[Budget and Fiscal Affairs on May 7, 2025.]
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FISCAL AFFAIRS COMMITTEE AND WELCOME TO OUR SPECIAL CALLED MEETING, UH, TO TALK ABOUT THE FY 2026 BUDGET.
I CALL THIS COMMITTEE MEETING TO ORDER AND WOULD LIKE TO WELCOME ALL COUNCIL MEMBERS IN ATTENDANCE.
UH, SO FAR WE HAVE MY VICE CHAIR, COUNCIL MEMBER MARIO CASTILLO, COUNCIL MEMBER LETITIA PLUMMER.
COUNCIL MEMBER ED POLLARD, VICE MAYOR, PRO TEM AMY PECK, COUNCIL MEMBER TIFFANY THOMAS.
COUNCIL MEMBER JULIAN RAMIREZ.
COUNCIL MEMBER TARSHA JACKSON AND STAFF FROM COUNCIL MEMBER ABBY CAYMAN'S, OFFICE COUNCIL MEMBER FRED FLICKINGER OFFICE.
I SEE COUNCIL MEMBER JOAQUIN MARTINEZ WALKING IN, AND COUNCIL MEMBER TWILA CARTER.
SO SHABAZZ AND HUFFMAN ARE VIRTUAL AND COUNCIL MEMBER EVAN SHABAZZ AND COUNCIL MEMBER HUFFMAN ARE ON VIRTUALLY AND IN WALKS THE MAYOR PRO TEM MARTHA CASTEX TATUM.
SO, UH, YOU'RE, UH, YOU'RE VERY POPULAR TODAY, MELISSA, UH, DEBOWSKI.
SO, UM, I JUST WANNA, UH, THANK THE FINANCE DEPARTMENT.
I KNOW ENDLESS WORK GOES INTO PUTTING THIS TOGETHER, AND THANK YOU.
I KNOW TONS OF TIME AND LOTS OF DEMANDS AND, AND THANK YOU FOR, FOR THE BUDGET BOOK AND FOR ALL THE WORK YOU'VE PUT INTO THIS.
AND ALSO THANK YOU FOR THE EXTRA WEEK THAT YOU'VE BUILT INTO THIS BUDGET.
UM, COLLEAGUES, WE, WE DON'T HAVE TO JUMP RIGHT INTO WORKSHOPS TOMORROW, WHICH IS SUCH A RELIEF.
EVERYBODY REALLY HAS TIME TO LOOK AT THE BOOK, TO, IT'S ALL ONLINE TOO.
YOU DON'T HAVE TO LOOK AT THE BOOK, UH, YOU TO, TO REALLY EXAMINE THE DEPARTMENTS BEFORE THEY COME IN FOR THEIR WORKSHOPS.
UH, WE ALSO, YOU, UM, EVERYONE SHOULD KNOW ABOUT THE SHAREPOINT SITE.
THAT IS REALLY THE, THE BEST WAY TO SUBMIT YOUR QUESTIONS.
DEPARTMENTS ARE GONNA GET BACK TO YOU WITHIN 48 HOURS WITH YOUR QUESTIONS.
IT'S REALLY THE MOST EFFICIENT WAY TO GET ALL OF THE BUDGET QUESTIONS AND ANSWERS DONE.
AND WITH NO FURTHER ADO, WE WILL PASS IT TO, OH, WE, WE JUST GOT THIS, UM, THE, THIS, UH, FOR, UM, ONLINE.
IT'S NOT ONLINE YET ON OUR WEBSITE, BUT IT'S COMING AS SOON AS BOB NOACK CAN GET IT UP THERE.
AND SO THERE IS A PAPER COPY HERE, BOO.
BUT THAT WAS THE BEST WE COULD DO.
UM, BUT, UM, LOOKING FORWARD TO THIS PRESENTATION.
DIRECTOR DEBOWSKI, THANK YOU FOR ALL YOUR HARD WORK AND THE FLOOR IS YOURS.
UM, I ALSO WANTED TO, UM, PIGGYBACK ON YOUR COMMENTS, UM, CHAIR THAT THIS BUDGET BOOK COULDN'T BE HERE WITHOUT, UM, THE WONDERFUL TEAM THAT'S BEHIND ME AT THE FINANCE DEPARTMENT.
UM, THEY PUT IN THE LONG NIGHTS, THE WEEKENDS, UM, TO GET THIS ALL TOGETHER A WEEK EARLY.
UM,
SO IT WAS A LOT GOING ON THIS YEAR.
AND, UM, THEY HANDLED IT WITH GRACE AND THEY WERE SO PROFESSIONAL AND WONDERFUL.
UM, SO THANK YOU TO THEM AND TO THEIR FAMILIES.
UM, WHO OF COURSE, ALL THE LONG HOURS AT AT WORK MEANS SOMEONE ELSE NEEDS TO PICK UP THE SLACK AT HOME.
SO I KNOW ALL THEIR FAMILIES HAVE SACRIFICED A LOT TOO, UH, AS WELL AS MINE, MY HUSBAND, MY CHILDREN, MY MOM, UM, MY MOM'S HERE HELPING WITH THE KIDS RIGHT NOW.
UM, AS WELL, I WANTED TO THANK THE OTHER DEPARTMENTS.
THE DEPARTMENT DIRECTORS AND THEIR STAFF PUT A LOT INTO THIS PROPOSED BUDGET AS WELL.
UM, YOU KNOW, THEY'VE BEEN INVOLVED AS WE ROLLED OUT THE CITYWIDE EFFICIENCY STUDY.
UM, THEY'RE LOOKING AT, UH, THEIR SPANS AND LAYERS, THEIR SPAN OF CONTROL, UH, REORGING, THEIR DEPARTMENTS.
UM, OBVIOUSLY THEY WERE A BIG PART OF THE VOLUNTARY RETIREMENT PROGRAM.
SO ALL THE COLLABORATION WE'VE GOTTEN FROM THE OTHER DEPARTMENTS AS WELL THAT HAS GONE INTO THIS, UM, IS SO APPRECIATED BY US.
UM, SO PRETTY LONG PRESENTATION TODAY.
SO ON SLIDE SIX, WE'LL START WITH CONNECTING BUDGET TO STRATEGY.
SO, UM, WE STARTED WITH THE OUTCOME-BASED BUDGETING A FEW YEARS BACK, UM, WHERE WE ARE CONNECTING THE BUDGET AND THE EXPENDITURES AT THE CITY, UH, TO STRATEGY IN ALIGNMENT WITH THE MAYOR'S PRIORITIES.
UM, SO ON THIS SLIDE, YOU SEE, UM, THE DIFFERENT COMPONENTS OF THE OUTCOME-BASED BUDGETING AND THE OUTCOME-BASED BUDGETING, UM, IS SOMETHING THAT THE ERNST AND YOUNG STUDY, WHEN THEY DID THE CITYWIDE ENTERPRISE STUDY THAT ERNST AND YOUNG LOOKED AT, UM, OUR PERFORMANCE MEASURES, OUR PROGRAMS AT THE CITY, AND MADE RECOMMENDATIONS, UM, ON WHERE WE CAN MAKE IMPROVEMENTS.
SO I, I'LL TOUCH JUST ON BACKGROUND OF IT AND THEN KIND OF GET INTO NEXT STEPS.
WHAT'S GONNA BE HAPPENING WITH OUTCOME-BASED BUDGETING.
SO OUTCOME-BASED BUDGETING MEANS THAT YOU,
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UM, ARE TAKING INPUT FROM HOUSTONIANS, UH, PUTTING IT INTO YOUR STRATEGIES AND YOUR DECISIONS YOU MAKE WHEN YOU DO, UM, BUDGETING.UH, WE ALSO HAVE TO ALIGN THE BUDGET, UH, BASED ON THE MAYOR'S STRATEGIC GUIDANCE.
UM, AND SO LOOKING AT THAT STRATEGIC GUIDANCE, LOOKING AT ALL OF THE SERVICES WE PROVIDE, UM, AND THE DIFFERENT AREAS THAT WE WANNA FOCUS THE BEST USE OF OUR DOLLARS ON.
SO THEN, UM, NUMBER THREE, POINT NUMBER THREE IS THAT PROGRAM BUDGETING.
THIS IS WHERE WE ALIGN THE PROGRAMS TO THE BUDGET, AND YOU'LL SEE INSIDE THE BUDGET BOOK PRESENTATION, UM, EACH PART OF THE BUDGET IS ALIGNED TO A PROGRAM.
AND NUMBER FOUR, ALL OF THOSE PROGRAMS HAVE PERFORMANCE MEASURES.
SO THE PERFORMANCE MEASURES ARE, UH, ONE OF THE THINGS THAT WE ENGAGED EY TO REVIEW, TO LOOK AT, UM, HOW, HOW WERE OUR PERFORMANCE MEASURES, ESPECIALLY COMPARED WITH PEERS BEST PRACTICES IN THE INDUSTRY, WHERE COULD WE MAKE IMPROVEMENTS? SO ONE OF THE RECOMMENDATIONS WAS, UM, THAT WE CAN, UH, HAVE MORE OUT, UM, OUTCOME BASED MEASURES VERSUS JUST OUTPUT BASED MEASURES.
AND THAT'S SOMETHING THAT, UH, WE'RE WORKING ON, UM, IMPROVING AND EXPANDING ON THOSE AS WE GO INTO THIS FISCAL YEAR.
SO, UM, ON THE NEXT SLIDE, SLIDE SEVEN, UM, AS I MENTIONED, THE PERFORMANCE MEASURES, THEY'RE BASED ON DATA-DRIVEN, UM, MEASURABLE, UM, PARAMETERS FOR EACH OF THE ITEMS THAT WE DO.
UH, WE HAVE TO LINK THOSE MEASURES TO OUR GOALS, UM, MEASURE OUR EFFICIENCY, AND OF COURSE, BE TRANSPARENT.
UM, SO ON THE TRANSPARENCY POINT, I DID WANT TO, UM, MAKE A PLUG, AND YOU CAN FIND IT THROUGH OUR OPEN FINANCE, UM, WEBSITE.
THERE'S A SECTION OF COURSE, WHERE YOU CAN EXPLORE THE CHECKBOOK, UM, THE BUDGET, DIFFERENT VISUALIZATIONS AND DOWNLOAD DATA.
ONE OF THOSE SECTIONS ON THE OPEN FINANCE PORTAL RELATES TO THE OUTCOME-BASED BUDGETING PERFORMANCE MEASURES.
SO ON THAT WEBSITE, EVERY QUARTER WE UPDATE, UM, THE PERFORMANCE MEASURES, WHAT THE TARGET IS, WHERE THE DEPARTMENT IS TRACKING WITH THE GOAL.
UM, SO THAT'S AVAILABLE ON OUR WEBSITE AND WE UPDATE IT QUARTERLY.
UM, SO, UM, GOING BACK TO NEXT STEPS ON THE OUTCOME-BASED BUDGETING, AS I MENTIONED WITH THE INFORMATION BEING ON OUR WEBSITE QUARTERLY, UM, AS WE IMPROVE ON THOSE PERFORMANCE MEASURES AND MOVE TOWARDS MORE OUTCOME BASED MEASURES, UM, VERSUS OUTPUT BASED MEASURES, WE'LL BE UPDATING THOSE ON THE WEBSITE, UH, THROUGHOUT THE FISCAL YEAR.
AND THE PLAN IS TO, UM, DISCUSS WHATEVER CHANGES ARE MADE DURING OUR BUDGET AND FISCAL AFFAIRS MEETING ONCE A QUARTER.
SO ON SLIDE EIGHT, UM, WE HAVE THE SAME FOUR PRIORITIES THAT MAYOR WHITMEYER, UM, HAS LAID OUT.
UM, PUBLIC SAFETY BEING THE NUMBER ONE PRIORITY INFRASTRUCTURE GOVERNMENT THAT WORKS AND QUALITY OF LIFE.
SO UNDER THE PUBLIC SAFETY, OF COURSE, ONE OF THE GOALS THAT HE, UM, TALKS ABOUT FREQUENTLY IS INCREASING THE NUMBER OF POLICE OFFICERS AND FIREFIGHTERS.
WE ALSO WANT TO, UM, EQUIP OUR FIRST RESPONDERS WITH THE SKILLS AND THE EQUIPMENT THAT THEY NEED, UM, AND COLLABORATE WITH THE COMMUNITY, UM, FOR INFRASTRUCTURE.
AGAIN, THAT'S ANOTHER PRIORITY OF HIS.
UM, AS YOU KNOW, UH, WE FREQUENTLY TALK ABOUT THE WATER AND WASTEWATER SYSTEMS AND HOW MUCH, UM, WORK AND IMPROVEMENT WE HAVE TO DO THERE.
SO MOVING ON TO THE BUDGET OVERVIEW, IF WE COULD GO TO SLIDE 10.
THIS SLIDE WILL GIVE YOU A COMPARISON OF THE CITYWIDE EXPENDITURES FOR THE FY 25 CURRENT BUDGET IN THE BLUE BAR COMPARED TO THE FY 26 PROPOSED BUDGET IN THE GREEN BAR.
SO IN THIS AREA YOU CAN SEE BROKEN DOWN BY, UH, FUND TYPE.
THE GENERAL FUND IS THE TOP GROUP OF BARS.
YOU SEE THAT THERE'S A OVERALL REDUCTION IN THE FY 26 PROPOSED BUDGET COMPARED TO THE FY 25 CURRENT BUDGET.
IT'S A REDUCTION OF $74 MILLION OF EXPENDITURES.
AND WE'LL TALK IN GREAT DETAIL THROUGHOUT THE PRESENTATION ABOUT HOW THAT WAS.
UM, YOU KNOW, THE, THE DIFFERENT INITIATIVES THAT WENT INTO THAT.
UH, FOR THE WATER AND SEWER OPERATING FUND, YOU SEE AN INCREASE THERE.
UM, FOR OTHER FUNDS YOU SEE AN INCREASE, UM, AND THAT'S THE AREA WHERE THE MAJORITY THE INCREASE IS ACROSS THE CITY, THE OTHER FUNDS.
AND SO JUST TO TOUCH ON THAT TOPIC A LITTLE BIT, THE DIFFERENCE BETWEEN THE CURRENT BUDGET OF ABOUT 1 BILLION AND NOW ABOUT 1.15 BILLION IN OTHER FUNDS.
UM, IT'S PREDOMINANTLY MADE UP, UM, THROUGH INCREASES FOR THE BUILDING INSPECTION FUND, STORMWATER FUND, D-D-S-R-F, AVALOR FUND, AND D-D-S-R-F METRO FUND.
UM, SO THAT, UH, COMPRISES THE MAJORITY OF THE INCREASE OF THE $140 MILLION IN THAT CATEGORY.
AND AVIATION IS, IS UP SLIGHTLY AS WELL.
SO OVERALL, THE ENTIRE BUDGET IS, UH, ABOUT A $7 BILLION BUDGET.
UH, IT'S $160 MILLION ABOVE THE PREVIOUS YEAR, AND THAT INCLUDES, OF COURSE, ALL THE FUND TYPES AND IT'S A NET CHANGE OF 2.3%.
SO ON SLIDE 11, UM, WE'LL TALK A LITTLE BIT ABOUT THE LONG-TERM
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LIABILITIES AT THE CITY.UM, THE PENSION REFORM, UM, THAT HAPPENED BACK IN 2017 CONTINUES TO, UM, IMPACT THE OPERATING BUDGET THAT WE HAVE AT THE CITY.
SO THE PENSION LIABILITY, UH, CURRENTLY STANDS AT 1.8 BILLION.
UM, THIS IS A VERY LARGE REDUCTION FROM WHERE WE WERE PRE PENSION REFORM WHEN WE WERE ANTICIPATING THE LIABILITY TO BE AROUND $8.2 BILLION.
AND THERE'S A SIDE FARTHER IN THE BACK WHERE YOU'LL SEE THE AMOUNT OF MONEY WE PUT TOWARDS THE PENSION SYSTEMS NOW VERSUS WHAT IT WOULD HAVE BEEN IF NOT FOR THE PENSION REFORMS. UM, SO WE DO, UM, IN THIS PROPOSED BUDGET INCLUDE THE CONTRIBUTIONS TO THOSE PENSION PLANS, UH, AND THAT WILL CONTINUE TO ADDRESS THE GOAL OF DECREASING THE LIABILITY OVER TIME AND CONTINUING ON WITH THE WORK THAT WAS STARTED WITH THOSE REFORMS. UM, THAT FUNDING IS DEFINITELY NEEDED TO CONTINUE TO IMPROVE THE FINANCIAL HEALTH OF THOSE PLANS AND ENSURE THAT THE RETIREMENT, UM, PACKAGES ARE IN PLACE FOR THE RETIREES.
THOSE THREE PENSION SYSTEMS ARE IN A MUCH HEALTHIER PLACE TODAY.
LIKE I MENTIONED, THE MUNICIPAL POLICE AND FIRE, THERE ARE THREE SEPARATE PLANS.
ALL THREE PLANS HAVE A MUCH HIGHER FUNDED RATIO THAN THEY DID PRIOR TO REFORMS, UH, FOR OPEP REFORM.
UM, THE OPEP LIABILITY CURRENTLY STANDS AT $2 BILLION.
UH, WE ARE STILL, UM, I KNOW IT'S NOT INCLUDED IN THIS FY 26 PROPOSED BUDGET.
WE ARE STILL PLANNING TO IMPLEMENT THE OP E TRUST.
HOWEVER, AT THIS POINT IN TIME, WE ARE ON A TEMPORARY HOLD WITH IMPLEMENTING THIS PROJECT AS WE REEVALUATE IT TO ASSESS OUR OTHER FINANCIAL PRIORITIES THAT WE HAVE GIVEN, UM, PROJECTED EXPENDITURES AND REVENUES.
AND WE WANNA ENSURE THAT, UM, UM, YOU KNOW, WE'RE USING THE BEST USE OF OUR DOLLARS TO CONTINUE TO PERFORM THE SERVICES FOR THE CONSTITUENTS.
SO, UM, WHENEVER WE DO BRING THAT DISCUSSION BACK, UM, THE GOAL OF THE TRUST FUND FOR THE OPE TRUST IS TO GROW THROUGH INVESTMENT EARNINGS FUNDING THAT WOULD OFFSET PAY AS YOU GO RETIREE COSTS IN THE FUTURE.
SO THE ESTIMATED PROJECTION AT THE TIME THAT THE ACTUARIES EVALUATED THE ESTABLISHMENT OF THE TRUST IS THAT THE TRUST FUND COULD, UH, FURTHER REDUCE THE LIABILITY DOWN TO ABOUT $1 BILLION, UM, BY 2048.
ON SLIDE 12, THE GENERAL FUND FULL-TIME EQUIVALENT POSITIONS.
UM, SO THIS SLIDE BREAKS DOWN THE NUMBER OF CIVILIAN POSITIONS THE POLICE CLASSIFIED IN THE PURPLE BAR AND THE NUMBER OF FIRE CLASSIFIED, UM, POSITIONS THAT ARE FUNDED OUT OF THE GENERAL FUND.
SO AS YOU CAN SEE FOR THE FY 26 PROPOSED BUDGET, THE NUMBER OF CIVILIAN POSITIONS HAS DECREASED FROM THE PREVIOUS YEAR.
THE NUMBER OF POLICE CLASSIFY HAS INCREASED, AND THE NUMBER OF FIRE CLASSIFIED IS ABOUT, UH, FLAT WITH THE PRIOR YEAR.
AND, UM, WE'LL GO INTO MORE DISCUSSION ABOUT THE, UH, VOLUNTARY RETIREMENT OPTION, UM, FURTHER ON, AND YOU'LL BE ABLE TO SEE THE BREAKDOWN, UM, BY DEPARTMENT ON SLIDE 13.
JUST TO TOUCH ON THE OVERALL GENERAL FUND BUDGET.
SO THE GENERAL FUND BUDGET, UM, WE'RE BUDGETING TO HAVE A 10.8% FUND BALANCE, AND THAT REPRESENTS 10.8% OF EXPENDITURES, NOT INCLUDING DEBT SERVICE AND PAY AS YOUGO TRANSFERS.
UM, AS A REMINDER, UM, SET BY ORDINANCE, OUR FINANCIAL POLICIES STATE THAT OUR DESIRED MINIMUM FUND BALANCE IS 7.5%.
AND SO, UH, THIS 10.8% REPRESENTS ABOUT $84 MILLION ABOVE THE MINIMUM OF 7.5%.
THE BUDGET INCLUDES THE 3.5% PAY RAISE FOR MUNICIPAL EMPLOYEES THAT WAS SET BY THE HOPE CONTRACT.
IT ALSO INCLUDES A 3% PAY RAISE FOR FIRE CLASSIFIED, AS WELL AS A 10% PAY RAISE FOR POLICE CLASSIFIED BASED ON THE PROPOSED CONTRACT.
THE BUDGET ALSO INCLUDES FUNDING FOR CADET CLASSES FOR PUBLIC SAFETY.
IT INCLUDES FUNDING FOR FIVE POLICE CADET CLASSES AND NINE FIRE CADET CLASSES.
AND I KNOW THE NINE CLASSES SOUNDS LIKE A LARGE NUMBER OF CLASSES COMPARED TO WHAT WE TRADITIONALLY DO.
UM, WE ARE PLANNING TO HAVE ABOUT 400 FIRE CADETS.
SO LAST YEAR WAS ABOUT 3 75, SO IT'S NOT THAT MANY MORE CADETS, BUT THE IDEAS TO HAVE, UM, SMALLER CLASS SIZES BECAUSE SOME OF THE SMALLER CLASSES WILL BE FAST TRACK CLASSES, UM, WHICH IS WHERE, UM, YOU KNOW, FIREFIGHTERS COME FROM EITHER REHIRES OR COME FROM ANOTHER AGENCY.
SO THAT'S WHY IT SEEMS LIKE A LARGE NUMBER OF CLASSES, EVEN THOUGH IT'S, UM, ONLY A SLIGHT INCREASE TO THE NUMBER OF CADETS.
AND THE BUDGET ALSO INCLUDES, OF COURSE, FULLY FUNDING THE THREE PENSION SYSTEMS, UH, IN ALIGNMENT WITH THE STATE STATUTE.
UM, THE BUDGET DOES INCLUDE A FUND BALANCE DRAWDOWN OF $107 MILLION FOR FY 26.
AND, UH, IT SETS THE FRAMEWORK FOR US TO CONTINUE TO WORK ON OUR EFFICIENCIES, UM, THAT ARE PROGRAMMED INTO THIS BUDGET AND CONTINUE TO EXPAND ON THOSE, UH,
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TO ACHIEVE FURTHER EXPENDITURE REDUCTIONS IN PREPARATION FOR FY 27.THE BUDGET DOES NOT INCLUDE ANY ONE-TIME LAND SALES OR PAYMENT DEFERRALS.
I KNOW, UM, THE OTHER THING I WANTED TO POINT OUT THAT WAS ASKED ABOUT, UM, I THINK IT WAS AT THE LAST, UH, BUDGET AND FISCAL AFFAIRS COMMITTEE MEETING, UM, IS ARE WE GOING TO REPLENISH ANY OF THE BUDGET STABILIZATION FUND WITH THE KNOCK ON WOOD UPCOMING HURRICANE SEASON? UM, SO WE ARE ABLE TO, IN THIS BUDGET REPLENISH, UM, WE'RE GONNA ADD ABOUT $12 MILLION TO THE BUDGET STABILIZATION FUND.
UM, THE MINIMUM SET BY FINANCIAL POLICIES IS ABOUT $25 MILLION, WHICH REPRESENTS 1% OF EXPENDITURES.
UM, HOWEVER, THE FINANCIAL POLICY STATE THAT WHEN YOU DRAW FROM THE FUND BALANCE, OR SORRY, WHEN YOU DRAW FROM THE BUDGET STABILIZATION FUND, YOU HAVE TWO YEARS TO FULLY REPLENISH IT.
SO THIS GETS US ABOUT HALFWAY THERE WITH THE REMAINING, UH, PLANS TO BE REPLENISHED BY 2027 IN, IN ALIGNMENT WITH THE POLICY.
SO ON SLIDE 14, I KNOW THERE'S A LOT OF FIGURES ON HERE.
SO, UM, THIS SLIDE, UH, GIVES A SNAPSHOT SUMMARY OF OUR GENERAL FUND REVENUES.
AND, UH, AS FAR AS A NET CHANGE COMPARED TO THE FY 25 ESTIMATES, SO COMPARED TO OUR FY 25 ESTIMATES, OUR FY 26 PROPOSED BUDGETARY REVENUES, UM, HAVE INCREASED BY $3 MILLION OR ABOUT 0.11%.
UM, SO YOU SEE A BREAKDOWN OF THE CHANGES, UM, IN THE, IN THE BOX BELOW.
UM, THE LARGEST CHANGE IS AN INCREASE TO PROPERTY TAX, AND THIS PROPERTY TAX AMOUNT IS CALCULATED IN COMPLIANCE WITH PROPOSITION ONE AND H UH, FOR NOW WE'RE ASSUMING A 0% POPULATION GROWTH AS WE WON'T GET THAT FIGURE UNTIL THE END OF MAY, UM, FROM THE US CENSUS BUREAU.
AND TYPICALLY WHEN WE GET THAT FIGURE FROM THE US CENSUS BUREAU, WE WOULD INCLUDE AS PART OF OUR BUDGET ADOPTION.
ANY CHANGES TO THAT, UM, NUMBER THAT NEEDS TO BE MADE.
UH, FOR OUR CPI ASSUMPTION, WE'RE USING 2.46%, UM, WHICH IS THE CPI THAT WE RECEIVED IN JANUARY.
UM, SALES TAX, UH, BASED ON OUR FY 25 ESTIMATES, WE'RE ASSUMING TO GO UP IN SALES TAX BY ABOUT $8.9 MILLION.
UM, AND THEN YOU SEE THE, UH, THE NEXT ONE DOWN INNER FUND.
UM, THIS IS WHERE WE, UH, GET REIMBURSEMENT BACK FROM, UM, OTHER DEPARTMENTS FOR INDIRECT COST RECOVERY, FOR COST ALLOCATION PLAN, AS WELL AS, UM, FIRE PROTECTION SERVICES.
UM, NUMBER FOUR, OTHER, THE MAJORITY OF THE INCREASE THERE IS RELATED TO HIGHER MOVING VIOLATION COLLECTIONS.
UM, NUMBER FIVE, INTEREST, UH, JUST WENT UP SLIGHTLY DUE TO HIGHER THAN ANTICIPATED, UM, CASH RECEIPTS, UM, INDUSTRIAL ASSESSMENTS ARE ABOUT FLAT COMPARED TO THE PREVIOUS YEAR, AND OUR GOVERNMENTAL IS DOWN.
UM, MOSTLY, PRIMARILY DUE TO THE METRO FUNDING TRANSFER GOING TO D-D-S-R-F INSTEAD OF THE GENERAL FUND.
UM, NUMBER SEVEN, UM, UNDER SALE OF CAPITAL ASSETS.
AS I MENTIONED, WE'RE NOT BUDGETING FOR ONE-TIME LAND SALES, SO WE DID HAVE SOME SIGNIFICANT LAND SALES IN FY 25, BUT WE'RE NOT BUDGETING FOR ANYTHING SIMILAR TO THAT IN FY 26.
IF THEY OCCUR, OF COURSE, WE'LL RECOGNIZE THEM THROUGH THE MONTHLY FINANCIAL REPORT AT THAT TIME.
UM, CHARGES FOR SERVICES, UH, WE'RE SHOWING A DECREASE, UM, PRIMARILY DUE TO LOWER AMBULANCE FEES.
THAT'S, UM, WE'RE TRYING TO MAKE A CONSERVATIVE PROJECTION FOR FY 26.
THERE IS SOME PENDING LEGISLATION, UM, THAT COULD ASSIST, BUT WE JUST WANTED TO HAVE A CONSERVATIVE PROJECTION FOR PURPOSES OF THE BUDGET.
UM, TYPICALLY WE DO DECREASE OUR, UM, BUDGET FOR FRANCHISE FEES YEAR OVER YEAR AS WE SEE, UM, BEHAVIOR PATTERNS CHANGE.
SO IN SLIDE 15, UM, FOR THE GENERAL FUND REVENUE, EXCLUDING OTHER RESOURCES, UM, AS WE TALKED ABOUT IN THE PREVIOUS SLIDE, THE PROPERTY TAX IS INCREASED AND THAT'S IN ALIGNMENT WITH THE PROPOSITION ONE AND H CALCULATION.
UH, SALES TAX IS SLIGHTLY INCREASED.
OTHER REVENUE DECREASED BASED ON WHAT WE TALKED ABOUT IN THE PREVIOUS SLIDE, AND FRANCHISE FEES DECREASED AS WELL.
UM, ONE THING TO NOTE IS THAT WE NO LONGER HAVE ANY, UH, ADDITIONAL ARPA REVENUE REPLACEMENT FUNDING TO RECOGNIZE.
WE DID, UM, INCLUDE THAT IN FY 25.
OUR LAST PIECE OF IT WAS ABOUT $15 MILLION THAT WE RECOGNIZED IN FY 25.
THIS GIVES YOU A HISTORICAL VIEW, UH, GOING BACK TO 2018 OF THE GENERAL FUND REVENUES, EXCLUDING OTHER RESOURCES.
UM, AS YOU SEE, IF YOU LOOK AT THE CHANGE YEAR OVER YEAR ON THE BOTTOM RIGHT BOX, UM, OUR TOTAL REVENUES, UM, EXCLUDING OTHER RESOURCES, UH, ARE PROJECTING BASED ON THE PROPOSED BUDGET TO GO UP BY ABOUT 1.3%.
UM, THE LARGEST, UM, AMOUNT OF OUR GENERAL FUND REVENUES BEING ABOUT 50% OF OUR REVENUES DOES COME FROM PROPERTY TAX.
UM, AND SALES TAX IS OUR SECOND LARGEST SOURCE OF GENERAL FUND REVENUE IN THE BLUE BAR.
UM, THE FOOTNOTE MENTIONS HOW MUCH IN THE ARPA FUNDING WE, UH, WERE ABLE TO UTILIZE
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IN THE PREVIOUS YEARS.UM, AND AS I MENTIONED, FY 25 IS THE LAST YEAR THAT WE'RE GONNA BE ABLE TO RECOGNIZE, UM, ANY ARPA MONEY FOR REVENUE REPLACEMENT.
FOR PROPERTY TAX REVENUE, UM, WE DID GET AN ESTIMATED ASSUMPTION OF TAXABLE VALUE, UM, FROM THE APPRAISAL DISTRICTS.
UH, AT THE, I THINK THEY SENT IT THE LAST WEEK OF APRIL.
UH, THEY'RE ESTIMATING THAT OUR TAXABLE VALUE IS AROUND $330 BILLION.
UH, HOWEVER, WE WON'T KNOW THE VALUE THAT WE NEED TO USE TO CALCULATE THE TAX RATE FOR THE FISCAL YEAR UNTIL WE GET THE CERTIFIED ROLE, UH, WHICH USUALLY COMES AT THE END OF AUGUST.
SO, UM, THAT ESTIMATED TAXABLE VALUE, UH, THAT THEY GAVE US OF $330 BILLION, UM, IS COMPRISED OF BOTH THE T'S INCREMENTAL VALUE AND, UH, THAT T'S INCREMENTAL VALUE.
UM, WHEN YOU LOOK AT THAT, UM, THE, THE SECOND BULLET, IF YOU NET OUT THE T'S INCREMENTAL VALUE, THE REMAINDER OF OUR TAXABLE VALUE IS ABOUT 282 BILLION, UM, IN PROJECTING OUR PROPERTY TAX REVENUE FOR THE FY 26 BUDGET, UM, AS I MENTIONED, WE HAVE YET TO RECEIVE THE POPULATION NUMBER FROM THE US CENSUS BUREAU.
SO BASED ON OUR C-P-I-C-P-I PLUS POPULATION CALCULATION THAT WE DO IN COMPLIANCE WITH PROP ONE, UH, FOR NOW WE'RE USING THE 0% POPULATION GROWTH AND A 2.46% CPI.
SO AS I MENTIONED, WE'LL TRUE THAT UP WHEN WE GET CLOSER TO THE ADOPTIVE BUDGET.
UM, BASED ON THOSE ASSUMPTIONS, UH, WE BELIEVE, UH, THAT THE PROPERTY TAX REVENUE WILL INCREASE BY $79.2 MILLION HIGHER THAN THE CURRENT ESTIMATES FOR FY 25.
AND ONE OF OUR ASSUMPTIONS IS THAT WE'RE STILL MAINTAINING OUR OVER 65 AND DISABLED EXEMPTION AT $260,000.
SLIDE 18 GIVES YOU A HISTORICAL VIEW OF THE, UM, ADOPTED OR PROPOSED BUDGET COMPARED TO THE ACTUALS FOR PROPERTY TAX REVENUE.
UM, I DID WANT TO BRIEFLY TOUCH ON THE DIFFERENT REVENUE CAPS THAT WE USE WHEN WE CALCULATE OUR REVENUES.
SO AGAIN, THIS BUDGET, AS ALWAYS, WE ALWAYS PROPOSE BASED ON PROP ONE AND H ESTIMATES AT THE TIME WE CALCULATE THE TAX RATE.
UM, WE ARE GOING TO HAVE TO DO A COUPLE DIFFERENT CALCULATIONS.
OF COURSE, WE'LL HAVE TO BY CALCULATE WHAT THE STATE CAP WILL BE, AND THEN WE'LL HAVE TO PROPOSE A TAX RATE IN COMPLIANCE WITH BOTH THE LOCAL CAPS AND THE STATE CAPS.
AND AGAIN, WE WON'T HAVE ALL THAT INFORMATION UNTIL WE HAVE THE CERTIFIED ROLES, WHICH USUALLY COMES AT THE END OF AUGUST.
SO ON SLIDE 19, UM, THIS GIVES YOU A HISTORICAL VIEW OF HOW MUCH REVENUE THE CITY HAS LOST OUT ON DUE TO THE, UM, VOTER, UH, LOCAL, UM, CHARTER CAP PROPOSITION ONE, AS WE CALL IT.
UM, SO THIS YEAR, EVERY, UH, EVERY YEAR WE UPDATE IT.
AND IN FY 26, BASED ON, UM, OUR ASSUMED TAXABLE VALUE THAT, UH, WAS THE PREVIEW THAT THE APPRAISAL DISTRICTS GAVE US, UM, WE BELIEVE THAT THE IMPACT OF THE REVENUE CAP FOR FY 26 IS $380 MILLION JUST IN ONE SINGLE YEAR.
SINCE FISCAL YEAR 15, THE CUMULATIVE IMPACT OF THE REVENUE CAP HAS BEEN ABOUT $2.6 BILLION.
SO MOVING ON TO SALES TAX REVENUE ON SLIDE 20, WE'RE USING AN ASSUMPTION OF A 1% INCREASE, UM, COMPARED TO OUR FY 25, UM, ESTIMATE FOR SALES TAX.
WE ARE TAKING A FEW THINGS INTO CONSIDERATION AS WE'RE, UM, AS WE'RE PROJECTING SALES TAX REVENUE FOR THE PROPOSED BUDGET.
WE HAVE OUR OWN INTERNAL REGRESSION MODELS, AND WE ALSO USE, UM, AN OUTSIDE CONSULTANT, DR.
UM, HE GIVES A DIFFERENT, UH, HOST OF ESTIMATES, LOW, MEDIUM HIGH, AS WELL AS A VERY DETAILED, UM, WRITEUP IN ANALYSIS ON HIS VIEW ON SALES TAX.
UM, WHEN WE MODEL OUR SALES TAX, THE MAIN, UM, DRIVER IN THE MODEL IS THE EMPLOYMENT FIGURES, LOCAL EMPLOYMENT.
WE ALSO LOOK AT THE PRICE PER BARREL OF OIL AND, UH, WHAT INFLATION IS.
SO THERE'S A VARIETY OF ASSUMPTIONS AND VARIABLES THAT GO INTO THE MODELING.
AND, UM, BASED ON THE MODELING, WE FEEL COMFORTABLE THAT WE CAN, UM, BUDGET FOR A 1% INCREASE FROM OUR CURRENT ESTIMATE.
UM, ONE THING THAT WE, I KNOW WE'VE BEEN TALKING ABOUT IS THE SALES TAX AUDIT THAT THE STATE COMPTROLLER'S OFFICE NOTIFIED US OF.
UM, SO THEY'RE STILL, UM, I KNOW WE SAW A DECREASE IN OUR REMITTANCE FOR THE MONTH THAT THEY FIRST INFORMED US OF THE AUDIT.
THEY THEN RETURNED THE AMOUNT OF MONEY THAT THEY WITHHELD FROM US THE FOLLOWING MONTH.
AND WHAT WE HAD TALKED ABOUT IS THAT WE'RE STILL, AND WE'RE STILL PLANNING TO DO THIS, IS TO ENTER INTO A REPAYMENT PLAN WITH THE STATE WHERE WE'RE GOING TO REPAY THE AMOUNT OF MONEY OVER THE SAME PERIOD THAT THE AUDIT COVERED, WHICH IS ABOUT, I THINK A 43 MONTH PERIOD.
AND SO, UH, THAT REPAYMENT WOULD EQUATE TO ABOUT $7 MILLION A YEAR OVER ABOUT FOUR YEARS TO RETURN THAT AUDIT FINDING.
[00:25:01]
WANTED TO ENTER INTO THAT REPAYMENT AGREEMENT WITH US BECAUSE THEY'RE DOING ANOTHER REVIEW OF THE AUDIT TO MAKE SURE THAT THE AUDIT FINDINGS ARE IN FACT CORRECT.SINCE IT IS SUCH A, EXCUSE ME, IT IS SUCH A SIGNIFICANT AUDIT FINDING, UM, MUCH HIGHER THAN WE'VE SEEN IN PAST, IN PAST AUDITS.
UM, SO ONCE WE DO HAVE THAT IN PLACE, OF COURSE, WE'LL, I ALWAYS UPDATE YOU EVERY MONTH ON HOW WE ARE WITH SALES TAX, SO I'LL BE SURE TO SHARE THAT INFORMATION WHENEVER WE DO ENTER INTO THE REPAYMENT AGREEMENT.
BUT FOR NOW, WE DID MAKE AN ADJUSTMENT, UM, FOR PURPOSES OF THE BUDGET.
SO, UM, THE 1% INCREASE THAT YOU SEE IS KIND OF NET OF THAT ASSUMPTION THAT WE'RE GONNA HAVE TO REPAY 7 MILLION EVERY YEAR.
UM, ON THE NEXT SLIDE, SLIDE, SLIDE 21, TRENDS IN SALES TAX REVENUES.
UM, AS YOU SEE THE FY 26 PROPOSED BUDGET, WE'RE PROPOSING ABOUT 902 MILLION, WHICH IS A 1% INCREASE FROM OUR CURRENT ESTIMATE OF 893 MILLION.
SLIDE 22 GIVES YOU A MONTHLY VIEW OF HOW SALES TAX COLLECTIONS HAVE BEEN SO FAR, UM, YEAR TO DATE, BROKEN OUT BY MONTH.
UM, AND WE JUST RECEIVED A ANOTHER MONTH OF INFORMATION, WHICH UNFORTUNATELY WE DIDN'T HAVE TIME TO UPDATE THE SLIDE FOR MARCH.
WE DID RECEIVE THE MARCH EARNED SALES TAX RECEIPTS.
UM, BASED ON THE BAR CHART, YOU SEE, WE WERE PROJECTING ABOUT $84 MILLION FOR THE MONTH OF MARCH IN OUR, UH, MARCH EARNED.
WE WERE NOTIFIED BY THE STATE TODAY THAT, UH, IT WAS ACTUALLY HIGHER THAN THAT.
IT CAME IN AT $85.4 MILLION, WHICH IS ABOUT ONE POINT A HALF PERCENT ABOVE WHAT WE WERE BUDGETING, AND IT REPRESENTS ABOUT 7.3% ABOVE THE PREVIOUS YEAR.
SO SALES TAX COLLECTIONS CONTINUE TO BE STRONG.
UM, WE DON'T FORESEE ANY NEED TO MAKE A CHANGE TO OUR ESTIMATE AT THIS POINT.
UM, IN FACT, THE REMAINING MONTHS, UM, IF EVEN IF THE REMAINING MONTHS COME IN 4.6% BELOW THE PREVIOUS YEAR, UH, THEN WE'LL STILL BE ON TRACK TO MEET THE CURRENT ESTIMATE OF 893 MILLION.
SO WE'RE MOVING ON TO THE GENERAL FUND EXPENDITURES NOW.
SO FOR THE GENERAL FUND EXPENDITURES, FY 26, LOOKING AT THE NET CHANGE VERSUS THE FY 25 CURRENT BUDGET, UM, AS I MENTIONED, THE EXPENDITURES ARE ACTUALLY DECREASING FROM THE PRIOR YEAR BY $74 MILLION, WHICH IS A DECREASE OF ABOUT 2.4% FOR THE GENERAL FUND.
UM, YOU SEE, UM, BREAKING DOWN SOME DETAIL ABOUT WHAT THOSE EXPENDITURE REDUCTIONS ARE.
UM, SO FOR THE FIRST LINE ITEM, OTHER SERVICES AND CHARGES 60, ABOUT $65 MILLION, UM, THAT'S A DECREASE IN EXPENDITURES, UH, FOR, THERE'S A VARIETY OF THINGS IN THERE, UM, INCLUDING CATEGORY MANAGEMENT, WHICH IS THE ERNST AND YOUNG RECOMMENDATION, UM, WHEREBY WE LOOK AT OUR GOODS AND SERVICES THAT WE PROCURE ERNST AND YOUNG RECOMMENDED, UM, AT THE TIME THAT THEY PUT OUT THE CITYWIDE EFFICIENCY STUDY THAT WE COULD REALIZE ANYWHERE FROM FIVE TO 15% OF SAVINGS BASED ON, UH, THE GOODS AND SERVICES WE PROCURE.
SO WE ARE USING A 5% FIGURE FOR PURPOSES OF CALCULATING THE AMOUNT, UM, THAT WE SEEK TO REDUCE FOR THIS BUDGET.
AND THEN THAT'S AN INITIATIVE THAT WILL BE GOING, UH, OVER THE COURSE OF MANY YEARS.
SO THAT, YOU KNOW, HOPEFULLY AS WE GET TO FY 27, IN 28, YOU SEE THOSE EXPENDITURE REDUCTIONS, UM, TO BE EVEN MORE SUBSTANTIAL.
THE 64 MILLION REDUCTION ALSO INCLUDES THE, UH, DEFERRING OF THE OPE TRUST THAT I MENTIONED, UH, EARLIER ON IN THE SLIDES.
UM, IT INCLUDES A DE UH, THIS IS A DECREASE FROM THE FY 28 CURRENT BUDGET, WHICH IS THE ESTIMATE, NOT NECESSARILY BASED ON THE FY 25 ADOPTED.
UM, AND THAT DOES INCLUDE A, UH, DECREASE VERSUS, UM, THE CLASSIFIED OVERTIME INCREASE THAT WE SAW IN FY 25.
IT ALSO INCLUDES CONSOLIDATION OF VARIOUS DEPARTMENTS INCLUDING, UH, THE A RA THREE ONE AND HOUSTON PUBLIC WORKS, UM, CUSTOMER ACCOUNT CONSOLIDATION, AND IT INCLUDES A, AN INCREASE, IT'S PARTIALLY OFFSET BY AN INCREASE, UM, WHERE WE HAD THE TRANSFER TO THE LOCAL DRAINAGE PROJECTS IN FY 25.
UM, ON ITEM NUMBER TWO, THIS IS THE GENERAL FUND IMPACT OF THE VOLUNTARY RETIREMENT PROGRAM.
UM, THIS IS REPRESENTS THE GENERAL FUND PORTION ONLY, AS I MENTIONED, AND WE HAVE MORE DETAILS, UH, FURTHER ON ABOUT THE, THE DIFFERENT DEPARTMENTS THAT THAT'S IMPACTING.
UM, FOR PENSIONS, YOU SEE A SAVINGS COMPARED TO THE FY 25 CURRENT BUDGET OF ABOUT $23 MILLION.
UM, THAT'S DUE TO A DECREASE IN THE CONTRIBUTION RATE FOR THE POLICE PENSION SYSTEM SINCE THAT PENSION SYSTEM HIT 90% FUNDED.
UM, AS WE SAW WITH THE FIRE SYSTEM A COUPLE YEARS AGO, WE FOLLOW THE CORRIDOR MECHANISM ESTABLISHED BY STATE STATUTE.
ONCE YOU HIT THAT 90% FUNDED, THE
[00:30:01]
CITY IS ABLE TO CONTRIBUTE THE CORRIDOR AT MINIMUM AS OPPOSED TO THE MIDPOINT.SO THAT'S WHAT'S RESULTING IN THIS SAVINGS THIS YEAR.
ON THE NEXT LINE DOWN, THE DEPARTMENTAL BUDGET REDUCTIONS, UH, THESE ARE THE REDUCTIONS THAT THE DEPARTMENTS SUBMITTED.
UM, THEY'RE NOT ACROSS THE BOARD REDUCTIONS, BUT THE DEPARTMENTS DID RECEIVE, UM, RECEIVE A TEMPLATE TO, UH, COME BACK TO THE ADMINISTRATION WITH WAYS IN WHICH THEY CAN FIND EFFICIENCIES AND SAVE COSTS.
AND THIS REPRESENTS THE, UH, ITEMS THAT THE ADMINISTRATION REVIEWED AND APPROVED.
AND I HAVE MORE, MORE DETAILS ON THAT AND FURTHER SLIDES AS WELL.
THE DIFFERENT DEPARTMENTS, WHEN THEY COME AND PRESENT THEIR BUDGET WORKSHOPS, THEY'LL BE ADDRESSING THOSE REDUCTIONS AND, UM, HOW THEY, UH, YOU KNOW, THE ONES THAT ARE SPECIFIC FOR THEIR DEPARTMENTS.
ITEM NUMBER, UH, NOTE NUMBER FIVE, EMPLOYEE COMPENSATION.
UM, THIS ONE IS THE AMOUNT OF MONEY INCREASE IN THE FY 26 BUDGET COMPARED TO THE CURRENT ESTIMATE.
AND THIS COVERS ALL THREE, UM, EMPLOYEE GROUPS.
IT INCLUDES A 3% FOR FIRE CLASSIFIED, THE 10% FOR POLICE CLASSIFIED BASED ON THE PROPOSED CONTRACT, AND THE MUNICIPAL 3.5% THAT'S IN THE APPROVED HOPE CONTRACT.
UM, THE SERVICE CHARGEBACK FUND, YOU SEE AN INCREASE, THIS IS FOR ITEMS LIKE ELECTRICITY AND IT, AND NUMBER SEVEN, UH, SLIGHT INCREASE TO HEALTH BENEFITS FUND.
UM, DROPPING DOWN TO THE OPERATING BUDGET ADJUSTMENTS.
UM, THE CAPTURED REVENUE TRANSFER TO D-D-S-R-F FROM THE GENERAL FUND IS AN INCREASE OF ABOUT 40, $48 MILLION COMPARED TO FY 25.
UM, THERE'S TWO COMPONENTS TO THIS.
UM, PART OF IT IS $16 MILLION, WHICH IS THE AMOUNT THAT WAS NEGOTIATED, UH, WITH THE PLAINTIFFS IN THE, UH, LITIGATION CASE.
UM, IN LIEU OF CONTRIBUTING THE FULL A HUNDRED MILLION DOLLARS IN FY 25 AND FY 26 AND 27, IN ADDITION TO, UM, WHAT THE CITY HAD HISTORICALLY CONTRIBUTED UNDER THE 11.80 CENT EQUIVALENT CALCULATION, THAT NEGOTIATION INCLUDED AN ADDITIONAL $16 MILLION ON TOP OF THE 11.80 CENT EQUIVALENT, AND THAT'S INCLUDED AS PART OF THE $48 MILLION THAT YOU SEE THERE.
THE REMAINDER OF THAT $47.9 MILLION IS THE NATURAL GROWTH IN THE CAPTURED REVENUE TRANSFER THAT WE SEE AS WE CONTINUE TO PAY DOWN THE DEBT.
THE D-D-S-R-F TRANSFER IS GOING TO CONTINUE TO INCREASE EVERY YEAR.
OTHER DEBT SERVICE ITEMS DECREASED FROM FISCAL YEAR 25 TO 26 BY ABOUT $56 MILLION FOR A NET OVERALL DECREASE TO DEBT SERVICE AND PAY OF 8.8 MILLION.
SO ALL OF THOSE ITEMS TOGETHER RESULT IN A DECREASE OF EXPENDITURES OF ABOUT $74 MILLION.
ON SLIDE 24, UM, THIS GIVES YOU A BREAKDOWN FOR THE GENERAL FUND EXPENDITURES BY CATEGORY.
AS YOU CAN SEE, PUBLIC SAFETY IS, UH, ROUGHLY EQUAL FROM FY 25 CURRENT BUDGET TO THE FY 26 PROPOSED BUDGET.
UH, EVEN WITH THOSE CONTRACTUAL INCREASES.
UM, THE DEBT SERVICE, AS I MENTIONED THE PREVIOUS SLIDE, THERE'S A DECREASE GENERAL GOVERNMENT, YOU CAN SEE THERE'S A DECREASE, AND ACTUALLY THERE'S A DECREASE IN EVERY SINGLE CATEGORY EXCEPT FOR THE PAY AS YOU GO CATEGORY, WHERE THAT'S WHERE YOU SEE THAT $47.9 MILLION INCREASE FOR D-D-S-R-F ALTOGETHER.
THE NET CHANGE ACROSS ALL THE CATEGORIES AGAIN, IS A $74 MILLION DECREASE, OR A SAVINGS OF ABOUT 2.4% ON SLIDE 25.
THIS BREAKS OUT HOW MUCH OF THE GENERAL FUND EXPENDITURES ARE PERSONNEL VERSUS NON-PERSONNEL, AND HOW MUCH OF THE PERSONNEL, UH, COSTS ARE CLASSIFIED VERSUS CIVILIAN.
SO AS YOU SEE OUT OF OUR $3.03 BILLION PROPOSED BUDGET, SORRY, IN THOUSANDS BILLION DOLLAR PROPOSED BUDGET, UM, PERSONNEL IS THE MAJORITY OF IT, ABOUT 61% OF THE 61% PERSONNEL, 76% OF THAT IS FOR CLASSIFIED.
SO OUT OF OUR $3 BILLION PROPOSED BUDGET, $1.4 BILLION IS FOR CLASSIFIED PERSONNEL.
CIVILIAN PERSONNEL COSTS ABOUT $439 MILLION.
AND THEN LOOKING AT THE OTHER CATEGORY IN THE BLUE, BLUE BAR AREA, 39% OF OUR TOTAL BUDGET, ABOUT 1.1 BILLION IS FOR NON-PERSONNEL COSTS.
AND THAT'S COMPRISED OF DEBT SERVICE AND PAY AS YOU GO THE $508 MILLION AND OTHER SERVICES AND CHARGES.
SO WHEN I TALK ABOUT THE CATEGORY MANAGEMENT COMPONENT, THE SAVINGS, UM, INITIATIVE THAT WE'RE GONNA BE WORKING ON WITH ERNST AND YOUNG, UM, THAT FIVE TO 15% SAVINGS, THE 5%, AGAIN, IS WHAT WE'RE BUDGETING.
IT COMES FROM A PORTION OF THAT OTHER SERVICES, THAT 625 MILLION YOU SEE THERE ON SLIDE 26.
THIS GIVES YOU A HISTORICAL VIEW OF THE TOTAL EXPENDITURE BUDGET.
AND AGAIN, I WANNA POINT YOU TO THE BOTTOM RIGHT BOX WHERE YOU SEE A DECREASE OF 2.4%
[00:35:01]
OF THE TOTAL BUDGET COMPARED TO THE PREVIOUS YEAR.NORMALLY WHEN WE'RE HAVING THIS CONVERSATION, WE'RE TALKING ABOUT HOW MUCH DID THE EXPENDITURE BUDGET INCREASE? THIS IS THE FIRST TIME YOU'RE SEEING THAT WE'RE HAVING A DECREASE, UM, IN THIS VIEW.
OF COURSE, UM, IN FY 21, WE DID SEE A DECREASE, UH, THAT WAS PRIMARILY DUE TO US BEING ABLE TO USE THOSE FEDERAL FUNDING TO OFFSET SOME OF COSTS THAT NORMALLY WOULD HAVE COME FROM THE GENERAL FUND.
SO SLIDE 27, UM, TOUCHING ON THE FINANCIALS FOR THE PENSIONS, UM, IN THE YELLOW, UM, TEXTURED BAR ON THE TOP, UM, THIS IS A REPRESENTATION OF WHAT THE CITY WOULD BE PAYING FROM THE GENERAL FUND FOR ADDITIONAL PENSION CONTRIBUTIONS HAD IT NOT BEEN FOR THE PENSION REFORMS. SO AS YOU CAN SEE, UM, WE ARE, UH, HAVING SOME SIGNIFICANT, UM, BUDGETARY, UM, COST AVOIDANCE AS A RESULT OF THE PENSION REFORMS. AND THE PENSION PLANS ARE IN A BETTER FUNDED STATUS, UM, THAN THEY WERE PRIOR TO THEIR REFORMS. SO AS YOU CAN SEE, ABSENT THE REFORMS, UM, WE WOULD HAVE, WE WOULD'VE HAD TO CONTRIBUTE ABOUT AN ADDITIONAL $300 MILLION IN THIS FISCAL YEAR ALONE.
UM, I JUST WANNA POINT OUT, AS I MENTIONED ON THE POLICE, BECAUSE OF THE CONTRIBUTION, UH, RATE CHANGE, BECAUSE THEY DID HIT 90% FUNDED.
IF YOU LOOK AT THE H POPS, UM, THE H POPS FIGURE ON THE TABLE BELOW THE FY 26 PROPOSED BUDGET CONTEMPLATES ABOUT $149 MILLION, UH, GENERAL FUND PAYMENT TO H OS COMPARED TO, UM, 168 MILLION THE, THE PREVIOUS YEAR.
SO ON THE NEXT SLIDE, THIS GIVES YOU A VISUAL REPRESENTATION OF HOW WE ADDRESS THE BUDGETARY GAP.
SO I KNOW THERE WAS A LOT OF TALK ABOUT THE, IS THE BUDGETARY GAP 200 MILLION? NOW WITH THE JONES CASE, IT'S 300 MILLION, 330 MILLION.
OKAY, SO HOW DID WE GET FROM THE $330 MILLION BUDGETARY GAP THAT WE HAVE DOWN TO THE $107 MILLION THAT WE'RE DRAWING FROM FUND BALANCE? SO THE FIRST AND FOREMOST, THE A HUNDRED MILLION DOLLARS ADDITIONAL, UH, CONTRIBUTION THAT WOULD HAVE BEEN NECESSITATED BY THE RESULT OF THE JONES CASE, WHICH IS, UM, NOW NO LONGER PLANNED FOR IN THIS BUDGET BECAUSE OF THE, UM, PARTNERSHIP AND THE PROPOSED AGREEMENT THAT WE HAVE WITH THE PLAINTIFFS.
UM, THAT $330 MILLION NOW COMES DOWN TO THE 230 MILLION THAT WE STARTED WITH.
SO STARTING FROM THE $230 MILLION GAP, UM, WE DID A SERIES OF, UM, THERE'S A WHOLE SERIES OF DIFFERENT ITEMS BETWEEN REVENUES AND EXPENDITURES THAT ARE DIFFERENT FROM THE TIME WE THOUGHT THE BUDGET GAP WAS $230 MILLION, AND THE TIME WE COME TO PROPOSE THE BUDGET DOWN TO 107 MILLION.
SO THIS SLIDE GIVES A VISUALIZATION OF ALL THE ADJUSTMENTS THAT HAPPEN.
AND THEN THE SLIDE FOLLOWING IT, UM, GIVES YOU THE BREAKDOWN WHERE YOU CAN SEE THE EXACT FIGURES, BUT JUST TO WALK THROUGH THE VISUAL ON THE FAR LEFT SIDE, THE BAR GIVES THAT INITIAL BUDGETARY GAP OF $230 MILLION.
AND THE REVENUE ADJUSTMENTS BOX, WHICH IS THE SHADED BLUE BOX, UM, FROM THE TIME WE HAD THE ASSUMPTION THAT THE GAP WAS GONNA BE 230 MILLION, WE HAVE, UH, INCREASED OUR PROPERTY TAX ESTIMATE BY ABOUT $5 MILLION.
AND THAT ADJUSTMENT WAS DUE TO THE, UH, YOU KNOW, THE RECEIPT OF THE CPI INFORMATION THAT WE GOT IN JANUARY.
SO THAT WAS A $5 MILLION INCREASE.
UH, THEN WE WANTED TO MAKE A LITTLE BIT MORE OF A CONSERVATIVE ASSUMPTION ON SALES TAX BECAUSE WE KNOW WE HAD THE AUDIT, UM, THE AUDIT, UH, THAT'S BEING RE-REVIEWED BY THE STATE.
SO THAT WAS A DECREASE OF ABOUT $5 MILLION.
SO WHEN YOU SEE I'M SAYING A DECREASE OF 5 MILLION OF SALES TAX, IT'S A DECREASE IN THE ESTIMATE OF SALES TAX, BUT WHEN YOU DECREASE THE REVENUE, IT INCREASES THE GAP.
SO THAT'S WHY YOU SEE IT AS AN INCREASE.
FRANCHISE FEES, AGAIN, UM, FRANCHISE FEES TYPICALLY DECREASE YEAR OVER YEAR.
SO YOU SEE, UH, AN ADDITIONAL $3 MILLION DECREASE IN FRANCHISE FEES.
WE'RE SHOWING AN INCREASE IN OTHER REVENUES OF ABOUT $20 MILLION FROM THE TIME WE INITIALLY CAME UP WITH THE 230 MILLION PROJECTION, THE MAJORITY OF THAT, UH, $20 MILLION.
YOU CAN SEE THE FOOTNOTE ON THE BOTTOM OF SLIDE 29 IF YOU HAVE YOUR PAPER COPY.
IT'S PRIMARILY DUE TO AN, UH, UH, IN, UH, INCREASE IN POOLED INTEREST AS WE HAVE NOT REALLY SEEN THOSE INTEREST, UM, RATES COME DOWN TOO MUCH YET.
UH, THAT'S ABOUT ONE POINT, UH, SORRY, 11.7 MILLION OF IT, UH, FIVE AND A HALF MILLION DOLLARS FOR AMBULANCE FEES ABOVE WHAT WE THOUGHT THEY WERE GONNA BE AT THE TIME.
WE CALCULATED THE 230 MILLION, AN INCREASE OF 2 MILLION FOR MOVING VIOLATIONS, 1.8 MILLION FOR INDIRECT COST ALLOCATION AND 550,000 FOR THE NEW SHORT TERM RENTAL, UH, REVENUE.
UM, IT WAS OFFSET BY A DECREASE OF REVENUE FOR, UM, CODE ENFORCEMENT, UH, BECAUSE THAT, UM, CODE ENFORCEMENT, UM, WORK HAS MOVED FROM THE DEPARTMENT OF NEIGHBORHOODS INTO PUBLIC WORK.
[00:40:01]
WHEN THE EXPENDITURE MOVES, THE REVENUES HAVE TO MOVE OUT AS WELL.UM, SO THAT COVERS ALL THE REVENUE ADJUSTMENTS THAT YOU SEE ON THE WATERFALL CHART.
MOVING OVER TO THE, AND I WOULD SAY THAT'S A, JUST TO GIVE YOU A TOTAL OF WHAT ALL THOSE ADD UP TO, THAT'S AN IMPROVEMENT OF REVENUES OF ABOUT $52 MILLION.
SO MOVING ONTO THE GREEN SHADED BAR, THE EXPENDITURE ADJUSTMENTS.
SO WE DID QUITE A LOT OF THINGS THAT SAVED ON EXPENDITURES, BUT WE ALSO DID A FEW THINGS THAT ADD TO THAT GAP AS FAR AS EXPENDITURES FROM THE TIME WE ORIGINALLY CALCULATED THE TWO 20.
SO ONE OF THE THINGS WE ADDED IS THE ADDITIONAL $16 MILLION FOR THE D-D-S-R-F INCREASE, UH, IN ALIGNMENT WITH THE PROPOSED JONES AGREEMENT.
AND THEN WE DID HAVE, UM, AN ASSUMPTION ABOUT WHAT THE HPOU COM A CONTRACT COST WAS GOING TO BE.
OF COURSE, WE ALWAYS ASSUME A, A MODEST ASSUMPTION IN OUR GAP FOR THE OUT YEARS WHEN WE CALCULATE IT.
UM, SO THE $50 MILLION THAT YOU SEE HERE DOES NOT RE REPRESENT THE ENTIRE COST OF THE HPOU CONTRACT FY 26.
IT JUST REPRESENTS THE PORTION ABOVE WHAT WAS FACTORED INTO THE $230 MILLION GAP AT THE TIME WE CALCULATED IT.
UM, AND THEN THE SAME FOR THE HOPE CONTRACT AT THE TIME, WE HAD THE PROPOSED BUDGET LAST YEAR, AND AT THE TIME WE CALCULATED THE $230 MILLION GAP.
WE HAD STILL BEEN IN NEGOTIATIONS WITH HOPE.
SO THERE'S AN ADDITIONAL $9 MILLION THERE THAT THE FINAL AGREEMENT ENDED UP BEING ABOVE WHAT THE ESTIMATE WAS AT THE TIME WE CALCULATED THE 230.
SO GOING ONTO THE EXPENDITURE REDUCTIONS, UM, YOU CAN SEE, UH, THE $29 MILLION FOR THE RETIREMENT, UM, SAVINGS.
THE, THE PENSION SAVINGS, UM, THE STREETLIGHT AND TRAFFIC SIGNAL.
ELECTRICITY IS ABOUT $22 MILLION.
THE CATEGORY MANAGEMENT THAT I MENTIONED IS ABOUT 17.5 MILLION OR 18 MILLION.
THE DEPARTMENTAL BUDGET REDUCTIONS WERE 16 MILLION.
THE DELAY OF THE IMPLEMENTATION OF THE EP TRUST 13 MILLION.
THE 3 1 1 CONSOLIDATION BETWEEN, UM, A RA AND PUBLIC WORKS 8 MILLION.
UH, THE CODE ENFORCEMENT CONSOLIDATION WAS, UH, $8 MILLION DECREASE IN EXPENDITURES, BUT AS I MENTIONED, WE HAVE TO OFFSET THAT WITH THE REVENUES AS WELL.
SO WHEN IT'S A $8 MILLION DECREASE IN EXPENDITURES AND ABOUT 2.6 MILLION IN REVENUES OFFSETTING, AND THEN THERE'S A HOST OF, UH, OTHER SMALL ITEMS THAT, UH, YOU SEE BETWEEN TWO AND $3 MILLION.
SO ALL OF THOSE ADJUSTMENTS TO THE REVENUES AND THE EXPENDITURES TOGETHER BRING THE GAP DOWN TO 107 MILLION.
SO AS I MENTIONED ON SLIDE 29, THIS GIVES YOU ALL OF THE, UM, THE MORE DETAILED, UH, COST ESTIMATES THAT ARE REFLECTED IN THE WATERFALL CHART IN THE SLIDE BEFORE.
OKAY, ON SLIDE 30, UM, I WANNA TALK MORE SPECIFICALLY ABOUT THE DEPARTMENTAL BUDGET REDUCTIONS.
UM, THAT TOTAL, THE $16 MILLION IN SAVINGS, THAT WAS ONE OF THE ITEMS THAT HELPED US TO REDUCE THE GAP DOWN.
UM, SO FOR THOSE $16 MILLION IN SAVINGS, THIS IS THE BREAKOUT BY DEPARTMENT, AND AS I MENTIONED, EACH OF THOSE DEPARTMENTS IS GOING TO, UM, GO INTO DETAIL ABOUT, UM, WHAT THOSE SAVINGS MEAN TO THEIR DEPARTMENTS AND, UM, MORE SPECIFICS ABOUT THOSE.
UM, BUT YOU SEE THE MAJORITY OF THE REDUCTION IS IN THE PARKS DEPARTMENT, UM, GENERAL SERVICES DEPARTMENT, HEALTH LIBRARY COURTS, AND SO ON.
OKAY, ON SLIDE 31, UM, THIS IS THE SNAPSHOT OF THE VOLUNTARY RETIREMENT INCENTIVE, UM, OPTION.
THIS IS A SNAPSHOT OF ALL FUNDS, AND THIS IS THE, ACROSS ALL OF THE DEPARTMENTS, THE NUMBER OF ELIGIBLE, UM, PARTICIPANTS FOR THE RETIREMENT OPTION.
I'M SORRY, I HAVEN'T, I KNOW THAT'S MY FAULT.
THE NUMBER OF ELIGIBLE, UM, EMPLOYEES FOR THEIR RETIREMENT PLAN WAS ABOUT 3000.
UM, AS OF THE END OF THE SIGNUP PERIOD, WHICH WENT THROUGH APRIL 28TH, UH, THE NUMBER OF THOSE ACCEPTING THE OPTION WAS OVER 1000, WHICH IS A 35% ACCEPTANCE RATE.
UM, THE ADMINISTRATION HAS LOOKED AT, AND I KNOW WE TALKED ABOUT IN OUR, UH, PRESENTATION WHEN, UM, THE DEPUTY CHIEF OF STAFF, UH, STEVEN, DAVID AND I WERE HERE MAYBE A MONTH AGO, UM, NOT ALL OF THE POSITIONS THAT, UM, NOT ALL OF THE JOB CLASSIFICATIONS FOR THE INDIVIDUALS THAT TOOK THE OPTION, UM, ARE GOING TO BE REFILLED.
OF COURSE, WE KNOW THAT THERE ARE QUITE A NUMBER OF CRITICAL POSITIONS THROUGHOUT THE CITY, PARTICULARLY FRONTLINE POSITIONS 3 1 1 9, 1 1, UM, SOLID WASTE TRUCK DRIVERS.
UM, THERE'S A LIST OF ABOUT 40, 42 JOB CLASSIFICATIONS THAT FALL INTO THE FAMILY OF POSITIONS THAT ARE GOING TO BE BACKFILLED.
[00:45:01]
TOTAL, THAT ACCEPTED ABOUT 882 OF THOSE FALL OUTSIDE OF THOSE, UH, CLASSIFICATIONS THAT ARE SLATED TO BE BACKFILLED.UM, SO BASED ON THAT, WE ARE PLANNING FOR A SAVINGS OF ABOUT $99 MILLION ON AN ANNUAL BASIS.
AND THAT INCLUDES THE COST OF THE SALARIES AS WELL AS THE, UM, BENEFITS, THE PENSION, THE FICA, UH, COST.
UM, SO YOU SEE IT BROKEN DOWN BY DEPARTMENT ACROSS ALL FUNDS, THE LARGEST DEPARTMENT.
UM, AS FAR AS THE NUMBER OF THOSE ACCEPTING, UM, WAS THE HOUSTON PUBLIC WORKS DEPARTMENT, UH, 249 FTES, UM, ACCEPTED, AND THERE'LL BE, UH, ANNUAL SAVINGS OF ABOUT $28.6 MILLION FOR THAT DEPARTMENT.
AND YOU CAN SEE ALL THE FIGURES FOR THE, FOR THE DEPARTMENTS BELOW.
UM, FOR THE LAST BAR, WE DID GROUP THE REMAINING DEPARTMENTS.
UM, WE HAVE A LOT OF DEPARTMENTS.
UM, AND FOR THOSE REMAINING DEPARTMENTS, IT'S ABOUT 80 FTES AND ABOUT $10.8 MILLION.
THE NEXT SLIDE DETAILS THE GENERAL FUND POSITIONS.
UM, SO OUT OF THE 3000 POSITIONS THAT WERE ELIGIBLE, 1000 OF THOSE ARE IN THE GENERAL FUND AND OUT OF THE ACCEPTANCES.
SO FOR PURPOSES OF PROPOSING THE BUDGET, UM, AS YOU KNOW, WE WERE DOING GENERAL APPROPRIATIONS AND WORKING ON THE BUDGET AT THE SAME TIME THAT THE SIGNUP PERIOD WAS HAPPENING.
SO WE TOOK A SNAPSHOT OF THOSE ACCEPTING THE OPTION AS OF APRIL 20TH FOR PURPOSES OF, UH, WE CALL IT A TARGET LETTER FOR PURPOSES OF, UH, GIVING THE DEPARTMENTS.
BASICALLY THIS IS THE BUDGET THAT YOU HAVE TO WORK WITH FOR NEXT YEAR.
SO FOR PURPOSES OF PROVIDING THAT BUDGET TARGET TO THE GENERAL FUND DEPARTMENTS, WE LOOKED AT THE NUMBER OF THOSE THAT ACCEPTED THE RETIREMENT OPTION AS OF APRIL 20TH.
AS OF THAT POINT IN TIME, THERE WERE 316 GENERAL FUND, UH, POSITIONS OF THOSE 279 ARE NOT ELIGIBLE FOR BACKFILL BASED ON THAT CRITICAL POSITIONS LIST.
UM, AND SO AS A RESULT OF THAT, UH, WHAT WE HAVE PROGRAMMED INTO THIS PROPOSED BUDGET IS A BUDGETARY SAVINGS OF ABOUT $29 MILLION FOR THOSE 279 POSITIONS.
AND YOU CAN SEE THE BREAKDOWN BY DEPARTMENT BELOW SLIDE 39, SORRY, 33.
UM, SO THIS IS A LOOK AT OUR TOTAL, UH, GENERAL FUND UNASSIGNED ENDING FUND BALANCE BASED ON THE $107 MILLION DRAW FROM FUND BALANCE TO CLOSE THE GAP.
THE FY 26 PROPOSED BUDGET, UH, HAS A REMAINING UNASSIGNED FUND BALANCE OF $273 MILLION.
UM, AND THIS IS, UM, 10.8% OF EXPENDITURES, LET LESS DEBT SERVICE AND PAY AS YOU GO.
UM, THE $189 MILLION, UH, IS WHAT WOULD BE REQUIRED FOR US TO HAVE IN THE FUND BALANCE.
SO IT REPRESENTS AN $84 MILLION, UH, SURPLUS ABOVE THE 7.5%.
AND I DID WANNA POINT OUT THE FY 25 ESTIMATE.
I KNOW I REVIEW THIS EVERY MONTH IN THE MONTHLY FINANCIAL REPORT, BUT, UM, THE, THE BAR NOT THE RIGHT MOST, BUT THE SECOND TO THE RIGHT, THE FY 25 ESTIMATE, YOU SEE THE FUND BALANCE FOR THE CURRENT FISCAL YEAR IS ESTIMATED TO BE 14.7% OF EXPENDITURES LESS DEBT.
AND I DID WANNA POINT OUT THAT AT THE TIME WE ADOPTED THE FY 25 BUDGET, UM, THAT FUND BALANCE, UH, THE PERCENTAGE WAS ABOUT 10.9%, WHICH IS ROUGHLY WHERE WE'RE PROPOSING THE BUDGET TO BE THIS YEAR.
UH, SINCE THE TIME WE ADOPTED THE FY 25 BUDGET, UH, WE'VE HAD A SERIES OF INCREASED REVENUES, UM, OFF PARTIALLY OFFSET BY INCREASED EXPENDITURES.
AND WE ALSO SAW AN INCREASE TO THE FY 24 ENDING FUND BALANCE THAT MADE THE FY 25 BEGINNING FUND BALANCE HIGHER THAN WE THOUGHT IT WAS GONNA BE AT THE TIME WE PROPOSED THE BUDGET.
SO THAT'S WHY YOU SEE AN IMPROVEMENT FROM THE 10.9%.
IT WAS AT THE TIME WE ADOPTED THE BUDGET TO WHERE IT IS, UH, TODAY FOR FY 25.
SO NOW WE'LL MOVE ON TO THE GENERAL FUND FIVE YEAR FORECAST.
SO JUST AS AN OVERVIEW, THE FIVE YEAR FORECAST SHOWS THE, UH, PROJECTED BUDGET GAP RANGE BASED ON, UM, A SERIES OF CONSERVATIVE AND OPTIMISTIC GROWTHS IN REVENUE.
UM, NONE OF THE OPTIONS INCLUDE ONE-TIME LAND SALES.
UM, THE OPTIONS, UH, THAT, UH, WE SHOW AS FAR AS THE, WHAT WE CALL THE BASELINE ASSUMPTION ASSUMES, UM, THE PROP ONE AND H LIMITATIONS AS WELL AS HOLDING THE, UH, THE SENIOR DISABLED EXEMPTION 260,000.
ALL OF THE, UM, ALL OF THE SCENARIOS ASSUME THAT WE ARE CONTRIBUTING THE PENSION COSTS BASED ON THE CORRIDOR AND COMPLIANCE WITH THE STATE STATUTE.
UM, AND THE EXPENDITURE ASSUMPTIONS WE'RE USING INCLUDE, UM, ALL OF THE CONTRACTUAL ESCALATORS THAT WE HAVE IN PLACE CURRENTLY.
SO ON SLIDE 36, THE KEY ASSUMPTIONS FOR THE REVENUE ON THE DIFFERENT, UM, OPTIONS YOU'RE GOING TO SEE, UM, WE HAVE SOME DIFFERENT REVENUE GROWTH ASSUMPTIONS FOR PROPERTY TAX BASED ON A VARIETY OF, UH, CPI AND POPULATION GROWTH
[00:50:01]
SCENARIOS, DEPENDING ON IF WE HAVE A HIGHER CPI OR LOWER CPI AND HIGHER AND LOWER POPULATION GROWTH.SO YOU'LL SEE A RANGE OF PROPERTY TAX, UM, UH, GROWTH ANYWHERE FROM, FROM 2.1 TO 4% IN THE OUT YEARS FOR SALES TAX GROWTH.
UM, YOU'LL SEE A VARIETY OF OPTIONS ANYWHERE FROM 1.9% GROWTH TO 4.8% GROWTH IN THE OUT YEARS.
FRANCHISE FEES, I KNOW WE'VE, UM, DISCUSSED IT ALREADY TODAY, BUT FRANCHISE FEES GENERALLY TREND TO GENERALLY TREND DOWN OVER TIME.
SO THAT'S WHY YOU SEE A, A DECREASE IN FRANCHISE FEES IN THE OUT YEARS.
AND, UM, OTHER REVENUES WE BASICALLY HAVE BASED THOSE ON HISTORICAL GROWTH.
I KNOW YOU SEE THE NEGATIVE 11% FOR FY 26 PROPOSED BUDGET.
UM, THAT'S PRIMARILY DUE TO, UM, LIKE I MENTIONED THE, EXCUSE ME, THE ARPA REVENUE.
WE NO LONGER HAVE IN THE FY 26 AS WELL AS THE DON CODE ENFORCEMENT REVENUE, UM, THAT IS NOW SITTING IN PUBLIC WORKS.
AND NONE OF THE, UM, NONE OF THE SCENARIOS ASSUME ANY ONE TIME SALE OF CAPITAL ASSETS.
SO FOR THE KEY ASSUMPTIONS FOR THE EXPENDITURE SLIDES TOUCHING ON THE PERSONNEL, UM, FOR THE FY 26 PROPOSED, OF COURSE, WE HAD THE 10% PROPOSED HPOU CONTRACTUAL INCREASE FIRED THE 3%, UH, CONTRACTUAL INCREASE, MUNICIPAL 3.5%, AND IN THE FORECASTED OUT YEARS, THE POLICE CLASSIFIED IS BASED ON THE PROPOSED CONTRACT.
UM, THE FIRE CLASSIFIED IS BASED ON THE COLLECTIVE BARGAINING AGREEMENT, ABSENT OF THE ADDITIONAL REVENUES.
AND THE MUNICIPAL EMPLOYEE IS BASED ON THE HOPE MEET AND FIRE AGREEMENT FOR THE PENSION CONTRIBUTIONS.
UM, FOR THE MUNICIPAL PLAN H MEPS WE'RE, UH, ESTIMATING THAT WE'RE GONNA CONTRIBUTE AT THE MIDPOINT OF THE CORRIDOR, UM, IN ADDITION TO THE LEGACY LIABILITY PAYMENT, UM, IN COMPLIANCE WITH STATE STATUTE.
AND THEN FOR THE POLICE PENSION PLAN, AS YOU SEE, UM, THE FY 26 BUDGET IS BASED ON THE MINIMUM OF THE CORRIDOR, BUT IN THE OUT YEARS, WE HAVE PROJECTIONS, UH, A RANGE OF ASSUMPTIONS, UM, THANK YOU, BASED ON THE CORRIDOR MINIMUM AND MIDPOINT AS, AS WELL AS FOR THE FIRE FOR HEALTH BENEFITS, YOU SEE A RANGE, UM, FROM A 4% TO A 5% GROWTH.
AND THE DEBT SERVICE, THE LINE YOU SEE AT THE BOTTOM IS BASED ON THE, UM, CURRENT DEBT SERVICE, UM, PROJECTIONS THAT WE HAVE, AS WELL AS THE PAY AS YOU GO TRANSFERS.
OKAY, SO ON SLIDE 38, THIS GIVES THE GRAPHIC REPRESENTATION OF WHERE WE SEE THE GAP RANGE TO BE BASED ON.
AND AGAIN, THIS IS AN ILLUSTRATIVE EXAMPLE, UM, WITH PROJECTIONS ABOUT, UH, WHAT OUR CURRENT EXPENDITURE PROJECTIONS ARE AND VARIOUS, UH, REVENUE PROJECTION ESTIMATES.
SO FOR FY 25, YOU SEE WHERE WE WERE STARTING OUT, OF COURSE, ALL THE SCENARIOS ARE THE SAME AS WE'RE, UH, IN THAT CURRENT FISCAL YEAR.
ABOUT $185 MILLION GAP IS WHAT WE ARE ENDING UP AT FOR FY 25 AS FAR AS HOW MUCH WE'LL HAVE TO DRAW FROM FUND BALANCE FOR THAT YEAR.
FOR FY 26, THE PROPOSED BUDGET IS A, UH, ASSUMING TO DRAW $107 MILLION FROM THE FUND BALANCE.
THAT'S OUR BASELINE GAP, THAT'S WHAT WE CALL IT.
UM, AND THEN IN OUR REVENUE ASSUMPTIONS AND THE OPTIMISTIC NUMBER ONE, TWO, AND THREE, WE'RE NOT ASSUMING ANY CHANGES TO THE REVENUE ASSUMPTIONS FOR THE CURRENT FISCAL YEAR.
WE DO GIVE A PESSIMISTIC VIEW, UM, OF WHAT OUR REVENUES COULD BE FOR FY 26, WHERE WE JUST SEE, UM, THAT'S BASED ON A LOWER, UM, SALES TAX, UH, COLLECTION, UH, VERSUS WHAT WE'RE PROPOSING.
SO YOU SEE A SLIGHT INCREASE TO THE GAP THERE IN THAT OPTION.
SO MOVING ON TO THE FY 27 YEAR, AND I GUESS WE CAN TALK THROUGH THE DIFFERENT, UM, THE DIFFERENT SCENARIOS FOR THE BASELINE.
YOU SEE THE GREEN LINE, THAT IS THE BASELINE ASSUMPTION, UM, BASED ON WHAT WE THINK THE REVENUES AND EXPENDITURES ARE TODAY.
SO AGAIN, THAT BUDGETARY GAP FOR THE BASELINE, UM, SCENARIO IS $107 MILLION FOR THIS FISCAL YEAR.
YOU SEE IT INCREASING TO 226 MILLION IN FY 27, UM, ON UP TO 462 MILLION BY FY 30.
SO PUTTING THIS INTO, UH, A FRAME OF REFERENCE COMPARED TO WHERE WE WERE AT THIS TIME LAST YEAR, AT THIS TIME LAST YEAR, UM, OUR BUDGET HERE, OUR ASSUMED BUDGETARY GAP BY THE FIFTH YEAR, UH, WAS BETWEEN THREE AND $400 MILLION FOR THE FIFTH YEAR.
UH, THE MAIN DRIVER OF THE DIFFERENCE IS THE, UH, INCLUDED, UH, THE INCREASE IN THE TRANSFER TO D-D-S-R-F, THE A HUNDRED MILLION DOLLARS ADDITIONAL NECESSITATED BY THE JONES AND WATSON, UM, LITIGATION.
SO MOVING ON TO THE OPTIMISTIC SCENARIO IN THIS SCENARIO, BASICALLY WE'RE ASSUMING A HIGHER SALES TAX AND PROPERTY TAX GROWTH BASED ONLY ON A CHANGE TO THE INFLATION.
SO STILL IN COMPLIANCE WITH THE PROPOSITION ONE, JUST REALLY DEPENDING ON THE INFLATION, UH, THAT WE GET, WILL REALLY DICTATE WHAT THAT PROPOSITION ONE AMOUNT WILL BE.
[00:55:01]
SO YOU SEE THAT'S WHAT THE OPTIMISTIC SCENARIO NUMBER ONE IS.UH, SO YOU SEE BASED ON HIGHER SALES TAX AND PROPERTY TAX GROWTH, AGAIN, BASED ON THE INFLATION ONLY STILL IN COMPLIANCE WITH PROP ONE, UM, IT WOULD DROP THE, THE FIFTH YEAR GAP, UH, FROM 462 MILLION TO 329 MILLION.
THE OPTIMISTIC SCENARIO NUMBER TWO, UM, JUST TAKES, JUST BUILDS ON OPTIMISTIC SCENARIO NUMBER ONE BY SHOWING WHAT THE BUDGETARY GAP WOULD BE IF WE HAD AN ADDITIONAL A HUNDRED MILLION DOLLARS A YEAR IN REVENUE.
AND OPTIMISTIC NUMBER THREE BUILDS ON OPTIMISTIC SCENARIO NUMBER ONE, BASICALLY WITH AN ADDITIONAL $200 MILLION IN REVENUE ON TOP OF WHAT SCENARIO, OPTIMISTIC SCENARIO NUMBER ONE SHOWS.
AND AGAIN, THE PESSIMISTIC SCENARIO, THAT'S JUST USING A MORE CONSERVATIVE ASSUMPTION ON SALES TAX AND, UM, PROPERTY TAX VERSUS THE BASELINE.
SO IN TERMS OF ADDRESSING THE GAP, WHAT'S NEXT ON SLIDE 39, OF COURSE WE KNOW WE HAVE THE PROPERTY TAX, UH, REVENUE CAP IN THE CITY CHARTER AND IN THE STATE LEGISLATION AS WELL.
WE KNOW, UM, THAT FIRE AND POLICE COSTS MAKE UP THE MAJORITY OF OUR GENERAL FUND EXPENDITURES, EXCLUDING DEBT AND PAY AS YOU GO.
WE ALSO KNOW WE HAVE TO KEEP OUR EYE ON ANY POTENTIAL LEGISLATIVE CHANGES, UH, THAT COULD FURTHER IMPACT SALES TAX OR PROPERTY TAX SPECIFICALLY.
SO IN THE SHORT TERM, UH, WE'RE PLANNING TO IMPLEMENT THE RECOMMENDATIONS FROM THE CITYWIDE EFFICIENCY ASSESSMENT THAT, THAT HAVE ALREADY BE ALREADY BEGUN.
UM, AS WE KNOW, UH, THE DEPARTMENTS ARE ALREADY WORKING ON IMPROVING THEIR SPAN OF CONTROL, THEY'RE REDUCING THEIR NUMBER OF LAYERS IN THEIR ORGANIZATION, LOOKING AT THE NUMBER OF DIRECT REPORTS TO THE MANAGERS.
UH, WE ALSO KNOW THAT, UM, WITHIN THE LAST COUPLE WEEKS WE BROUGHT THE, UM, ERNST AND YOUNG AN ADDITIONAL, UM, TASK ORDER FOR THEM TO ASSIST US WITH IMPLEMENTING THE CATEGORY MANAGEMENT.
SO THAT'S GONNA BE A LONG TERM PROJECT, SHORT AND LONG TERM PROJECT FOR US.
WE'RE GONNA CONTINUE OUR HIRING CONTROL AS WE HAVE A VACANCY, UM, ELIMINATE VACANCIES AND HAVE A HIRING FREEZE IN PLACE.
UM, UNTIL, UH, SUCH TIME THAT DEPARTMENTS HAVE COMPLETED THEIR REORGANIZATION PLAN, ALL THOSE HIRINGS ARE GONNA BE, UM, VETTED AND OF COURSE ENSURE THERE'S BUDGETARY AVAILABILITY.
WE'RE GONNA CONTINUE, UH, WITH OUR COLLABORATION WITH OTHER LEVEL OF GOVERNMENT AS WELL AS COLLABORATION, UM, WITHIN OTHER DEPARTMENTS AT THE CITY.
SO I KNOW WE TALKED ABOUT IN THE PRESS CONFERENCE YESTERDAY, BUT INCLUDED IN THIS PROPOSED BUDGET IS CONSOLIDATING A LOT OF THOSE, UM, FUNCTIONS LIKE HR, IT AND FINANCE THROUGHOUT THE CITY.
WE'RE GONNA CONTINUE TO LOOK AT DEVELOPING, UM, NEW REVENUE SOURCES IF AVAILABLE.
WE'RE ALSO GOING TO LOOK AT EVALUATING THE FEES FOR REVENUES THAT WE ALREADY CURRENTLY HAVE.
SO WE HAVE A CITYWIDE FEE SCHEDULE, UM, THAT WE REVIEW THE FEES ON A REGULAR CYCLE TO SEE IF ANY NEED TO BE, UH, READJUSTED BASED ON THE COST OF PERFORMING THOSE SERVICES.
WE'RE GOING TO CONTINUE TO IMPLEMENT THOSE CITYWIDE EFFICIENCY, UH, IMPROVEMENTS, LIKE I MENTIONED WITH CATEGORY MANAGEMENT.
IT'S NOT JUST A ONE YEAR EFFORT.
IT'S GONNA HAVE TO BE A CONTINUAL EFFORT OVER THE COURSE OF MANY FISCAL YEARS.
AND WE'RE GONNA CONTINUE TO COLLABORATE, UM, WITH OUR OTHER JURISDICTIONAL PARTNERS.
THAT CONCLUDES MY PRESENTATION DIRECTOR.
THAT WAS AN HOUR SOLID OF TALKING.
THE AMOUNT OF INFORMATION IN YOUR HEAD IS INCREDIBLY IMPRESSIVE.
NOT EVEN A DRINK OF WATER IN THAT HOUR.
UM, WE HAVE BEEN JOINED COLLEAGUES BY COUNCIL MEMBER ABBY CAYMAN.
CONGRATULATIONS ON YOUR AWARD TODAY FROM ABDA AND COUNCIL MEMBER WILLIE DAVIS AND STAFF.
UM, I'M GONNA GO STRAIGHT TO QUESTIONS.
COUNCIL MEMBER POLLARD, THANK YOU CHAIR, AND THANK YOU DIRECTOR FOR YOUR, UM, PRESENTATION.
SO WE, WE'LL, WE'LL START WITH THIS BALLOT, UH, THIS BUDGET NOT BEING A STRUCTURALLY BALANCED BUDGET BECAUSE WE'RE USING, UM, RECURRING REVENUES.
WELL, WE'RE, WE'RE DRAWING DOWN $107 MILLION OFF OF OUR FUND BALANCE, UH, TO BE ABLE TO BUDGET FOR, UH, THIS PROPOSAL.
SO OUR, OUR REVENUES ARE NOT MEETING OUR EXPENDITURES.
SO WE'RE STARTING OFF STRUCTURALLY IMBALANCED FROM THE JUMP.
IS THAT, IS THAT CORRECT? I WOULD SAY THAT THIS IS A, A BALANCED BUDGET, BUT NOT A STRUCTURALLY BALANCED BUDGET.
SO, UM, ONE THING I WANTED TO REEMPHASIZE IS THAT AT THE TIME WE DID THE FY 25 PROPOSED BUDGET, AT THAT TIME, WE DREW ALMOST $200 MILLION OF FUND BALANCE DOWN TO CLOSE THE GAP LAST YEAR.
WE'VE BEEN ABLE TO CUT THAT DRAW FROM FUND BALANCE IN HALF, UM, BASED ON THE ADDITIONAL REVENUES THAT WE'RE ASSUMING AS WELL AS THE, UH, EXPENDITURE REDUCTIONS, UH, THROUGH ALL THOSE INITIATIVES.
SO, UM, YOU'RE CORRECT, IT'S NOT A STRUCTURALLY BALANCED BUDGET, BUT IT IS A LARGE STEP IN THAT DIRECTION.
[01:00:01]
THE REVENUE PROJECTIONS, AND WHEN YOU LOOK AT THE FIVE YEAR FORECAST, WHEN YOU'RE AT A BASELINE, IT'S ES IT'S ESTIMATING THAT EACH FISCAL YEAR WE'RE GONNA HAVE, UH, 200, $300 MILLION PLUS DEFICIT.AND SO, WAS THERE NOTHING PROPOSED OR THOUGHT OF TO SAY, UM, WHAT COULD BE DONE TO ENSURE THAT IN THE OUT YEARS WE'RE BUDGETING SO THAT WE ARE NOT ALWAYS FACED WITH A MULTI HUNDRED MILLION DOLLAR DEFICIT? SO I THINK WITH THE MAYOR, UM, AND I, I KNOW HE TRIED TO REITERATE HIS MESSAGE YESTERDAY IN THE PRESS CONFERENCE.
UM, HIS NUMBER ONE PRIORITY IS MAKING SURE THAT WE'RE USING THE DOLLARS THAT WE DO HAVE AS EFFICIENTLY AS WE CAN.
SO, UH, COMPLETING, YOU KNOW, THE ERNST AND YOUNG CITYWIDE EFFICIENCY STUDY, FINDING ALL THOSE EFFICIENCIES THAT WE CAN, UM, REDUCING THE DUPLICATION BY THE CONSOLIDATIONS FROM THE DEPARTMENTS, COLLABORATING WITH THE OTHER LEVELS OF GOVERNMENT.
UM, WE SEE THAT AS THE THING THAT HAS TO HAPPEN FIRST AND FOREMOST, TO MAKE SURE THAT WE'RE USING THE, THE MONEY THAT WE DO HAVE AS EFFICIENTLY AS WE CAN.
UM, AND I THINK THE MAYOR'S BEEN CLEAR THAT THAT'S HIS FIRST PRIORITY.
DO THAT FIRST AND THEN BASED ON THAT, UH, IN THE FUTURE, UM, YOU KNOW, WE HAVE TO TALK TO THE CITIZENS ABOUT WHAT TYPE OF SERVICES DO THEY WANNA HAVE BASED ON THE RESOURCES THAT WE HAVE AVAILABLE TO US.
SO I THINK THAT'S A, AN IMPORTANT DISCUSSION AND I THINK IT'S A, A, YOU KNOW, A MORE, UH, MEDIUM TO LONG TERM DISCUSSION.
I THINK WE'VE, BASED ON THE, ALL THE WORK DONE IN FY 25 AND THIS PROPOSED BUDGET, I BELIEVE THAT WE'VE DONE THAT FIRST STEP, WHICH IS BEING AS EFFICIENT AS WE CAN BE WITH THE MONEY THAT WE DO HAVE.
SO WE HAVE $84 MILLION ABOVE THE 7.5 THAT'S PROPOSED IN THIS.
BUT IN THE BUDGET STABILIZATION FUND, WE'RE NOT ACCOUNTING FOR, UH, THE $25 MILLION MINIMUM THAT IS, THAT IS, I GUESS, RECOMMENDED TO HAVE, OR WE CAN DEFER THAT TO NEXT YEAR.
SO THAT MEANS THAT WE'RE, WE'RE MINUS 13 MILLION ON THAT.
SO IF WE WERE TO TAKE THE 25 MILLION INTO ACCOUNT WITH THE 84, IT REALLY WOULD ONLY PUT US AT ABOUT $71 MILLION ABOVE THE 7.5.
IS THAT ANYWHERE CLOSE TO WHERE WE'VE BEEN IN THE PAST AS IT PERTAINS TO, UM, THE AMOUNT OF MONEY THAT WE HAVE IN OUR GENERAL FUND? AND IF WE'RE AT THAT AMOUNT, IF WE'RE ONLY AT 70 MILLION, IF YOU TAKING THAT, TAKE THAT INTO ACCOUNT ABOVE THE 7.5, AREN'T WE ALMOST CHECK TO CHECK LIVING CHECK TO CHECK ABOVE THE 7.5 ON A, ON A MONTHLY BASIS.
SO LET ME TOUCH ON THE BUDGET STABILIZATION FUND FIRST.
SO THE, UM, THE MONEY THAT WE ARE, UM, REPLENISHING THE BUDGET STABILIZATION FUND WITH IS COMING FROM OUR REIMBURSEMENTS THAT WE'VE GOTTEN THROUGH OUR, OUR FEDERAL AND STATE PARTNERS.
SO OUR ASSUMPTION FOR HOW WE'RE GOING TO COMPLETE REPLENISHMENT OF THE BUDGET STABILIZATION FUND WILL COME THROUGH THOSE DISASTER REIMBURSEMENTS, NOT NECESSARILY FROM GENERAL FUND FUND BALANCE.
UM, AS YOU MENTIONED, WE HAVE UNTIL FY 27 TO REFILL IT.
UM, SO THAT'S SOMETHING WE'RE GONNA BE LOOKING AT OVER THE COURSE OF THE NEXT YEAR.
UM, IF YOU, UM, IF YOU LOOK AT SLIDE 33, UM, THIS GIVES THE HISTORICAL VIEW OF THE GENERAL FUND UNASSIGNED UNASSIGNED FUND BALANCE.
UM, AS YOU MENTIONED, OF COURSE, YOU KNOW, IN, IN PAST YEARS, IN FISCAL YEAR 22 AND 23, WHEN WE DID HAVE, UM, SIGNIFICANT FEDERAL FUNDING, THERE WAS A SUBSTANTIAL AMOUNT OF FUND BALANCE IN EXCESS OF OUR SEVEN POINT A HALF PERCENT.
UM, WHEN YOU LOOK AT THE YEARS, UM, PRIOR TO COVID, YOU KNOW, THE FUND BALANCE, YOU SEE THE, UM, BASED ON THE ORANGE BAR, UM, THE UNASSIGNED UNASSIGNED FUND BALANCE BASED ON WHERE WE ARE NOW, IS ROUGHLY KIND OF IN LINE WITH WHERE WE WERE, UH, PRIOR TO COVID.
AND, AND FINALLY, BEFORE YOU PUT ME BACK IN THE QUEUE, UM, WE WENT SUBSTANTIALLY OVER IN THIS FISCAL YEAR AS IT PERTAINS TO OVERTIME WHEN YOU BUDGETED FOR OVERTIME FOR POLICE, FIRE, AND SOLID WASTE IN THIS PARTICULAR BUDGET.
UM, DO WE ACCOUNT FOR THE AMOUNT OF MONEY THAT WE SPENT THIS YEAR? OR HOW WAS THAT, UH, PROPOSED? WE'RE NOT FULLY ACCOUNTING FOR THE AMOUNT OF MONEY THAT WE SPENT IN FY 25.
UM, WE'RE REALLY BASING OUR OVERTIME BUDGET, UM, BASED ON HOW WE BUDGETED IN THE PREVIOUS YEAR.
WE KNOW THAT, UM, WITH THE, UH, CADET CLASSES, UH, MORE BEING BUDGETED AND MORE CADETS COMING ONLINE, AS WE INCREASE THOSE, UM, CADETS AND INCREASE THOSE CLASSIFIED COMING ONLINE, AND I GUESS I'M TALKING CLASSIFIED, I'M TALKING ABOUT POLICE AND FIRE, UH, AS THOSE COME ONLINE, UM, THAT SHOULD RESULT IN A DECREASE OF OVERTIME COSTS NEEDED.
[01:05:01]
UM, THE CHIEFS COME AND DO THEIR DEPARTMENT BUDGET WORKSHOPS, THEY'RE GOING TO BE, UM, TALKING ABOUT THAT AS WELL.SO THAT'LL BE HAPPENING IN THE NEXT COUPLE WEEKS.
UM, AS FAR AS SOLID WASTE, I KNOW THE NEW INTERIM SOLID WASTE DIRECTOR, UM, ALSO HAS, UM, SEVERAL NEW IDEAS IN ORDER TO ASSIST WITH OVERTIME THAT I THINK HE'LL BE, UM, LAYING OUT IN HIS DEPARTMENT BUDGET WORKSHOP AS WELL.
BUT WAS THE BUDGET, WAS THE OVERTIME DOLLARS THE SAME AS PROPOSED IN IN 25, OR DID THEY DECREASE? THEY DIDN'T DECREASE FROM THE 25 PROPOSED.
COUNCIL MEMBER, VICE MAYOR, PRO TEM PECK, THANK YOU CHAIR AND THANK YOU DIRECTOR FOR THE PRESENTATION AND ALL OF THE WORK THAT HAS GONE INTO THIS.
I THINK IN ALL OF THE YEARS THAT I'VE WORKED AT THE CITY, UM, THIS IS PROBABLY ONE OF THE BEST BUDGETS THAT I'VE SEEN.
THERE'S STILL A LOT OF WORK LEFT TO DO, BUT I THINK THAT IT'S MOVING US IN A REALLY GOOD DIRECTION AND PUTTING MONEY, UM, IN PLACES WHERE I THINK HOUSTONIANS WOULD LIKE TO SEE THEIR MONEY BEING SPENT, YOU KNOW, PUBLIC SAFETY, INFRASTRUCTURE, SOLID WASTE.
SO I'M REALLY EXCITED ABOUT THAT.
UM, FOR LONG-TERM LIABILITIES, WHERE ARE WE AS IN TERMS OF, UM, DEFERRED MAINTENANCE AND DOES THIS BUDGET ADDRESS THAT AT ALL? SO IN THIS BUDGET, UM, WE ARE, UM, TRANSFERRING THE AMOUNT TO THE MAINTENANCE RENEWAL AND REPLACEMENT FUND IN COMPLIANCE WITH THE FINANCIAL POLICIES.
SO AS YOU PROBABLY RECALL, THE FINANCIAL POLICY STATES THAT WE TRANSFER, UM, A CERTAIN PERCENT OF OUR ASSET VALUE INTO THE MAINTENANCE RENEWAL AND REPLACEMENT FUND.
UM, SO WE ARE, I BELIEVE, AT 2% OF OUR, UH, PERCENT OF OUR ASSET VALUE THAT WE'RE TRANSFERRING INTO THE MAINTENANCE RENEWAL AND REPLACEMENT FUND.
UM, SO WE ARE ADDING, I OFF THE TOP OF MY HEAD, I THINK IT'S ABOUT AN ADDITIONAL $11 MILLION COMPARED TO THE PREVIOUS YEAR.
DO WE HAVE AN UPDATED REPORT ON WHAT THAT NUMBER IS IN DEFERRED MAINTENANCE? UM, WE CAN CERTAINLY GET WITH GENERAL SERVICES ON THAT.
I KNOW, UM, THE NUMBER WAS ROUGHLY AROUND, I THINK $900 MILLION IN DEFERRED MAINTENANCE AND GENERAL FUND FACILITIES ONLY, UM, ABOUT A YEAR AGO.
SO WE'LL BE SURE TO UPDATE THAT AND WE'LL PROBABLY INCLUDE IT IN OUR PRESENTATION.
WE PROPOSED THE CIP, UM, NEXT MONTH.
SO, UM, I DO KNOW THAT GENERAL SERVICES DEPARTMENT IS ALSO WORKING ON, UH, CITYWIDE FACILITIES MASTER PLAN.
UM, THEY'VE RECENTLY PUT OUT A RFP FOR THAT, UH, TO SELECT AN OUTSIDE VENDOR TO HELP US WITH THE CITYWIDE MASTER PLAN, WHERE WE CAN DO, UM, A ROOF LINE ANALYSIS WHERE WE CAN SEE, UM, OF COURSE WE KNOW OUR BUILDING INVENTORY.
BUT, UM, ANOTHER PIECE OF IT IS, UM, KIND OF PUTTING THE INFORMATION TOGETHER WITH THE DEFERRED MAINTENANCE FOR THOSE BUILDINGS, THE USAGE OF THOSE BUILDINGS, YOU KNOW, HOW MANY, HOW MANY, UH, CITY EMPLOYEES WORK THERE, HOW MANY CONSTITUENTS VISIT THAT BUILDING.
SO WE CAN FIGURE OUT ONCE WE HAVE THAT FACILITIES MASTER PLAN, HOW BEST TO TARGET OUR LIMITED DOLLARS THAT WE DO HAVE FOR DEFERRED MAINTENANCE TO WHERE THEY CAN HAVE THE MOST, UM, IMPACT FOR THE USAGE OF THOSE FACILITIES.
UM, FOR, UM, THIS NEXT FISCAL YEAR FOR, UM, PROP H, DO WE KNOW HOW MUCH MONEY WE ARE COLLECT, GOING TO COLLECT OR PROJECTED TO COLLECT THAT'S ACTUALLY GOING TO GO TO PUBLIC SAFETY FROM PROP HI KNOW IT'S NOT THE $90 MILLION OVER, YOU KNOW, THE CAP EVERY YEAR, BUT DO WE HAVE AN ESTIMATE ON THAT FOR THIS NEXT FISCAL YEAR? SO WE ARE, UM, ON THIS PROPOSED BUDGET, WE ARE ASSUMING THE FULL $90 MILLION.
UM, AND THEN MY LAST QUESTION, UM, FOR THE JOBS WHERE PEOPLE RETIRE, THAT WILL NOT BE BACKFILLED FOR AREAS THAT ARE NON-GENERAL FUND EMPLOYEES.
UM, DO WE KNOW IF, UM, ANY OF THOSE SAVINGS COULD BE TRANSFERRED TO THE GENERAL FUND FROM ENTERPRISE FUNDS OR OTHER FUNDS, UM, WHERE NOW AT GENERAL FUND EMPLOYEES MIGHT BE ABSORBING SOME OF THOSE DUTIES? SO WE, UM, GET TO THE SLIDE.
SO, UM, IN THE PROPOSED BUDGET, WE CERTAINLY ARE LOOKING WHERE THOSE CONSOLIDATION OF FUNCTIONS CAN HAPPEN, LIKE WITH THE 3 1 1 WITH THE, UH, THE CONTACT CENTERS, THE CODE ENFORCEMENT.
UM, SO THAT IS DEFINITELY A PART OF THE PROPOSED BUDGET.
UM, OF COURSE WE STILL HAVE TO, YOU KNOW, WE HAVE TO BE MINDFUL THAT THE USE OF THE FUNDS, PARTICULARLY IF THEY'RE AN ENTERPRISE FUND, UM, FOR THE AIRPORT, FOR EXAMPLE, UM, YOU KNOW, THE FAA HAS REVENUE DIVERSION RULES, UM, WHERE AIRPORT FUNDS HAVE TO BE SPENT ON AIRPORT FUNCTION.
UM, WE DO OF COURSE, WORK WITH THE AIRPORT ON WHAT WE CALL COST ALLOCATION PLAN OR, OR DIRECT OR INDIRECT CHARGES, WHERE IF ANOTHER CITY DEPARTMENT IS PERFORMING A SERVICE ON BEHALF OF THE AIRPORT, UH, THE GENERAL FUND DOES RECEIVE REVENUE FOR THAT.
SO, UM, FOR EXAMPLE, UM, THE FIRE SERVICES THAT ARE PERFORMED AT THE AIRPORTS, THE POLICE SERVICES THAT ARE PERFORMED AT THE AIRPORTS, THOSE THOSE FUNDS FROM THOSE ENTERPRISE FUNDS ARE ABLE TO BE USED FOR THAT.
BUT THERE DOES HAVE TO BE A LINKAGE WITH THE,
[01:10:01]
UM, THE ALLOWABLE USES OF THOSE FUNDS.BUT CERTAINLY WE'RE LOOKING AT, UM, YOU KNOW, WHERE ANY, UM, CONSOLIDATIONS OR, UM, APPROPRIATE COST ALLOCATION CAN BE, UM, INCORPORATED.
COUNCIL MEMBER CAYMAN, THANK YOU, CHAIR DIRECTOR, MARATHON PRESENTATION, BUT EXTREMELY HELPFUL.
UM, THANK YOU TO YOU AND I THINK THE ENTIRE TEAM, UH, DESERVES RECOGNITION.
SO, BUT THE BOTTOM LINE, AND I BRING THIS UP, EVERY YEAR SINCE FY 2015, WHEN THE REV CAP HIT, WE HAVE LOST 2.59 BILLION COMING INTO THE CITY.
AND SINCE IN THIS UPCOMING FISCAL YEAR ALONE, WE STAND TO LOSE 380 MILLION, GIVE OR TAKE.
IS THAT CORRECT? YES, THAT'S CORRECT.
SO AGAIN, I JUST WANT THE PUBLIC TO UNDERSTAND HOW MUCH THE CITY IS NOT TAKING IN THAT COULD ADDRESS ALL OF THESE THINGS.
AND THE REASON I RAISE THAT IS WHAT I'M SEEING, BUT PLEASE CORRECT ME IF I'M WRONG, OUR BIGGEST CUTS THIS UPCOMING YEAR ARE TO PARKS BUILDING MAINTENANCE OR GSD, THE HEALTH DEPARTMENT AND OUR PUBLIC LIBRARIES.
IS THAT ACCURATE? THOSE ARE BASED ON THE DEPARTMENT REDUCTIONS, UM, FOR THE, UM, THAT THE DEPARTMENT SUBMITTED.
LOOKING AT THAT SLIDE, THOSE ARE THE ONES THAT TOTAL THE $16 MILLION OF REDUCTIONS.
UM, THERE ARE ALSO, OF COURSE, OTHER REDUCTIONS TO THOSE DEPARTMENT BUDGETS ON TOP OF THAT ASSOCIATED WITH THE VOLUNTARY RETIREMENT PLAN.
SO THAT WOULD BE IN ADDITION TO THOSE COSTS.
SO IT'S THE BUDGETARY CUTS PLUS THE ADDITIONAL PERSONNEL IN THOSE DEPARTMENTS THAT ARE TAKING THE BIGGEST HITS.
AND OBVIOUSLY IN PUBLIC WORKS, THE LOSS OF THAT MANY PERSONNEL, AND WE'RE NOT GONNA FILL THOSE, UH, CAN CREATE OTHER CHALLENGES DEPENDING ON THE DIVISION.
I KNOW EVERYONE WILL WORK AS HARD AS THEY CAN.
I HAVE NO DOUBT ABOUT THAT, BUT RIGHT.
CERTAINLY PEOPLE, UH, THERE CAN BE CHALLENGES, EVEN THOUGH WE ARE WORKING ON CONSOLIDATION, STREAMLINING AND ALL OF THOSE THINGS.
I APPRECIATE, UH, THE TOPIC ABOUT PENSION, UH, REFORM LIABILITY, BECAUSE I THINK THAT HAS PUT US IN A MUCH STRONGER POSITION THAN WE OTHERWISE WOULD BE.
WE'RE GOING FROM, I THINK YOU SAID, AN $8.2 BILLION LIABILITY TO WHEN PENSION REFORM WAS PASSED TO 1.8 BILLION.
UM, SO I HOPE PEOPLE RECOGNIZE, AGAIN, HOW SIGNIFICANT THAT IS, UH, ON OPEP.
I KNOW I'M GONNA DEFER TO THE CHAIR, UH, WHO'S KIND OF LEADING THE WAY ON THIS.
ON PAGE 11, UM, THE DEFERRAL OF PUTTING THOSE DOLLARS IN THAT WE SAID, UH, AND AGAIN, I I'M GONNA DEFER TO YOU CHAIR, BUT IS THERE ANY IMPACT OR CONCERN ABOUT THE CREDIT RATING IMPLICATIONS FOR THE CITY, GIVEN WHAT WE HAD SAID WE WERE GONNA DO PREVIOUSLY? IS THAT A CONCERN OR ARE THERE OTHER CONCERNS THAT COULD HAVE A, A MORE LONG-TERM IMPACT ON THE CITY IF WE DON'T FULFILL THAT? YEAH, SO THE CREDIT RATING AGENCIES LOOK AT LONG-TERM LIABILITIES.
THEY USUALLY GROUP TOGETHER DEBT PENSION AND OPEP LIABILITIES AS LONG-TERM LIABILITIES.
UM, THE OPEP LIABILITY, THE IDEA WITH THE OPEP TRUST IS TO, UM, OF COURSE SET THOSE DOLLARS ASIDE AND GROW THROUGH INVESTMENT EARNINGS, THAT ASSET THAT COULD USE TO OFFSET THE LIABILITY.
TYPICALLY, WHEN AN ACTUARY LOOKS AT THAT, THEY WOULD NOT NECESSARILY TAKE INTO, INTO THEIR PROJECTION TO, UM, SHOW THAT DECREASE IN LIABILITY UNTIL YOU SHOW A FUNDING PATTERN.
SO IT COULD TAKE, EVEN IF ONCE WE START THE LIABILITY, UH, THE TRUST, IT COULD TAKE A FEW YEARS TO SHOW THAT PROJECTION AS A DECREASE.
THE RATING AGENCIES ALSO LOOK THOUGH AT FUND BALANCE.
UM, AND SO WHEN WE'RE LOOKING AT ALL OF OUR ITEMS THAT WE HAVE TO CHOOSE FROM BASED ON OUR LIMITED AMOUNT OF REVENUES AND WHAT WE CAN PAY FOR, UM, THAT WAS ONE WHERE, YOU KNOW, IF WE, IF WE START THE OPE TRUST CONTRIBUTE TOWARD THE OPEP TRUST, OF COURSE, YOU KNOW, THAT WILL HAVE TO BE A FURTHER DRAW FROM FUND BALANCE.
AND SO IT'S, IT'S A BALANCING ACT.
THANK YOU FOR THAT EXPLANATION.
AND THEN TO THAT, UM, I'M NOT NECESSARILY DEFINING THIS CORRECTLY, SO I'D APPRECIATE YOUR GUIDANCE.
WE SAID NO, WE'RE NOT DOING ANY PAYMENT DEFERRALS, UH MM-HMM
BUT WOULDN'T SOMETHING LIKE OPED BE A DEFERRAL? OR HOW ARE WE DEFINING NO PAYMENT DEFERRALS THE PAYMENT DEFERRAL? UM, HISTORICALLY, I KNOW, UM, WHEN WE'VE HAD BUDGETARY CHALLENGES, AND ESPECIALLY INITIALLY, UH, DURING COVID, BEFORE WE HAD THE FEDERAL RELIEF, UM, PAYMENT DEFERRALS IN THAT SENSE REFERS TO, YOU MAY REMEMBER, WE, UM, WE HAVE A CONTRACT WITH THE ZOO WHERE WE MAKE A PAYMENT TO THE ZOO ANNUALLY.
WE HAD WORKED WITH THE ZOO TO DEFER
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THAT PAYMENT SO THAT WE DIDN'T PAY IT NECESSARILY THIS YEAR, BUT THEN WE MADE A DOUBLE PAYMENT THE FOLLOWING YEAR, UM, THE SIX 11 WALKER RENT THAT THE GENERAL FUND PAYS TO THE UTILITY BECAUSE THE UTILITY OWNS SIX 11 WALKER.HISTORICALLY, WHEN WE HAD BUDGETARY GAPS, WE HAD DEFERRED THAT RENT PAYMENT.
SO THOSE ARE THE TYPE OF, UH, ONE-TIME DEFERRALS.
UH, AND I HAVE ONE MORE QUESTION THEN I'LL GO BACK INTO Q.
UM, REGARDING THE BUDGET STABILIZATION FUND, UH, THIS REALLY CONCERNS ME.
I THINK I'VE SAID THIS, UH, MULTIPLE TIMES THIS YEAR, LAST YEAR, UH, WHEN I'M NOT AWARE OF A POLICY THAT SAYS WE CAN, UH, MOVE IT, RE REPLENISH IT WITHIN A LONGER PERIOD OF TIME, I'D LOVE TO KNOW WHAT IF A REFERENCE OR CITATION TO THAT POLICY IS MM-HMM
UM, BUT MORE SO WHETHER OR NOT WE'RE ABLE TO DO THAT, WE HAVE ALWAYS NEEDED THOSE DOLLARS.
UH, AGAIN, WE JUST HAD MAJOR STORMS TODAY.
WE WERE CONCERNED ABOUT FLOODING.
UH, WE ARE ON THE HEELS OF HURRICANE SEASON IN HOUSTON TO NOT BE ADDING IN THE FULL AMOUNT THAT WE ARE ABLE TO, THE BUDGET STABILIZATION FUND, WHICH AGAIN, IT HAS A FANCY NAME, BUT IT'S FOR PRIMARILY DISASTER RESPONSE THAT ALLOWS US TO JUMP INTO ACTION QUICKLY.
I'M OF THE OPINION WE NEED TO BE FILLING THAT UP IMMEDIATELY AND NOT DEFERRING THAT ANY LONGER.
UH, SO I, IT'S MORE A, A COMMENT, NOT A QUESTION, OTHER THAN IF I COULD GET THIS, THE POLICY CITATION.
BUT I THINK IT IS A VERY, UH, RISKY MOVE TO NOT BE REPLENISHING THOSE DOLLARS THAT ARE SET ASIDE FOR EMERGENCY AND DISASTER RESPONSE HERE IN HOUSTON.
IT'S, UM, THE BUDGET STABILIZATION FUND POLICY IS PART OF OUR FINANCIAL POLICIES.
SECTION C, POLICY NUMBER FOUR, SECTION CC FOUR.
AND TO THE, UH, TEAM, I HAVE A SERIES OF QUESTIONS, SO I'M GONNA MOVE, UH, QUICKLY.
UM, HOW DOES THIS ADMINISTRATION DEFINE ESSENTIAL, ESSENTIAL MM-HMM
THE, THE EMPLOYEE'S NOT ELIGIBLE FOR BACKFILL.
UM, SO THERE'S A, UM, A LIST OF JOB CLASSIFICATIONS.
I THINK IT'S ABOUT 42 CLASSIFICATIONS THAT THE HUMAN RESOURCES DEPARTMENT PUT TOGETHER AND WORK WITH THE ADMINISTRATION ON.
UM, IT PRIMARILY, AND THOSE ARE THE POSITIONS THAT WILL BE ELIGIBLE TO BE BACKFILLED.
UM, IT'S PRIMARILY FRONTLINE, UH, EMPLOYEES.
UM, AS I MENTIONED THE 3 1 1, THE 9 1 1, I CAN SHARE THE FULL LIST.
UM, MECHANICS, ANIMAL CARE TECHNICIANS, CUSTODIANS, ELECTRICIANS, EQUIPMENT OPERATORS, LIFEGUARDS, UM, POLICE TELECOMMUNICATORS.
THAT WHOLE LIST THAT WE ALL LIKE, THOSE ARE THE TYPES OF POSITIONS.
WE CAN SHARE THAT, THAT WOULD BE REALLY HELPFUL JUST TO KNOW IN CONTEXT.
UM, BECAUSE, UH, ANYTHING OUTTA CONTEXT, YOU KNOW, YOU CAN'T REALLY HAVE A A, A COMP, I CAN'T HAVE A COMPLETE THOUGHT INTO THE, TO SPEAK TO THE POINT ABOUT THE BACKFIELD.
UM, CURIOUS, AND I DON'T KNOW IF THIS IS A PUBLIC SAFETY LABOR CONVERSATION, IS HPDS CONTRACT STRUCTURED THE SAME WAY AS HOUSTON FIRES IN TERMS OF PERCENTAGE? SO WHAT WE PROPOSED, IT WAS LIKE A 10, 6 5, 5 4 IF ADDITIONAL REVENUE WAS ACQUIRED.
AND THEN, AND SO NOW IN, IN THIS BUDGET, IT'S THREE, THREE IS HPD SIMILAR TO WHAT THIS, WHAT'S PROPOSED VERSUS WHAT'S AN ACTUAL THERE'S GOING TO BE A PUBLIC SAFETY COMMITTEE, UH, SORRY.
IT'S A JOINT COMMITTEE OF BFA, PUBLIC SAFETY AND LABOR TOMORROW.
UM, AND I THINK THEY'LL, THEY'LL, UH, TALK MORE SPECIFICS ABOUT THE CONTRACT THEN.
BUT HIGH LEVEL, GENERALLY, UH, THE POLICE PROPOSED CONTRACT IS THE 10, 8, 6, 6, 6 AND A HALF.
UM, AND THE FIRE CONTRACT WAS 10 AND UP TO 6, 6, 6, 6.
IF THERE WAS ADDITIONAL REVENUES, ADDITIONAL REVENUE, CORRECTIONAL REVENUE.
SO WHAT WE'RE LOOKING AT IN TERMS OF PROPOSED WHAT'S IN THE BUDGET OF THE 10, 8, 6, 6, 6 AND A HALF IS WHAT THAT IS FOR H WHAT PROPOSED.
SO THERE WERE A SERIES OF, UH, MENTIONS AROUND CONSOLIDATIONS.
AND I THINK IT WILL BE HELPFUL FOR COUNCIL OFFICES TO HAVE A VERY CLEAR OUTLINE OF WHAT IS PROPOSED IN TERMS OF DEPARTMENTS, ESPECIALLY WHEN THEY ARE FRONT LOADING, LIKE CONSTITUENT SERVICES 3 1 1 DAWN PUBLIC WORKS, BECAUSE
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OUR OFFICE IS ALREADY RECEIVING INQUIRIES ABOUT PROHIBITED YARD PARKING.AND WHO DOES IT? IS IT 3 1 1? IS IT HPD? AND THERE IS SOME CONFUSION AMONGST THE RANKS ABOUT WHERE THAT LIVES.
SO IN, IN AN EFFORT, IF I MAY, UM, WRAP THIS UP, UM, IN AN EFFORT JUST TO COMMUNICATE WHAT THESE EFFICIENCIES ARE AND MOVING FORWARD, WHAT RESIDENTS CAN EXPECT, THAT WILL BE EXTREMELY HELPFUL AS THIS BUDGET MOVES OUT.
AND THEN ALSO LASTLY, THE HECTOR BILL, UM, THE PROPOSED BILL THAT'S IN THE HOUSE RIGHT NOW, IS THERE AN ANTICIPATED REVENUE THAT THE CITY AND, UH, BELIEVES THAT WE'RE GONNA RECEIVE FROM THAT? AND IF SO, WHERE WOULD THE, IS THAT A REIMBURSABLE THAT HPD OR IS THAT A GENERAL FUND? EXPONENTIAL TO US.
NO POTENTIAL REVENUES FROM THAT PENDING LEGISLATION ARE INCLUDED IN THE PROPOSED BUDGET.
SO IF THAT LEGISLATION WERE TO PASS, IT WOULD BE ADDITIONAL.
BUT WHERE WOULD THAT GO? PRIMARILY POLICE AND FIRE.
UH, THEIR EXPENDITURES ARE PRIMARILY IN THE GENERAL FUND.
SO THE REVENUE WOULD COME INTO THE GENERAL FUND.
THANK YOU FOR POLICE AND FIRE COUNCIL MEMBER RAMIREZ.
THANK YOU, MADAM CHAIR AND THANK YOU DIRECTOR AND YOUR STAFF FOR THIS, UH, GREAT PRESENTATION.
AND ALL THE WORK Y'ALL PUT IN, IT'S TRULY MIND BOGGLING
SO LET ME, LET ME ASK YOU ABOUT THIS CONCEPT OF, UH, MONEY THAT'S LOST OUT ON BECAUSE OF THE LOCAL, UH, REV CAP.
I BELIEVE YOUR CHART SHOWS THE IMPACT IS $380 MILLION THIS COMING FISCAL YEAR.
AND I, I WANNA ANALOGIZE TO, UH, THE WATER THAT WE LOSE THROUGH OUR WATER LEAKS.
I MET WITH DIRECTOR MACKAY RECENTLY, AND HE TOLD ME, I BELIEVE THAT WE HAVE 1400 WATER LEAKS IN THE CITY, WHICH RESULTS IN BILLIONS AND BILLIONS OF, OF GALLONS OF WATER TRULY BEING LOST.
NO ONE CAN DRINK IT, NO ONE CAN USE IT TO WATER LAWNS.
AND WHEN WE SPEAK OF MONEY LOST TO THE CAP, UM, THAT'S REALLY MONEY THAT HOUSTONIANS GET TO KEEP IN THEIR OWN POCKET.
RIGHT? I THINK THERE'S TWO COMPONENTS TO IT.
YES, THEY GET TO KEEP IT TO THEIR OWN POCKET, BUT WHAT SACRIFICE TO SERVICES COME ON THE OTHER END OF HAVING FEWER REVENUES INTO THE CITY? I, I GET THAT.
AND I GUESS THAT'S THE PURPOSE OF INCLUDING THIS SLIDE IN THE, IN THE PRESENTATION.
BUT, YOU KNOW, THAT'S $380 MILLION HOUSTONIANS WILL GET TO SPEND ON EDUCATION, HOUSING, HEALTH, UH, ET CETERA.
AM I WRONG ON THAT? IT'S MONEY THAT DIDN'T OTHERWISE COME TO THE CITY.
UH, BUT THEY MIGHT HAVE GOOD USES FOR IT, RIGHT? THEY MAY.
THAT'S REALLY NOT FOR THE FINANCE DIRECTOR.
UH, IS GENERAL FUND FULL-TIME EQUIVALENCE? SO THE DIFFERENCE BETWEEN, UH, CIVILIAN EMPLOYEES IN FY 25 AND FY 26 IS, UH, UH, IF MY MATH IS RIGHT, ABOUT 250 THERE, IT'S 4,209 DOWN TO 3,846.
EARLIER, EARLIER YOU'D SAID, UH, ABOUT 1,059 EMPLOYEES HAD HAD TAKEN THE, THE RETIREMENT MM-HMM
UM, SO THIS IS A SMALLER NUMBER AND CAN YOU EXPLAIN WHY THAT IS? SURE.
SO, UH, FOR THE RETIREMENT INCENTIVE PACKAGE, UH, THE NUMBER OF FTES, UH, THAT WE RECOGNIZE IN THE PROPOSED BUDGET THAT HAD TAKEN THE RETIREMENT PACKAGE IN GENERAL FUND WAS 279 INDIVIDUALS.
THIS DIFFERENCE IS ABOUT THREE, SORRY, IT'S IN THE 3 363.
SO IN ADDITION TO THE RETIREMENT INCENTIVE, THERE ARE OTHER, UH, POSITIONS THAT ARE NOT BUDGETED IN THE PROPOSED BUDGET.
SO SOME OF THOSE DEPARTMENTAL REDUCTIONS, THE 16 MILLION TO DEPARTMENTAL REDUCTIONS, SOME OF THOSE WERE OTHER, UH, VACANCIES THAT DEPARTMENTS ARE GIVING UP THAT EITHER HAVE NOT BEEN FILLED FOR A LONG TIME OR THEY DON'T, UM, NEED TO PERFORM THE SERVICES FOR THE CONSTITUENTS.
AND LET ME ASK YOU ABOUT FRANCHISE FEES.
UM, I'LL GO BACK IN THE QUEUE.
UM, DIRECTOR DEBOSKY ON PAGE 28.
UM, WHEN WE TALK ABOUT THE PROPERTY TAX REVENUE ADJUSTMENTS, THAT $5 MILLION, TELL ME ABOUT THE, THE DIFFERENCE BETWEEN THAT NUMBER,
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UM, BEFORE PROTEST AND AFTER PROTEST.DO IS, DO WE TYPICALLY SEE A BIG ADJUSTMENT AFTER PROTEST? WE DO.
SO, UM, WHEN WE SET THE PROPERTY TAX RATE, THERE'S A VARIETY OF ASSUMPTIONS THAT WE LOOK AT.
SO WE KNOW THAT, UM, WE'RE, WE'RE BASING OUR PROPOSED BUDGET BASED ON THE CAPPED AMOUNT OF REVENUE WE CAN GET ON THE LOCAL PROP ONE AND H CAP.
WHEN WE GO TO SET THE TAX RATE, WE, WE KNOW THE REVENUE THAT WE'RE ALLOWED TO COLLECT, WE SEE AN ESTIMATE OF THE VALUE THAT THE APPRAISAL DISTRICTS GIVE US, AND THEN WE USE ASSUMPTIONS ABOUT HOW MUCH OF THAT VALUE IS GOING TO BE LOST THROUGH THOSE PROTESTS AND HEARINGS.
UM, WE HAVE SEEN A RECORD AMOUNT OF HISTORICAL VALUE LOSS BECAUSE OF THOSE HEARINGS, UM, HERE IN THE LAST COUPLE YEARS.
AND SO THAT IS ONE OF THE ASSUMPTIONS THAT WE TAKE WHEN WE SET THE TAX RATE TO ENSURE THAT WE'RE, YOU KNOW, COLLECTING THE CAPPED AMOUNT OF REVENUE BASED ON THE BEST INFORMATION WE HAVE AT THE TIME.
SO THIS, THIS NUMBER ALREADY TAKES INTO CONSIDERATION THE NUMBER OF PEOPLE THAT WE ANTICIPATE WILL PROTEST AND THE AMOUNT OF REVENUE THAT WILL NOT COME TO THE CITY.
CORRECT? THIS TAKES INTO THOSE YES.
THAT TAKES THOSE ASSUMPTIONS INTO, YES, MA'AM.
AND THEN THE OTHER QUESTION I HAVE IS, CAN WE TALK ABOUT, I'M CONCERNED ABOUT THE CODE ENFORCEMENT.
WHERE, WHERE IS IT AND HOW, HOW ARE WE GOING TO UTILIZE CODE ENFORCEMENT IN THE CITY? MM-HMM
SO, AND I THINK, UM, DIRECTOR SIMS AND DIRECTOR MACKEY CAN TALK MORE DIRECTLY TO THE OPERATIONS OF IT WHEN THEY GET TO THEIR DEPARTMENT BUDGET WORKSHOPS.
UM, BUT THE WAY I UNDERSTAND IT, SINGLE FAMILY CODE ENFORCEMENT WAS BEING DONE IN ONE DEPARTMENT.
MULTIFAMILY CODE ENFORCEMENT WAS BEING DONE IN ANOTHER DEPARTMENT.
THE CODE ENFORCERS CAN BE TRAINED ON BOTH TYPES OF CODE ENFORCEMENT MM-HMM
UM, SO THAT THERE CAN BE MORE EFFICIENCIES AND MORE CODE ENFORCERS THAT CAN COVER THE, UM, THE, UH, THE, I CALL 'EM CASES, BUT THE, THE CALLS.
UM, AND SO I'M, I'M KIND OF VEERING INTO THE OPERATIONAL SIDE.
I THINK THAT'S WHERE DIRECTOR SIMS AND DIRECTOR MACKEY CAN PROBABLY GET MORE INTO THE DETAILS ON THE OPERATIONAL SIDE.
THE, UH, THE COST IMPACT THOUGH IS GOING TO BE, UH, SAVINGS TO THE GENERAL FUND, UM, OF ABOUT $8 MILLION IN EXPENDITURES OFFSET BY THE LOSS OF SOME REVENUE THAT WE HAD IN THE CODE ENFORCEMENT SIDE.
SO IT'S A NET SAVINGS TO THE GENERAL FUND OF ABOUT $6 MILLION BECAUSE OF THE CONSOLIDATION.
SO, I MEAN, IF WE CONSOLIDATED THE PEOPLE, I UNDERSTAND.
SO ARE YOU, ARE, IS THAT COMING FROM BUILDING LEASE? I MEAN, WHAT OTHER CON CO CONSOLIDATION COSTS? SO IT'S THE COST OF THE, OF THE EMPLOYEES THAT WERE DOING CODE ENFORCEMENT AND DAWN, ARE NOW GOING TO BE, SO EMPLOYEES HAVE LEFT.
SO IT'S, THEY'VE MOVED FROM DAWN DUCTION AND EMPLOYEES TO PUBLIC WORKS? NO, NOT A REDUCTION IN EMPLOYEES.
THEY MOVE FROM ONE DEPARTMENT TO ANOTHER.
BUT THEY'RE STILL IN THE BUDGET.
BUT THEY'RE BEING PAID OUT OF A PUBLIC WORKS FUND NOW BUILDING INSPECTION FUND.
BEFORE WE GO TO THE NEXT ROUND, I, I KIND OF HAD SOME QUESTIONS ALONG THE SAME LINE.
I, I'D LIKE TO GET JUST A CLEAR PICTURE OF ALL THE, THE, UH, CUS AND D-D-S-R-F, UM, WHAT, WHAT EXPENSES FROM THE GENERAL FUND THEY'RE TAKING ON.
I CAN GATHER A LOT OF IT FROM YOUR SLIDE 28 THAT GOES THROUGH THE, THE REDUCTIONS AND THE, UM MM-HMM
AND THE, THE CONSOLIDATIONS, THE CODE ENFORCEMENT.
BUT JUST I THINK IT'D BE GOOD TO HAVE A LIST OF THE, OF, OF ALL OF THE, WHAT THE CUS AND D-D-S-R-F ARE TAKING ON, ON THE STREET LIGHTS.
I KNOW WE USED METRO TO DO THAT OVER THE PAST YEAR MM-HMM
AND WE'RE NOT GONNA DO THAT AGAIN.
BUT WE, HOW, HOW THEN ARE WE, UM, REDUCING, UM, SO FOR THE 22 MILLION FROM THE GENERAL FUND? SURE.
SO FOR THE FY 26, WE'RE STILL PLANNING TO DO WHAT WE DID IN FY 25 OF THE STREET LIGHTS.
SO METRO WILL BE PAYING FOR THE STREETLIGHTS AT GENERAL MOBILITY FUNDS FOR FY 26.
WE'RE, WE HAVEN'T HAD THOSE DISCUSSIONS WITH THAT.
WE'LL TALK ABOUT THAT NEXT YEAR.
AND ON THE DECREASE IN THE H POPS CONTRIBUTION MM-HMM
DOES THAT IN ANY, AND I KNOW IT'S ALL WITHIN THE CORRIDOR AND THAT'S ALL GOOD STUFF MM-HMM
BUT DOES THAT IN ANY WAY INCREASE THE OVERALL LIABILITY? NO, UH, ACTUALLY THE LIABILITY CONTINUES TO BE DECREASED.
SO, UM, WE'LL STILL BASICALLY THE WAY THAT, BECAUSE THE WAY THE CORRIDOR FUNCTIONED, UM, UNTIL THERE ARE 90% FUNDED, WE CONTRIBUTE AT THE MIDPOINT, EVEN IF OUR CALCULATED RATE IS BELOW THE MIDPOINT.
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UM, FOR THE PAST COUPLE YEARS WE'VE BEEN BASICALLY, I DON'T WANNA SAY OVER CONTRIBUTING, 'CAUSE THE MORE YOU PAY NOW, THE LESS YOU'LL PAY LATER.BUT BECAUSE OF THE WAY THE CORRIDOR WORKS, IT ALLOWS, UM, YOU KNOW, CONTRIBUTIONS FROM THE CITY TO FURTHER DECREASE THAT LIABILITY BEYOND WHAT WAS ORIGINALLY ANTICIPATED.
SO THE FUNDING STATUS CONTINUES TO IMPROVE FOR THOSE PLANS.
OF COURSE, THAT'S BASED ON THE FACT THAT THEY EARNED THE 7% INVESTMENT RATE OF RETURN.
UM, THERE'S A LOT OF ASSUMPTIONS IN THERE.
BACK TO THE METRO MONEY, ARE, IS IT IN THIS BUDGET, IS IT GOING TO FUND TRAFFIC ENFORCEMENT LIKE WE DID IN 25 FOR THIS BUDGET? YES.
AND THE $15 MILLION IN ARPA MONEY FOR REVENUE REPLACEMENT, IS THAT JUST GENERAL REVENUE REPLACEMENT KIND OF ALL OVER? OR WAS IT FOR SOMETHING SPECIFIC? NO, THAT WAS FOR THE REVENUE, UH, REPLACEMENT, THE CALCULATION BASED ON THE DEPARTMENT OF TREASURY.
UM, IS THERE ANY ADDITIONAL NEW REVENUE SOURCES THAT THIS BUDGET PROPOSES? I KNOW WE'RE SPENDING, I THINK YOU SAID 2.3 MILLION, UH, PERCENT MORE THAN LAST YEAR, BUT ARE WE, ARE WE BRINGING IN ANY MONEY NEW REVENUE SOURCES? MM-HMM
UM, SO IF YOU LOOK ON SLIDE 14, IT LAYS OUT THE, UM, INCREASED REVENUES FROM FISCAL YEAR 25 ESTIMATE TO THE FY 26 PROPOSED.
UM, THERE'S A HOST OF PLUSES AND MINUSES, UM, BUT THE, THE PRIMARY DRIVERS OF THE CHANGE OF THE $3 MILLION IS ON THIS SLIDE.
SO, SO FOR INSTANCE, WITH THE, WITH THE FIRE CONTRACT, THEIR, THEIR PAY RAISES WERE TIED TO AN ESCALATOR BASED ON ADDITIONAL REVENUE.
IN THIS PROPOSAL, THEY'RE STAYING AT 3%.
AND IS THAT BECAUSE THERE'S NO ADDITIONAL REVENUE THAT COULD BE TIED TO THAT? SO THE, THE WAY THE CONTRACT AND THE MOU IS WORDED IS THAT, UM, THERE HAD TO BE, THERE HAD TO BE THREE COMPONENTS MET.
ONE OF THEM HAD TO BE THAT THERE WAS ADDITIONAL REVENUE DEDICATED TO PUBLIC SAFETY.
IT HAD TO BE ACCOMPLISHED THROUGH JOINT EFFORTS BETWEEN THE CITY AND THE UNION.
AND IT HAD TO BE IN AN AMOUNT SUFFICIENT TO COVER THE ENTIRE COST OF THE CBA.
SO SINCE THOSE THREE CRITERIA WERE NOT MET, THE PROPOSED BUDGET HAS THE 3%, AND REGARDING THE, THE SETTLEMENT, UM, NEGOTIATION WITH THE NEGOTIATED SETTLEMENT THAT WE HAD WITH THE PLAINTIFFS ON THIS, UH, DRAINAGE STREETS AND DRAINAGE LAWSUIT.
TELL ME HOW THAT DOES NOT WORK INTO THIS.
YOU SAID WE'RE, WE'RE, WE'RE NOT FACTORING IN IN THIS CURRENT FISCAL YEAR.
SO THE, UH, THE PROPOSED AGREEMENT THAT WAS, UM, POSTED ON COUNCIL AGENDA TODAY WAS ITEM 18, BUT IT, UH, WAS NOT RECEIVED IN TIME FOR CONSIDERATION.
UM, THAT AGREEMENT, UM, WAS REACHED WITH THE PLAINTIFFS, UH, SPECIFICALLY TO MITIGATE THE TIMING AND IMPACT OF THE AMOUNT OF MONEY THAT THE GENERAL FUND NEEDS TO TRANSFER TO THE D-D-S-R-F.
SO INSTEAD OF TRANSFERRING THE 11.80 CENT FULL, STARTING IN FISCAL YEAR 25, UH, WHAT THE PLAINTIFFS HAVE AGREED TO IS THAT WE CAN END FISCAL YEAR 25 BY TRANSFERRING THE 11.80 CENT EQUIVALENT, PLUS THE 8 MILLION THAT WAS ADDED BY BUDGET AMENDMENT DURING THE BUDGET FOR FY 26, WE CAN TRANSFER THE 11.80 CENT EQUIVALENT PLUS AN ADDITIONAL $16 MILLION.
SO THAT $16 MILLION IS INCLUDED IN THE PROPOSED BUDGET.
AND THEN THE AGREEMENT CONTEMPLATES AN FY 27 INSTEAD OF AN ADDITIONAL 16, IT'S AN ADDITIONAL 48.
AND THEN BY FY 28, IT'S THE 11.80 CENT FULL.
SO THE AGREEMENT THAT WAS NEGOTIATED WITH THE PLAINTIFFS BASICALLY ALLOWS US TO, UM, INCREMENTALLY GET TO THAT 11.80 CENT FULL.
SO HOW WILL WE PAY FOR THAT IN THE OUT YEARS WHEN THERE'S NO ADDITIONAL REVENUE PROPOSED IN THIS YEAR? SO YOU FOR TO PLAN FOR THAT, YOU SEE THAT AS PART OF THE PROJECTIONS TO THE BUDGETARY GAP THAT I PRESENTED IN THE FIVE YEAR FORECAST.
ALL, I'LL BE BACK IN THE QUEUE.
COUNCIL MEMBER PLUMMER, THANK YOU CHAIR.
DEBOSKY ROLE, DONE A NOTE TO THE TEAM AS WELL.
UM, I WANNA KIND OF DO A FOLLOW UP QUESTION TO COUNCIL MEMBER CAYMAN REGARDING, UM, THE DEPARTMENTS THAT HAVE LOST SOME FUNDING OR THE MAJORITY OF FUNDING.
UM, CAN YOU, I WANNA CLARIFY THAT THERE WAS NO, ACROSS THE BOARD CUTS ON THAT THEY CHOSE WHAT, HOW THEY WANTED TO CUT WITHIN THEIR DEPARTMENTS.
CAN YOU TALK A LITTLE BIT ABOUT, AND I KNOW EVERY DEPARTMENT'S DIFFERENT, BUT HOW DO YOU BELIEVE THAT THEY MADE THEIR CHOICES OR WHAT KIND OF WERE SPECIFIC, UM, THINGS THAT THEY FELT WERE
[01:35:01]
MOST IMPORTANT ON HOW THEY CAN KIND OF COME DOWN ON THEIR BUDGETS? SURE.SO WITHOUT LOSING SERVICES, ET CETERA.
SO IT WAS DEFINITELY NOT AN ACROSS THE BOARD REDUCTION.
UM, EACH OF THE DEPARTMENT DIRECTORS LOOKED AT THEIR BUDGETS, UH, AND, UH, MADE A DETERMINATION ABOUT WHAT REDUCTIONS THEY COULD MAKE, UH, WITHOUT IMPACTING SERVICES.
UM, SO THAT LOOKS, YOU KNOW, DIFFERENT OF COURSE FOR EACH DEPARTMENT.
UM, AS I MENTIONED, A LOT OF THEM, UM, PROPOSE TO, LIKE MY, FOR MY OWN DEPARTMENT, FOR EXAMPLE, PROPOSE TO ELIMINATE VACANT POSITIONS THAT HAD BEEN VACANT FOR SOME TIME.
UM, SO EITHER POSITIONS THAT WE CAN'T FILL BECAUSE THEY'RE HARD TO FILL POSITIONS OR DUTIES HAVE ALREADY BEEN ABSORBED BY INCUMBENT STAFF.
UM, SO THERE'S, UH, DEFINITELY VACANCY REDUCTIONS IN THERE.
UM, THERE'S ALSO, YOU KNOW, UM, THERE'S SOME ADDITIONAL, THERE'S VACANCY SAVINGS.
UM, THERE ARE SOME OTHER EVEN CONSOLIDATIONS INSIDE DEPARTMENTS, UM, WHERE, UH, DIFFERENT GROUPS INSIDE DEPARTMENTS ARE GOING TO HAVE BETTER COLLABORATION WITH EACH OTHER.
I THINK THAT EACH OF THE DIRECTORS, WHEN THEY DO THEIR BUDGET WORKSHOPS CAN SPEAK, UM, MORE CLEARLY ABOUT THAT.
BUT I WOULD SAY THAT A LOT OF IT IS, UH, VACANCY REDUCTION AND THAT'S GONNA BE SOMETHING THAT'S GONNA BE A RECURRING SAVINGS, NOT JUST ONE TIME.
THANK YOU DIRECTOR TO YOU AND YOUR TEAM FOR A VERY THOROUGH PRESENTATION ON SLIDE 17 PROPERTY TAX REVENUE ASSUMPTIONS.
UM, YOU'VE MENTIONED THE 65 OVER 65 DISABLED CURRENTLY AT 260,000.
UM, WHEN WAS THE LAST TIME THAT WAS ADJUSTED? ABOUT THREE YEARS AGO.
YEAH, ABOUT TWO OR THREE YEARS AGO.
AND SO IF THAT IS ADJUSTED FIVE OR $10,000, DOES THAT, WHAT IMPACT DOES THAT HAVE ON, ON THE BUDGET? UM, SO IT, IT REALLY DEPENDS ON THE YEAR.
UM, IN THE YEAR THAT WE INCREASED THE OVER 65 EXEMPTION, IT WAS A YEAR IN WHICH WE HAD, UM, HIGH TAXABLE VALUE GROWTH AT THE CITY.
SO WHEN YOU HAVE HIGH TAXABLE VALUE GROWTH AND YOU'RE OPERATING UNDER OUR REVENUE CAP NINE OUTTA THE LAST 11 YEARS, WE LOWER THE TAX RATE.
SO IN A YEAR WHERE WE HAVE HIGH TAXABLE VALUE GROWTH, IT DOES NOT HURT OUR REVENUE TO INCREASE THE EXEMPTIONS.
UM, AND SO THE LAST TIME WE DID THAT WAS A YEAR THAT WE DID HAVE HIGH TAXABLE VALUE GROWTH.
UM, FOR THE FOLKS THAT TOOK THE VOLUNTARY, UH, INCENTIVE RETIREMENT, ABOUT 800 OR SO OF THOSE POSITIONS ARE NOT GONNA BE BACKFILLED, UM, FOR THE REMAINDER.
DOES THE BUDGET TAKE INTO ACCOUNT THE COST OF FILLING THOSE POSITIONS? IT DOES.
UM, JUST, UH, WANTED TO GO BACK TO THE VACANCY REDUCTIONS SPECIFICALLY ON SLIDE 30.
IS MAJORITY OF THAT, UM, SAVINGS BECAUSE THEY'RE NOT GONNA BE LOOKING AT FILLING A LOT OF, I THINK ON AVERAGE THERE ARE 300 PLUS VACANCIES ALMOST ANNUALLY.
IS THAT ONE OF THE REASONS WHY WE SEE SUCH A BIG, UM, YOU KNOW, REDUCTION IN PARKS FOR PARKS? UH, THERE WERE VACANCY REDUCTIONS.
UH, THERE WERE ALSO SOME, UM, PLANNED, UH, NOT CAPITAL PROJECTS, BUT MORE MAINTENANCE, UM, REFRESHES OF SOME PARKS, UM, THAT WERE BUDGETED.
AND, UM, SOME OF THOSE FUNDS HAVE BEEN BUDGETED AND NOT SPENT YEAR OVER YEAR.
SO, UM, PARKS LOOKED AT THAT AND SAID, WELL, YOU KNOW, WE HAVEN'T SPENT THAT MONEY HISTORICALLY, SO WE CAN GO AHEAD AND GIVE THAT UP AS A REDUCTION WITHOUT IMPACTING SERVICES.
AND, AND SO YOU'RE SAYING, SO THERE'S SOME PARK PROJECTS THAT WE HAVEN'T COMPLETED, AND SO WE'RE NOT, WE'RE NOT GOING TO CONTINUE THE BUDGET.
THEY'RE NOT, UM, THEY'RE NOT CAPITAL PROJECTS.
I THINK SOME OF THEM ARE MORE LIKE GROUNDS MAINTENANCE.
UM, WELL, THEY'RE NOT CAPITAL PROJECTS.
THERE WERE THINGS THAT WERE BUDGETED IN THE OPERATING BUDGET THAT THEY HAD NOT COMPLETED HISTORICALLY.
SO I HAD BEEN BASICALLY HAD BEEN UNSPENT FUNDING IN THE PAST THAT WAS EITHER UTILIZED FOR ANOTHER PURPOSE OR FLOAT TO FUND BALANCE AT THE END OF THE YEAR.
AND THEN ANOTHER QUESTION FOR THE ELIGIBLE TO KIND OF, UH, FILL, UM, WE HAD 177, UH, UNDER ALL FUNDS.
AND THEN FROM THE GENERAL FUND, THERE'S TWO, THERE'S, THERE'S SOME THAT, THAT CAN STILL BE FILLED.
UM, IS THERE A BREAKDOWN FOR DEPARTMENT? LIKE WHERE, WHERE CAN WE BACK, UH, OR WHERE CAN WE FILL THOSE, THOSE POSITIONS BACK UP? YEAH, WE CAN PROVIDE THAT.
SIMILAR TO THE BREAKDOWN YOU SEE FOR THE ONES THAT WILL NOT BE FILLED, WE CAN PROVIDE THE BREAKDOWN FOR THE ONES THAT WILL BE OKAY.
[01:40:01]
WHERE WE'RE GONNA BE LOOKING AT, UH, FILLING THOSE POSITIONS.AND THEN LASTLY, UM, YOU KNOW, THANK YOU FOR THE PRESENTATION.
UH, IT'S GOOD TO SEE THAT WE ARE, UH, LOOKING AT EFFICIENCIES.
UM, AND THEN OF COURSE, UH, WHEREVER THERE'S WAYS TO, WE'RE GETTING RID OF AS WELL.
UM, YOU KNOW, I THINK FOR ME, WHAT I'M FOCUSED ON IS THE SHORT TERM AND LONG TERM GOALS AND WHAT THOSE REVENUES ARE GONNA LOOK LIKE.
UH, I PLAN SUBMITTING AN, UH, YOU KNOW, AN AMEN BUDGET AMENDMENT ON TRASH AS WELL.
UH, ON DEMAND SERVICE FOR HEAVY TRASH, I, I, I THINK WE NEED TO ULTIMATELY START HAVING THESE TOUGH CONVERSATIONS.
I KNOW IT'S, YOU KNOW, SOME FOLKS WANNA SEE IT BACK ON THE BALLOT, THAT'S FINE.
BUT I THINK WE NEED TO ULTIMATELY START, START HAVING THESE, THESE, THESE TOUGH CONVERSATIONS, UM, UH, WITH THE PUBLIC.
AND I THINK AS ELECTED OFFICIALS, WE NEED TO START MAKING SOME OF THESE TOUGH CONVER, YOU KNOW, DECISIONS AS WELL, UH, WHETHER IT IS THE REV CAP.
UM, BUT AGAIN, THAT'S, THAT'S REALLY WHAT I'M FOCUSED ON BECAUSE I THINK, YOU KNOW, THE ADMINISTRATION, YOU KNOW, HIS, THE MAYOR AND HIS TEAM ARE DOING A GREAT JOB OF, OF ADDRESS ADDRESSING THOSE, UM, YOU KNOW, WASTE INEFFICIENCIES.
BUT NOW, YOU KNOW, THERE'S STILL A LOT OF, THERE'S A BIG GAP, UH, OVER THE NEXT COUPLE YEARS AS WE, AS YOU SHARED WITH US.
AND SO AT SOME POINT WE GOTTA BE REAL ABOUT WHAT IS IT THAT WE WANNA PROVIDE.
UH, AND COUNCIL MEMBER CASTILLO, GREAT QUESTION.
UM, I BELIEVE WE HAD THE FIRST FOUR YEARS ON COUNCIL, LOWERED THE TAX RATE AND THEN MAINTAINED, UH, THE TAX RATE SINCE THAT TIME.
UM, I WAS LOOKING AND YES, WITH THE $260,000 EXEMPTION AS WELL FOR SENIORS AND DISABILITIES, I THINK THAT'S SOMETHING WE AT LEAST NEED TO MAINTAIN.
UH, GOING TO THE REVENUE CAP THOUGH, BECAUSE IT WAS BROUGHT UP BY MY CALCULATIONS DIRECTOR, IT'S ONLY SAVING THE AVERAGE HOUSTONIAN A HUNDRED DOLLARS A YEAR VERSUS COSTING THE CITY ABOUT $380 MILLION.
AND THAT'S AGAIN, WHEN WE'VE LOWERED TAX RATES, WE'RE ADDING IN EXEMPTIONS, UH, FOR SENIORS AND DISABILITIES.
WE'RE DOING EVERYTHING WE CAN EVERYWHERE, BUT IT'S, THE REVENUE CAP IS ONLY SAVING THE AVERAGE HOUSTONIAN A HUNDRED DOLLARS A YEAR.
'CAUSE IT WAS BROUGHT UP, THIS WASN'T ON MY MY RADAR BEFORE, BUT WITH THE STATE LEGISLATION RELATING TO HECTOR AND THAT GOING TO POLICE AND FIRE POTENTIALLY FOR THE CITY, WOULD THAT FUNDING IF RECEIVED, ACTIVATE THAT 6% OR DOES THAT STILL NOT QUALIFY UNDER THE, THE CON CONTRACTUAL AGREEMENT? I THINK THAT WE WOULD HAVE TO EVALUATE THAT ONE.
AND IF THE REVENUE CAME, THE, THE WAY THE MOU AND THE CONTRACT STATES IS THAT THE REVENUE HAS TO BE, HAS TO MEET THREE CRITERIA.
IT HAS TO BE OBTAINED THROUGH JOINT EFFORTS.
AND, AND SO I, I DON'T WANNA INTERRUPT YOU, BUT I ONLY HAVE A LITTLE TIME.
I KNOW YOU SAID THEM BEFORE I SAID THEM.
THOSE THREE, YEAH, THOSE THE THREE REQUIREMENTS.
SO I THINK IT WOULD BE HELPFUL TO KNOW, UM, FOR THOSE THAT ARE WORKING ON THIS, WHETHER OR NOT WE BELIEVE, AND MAYBE IT'S LEGAL, THAT THAT ACTIVATES THAT 6%.
UM, WITH ON PAGE 12, OH, SORRY.
WITH THE BUDGET EXERCISES THAT COUNCIL MEMBER PLUMMER REFERRED TO, WAS THERE A REQUEST BY THE DEPARTMENT, SO HEY STARTED A 5% LESS BUDGET OR WAS THERE A, A STARTING POINT THAT WAS DIRECTED TO EACH DEPARTMENT TO DO AND THEN WE WENT FROM THERE AS TO YES, WE'RE NOT GONNA TAKE ALL OF THAT, ET CETERA.
WAS THERE A, WHAT WAS THE PRACTICE? THE STARTING POINT WAS 10%.
SO EACH DEPARTMENT WAS ASKED TO CUT 10% OF THEIR BUDGET.
THEY WERE ASKED AS AN EXERCISE.
THEY WERE ASKED TO LOOK AT THEIR BUDGET AND SEE WHAT EFFICIENCIES AND WHAT SAVINGS THEY COULD HAVE UP TO 10% FOR THE ADMINISTRATION TO EVALUATE AND DECIDE WHAT WOULD HAVE THE LEAST IMPACT TO THE CONSTITUENTS.
AND I CAN TELL YOU THAT WHAT WAS ACCEPTED AND WHAT'S INCLUDED IN THIS BUDGET DOES NOT GET UP TO THAT 10%.
UM, ON PAGE 12, CIVILIANS WE SHOW ARE DECREASING, RIGHT? THE NUMBER IS DECREASING AT THE CITY.
SEVERAL YEARS AGO, AND THIS MAY BE MORE OF A POLICY QUESTION, UM, WITH ESPECIALLY POLICE, I REMEMBER WE HAD A LOT OF CLASSIFIED DOING CIVILIAN ROLES, AND THAT WAS ONE OF THE PROBLEMS THAT WAS RAISED.
SO THEN WE SAID, WE NEED MORE CLASSIFIED, EXCUSE ME, CIVILIAN, SO WE CAN GET CLASSIFIED BACK ONTO THE STREETS.
ARE WE CONCERNED, IS THE ISSUE GONNA COME UP AT ALL WHERE WE, WE ARE SEEING SUCH A REDUCTION IN CIVILIAN THAT NOW CLASSIFIED ARE BEING ASKED TO GO BACK INTO THOSE ROLES? NOW I THINK THE POLICE CHIEF IS CHRIS.
THE POLICE CHIEF IS DOING THE OPPOSITE OF THAT, AND HE'LL SPEAK TO THAT.
UM, I GUESS PUT ME BACK IN QUEUE.
THANKS COUNCIL MEMBER RAMIREZ.
AND, UH, DIRECTOR, JUST A COUPLE MORE THINGS.
[01:45:01]
FEES HAVE BEEN TRENDING DOWN, ACCORDING TO YOUR CHART, ABOUT $40 MILLION OVER THE LAST, UH, EIGHT YEARS.CAN YOU SORT OF EXPLAIN WHY THAT IS? WHY WE'RE LOSING SO MUCH REVENUE MM-HMM
MAYBE THAT'S NOT THE RIGHT WORD, BUT COLLECTING LESS REVENUE? YEAH.
THE MAJORITY OF THE CHANGE, AND I CAN'T REMEMBER THE YEAR, BUT IT WAS SENATE BILL 1152 THAT CHANGED THE WAY THE FRANCHISE FEE, UM, CAN COME TO THE LOCALITIES.
UM, THAT HAD A HUGE IMPACT ON OUR FRANCHISE FEE REVENUE, UM, SEVERAL YEARS BACK.
UM, AND THE OTHER PIECE THAT'S DRIVING IT IS USAGE, RIGHT? AS FEWER PEOPLE HAVE CABLE, USUALLY FRANCHISE FEES ARE CALCULATED BASED ON A PERCENTAGE OF GROSS REVENUES.
SO THE, UH, FRANCHISE FEE, UH, IS GONNA DECREASE DEPENDING ON USAGE OF, UM, THOSE SERVICES THAT MM-HMM
AND, UM, ON THAT POINT, THE, THE CITY IS IN LITIGATION OVER, UH, COLLECTING FOR VIDEO, STREAMING, TRYING TO COLLECT FROM, FOR VIDEO STREAMING FROM COMPANIES SUCH AS NETFLIX, HULU, AND DISNEY.
UH, SO WE'LL SEE HOW THAT TURNS OUT.
I DON'T KNOW IF YOU'VE HEARD ABOUT THAT OR NOT.
I'M NOT FAMILIAR WITH THE DETAILS.
UM, AND LAST POINT ON SLIDE 17, PROPERTY TAX REVENUE ASSUMPTION BULLET POINTS.
UH, YOU NOTE HERE THAT, UH, WE ARE AT ZERO POPULATION GROWTH.
IS THAT RIGHT? FOR, FOR PURPOSES OF PLANNING THE PROPOSED BUDGET, WE GENERALLY TRY TO TAKE THAT CONSERVATIVE APPROACH.
UM, SO WHEN WE CALCULATE THE PROP ONE CAP, WE HAVE TO USE THE POPULATION THAT THE US CENSUS BUREAU GIVES US.
THEY DON'T GIVE US THAT NUMBER UNTIL THE LAST WEEK OF MAY.
SO THE WEEK BEFORE WE ADOPT THE BUDGET, WE WILL MAKE THAT ADJUSTMENT, UH, IN THE BUDGET AND WE'LL SHARE THAT WITH COUNCIL BEFORE ADOPTION.
SO IT, THE, THE, THE PROPERTY TAX REVENUE FIGURE MAY CHANGE SLIGHTLY BASED ON THAT.
AND, AND IF MEMORY SERVES LAST YEAR IT WAS ABOUT ZERO.
THE YEAR BEFORE, I SHOULD SAY IT WAS ABOUT 0.3%.
UH, YOU HAVE IN YOUR, UH, YOUR BUDGET PROPOSAL, UM, A NEGATIVE 17.2 MILLION THAT'S BAKED IN, UH, THE BUDGET CALLED LIKE MANAGEMENT SAVINGS.
CAN YOU EXPLAIN WHAT MANAGEMENT SAVINGS IS? SURE.
SO THAT'S THE CATEGORY MANAGEMENT PROGRAM THAT THE CITYWIDE EFFICIENCY STUDY RECOMMENDED.
UM, SO THE, UM, WHEN ERNST AND YOUNG, UH, LOOKED AT THE CITY'S SPENDING ON CONTRACTED SPENDING ON GOODS AND SERVICES, UM, BASED ON THEIR RECOMMENDATION OF WHAT THEY'VE SEEN, UM, WITH OTHER CLIENTS, YOU CAN BRING DOWN THAT SAVINGS ANYWHERE FROM FIVE TO 15% BY, UH, BRINGING TOGETHER, LET'S SAY YOU HAVE, UM, MULTIPLE CONTRACTS ACROSS THE CITY FOR THE SAME SERVICE FOR DIFFERENT DEPARTMENTS.
SO, UH, WHAT THIS, BUT IS THAT, BUT IS THAT GONNA BE SPECIFIED OR IS THAT JUST LIKE GENERAL, LIKE WHAT SO MM-HMM
SO THE WAY WE HAVE IT PROGRAMMED IN THE BUDGET IS IN THAT ONE LIT LINE ITEM, THE MANAGEMENT INITIATIVES.
UM, WE'VE ALREADY KICKED OFF WITH ERNST AND YOUNG, THAT PROJECT'S GONNA BE DRIVEN BY, UM, SPD AND JED SHOP TO, UM, TARGET WHERE WE CAN GET THE MOST SAVINGS SPECIFICALLY FOR THE GENERAL FUND INITIALLY, UH, TO, TO, OF COURSE HIT THAT GOAL AND HOPEFULLY MORE THROUGHOUT THE FISCAL YEAR, BUT IT'S GONNA CUT ACROSS ALL GENERAL FUND DEPARTMENTS.
AND WHEN WE WERE DOING THE VOLUNTARY RETIREMENT PACKAGE, I KNOW IN YOUR, YOUR PROPOSAL, SOME OF THOSE POSITIONS NEED TO BE REHIRED OR FILLED.
UM, ARE THEY BEING REFILL HIRED WITH THE SAME PEOPLE OR DIFFERENT PEOPLE AND ARE THEY COMING IN AT A LOWER COST POINT? IS THAT, UH, I GUESS CONSIDERED A SAVINGS YES.
SO BASED ON OUR SAVINGS ASSUMPTION, WE HAD ASSUMED THAT WE WERE GONNA BACKFILL A LIMITED NUMBER OF THOSE POSITIONS AND AT A LOWER COST THAN THE, UH, INDIVIDUALS THAT RETIRED.
UM, AND SO YOU DO SEE THAT REFLECTED IN THIS PROPOSED BUDGET.
AND WHEN YOU SPEAK OF OUTCOME BASED BUDGETING, WHAT PERCENT OF, I GUESS THE MEASURES ARE BEING CONSIDERED FOR OUTCOME BASED BUDGETING IN THIS PROPOSAL? SO WHEN ERNST AND YOUNG LOOKED AT OUR PROPOSED BUDGET, UH, SORRY, OUR, UM, OUR PERFORMANCE MEASURES, WHAT THEY SEE IS THAT MOST OF OUR PERFORMANCE MEASURES MEASURE OUR OUTPUT VERSUS OUR OUTCOME.
ERNST AND YOUNG IDENTIFIED THAT ONLY 6% OF OUR MEASURES REALLY MEASURE OUTCOME.
UM, AND SO THAT'S SOMETHING THAT WE WANNA WORK WITH.
UM, ERNST AND YOUNG IS GONNA PARTNER WITH THE DEPARTMENT DIRECTORS TO COME UP WITH, UM, RECOMMENDATIONS FOR REVISED PROPOSED MEASURES THAT YOU'LL SEE WE REPORT ON THROUGHOUT THE YEAR.
AND SO ALSO WHEN, WHEN EMPLOYEES ARE BEING CONSOLIDATED AND SHIFTED FROM ONE DEPARTMENT TO THE, TO THE OTHER, LIKE SOLID WASTE OR WHO'S GOING OVER THE PUBLIC CODE ENFORCEMENT, CODE ENFORCEMENT, EXPLAIN HOW
[01:50:01]
THAT'S THE SAVINGS AGAIN, BECAUSE WE'RE USING THE SAME PEOPLE THAT MAKING THE SAME AMOUNT OF MONEY, BUT TELL ME WHERE THE SAVINGS COME IN.SO THE GENERAL FUND WAS PAYING FOR CODE ENFORCEMENT OUT OF DEPARTMENT OF NEIGHBORHOODS.
NOW THAT THOSE EMPLOYEES ARE MOVING OVER TO PUBLIC WORKS, PUBLIC WORKS WILL BE PAYING FOR THEM.
SO YOU'LL SEE A REDUCTION IN THE GENERAL FUND, BUT IF YOU LOOK IN THE PROPOSED BUDGET, YOU SEE AN INCREASE IN THE, UM, BUILDING INSPECTION FUND FOR THOSE, FOR THAT CHANGE.
SO, SO IT'S A REDUCTION IN, IT'S MOVING FROM A GENERAL FUND TO, TO A SPECIAL REVENUE FUND.
UM, THE FEDERAL FUNDING CUT IMPACTS, I BELIEVE ON ONE SLIDE WE SAID WE AREN'T EXPECTING SIGNIFICANT IMPACTS.
UM, DO WE THOUGH YET HAVE A BREAKDOWN OF HOW MANY, LIKE, WHICH OF OUR DEPARTMENTS RELY ON FEDERAL FUNDING GRANTS? AND ARE THOSE GRANTS COUNTED IN GENERAL REVENUE? ARE THOSE, WHERE DO THOSE FALL IN THE, THE OVERALL BUDGET OF THE CITY? SO THE, THE GRANT FUNDS ARE NOT IN THE PROPOSED BUDGET.
UM, THAT'S SOMETHING I, I HAVE MY PERSONAL IDEAS ABOUT THAT, THAT IN THE FUTURE, I THINK WE SHOULD ADD SOME TRANSPARENCY AROUND THAT IN THE BUDGET, AT THE TIME OF BUDGET PROPOSAL.
UM, BUT WE KNOW THAT IN GENERAL, THE DEPARTMENTS THAT GET THE MOST FEDERAL GRANTS FOR THEIR OPERATIONAL BUDGETS ARE THE HOUSING DEPARTMENT AND THE HEALTH DEPARTMENT.
UM, OF COURSE, A LOT OF OTHER DEPARTMENTS GET FEDERAL AND STATE GRANTS AS WELL.
PUBLIC SAFETY GRANTS, WE HAVE INFRASTRUCTURE GRANTS, UH, THAT FOR PUBLIC WORKS, PUBLIC SAFETY GRANTS, UI.
SO THERE ARE A HOST OF FEDERAL GRANTS THROUGHOUT THE CITY.
SO AGAIN, I, I WOULD ASK THROUGH THIS BUDGET SEASON, WE, IF THERE'S A WAY TO GET A PICTURE OF BY DEPARTMENT, THE GRANTS THAT WE DO RECEIVE AND WHAT MAY WE BELIEVE BE AT RISK OR THAT WE HAVE LOST, UM, THAT WOULD BE VERY HELPFUL.
THE, UH, PAGE 20, THE TAX SALES ASSUMPTION.
UH, EMPLOYMENT IS THE KEY DRIVER OF SALE TAX REVENUE.
UM, BUT MD ANDERSON HAS A HIRING FREEZE.
BAYLOR COLLEGE OF MEDICINE CUT OVER A HUNDRED EMPLOYEES DUE TO FEDERAL, UM, POLICIES AND CUTS.
OIL AND GAS CORPORATIONS ARE INSTITUTING LAYOFFS.
SO WHAT, UM, AND AT THE SAME TIME WITH OIL PRICES, RIGHT? OPEC IS ACCELERATING PRODUCTION, OIL PRICES ARE DROPPING TO THEIR LOWEST SINCE 21.
WE FEEL VERY STRONGLY THAT WE HAVE THIS PREDICTION, BUT ARE IN WHAT WE'RE ESTIMATING, IS ALL OF THIS INCLUDED IN THAT FORECAST? SO OUR FORECAST FOR SALES TAX, UM, WE USE, I MENTIONED OUR REGRESSION MODEL.
THE AMOUNT OF MONEY THAT WE'RE BUDGETING FOR SALES TAX IS, WE HAVE SEVERAL SCENARIOS.
IT'S CLOSER TO THE PESSIMISTIC END.
IT'S BETWEEN THE PESSIMISTIC, SO WE HAVE PESSIMISTIC, LIKELY AND OPTIMISTIC.
SO IT'S BETWEEN THE PESSIMISTIC AND THE LIKELY IS WHERE THE 1% GROWTH IS COMING FROM.
SO IT'S ON THE LOWER END OF OUR MODEL ASSUMPTIONS.
AND, AND AGAIN, I DEFER TO THE EXPERTS, BUT I'M GETTING VERY CONCERNED ABOUT WHAT WE'RE BASING ON VERSUS WHAT, UM, THE ONGOING CRISIS MAY EVOLVE INTO, UH, FOR JOB LOSSES IN THE HOUSTON AREA.
UM, AND THE PRICE OF OIL, UH, WHICH BOTH HAVE SIGNIFICANT IMPACTS ON OUR ECONOMY LOCALLY.
AND WE, WE CERTAINLY TRY TO BUDGET CONSERVATIVELY AND HOPEFULLY THROUGHOUT THE YEAR REALIZE ADDITION ADDITIONAL TO THAT, SO WE FEEL COMFORTABLE WITH THIS ESTIMATE.
UM, WITH HOW WE'RE DEFINING LAND SALES, UH, WE SAID THERE ARE NO, THERE HAVE BEEN NO AND NO PLANNED LAND SALES.
I KNOW THAT THERE HAVE BEEN SMALLER MULTIPLE SALES, FOR EXAMPLE, IN DISTRICT C.
UM, HOW DO WE DEFINE LAND SALE? SO FOR PURPOSES OF THE BUDGET, WE TYPICALLY ONLY BUDGET, I THINK IT'S $2.5 MILLION FOR SALE OF CAPITAL ASSETS, WHICH WOULD REALLY BE EASEMENT SALES.
UM, EVEN AND THAT'S WHAT WE'RE SEEING A LOT OF.
EVEN ON EASEMENT SALES, WE'RE TRENDING ABOVE BUDGET FOR FY 25.
UM, BUT WHAT YOU DON'T SEE IN THIS BUDGET WILL BE, YOU KNOW, EVEN UP TO THAT WHERE WE'RE TRENDING.
I THINK FOR SALE OF EASEMENTS, WE'RE AT AROUND 6 MILLION THIS YEAR.
AND 25 WE'RE ONLY BUDGETING TWO AND A HALF MILLION FOR FY 26.
UH, CHAIR, I ONLY HAVE TWO MORE QUESTIONS.
THERE'S SOMETHING CALLED TRANSFER FROM OTHER FUNDS.
UH, I SEE THE FOOTNOTE, BUT I JUST WAS WONDERING IF YOU CAN ELABORATE A LITTLE BIT ON WHAT THAT IS.
UM, SO WE TALKED ABOUT THE, THE TRAFFIC ENFORCEMENT AND THEN THE, UM, THE OTHER PIECE,
[01:55:01]
THE 8.6 MILLION REIMBURSEMENT OF THE THREE EIGHTIES AND THE MUNICIPAL SERVICE CHARGE.THIS RELATES TO THE TS 24 CONVERSATION THAT WE HAD AT BUDGET AND FISCAL AFFAIRS AND COUNCIL LAST MONTH.
SO IN THE FY 25 ESTIMATES, UM, WE ARE REFLECTING AN INCREASE IN REVENUE, UM, FROM THET 24 FOR PRIOR YEARS.
UM, SET ASIDE FOR THE TS IN ADDITION TO REIMBURSEMENT OF THE THREE 80 AGREEMENTS, UH, TS 24 HAS ALSO HISTORICALLY NEVER PAID THE MUNICIPAL SERVICE CHARGE THAT WE'VE CALCULATED FOR THEM.
SO THAT AMOUNT IS INCLUDED IN THIS TRANSFERS FROM OTHER FUNDS.
BUT THAT DOESN'T INCLUDE THE POTENTIAL FUNDING, UH, SCHEME ISN'T THE RIGHT WORD THAT GIVES A BAD CONNOTATION.
BUT THE FUNDING PLAN AS IT RELATES TO THE DRAINAGE SETTLEMENT? CORRECT.
THE DRAINAGE, THE DRAINAGE SETTLEMENT, UM, THAT'S PROPOSED WITH THE PLAINTIFFS IS BUDGETED HERE.
SO YOU'LL SEE THE METRO FULLY BUDGETED IN THE D-D-S-R-F METRO.
UH, YOU'LL SEE THE 11.80 CENT HISTORICAL CALCULATION, PLUS THE ADDITIONAL 16 MILLION COMING INTO THE D-D-S-R-F AT VALOREM FUND.
UM, AS WELL AS YOU'LL SEE THE, UM, THE DRAINAGE CHARGE BUDGETED AS WELL.
AND LASTLY, UM, REGARDING OVERTIME ESTIMATES, AND THIS IS SOMETHING I I WILL BE ASKING OF THE OTHER DEPARTMENTS MM-HMM
RIGHT? THIS DOESN'T ALL FALL ON YOU, DIRECTOR.
UM, BUT I, AND I'M NOT PICKING ON ONE DEPARTMENT OVER ANOTHER, I JUST HAVE ONE PAGE OPEN IN, IN THE BIG BUDGET, UM, OVER TIME FY 24 ACTUAL FOR THE FIRE DEPARTMENT, UM, COMPARED TO, LET ME SAY IT THIS WAY.
OUR OVERTIME IN FY 25 ESTIMATE IS 805.
I'M ON PAGE, UH, THREE SIX OF THIS.
WE'RE GOING ALL THE WAY DOWN FOR FY 26 TO 366.
UH, ARE WE, YES, WE'RE ADDING IN CADETS, BUT WE'RE ALSO STILL IN ALL OF OUR DEPARTMENTS DEALING WITH, UH, RETIREMENT, RIGHT? SO WE'RE STILL PLAYING CATCH UP.
WE'RE NOT AT TOTAL NET GAIN YET.
ARE WE CON I'M A LITTLE CONCERNED ARE WE NOT ABOUT OUR ESTIMATES FOR OVERTIME AND WHAT WE'RE SAYING WE'RE ESTIMATING VERSUS WHAT IT COULD ACTUALLY BE.
SO FOR THE OVERTIME, UM, I KNOW YOU'RE LOOKING AT IT COMPARED TO THE FY 25 ESTIMATE, BUT IT IS ROUGHLY IN LINE WITH WHAT WE HAD AT THE TIME OF THE FY 25 ADOPTED BUDGET.
AND TO YOUR POINT ABOUT THE CADETS, I THINK THAT, UM, PARTICULARLY FOR FIRE SPEAKS TO THE NINE FIRE CADET CLASSES, PARTICULARLY ON THOSE FAST TRACK CLASSES.
ALTHOUGH THEY'RE SMALLER CLASS SIZES, THE NINE CLASSES TOTAL IS STILL A LARGER NUMBER OF CADETS THAN WE BUDGETED FOR IN FY 25.
SO THE HOPE IS, ESPECIALLY WITH THE FAST TRACK CLASSES, TO GET THEM THROUGH THE, THE CLASSES FASTER AND REDEPLOYED IN THE FIELD TO DECREASE THE OVERTIME.
BUT WE WENT FROM AN FY 24, ACTUAL THE 524 THEN TO 8 0 5.
SO, AND THEN NOW WE'RE GOING BACK DOWN EVEN LOWER THAN FY 24 ACTUALS.
I WOULD SAY THAT IT'S IN LINE WITH THE FY 25 BUDGET AT THE TIME OF ADOPTION.
AND TYPICALLY THROUGHOUT THE FISCAL YEAR, WE MONITOR THE EXPENDITURES, THE REVENUE SAVINGS, AND WE'LL, WE'LL OF COURSE BE REPORTING AND REFLECTING THAT EVERY MONTH AND TRACKING IT.
UH, MADAM DIRECTOR, THANK YOU SO MUCH FOR YOUR PRESENTATION.
YOU KNOW, I, I'M ONE OF THE NEW KIDS ON THE BLOCK AROUND HERE AND LAST YEAR GETTING A LOOK AT ALL THESE BUDGETS, NUMBERS AND UNDERSTANDING IT AND LIST OF COLLEAGUES.
BUT I MUST SAY, UM, I HAVE A BETTER UNDERSTANDING, AND IT COULD BE MORE CLEARER THAN IT, THAN WHAT YOU DID TODAY, CONNECTING BUDGETED STRATEGIES.
I READ THIS AND LOOKED AT IT, AND FROM THE STANDPOINT, I JUST WANT TO COMMEND YOU AND THE PRESENTATION THAT YOU'VE MADE.
I THINK ALL OF THE TEAM, THE MAYOR AND THE OTHERS HAVE DONE A PHENOMENAL JOB IN TRYING TO SAVE MONEY.
THAT'S WHAT WE ARE HERE TO DO.
AND, UM, AND OF COURSE, UM, WE MAY NOT ALWAYS GET ALL WE WANT, BUT AT LEAST WE GOING TO GET SOMETHING.
I MEAN, YOU ARE, YOU KNOW, I'M, I'M CERTAINLY NOT A GENIUS IN TERMS OF NUMBERS, BUT IT WAS JUST PHENOMENAL IN YOUR PRESENTATION AND HOW YOU MADE IT, UH, APPEAR AND PRESENTED TO US.
I THINK THE CITIZENS IN THE CITY WOULD BE HAPPY TO KNOW THAT WE'RE TRYING TO MOVE AND A BETTER DIRECTION WHEN IT COMES TO OUR BUDGET, UH, AND WHAT WE'VE DONE BEFORE.
AND SO THANK YOU FOR, FOR JUST, YOU KNOW, TAKING
[02:00:01]
THE, THE, UH, PROFESSIONALISM IN, IN REALLY DEALING WITH THIS MATTER.THANK YOU, COUNCIL MEMBER POLLARD.
ALRIGHT, THIS WOULD BE MY, MY LAST COMMENTS.
BUT, UM, FOR, TO, TO PIGGYBACK OFF OF COUNCIL MEMBER CAYMAN FOR, FOR SALES TAX, I THINK FOR A FISCAL YEAR, 2025, OUR CURRENT FISCAL YEAR, THERE IS PROJECTED 893 MILLION FOR SALES TAX.
WHAT WAS IT THE YEAR BEFORE? WE BUDGETED A 1.4% INCREASE LAST YEAR FROM 24 TO 25.
SO, UH, WE ARE DECREASING OUR GROWTH, BASICALLY, NOT A DECREASE IN REVENUE, BUT, YOU KNOW, FROM 24 TO 25, 1 0.4% THIS YEAR, WE'RE GONNA BUDGET A 1% INCREASE.
BUT DID WE MEET OUR, DID WE MEET OUR PROJECTION FOR SALES TAX THIS YEAR OR, OR INCREASE OR SURPASS IT? SO I THINK AT THIS POINT WE'RE ON TRACK TO SURPASS IT, BUT I DON'T FEEL COMFORTABLE TO SHOW IT JUST YET.
BUT I DO BELIEVE AT THE END OF THE FISCAL YEAR, SO THAT WE WILL BE ABOVE THE 6 93, SORRY, 8 93, UM, WE ARE TRENDING, BASICALLY THE REMAINING MONTHS WOULD HAVE TO COME IN A 4.6% DECREASE FOR THE REMAINING MONTHS FROM THE PRIOR YEAR TO HIT THE 8 93.
SO I, I BELIEVE WE WILL SURPASS IT.
WELL, I WANT, I WANT TO THANK YOU AS WELL, UH, FOR, FOR THE WORK, YOUR ENTIRE TEAM THAT'S BEHIND YOU.
I WANT TO THANK YOU ALL FOR THE WORK.
I KNOW THIS IS, IS DIFFICULT, UH, TO THE MAYOR'S TEAM, HIS, HIS, HIS STAFF.
I WANT TO THANK YOU ALL FOR THE WORK.
UM, WE CAN GO ON AND ON ABOUT, ABOUT THE BUDGET AND, AND, AND GIVE OUR PARTICULARS.
I THINK ONE OF MY, UM, ONE OF THE THINGS I LOOK AT IS THE FIVE YEAR FORECAST AND TO SEE WHERE WE'LL BE, UM, THREE YEARS FROM NOW, FOUR YEARS FROM NOW, FIVE YEARS FROM NOW, AND FROM A BASELINE TO A OPTIMISTIC STANDPOINT, THOSE NUMBERS ARE PRETTY LARGE.
BUT, UM, I DO BELIEVE YOU ALL DID, UM, A GOOD JOB IN TRYING TO FIGURE OUT HOW TO, UM, BALANCE THIS BUDGET AND, UM, PRESENT US WITH SOMETHING TO DIGEST.
SO TO YOU, TO YOU AND YOUR ENTIRE TEAM AND TO THE MAYOR'S TEAM, UH, THANK YOU FOR THE PRESENTATION AND FOR THE HARD WORK.
THANK YOU MADAM CHAIR AND AND DIRECTOR.
UH, I WANT TO AGREE WITH WHAT COUNCIL MEMBER DAVIS SAID.
UM, THANK YOU TO MAYOR WHITMEYER AND TO YOU AND YOUR TEAM AND THE MAYOR'S STAFF FOR BRINGING US A BUDGET THAT DOES NOT RAISE TAXES, THAT FINDS, UH, INEFFICIENCIES AND, UM, PLACES WHERE WE CAN SAVE MONEY.
I THINK, UH, THE RESIDENTS OF HOUSTON WILL BE PLEASED, AND I KNOW THIS IS DIFFICULT, UH, TO LOOK FOR THOSE SAVINGS, AND I JUST APPRECIATE ALL THE WORK THAT HAS GONE INTO THIS.
THERE'S NO OTHER COUNCIL MEMBERS IN THE QUEUE.
WE'LL NOW GO TO PUBLIC SPEAKERS.
WE'LL FIRST HEAR FROM DOMINIC MAZO.
ARE YOU USING THE, UH, EVOLVE HOUSTON VAN? OKAY.
ABBY, I WANNA CONVINCE YOU FOR SOMETHING WHICH YOU'VE BEEN DOING FOR DOMESTIC VIOLENCE.
I AM A CHILD OF PARENTS WHO ARE ABUSED BOTH OF MY PARENTS, AND THAT GOT ONTO ME.
SO YOU'RE TRYING TO BREAK THAT CYCLE.
AND I THINK, UH, THERE'S ONE OTHER ISSUE WITH ALL THIS, THAT WE'RE NOT LOOKING AT WHAT'S HAPPENING NEXT YEAR.
WE ARE BASICALLY GOING TO HAVE SEVEN SUPER BOWLS IN ONE MONTH OR A SIX WEEK PERIOD WITH THE WORLD CUP PLAYOFFS.
HAS THERE BEEN ANY STUDY DONE? HOW THAT IS GOING TO AFFECT THE BUDGET? BECAUSE I REALLY THINK, UM, UH, I HADN'T SEEN THE BUDGET, BUT YOU KNOW, THAT'S GONNA AFFECT EVERYTHING IN THE CITY.
YOU KNOW, INFRASTRUCTURE, UM, METRO'S GONNA AFFECT THIS EFFECT.
UH, AND THE OTHER ISSUE IS, UH, FIRST HOUSTON, I AM CONCERNED ABOUT THE EXPANSION OF THE GRB.
[02:05:01]
THAT'S PROBABLY GONNA PAY FOR ALL THAT, BUT THAT IS STILL A CITY PROPERTY.AND THEY ARE PUTTING UP A, A BOND ON THAT USING THE, THE, UH, HOT TAXES WHERE IF THIS WAS DIRECTLY DONE BY THE CITY, IT WOULD HAVE TO GO BEFORE THE VOTERS.
IF I'M, IF I REMEMBER MY CAR, UH, CIVICS CLASS WHEN I WAS IN HIGH SCHOOL.
AND I THINK THAT THAT NEEDS TO BE LOOKED AT BECAUSE I'M GONNA TELL YOU SOMETHING, UH, JIM ROBINSON, HE WAS THE BUDGET MANAGER FOR HARRIS COUNTY.
I ASKED HIM ONE DAY AND HE WAS ALSO A METRO BOARD MEMBER.
I ASKED HIM WHETHER, WHAT HAPPENS IF A TURD OR OR ONE OF OUR AGENCIES LIKE THAT GOES UNDER, WHO HAS TO PAY FOR THE DEBT? IT COMES TO THE HORSESHOE, IT COMES TO THE 9 0 1 BAGBY.
SO I THINK WE'RE GONNA HAVE TO BE VERY CAREFUL WITH THE MANAGEMENT DISTRICTS AND DETERRED.
WE HAVE TO BE, YOU KNOW, WE CANNOT HAVE RUN A DEFICIT THAT IS IN THE STATE CONSTITUTION, BUT WE'RE GONNA HAVE TO BE, MAYBE WE NEED TO HAVE A LOOK AT WITH, YOU KNOW, YOU, YOU DID THAT BUDGET STUDY WITH THAT OUTSIDE GROUP.
I THINK IT WAS A GOOD IDEA, BUT MAYBE WE NEED TO TAKE THAT FURTHER.
WE NEED TO TAKE IT TO THE CHURCH, THE MANAGEMENT DISTRICT, THE, THE AIRPORT MANAGEMENT DISTRICT SO THAT WE DON'T GET HUNG UP.
AND I DO AGREE, UH, AS YOU BROUGHT UP SOMETHING ABOUT STUFF COMING FROM WASHINGTON AND I WOULD BACK UP AUSTIN, UH, WE CANNOT DEPEND ON IT.
AND I THINK THAT WAS A VERY SOUND COMPLI SENTENCE YOU SAID ABOUT FIVE TO 10 MINUTES AGO.
SO AGAIN, THIS BUDGET IS NOT GONNA BE EASY FOR ANYONE AND LA AND I THINK YOU TOO, THE PUBLIC SPEAKERS ON THIS NEED TO COME FIRST.
YOU KNOW WHY, AND WILLIE, YOU'VE SEEN THIS AT METRO MEETINGS, SOMETIMES A CUSTOMER WILL COME UP AT METRO AND AT TRANSPORTATION POLICY COUNCIL, THE, THE SPEAKER PUBLIC SPEAKERS COME FIRST.
AND SOMETIMES THE PUBLIC SPEAKER CAN, CAN COME OUT OF NOWHERE AND HAVE A GOOD IDEA, OR HE OR SHE SEES SOMETHING THAT NOBODY ELSE DOES.
AND THEN, YOU KNOW, YOU HAVE ALL TO, LIKE TODAY WE HAVE ALL THE, MOST OF THE COUNCIL HERE, WE HAVE STAFF HERE.
UH, YOU KNOW, AND LIKE I SAID, I'M GONNA SAY THIS AT LAST AND I THINK WE NEED TO SAY THIS AT THE BEGINNING AND THE END OF EVERY CITY COUNCIL MEETING AND COUNCIL AND COMMUNITY, THE PEOPLE ARE THE CITY.
AND MAKE SURE YOU LISTEN TO US.
AS ALSO, WAIT, A COUPLE PEOPLE WANNA ADDRESS YOU.
DOMINIC, THANK YOU FOR ALWAYS COMING AND, AND, UH, THE WORK THAT YOU TAKE TO GET HERE, UM, I DO THINK WE'RE GONNA GET, OF COURSE, A HUGE ECONOMIC BOOM WHEN IT COMES TO THE WORLD CUP BEING HERE.
UH, WHAT I'VE LEARNED IS YOU CAN'T, YOU CAN'T BUDGET OFF OF SPECULATION THOUGH.
SO UNTIL YOU HAVE THOSE NUMBERS AND UNDERSTAND WHAT THOSE NUMBERS ARE AND WHAT SOME OF THE CIRCUMSTANCES AROUND THAT EVENT IN THAT FISCAL YEAR, IT WOULDN'T BE WISE TO BAKE THOSE IN.
BUT I DO THINK HAVING A ESTIMATE OF WHAT TO MAYBE ANTICIPATE, UH, IS GOOD TO GO OFF OF.
UM, I THINK I ENJOY HAVING THE, THE, THE PRESENTATION FIRST BECAUSE SOMETIMES THE PRESENTATION CAN ALSO ANSWER SOME OF THE QUESTIONS FROM THE PUBLIC AND IT KIND OF GIVES A FOUNDATION AND THE OVERVIEW ABOUT WHAT WE'RE DISCUSSING AND THEN BE ABLE TO LAY OUR QUESTIONS BASED ON THAT.
SO YOUR QUESTIONS AND YOUR INSIGHT ARE ALWAYS VALUED.
AND I WANT TO THANK YOU FOR ALWAYS COMING FORWARD.
THANK ANYBODY ELSE IN QY ASK ME A QUESTION.
OH, DOMINIC, THANK YOU FOR YOUR KIND WORDS.
I DID WANNA SAY, UM, THANK YOU FOR SHARING YOUR PERSONAL STORY.
ONE OF THE THINGS WE TALKED ABOUT EARLIER TODAY WAS THE IMPORTANCE OF, UH, ADDRESSING THE STIGMA AROUND DOMESTIC AND FAMILY VIOLENCE AND BEING ABLE TO EMPOWER SURVIVORS TO COME FORWARD.
UH, AS IT RELATES TO THE WORLD CUP, I DON'T HAVE ALL THE DETAILS, BUT I DID WANNA SHARE, UH, LIKE COUNCIL MEMBER POLLARD, I AGREE.
WE WILL SEE, RIGHT? INCREASE SALES TAX, INCREASE RIDERSHIP ON METRO, THINGS THAT ARE GOOD FOR THE CITY.
AT THE SAME TIME, THE EVENT COSTS FROM A PUBLIC SAFETY PERSPECTIVE, UM, DOES NEED TO BE ACCOUNTED FOR.
ONE OF THE GREAT THINGS I BELIEVE THAT THE ADMINISTRATION IS DOING, THAT THE SPORTS AUTHORITY IS DOING, UH, THAT THE WORLD CUP COMMITTEE IS DOING.
'CAUSE IT'S NOT JUST HOUSTON, RIGHT? WHEN WE HOST THE WORLD CUP, IT'S A BUNCH OF DIFFERENT CITIES.
UH, THEY ARE ALL WORKING TOGETHER AND APPLYING FOR OTHER TYPES OF OUTSIDE FUNDING TO HELP US PAY FOR SOME OF THOSE ADDITIONAL COSTS.
SO I DON'T HAVE AN UPDATE ON THAT, BUT I WANTED TO VALIDATE YOUR CONCERN, BUT ASSURE YOU THAT, UH, FOLKS ARE WORKING ON THAT, UH, VERY, VERY DILIGENTLY.
ANYBODY ELSE? THANK YOU DOMINIC.
AND YOU BRING UP A GOOD POINT ABOUT PUBLIC SPEAKERS.
I KNOW AT TPC AND AT HGAC, THEY, THEY DO COME, THEY DO COME
[02:10:01]
FIRST.SO I'M GONNA GIVE THAT SOME THOUGHT.
UH, WE'LL NOW HEAR FROM JACK VALINSKI.
'CAUSE I KNOW Y'ALL HAVE TO SIT THERE FOR A LONG TIME TOO.
I'M MORE APPRECIATIVE OF LEGISLATIVE BODIES MORE AND MORE.
UM, I LEFT TWO BOARDS THIS YEAR BECAUSE OF FINANCIAL PROBLEMS OF NOT DEALING WITH IT.
AND SO I KNOW THIS IS VERY TOUGH.
I COULD NOT UNDERSTAND READING ALL THAT.
BUT ONE OF THE THINGS I WOULD HOPE THAT YOU WOULD DO AS AN AMENDMENT IS FIX THAT CLOCK.
UM, THE PRESS KEPT SAYING IT WAS ABOUT $300 MILLION DEFICIT.
AND NOW IT LOOKS LIKE IT'S, YOU'RE GETTING THERE.
BUT COUNCIL MEMBER POLLARD, HOW YOU TALKED ABOUT THAT, IT'S GONNA CONTINUE DOWN THE ROAD.
WE'VE GOTTA MOVE FORWARD ON THIS.
SO THEY'RE NOT, WE'RE FACING THIS EVERY YEAR.
UM, AND I KNOW WHAT THE ANSWER IS.
UH, THE TOLL ROAD MONEY, IF YOU GET THE MONEY, ISN'T THAT GONNA GO TO THE GENERAL FUND AND BASICALLY BE WASHED OUT BECAUSE WE'RE GONNA HAVE TO GIVE THEM MONEY BACK.
HEALTH DEPARTMENTS, WE'RE LOSING FEDERAL MONEY, HAVING PEOPLE VACCINATED AND, AND SERVING THE PEOPLE WHO CAN'T GET HEALTH ANYWHERE ELSE.
THAT'S SUCH AN IMPORTANT PART OF WHAT THE CITY DOES, ESPECIALLY WHEN WE DO BACK TO SCHOOL.
YOU SEE ALL THOSE KIDS THERE GETTING VACCINATIONS AND EYE CHECKUPS AND TEETH CHECKS UP.
THAT'S, THAT'S A GREAT THING THAT WE DO.
WE CAN'T CONTINUE ON TO HAVE THESE PROBLEMS OVERTIME.
YOU KNOW WHAT, THE PROBLEM WITH OVERTIME, PLEASE LOOK AT THE BUDGET BETTER ON OVERTIME.
A THOUSAND PEOPLE GONE INTO THE CITY, THAT'S GONNA HURT, THAT'S GONNA HURT SOMEWHERE IN DELIVERING CITY TO GIVING, UH, DELIVERING SERVICES TO THE CITY.
THE WATER LINES, WE ALL KNOW THAT'S A PROBLEM.
IT'S NOT AN EASY THING WITH THE CLIMATE WE'RE IN AND THE WAY THE CITY'S SET UP.
BUT PLEASE DON'T KEEP KICKING THE CAN DOWN THE ROAD.
THAT'S WHAT THE MAYOR KEEPS SAYING.
I DON'T KNOW WHAT THE ANSWER IS, BUT $300 MILLION DEFICIT AT THE BEGINNING OF THIS.
THE, THE LOOKING AT THIS THING IS GONNA CONTINUE ON.
THANK YOU JACK, AND THANKS FOR ALL YOU CONTINUE TO DO FOR OUR CITY.
ALL RIGHT GUYS, READ THE REST OF THE SCHEDULE.
I THINK WE HAVE COME TO THE END OF THIS MEETING AND I JUST WANT TO THANK EVERYBODY FOR YOUR PARTICIPATION.
BEFORE WE ADJOURN, SOME IMPORTANT DATES, BUDGET WORKSHOPS WILL BEGIN TUESDAY, MAY 13TH THROUGH TUESDAY, MAY 20TH, RIGHT HERE IN COUNCIL CHAMBER.
THERE WILL BE TWO BUDGET TOWN HALLS.
I AM CO-CHAIRING WITH OUR CO-HOSTING WITH MY VICE CHAIR COUNCIL MEMBER MARIO CASTILLO.
ONE SATURDAY, MAY 17TH AT 10:00 AM AT THE FONDE CENTER, ANOTHER ONE THURSDAY, MAY 22ND, 6:00 PM HELD VIRTUALLY VIA MICROSOFT TEAMS. THE PUBLIC HEARING HERE IN THE COUNCIL CHAMBER WILL BE WEDNESDAY, MAY 21ST AT 9:00 AM COUNCIL MEMBERS.
BUDGET AMENDMENTS WILL BE PRESENTED AT THE MAY 28TH COUNCIL MEETING AND THEN TAGGED FOR CONSIDERATION FOR A VOTE ON JUNE 4TH.
LASTLY, DON'T FORGET ABOUT THE, YOUR 2 CENTS BUDGET SURVEY WAS RELEASED ON APRIL 17TH.
WE'RE GETTING GOOD PARTICIPATION AND, UH, WE WILL BE DISCUSSING THE BUDGET OVER THE NEXT MONTH.
SO WE WANNA HEAR FROM YOU, UM, MELISSA AND TEAM, UNBELIEVABLE WORK.
WE'RE VERY PROUD OF YOU AND, AND EVERYTHING YOU'VE DONE TODAY.
UM, THIS MEETING IS ADJOURN ADJOURNED.
HPU OH YES, AN HPLU CONTRACT TOMORROW AT 10:00 AM SEE YOU THERE.