENT, OR THEY WILL GO TO ONE OF THE SISTER AGENCIES AND MAKE MORE, DOING LESS WORK BECAUSE WE'RE ACTUALLY DOING A CERTIFICATION HERE.
AND SO WE DO THAT TERRIBLY AFFECTS OUR BACKLOG, UM, VERY QUICKLY.
SOME OF THE THINGS THAT WE PUT IN PLACE TO IMPROVE OUR PROCESS HAVE BEEN GOING TO, UM, OUR INTERVIEWS ONLY WHEN NECESSARY.
UM, SITE VISITS ONLY FOR THE FEDERAL PROGRAM BECAUSE IT IS REQUIRED DESK AUDITS.
UM, INSTEAD OF THREE POINTS OF CONTACT, WE DO ONE, UM, CHANGE REQUESTS AND OWNERSHIP ARE DONE BY OUR SCREENING STAFF.
INSTEAD OF THAT GOING TO A BDC, UM, THE INTERSTATE TRANSFERS ARE NOW DONE AUTOMATICALLY FOR THE FEDERAL PROGRAM INSTEAD OF COMPLETING THE APPLICATION AND, UM, GOING THROUGH THE PROCESS AND THEN FILLING VACANCIES, WE'VE TRIED AS BEST WE CAN TO FILL THOSE AS QUICKLY AS POSSIBLE.
UM, SO AS YOU CAN SEE FOR OUR PRODUCTION, WHAT WE HAVE ON THE LEFT SIDE ARE OUR ACTUALS RIGHT NOW.
UH, RIGHT NOW OUR CERTIFICATION IS FREE.
WE HAVE A HIGH VOLUME BECAUSE WHEN THINGS ARE FREE, PEOPLE TAKE ADVANTAGE OF IT.
AND SO, UH, WE HAVE 421 APPLICATIONS PENDING, UH, WHICH ADDS TO OUR BACKLOG.
130 RENEWALS PENDING AS PART OF OUR BACKLOG.
OUR AVERAGE TIMELINE, UM, ACTUALLY HAS DECREASED FROM LAST YEAR.
SO WE'RE MAKING SOME INROADS BY BRINGING STAFF IN.
BUT NOW AS WE START TO LOSE STAFF, WE'LL HAVE THE SAME ISSUE.
UM, WE HAVE ZERO REVENUE AND WE HAVE A HIGH TURNOVER.
SOME OF THE REIMAGINING OF OUR DEPARTMENT.
ON THE RIGHT SIDE, YOU'LL SEE, UH, VENDOR FEES.
WE THINK CHARGING VENDOR FEES WILL REDUCE THE VOLUME.
OF COURSE, PEOPLE WON'T JUST DO IT TO DO IT.
YOU'LL HAVE SOME INVESTMENT IN THAT.
UM, LOCAL AGENCY FEES IS SOMETHING THAT WE ARE ALSO PROPOSING, WHICH WOULD HOPEFULLY, UM, ADD TO OUR STAFF LEVEL AND INCREASE OUR STAFF.
INCREASE STAFF, OF COURSE, WOULD CAUSE HIGHER PRODUCTION, COMPETITIVE SALARY WOULD ADD TO OUR RETENTION, UH, REASSESSING OUR POLICIES.
WE WANNA STREAMLINE OUR POLICIES AND WE'RE LOOKING AT DOING THAT.
AND THAT WILL ADD TO OUR PRODUCTION AS WELL.
UM, REDUCING OUR BACKLOG WILL ALLOW US TO PROCESS THE 45 TO 60 DAYS INSTEAD OF THE 149 THAT WE'RE AT CURRENTLY.
UM, AND, UM, FUNDS BEING ALLOCATED TO THE DEPARTMENT SO THAT WE CAN STAFF UP ACCORDINGLY.
WE'LL GET INTO THE, UH, REVENUE GENERATION.
I'M GONNA TURN THAT OVER TO VANESSA.
SO THE SLIDE IN FRONT OF YOU IS A COMPARISON TO TWO PARTNER AGENCIES.
THE HOUSTON MINORITY SUPPLY DIVERSITY COUNCIL IS A LOCAL, UH, AGENCY.
UH, THEY PROCESS MBE APPLICATIONS ONLY, AND THEY BASE THEIR REVENUE APPLICATIONS OFF OF, UH, I'M SORRY, THEIR APPLICATIONS ARE BASED OFF OF REVENUE.
SO YOU GUYS SEE, WHEN YOU APPLY WITH H-M-S-D-C, IF YOU ARE MAKING LESS THAN $1 MILLION, YOU WILL PAY THEM THAT $400 TO GET YOUR APPLICATION PROCESSED.
UH, AND THEN IT GOES ALL THE WAY UP TO THE 1400, UH, IF YOU'RE AT 50 MILLION AND ABOVE.
THEY ALSO PROCESS, UH, APPLICATIONS
[00:40:01]
EXPEDITED FOR $350.ADDITIONAL, UH, NORTH CENTRAL TEXAS REGIONAL CERTIFICATION AGENCY IS A-T-U-C-P PARTNER WITH THE CITY OF HOUSTON.
AND THEY'RE COMPARABLE TO US WITH THEIR COUNTY AREAS.
THEY CHARGE BY THE CERTIFICATION TYPE.
AND SO IF YOU ARE APPLYING FOR, LET'S SAY, A MBE CERTIFICATION, YOU'RE GONNA PAY THE ONE 50.
AND IF YOU WANNA ADD WBE WITH THAT MBE ADDITIONAL A HUNDRED DOLLARS ON UP TO PDBE AND SBE, UH, THEY ALSO CHARGE A OUT JURISDICTION FEE.
UH, SO IF YOU'RE NOT IN THEIR NORMAL COUNTY AREAS AND YOU WISH TO BE A CERTIFIED WITH N-C-T-R-C-A, YOU WILL PAY AN ADDITIONAL $250.
AND THEY CHARGE A RENEWAL FEE FOR EACH CERTIFICATION TYPE, WHICH IS $75, WHAT WE PROPOSED WITH THE CITY.
AND SO, UH, THE FIRST TYPE WILL BE $200 AND AN ADDITIONAL $50 FOR EACH, UH, TYPE.
AND THEN A RENEWAL FEE AT $75 FOR EACH TYPE.
UH, WE PROPOSE THIS, UH, WOULD BE A GOOD OPTION BEING THAT, UH, AGAIN, IT WOULD HAVE SKIN IN THE GAME WHEN YOU ARE APPLYING FOR CERTIFICATION VERSUS IT BEING FREE.
AND, UH, IF WE UNDERSTAND, IT'LL BRING DOWN THE, UH, APPLICATIONS.
HOWEVER WE FEEL LIKE, UH, THOSE THAT ARE READY WILL, UH, PROCEED WITH APPLY.
UM, SO ON THE NEXT SLIDE, YOU'LL SEE THE PROJECTIONS BASED ON OUR PAST YEAR.
SO WE LOOKED AT FY 23 FY 24, UM, FY 23.
BASED ON THE FIRST TYPE WE STARTED WITH MBES 521 WERE PROCESSED.
IF WE WERE TO USE THIS SAME FEE SCHEDULE, IT WOULD HAVE GENERATED 133,500.
UM, BASED ON THE FY 24, WHICH WAS OUR IMMEDIATE PAST YEAR, IT WAS, THERE WAS AN INCREASE IN THE TYPES OF APPLICATIONS WE RECEIVED.
UM, PROCESSING ACCORDING TO THE FEE SCHEDULE THAT WE PROPOSED WOULD'VE GENERATED ABOUT 150,200.
SO THIS IS REVENUE BASED ON FEES.
UM, THE RENEWAL FEES, IF WE WERE HAVE, IF WE WOULD'VE DONE RENEWALS IN THE FY 23, THAT WOULD'VE GENERATED ADDITIONAL $59,250 RENEWALS IN FY 24 WOULD'VE DOUBLED AND BEEN ABOUT 104,000.
NEXT SLIDE, WE PROPOSED SOME OTHER ADDITIONAL, UM, ADMINISTRATIVE FEES.
UM, OUT OF JURISDICTION FEE EXPEDITING, FEE OUT JURISDICTION WOULD BE TWO 50.
WE DO GET MULTIPLE, MANY REQUESTS TO EXPEDITE AND CURRENTLY WE DO NOT EXPEDITE BECAUSE OF OUR BACKLOG.
UM, BUT IF WE DID AN EXPEDITING FEE, IT WOULD BE 30 DAYS, 3 25.
UM, THERE'S ALSO A DE-LIST FEE FOR THOSE THAT WE HAVE TO TAKE OUT BECAUSE THEY CHANGED OWNERSHIP AND DID NOT NOTIFY US.
THAT'S ONE 50 AND AN APPEAL ADMINISTRATIVE FEE.
SO THERE ARE COMPANIES THAT APPEAL THE DECISIONS.
UM, AND THAT'S, UH, QUITE A BIT OF WORK THAT GOES INTO THE APPEAL PROCESS OF DETERMINATION.
SO 150 FEET FOR THAT NEXT SLIDE.
UM, SOMETHING THAT, UM, COUNCIL WAS VERY INTERESTED IN IS OUR LOCAL AND PUBLIC AGENCY FEES.
AND SO THESE ARE THE ENTITIES THAT SHARE THE CERTIFICATION.
UH, WE HAVE THE 5,800 CERTIFIED FIRMS, BUT ONLY ABOUT 25% ARE, UM, RIGHT NOW CONTRACTED WITH THE CITY OF HOUSTON.
THAT MEANS THAT THE OTHER 75% IS DOING WORK ELSEWHERE AND WE ARE FINE WITH THAT.
UM, BUT THESE ARE THE OTHER ENTITIES THAT SHARE THE CERTIFICATION.
WHAT WE ARE PROPOSING IS, UM, A FEE FOR EACH OF THESE ENTITIES, UM, AT A HUNDRED THOUSAND PER YEAR, UH, WHICH WOULD, UM, COVER THE PROCESSING FEE, INCREASING THE NUMBER OF STAFF, UM, AND INCREASING OUR STAFF, UH, SALARIES.
THIS WOULD GENERATE $600,000 A YEAR FOR THE DEPARTMENT.
NEXT SLIDE IS A PROPOSED CONTRACT COMPLIANCE FEE WHERE WE WERE ASKED FOR CERTIFICATION, BUT I FELT LIKE WE NEEDED TO TOUCH ON.
THERE ARE OTHER AREAS THAT WE FEEL LIKE WE COULD ALSO GENERATE REVENUE FOR THE DEPARTMENT.
UM, WE PROVIDE A MEDIATION SERVICE THAT IS FREE TO FIRMS. UM, AND THERE'S TWO STAFF PERSONS WHO ARE CERTIFIED MEDIATORS.
AND CURRENTLY IT TAKES QUITE A BIT TO GET READY FOR THAT.
THEY HAVE TO MEET, THEY MEET WITH, UH, BOTH THE PRIMES AND THE SUBS, SOMETIMES SEVERAL TIMES TO COME THROUGH TO SOME RESOLUTION OF THEIR ISSUE.
WE WOULD LIKE TO CHARGE A MEDIATION FEE FOR THAT.
UM, B TWO, WHICH WILL ENCOURAGE PEOPLE TO RESOLVE THEIR OWN ISSUES.
[00:45:01]
B TWO G NOW, UM, WHICH IS A PLATFORM THAT OUR PRIMES USE TO ENTER THEIR, UM, DATA.WE WERE PROPOSING YOU, UM, CHARGING ONE 50 PER CONTRACT AS THEY, YOU KNOW, GET READY TO GEAR UP.
THEY UTILIZE THIS FOR ENTERING THEIR PAYMENTS, ADDING THEIR SUBCONTRACTORS.
THERE'S A LOT OF WORK THAT GOES INTO THAT.
BUT THAT, UH, PLATFORM WE PAY FOR CURRENTLY AND LCP TRACKER, WHICH IS USED FOR CERTIFIED PAYROLL.
THERE IS NO COST TO ANY OTHER BUSINESSES FOR THAT, BUT THIS WOULD BE JUST FOR THE PRIMES AND NOT FOR THE SMALL BUSINESS.
ALSO UNDERPAYMENT PENALTIES, WHICH WE CURRENTLY COLLECT.
UM, THE FEES THAT THE, UH, REVENUE THAT WOULD BE GENERATED FROM THAT MEDIATION A LITTLE OVER 5,000 B TWO G NOW WOULD BE CLOSE TO 273.
UM, THOUSAND LCB TRACKER WOULD GENERATE ABOUT 273,000.
THIS IS BASED UPON THE NUMBER OF CONTRACTS THAT WE CURRENTLY MONITOR.
UM, AND THE UNDERPAYMENT PENALTIES ABOUT 250,000 BASED ON LAST YEAR'S GENERATION.
SO THE NEXT TWO SLIDES, YOU'LL SEE LIKE THE SUMMARY OF EVERYTHING.
WE ARE LOOKING AT NEW APPLICATIONS BASED ON FY 24, 150,200, UH, REVENUE PROCESSING FEES FOR RENEWALS, 104,000, UH, PUBLIC PARTNERSHIP FEES, 600,000 EXPEDITING FEES, 32 500 APPEAL FEES, 3,600.
NEXT SLIDE ARE OUT OF JURISDICTION FEES.
WE DON'T HAVE DATE ON THAT 'CAUSE WE'VE NEVER DONE THAT, BUT, UM, SO THAT'S A PLACEHOLDER DE-LIST FEE.
A THOUSAND MEDIATION FEES, 52 50 B TWO JUVENILE FEES, 272,000 LCP TRACKER FEES, 272,000.
AND THEN UNDERPAYMENTS 250,000 BASED ON OUR, UH, PAST YEAR.
UM, SO THAT TOTALS ABOUT 1.6 MILLION, UM, AND REVENUE THROUGHOUT THE DEPARTMENT BASED ON CERTIFICATION AND COMPLIANCE FEES.
AND THIS IS JUST OPTIONS THAT WE'RE PROPOSING.
UM, WE'RE NOT WEDDED TO ANY OF THIS.
IF YOU GO TO THE NEXT PAGE, WHICH IS REVENUE VERSUS STAFFING, UH, WE LOOKED AT, UM, THE NUMBER OF STAFF AND APPLICATIONS WE GENERATE.
AND IF WE WERE TO INCREASE STAFF, WE WOULD BE ABLE TO INCREASE BASED ON THE NUMBER OF APPLICATIONS THAT WE PROCESS.
UM, THE FIRST APP, OF COURSE, IF WE WENT WITH ALL THE FEES, RIGHT? SO I'M PUTTING IN ALL THE FEES THAT THE 1.6 WOULD ADD 17 FTES, WHICH WOULD ALLOW US TO DO ABOUT 2,500 MORE APPLICATIONS.
IF WE WERE TO JUST GO WITH THE AGENCY FEES, WHICH IS THE 600,000 AND START WITH THERE AND RAMP UP, THAT WOULD GIVE US SIX FTES S AT ABOUT IN HALF AT ABOUT 900 APPLICATIONS.
AND THEN JUST THE CERTIFICATION FEES, WHICH BE TWO HUNDRED AND TWENTY TWO HUNDRED FIFTY 5,000 AND ADD 2.5 FTES AT ABOUT 375 MORE APPLICATIONS.
NOW WITH ACKNOWLEDGING THAT THE ADDITIONAL FEES, THE VOLUME WOULD PROBABLY GO DOWN AT LEAST 20% SO THAT EVEN THE 2.5, UM, IN NEW FTES WOULD BE HELPFUL.
UM, BUT WE WOULD LIKE TO GENERATE MORE THAN THAT.
AND THEN THE LAST PIECE IS THE COMPLIANCE FEES, WHICH IS TOTALED ABOUT 800,000.
THAT WOULD ADD ABOUT EIGHT FTES ON THE COMPLIANCE SIDE.
ANY QUESTIONS? SO WE DO HAVE QUESTIONS, BUT I DID WANNA SAY THANK YOU VERY MUCH BECAUSE I KNOW IT TOOK A LOT OF EFFORT AND TIME AND WORK, UM, TO PULL ALL THIS TOGETHER BASED ON THE PREVIOUS DATA, UH, THE BUDGET AMENDMENTS THAT WERE SUBMITTED, UM, FROM COUNCIL MEMBER ALCORN AND COUNCIL MEMBER MARTINEZ, UM, BROUGHT UP SOME GREAT POINTS FOR US TO LOOK AT HOW WE CAN MONETIZE SOME OF THE WORK THAT WE DO.
I THINK THE MOST IMPORTANT THING FOR ME IS I WANNA MAKE SURE THAT WITH THIS INFORMATION, THAT WE ALSO TAKE THIS INFORMATION TO OUR STAKEHOLDERS.
UM, OUR SMALL BUSINESS OWNERS ARE, YOU KNOW, THE BACKBONE OF OUR CITY'S ECONOMIC DEVELOPMENT.
I WANNA MAKE SURE THAT THEY KNOW WHAT WE ARE DISCUSSING AND THAT WE CAN ALSO INCLUDE THEM IN THESE CONVERSATIONS.
I DO LIKE THE, UM, REVENUE PROJECTIONS FROM THE ON PAGE 18, THE PROPOSED LOCAL AND PUBLIC AGENCY FEE.
UM, I THINK IF WE ARE SHOWING 70% OF OUR CERTIFIED FIRMS ARE DOING BUSINESS WITH WORK AT THESE OTHER ENTITIES, THAT WE ARE PROVIDING AN AN EXTREMELY VALUE ADDED SERVICE, UM, ESPECIALLY FOR THESE ENTITIES.
DO ANY OF THESE ENTITIES HAVE THEIR OWN INTERNAL CERTIFICATIONS OR DO THEY ONLY
[00:50:01]
DEPEND ON OUR CERTIFICATION? METRO HAS AN SBE CERTIFICATION, UM, AND HARRIS COUNTY HAS AN SBE CERTIFICATION THAT IS THE LOWEST LEVEL OF, I DON'T WANNA SAY LOWEST, BUT IT IS THE LOWEST LEVEL OF CERTIFICATION.IT'S THE SIMPLEST CERTIFICATION.
THEY ALSO, UM, HAVE GOALS THOUGH WITH MSS AND WS AND THEY HAVE DBE GOALS THAT THEY UTILIZE OUR CERTIFICATION FOR.
BUT IF I'M A BUSINESS AND I WANT TO DO BUSINESS WITH HARRIS COUNTY AS AN MWBE, I WOULD HAVE TO MAKE SURE I GET THE CERTIFICATION THROUGH THE CITY OF HOUSTON TO DO MY BUSINESS WITH HARRIS COUNTY.
SO HARRIS COUNTY UTILIZES OUR LIST.
SO ALL OF THESE ENTITIES UTILIZE OUR LIST.
DO YOU HAVE A FEEL FOR WHAT A HUNDRED THOUSAND DOLLARS LOOKS LIKE, UM, TO THOSE ENTITIES? I MEAN, HAVE WE HAD ANY PRELIMINARY DISCUSSION ON WHETHER OR NOT THEY'RE GONNA SAY, OH, WELL I'LL START MY OWN MWBE CERTIFICATION.
UM, DO WE HAVE ANY FEEL FOR WHAT THESE AGENCIES MAY, MAY DO? WILL WE GET 600,000 FROM THESE SIX AGENCIES? WE CURRENTLY HAVE HAD DISCUSSIONS WITH THE COUNTY.
UM, THEY HAVE ALWAYS BEEN OPEN TO, IT'S JUST BEEN SOME REITERATIONS OF IT, UM, KNOWING THAT THEY GEAR UP WITH MORE DBE, UM, NEEDS AND THEY HAVE MORE, UH, ROAD WORK COMING.
AND SO THAT HAS BEEN SOME DISCUSSION.
THEY ARE OPEN TO SHARING THE LOAD WITH US AND PROVIDING SOME FUNDING.
UM, THEY HAVE NOT TRACKED AND WE HAVE NOT TRACKED LIKE HOW MANY OF OUR FIRMS ARE UTILIZING.
SO WE ARE TALKING NOW ABOUT TRACKING THAT.
UM, THEIR, UM, THEIR KIND OF STANCE THAT I'VE BEEN TALKING TO THEIR DEO OFFICE DIRECTOR IS THAT UM, THEY WANT TO ENSURE THAT WE HAVE MORE PEOPLE TO PUSH OUT MORE WORK BECAUSE PEOPLE SHARE.
WE CAN'T SAY THAT ONLY HARRIS COUNTY USES IT.
'CAUSE THE FIRM MAY HAVE WORK WITH HARRIS COUNTY, THE MEDICAL DISTRICT, UH, HARRIS HEALTH AND THE CITY.
AND SO MOST OF THESE FIRMS, WE SHARE THEM AND WE SHARE THE SUBCONTRACTORS AS WELL.
UM, AND SO ON THAT THAT THAT SAME KIND OF, UH, TOPIC, WE HAVE ABOUT 10 COUNTIES THAT UTILIZE OUR CERTIFICATIONS.
IS THERE A BREAKDOWN OF, YOU KNOW, IS IT 70% 8% THAT FROM THAT OUR CITY OF HOUSTON CERTIFIED AGENCIES THAT, THAT ACTUALLY DO WORK WITH THEM? DO Y'ALL, DO Y'ALL HAVE THAT NUMBER? THAT'S ALSO A NUMBER.
SO VANESSA AND I WERE TALKING ABOUT THAT EARLIER WHEN, UM, THE ONLY TIME THAT WE KNOW IS IF YOU COME IN AND YOU SELF-IDENTIFY AND SAY, I NEED THIS CERTIFICATION FOR MONTGOMERY COUNTY, OR I NEED THIS FOR THE COUNTY.
AND SOME PEOPLE WILL DO THAT, MOST PEOPLE DON'T.
SO WE ARE LOOKING AT NOW A WAY THAT WE CAN CAPTURE THAT COMING IN.
UM, SOMETIMES FIRMS AT THE APPLICATION PROCESS DON'T KNOW WHO THEY'RE GOING TO WORK FOR, SO THEY DON'T INDICATE THAT.
THEY JUST SAY, I WANNA BE CERTIFIED, I KNOW I WANT GOVERNMENT CONTRACTING.
REALLY, THAT'S WHAT WE ARE PUSHING, RIGHT? AND SO BE READY WHEN THE CONTRACTS ARE COMING OUT, YOU'RE READY TO, TO BE ADDED.
UM, SO WE DON'T ACTUALLY HAVE THOSE FUNDS.
THAT WOULD BE INFORMATION WE CAN REQUEST AS WELL FROM THE ENTITIES THOUGH.
AND, AND PROBABLY THE, THE MILLION DOLLAR QUESTION, WHEN DID THE BACKLOGS REALLY BEGIN? DO YOU KNOW, I DON'T KNOW IF YOU HAVE ANY HISTORICAL KNOWLEDGE OR HAVE THEY ALWAYS BEEN THERE? YOUR QUESTION
WE WENT TO OUR ONLINE APPLICATION.
UH, PRIOR TO THAT WE WERE ALL PAPER.
AND SO ONCE WE WENT TO ONLINE, IT STARTED TRICKLING IN.
SO, UH, RIGHT NOW WE HAVE OVER 300 APPLICATIONS THAT HAVE BEEN STARTED.
AND AT ANY TIME, UH, 10 20 OF 'EM CAN JUST COME ON IN, UH, DURING THE WEEK.
UH, WITH THAT ONLINE PROCESS, IT MAKES IT EASY FOR US TO GET THE PAPERWORK UP FRONT, BUT WE ALWAYS HAVE A TRICKLE IN ON TOP OF THAT.
UH, WE DID THE SUPER BOWL INITIATIVE AND THAT TOOK PRIORITY OVER APPLICATIONS WE ALREADY HAD PENDING.
AND DURING THAT TIME WE ONLY HAD ABOUT FOUR BDCS OR, UH, CERTIFICATION SPECIALISTS TO TACKLE THAT AS WELL AS THE WORKLOAD WE HAD.
SO, UH, AT THAT TIME, BDCS, WHICH INCLUDED MYSELF, HAD UPWARD OF 200 APPLICATIONS PENDING JUST FOR ME TO PROCESS.
AND, AND IF I'M NOT MISTAKEN, THIS HAPPENED DURING COVID, RIGHT WHEN COVID HAPPENED, THAT'S WHEN THE TRANSITION MO MAINLY HAPPENED.
UH, NO, THE SWITCH, WE WENT TO THE ONLINE APPLICATION, UH, B TWO G ONLINE APPLICATION PRIOR TO COVID.
UH, WE, UH, STOPPED DOING INTERVIEWS ON EVERY APPLICATION.
UH, SO PRIOR TO, WE WERE GOING OUT IN THE FIELD DOING AN INTERVIEW ON EVERY COMPANY THAT WE, THAT APPLIED, WHETHER WE KNEW UPFRONT THERE WERE ELIGIBLE OR NOT.
[00:55:01]
DID AN INTERVIEW, WHICH MEANS WE GOT IN A CITY CAR AND TRAVELED TO GALVESTON TO DO A 30 MINUTE INTERVIEW, TRAVEL ALL THE WAY BACK TO WRITE A SUMMARY ON SOMETHING WE KNEW WAS ELIGIBLE.THAT WAS ONE OF OUR IMPROVEMENTS.
AND, AND LET ME KIND OF WALK YOU BACK JUST A BIT.
THANK YOU FOR THE WORK THAT YOU'RE DOING.
AS, UH, THE, UH, CHAIRWOMAN MAYOR PRO TEM MENTIONED, THIS IS SOMETHING THAT YOU KNOW, BOTH MYSELF AND UM, THIS CHAIRWOMAN FOR, 'CAUSE WE'RE DOING JOINT, UH, CHAIRWOMAN FOR THE BUDGET, UH, UM, COUNCILOR ALQUAN HAD BROUGHT UP EARLY THIS YEAR.
'CAUSE IT WAS, IT WAS REALLY SURPRISING TO, TO, TO KNOW THAT WE'RE HAVING TO DO THIS HEAVY LIFT AND, YOU KNOW, THESE OTHER AGENCIES WEREN'T, WEREN'T DOING THE, YOU KNOW, ANY CONTRIBUTION TOWARDS IT.
AND SO I APPRECIATE Y'ALL TACKLING THAT.
BUT THEN ALSO IN ADDITION TO THAT, MAKING SURE THAT THERE'S ALSO A, A FEE STRUCTURE, UM, THAT WE CAN PROPOSE TO SMALL BUSINESSES.
AND JUST LAST COMMENT, JUST WANNA SAY THAT, UH, I'M IN AGREEMENT.
WE NEED TO MAKE SURE THAT WE'RE SPEAKING TO ALL THE, UH, DIFFERENT ORGANIZATIONS THAT REPRESENT SMALL BUSINESSES, UH, THEIR STAKEHOLDERS AND WE NEED TO, I REALLY WANNA KNOW WHAT, WHAT THEIR FEEDBACK IS AS WELL.
UM, THANK YOU FOR THE PRESENTATION.
UM, FOR THE, UM, SLIDE 11, YOU TALKED ABOUT THAT FUNDS NEED TO BE ALLOCATED TO THE DEPARTMENT.
UM, HAVE THERE BEEN DISCUSSIONS ABOUT HOW THAT WILL HAPPEN? UM, OR IS THE PLAN TO DO LIKE A SPECIAL REVENUE FUND OR ARE YOU JUST PLANNING ON INCREASING THE DEPARTMENT'S, UM, FUNDS BY THE SAME AMOUNT? MY UNDERSTANDING IS THAT WOULD HAVE TO BE A SPECIAL FUND BECAUSE OTHERWISE IT WILL GO AS REVENUE TO THE GENERAL FUND.
SO WE WOULD HAVE TO SET UP A SPECIAL COST CENTER WITH A REVENUE FUND FOR THAT.
UM, YOU HAD UNDERPAYMENT PENALTIES.
CAN YOU GIMME SOME MORE INFORMATION EXACTLY WHAT THAT IS? UM, SO WE ARE CHARGED, UM, BECAUSE WE MONITOR THE CONSTRUCTION CONTRACTS TO REVIEW CERTIFIED PAYROLL FOR THE SUBCONTRACTORS, UM, OUT ON OUR CONTRACTS.
AND SO THEY PUT THEIR CERTIFIED PAYROLL INTO LCP TRACKER, THEY CERTIFY THAT THIS IS CORRECT.
OUR COMPLIANCE OFFICERS WILL REVIEW THAT AND VERIFY THAT BASED ON THEIR PAY STUBS AND SITE VISITS.
UM, WE DO HAVE OCCURRENCES WHERE SOMEONE IS ENTERED OR PAID LABORER WAGES, BUT THEY'RE OUT AT THE SITE WORKING AS AN ELECTRICIAN OR BACKHOE OR SOMETHING WHERE THEY SHOULD HAVE BEEN MADE MAKING $20 MORE OR $15 MORE.
UH, WE ARE CHARGED WITH ASSESSING THAT UNDERPAYMENT.
WE ENSURE THAT THE COMPANY MAKES THE EMPLOYEE WHOLE WITHIN 30 DAYS.
WE VERIFY THAT THE EMPLOYEE HAS BEEN PAID OUT AT THE CORRECT RATE AND THERE'S ALSO A STATE IMPOSED PENALTY, UH, THAT THE CITY IS ALLOWED TO COLLECT, WHICH GOES BACK TO OUR DEPARTMENT TO COVER SOME OF OUR COMPLIANCE, UH, EQUIPMENT, SUPPLIES AND TRAINING NEEDS.
UH, HOW MANY CURRENT FULL-TIME EMPLOYEES DO YOU HAVE? 36.
IT LOOKS LIKE THE ALL IN COST FOR AN EMPLOYEE GIVEN FROM THE REVENUE YOU SHOWED IN THE ADDITIONAL EMPLOYEES ABOUT A HUNDRED THOUSAND DOLLARS PER EMPLOYEE? YES.
AND, AND I DON'T KNOW IF THIS HAS GOT ANYTHING TO DO WITH YOUR DEPARTMENT, WHETHER OR NOT YOU'RE ABLE TO ANSWER THE DISPARITY STUDY THAT WE DID AND WE PAID, I THINK $900,000 FOR AND THEN SAID, NO, WE DON'T LIKE THE RESULTS.
AND DID ANOTHER ONE, DID WE RECOUP ANY OF THAT $900,000? NOT THAT I'M AWARE OF.
ALSO, I HAD A CONSTITUENT CONTACT ME TRYING TO FIND OUT IF HE ACTUALLY MEETS THE MINIMUM FOR THE MINORITY PORTION OF THE MWBE.
I GUESS HE COMES FROM A MIXED RACE FAMILY.
WHAT, WHAT IS THE, THE MINIMUM IN ORDER TO QUALIFY? UM, AND SO THAT'S, UH, WELL THAT'S A LOADED QUESTION.
UH, 'CAUSE THERE ARE MANY REQUIREMENTS
UM, AND SO IT'S A FUNCTIONAL MISSION.
UM, THERE'S, I'M SORRY, IT'S, IT'S A FUNCTIONAL WHAT A FUNCTIONAL MISSION, WHICH MEANS THAT THEY HAVE TO HOLD THE EXPERTISE AND KNOWLEDGE.
THEY HAVE TO, UM, OF COURSE BE A PART OF THE PRESUMPTIVE GROUP.
I WAS TALKING ABOUT ABOUT HIS RACE.
UM, UH, SO, UH, THE RACE, UH, WOULD BE, UH, EITHER AFRICAN AMERICAN, HISPANIC,
BUT HE'S IN A MIXED RACE FAMILY.
SO IF, IF I HAVE A CAUCASIAN FATHER AND AN AFRICAN AMERICAN MOTHER, DO I QUALIFY? SO THEN IT GOES TO WHAT YOU HOLD YOURSELF OUT TO BE.
SO IF YOU ARE HOLDING YOURSELF OUT TO BE IN PUBLIC, I'M SORRY, IT GOES TO WHAT, WHAT YOU HOLD, HOW DO YOU IDENTIFY? YES.
SO IT'S BASED SELF-IDENTIFICATION.
IT'S NOT SO BECAUSE, UH, YOUR, WE DO COLLECT YOUR BIRTH CERTIFICATE OR A PASSPORT.
[01:00:01]
SO THAT IS A REQUIRED DOCUMENT WITH ANY OF THE APPLICATIONS.UH, THEN THERE'S SIGNED AFFIDAVITS.
SO IN ON ONE OF THOSE SIGNED AFFIDAVITS, YOU WILL CHOOSE ON THAT APP, YOU DO HAVE TO CHOOSE ON THAT AFFIDAVIT AND SO SWORN AFFIDAVIT THAT YOU ARE IN THIS PARTICULAR RACE.
UM, AND SO WE HAVE TO LOOK AT THOSE DOCUMENTS TO DETERMINE, UM, WE TAKE SOME OTHER STEPS.
SO IT IS ALSO IF YOU HOLD YOURSELF OUT, WHICH MEANS YOU ARE SOME EXAMPLES, UH, MIXED RACE, MALE, UH, FATHER BLACK, MOTHER WHITE, MM-HMM
BUT YOU JOINED AN, UH, AFRICAN AMERICAN FRATERNITY AND MAYBE YOU'RE IN THAT FRATERNITY, YOU ARE TELLING EVERYONE THAT YOU ARE BLACK, YOU ARE HOLDING YOURSELF OUT TO BE BLACK.
UM, SO THAT'S SOME OF THE STUFF THAT WE, IN CERTIFICATION, SOME STEPS WE FURTHER WE HAVE TO DO OUTSIDE OF THE GENERAL PAPERWORK THAT WE COLLECT.
COUNCIL MEMBER RAMIREZ IS ONLINE AND HE DOES HAVE A QUESTION.
I, I BELIEVE HE WAS HAVING TROUBLE WITH HIS MIC, SO HE SENT IT IN THE CHAT HERE.
UM, UM, THE NUMBERS OF CERTIFIED FIRMS IN EACH CATEGORY, CAN YOU EXPLAIN WHETHER SLASH HOW WE KNOW THESE FIRMS ARE CURRENTLY ACTIVE? I GUESS IN YOUR, IN YOUR BEGINNING, AT THE BEGINNING WHEN YOU HAD ALL THE APPLICATIONS THAT YOU, UM, THAT YOU PROCESSED ON PAGE, UH, FOUR FOR LIKE, HOW MANY OF THOSE ARE ACTIVE? I MEAN, THE APPLICATIONS I GUESS ARE ACTIVE, BUT
IT DOES NOT MEAN THAT THEY'RE ACTUALLY DOING WORK, BUT THEY HAVE THE CAPABILITY TO BID FOR WORK AND DO WORK WITH THEIR CERTIFICATION.
TEXT HIM TO SEE IF THAT ANSWERED HIS QUESTION.
WAIT, THERE'S ONE, THERE'S ONE MORE PART TO IT.
WITH REGARD TO EACH FIRM CERTIFIED, DO WE MEASURE WHETHER THE CERTIFICATION HAS ASSISTED THEM IN GETTING WORK? SO WE ARE, UM, WE JUST STARTED WITH A SYSTEM, QUALTRICS, WHERE WE ARE FOLLOWING THE FOOTSTEPS OF A PERSON WITH THE OFFICE OF BUSINESS OPPORTUNITY.
UM, SO IF YOU ATTEND AN OUTREACH EVENT, IF YOU ATTEND A CERTIFYING CLASS OR YOU TURN THE CERTIFICATION WORKSHOP, WE LOOK AT, UM, WHETHER YOU COME BACK IN AND GET CERTIFIED.
IF YOU ARE CERTIFIED, WHETHER YOU ACTUALLY GET A CONTRACT, WE CAN TRACK THAT INFORMATION AND I CAN SEND THAT TO YOU ALL.
UH, THANK YOU FOR YOUR PRESENTATION.
AND YOU ALL PUT IN A LOT OF WORK.
I COULD SEE IN TERMS OF NUMBERS BASED ON SALARY, IN TERMS OF TURNOVER, YOU SAY YOU HAD LIKE A 35% TURNOVER AND RIGHT NOW YOU HAVE ACTIVELY EMPLOYED 36 PEOPLE.
SO WHAT, BASED ON SOME OF THE IMPROVEMENTS, UM, THAT YOU DID, AND I'M SURE THAT WAS BASED ON MADAM DIRECT, THAT WAS BASED ON THE NUMBER OF PEOPLE THAT YOU HAD IN ORDER TO ACCOMPLISH YOUR, YOUR GOALS.
RIGHT? SO WHAT, WHAT NUMBER WOULD YOU NEED IN ORDER TO JUSTIFY WITH SOME OF THE IMPROVEMENTS THAT YOU HAD TO DO IN ORDER TO ACCOMMODATE THAT, UH, OUTPUT? WHAT, WHAT, WHAT NUMBER WOULD YOU NEED AT FULL STAFF? YOU'RE ASKING TERMS OF STAFF? YEAH.
UM, WE ARE NOW AT 57, IF WE IN COMPLIANCE WERE TO HAVE, OUR CALCULATION WAS 37 ADDITIONAL COMPLIANCE OFFICERS THAT WAS SUFFICE AND WE HAD 37 ADDITIONAL 35 TO 37 CERTIFICATION OFFICERS THAT WOULD GIVE US ENOUGH TO KEEP UP WITH THE VOLUME.
UM, THAT'S AN ADDITIONAL 60, 70 PEOPLE.
THEY WOULD SIT ON TOP OF EACH OTHER, BUT I CERTAINLY TAKE THEM.
SO, SO, SO THE ADJUSTMENT THAT YOU MADE IN REGARDS TO APPLICATION FEES, AND I SAW THAT WHAT IT WOULD DO AT ADDITIONAL MONIES, UH, WOULD HELP YOU TO ACCOMMODATE THE SHORTAGE OF STAFF THAT YOU NEED.
HOW, WHAT'S THE COST FOR B TWO G RIGHT NOW? LIKE, UH, $74,000.
SO HOW MUCH? SO WE'RE PROBABLY, AND THAT'S FOR EACH MODULE, SO 74 FOR B TWO G 74 FOR LCP TRACKER.
SO THE THOUGHT PROCESS IS THAT, THAT THE, UH, PRIMES COULD PAY OUT THAT, THAT APPLICATION TO HELP.
[01:05:01]
QUESTION IS, UM, KIND OF IN LINE, IN LINE WITH, YOU KNOW, MAKING SURE THAT WE'RE GOING OUT TO SPEAKING TO THESE SMALL BUSINESSES.UM, WOULD Y'ALL HAPPEN TO HAVE A, A QUICK NUMBER OF, LET'S SAY I DECIDED TO COME IN AND I WANTED TO DO ALL THE CERTIFICATIONS, UM, WHAT THE, WHAT THE FEE WOULD AMOUNT TO AS A SMALL BUSINESS IF YOU DID THEM ALL? YEAH.
WAS IT FOUR 50? DID THEM ALL AND YEAH, THREE 50.
UM, AND, AND THERE'S TWO OPTIONS.
UM, BEING ABLE TO SPEAK TO THOSE AS WELL, JUST SO THAT WAY FOLKS KNOW EXACTLY WHAT THEY'RE PAYING FOR.
UM, AGAIN, JUST, UH, IT'S GONNA BE IMPORTANT, YOU KNOW, AS WE MOVE FORWARD.
IT'S SOMETHING NEW, YOU KNOW, UM, WE'VE, WE'VE BEEN RUNNING THE CITY FOR A LONG TIME THE SAME WAY, AND CHANGE IS HARD.
AND SO JUST MAKING SURE THAT WE'RE HAVING THOSE CONVERSATIONS OPENLY AND TRANSPARENT'S IMPORTANT AS WELL.
SO, UH, AGAIN, I JUST WANTED TO CLOSE BY SAYING, YOU KNOW, THANK YOU, UH, DIRECTOR.
UM, YOU KNOW, THIS IS SOMETHING THAT COULD DEFINITELY, UH, BENEFIT, UH, THE OFFICE OF BUSINESS OPPORTUNITY AND IN TURN REALLY SUPPORT AND, AND, UM, UH, THE SMALL BUSINESSES IN OUR COMMUNITY AS WELL.
ON SLIDE SIX, YOU SEE THE LIST OF THE COUNTIES.
UM, I KNOW WE'RE GONNA, WE'RE CONTEMPLATING CHARGING HARRIS COUNTY.
UM, WILL WE CHARGE ANY OF THESE OTHER COUNTIES OR DO THEY USE IT ENOUGH? WE, UH, WOULD NEED TO DO PROBABLY AN ASSESSMENT OF THAT.
AND SEE WHAT THE UTILIZATION IS.
UM, I, I LIKE THIS PROPOSAL VERY MUCH.
I THINK YOU GUYS ARE, UH, DESPERATELY IN NEED FOR, UM, SOME ADDITIONAL RESOURCES, UH, TO HELP YOU DO THIS BUSINESS AND, AND WORK IT, UM, NOT WORK YOU TO DEATH AND, AND NOT HAVE TO, WHAT WAS COMPELLING TO ME WAS NOT HAVE TO KEEP TRAINING PEOPLE THAT ARE JUST GONNA LEAVE OVER AND OVER.
IT JUST DOESN'T MAKE ANY SENSE.
WHAT, WHAT'S THE NEXT STEPS HERE? I MEAN, ARE, I KNOW THE MAYOR, DOESN'T THE MAYOR HAVE A BOARD THAT OVERSEES SOME OF THIS STUFF? ADVISORY BOARD.
SO WILL THAT HAPPEN NEXT? OR WHAT, WHAT ARE THE NEXT STEPS? SO YES, WE HAVE AN ADVISORY BOARD MEETING.
UH, WE WILL PROPOSE THIS TO THEM.
UH, WE USUALLY HAVE A TASK FORCE AND WE HAVE A COMMITTEE THAT'S A POLICY COMMITTEE AND WE WOULD DEFINITELY, UM, ENGAGE THEM AROUND THIS.
THEY ARE STAKEHOLDERS, THEY'RE SMALL BUSINESS OWNERS.
MANY OF THEM, YOU KNOW, HAVE CONTRACTS THROUGHOUT THE REGION.
AND SO WE WOULD DEFINITELY, UM, LIKE TO SEE WHAT THEIR FEEL IS ABOUT THIS AND ANY FEEDBACK THAT YOU ALL COULD PROVIDE AS WELL.
SO, SO POTENTIALLY IN THE NEXT, SAY TWO OR THREE MONTHS? YES.
ANY OTHER QUESTIONS? ANY PUBLIC SPEAKERS? NO.
WITH NO PUBLIC SPEAKERS, I DO WANT TO ANNOUNCE THAT THE NEXT REGULARLY SCHEDULED BUDGET AND FISCAL AFFAIRS MEETINGS WILL BE ON TUESDAY, DECEMBER THE THIRD AT 10:00 AM AND THE NEXT ECONOMIC DEVELOPMENT MEETING WILL MEET ON NOVEMBER THE 20TH AT 2:00 PM THANK YOU AGAIN FOR THE PRESENTATION.
WE LOOK FORWARD TO CONTINUING THIS CONVERSATION AND ENGAGING OUR STAKEHOLDERS SO WE CAN MAKE THE BEST DECISION FOR OUR CITY.