[Budget and Fiscal Affairs on April 29, 2025.]
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AFFAIRS COMMITTEE AND WELCOME TO OUR APRIL 29TH, 2025 MEETING.
I AM PLEASED TO BE JOINED BY VERNON LEWIS TODAY.
WILL JONES TODAY REPRESENTING THE CONTROLLER AND MELISSA DEBOWSKI, REPRESENTING THE FINANCE, THE DIRECTOR OF THE FINANCE DEPARTMENT.
AND WE CAN GO AHEAD AND GET STARTED WITH THE QUARTERLY FINANCIAL REPORT PORT.
OH, I HAVE BEEN JOINED BY THE VICE MAYOR PRO TEM AMY PECK, STAFF FROM COUNCIL MEMBER ABBY CAYMAN'S, OFFICE COUNCIL MEMBER FRED FLICKINGER, COUNCIL MEMBER MARY NAN HUFFMAN, COUNCIL MEMBER AND VICE CHAIR MARIO CASTILLO AND STAFF FROM COUNCIL MEMBER MARTINEZ'S, OFFICE.
COUNCIL MEMBER MAYOR PRO TEM MARTHA CASTEX, TATUM'S OFFICE COUNCIL MEMBER RAMIREZ'S OFFICE.
COUNCIL MEMBER JACKSON'S OFFICE AND COUNCIL MEMBER PLUMMER'S OFFICE.
OH, AND COUNCIL MEMBER THOMAS'S OFFICE ON VIRTUALLY, AND COUNCIL MEMBER CAYMAN IS ON VIRTUALLY.
I THINK THIS IS GOING TO BE A A FAIRLY, WE DON'T, WE, WE WERE JUST DISCUSSING THIS ON TODAY'S AGENDA.
I THOUGHT I'D SAVE EVERYBODY FOR THE, THE MONTH AHEAD WHEN WE WERE GONNA HAVE LOTS OF TALK OF, OF FINANCIAL THINGS.
BEFORE WE GET STARTED, I DO WANT TO REMIND EVERYBODY ABOUT THE BUDGET SURVEY, THE YEAR 2 CENTS SURVEY THAT I HAVE OUT.
I, I HAD SOME ASSISTANCE FROM THE KINDER INSTITUTE, SO IT'S NEW AND IMPROVED.
WE ALREADY HAVE ABOUT 600 RESPONSES, SO I'M EXCITED ABOUT THAT.
BUT, UM, ASKING MY COLLEAGUES IF YOU CAN GET IT OUT TO YOUR LISTS AND, UH, ASK PEOPLE AT SUPER NEIGHBORHOOD MEETINGS AND CIVIC CLUB MEETINGS TO, THE MORE INFORMATION WE HAVE, THE BETTER AND IT'S A LOT MORE QUESTIONS AND WE'RE GETTING A LOT MORE INSIGHT OFF OF THIS ONE.
SO THAT'S MY PLUG FOR THE YEAR 2 CENTS SURVEY AND WE WILL GET STARTED.
WILL, YEAH, CAN BE JUST A LITTLE BIT.
UM, COUNCIL MEMBERS AND STAFF, I'M HERE TODAY, TODAY TO PRESENT THE QUARTERLY FINANCIAL REPORT FOR THE PERIOD ENDING MARCH 31ST, 2025.
IN THE GENERAL FUND, THE CONTROLLER'S OFFICE IS PROJECTING AN ENDING FUND BALANCE OF 244.7 MILLION OR 9.4% OF EXPENDITURES, LESS DEBT SERVICE AND PAY AS YOU GO.
UH, FOR FY 25, THIS IS 136.1 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT.
THE DIFFERENCE IS DUE TO A LOWER REVENUE AND HIGHER EXPENDITURE PROJECTION THAN THE FINANCE DEPARTMENT.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY 50.4 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT AND PAY AS YOU GO.
UH, WE HAVE INCREASED OUR REVENUE PROJECTION BY, BY 4.5 MILLION FROM LAST MONTH'S REPORT, UM, MAINLY DUE TO THE FOLLOWING.
GAS FRANCHISE INCREASED BY 2 MILLION DUE TO HIGHER THAN ANTICIPATED GAS FRANCHISE ACTIVITY TRANSFERS FROM OTHER FUNDS INCREASED BY 1.3 MILLION DUE TO FY 2024 DIRETO OVERTIME REIMBURSEMENT, UH, SALE OF CAPITAL ASSETS INCREASED BY 1.2 MILLION DUE TO HIGHER THAN ANTICIPATED RIGHT OF WAY EASEMENT SALES.
WE HAVE DECREASED OUR EXPENDITURE PROJECTION BY 12.2 MILLION FROM THE FEBRUARY, 2025 REPORT TO REFLECT THE FOLLOWING, AN INCREASE OF 11 MILLION IN VARIOUS DEPARTMENTS TO REFLECT COSTS ASSOCIATED WITH THE MUNICIPAL EMPLOYEE VOLUNTARY RETIREMENT OPTION, AN INCREASE OF 1.8 MILLION IN GENERAL SERVICE DEPARTMENT TO REFLECT FUNDING FOR FACILITIES SECURITY AND MAINTENANCE SERVICES, AND INCREASE OF 1.4 MILLION IN THE SOLID WASTE DEPARTMENT TO REFLECT HIGHER OVERTIME COSTS.
UM, AND AN INCREASE AT 1.4 MILLION IN THE PARKS AND RECS DEPARTMENT TO REFLECT, UH, SEWER SERVICE OVERAGE.
THEN WE HAVE A DECREASE OF 5.6 MILLION IN VARIOUS DEPARTMENTS TO REFLECT VACANCY SAVINGS.
AND THEN AN 8 MILLION DECREASE IN THE CAPTURED REVENUE TRANSFER TO THE DEDICATED DRAINAGE STREET RENEWAL FUND, REFLECTING THE BUDGETED GENERAL FUND TRANSFER FOR STREET AND DRAINAGE IMPROVEMENT PROJECTS.
AS NOTED IN THE LAST MONTH'S REPORT, AS A RESULT, THE D-D-S-R-F AT VALER FUND REVENUE WILL DECREASE BY THE SAME AMOUNT, A 14.2 MILLION DECREASE IN GENERAL GOVERNMENT REFLECTING THE DELAYED IMPLEMENTATION OF THE, UH, EP TRUST FUND AND A SHIFT IN FUNDING SOURCE FOR THE HOUSTON NAVIGATION CENTER OPERATION TO THE INITIATIVE TO END STREET HOMELESSNESS FUND, WE HAVE THE FOLLOWING CHANGES IN THE ENTERPRISE FUND FOR THE AVIATION OPERATING FUND.
OPERATING EXPENSES INCREASED BY 2.2 MILLION DUE TO COSTS ASSOCIATED WITH THE MUNICIPAL EMPLOYEE.
VOLUNTARY RETIREMENT OPTION OPERATING TRANSFERS FROM THE REVENUE FUND TO THE AIRPORT IMPROVEMENT FUND DECREASED
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BY 2.2 MILLION AND THE COMBINED UTILITY SYSTEMS FUND OPERATING EXPENSES INCREASED BY 2 MILLION DUE TO COSTS ASSOCIATED WITH THE MUNICIPAL EMPLOYEE.VOLUNTARY RETIREMENT OPTION AND NON-OPERATING REVENUES INCREASED BY 16.1 MILLION DUE TO HIGHER INTEREST INCOME AND LAND SALES.
OPERATING TRANSFERS DECREASED BY 19.7 MILLION DUE TO LOWER DEBT SERVICE TRANSFERS AS A RESULT OF HIGHER IMPACT FEE REVENUE AND HIGHER NET SWAP REVENUES.
AND THEN IN THE STORMWATER FUND EXPENDITURES DECREASED BY 2 MILLION, UH, DUE TO PERSONNEL SAVINGS.
NOW FOR THE 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 VARIABLE RATE STRUCTURE.
AS OF MARCH 31ST, 2025, THE RATIO OF UNHATCHED VARIABLE RATE DEBT FOR EACH TYPE OF OUTSTANDING DEBT WAS BELOW THAT THRESHOLD.
SO I WILL MOVE ON TO THE QUARTERLY INVESTMENT REPORT.
SO AS OF MARCH 31ST, 2025, THE CITY HAD $6.46 BILLION INVESTED IN OUR GENERAL FUND INVESTMENT POOL.
THE CHARACTER OF THIS POOL IS THAT OF A SHORT TERM BOND FUND THAT HOLDS INVESTMENTS OF HIGH CREDIT QUALITY FIT RATINGS.
REVIEWED THIS POOL AND ASSIGNED THE POOL AS HIGHEST RATING OF AAA.
OUR INVESTMENT STRATEGY IS TO MATCH ASSETS AND LIABILITIES FOR A PERIOD OF ONE YEAR INTO THE FUTURE AND TO EXERCISE DISCRETION FOR THE BALANCE OF THE REMAINING FUNDS.
INVESTMENTS ARE 15 MILLION HIGHER THAN LAST YEAR, AND THIS IS PRIMARILY A CHARITABLE TO, UH, THE FEDERAL GRANTS FOR NATURAL DISASTERS IN THE GRANT FUND.
AS OF MARCH 31ST, 2025, THE JOURNAL INVESTMENT POOL WAS YIELDING 3.927%, WHICH IS UP FROM 3.815% YIELD IN THE PRIOR QUARTER.
IN ADDITION TO THE JOURNAL INVESTMENT POOL, WE HAVE TWO SMALL INVESTMENT POOLS THAT TOTAL ABOUT 16 MILLION.
THESE POOLS EXIST TO COMPLY WITH TAX REQUIREMENTS OF THE FEDERAL GOVERNMENT.
A DETAILED LISTING OF ALL THE SECURITIES OWNED BY THE CITY APPEAR AT THE BACK OF THE INVESTMENT REPORT.
ALONG WITH THE INVESTMENT REPORT WE HAVE INCLUDED, UH, WITH THIS MO FAR, THE QUARTERLY SWAT REPORT AS IS REQUIRED BY THE CITY SWAT POLICY.
THE WRITTEN SWAP REPORT THAT APPEARS IN THE MOFA OFFERS A COMPREHENSIVE DESCRIPTION OF OUR TWO SWAP POSITIONS.
THE CITY HAD A NET PAID FOR THE NINE MONTHS ENDING MARCH 31ST, 2025 FROM ITS SWAPS OF 4.8 MILLION.
FAIR VALUE FOR BOTH SWAPS AS OF MARCH 31ST, 2025 WAS NEGATIVE 73 MILLION, WHICH IS APPROXIMATELY 15 MILLION MORE, UH, THAN THE PRIOR QUARTER OF NEGATIVE 58 MILLION.
THE CITY SWAPS ARE FAIRLY COMPLEX, AND IF YOU HAVE QUESTIONS REGARDING THE REPORT, PLEASE DON'T HESITATE TO CONTACT MY OFFICE.
SO FINALLY, I WOULD LIKE TO HIGHLIGHT ONE OF THE MAJOR DIFFERENCES IN OUR REVENUE PROJECTIONS COMPARED TO FINANCE.
SO, UH, THERE'S A TS 24 INCREMENT.
CLAWBACK FINANCE IS PROJECTING ABOUT 25.2 MILLION TRANSFER FROM THE TS 24 GREATER HOUSTON FUND TO THE GENERAL FUND.
SO THIS INCLUDES ABOUT 17.4 MILLION IN CITY OF HOUSTON INCREMENT TRANSFERS MADE IN FFY 2021 AND FY 2022, WHICH HAVE NOW BEEN DETERMINED TO HAVE BEEN TRANSFERRED AN ERROR IN APPROXIMATELY 7 MILLION RELATED TO THREE 80 PAYMENTS, UH, REIMBURSEMENTS FOR FY 22 THROUGH FY 25.
SO A LITTLE BIT OF BACKGROUND IS, AS BEST I CAN EXPLAIN, IT'S QUITE, UH, COMPLICATED AS IT RELATES TO THIS TURS 24.
SO IN IN FY 20, THE TURS 24, UH, GREATER HOUSTON PROJECT PLAN WAS AMENDED TO INCREASE THE CITY'S PARTICIPATION FROM 5% UP TO 75%.
AND SO BASED ON THAT AMENDMENT, THE CITY BEGUN TRANSFERRING THE INCREMENT TO THE TS FUND IN 21 AND 22.
SO, BUT HOWEVER, IT WAS RECENTLY DETERMINED THAT THOSE TRANSFERS SHOULD NOT HAVE OCCURRED UNTIL FY 22, UH, WHEN THE REDEVELOPMENT AUTHORITY WAS CREATED AND THE TRI-PARTY AGREEMENT WAS PROPERLY AMENDED.
UH, SO THE INCREMENT NOW BEING RETURNED TO THE GENERAL FUND, UH, POTENTIALLY WOULD'VE BEEN INCLUDED IN THE FY 20, UH, PROP ONE CALCULATION AND, AND NOT EXCLUDED AS PART OF THET UH, INCREMENT TRANSFER.
UM, AND SO, UH, I KNOW FINANCE THAT THEY'VE IDENTIFIED THIS ISSUE ABOUT A MONTH AGO AND THE CONTROL'S OFFICE, WE WERE BRIEFED LAST WEEK.
UM, AND WE DID HAVE, UH, SOME DISCUSSIONS WITH LEGAL, WITH FINANCE AND WITH ECONOMIC DEVELOPMENT.
UM, AND SO WE'RE HOLDING OUR PROJECTIONS, UM, PENDING FURTHER REVIEW OF THE CITY CHARTER LANGUAGE WITH LEGAL, UH, JUST TO CONFIRM WHETHER OR NOT THE CITY HAS, UH, THE AUTHORITY TO MOVE THIS INCREMENT BACK TO THE GENERAL FUND.
UM, I DO KNOW, UH, IN THE PAST, UH, THAT WE OFTEN SOMETIMES COLLECT MORE THAN, UH, WHAT, WHERE WE SET THE CAP FOR THE PROPERTY TAX REVENUE.
AND THERE ARE MANY, YOU KNOW, DIFFERENT REASONS WHY THAT'S THE CASE.
UH, WHETHER, YOU KNOW, COLLECTION IS HIGHER THAN WHAT WE ANTICIPATED OR, UH, YOU KNOW, HEARING LOSS.
UM, AS LONG AS WHEN WE SET THE,
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THE, THE RATE, UH, WE ARE IN COMPLIANCE WITH THE INFORMATION THAT WE HAVE AVAILABLE AT THE TIME.THIS ONE IS, IT'S A LITTLE DIFFERENT JUST TRYING TO UNDERSTAND, UM, UH, THE, THE IMPLICATIONS OF, YOU KNOW, THE, THAT TS INCREMENT THAT WE EXCLUDED BACK IN 2020, UM, THAT WAS SITTING IN THE, THAT TS FUND THAT WE'RE NOW CLIMB BACK.
SO WE JUST WANNA HAVE A LITTLE MORE DIALOGUE AND WE KIND LEFT IT WITH LEGAL THAT, UM, THAT WOULD BE A FOLLOW UP TO GET A BETTER UNDERSTANDING OF, UH, HOW, YOU KNOW, THE, THE LEGALITY AND HOW IT RELATES TO THE CHARTER LANGUAGE.
AND THEN ALSO A BETTER UNDERSTANDING OF THE THREE EIGHTIES THAT'S ALSO TIED TO THIS REIMBURSEMENT.
SO THAT'S WHY WE HAVEN'T REFLECTED THAT PROJECTION IN OUR MONTHLY FINANCIAL REPORT.
I'M GONNA NEED, WE'RE GONNA NEED SOME MORE INFORMATION ON THAT.
I'M SURE YOU'RE GONNA PROVIDE PROBABLY A FLOW CHART AND TIMING AND ALL THAT KIND OF STUFF ON, ON THAT, ON THAT TRANSFER.
OH, I DO WANNA WELCOME COUNCIL MEMBER WILLIE DAVIS, COUNCIL MEMBER TWILA CARTER, AND COUNCIL MEMBER LETITIA PLUM TO THE HORSESHOE.
THIS IS THE NINE PLUS THREE FINANCIAL REPORT FOR THE PERIOD ENDING MARCH 31ST, 2025.
FISCAL YEAR 25 PROJECTIONS ARE BASED ON NINE MONTHS OF ACTUAL RESULTS IN THREE MONTHS OF PROJECTIONS FOR THE GENERAL FUND.
OUR REVENUE PROJECTION IS 68.4 MILLION HIGHER THAN THE ADOPTED BUDGET, AND 27.7 MILLION HIGHER THAN THE PRIOR MONTH PROJECTION.
THE VARIANCE FROM THE PRIOR MONTH PROJECTION IS PRIMARILY DUE TO, UH, $26.4 MILLION INCREASE IN TRANSFERS FROM OTHER FUNDS DUE TO THE T 24 TRANSFER.
UM, THAT DEPUTY CONTROLLER JONES, UH, MENTIONED AS WELL AS DICHO POLICE OVERTIME REIMBURSEMENT WE'RE ALSO REFLECTING A $1.2 MILLION INCREASE IN SALES OF CAPITAL ASSETS DUE TO HIGHER THAN ANTICIPATED LAND SALES.
UM, TOUCHING ON SALES TAX, WE'RE NOT CHANGING OUR PROJECTION THIS MONTH.
UM, BUT JUST WANTED TO GIVE AN UPDATE THAT SALES TAX RECEIPTS FOR THE MONTH OF FEBRUARY WERE 66.2 MILLION, WHICH IS 1.4 MILLION LOWER THAN THE SAME PERIOD LAST YEAR.
AND, UM, 1.5 MILLION LOWER THAN THE BUDGET.
IN ORDER TO MEET THE CURRENT ESTIMATE OF 893 MILLION, THE REMAINING PERIODS NEED TO COME IN 1.4% BELOW THE PRIOR YEAR.
SO WE'LL CONTINUE TO MONITOR THIS.
MOVING OVER TO THE EXPENDITURE SIDE FOR GENERAL FUND, THE EXPENDITURE PROJECTION IS 61.2 MILLION HIGHER THAN THE ADOPTED BUDGET AND 3.9 MILLION LOWER THAN THE PRIOR MONTH.
THE VARIANCE FROM THE PRIOR MONTH IS PRIMARILY DUE TO A $14.2 MILLION DECREASE IN GENERAL GOVERNMENT, WHICH IS, UH, REFLECTED TO, UM, TO RECOGNIZE THE DEFERRED PAYMENT, UH, TO THE EP TRUST, AS WELL AS A TRANSFER OF THE HOUSING NAVIGATION CENTER OPERATION FUNDS TO THE NEWLY CREATED, UH, STREET HOMELESSNESS FUND.
WE'RE ALSO PROJECTING A $5.6 MILLION DECREASE IN VARIOUS DEPARTMENTS DUE TO VACANCY SAVINGS, AS WELL AS $11 MILLION INCREASE TO THE VARIOUS DEPARTMENTS TO REFLECT THE, UM, THE COST OF THE INCENTIVE AND THE TERMINATION PAY FOR THE VOLUNTARY MUNICIPAL EMPLOYEE RETIREMENT PAYOUT OPTION.
WE'RE ALSO PROJECTING A $1.8 MILLION INCREASE IN GENERAL SERVICES DEPARTMENT TO REFLECT ADDITIONAL FUNDING NEEDED FOR FACILITY SECURITY AND MAINTENANCE SERVICES, AS WELL AS $1.4 MILLION INCREASE IN THE SOLID WASTE DEPARTMENT TO REFLECT HIGHER THAN ANTICIPATED OVERTIME AND 1.4 MILLION INCREASE IN PARKS TO REFLECT, UH, SEWER SERVICE OVERAGE CHARGE.
WE'RE PROJECTING THE ENDING FUND BALANCE TO BE 380 MILLION, WHICH IS 31.6 MILLION HIGHER THAN THE PRIOR MONTH, AND REPRESENTS 14.7% OF ESTIMATED EXPENDITURES NOT INCLUDING DEBT SERVICE AND PAY AS YOU GO.
THAT FUND BALANCE IS 186.5 MILLION ABOVE THE TARGET OF HOLDING 7.5%.
SO MOVING OFF OF GENERAL FUND TO THE ENTERPRISE SPECIAL AND OTHER FUNDS IN THE AVIATION, UM, OPERATING FUND, UM, EXPENDITURES INCREASED BY 2.2 MILLION DUE TO THE, UM, RETIREMENT OPTION, UM, COST.
AND AS A RESULT, THE OPERATING TRANSFERS DECREASED BY 2.2 MILLION IN THE COMBINED UTILITY SYSTEM.
OPERATING EXPENDITURES INCREASED BY 2 MILLION DUE TO THE RETIREMENT OPTION.
AND NON-OPERATING REVENUES INCREASED BY 16 MILLION DUE TO HIGHER THAN ANTICIPATED INTEREST ON, UH, POOLED INVESTMENT EARNINGS AS WELL AS LAND SALES.
OPERATING TRANSFERS DECREASED BY 19.7 MILLION DUE TO, UM, LOWER THAN ANTICIPATED DEBT SERVICE TRANSFERS IN CUS IN THE STORMWATER FUND.
EXPENDITURES DECREASED BY 2 MILLION DUE TO PERSONNEL SAVINGS AND THE AUTO DEALER SPECIAL REVENUE FUND REVENUE DECREASED BY 1.2 MILLION DUE TO LOWER THAN ANTICIPATED SALES OF IMPOUNDED VEHICLES AS WELL AS VEHICLE AUCTION FEES IN THE BUILDING INSPECTION FUND EXPENDITURE INCREASED BY
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3.4 MILLION DUE TO PERSONNEL OVERAGE AS WELL AS THE, UH, MUNICIPAL RETIREMENT OPTION PLAN.THE ESSENTIAL PUBLIC HEALTH SERVICES FUND REVENUES INCREASED BY 927,000 DUE TO HIGHER THAN ANTICIPATED INTEREST ON POOLED INVESTMENTS AND EXPENDITURES DECREASED BY 5.3 MILLION DUE TO PERSONNEL SAVINGS IN THE HEALTH SPECIAL REVENUE FUND.
REVENUES INCREASED BY 580,000, MAINLY DUE TO HIGHER THAN ANTICIPATED AMBULANCE PERMITS, GARAGE PARKING REVENUES AND INTEREST ON POOLED INVESTMENTS AND EXPENDITURES DECREASE BY 1.8 MILLION DUE TO SAVINGS AND PERSONNEL SUPPLIES AND SERVICES FOR THE HOUSTON EMERGENCY CENTER FUND.
EXPENDITURES DECREASED BY 1.6 MILLION DUE TO SAVINGS AND PERSONNEL SUPPLIES AND SERVICES.
AND IN THE HOUSTON OPIOID ABATEMENT FUND REVENUES INCREASED BY 1.7 MILLION DUE TO HIGHER THAN ANTICIPATED JUDGMENT AND CLAIMS RECEIPTS FOR THE MAINTENANCE RENEWAL AND REPLACEMENT FUND EXPENDITURES INCREASED BY 1.7 MILLION DUE TO HIGHER THAN ANTICIPATED BUILDING MAINTENANCE SERVICES.
AND FOR THE PLANNING AND DEVELOPMENT SPECIAL REVENUE FUND EXPENDITURES DECREASED BY 1.1 MILLION DUE TO PERSONNEL SAVINGS FOR THE SPECIAL WASTE TRANSPORTATION AND INSPECTION FUND EXPENDITURES DECREASED BY 1.3 MILLION DUE TO SAVINGS IN PERSONNEL SUPPLIES AND SERVICES.
AND THAT CONCLUDES ALL THE CHANGES.
THOSE CHANGES THAT I, UM, MENTIONED ARE GOING TO BE REFLECTED IN THE GENERAL APPROPRIATION ITEM THAT COUNCIL'S GONNA BE, UM, CONSIDERING ON WEDNESDAY.
SO, UH, I KNOW IT'S A LOT OF NUMBERS AND MOVING PIECES THIS MONTH, BUT THIS MONTH IS WHERE WE DREW UP THE FY 25 BUDGET TO OUR ESTIMATE PROJECTIONS THAT WE'VE BEEN DOING ALL THROUGHOUT THE YEAR.
UM, SO MOVING ON TO THE ECONOMIC INDICATORS.
THE EMPLOYMENT FOR THE AREA, UM, IS ABOUT FLAT COMPARED TO THE PRIOR YEAR AND THE UNEMPLOYMENT RATE, UM, LIKEWISE IS, UM, ABOUT FLAT COMPARED TO THE PRIOR MONTH.
UM, IN THE ENERGY SECTOR, THE AVERAGE OIL PRICE IS $68 FOR THE MONTH OF MARCH PER BARREL OF OIL, WHICH IS ABOUT 4% LOWER THAN THE PRIOR MONTH AVERAGE.
UM, AND FOR THE HOME SALES, THE LATEST REPORT FROM THE HOUSTON ASSOCIATION OF REALTORS SHOWS THAT THE TOTAL SINGLE FAMILY HOME SALES WAS ABOUT 2.6% HIGHER COMPARED TO THE SAME PERIOD LAST YEAR.
AND THE MEDIAN PRICE INCREASED BY ABOUT 1.5%, UM, COMPARED TO THE PREVIOUS YEAR AS WELL.
UM, FOR THE DISASTER REPORT, AS OF THE MONTH OF MARCH, WE HAVE PAID $94.2 MILLION IN INVOICES RELATED TO DEBRIS REMOVAL, AND WE HAVE ALSO RECEIVED 99.7 MILLION IN FUNDING, WHICH COVERS THE COST OF THE DEBRIS REMOVAL AS WELL AS SOME, UM, OVERTIME.
AS WE MENTIONED, WE'RE REFLECTING SOME OF THAT AS REIMBURSEMENT BACK TO THE GENERAL FUND THIS MONTH.
THANK YOU BOTH FOR YOUR PRESENTATION.
UM, DIRECTOR DEBOWSKI, SO ON THE 26.4 MILLION TRANSFER, UM, OBVIOUSLY THE CONTROLLER'S OFFICE STILL HAS QUESTIONS ON THAT.
UM, CAN YOU WALK ME THROUGH THE RATIONALE AS TO WHY Y'ALL FEEL COMFORTABLE HAVING THIS IN THE REPORT? SURE, YEAH, AND I, AND, UM, LIKE I KEEP WANTING TO CALL HIM DIRECTOR JONES, SORRY.
DEPUTY CONTROLLER JONES MENTIONED, UM, WE HAVE BEEN MEETING, UH, HAD A COUPLE MEETINGS LAST WEEK AND, UM, ARE GONNA CONTINUE TO HAVE CONVERSATIONS TO, UH, WORK THROUGH THEIR QUESTIONS TOGETHER WITH LEGAL AND ECONOMIC DEVELOPMENT.
UM, SO IN WORKING WITH ECONOMIC ECONOMIC DEVELOPMENT AND THE LEGAL DEPARTMENT, WE HAVE BEEN LOOKING AT, UM, ALL OF OUR TS FUNDS.
YOU KNOW, ERNST AND YOUNG IS ALSO DOING THE, THE AUDIT OF THE TS FUNDS.
AND THIS IS A SEPARATE REVIEW UNRELATED TO WHAT THEY'RE DOING THERE, WHERE WE'RE LOOKING AT THE, UM, THE BALANCES THAT THE TOUR HAVE IN THEIR FUNDS AND IDENTIFIED THAT, UM, FOR T 24 AS, UM, DEPUTY CONTROLLER JONES MENTIONED.
UM, BACK IN, UM, THIS GOES KIND OF ALL THE WAY BACK TO WHEN THE CITY INCREASED THE PARTICIPATION IN THE TERMS FROM THE 5% TO THE 75%, WHICH WAS DONE IN FISCAL YEAR 21, TAX YEAR 20.
UM, AT THE TIME WHEN WE WERE CALCULATING THE TAX RATE, UM, WE HAD CALCULATED THE TAX RATE AFTER THE, UM, COUNTY COMMISSIONER'S COURT AND CITY COUNCIL HAD VOTED TO INCREASE THE PARTICIPATION FROM 5% TO 75%.
UM, OUR THOUGHT AT THAT TIME WAS THAT THOSE WERE THE LEGAL, UM, UH, THOSE WERE ALL THE LEGAL STEPS NEEDED IN ORDER TO INCREASE THE PARTICIPATION FROM THE 5% TO THE 75%.
UM, SO AT THAT POINT, UM, THAT'S HOW WE WORKED UNDER THE, UM, THE GUIDANCE FROM THE LEGAL DEPARTMENT AT THE TIME, UM, AND SET THE TAX RATE ACCORDINGLY, AND AT THAT TIME SENT THE MONEY TO THE TS FUND.
UM, SUBSEQUENT TO THAT, THE CREATION OF THE REDEVELOPMENT AUTHORITY, UH, THE CITY REDEVELOPMENT AUTHORITY FOR THAT TS, UM, NEEDED
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TO HAPPEN AS WELL AS GETTING THE PROJECT PLAN AGREEMENT IN PLACE.SINCE THAT DIDN'T HAPPEN UNTIL TWO FISCAL YEARS LATER.
WHAT LEGAL IS NOW ADVISING IS THAT THOSE FUNDS THAT WERE SET ASIDE FOR THE TURS, UH, SINCE THERE WAS NO REDEVELOPMENT AUTHORITY AT THE TIME AND NO PROJECT PLAN AGREEMENT IN PLACE AT THE TIME THAT THOSE FUNDS CAN AND SHOULD COME BACK TO THE GENERAL FUND.
UM, SO THAT IS THE MAJORITY OF THE PORTION OF THE $25 MILLION THAT WE'RE TALKING ABOUT.
UM, AND THAT COVERS TWO FISCAL YEARS.
THAT COVERS FISCAL YEAR 21 AND FISCAL YEAR 22.
SUBSEQUENT TO THAT, WHEN THE CITY OF REDEVELOPMENT AUTHORITY WAS SET UP AND THE PROJECT PLAN AGREEMENT WAS IN PLACE STARTING IN FISCAL YEAR 23, UM, THE REMAINDER OF THE 25 MILLION THAT WE'RE PROPOSING TO BRING BACK TO THE GENERAL FUND IS FOR NOT THE ENTIRE AMOUNT OF THE INCREMENT, BUT FOR THE PORTION TO REIMBURSE THE CITY BACK FOR THE THREE 80 AGREEMENTS THAT ARE INSIDE THE TURS 24 ZONE.
SO THAT INCLUDES CERTAIN PORTIONS OF THE DOWNTOWN LIVING INITIATIVE, THREE 80 AGREEMENT, THE MARRIOTT MARQUEE AGREEMENT, UM, FOR THE REIMBURSEMENTS ASSOCIATED WITH PROPERTY TAX AS WELL AS THE BUFFALO POINT HOMES ROAD AGREEMENTS.
UM, SO THE CITY HAS THESE THREE 80 AGREEMENTS IN PLACE SINCE THEIR ECONOMIC, THE POINT OF A THREE 80 AGREEMENT IS ECONOMIC DEVELOPMENT.
UM, AS WELL THE, THE POINT OF CREATING A TOURS IS TO SPUR ECONOMIC DEVELOPMENT.
UM, AND SO SINCE THESE, UH, AREAS AND DEVELOPMENTS ARE INSIDE T 24, WE FEEL COMFORTABLE THAT WE CAN USE THATT 24 MONEY, UH, FOR THOSE, UH, FY 23, 24 AND 25 TO REIMBURSE THE GENERAL FUND FOR THE COST OF THOSE THREE 80 AGREEMENTS.
AND THAT'S GONNA BE SOMETHING THAT WE'RE WORKING AND YOU'LL SEE IN THE PROPOSED BUDGET, UH, WORKING WITH UMT 24 TO INCLUDE THE COST OF, UH, REIMBURSING THE CITY FOR THOSE THREE 80 AGREEMENTS ON A GOING FORWARD BASIS AS WELL.
AND FOR THE, THE PORTION OUTSIDE OF THE THREE 80 AGREEMENTS, UM, THAT WAS TRANSFERRED, HOW DOES THAT INTERACT WITH THE REVENUE CAP BECAUSE IT'S TURS DOLLARS AND THAT IS TAKEN BEFORE THE CAP IS CALCULATED? SURE.
SO, UM, WHEN WE CALCULATE THE PROP ONE CAP, WE OF COURSE ARE USING THE BEST INFORMATION THAT WE HAVE AT THE TIME.
WE CALCULATE THE CAPPED AMOUNT OF REVENUE BASED ON THE CPI PLUS POPULATION GROWTH THAT WE, WE HAVE, AND I WANNA BE CLEAR 'CAUSE WE'RE TALKING ABOUT THE CAP AND THE TAX RATE THAT WE CALCULATED BACK IN FISCAL YEAR 21 AND FISCAL YEAR 22.
UM, IT'S STILL THE CASE AND IT'S ALWAYS THE CASE THAT WHEN YOU CALCULATE THE TAX RATE, YOU USE A HOST OF ASSUMPTIONS, YOU USE AN ASSUMPTION ABOUT WHAT YOU THINK COLLECTION RATE'S GONNA BE, ABOUT WHAT YOU THINK DELINQUENT TAXES COULD BE REFUNDS, COULD BE, UH, HEARING LOSS, COULD BE THERE'S, I DON'T KNOW, PROBABLY A DOZEN DIFFERENT VARIABLES THAT GO INTO THAT CALCULATION OF THE RATE AND THE ADMINISTRATION.
THAT WAS THE CASE IN FY 21 AND IT'S STILL THE CASE NOW USES THEIR, THE FINANCE DEPARTMENT USES OUR BEST JUDGMENT ABOUT WHAT ARE THE MOST, UM, REASONABLE VARIABLES AND ASSUMPTIONS TO MAKE.
UH, AND THEN WE WORK WITH THE CONTROLLER'S OFFICE AND THEY CERTIFY THE TAX RATE THAT WE ADOPT AT THE TIME USING THE INFORMATION THAT WE HAVE AT THE TIME.
NOW BEHAVIOR OBVIOUSLY VARIES FROM WHAT OUR ASSUMPTIONS ARE.
COLLECTION RATE COULD BE HIGHER, LOWER, UM, HEARING LOSS COULD BE HIGHER OR LOWER.
REFUNDS HIGHER, LOWER DELINQUENT PAYMENTS HIGHER AND LOWER.
WE NEVER COLLECT EXACTLY THE AMOUNT OF CAPPED REVENUE THAT'S BEHAVIOR, RIGHT? WE USE THE BEST ASSUMPTION WE CAN MAKE AT THE TIME.
AND SO THAT'S NO DIFFERENT THAN THIS CIRCUMSTANCE.
IT'S A DIFFERENT VARIABLE THAT WE'RE TALKING ABOUT.
WE'RE TALKING ABOUT THE T TRANSFER IN THIS CASE, BUT THE T TRANSFER IS ONE OF THOSE VARIABLES THAT UM, JUST LIKE WHEN WE SET THE TAX RATE THIS YEAR, WE MAKE AN ASSUMPTION ABOUT WHAT THET TRANSFER IS GONNA BE BASED ON WHAT WE THINK THET VALUE IS GONNA BE.
AND THE T VALUE IS NEVER EXACTLY THAT AMOUNT THAT YOU THINK IT'S GONNA BE AT THE TIME YOU GET YOUR CERTIFIED ROLE TO THE FINAL ROLE.
SO THERE ARE ALWAYS ADJUSTMENTS EVERY YEAR WHEN YOU LOOK AT THE ASSUMPTION TO THE ACTUAL THANKS.
I WILL HAVE SOME FOLLOW-UP QUESTIONS FOR LEGAL, BUT APPRECIATE YOUR ANSWERS.
AND THANK YOU BOTH FOR THE PRESENTATION.
UM, FOR THE RECHO OVERTIME REIMBURSEMENTS, I COULDN'T REMEMBER, UM, THE MONEY THAT WE SPENT ON THE DIRECT, DID THAT ALL COME FROM THE GENERAL FUND AND THEN WERE REIMBURSING BACK TO THE GENERAL FUND OR WAS ANY OF THAT THROUGH THE BUDGET STABILIZATION FUND AND WAS THAT MONEY REIMBURSED IF IT CAME FROM THAT FUND AT ALL? SO A COMBINATION OF BOTH.
SO, UM, AFTER THE DERECHO, I'M TRYING TO THINK OF THE EXACT TIMING, BUT AFTER THE DERECHO AND BARREL, WE DID TRANSFER THE MONEY FROM THE BUDGET STABILIZATION FUND INTO THE DISASTER RECOVERY FUND.
UM, SO WE USE THAT DISASTER RECOVERY FUND MONEY TO PAY FOR THE DEBRIS INVOICES FOR THE DEBRIS HAULERS.
SPECIFICALLY WITH THIS, UM, ADJUSTMENT THAT WE'RE TALKING ABOUT IS
[00:25:01]
PERTAINING TO SOLID WASTE OVERTIME AND THE OVERTIME, UH, STAYED IN THE GENERAL FUND.SO IN THIS CASE, THE EXPENSE WAS OCCURRED AND INCURRED IN THE GENERAL FUND AND THE REIMBURSEMENT IS COMING BACK TO THE GENERAL FUND.
WE DO STILL HAVE, UM, TO YOUR POINT ON THE BUDGET STABILIZATION FUND, UM, A SIGNIFICANT OF THE AMOUNT OF THE REVENUE THAT WE'VE RECEIVED BACK, UM, FROM FEMA AND THE STATE FOR THE DEBRIS HAULER PAYMENTS THAT WE'VE MADE.
WE DO NEED TO DETERMINE, UM, HOW MUCH OF THAT AND WHEN CAN WE TRANSFER IT BACK TO THE BUDGET STABILIZATION FUND.
AND DO WE ANTICIPATE FOR NEXT FISCAL YEAR THAT THAT FUND WILL BE FULLY FUNDED TO THE EITHER THE OF THE, THE HIGHER OF THE TWO OPTIONS FOR THAT FUND? SURE.
I DON'T KNOW THAT IT WILL BE FULLY FUNDED FOR FY 26, BUT I DO ANTICIPATE THAT WE'RE GOING TO INCLUDE SOME IN THE BUDGET FOR REPLENISHING THE FUND.
COUNCIL MEMBER FLICKINGER QUESTION ON THE 1.4 MILLION INCREASE IN PARKS FOR SEWER SERVICE OUT OVERAGE, WHAT EXACTLY IS THAT? SO THE PARKS DEPARTMENT, UM, PAYS A WATER BILL TO THE COMBINED UTILITY SYSTEM AND, UH, THE, THE REFLECTION OF THIS IS DUE TO AN INCREASED USAGE THAT THE PARKS DEPARTMENT HAD FOR THEIR WATER ON TOP OF WHAT WAS BUDGETED.
AND ALSO YOU TALK ABOUT, UH, THE REVENUE DECREASING BY 1.2 MILLION DUE TO LOWER, LOWER ANTICIPATED SALES OF IMPOUNDED VEHICLES.
IS, IS THAT GOING TO BE MADE UP IN, WAS THERE JUST A DELAY OR IS THERE FEWER IMPOUNDED VEHICLES OR, I MIGHT HAVE TO FOLLOW UP ON THAT ONE AND GET BACK TO YOU.
AND THE OTHER QUESTION I HAD IS THE PRICE OF OIL.
UM, SAW THIS MORNING IT WAS JUST ABOVE $60.
AT WHAT POINT IN TIME DOES THAT START IMPACTING SALES TAX REVENUE? SO FOR SALES TAX, OUR, UM, MODEL THAT WE, OUR REGRESSION MODEL THAT WE USE TO RUN OUR SALES TAX PROJECTION, THE PRICE OF OIL IS ONE COMPONENT OF THAT.
UM, I WOULD SAY THAT THE PRICE OF OIL IS NOT THE MOST IMPORTANT COMPONENT OF OUR MODEL.
THE MOST IMPORTANT COMPONENT OF THE MODEL IS, UM, OUR EMPLOYMENT JOBS.
UM, OF COURSE WE'RE HEAVILY RELIANT ON THE OIL INDUSTRY IN TEXAS.
SO, UH, DEPENDING ON HOW THE OIL MARKET IS THAT COULD IM IMPACT JOBS.
UM, WE TYPICALLY ARE PRETTY CONSERVATIVE ON OUR, WHAT WE ASSUME THE PRICE OF OIL AND EMPLOYMENT TO BE IN OUR REGRESSION MODEL.
UM, SO I WOULD SAY THAT THE PRICE OF OIL RIGHT NOW WHERE IT IS TODAY IS STILL WITHIN THE RANGE THAT I DON'T FEEL WE NEED TO MAKE AN ADJUSTMENT TO SALES TAX.
I THINK THERE'S A LARGER, WELL WE ALL KNOW THERE'S LARGER, UH, IMPLICATIONS WITH THE TARIFFS, UM, COMING GOING, RIGHT.
IT'S HARD TO PREDICT AT THIS POINT.
UM, WE ARE WORKING WITH, UM, WE ENGAGE WITH AN OUTSIDE, UH, CONSULTANT, DR.
GILMER AT U OF H, UM, TO HELP US WITH OUR PROJECTIONS ON SALES TAX.
AND WE'RE ASKING HIM TO LOOK INTO, UM, THE EFFECTS THAT THE TARIFFS COULD HAVE ON SALES TAX.
AND, UM, ONCE WE HAVE THAT INFORMATION WE'LL BE, WE'LL BE, I KNOW WE'VE BEEN TALKING A LOT ABOUT THAT WE'LL BE, UH, SHARING IT AND INCLUDING THAT WHEN WE MAKE OUR PROJECTION FOR THE FY 26 BUDGET.
YEAH, I MEAN I CERTAINLY THINK THERE'S SOME GIVE AND TAKE WITH THE PRICE OF OIL IS OIL COMES DOWN, GAS PRICES COME DOWN, WHICH MEANS PEOPLE HAVE MORE MONEY IN THEIR POCKETS AND IF IT GETS LOW ENOUGH THEN IT STARTS AFFECTING EMPLOYMENT AND THEN OBVIOUSLY THAT REALLY IMPACTS IT.
I DO WANT TO ADD TO THAT 'CAUSE UH, OUR MODELS ARE SOMEWHAT SIMILAR.
WE LOOK AT OIL PRICES AS WELL.
AND SO ONE OF THE THINGS WE'RE REALLY TRYING TO FIGURE OUT, LIKE DIRECTED DEBOWSKI MENTIONED IS THE IMPACT OF TARIFFS AND WHAT IT CAN MEAN, UH, WITH OIL PRICES ALREADY TRENDING LOWER AND WITH THE, THE ENERGY JOBS IN HOUSTON.
'CAUSE WHAT WE TEND TO SEE IS WHEN UH, WE START LOSING ENERGY JOBS IN HOUSTON IS WHEN THE SALES TAX GET IMPACTED.
SO, UH, WE'RE, WE'RE TAKING A VERY CLOSE LOOK 'CAUSE THIS, THIS PAST MONTH, UM, OR FEBRUARY'S RECEIPTS FOR US WERE DOWN ABOUT 2%.
I THINK IT WAS A LITTLE UNDER 2% FOR YOU OR CLOSE TO THAT.
UM, AND SO THAT, YOU KNOW, NOT SAYING THAT THAT IS A, A GLARING SIGN, BUT UH, WE NEED TO REALLY PAY CLOSE ATTENTION TO THE NEXT COUPLE OF MONTHS TO SEE IF WE ARE STARTING TO SEE A TREND OF THE SALES TAX GOING DOWN.
AND, AND WE STILL HAVE TO ACCOUNT FOR THIS $26 MILLION AUDIT ADJUSTMENT.
UM, THAT'S GOING TO BE CARRIED OUT OVER 44 MONTHS.
I KNOW DIRECTOR ABAKI IS WORKING VERY CLOSE WITH THE STATE 'CAUSE WE ALSO WANT TO MAKE SURE WE UNDERSTAND THE IMPACT TO OUR LPA PAYMENTS, BUT SALES TAX COULD BE A A A A CONCERN OVER THE NEXT COUPLE OF MONTHS.
SO WE HAVE TO REALLY WATCH THAT CLOSELY.
THANK YOU COUNCIL MEMBER DAVIS.
UH, THANK YOU BOTH FOR YOUR PRESENTATION.
I JUST WANTED TO ASK THE QUESTION TO FINANCE DIRECTOR, HAVE WE RECEIVED ANY REIMBURSEMENTS? 'CAUSE I THINK ON LAST YEAR YOU REMEMBER MY CONTACT AND WAS CONCERNED ABOUT SOME OF THE FEDERAL REIMBURSEMENT.
HAVE WE GOTTEN ANYTHING BACK DUE TO THE, UH, FEMA
[00:30:01]
REIMBURSEMENT FOR STORMS AND OTHER FINANCE OR INDICATING THAT WE WILL GET IT BACK IF NOT YES.UM, SO FOR THE CURRENT PERIOD, FOR THE, UM, FOR THE DISASTERS THAT WE'VE SEEN, UM, WE HAVE RECEIVED ALL OF THE MONEY FOR THE INVOICES THAT WE'VE SUBMITTING SUBMITTED TO THE STATE.
SO THE TEXAS DIVISION OF EMERGENCY MANAGEMENT TEEM, UM, IS OUR, UH, LIAISON BETWEEN OURSELVES AND THE FEDERAL GOVERNMENT.
AND SO WE'VE, UH, HAD A GOOD WORKING RELATIONSHIP WITH THEM TO RECEIVE THE REVENUE BACK THAT WE'VE SUBMITTED.
UM, WE STILL HAVE SOME THINGS THAT WE NEED TO SUBMIT TO THE STATE PERTAINING TO SOME OF THE EMPLOYEE COSTS.
THEY'RE CURRENTLY REVIEWING THE TIME SHEETS FOR THE OVERTIME ASSOCIATED WITH THOSE DISASTERS.
UM, BUT I THINK THAT WE HAVE A, A GOOD WORKING RELATIONSHIP WITH THE STATE, UM, AT THIS POINT.
OF COURSE, YOU KNOW, THINGS AT THE FEDERAL LEVEL ARE ALWAYS A LITTLE BIT UNCERTAIN, BUT I THINK FOR NOW WE'RE UH, WE'RE HAVING GOOD DIALOGUE AND GOOD, UM, RE YOU KNOW, REIMBURSEMENT WITH THAT.
SO, SO THE INDICATOR IS THAT WE WILL BE REIMBURSED FOR THOSE EMPLOYEE OVERTIME AMOUNTS, BUT THE RELATIONSHIP IS IN PROCESS ONGOING AS OF NOW? YES.
THEY'RE IN THE PROCESS OF REVIEWING THE, UM, I CALL 'EM TIME CARDS, BUT THEY'RE THE TIME SHEETS BASICALLY THAT TRACK THE OVERTIME THEY HAVE TO MAKE SURE THAT THINGS ARE CODED CORRECTLY.
SO THAT'S WHERE WE ARE IN THE PROCESS WITH THAT.
SO AM I UNDERSTANDING ON THE TS 24 DEAL, WE, WHEN WE WENT FROM FIVE TO 75%, WE WERE USING THE 75% AND THEN WE WEREN'T REALLY DOING ANYTHING WITH THAT TURS FOR A COUPLE YEARS? CORRECT.
SO IT'S GOING BACK TO THE 5% AND GETTING THAT DELTA, IS THAT FOR THOSE TWO FISCAL YEARS, THOSE FISCAL YEAR 21 AND 22? YES.
AND THAT'S A SEPARATE THING FROM WHAT YOU'RE DOING ON THE THREE EIGHTIES? CORRECT.
SO FOR FISCAL YEARS, 23, 24 AND 25, SINCE AT THAT POINT THE CITY RDA HAD BEEN IN PLACE AND THE CITY PROJECT PLAN AGREEMENT HAD BEEN IN PLACE, THE FUNDS THAT WE, UH, TRANSFERRED FOR THE 75% PARTICIPATION FOR FY 23, 24 AND 25, UH, CAN STAY WITH THE T FUND AND OF THAT AMOUNT WE'RE PROPOSING OKAY.
THAT THEY REIMBURSE THE THREE 80.
SO IT'S ONLY A PORTION OF THOSE FISCAL YEARS THAT WILL COME BACK.
I THINK I'M FOLLOWING THAT NOW.
UM, ON THE, AS WE ALL KNOW, THE S AND P FIVE HUNDRED'S DONE A, YOU KNOW, ABOUT SEVEN PLUS PERCENT DROP, UM, SINCE JANUARY.
UM, HOW ON THE INVESTMENT PORTFOLIO, HOW IS THAT, ARE WE, ARE WE CHANGING OUR STRATEGY IN ANY WAY? I, I NOTICED THAT IN THE MONEY MARKET FUNDS, IT LOOKS LIKE WE HAVE, UM, A, A LESSER PERCENT OR A GREATER PERCENTAGE THAN WE DID IN THE, IN OUR PORTFOLIO OF MARCH 31ST 25 COMPARED TO DECEMBER 31ST, 24.
AND I DON'T KNOW IF I'M LOOKING AT THE RIGHT STUFF.
VERNON, I, I, I MEAN ARE WE ADJUSTING OUR, OUR, OUR INVESTMENT STRATEGY IN ANY WAY? OR IT MIGHT BE A QUESTION FOR YOU OR VERNON, WHAT WHOEVER WANTS TO YEAH, I MEAN, VERNON'S PROBABLY THE MOST APPROPRIATE SINCE HE HANDLES THE INVESTMENTS.
HOW ARE YOU INVESTING ALL THAT? $16 BILLION, WHATEVER, WHAT WAS IT? ALRIGHTY.
UH, WE ARE ADJUSTING FROM 1.2 TO 1.4 YEARS OF DURATION FOR OUR INVESTMENT INVESTMENT STRATEGY.
CAN YOU ELABORATE A LITTLE BIT MORE ON THAT? SO CONSIDERING FOR THE VIEWING PUBLIC, I WAS A FINANCE MAJOR BACK IN THE DAY, BUT SO WHAT'S CONSIDERING WHAT'S GOING ON IN THE MARKET RIGHT NOW? WE HAVE WHAT WE CALL AN INVERTED YIELD CURVE WHERE THE SHORT TERM, SHORT TERM IS HIGHER THAN THE LONG TERM.
SO OUR STRATEGY IS TO KIND OF HOLD ON WHAT WE HAVE CURRENTLY AT THIS POINT FOR LIQUIDITY PURPOSES BECAUSE WE DON'T KNOW WHAT THE FINANCIAL CONSTRAINT WE MAY HAVE GOING ON IN AMERICA AT THIS POINT AND WHAT'S GOING ON WITH THE TARIFF.
WE WANNA MAKE SURE WE HAVE ENOUGH CASH FLOW TO MEET THE CITY'S OPERATION NEEDS.
UM, FRED ASKED MY QUESTION ABOUT, I DIDN'T KNOW ABOUT THE SO SEWAGE OVERAGE EITHER.
I DID WANNA GET REMINDED ABOUT THE, WHAT YOU SAID, UM, WILL ABOUT THE D-D-S-R-F.
WHAT DID WE LA LAST MONTH, I MEAN, AND I KNOW WE TALKED ABOUT THE SETTLEMENT AND EVERYTHING, BUT WHAT, WHAT EXACTLY IS THAT? BECAUSE I DIDN'T SEE THAT IN YOUR REPORT.
SO WHAT HAPPENED IS, IF YOU REMEMBER IN JANUARY, THE CONTROLLER'S OFFICE, WE ARE PROJECTING THAT THE CITY OWES THE FULL, UH, 11 POINT CENT BY THE END OF THE FISCAL YEAR.
UH, SO LAST MONTH THERE WAS AN ADJUSTMENT TO, UH, THE PROJECTION WHERE THERE'S $8 MILLION, UH, VIA THE COUNCIL AMENDMENT THAT WAS APPROVED FOR DRAINAGE.
AND SO WE DIDN'T CAPTURE THAT 8 MILLION LAST MONTH.
SO NOW WE ARE ADJUSTING IT BY THE 8 MILLION.
I UNDERSTAND, I UNDERSTAND THAT NOW.
[00:35:01]
OH, AND THE OPIOID OPIOID ABATEMENT FUND IS THAT, THAT'S THE SAME MONEY WE'VE HAD, RIGHT? I MEAN IS THAT, WAS THAT NEW MONEY THAT WE'VE GOTTEN FROM THE SETTLEMENT? IT SAYS 1.7 MILLION MORE, BUT MAY, BUT I THINK THAT'S WHAT THEY HAVE NOW.SO, AND, AND YOU CAN CORRECT ME IF I'M WRONG SINCE MY FIRST YEAR DEALING WITH IT, BUT, UM, BECAUSE OF THE SETTLEMENT, THEY'RE GONNA SEND US, I BELIEVE ANNUAL, UM, ALLOCATIONS TO THE FUND.
THE STATE, UH, HAS THE MONEY THEY GIVE AN ALLOCATION.
SO THIS IS ANOTHER ANNUAL ALLOCATION THAT WE'RE GETTING.
SO WE CAN EXPECT THIS 1.7 MILLION.
FIRST WE JUST, WE DIDN'T REFLECT IT IN THE BUDGET BECAUSE WE DON'T KNOW WHAT THE ALLOCATION IS GONNA BE.
BUT, AND I'VE ALWAYS BEEN TOLD WE DON'T KNOW WHEN WE'RE GETTING AND WHAT WHATEVER, BUT NOW WE'RE CERTAIN THAT THIS AMOUNT'S COMING THIS YEAR AND CORRECT.
AND DO WE KNOW ABOUT FUTURE YEARS? WE DON'T KNOW ABOUT FUTURE YEARS.
I DON'T THINK I HAVE TO GO BACK AND LOOK AT THE CORRESPONDENCE FROM THE STATE, BUT THEY JUST NOTIFIED US ABOUT THIS YEAR'S ALLOCATION HERE RECENTLY.
ANY OTHER QUESTIONS FROM COUNCIL MEMBERS OR STAFF? NO.
APPRECIATE YOUR GOOD WORK AND LOOK FORWARD TO THE MONTH AHEAD AND WE WILL NOW GO TO PUBLIC SPEAKERS.
AND THE MULTI-CITY CENTER IN METRO FOR ROAD REPAIR, HOPEFULLY ON ROADS THAT TRANSIT USES, I'M HEARING THAT THERE IS A $90 MILLION AMOUNT SET SET APART FROM CITY OF HOUSTON, BUT IT'S SITTING IN METRO'S BANK AND NOT IN CITY OF HOUSTON BANK.
SO I DON'T KNOW WHAT THE, WHAT THE SCORE IS.
I'M JUST HEARING THINGS FROM PUBLIC SPEAKERS AND BOARD MEMBERS.
BUT HOW DOES THAT MONEY COME OVER THIS? OKAY, EACH MONTH, UH, THERE'S AMOUNT OF MONEY SET ASIDE FOR HOUSTON.
DOES IT COME OVER DIRECTLY FROM METRO OR OVER HERE? DOES CHRIS HAVE TO CALL METRO AS THEY MOVE THE MONEY? I DON'T KNOW HOW THAT WORKS.
SO MAYBE THAT'S SOMETHING THAT NEEDS TO BE LOOKED AT.
AND LASTLY, WITH THE BUDGET COMING IN, AND AS I KNOW WE HAVE A DENTIST HERE, BUT FOR SOME, ALL OF Y'ALL IN THE HORSESHOE, IT'S GONNA BE LIKE PULLING TEETH AND IT'LL BE VERY PAINFUL.
WE, I WOULD LIKE TO SEE, AND ELLA I THINK YOU WOULD AGREE WITH THIS, MARIO AND, UH, ABBY SATURDAY HAD A MEETING ON 11TH STREET IN THE HEIGHTS CONCERNING TRANSPORTATION ISSUES IN THE HEIGHTS.
THIS IS WHAT WE NEED TO HAVE, WE NEED TO BRING GOVERNMENT OR THE PEOPLE WHO ARE THE CITY THAT LINE UP THERE TO, TO THE PEOPLE.
AND I THINK AS THE BUDGET COMES ABOUT, I WOULD LIKE TO SEE MORE AND MORE PUBLIC ENGAGEMENT IN THAT SORT.
MARIO, HOW MANY PEOPLE SHOWED UP THERE THAT SPOKE AT GOVERNMENT MEETINGS FOR THE FIRST TIME? ABOUT A QUARTER.
WE HAD A BUNCH AND YOUNG PEOPLE, WE ACTUALLY HAD PEOPLE, TEENAGERS AND YOUNG AND EVEN ELEMENTARY SCHOOL PE UH, PEOPLE SHOWED UP AND, AND THEY SAID, AND THIS IS WHAT I'D LIKE TO SEE, BUT I, WE GOT TO BRING THIS TO THE PUBLIC.
AND MY QUESTION IS TOO, PARTICULARLY THIS GROUP IS SO IMPORTANT, MAYBE EVERY SO OFTEN YOU NEED TO HAVE THE MEETING AT 5, 6, 7 O'CLOCK IN THE EVENING HERE SO THAT PEOPLE COULD EVEN COME HERE BY CAR, METRO WALK, WHATEVER, OR ZOOM OR TEAMS AND THEY CAN GET INVOLVED.
AND I THINK WE GOT, I'M HEARING THINGS FROM CITY, THE COUNCIL METRO, UM, TRANSPORTATION ADVISORY COUNCIL, THAT THEY ARE LIKE THE IDEA OF ME COMING TO THESE MEETINGS BECAUSE I'M ACTUALLY OUT THERE AND BRINGING INFORMATION IN AND I THINK WE NEED MORE CITIZENS TO DO THAT, BUT THE HORSESHOE AND THOSE POWERS THAT BE NEED TO MAKE THESE PLATFORMS SO THAT PEOPLE CAN DO THIS.
SO WITH THAT, I HAVE NO COMMENTS.
AND, UM, WE ARE HAVING A BIG BUDGET TOWN HALL.
YOU'RE GONNA BE THERE MAY 17TH, 10:00 AM AT THE BONDY CENTER.
WE'RE ALSO HAVING A AT, AT THE FONDE CENTER NEARBY AND WE'RE ALSO HAVING ONE ON THURSDAY, MAY 22ND AT 6:00 PM VIRTUALLY.
SO WE HAVE A COUPLE OPPORTUNITIES THAT ARE OUTSIDE THESE BUSINESS HOURS.
'CAUSE I KNOW Y'ALL, SOME OF Y'ALL HAD ONE, A SPECIAL POPUP, ONE LAST,
[00:40:01]
LAST FALL OR SOMETHING LIKE THAT.YEAH, THE NIGHT OF THE DERECHO, DOUG SMITH WAS THERE.
WE ALMOST HAD TO HIDE OUT IN THE BATHROOMS. UM, OKAY.
DOUG, ARE YOU SPEAKING TODAY? I HOPE.
IS THAT BETTER? YEAH, DEFINITELY.
I JUST WANTED TO HIGHLIGHT, UH, SOME OF THE THINGS THAT I SAW GOING THROUGH THE BUDGET TODAY.
PROBABLY MOST OF YOU KNOW ALL ABOUT IT, BUT IT JUST POPPED OUT TO ME WHEN I WAS LOOKING AT IT AND, UH, YOU DON'T SEE IT PUBLICIZED A LOT.
AND THAT IS WE SPEND $400 MILLION JUST FOR HEALTH BENEFITS FOR OUR EMPLOYEES.
THAT DOESN'T INCLUDE THEIR PAY, THAT DOESN'T INCLUDE THEIR PENSION, THAT'S JUST FOR HEALTH BENEFITS.
I SAY THAT ALL THE TIME, DON'T I? THAT IS A LOT OF MONEY.
SECONDLY, UH, I'M SURE THERE IS A CONCERN ON YOUR PART THAT THE DELAYED IMPLEMENTATION OF THE OPE TRUST FUND WAS MADE.
WHAT WAS THE REASON FOR THAT? UH, I, I DON'T KNOW, BUT I'M ASKING.
AND THIRD, UH, IF YOU GO TO PAGE 22, THE REPORT, YOU'LL SEE THAT, UH, THEY'RE TRANSFERRING $98 MILLION OF D-D-S-R-F FUNDS TO DEBT.
AND YOU ALSO SEE ON THE SAME PAGE, THERE'S AN ESTIMATED $440 MILLION OF DEBT LEFT, WHICH MEANS WE SHOULD HAVE THAT DEBT PAID OFF WITHIN THREE OR FOUR MONTHS, WHICH IS GREAT.
THAT MEANS THERE'S GONNA BE ANOTHER $98 MILLION FOR STREET AND DRAINAGE IMPROVEMENTS.
I DON'T KNOW IF IT'S GONNA BE THREE OR FOUR MONTHS, BUT YOU KNOW, WE'VE ALREADY PAID OVER $1.5 BILLION WORTH OF DEBT DOWN OUT OF THE D-D-S-R-F.
SO I EXPECT WITH THIS SETTLEMENT WITH THE PLAINTIFFS AND THE ADDITIONAL MONEY, UH, CAPTURED REVENUES COMING FROM AVALOR AND WE ARE GONNA GET RID OF THAT LAST BIT OF DEBT.
AND THAT'LL MEAN A TON MORE PRO MONEY, TON MORE MUCH WHATEVER.
AND FINALLY, UH, SOMETIMES I WONDER IF IT, IT IS WORTH IT TO COME TO THESE MEETINGS, BUT IF YOU LOOK AT PAGE 14, UH, OF THE GENERAL FUND REPORT I HAD ASKED SEVERAL MONTHS AGO, I SAID IT WOULD BE MUCH MORE IMPORTANT TO ME TO NOT HAVE THE DIFFERENCE BETWEEN THE CONTROLLER AND FINANCE, UH, IN THAT REPORT.
WHAT'S REALLY IMPORTANT TO ME, AND I THINK SHOULD BE IMPORTANT TO ALL OF YOU, IS HOW DOES WHAT THEY'RE PROJECTING DIFFER FROM WHAT THE BUDGET IS? AND MELISSA ADDED THAT COLUMN, UH, IN THIS MONTH'S REPORT.
I, I JUST, I THANKED HER AND SHE SAID IT HELPS US TOO.
I THINK IT'S AN IMPORTANT, SEE THE PUBLIC CAN HAVE AN IMPACT ON CITY GOVERNMENT DOWN THERE.
WELL AND I THINK THAT THAT FIGURE, THOSE FIGURES ARE IMPORTANT FOR ALL OF YOU.
'CAUSE I USUALLY HAVE TO GO BACK AND LOOK AT THE COLUMN AND NOW IT'S ALL THERE FOR ME.
AND THEN ONE MORE, MELISSA'S NOT HERE, BUT ONE MORE THING THAT I HOPE MAYBE SHE'LL CONSIDER IN FUTURE YEARS.
YOU LOOK AT THE ACTUAL PROPERTY TAX REVENUES AND THEY'RE A BILLION, ALMOST 1,000,000,006, AGAINST THE PROJECTION OF 1,000,000,004.
THERE'S $200 MILLION DIFFERENCE.
AND I KNOW WHAT THAT IS AND YOU KNOW WHAT THAT IS.
AND THAT'S THE TURS MONEY HAS NOT BEEN TRANSFERRED YET.
AND AS AN ACCOUNTANT, IF THEY WOULD DO AN ACCRUAL, THEY KNOW ROUGHLY HOW MUCH THE TURS IS GONNA HAVE TO BE TRANSFERRED.
THEY COULD DO AN ACCRUAL ACCRUING THAT LIABILITY AND REDUCING THE PROPERTY TAX REVENUE BY THAT.
I WONDER WHY THERE'S A REASON THEY WAIT TILL THEY YEAH.
WE ALWAYS APPRECIATE YOUR INPUT.
ANYONE ELSE? I GUESS IT'S JUST YOU GO BACK THERE, BUT ANYBODY ONLINE WANNA, WANNA CHIME IN? OKAY, WITH THAT GUYS, I HAVE A FEW ANNOUNCEMENTS.
UM, THE FISCAL YEAR 2026 BUDGET IS EXPECTED TO BE RELEASED NEXT TUESDAY, MAY 6TH.
WE WILL THEN HAVE A MEETING WEDNESDAY, MAY 7TH OF BFA MEETING AT 2:00 PM TO HEAR, UH, MELISSA DEBOWSKI PRESENT THE FIVE YEAR FORECAST AND THE BUDGET OVERVIEW.
UH, BUDGET WORKSHOPS WILL BEGIN TUESDAY, MAY 13TH AND GO THROUGH TUESDAY, MAY 20TH.
AND DOUG, YOU'LL NOTICE THERE'S A WHOLE WEEK BEFORE WE START WORKSHOPS.
SO, UM, REALLY GIVING COUNCIL AND STAFF AND PUBLIC A CHANCE TO, TO GO THROUGH THE BUDGET BEFORE WE START THE WORKSHOP SO THAT YOU COULD HAVE SOME GOOD QUESTIONS.
FORMULATED THE TWO BUDGET TOWN HALLS I MENTIONED SATURDAY, MAY 17TH AT 10:00 AM AT THE FONDE CENTER, THURSDAY, MAY 22ND AT 6:00 PM VIRTUALLY ON MICROSOFT TEAMS. THE PUBLIC HEARING ON THE BUDGET WILL BE HERE IN PUB IN CITY COUNCIL CHAMBER WEDNESDAY, MAY 21ST AT 9:00 AM BUDGET AMENDMENTS WILL BE PRESENTED AT THE MAY 28TH COUNCIL MEETING AND TAGGED
[00:45:01]
FOR CONSIDERATION FOR WEDNESDAY, JUNE 4TH.AND, UM, AS I SAID AT THE BEGINNING, PLEASE PUSH OUT MY YEAR 2 CENTS BUDGET SURVEY.
AND THANK YOU ALL VERY MUCH FOR YOUR PARTICIPATION.