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GOOD AFTERNOON[Budget and Fiscal Affairs on May 6, 2026.]
EVERYONE.THE BUDGET AND FISCAL AFFAIRS COMMITTEE WILL COME TO ORDER AT 2:00 PM I'M VICE CHAIR MARIO CASTILLO, JOINED BY COLLEAGUES, COUNCIL MEMBER JULIAN RAMIREZ, COUNCIL MEMBER TWILA CARTER, COUNCIL MEMBER JOAQUIN MARTINEZ.
AND ALSO STAFF FROM COUNCIL MEMBER ALEJANDRO SALINAS, COUNCIL MEMBER CAYMAN, COUNCIL MEMBER FLICKINGER AND COUNCIL MEMBER MARY NAN HUFFMAN.
I CALLED THIS MEETING TO ORDER AND WOULD LIKE TO WELCOME ALL COUNCIL MEMBERS IN ATTENDANCE AND THEIR STAFF.
TODAY'S AGENDA IS THE PROPOSED FY 2027 BUDGET AND FORECAST.
BEFORE WE GET STARTED, A FEW IMPORTANT DATES TODAY, MAY 6TH.
WE ARE RECEIVING THE FIVE YEAR FORECAST AT THE BUDGET AND FISCAL AFFAIRS COMMITTEE.
MAY 12TH THROUGH 19TH, WE WILL BE HOLDING BUDGET WORKSHOPS AT THE BUDGET AND FISCAL AFFAIRS COMMITTEE, MAY 16TH, AN IN-PERSON BUDGET TOWN HALL AT THE FONDE RECREATION CENTER.
THAT IS A SATURDAY AT 10:00 AM MAY 20TH, A PUBLIC HEARING AT THE COUNCIL, UH, CITY COUNCIL MEETING AT 9:00 AM HERE IN CHAMBERS.
AND THAT EVENING, A VIRTUAL BUDGET TOWN HALL AT 6:00 PM ONLINE AND MAY 27TH.
COUNCIL MEMBERS SUBMIT AMENDMENTS HERE AT THE HORSESHOE FOR THE BUDGET WITH JUNE 3RD BEING THE MEETING WHERE THE BUDGET IS CONSIDERED AS AMENDED.
ALSO, UH, OUR CHAIR COUNCIL MEMBER ALCORN, HAS JOINED US.
UH, WE WELCOME HER TO THE MEETING.
SO FOR THE FY 2027 BUDGET WORKSHOP PROCEDURES, COUNCIL MEMBERS ARE ENCOURAGED TO SUBMIT ANY DEPARTMENT BUDGET WORKSHOP QUESTIONS IN A WORD DOCUMENT AND UPLOAD THOSE TO SHAREPOINT BUDGET WORKSPACE.
ALL PRESENTATIONS FOR BUDGET WORKSHOPS WILL BE POSTED ON SHAREPOINT 48 HOURS BEFORE THE DAY OF THE DEPARTMENT'S WORKSHOP.
THOSE PRESENTATIONS WILL THEN BE UPLOADED TO THE BFA WEBSITE AS THEY BECOME AVAILABLE.
DEPARTMENTS HAVE BEEN DIRECTED TO PROVIDE RESPONSES TO COUNCIL MEMBERS WITHIN 48 HOURS OF RECEIPT.
DEPARTMENT RESPONSES WILL ALSO BE UPLOADED TO SHAREPOINT, AND QUESTIONS FROM COUNCIL MEMBERS CAN BE UPLOADED AT ANY TIME DURING THE BUDGET WORKSHOP PROCESS.
THE EARLIER THE BETTER, ALLOWING DEPARTMENTS PLENTY OF TIME TO PROVIDE RESPONSES, AND PUBLIC SPEAKERS SHOULD HAVE SIGNED UP ONLINE BY 5:00 PM YESTERDAY.
UH, IF YOU'D LIKE TO SIGN UP IN PERSON TODAY, THERE IS A SIGNUP SHEET OVER AT THE, UH, PRESS TABLE UP HERE TO MY LEFT.
AND FOR A WRITTEN RESPONSE TO YOUR QUESTION OR PUBLIC COMMENT, PLEASE ASK YOUR DISTRICT OR AT LARGE COUNCIL MEMBER TO SUBMIT ON YOUR BEHALF IN TERMS OF THE RULES FOR TODAY'S MEETING, COUNCIL MEMBERS AND STAFF, PLEASE HOLD YOUR QUESTIONS UNTIL THE END OF THE DIRECTOR'S PRESENTATION.
AS OF OUR DEADLINE YESTERDAY, 5:00 PM WE HAVE FIVE PUBLIC SPEAKERS SIGNED UP TO SPEAK.
HOWEVER, IF THERE ARE ANY MEMBERS OF THE PUBLIC THAT WOULD LIKE TO PARTICIPATE IN PUBLIC COMMENT, AGAIN, GO TO THE SIGN UP SHEET ON THE PRESS TABLE.
THE AGENDA ITEM PROPOSED FY 2027 BUDGET IN FIVE YEAR FORECAST IS WHAT WE WILL HEAR.
UM, SO AT THIS TIME, I'D LIKE TO WELCOME FINANCE DIRECTOR MELISSA DEBOWSKI, TO PRESENT THE PROPOSED FY 2027 BUDGET AND FIVE YEAR FORECAST.
ALSO, BEFORE YOU START DIRECTOR, I JUST WANNA RECOGNIZE WE'VE BEEN JOINED BY STAFF, UH, FROM COUNCIL MEMBER JACKSON'S OFFICE, AS WELL AS COUNCIL MEMBER POLLARD.
UM, SO BEFORE I GET STARTED ON THE BUDGET OVERVIEW AND FIVE-YEAR FORECAST, I WANTED TO THANK, UM, ALL THE HARD, ALL THE TEAM THAT PUT ALL THE HARD WORK INTO PRODUCING THIS BUDGET.
UM, I KNOW WE USUALLY TALK ABOUT HOW BUSY WE ARE AT THIS TIME OF YEAR, BUT WE REALLY STARTED WORKING ON THIS BUDGET ON JULY 1ST OF LAST YEAR.
UM, AND EVEN A LOT OF THE PRE-WORK THAT WENT INTO SOME OF THESE IDEAS HAS BEEN GOING ON FOR MANY YEARS.
UM, SO, BUT NOT TO SAY THAT, OF COURSE, THERE'S ALWAYS A CRUNCH TIME AT THE END.
SO THE TEAM THAT'S SITTING BEHIND ME, AND WE ALSO HAVE SOME, UM, SOME MORE STAFF BACK AT THE OFFICE THAT ARE STILL WORKING, RIGHT, BECAUSE, UM, WE'RE STILL, AS YOU MENTIONED, WE HAVE THE DEPARTMENT BUDGET WORKSHOPS COMING UP.
UM, BUT I REALLY WANTED TO THANK THEM FOR ALL THE LONG HOURS THEY PUT IN NIGHTS, WEEKENDS, WAY, WAY TOO LONG ONE NIGHT.
UM, SO, UH, THEY REALLY SACRIFICE A LOT TO PUT, PUT THIS DOCUMENT TOGETHER.
UM, IT'S NOT JUST THEM, IT'S ALSO THEIR FAMILY, UM, THAT SUPPORTS THEM.
UM, SO I REALLY WANNA SPEND A MOMENT TO THANK THEM.
UM, THEN OF COURSE, MY OWN FAMILY.
UM, MY CHILDREN HAVE BEEN VERY PATIENT WITH ME EVEN LAST NIGHT WORKING ON THE SLIDES.
UM, MY HUSBAND THAT SUPPORTS ME, AND THEN
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ALL THE OTHER DEPARTMENTS AT THE CITY, THEY PUT A LOT OF WORK INTO THIS AS WELL.UM, REALLY WORKING TOGETHER AND PULLING TOGETHER TO, TO GET THIS BUDGET WHERE IT NEEDED TO BE.
UM, SO WE'LL GO TO, I THINK IT'S SLIDE FIVE, CONNECTING BUDGET TO STRATEGY.
SO SPEND A LITTLE BIT OF TIME TALKING ABOUT THE OUTCOME-BASED BUDGETING.
SO WE CONTINUE ON WITH THE ON SLIDE SIX WITH THE OUTCOME-BASED BUDGETING.
UM, THE WAY WE LAY OUT THE BUDGET, UH, IT'S BASED ON, UH, MAYOR'S PRIORITIES AND PROGRAMS, UH, ARRANGED AROUND THOSE PRIORITIES.
UM, LOOKING IN THE BUDGET BOOK, WHICH, UM, COUNCIL MEMBERS RECEIVED HARD COPIES OF YESTERDAY AND IS ALSO AVAILABLE ON THE WEBSITE, YOU SEE THE BUDGET BROKEN OUT, BOTH EXPENDITURES AND REVENUES AND FTES BY PROGRAM, UM, ASSOCIATED WITH EACH OF THOSE PROGRAM, WE HAVE SOMETHING THAT WE CALL, UH, EITHER PERFORMANCE MEASURES OR SOMETIMES KNOWN AS KPIS.
SO I'LL TALK A LITTLE BIT MORE ABOUT THOSE IN THE SLIDES TO COME.
BUT, UM, BASICALLY WE'RE ON, I THINK MAYBE THE THIRD OR FOURTH YEAR NOW OF ORGANIZING OUR BUDGET AROUND THE OUTCOME-BASED BUDGET, UM, UH, WAY OF ORGANIZING IT.
SO ON THE NEXT SLIDE, THIS SLIDE GOES OVER THE MAYOR'S PRIORITIES.
SO, UM, THEY'RE THE SAME PRIORITIES THAT WE'VE HAD FOR THE LAST TWO YEARS, UM, WITH THE TOP TWO REALLY BEING PUBLIC SAFETY AND INFRASTRUCTURE.
UM, THE, THE SECOND TWO ARE GOVERNMENT THAT WORKS IN QUALITY OF LIFE, AND YOU CAN SEE THAT, UM, WE DO, UH, PUT MOST OF THE BUDGET TOWARDS THE TOP TWO PRIORITIES.
UM, AND THAT REALLY REFLECTS THE MAYOR'S PRIORITY AND VISION FOR THE CITY.
SO ON SLIDE EIGHT, UM, AGAIN, CONNECTING BUDGET TO STRATEGY.
SO OUTCOME-BASED BUDGETING IS REALLY ABOUT, UM, DATA-DRIVEN DECISION MAKING AND MAKING SURE THAT, UH, WE HAVE A WAY OF MEASURING OUR RESULTS AND LINKING OUR BUDGET TO THE GOALS THAT WE HAVE AT THE CITY.
UM, THE POINT OF IT IS TO REALLY INCREASE, INCREASE TRANSPARENCY AND TO PUT SOME MEANINGFUL MEASURES THAT THE PUBLIC CAN, UM, CAN UNDERSTAND AND BE ABLE TO, UM, UNDERSTAND HOW THEIR DOLLARS ARE BEING PUT TO WORK TOWARDS WHICH PROGRAMS. UM, SO JUST A LITTLE BIT OF UPDATE ON WHAT'S BEEN GOING ON WITH THE OUTCOME-BASED BUDGETING.
UM, BACK IN FISCAL YEAR 25, WE WENT THROUGH THE CITYWIDE EFFICIENCY STUDY WHERE ALL OF OUR, UM, UH, PERFORMANCE MEASURES WERE EVALUATED BY OUR, UM, OUR PARTNERS WITH ERNST AND YOUNG.
UM, WE THEN DID A DEEP DIVE INTO THOSE PROGRAM AND KPI, UM, KPI'S, KEY PERFORMANCE INDICATORS WITH EACH DEPARTMENT DOING WORKSHOPS THROUGHOUT FISCAL YEAR 26 TO REFINE THOSE KEY PERFORMANCE INDICATORS AND TO FOCUS ON WHICH OF THOSE PERFORMANCE INDICATORS ARE MOST MEANINGFUL FOR THE PUBLIC.
SO, UM, MOVING ON TO WHAT THE NEXT STEPS ARE, UH, WE, WE STILL WANNA CONTINUE TO REFINE THOSE PROGRAMS IN KPIS.
AND, AND ON SLIDE NINE, WE GIVE A BREAKDOWN OF SOME OF THE DEPARTMENTS THAT HAVE GONE THROUGH THE DEEP DIVE WORKSHOPS ALREADY.
UM, THERE'S 12 DIFFERENT DEPARTMENTS THAT WENT THROUGH THE DEEP DIVE WORKSHOPS, AND A LOT OF THOSE, UM, UPDATED KPIS YOU SEE AS PART OF THE PROPOSED BUDGET.
SO EACH OF THE DEPARTMENT DIRECTORS, WHEN THEY DO THEIR BUDGET WORKSHOP, IS GOING TO GO THROUGH ALL OF THEIR KPIS FOR THEIR DEPARTMENT, UM, AND TALK ABOUT WHICH ONES ARE NEW, UM, OR WHICH ONES ARE, UM, I DON'T WANNA SAY GOING AWAY, BUT MAYBE MORE THINGS THAT ARE TRACKED INTERNALLY VERSUS IN THE EXTERNAL FACING DOCUMENT TO REALLY TRY TO FOCUS ON, UH, WHAT'S THE MOST MEANINGFUL FOR THE PUBLIC.
SO, GOING ON TO THE NEXT SECTION, UM, WE'LL TALK A LITTLE BIT ABOUT THE STRUCTURAL BUDGET REFORMS THAT ARE THE, UH, NEWEST PART OF THIS YEAR'S BUDGET CYCLE.
UM, SO SOME OF THESE SLIDES MIGHT LOOK FAMILIAR TO YOU ALL ON THE NEXT SLIDE.
UM, THERE'S SOME OF THE INFORMATION THAT WE TALKED ABOUT IN SOME OF THE, UM, ONE-ON-ONE MEETINGS THAT WE HAD BEFORE THE BUDGET WAS ANNOUNCED.
SO JUST TO GIVE AN OVERVIEW OF SORT OF WHAT'S BEEN GOING ON, UM, SINCE JANUARY OF 2024, I ALREADY MENTIONED THAT WE WENT THROUGH THE ARNST AND YOUNG CITYWIDE EFFICIENCY STUDY.
UM, WE DID A LOT OF REORGANIZATION, UM, OF THE DEPARTMENTS LOOKING AT THE SPANS AND LAYERS, LOOKING AT HOW MANY, UM, STAFF TO MANAGER RATIOS WE HAD AND GOING THROUGH THAT PROCESS TO REALLY BE AS, UM, STREAMLINED AND EFFICIENT AS WE CAN WITH OUR RESOURCES.
UM, SO GOING ON INTO, UM, NOW 2025, UM, WE REALLY AIM TO LOOK AT HOW WE COULD REDUCE THE EXPENDITURE BUDGET FOR THE CITY.
SO WE HAD A LOT OF SUSTAINABLE REDUCTIONS THAT WERE PART OF THE FY 26 BUDGET, INCLUDING THE VOLUNTARY RETIREMENT INCENTIVE PROGRAM THAT GENERATED ABOUT $30 MILLION OF RECURRING SAVINGS FOR THE GENERAL FUND ALONE.
UM, IN ADDITION TO A HOST OF OTHER ITEMS THAT RESULTED IN REALLY KIND OF BRINGING DOWN THE BASELINE WHERE WE WERE FOR FISCAL YEAR 26.
UM, AND I KNOW WE TALKED ALL ABOUT THAT LAST YEAR, SO I'M NOT GONNA SPEND TOO MUCH TIME FOCUSING ON FISCAL YEAR 26.
UM, BUT WE KNEW THAT WE HAD A LOT, A LOT MORE TO GO.
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THE, THE FUNDING GAP, UM, FOR FISCAL YEAR 27 WAS LOOMING AROUND $200 MILLION.AND WE KNEW THAT WE HAD, UM, ALTHOUGH WE ARE STILL OF COURSE, CONTINUING ON THE EFFICIENCY MEASURES AND FIGURING OUT, YOU KNOW, IF WE HAVE AGED VACANT POSITIONS THAT HAVE BEEN VACANT FOR A LONG TIME, YOU KNOW, WHAT OTHER SAVINGS CAN WE IDENTIFY? WE KNOW THAT ALL OF THOSE SMALL THINGS ARE NOT GOING TO, WHILE, WHILE ALL SMALL PIECES ADD UP TO SOMETHING LARGER, WE KNOW THAT THAT'S NOT GONNA BE ENOUGH TO GENERATE $200 MILLION, UM, IN SAVINGS THAT WE, WE REALLY NEED FOR FISCAL YEAR 27.
SO ON SLIDE 12, UM, I'M NOT GONNA SPEND TOO MUCH TIME ON THIS SLIDE BECAUSE I THINK WE ALL KNOW WE HAVE THE PROPERTY TAX REVENUE CAP WITH THE STATE CAP, THE LOCAL CAP, AND WE DO HAVE SOME MORE SLIDES, UM, IN THE BACK OF OR IN THE MIDDLE OF THE PRESENTATION ABOUT THAT.
BUT WE HAVE, UM, OBVIOUSLY WE HAVE THOSE CAPS IN PLACE, LIMITING OUR SINGLE LARGEST SOURCE OF REVENUE FOR THE GENERAL FUND.
UM, WE HAVE REDUCED OUR TAX RATE, UM, CONSISTENTLY, UM, FOR OVER A DECADE.
UH, IT WAS AT 63 CENTS, AND NOW IT'S DOWN TO 51 CENTS.
AT THE SAME TIME, WE HAVE A GROWING POPULATION AND A GROWING DEMAND FOR SERVICES THAT WE NEED TO PROVIDE TO THE CONSTITUENTS.
UM, WE KNOW THAT COSTS ARE INCREASING, RIGHT? WE HAVE TO DEAL WITH INFLATION JUST LIKE, UM, JUST LIKE THE AVERAGE CITIZEN AND OUR COSTS THAT WE HAVE TO PERFORM THOSE SERVICES.
UM, AND WE ALSO HAVE INFRASTRUCTURE OBLIGATIONS THAT WE NEED TO COMPLY WITH.
SO, MOVING ON TO, UM, SLIDE 13, UM, TO GET INTO THE DETAILS OF WHAT WE'RE DOING AS PART OF THE FY 27 BUDGET.
UM, THE FIRST ITEM IS, UH, HAVING THE SOLID WASTE DEPARTMENT BECOME PART OF THE MUNICIPAL UTILITY THAT THE CITY ALREADY, UH, MAINTAINS BEING THE WATER AND WASTEWATER UTILITY AND STARTING AN ADMINISTRATIVE FEE ASSOCIATED WITH THAT.
THE SECOND ITEM THAT WE'RE DOING IS STARTING THE RIGHT OF WAY RENTAL FEE, UH, FOR THE COMBINED UTILITY SYSTEM.
THESE TWO ITEMS ARE STANDARD PRACTICES IN MAJOR CITIES THROUGHOUT TEXAS.
UM, THEY HELP ALIGN COSTS WITH SERVICE AND THEY HELP TO SUPPORT, UM, MOVING TOWARDS A STRUCTURALLY BALANCED BUDGET.
SO TO GET INTO DETAILS ON THE SOLID WASTE PROPOSED CHANGES, UM, CURRENTLY WE HAVE THE WATER AND WASTEWATER ENTERPRISE FUND AT THE CITY, WHICH IS PART OF THE COMBINED, WHICH IS THE COMBINED UTILITY SYSTEM.
SO THE IDEA IS THAT, UM, UNDER STATE LAW CHAPTER 1502, UM, SOLID WASTE CAN BE PART OF THE COMBINED UTILITY SYSTEM.
SO WE'RE GOING TO, UM, REORGANIZE THE SOLID WASTE DEPARTMENT AS A DIVISION WITHIN THE HOUSTON PUBLIC WORKS DEPARTMENT, AND THE COMBINED UTILITY SYSTEM WILL NOW BE THE, UM, THE FUND THAT THE SOLID WASTE OPERATIONS ARE FUNDED FROM.
IN ORDER TO SUPPORT THAT TRANSITION, WE'RE GOING TO PROPOSE A GRADUAL FEE, WHICH WILL START AT $5 PER HOUSEHOLD, PER PER MONTH.
UM, AND WE'LL, UH, THE IDEA IS THAT WE'LL, IT WILL SLOWLY INCREASE OVER TIME, BE $5 PER HOUSEHOLD PER MONTH FOR THE FIRST TWO YEARS, UM, AND INCREASE BY $5 EVERY YEAR AFTER THAT.
AND WE HAVE SOME MORE DETAILS IN THE NEXT SLIDE.
UM, BY BRINGING IN THAT FUNDING AS WELL AS COMBINING IT WITH THE COMBINED UTILITY SYSTEM, IT WILL SUPPORT THE SOLID WASTE, UM, OPERATIONS IN TERMS OF REPLACING FLEET, UM, HELPING WITH STAFFING AND RELIABILITY OF THE SYSTEM, AND ALSO ADDRESSING THE LONG-TERM NEGLECT THAT BOTH THE TRANSFER STATIONS AND THE RESIDENTIAL, UM, OR SOMETIMES WE CALL THEM, THE NEIGHBORHOOD DROP OFF CENTERS HAVE HAD.
SO MOVING TO SLIDE 15, THE DETAILS OF THE FEE, UM, IN FISCAL YEAR 26, THE SOLID WASTE DEPARTMENT'S BUDGET IS APPROXIMATELY ABOUT $107 MILLION.
AND, UM, THIS $5 ADMINISTRATIVE FEE IS ONLY GOING TO APPLY TO THE ROUGHLY 400,000 CUSTOMERS THAT CURRENTLY GET THE RESIDENTIAL COLLECTION.
UM, IF YOU ONLY JUST LOOK AT THE SOLID WASTE DEPARTMENT'S OPERATING BUDGET AND APPROXIMATELY DIVIDE BY THE 400,000 CUSTOMERS, IT COMES OUT TO APPROXIMATELY $25 PER HOUSEHOLD PER MONTH.
UM, WE ALSO WENT THROUGH THE BURNS AND MCDONALD, UM, UH, STUDY, WHICH THAT, THAT FINAL REPORT IS AVAILABLE ON THE WEBSITE, UM, JUST AS OF TODAY.
AND THAT STUDY SHOWS THAT THE, THE SIMPLE MATH CALCULATION ALIGNS WITH, UM, WHAT THE FEE FOR THE FULL COST OF SERVICE WOULD BE, UH, WITH THAT DEPARTMENT.
WE TALK A LITTLE BIT MORE ABOUT THE STUDY, UM, FURTHER ON IN THE SLIDES.
SO, UM, JUST IN TERMS OF, UH, WHAT THE FEE LOOKS LIKE, AGAIN, STARTING OFF AT $5 PER HOUSEHOLD PER MONTH, AND THE IDEA OF STARTING OFF WITH $5 PER MONTH IS TO, UM, MINIMIZE IMPACT TO THE HOUSEHOLDS AND TO, UM, MAKE SURE NOT TO SHOCK THEM RIGHT AWAY, RIGHT WITH, UH, $25 RIGHT OUT OF THE GATE.
SO THE IDEA IS TO START OFF WITH $5 PER HOUSEHOLD PER MONTH, UM, INCREASING OVER TIME.
UM, OF COURSE ALONG THE WAY WE HAVE, UM, LIKE I MENTIONED, THE BURNS AND MCDONALD'S STUDY IS A COST OF SERVICE STUDY.
SO, UM, WE WOULD WANT TO MAKE SURE THAT, THAT WHEREVER THE FEE ENDS UP BEING IN THE LONG RUN IS APPROPRIATE BASED ON THE COST THAT IT IS TO PROVIDE THE SERVICE.
UM, SO THAT WOULD BE SOMETHING THAT WOULD BE LOOKED AT AT A REGULAR BASIS AND WOULD BE BROUGHT FORWARD TO CITY COUNCIL AT
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THAT TIME TO MAKE SURE THAT THE FEE BEING CHARGED IS APPROPRIATE IN ALIGNMENT WITH THE COST OF THE SERVICE.SO FOR THE FIRST FEW YEARS, THE IDEA IS THAT THE, UM, CURRENT ENTERPRISE FUND, THE COMBINED UTILITY SYSTEM, WILL SUBSIDIZE THE TOTAL COST OF PERFORMING THE SERVICE FOR THE SOLID WASTE OPERATIONS, UM, WITH THE, THE $5 PER HOUSEHOLD PER MONTH, UM, HELPING TO OFFSET THAT COST.
AND, UM, IT'S IMPORTANT TO NOTE THAT WE CALL IT THE, UM, AN ADMINISTRATIVE FEE.
AND I JUST WANNA GO INTO THE NEXT SLIDE TO EXPLAIN WHAT MORE ABOUT WHAT THAT MEANS.
SO ON SLIDE 16, UM, AND THIS IS A SCREENSHOT, IT'S AN EXCERPT FROM THE BURNS AND MCDONALD'S STUDY, WHICH AGAIN, IS, IS NOW AVAILABLE ON THE WEBSITE ON PAGE SIX DASH 13 OF IT.
UM, THEY BREAK OUT WELL THROUGH ALL THROUGHOUT THE REPORT.
THEY BREAK OUT COMPONENTS OF THE FEE THEY BREAK OUT.
HOW MUCH OF THE OVERALL FEE IS IT FOR RESIDENTIAL COLLECTION, HOW MUCH IS FOR RECYCLING, HOW MUCH WOULD GO TOWARDS, UM, ROLL OFF DUMPSTERS, ILLEGAL DUMPING, ALL OF IT GOES TOGETHER TO CALCULATE AN OVERALL TOTAL FEE OF THE ENTIRE SOLID WASTE OPERATION.
THE COMPONENT OF THAT FEE THAT RELATES TO ADMINISTRATIVE COST COMES UP TO $7 AND 57 CENTS.
SO THE IDEA IS TO START OFF BY NOT EVEN GOING UP TO THE $7 AND 57 CENTS, BUT RATHER SETTING THE $5 FEE, UH, WHICH WILL RECOVER MOST OF THE COST OF THE ADMINISTRATION OF THE SOLID WASTE OPERATIONS.
SO, GOING ON TO SLIDE 17, UM, THIS GIVES A SNAPSHOT OF WHAT THE MAJOR CITIES THROUGHOUT TEXAS, UM, AS WELL AS THE SURROUNDING CITIES AROUND OUR AREA CHARGE, UM, FOR THEIR SOLID WASTE FEES.
UM, AS YOU CAN SEE, THE $5 FEE IS WELL BELOW THE LOW END OF THE RANGE OF THE FEES, UM, THROUGHOUT THE STATE.
AGAIN, THE $5 IS THE ADMINISTRATIVE PORTION, UM, AND THE OTHER CITIES, THIS IS REALLY MORE OF THE FULL COST OF SERVICE FOR THEIR OPERATIONS.
YOU SEE A RANGE ON SOME OF THE CITIES BECAUSE SOME CITIES, UM, LIKE AUSTIN FOR EXAMPLE, HAS A PAY PAY AS YOU THROW MODEL.
SO THE LARGER OF A TRASH CAN YOU GET, IF YOU HAVE THE LARGEST ONE IS $65 A MONTH, YOU CAN OPT IN THEIR OPERATIONS TO GET A LOWER CAN AND ONLY PAY $28 A MONTH.
SO THAT'S WHY YOU SEE A RANGE ON SOME OF THOSE ACROSS SOME OF THOSE PEER CITIES.
SO MOVING ON TO SLIDE 18 THE RIGHT OF WAY.
UM, SO THIS CONCEPT IS NOT, IT'S NOT NEW, UH, THROUGHOUT THE STATE, AND IT'S NOT REALLY NEW TECHNICALLY WITH THE CITY OF HOUSTON EITHER.
SO WE DON'T CURRENTLY CHARGE OUR WATER AND OUR WASTEWATER UTILITY SYSTEM A RIGHT OF WAY FEE, BUT WE DO CHARGE A SIMILAR FEE TO ALL OF THE OTHER UTILITIES THAT, UM, THAT USE THE CITY'S RIGHT OF WAY FOR THEIR OPERATIONS.
SO, FOR EXAMPLE, CENTER POINT, ELECTRICITY, NATURAL GAS, CABLE, TV, TELEPHONE, UM, THESE ARE ALL ENTITIES AND UTILITIES THAT CHARGE, UH, ARE CHARGED FRANCHISE FEES THAT COMES AS REVENUE TO THE GENERAL FUND.
SO THE IDEA WITH THIS CONCEPT IS THAT PUBLIC STREETS AND PUBLIC RIGHT OF WAY ARE SHARED PUBLIC ASSETS THAT BELONG TO THE CONSTITUENTS OF THE CITY OF HOUSTON, AND THAT WHEN THESE UTILITIES USE THOSE PUBLIC ASSETS, THE GENERAL FUND SHOULD BE COMPENSATED FOR THEM.
SO WHAT WE'RE PROPOSING IS A $5, UH, SORRY, 5% OF GROSS REVENUES, UM, OF THE COMBINED UTILITY SYSTEMS, GROSS REVENUES, AND THAT WILL COME OUT TO ABOUT $104 MILLION FOR FISCAL YEAR 27.
AGAIN, THIS IS ANOTHER FEE, ANOTHER AREA WHERE EVERY OTHER MAJOR CITY IN TEXAS HAS A FEE, UH, THAT'S SIMILAR TO THIS, UM, FOR THEIR WATER AND WASTEWATER SYSTEM.
SO ON SLIDE NINE, UM, THIS GIVES YOU A SNAPSHOT OF WHAT THOSE OTHER CITIES ARE CHARGING AND BRINGING IN AS REVENUE TO THEIR GENERAL FUND.
SO SAN ANTONIO OWNS THEIR ELECTRICITY UTILITY AND THEY CHARGE THEIR ELECTRICITY UTILITY, 14% OF GROSS REVENUES.
THEY CHARGE THEIR WATER UTILITY, 4% OF GROSS REVENUES.
AND DALLAS, IT IT'S THE WATER SYSTEM IS 6% OF GROSS REVENUES PLUS A PAYMENT IN LIEU OF PROPERTY TAXES.
AUSTIN ENERGY CHARGES 12% OF GROSS REVENUES, AUSTIN WATER, 8% OF GROSS REVENUES, FORT WORTH 5% OF GROSS REVENUES IN EL PASO, 10% OF GROSS REVENUES.
AND, UM, AS WE KNOW WITH THE CITY OF HOUSTON, WE DON'T CURRENTLY CHARGE THIS FEE TO OUR WATER AND WASTEWATER UTILITY.
SO TO PUT IT INTO A FRAME OF REFERENCE THOUGH, UM, USING SAN ANTONIO AS AN EXAMPLE, SAN ANTONIO, UH, FOR THEIR GENERAL FUND BETWEEN WHAT THEY COLLECT FROM THEIR ELECTRICITY UTILITY AND THEIR WATER UTILITY IS THEY BRING AS MUCH MONEY FROM THEIR UTILITY AS THEY GET FROM PROPERTY TAXES IN THE CITY OF SAN ANTONIO.
OKAY, SO NOW WE'RE GONNA GO ON TO THE MORE OF THE SLIDES THAT YOU'RE USED TO SEEING AS PART OF THE FIVE YEAR FORECAST, JUST TO GIVE YOU THE OVERALL SNAPSHOT OF INCLUDING THESE TWO MAJOR CHANGES WE'RE DOING.
WHERE DOES THAT LAND US WITH THE GENERAL FUND? SO ON SLIDE 29, UM, THIS GIVES YOU AN OVERALL VIEW OF THE ENTIRE CITY BUDGET BROKEN
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DOWN BY FUND TYPE.UM, WE HAD THE GENERAL FUND, UM, THE WATER AND SEWER FUND, AND THIS IS, UM, THE, THE EXPENDITURES COMPARISON.
WE HAVE THE OTHER FUNDS, WHICH WOULD INCLUDE, UM, SPECIAL REVENUE FUNDS, AND THEN WE HAD THE AVIATION ENTERPRISE FUND.
UM, SO AS YOU CAN SEE, WHEN YOU ADD ALL THE FUNDS TOGETHER, THE FY 26 CURRENT BUDGET IS ABOUT $7.1 BILLION.
AND THE FY 27 PROPOSED BUDGET IS ABOUT $7.5 BILLION, A NET CHANGE OF ABOUT 5%.
SO ON SLIDE 22, UM, WE OF COURSE FOCUS ON OUR EXPENDITURE BUDGET, BUT WE ALSO HAVE TO KEEP OUR EYE ON THE LONG, LONG-TERM LIABILITIES OF THE CITY.
UM, SO JUST WANTED ON SLIDE 22, THANK YOU.
WANTED TO TOUCH ON THE PENSION REFORM.
UM, THAT WAS A VERY IMPORTANT INITIATIVE THAT WE HAVE A SLIDE LATER ON, UM, WHERE WE ARE SAVING LITERALLY HUNDREDS OF MILLIONS OF DOLLARS A YEAR THAT THE, IN THE GENERAL FUND ALONE, THAT THE GENERAL FUND WOULD HAVE TO BE PAYING TOWARDS PENSIONS.
HAD WE NOT UNDERTAKEN THE PENSION REFORM, UM, BACK IN 2017, ALMOST 10 YEARS AGO.
SO THAT, UH, PENSION LIABILITY WAS ABOUT $8 BILLION.
IT NOW STANDS AT 1.7 BILLION, AND THE PROPOSED BUDGET INCLUDES CONTRIBUTIONS TO ALL THREE OF THE PENSION PLANS THAT CONTINUE TO WORK TO DECREASE THE LONG-TERM LIABILITIES OVER TIME.
SO IT'S SOMETHING THAT'S IMPORTANT, UM, TO, TO KEEP THE THREE PENSION SYSTEMS IN A VERY HEALTHY FINANCIAL PLACE SO THAT WE CAN ENSURE THAT THE RETIREMENTS ARE AVAILABLE FOR OUR RETIREES FOR THE MUNICIPAL POLICE AND FIRE, UM, PENSION PLANS.
MOVING OVER TO THE OPEP REFORM, THIS IS OTHER POST-EMPLOYMENT BENEFITS.
UM, THIS IS ANOTHER LONG-TERM LIABILITY OF THE CITY.
UH, THE CURRENTLY STANDS AT 1.8 BILLION.
UM, YOU MIGHT REMEMBER WE UNDERWENT OPEP REFORM BACK IN 2021 AND 2022, UM, THAT SOUGHT TO BRING DOWN THE LIABILITY OVER TIME.
PART OF THAT INITIATIVE, UM, WAS TO CREATE AN OP E, UM, TRUST FUND, WHICH WE JUST INSTITUTED LAST YEAR.
UM, IT WAS, UH, AMENDMENT BUDGET, AMENDMENT BY COUNCIL MEMBER ALCORN.
UM, IT WAS SOMETHING THAT WE HAD DISCUSSED FOR YEARS.
UM, AND FINALLY, UH, WITH FISCAL YEAR 26 WE'RE GETTING STARTED WITH THAT.
SO WITH THE TRUST FUND INCLUDED IN THE FY 27 BUDGET, THERE IS A CONTRIBUTION.
UH, LAST YEAR IT WAS 10 MILLION.
THIS YEAR IT'S 12.5 MILLION, AND THE PLAN FOR FUTURE CONTRIBUTIONS INCREASES BY TWO AND A HALF MILLION PER YEAR, UM, TO PUT THAT MONEY INTO A TRUST FUND THAT WILL, UM, SAVE AND GROW THROUGH INVESTMENT EARNINGS FUNDS THAT WILL IN THE FUTURE, OFFSET PAY AS YOU GO COSTS FOR RETIREE, UM, HEALTHCARE.
UM, BASED ON OUR, UH, PLAN FOR THE PLAN CONTRIBUTIONS IN THE FUTURE, UH, IT'S ESTIMATED THAT THE TRUST FUND WILL ALLOW US TO REDUCE THE LIABILITY DOWN TO $1.1 BILLION, UM, IN THE NEXT 20 YEARS.
ON SLIDE 23, THIS GIVES YOU A SNAPSHOT OF OUR FTES AT THE CITY.
UM, ONE THING TO, TO PAY ATTENTION TO ON THIS SLIDE IS THE CIVILIAN, UM, POSITIONS LOOKING, AND THIS IS AGAIN, JUST FOR THE GENERAL FUND, UM, BUT LOOKING AT THE CIVILIAN LINE FROM FISCAL YEAR 26 CURRENT TO FISCAL YEAR 27 PROPOSED, YOU DO SEE A DECREASE THERE.
THAT DECREASE IS, UM, PRIMARILY DUE TO THE SOLID WASTE DEPARTMENT, UM, 393 FTES MOVING FROM THE GENERAL FUND INTO THE COMBINED UTILITY SYSTEM ENTERPRISE FUND.
AS THE SOLID WASTE, UM, OPERATION BECOMES PART OF THAT UTILITY, UM, YOU SEE THAT THE POLICE CLASSIFIED HEADCOUNT IS PROJECTED TO INCREASE, UM, AS WE ARE BUDGETING FOR FIVE CADET CLASSES, UM, TO BRING ADDITIONAL, UH, POLICE CLASSIFIED ONLINE AND THE FIRE CLASSIFIED.
AS YOU CAN SEE, WE'VE MADE A LOT OF IMPROVEMENTS OVER THE LAST COUPLE YEARS.
UM, STARTING FROM AROUND, WE WERE AT ABOUT 3,600 FTES OF FIRE R CLASSIFIED BACK IN 2021, AND NOW WE'RE PROJECTING TO BE, UM, YOU KNOW, RIGHT AROUND NEAR 3,900, UM, IN FISCAL YEAR 27.
ON SLIDE 24, UM, JUST SOME HIGHLIGHTS OF THE GENERAL FUND BUDGET.
UM, THE GENERAL FUND BUDGET, UH, BASED ON THE PROPOSED BUDGET, THE FUND BALANCE STANDS AT ABOUT 10.5% OF FUND BALANCE OF EXPENDITURES, NOT INCLUDING DEBT SERVICE AND PAY AS YOU GO TRANSFERS.
UM, THIS IS ABOVE THE MINIMUM OF 7.5%, UM, AND IT'S ABOUT 77 MILLION ABOVE THAT, UH, THAT MINIMUM THRESHOLD.
THE BUDGET INCLUDES, UM, CONTRACTUAL INCREASES FOR THE MUNICIPAL FIRE AND POLICE, UM, CLASSIFIED AS WELL.
AND THOSE ARE, UM, IN LINE WITH THE CONTRACTS THAT ARE CURRENTLY IN PLACE FOR THE CADET CLASSES.
UM, WE REALLY WANTED TO FOCUS ON MAKING SURE THAT WE CONTINUE TO RECRUIT AND RETAIN OUR CLASSIFIED.
SO FOR THE POLICE, WE'RE BUDGETING FOR FIVE CADET CLASSES.
UM, AND THE PLAN IS TO HAVE ABOUT 75 CADETS PER CLASS.
UM, AND THE IDEA IS TO GET AN ADDITIONAL 375 CADETS GRADUATED THROUGH THE ACADEMY FOR POLICE FOR FIRE.
YOU SEE 11, UH, CADET CLASSES,
[00:25:01]
AND THIS IS A LARGE NUMBER OF CADET CLASSES, AND THE REASON THAT IT'S SO LARGE IS THAT MANY OF THESE CLASSES ARE GOING TO BE, UM, AND THE FIRE CHIEF CAN, CAN TALK MORE IN THE OPERATIONS ABOUT IT, BUT THEY'RE GONNA BE WHAT WE CALL FAST TRACK CLASSES, UM, WHICH WILL REALLY ALLOW US TO, UM, BRING BACK PEOPLE THAT ARE EITHER ALREADY, UM, TRAINED AND COMING FROM ANOTHER JURISDICTION OR POSSIBLY REHIRES BACK TO HFD THAT HAVE BEEN THROUGH THE FULL, UM, ACADEMY BEFORE.AND THIS WILL ALLOW US TO GET THEM, UM, ONLINE AS CLASSIFIED FIREFIGHTERS MORE QUICKLY WITH ALL THE PROPER TRAINING FOR FIRE CERTIFICATION AND EMT, UM, THAT'S NEEDED TO PERFORM THAT IMPORTANT WORK.
THE BUDGET ALSO FULLY FUNDS, UM, THE FREE PENSION SYSTEMS BASED ON THE COST CORRIDOR, UM, MECHANISM THAT'S IN STATE LAW AFTER PENSION REFORM AND THE GENERAL FUND BUDGET.
IMPORTANTLY, I KNOW WE'VE HAD A LOT OF DISCUSSION ABOUT OVER TIME COST AROUND THE HORSESHOE.
UM, WE REALLY WANTED TO TAKE A LOOK, A DIFFERENT APPROACH AT HOW WE BUDGET FOR OVERTIME, STILL UNDERSTANDING THAT GENERALLY WE HAVE SAVINGS IN EITHER BASE PAY OR OTHER AREAS THAT CAN HELP OFFSET THE COST OF OVERTIME, UM, IN THOSE DEPARTMENTS.
BUT WE DID WANT TO, UH, FIND A MIDDLE GROUND BETWEEN WHAT WE HAD PREVIOUSLY BUDGETED AND WHERE WE THINK THE ULTIMATE UM, NUMBER WILL END UP BEING SO THAT WE HAVE A BETTER REFLECTION IN THE BUDGET OF WHERE WE THINK THAT OVERTIME IS HEADED.
SO FOR CLASSIFIED POLICE, WE'VE ADDED AN ADDITIONAL $6.6 MILLION OF OVERTIME COMPARED TO LAST YEAR'S ADOPTED BUDGET, AN ADDITIONAL $9 MILLION FOR CLASS CLASSIFIED OVERTIME FOR FIRE COMPARED TO LAST YEAR'S BUDGET.
THE BUDGET ALSO INCLUDES A, UM, SMALL, UH, FUND BALANCE DRAWDOWN OF ABOUT $25 MILLION AS WE CONTINUE TO WORK ON EFFICIENCIES AND FURTHER EXPENDITURE REDUCTIONS TO PREPARE FOR FISCAL YEAR 20 EIGHT'S BUDGET.
UM, THE BUDGET DOES NOT INCLUDE ANY ONE-TIME LAND SALES OR PAYMENT DEFERRALS.
UM, AND IT INCLUDES IMPORTANTLY, UM, AND THE REPLENISHMENT OF THE BUDGET STABILIZATION FUND IN FISCAL YEAR 2027 FOR THE FUNDING THAT WAS DRAWN FOR, UH, THE DIRE SHOW AND HURRICANE BARREL.
MOVING ON TO SLIDE 25, THIS GIVES A BREAKDOWN OF THE GENERAL FUND REVENUE, UM, IN TERMS OF WHAT THE FY 27 NET CHANGES COMPARED TO FY 26 ESTIMATES.
SO AS YOU CAN SEE, THE OVERALL REVENUE FOR THE GENERAL FUND INCREASED BY 4.95%.
THE LARGEST CATEGORY THAT THE INCREASE WAS IN IS IN THE INTERGOVERNMENTAL CATEGORY, AND THIS IS PRIMARILY DUE TO THE RIGHT OF WAY, UH, RENTAL FEE COMING FROM THE WATER AND WASTEWATER SYSTEM BASED ON THE 5% OF GROSS UTILITY REVENUES.
UH, THE SECOND LARGEST AREA IS RELATED TO PROPERTY TAX, AND WE HAVE SOME MORE SLIDES ON EXPLAINING THE PROPERTY TAX FIGURE.
UM, THIS PROPERTY TAX, UM, INCREASE IS, UM, ASSUMING A 51.92 CENT TAX RATE, WHICH IS OUR CURRENT TAX RATE, AND IS BASED ON OUR ASSUMPTION OF WHAT WE BELIEVE, UM, BASED ON INFORMATION FROM THE APPRAISAL DISTRICTS WHERE WE THINK THE PROPERTY VALUATIONS, UH, WILL COME IN WHEN WE GET THE CERTIFIED ROLE.
UM, LOOKING AT SALES TAX, WE'RE PROJECTING A 21 MIL, $21 MILLION INCREASE FROM THE PRIOR YEAR.
UM, AND THEN THERE'S A, A HOST OF OTHER, UM, SMALLER ITEMS THAT EQUAL UP TO THE TOTAL INCREASE IN NET REVENUES OF $49 MILLION.
UM, WITH DETAILS IN THE NOTES BELOW, AND WE'LL DIVE INTO EACH OF THOSE, UM, SUBCATEGORY AREAS TO GET INTO THE DETAILS ON EACH OF THOSE MAJOR SOURCES.
SO ON SLIDE 26, THIS GIVES YOU A VIEW OF THE, UM, OF THE GENERAL FUND REVENUES LAST YEAR COMPARED TO THIS YEAR.
FOR PROPERTY TAX, AGAIN, IT'S AN INCREASE BASED ON THE WHATEVER THE ASSUMED, UM, TAXABLE VALUE GROWTH IS FROM THE APPRAISAL DISTRICTS SALES TAX, AGAIN, AN INCREASE OF ABOUT $20 MILLION.
OTHER REVENUES, THAT CATEGORY IS WHERE YOU SEE THE COMBINED UTILITY SYSTEM, UH, RIGHT OF WAY.
RENTAL FEE IS IN THAT OTHER REVENUE CATEGORY, WHICH IS THE CAUSE FOR THAT, UM, THAT INCREASE IN THAT CATEGORY.
AND FRANCHISE FEES ARE ABOUT FLAT.
SO MOVING ON TO SLIDE 27, UM, THIS GIVES YOU A HISTORICAL VIEW GOING BACK TO 2019 OF THE BREAKDOWN OF THE REVENUES.
AND SO ONE IMPORTANT PIECE TO TALK ABOUT WITH THE COMBINED UTILITY SYSTEM RIGHT OF WAY, UM, RENTAL FEE FOR THE WATER AND WASTEWATER SYSTEM IS THAT IT DOES ALLOW US TO HELP CONTINUE TO DIVERSIFY OUR REVENUE BREAKDOWN.
SO RIGHT NOW WE'RE VERY RELIANT ON PROPERTY TAX BEING OVER HALF OF OUR GENERAL FUND REVENUE SALES TAX, WHICH AS WE KNOW CAN BE VOLATILE, IS ANOTHER, UH, ABOUT A QUARTER OF OUR REVENUE.
AND THEN THE FRANCHISE FEES AND OTHER FEES AND CHARGES FOR SERVICES MAKE UP THAT REMAINING 25%.
SO IT'S REALLY GOING TO ALLOW US TO, UM, KIND OF DIVERSIFY THAT REVENUE STREAM, UH, TO HELP, UM, YOU KNOW, MINIMIZE, UM, IMPACT AND ECONOMIC SHOCKS THAT CAN COME WITH SOME OF THE MORE
[00:30:01]
VOLATILE STREAMS LIKE SALES TAX, FOR EXAMPLE.SO ON SLIDE 28, JUST AS A REFRESHER, UM, FOR EVERYONE TO DIVE INTO THE PROPERTY TAX SIDE, I THINK EVERYONE HERE KNOWS, WE TALK ABOUT IT ALL THE TIME THAT OUR TAX RATE HAS GONE DOWN BY ALMOST 20%, UM, SINCE THE TIME WE HIT THE PROPOSITION ONE CAP.
UM, BA BACK IN 2015, THE TAX RATE WAS, UM, 63.88 CENTS, AND NOW WE'RE AROUND 51, UH, 51 CENTS, 51 9 1 9.
UM, ON OUR PROPERTY TAX REVENUE, WE ARE LIMITED BY OUR LOCAL CAP AND THE STATE CAP.
UM, GENERALLY OUR LOCAL CAP OR SO FAR, HISTORICALLY, OUR LOCAL CAP HAS BEEN MORE RESTRICTIVE FROM VERSUS THE STATE CAP, BUT IT'S SOMETHING THAT WE NEED TO CONTINUE EVERY YEAR TO CALCULATE BOTH CAPS TO MAKE SURE THAT WE'RE COMPLYING WITH BOTH.
UM, SO FOR PROPOSITION ONE AND H, UM, WE HAVE TO BE THE LESSER OF THE, UH, 4.5% GROWTH FROM THE PRIOR YEAR'S REVENUE OR, UH, CPI PLUS POPULATION INCREASE FROM THE PRIOR YEAR'S CAPPED AMOUNT.
SO WE HAVE TO DO TWO CALCULATIONS ON THAT SIDE.
AND THEN WE DO ANOTHER CALCULATION ON THE STATE CAP SIDE WHERE WE CAN ONLY INCREASE OUR REVENUES BY NO MORE THAN, UH, THREE POINT A 5%.
OUR M AND O REVENUES MORE THAN 3.5% PLUS OUR DEBT SERVICE TAX RATE.
UM, SO THAT'S SOMETHING THAT, UH, HAS CONTINUED TO BE A CHALLENGE FOR US, UM, BUT IS SOMETHING THAT WE OBVIOUSLY STILL PERFORM ALL THE CALCULATIONS AND MAKE SURE THAT WE ARE PROPOSING A BUDGET AND ADOPTING A TAX RATE AND COMPLIANCE WITH, UM, ALL THOSE LIMITATIONS THAT WE HAVE.
SO ON SLIDE 29, TO TALK SPECIFICALLY ABOUT THE FISCAL YEAR 27 PROPOSED PROPERTY TAX REVENUE, UH, WE'RE BUDGETING ABOUT $1.5 BILLION FOR PROPERTY TAX REVENUE.
AGAIN, IT'S AN INCREASE OF 50 MILLION COMPARED TO THE FY 26 ESTIMATE, BUT IT ASSUMES NO INCREASE TO THE TAX RATE AND KEEPING THE TAX RATE THE SAME AT 51 9 1 9.
AND THIS INCREASE IN REVENUE IS ONLY ATTRIBUTABLE TO THE ASSUMED GROWTH IN TAXABLE VALUE AS SET BY THE APPRAISAL DISTRICTS, WHICH AGAIN, THIS WE'RE USING AN ASSUMPTION BASED ON A, AN EARLY ESTIMATE THAT THEY SENT US.
WE WON'T KNOW THE FINAL VALUE UNTIL WE GET THIS, WELL, IT'S NOT EVEN THE FINAL VALUE, BUT WE WON'T HAVE THE INITIAL ROLE UNTIL, UM, LATER ON IN THE SUMMER.
AND THAT'S WHAT WE REALLY, UM, WILL USE TO, UH, ADOPT, FORMALLY ADOPT OUR TAX RATE.
UM, AND THE ROLE DOES CHANGE THROUGHOUT THE YEAR.
I SAY IT WON'T EVEN BE THE FINAL BECAUSE THE ROLE CHANGES EVERY MONTH UNTIL WE GET TO THE, UM, JUNE OF THE FOLLOWING YEAR.
UM, SO JUST TO TALK ABOUT THE, UM, ASSUMPTIONS THAT WENT INTO OUR, OUR BUDGETED AMOUNT OF 1.5 BILLION, UM, WE ARE ASSUMING THAT THE TAXABLE VALUE FOR THE CITY OF HOUSTON WILL BE 353 BILLION.
AND AGAIN, WE'RE GONNA RECEIVE FURTHER INFORMATION LATER ON IN THE SUMMER, UM, TO, TO FIRM UP THAT ESTIMATE.
UM, THE ESTIMATED TAXABLE VALUE NET OF THE TAX INCREMENT AGREEMENTS THOUGH IS 294 BILLION.
AND SO THE REVENUE THAT WE'RE PROPOSING IN THE BUDGET IS ABOUT $20 MILLION BELOW THE PROP ONE AND H CAP.
SO, UM, TO EXPLAIN THAT A LITTLE BIT BETTER, WE CALCULATE THE PROP ONE AND H CAP, AND THEN WHEN WE LOOK AT HOW MUCH REVENUE DO WE THINK WE CAN GET, KEEPING OUR TAX RATE THE SAME BASED ON THE INFORMATION WE GET ON THE ASSESSED VALUATION FROM THE APPRAISAL DISTRICT, WE THINK THAT THAT PUTS OUR, OUR REVENUE ESTIMATE ABOUT $20 MILLION BELOW THE PROP ONE AND H CAP.
UM, AGAIN, WE'RE STILL WAITING ON SOME INFORMATION, UM, FROM THE, UM, WE HAVE THE, WE HAVE THE INFORMATION ON THE INFLATION THAT WE USE FOR THE PROP ONE CAP, BUT WE'RE STILL WAITING ON THE US CENSUS BUREAU INFORMATION, WHICH WE'LL GET IN MAY, AND WE WILL FINALIZE THAT PROP ONE AND H CAP NUMBER AT THAT TI AT THAT TIME.
AND AGAIN, WE ARE KEEPING OUR, UH, OVER 65 AND DISABLED EXEMPTION AT $260,000, WHICH IS WHAT WE HAD LAST YEAR AS WELL.
SLIDE 30 GIVES YOU A LITTLE ILLUSTRATION OF HOW WE CAME SINCE THIS IS DEFINITELY A DIFFERENT, UH, A DIFFERENT WAY TO LOOK AT PROPERTY TAX FORCE.
WE'VE BEEN BUDGETING THE PROP ONE AND H CAP OF PROPERTY TAX REVENUE SINCE FISCAL YEAR 15.
SO WE WANTED TO PROVIDE A, A VISUAL TO SHOW YOU THE PROCESS, UH, THAT WE WENT THROUGH IN THE ANALYSIS THAT WE DID TO COME UP WITH WHAT WE'RE PROPOSING AS PROPERTY TAX REVENUE FOR THIS BUDGET.
UM, WE RECEIVED THE APRIL CERTIFIED ESTIMATE FROM THE APPRAISAL DISTRICTS, WHICH SAID THAT THEY TOLD US THAT OUR TAXABLE VALUE SHOULD GO UP BY 0.9 0.59% COMPARED TO THE PREVIOUS YEAR.
GENERALLY, FROM THE APRIL CERTIFIED ESTIMATE UNTIL THE TIME WE GET THE INITIAL ROLE IN THE SUMMER, THERE IS A CHANGE AS THEY CONTINUE TO GO THROUGH AND LOOK THROUGH THOSE VALUES AND FINALIZE THEIR ESTIMATES.
UH, LOOKING AT A FIVE, WE LOOKED AT A LOT OF SCENARIOS.
A THREE YEAR AVERAGE, A FIVE YEAR AVERAGE, A SEVEN YEAR AVERAGE.
UM, WE DECIDED TO USE A FIVE YEAR AVERAGE, UM, WHICH IS THE AMOUNT, UM, THAT THE APPRAISAL DISTRICT GENERALLY TENDS TO CHANGE THE ROLE ABOUT 2.6% OF AN INCREASE BETWEEN APRIL AND THE INITIAL ROLE.
SO WHEN WE ADD THAT TOGETHER WITH THE 0.59% FROM THE APRIL ESTIMATE, WE ASSUME THAT THE INITIAL ROLE
[00:35:01]
WILL BE AROUND 3.19%.AGAIN, THIS IS AN ASSUMPTION UNTIL WE GET THE FINAL INFORMATION BASED ON THAT, THAT'S HOW WE CAME TO THE VALUE OF 343 BILLION.
ONCE WE NET OUT THE T'S, UM, TAXABLE VALUE, AND THEN WE MULTIPLY THAT, UM, NET VALUE BY OUR TAX RATE OF 51 9 1 9, WE COME WITH THE PROPOSED PROPERTY TAX REVENUE OF 1.5 BILLION.
SO AGAIN, THIS IS A LITTLE BIT OF A DIFFERENT, UM, METHOD, A DIFFERENT WAY FOR US.
UM, 'CAUSE WE'RE USED TO JUST BUDGETING AT THE PROP ONE CAP AND WE'LL SET THE TAX RATE LATER.
UM, AT THIS TIME WE ARE TAKING WHAT WE KNOW THE TAX RATE IS, THE CURRENT TAX RATE, 51 9 1 9, UM, AND AN ESTIMATE OF THE ROLE AND THEN COMING UP WITH THE REVENUE THAT'S ASSOCIATED WITH THAT.
SO MOVING ON TO SLIDE 31, UM, TRENDS IN PROPERTY TAX REVENUES GIVES, THIS GIVES YOU A SNAPSHOT OF WHAT'S HAPPENED SINCE, UM, 2023.
UM, YOU CAN SEE FOR THE LAST CONSECUTIVE, UM, THREE YEARS IN FISCAL YEAR 26, 25 AND 24, WE'VE COLLECTED BELOW OUR BUDGETED AMOUNT OF PROPERTY TAXES, UM, BASED ON COLLECTIONS AND, UM, AS WELL AS, UH, KEEPING THE TAX RATE THE SAME IN FISCAL YEAR 25 AND FISCAL YEAR 26.
ON SLIDE 32, UM, THIS SHOWS YOU, UM, HOW MUCH REVENUE THE CITY HAS FOREGONE SINCE WE HAVE HIT THE REVENUE CAP.
UM, BUT WHILE THE BAR CHART ONLY GOES BACK TO FISCAL YEAR 20, UM, THE CUMULATIVE AMOUNT, THE CUMULATIVE IMPACT THAT THE REVENUE CAP HAS HAD ON THE CITY, UM, SINCE FISCAL YEAR 15 IS A, UM, FOREGONE REVENUE OF $2.9 BILLION, UM, THAT OTHERWISE WOULD HAVE BEEN COLLECTED IF THE TAX RATE HAD BEEN 63.88 CENTS, UM, SINCE FISCAL YEAR 15.
IN FISCAL YEAR 27 ALONE, UM, THE IMPACT OF THE REVENUE CAP ON THE CITY'S REVENUE IS $379 MILLION FOR FISCAL YEAR 27 ALONE.
UM, JUST TO TOUCH ON HOW THAT TRANSLATES TO THE AVERAGE HOMEOWNER, UM, BASED ON THE REVENUE CAP, UM, THE ESTIMATED ANNUAL REVENUE CAP TAX RELIEF FOR THE AVERAGE HOMEOWNER, AND THIS IS BASED ON A HOME VALUE OF ABOUT $320,000, IS ABOUT $419.
AND THE CUMULATIVE SAVINGS SINCE THE INCEPTION OF THE CAP, UH, OVER 2015 IS ABOUT, UH, $2,916 THAT SOMEONE THAT HAD A $320,000 HOME, UH, WILL HAVE SAVED ON SLIDE 33 SALES TAX.
MOVING OVER TO SALES TAX REVENUE, WHICH AGAIN IS OUR SECOND HIGHEST REVENUE SOURCE FOR THE GENERAL FUND, OUR ASSUMPTION IS THAT THE SALES TAX FOR FISCAL YEAR 27 WILL BE A 2.4% INCREASE FROM THE FY 26 ESTIMATES.
UM, SOME OF THE MAIN DRIVERS THAT WE INCLUDE IN OUR INTERNAL REGRESSION MODELING ARE EMPLOYMENT, UM, CONSUMER SPENDING, AND OIL AND GAS ACTIVITY, WHICH IS IMPORTANT FOR OUR REGION.
UM, WE ARE EXPECTING TO SEE AN INCREASE IN SALES TAX EARNINGS, UM, PARTICULARLY IN THE FIRST QUARTER OF THE FISCAL YEAR, UM, DUE TO WORLD CUP ACTIVITIES HAPPENING.
IN ADDITION TO OUR, OUR, JUST OUR, OUR NATURAL GROWTH, UH, WE OF COURSE CONTINUE TO CLOSELY MONITOR THIS, AND I GIVE AN UPDATE EVERY MONTH IN THE MONTHLY REPORT ABOUT OUR RECEIPTS AND HOW WE'RE TRENDING WITH OUR ESTIMATES.
SO ON SLIDE 34, THIS GIVES YOU THE PICTURE OF SALES TAX REVENUES SINCE FISCAL YEAR 23.
UM, YOU CAN SEE THAT, UM, WE HAVE BUDGETED CONSERVATIVELY, UM, EVERY YEAR IN EACH OF THOSE YEARS WE'VE COLLECTED ABOVE.
UM, OUR ACTUALS HAVE COME IN ABOVE WHAT WE HAVE SET IN OUR ADOPTED BUDGET, UM, AS OUR GOAL TO, TO COLLECT.
UM, AND SO FOR FISCAL YEAR 27, AGAIN, WE'RE USING WHAT WE FEEL IS A, A CONSERVATIVE, THE SAME METHODOLOGY WE'VE USED IN THE PAST AND OUR REGRESSION MODEL, WE HAVE OUR INTERNAL MODEL THAT SHOWS WE HAVE A PESSIMISTIC, A LIKELY AND AN OPTIMISTIC SCENARIO, AND EVERY YEAR WE TAKE THE AVERAGE BETWEEN THE PESSIMISTIC AND THE LIKELY SCENARIO.
SO ON THE BOTTOM, SORT OF END OF THE RANGE.
UM, AND THAT'S WHERE WE'RE PROPOSING THE, UM, $942 MILLION ON SLIDE 35.
UM, THIS SHOWS YOU THE MONTHLY SALES TAX COLLECTIONS.
UM, BASED ON INFORMATION THAT WE HAD AS OF YESTERDAY, UM, THE REMAINING MONTHS FOR FISCAL YEAR 26 WOULD'VE HAD TO COME IN 1.24% BELOW PRIOR YEAR TO MEET THE FINANCE DEPARTMENT'S CURRENT ESTIMATE OF 920 MILLION.
UH, WE GOT MORE GOOD NEWS ON SALES TAX TODAY, UM, THAT OUR RECEIPTS CAME IN ABOVE BUDGET.
SO THAT NUMBER NOW IS FOR THE REMAINING THREE MONTHS.
UM, THE, THE ACTUALS WOULD HAVE TO COME IN ABOUT 3% BELOW PRIOR YEAR IN ORDER TO HIT OUR ESTIMATE OF 920 MILLION.
UM, SO WE DO SEE THAT WE PROBABLY WILL INCREASE, UM, THAT ESTIMATE, UM, BY THE TIME WE GET TO THE END OF THE YEAR, UM, ABOVE THE $920 MILLION THAT WE'RE CURRENTLY SHOWING IN THE MONTHLY FINANCIAL REPORT.
[00:40:02]
OKAY, SO WE'RE GOING TO MOVE OVER TO THE EXPENDITURE SIDE OF THE GENERAL FUND BUDGET NOW, AND LOOKING AT SLIDE 36 SHOWS A BREAKDOWN OF WHAT THE FISCAL YEAR 2027 GENERAL FUND EXPENDITURES ARE COMPARED TO THE FISCAL YEAR 26 CURRENT BUDGET.UM, YOU CAN SEE THAT WE ARE, UH, PLANNING TO DECREASE THE BUDGET BY $11 MILLION OR 0.35%.
THE LARGEST DRIVER OF THAT DECREASE, UM, IS THE SOLID WASTE DEPARTMENT BEING RESTRUCTURED AS A DIVISION AND REORGANIZED WITHIN THE HOUSTON PUBLIC WORKS DEPARTMENT IN, AS PART OF THE COMBINED UTILITY SYSTEM.
UM, THAT GENERATES A SAVINGS OF ABOUT $104 MILLION IN THE OPERATING BUDGET.
UM, ADDITIONALLY, UM, EVEN THOUGH WE'RE INCREASING THE OPPER, UH, THE ADOPTED BUDGET, UH, FOR THE OVERTIME, UM, FOR FIRE AND POLICE, UM, IT IS STILL BELOW WHAT WE SEE THE ACTUALS COMING IN AT, AT FISCAL YEAR 26.
UM, BUT AGAIN, AS WE GO THROUGH THE YEAR, WE USUALLY HAVE SAVINGS TO OFFSET THOSE THINGS.
UM, SO, UH, THAT IS ACCOUNTED FOR IN THE FISCAL YEAR 27 BUDGET.
THE THIRD LINE ITEM IS A, UM, BUDGETARY REDUCTION THAT THE DEPARTMENTS WENT THROUGH THEIR 10% REDUCTION SCENARIO EXERCISES.
UM, AND WE WERE ABLE TO GO THROUGH THOSE, UM, UH, THOSE PROPOSALS FROM THE DEPARTMENTS AND, UH, HAVE THE ADMINISTRATION REVIEW THOSE AND MOVE FORWARD WITH ABOUT 12.6 MILLION IN, UM, REDUCTIONS BASED ON THE EFFICIENCY, UM, INITIATIVES THAT THE DEPARTMENTS ARE GOING TO BE DOING.
WE ALSO, UM, REALLOCATED, UH, DID A REALLOCATION PARTICULARLY IN THE HEALTH DEPARTMENT, UM, THAT RESULTS IN WHAT LOOKS LIKE A SAVINGS IN THE GENERAL FUND OF $10.5 MILLION, BUT REALLY IT'S A REALIGNMENT OF THE SAME PROGRAMS ACROSS THE GENERAL FUND AND THE SPECIAL REVENUE FUNDS FOR THE HEALTH DEPARTMENT.
WERE REAL RE REALIGNED BOTH THE EXPENDITURES AND THE REVENUE.
SO THERE'S A NET ZERO IMPACT TO THE BOTTOM LINE FOR THE GENERAL FUND, BUT IT'S GOING TO, UM, ALLOW THE HEALTH DEPARTMENT TO REALLY MORE CLOSELY SEE, UH, THE EXPENDITURES AND THE REVENUES FOR CERTAIN PROGRAMS IN THE APPROPRIATE FUND.
UM, AND SO THERE'S A, THERE'S QUITE A LONG LIST OF ITEMS ON HERE, BUT, UM, JUST GOING DOWN THE LIST, UM, I'LL TOUCH ON SOME OF THE INCREASES.
UM, THE $89.9 MILLION INCREASE IN EMPLOYEE COMPENSATION, THIS IS TO ADD TO, UM, PRIMARILY THE POLICE AND FIRE DEPARTMENT FOR THEIR CONTRACTUAL INCREASES IN ALIGNMENT WITH THEIR CONTRACTS AS WELL AS THE HOPE CONTRACT FOR THE MUNICIPAL EMPLOYEES.
UM, WE ALSO SEE HEALTH BENEFITS COST TRENDING HIGHER, SO WE ADDED $22 MILLION TO THE BUDGET FOR THAT.
UM, PENSIONS, $19 MILLION INCREASE AS AGAIN, THIS IS ASSOCIATED WITH THE, UM, EMPLOYEE COMPENSATION PER THE, UH, CONTRACTUAL OBLIGATIONS.
UM, WE ALSO HAVE, UH, AN INCREASE OF THE $2 MILLION FOR THE OEP TRUST THAT I MENTIONED PREVIOUSLY.
ANOTHER MAJOR ITEM DROPPING DOWN TO THE SECOND SUBCATEGORY IS FOR THE CAPTURED REVENUE TRANSFERS TO D-D-S-R-F.
SO THIS IS AN INCREASE OF $31 MILLION MORE GOING TOWARDS THE D-D-S-R-F INFRASTRUCTURE, UM, IMPROVEMENT FOR THE STREETS AND THE DRAINAGE, UH, COMPARED TO LAST YEAR'S BUDGET.
AND THIS NUMBER IS IN ALIGNMENT WITH THE JONES AND WATSON SETTLEMENT AGREEMENT.
SO ALL OF THOSE ITEMS TOGETHER ARE A NET CHANGE IN EXPENDITURES OF ABOUT $11 MILLION DECREASE COMPARED TO FISCAL YEAR 26, CURRENT BUDGET.
SLIDE 37 GIVES YOU A SNAPSHOT OF THE D-D-S-R-F REVENUE.
UM, THESE ARE THE D-D-S-R-F, UH, REVENUES THAT COME FROM THE AVALOR TAX, UM, SHOWING IN THE TEAL, THE LARGE TEAL SECTION.
UM, YOU ALSO SEE THE THIRD PARTY, WHICH IS PRIMARILY MADE UP OF METRO, AND THEN THE ORANGE IS THE DRAINAGE CHARGE.
UM, AND YOU SEE WITH THE RED DASH LINE WHAT THE AMOUNT OF MONEY GOING TOWARDS D-D-S-R-F, UM, BEFORE THE JONES AND WATSON SETTLEMENT AGREEMENT WAS AND WHAT IT IS, UM, AFTERWARDS.
SO AS YOU CAN SEE OVER TIME, UM, THOSE, UH, THOSE RESOURCES GOING INTO THE D-D-S-R-F TO IMPROVE THE STREETS AND DRAINAGE CONTINUES TO GROW.
ON SLIDE 38, UM, THIS GIVES YOU A BREAKDOWN OF THE GENERAL FUND EXPENDITURES, UM, FROM FY 26 CURRENT BUDGET COMPARED TO THE PROPOSED BUDGET FOR 27.
YOU CAN SEE PUBLIC SAFETY, UM, IS THE LARGEST INCREASE, AGAIN, WITH THE CONTRACTUAL OBLIGATIONS FOR THE POLICE AND THE FIRE BEING INCLUDED IN THAT, AS WELL AS THE, UM, AMOUNT OF MONEY THAT WE INCLUDED IN THE BUDGET TO MORE CLEARLY REFLECT WHERE WE THINK THE OVERTIME WILL END UP BY THE END OF THE YEAR.
UM, IN THE DEBT SERVICE CATEGORY, YOU SEE IT GOING DOWN SLIGHTLY, AND PART OF THAT DECREASE IS DUE TO THE, UM, DEBT SERVICE RELATED TO THE SOLID WASTE DEPARTMENT, UM, WILL NOW BE TAKEN ON, UM, BY THE COMBINED UTILITY SYSTEM AS SOLID WASTE MOVES INTO THE UTILITY FUND.
UM, ALL THE OTHER CATEGORIES REMAINED EITHER FLAT OR SLIGHTLY DOWN.
[00:45:01]
DEVELOPMENT AND MAINTENANCE SERVICES, YOU SEE A LARGE A HUNDRED MILLION DOLLAR DECREASE THERE THAT IS REFLECTIVE OF SOLID WASTE MOVING OUTTA THE GENERAL FUND AND INTO THE UTILITY.AND THE PAY AS YOU GO IS REALLY THE ONLY OTHER CATEGORY BESIDES PUBLIC SAFETY THAT INCREASES, UH, WHICH THIS IS REFLECTIVE OF THE ADDITIONAL $31 MILLION GOING TO THE D-D-S-R-F FUND FOR THE STREETS AND DRAINAGE PROJECTS.
SLIDE 39 GIVES YOU A BREAKDOWN OF OUR, UH, PERSONNEL AND NON PERSONNEL COSTS.
SO WHEN WE TALK ABOUT THE GENERAL FUND, WE TALK ABOUT THE FACT THAT WE ARE LARGELY PUBLIC SAFETY, LARGELY PERSONNEL.
UM, AND WHEN YOU START LOOKING AT THE REST OF THE BUDGET, UM, YOU KNOW, IT'S, IT'S, IT'S THE MINORITY OF THE GENERAL FUND BUDGET.
SO FOCUSING ON THE THE MIDDLE BAR, UM, THIS BREAKS DOWN THE OVERALL GENERAL FUND BUDGET BEING, UH, 62% PERSONNEL AND 38% OTHER OF THE 62% PERSONNEL IN THE LEFT, UM, STACKED BAR, 82% OF THAT PERSONNEL IS CLASSIFIED AND 18% IS CIVILIAN.
LOOKING AT THE BLUE BOXES, THE 38% THAT'S NON-PERSONNEL OF THE GENERAL FUND BUDGET, THEY, THAT BREAKS DOWN INTO ABOUT HALF BEING DEBT SERVICE AND PAY AS YOU GO, COSTS FOR CAPITAL IMPROVEMENT PROJECTS AND, UH, TRANSFERS TO D-D-S-R-F.
AND THEN THE REMAINING 51% IS WHERE OUR OTHER SERVICES AND CHARGES, UM, FALL ON SLIDE 40.
UM, THIS GIVES YOU THE HISTORICAL VIEW OF OUR EXPENDITURE BUDGET IN THE GENERAL FUND OVER TIME.
UM, YOU CAN SEE THIS YEAR, AS I MENTIONED, IN FISCAL YEAR 27, WE HAVE A DECREASE OF ABOUT $11 MILLION COMPARED TO OUR CURRENT BUDGET.
UM, BASED ON ALL THOSE INS AND OUTS WE WENT THROUGH A FEW SLIDES AGO.
SLIDE 41, UM, GIVES YOU THE OVERVIEW OF THE PENSION, THE THREE PENSION SYSTEMS, AND HOW MUCH WE PUT TOWARDS, UM, THE POLICE, FIRE, AND MUNICIPAL PENSION SYSTEM.
AGAIN, ALL OF OUR, UM, CONTRIBUTIONS FOR THE FISCAL 27 BUDGET ARE IN ALIGNMENT WITH THE STATE LAW AND THE COST CORRIDOR CONTROL MECHANISM, BUT INTO PLACE BY PENSION REFORM.
THE YELLOW BOX YOU SEE AT THE TOP IS THE AMOUNT OF MONEY THAT THE GENERAL FUND WOULD HAVE HAD TO CONTRIBUTE IN INCREMENTAL FUNDING, HAD PENSION REFORM NOT TAKEN PLACE.
SO AS YOU CAN SEE, THE CITY IS SAVING LITERALLY HUNDREDS OF MILLIONS OF DOLLARS A YEAR IN, IN AVOIDED COST, UM, THAT WE WOULD'VE HAD TO OTHERWISE PAY.
UM, HAD PENSION REFORM NOT TAKEN PLACE.
UM, THIS IS A VISUAL REPRESENTATION OF HOW WE GOT, FROM WHAT WE TALKED TO, WHAT WE TALKED ABOUT LEADING UP TO THE BUDGET WE TALKED ABOUT IN FISCAL YEAR 27, WE SEE AROUND A $200 MILLION, UH, GAP FOR THE GENERAL FUND BUDGET.
AND WHERE WE ARE NOW IS AROUND A $25 MILLION GAP.
AND THIS SLIDE IN A VISUAL REPRESENTATION, ALTHOUGH IT'S VERY TINY FONT, UM, GOES THROUGH, UH, SORT OF REALLY LINE BY LINE HOW WE GOT FROM A $209 MILLION GAP DOWN TO THE $25 MILLION GAP.
UM, SO JUST GOING THROUGH SOME OF THE LINE ITEMS IN THE REVENUE SIDE, WHICH IS IN THE BLUE BOX, UM, YOU SEE THAT WE MADE SOME, UH, INCREASED PROJECTIONS TO OUR SALES TAX REVENUE OF A FEW MILLION DOLLARS.
UH, FRANCHISE FEES ALSO A SLIGHT INCREASE.
UM, WE SHOWED A ACTUALLY A DECREASE IN OUR LICENSES AND PERMITS CATEGORY, UM, BASED ON TRENDS AND OUR GOVERNMENTAL REVENUE IS THE ONE THAT WENT UP THE MOST.
AND AGAIN, THIS IS REALLY DRIVEN BY THE RIGHT OF WAY REVENUE COMING INTO THE GENERAL FUND FOR THE, UH, RIGHT OF WAY RENTAL FEE, UM, CHARGES FOR SERVICES, UM, A SLIGHT INCREASE IN OUR, UH, ASSUMPTIONS, UM, DIRECT INTER FUND, A SLIGHT INCREASE, A SLIGHT DECREASE IN OUR, UM, INTEREST PROJECTIONS.
UM, AND THEN THE OTHER CATEGORIES ARE KIND OF SMALL IN THAT REVENUE AREA.
GOING ONTO THE EXPENDITURE SIDE, UM, YOU KNOW, WE, WE BREAK DOWN IN HERE, UM, ALL THE ALIGN ITEMS THAT BOTH ADDED TO THE EXPENDITURES AND REDUCED THE EXPENDITURES.
UM, A LOT OF THE SUBCATEGORIES ARE RELATED TO, UM, PLACES THAT WE, THAT WE ARE ADDING ADDITIONAL FUNDS FOR, FOR EXAMPLE, ARE RELATED TO OUR FIREARM POLICE CONTRACTS, UM, FOR OVERTIME PAY, UH, FOR ADDITIONAL CADET TECHNOLOGY AND EQUIPMENT PAY UNIFORMS. UM, A LOT OF THINGS THAT ARE, UM, INCREASES FROM WHAT WE CURRENTLY HAD BEEN PROJECTING WHEN WE INITIALLY STARTED LOOKING AT THE FISCAL YEAR 27.
MOVING ONTO THE ORANGE BAR SECTION OF THE EXPENDITURES, THIS IS WHERE YOU SAW WE DECREASE OUR PROJECTION OF EXPENDITURES WITH THE LARGEST INCREASE BEING, UH, DUE TO THE SOLID WASTE DEPARTMENT, UM, BECOMING PART OF THE UTILITY WITH ALL OF THOSE THINGS TOGETHER IS HOW WE GET TO THE BUDGETARY GAP ON THE FAR RIGHT OF THE $25 MILLION.
[00:50:01]
THIS GIVES YOU THE SAME INFORMATION IN A SLIGHTLY DIFFERENT FORMAT, UM, BUT IT HAS ALL THE, THE FACTS AND FIGURES THAT TIE TO THE, TO THE GRAPH IN THE PREVIOUS SLIDE.SO GOING ON TO SLIDE 44, UM, THIS IS A SNAPSHOT OF THE DEPARTMENTAL BUDGET REDUCTIONS, UM, FOR THE DIFFERENT DEPARTMENTS.
EACH OF THE DEPARTMENTS WAS ASKED TO SUBMIT A 10% REDUCTION SCENARIO AND IDEAS FOR HOW THEY COULD BE MORE EFFICIENT, UH, WITH THEIR DOLLARS TO, UM, EITHER FREE UP RESOURCES OR, UM, ACCOMPLISH THE SAME WORK WITH, UM, YOU KNOW, EITHER WITH FEWER STAFF OR VACANT POSITIONS.
UM, THE, THE MAJORITY OF THIS IS VACANT POSITIONS.
UM, AND AGAIN, THIS IS FOR THE, THE GENERAL FUND ALONE.
UM, YOU CAN SEE THAT THE POLICE IS THE LARGEST PIECE OF THE $12.6 MILLION.
UM, THIS IS RELATED TO, UM, CIVILIAN VACANT POSITIONS THAT THE POLICE DEPARTMENT HAS, UM, THAT HAVE BEEN, UM, VACANT FOR A WHILE AND ARE CURRENTLY, UM, YOU KNOW, UNDER REVIEW TO BE, UM, EVALUATED BEFORE THEY'RE FILLED, UH, IN THE FUTURE.
AND EACH ONE OF THE DEPARTMENT DIRECTORS THAT, THAT'S THE LARGEST ONE.
BUT EACH ONE OF THE DEPARTMENT DIRECTORS WHEN THEY DO THEIR DEPARTMENT BUDGET WORKSHOPS IS GOING TO SPEAK TO, UM, THEIR BUDGET IN TOTALITY ON THE REVENUE AND EXPENDITURE SIDE, AND WILL GIVE DETAIL ABOUT THEIR, UM, THEIR SAVINGS IN THEIR INDIVIDUAL DEPARTMENTS.
ON SLIDE 45, THIS GIVES YOU THE HISTORICAL VIEW OF WHAT THE GENERAL FUND FUND BALANCE HAS BEEN SINCE FISCAL YEAR 17.
UM, WE HAVE A LITTLE BIT DIFFERENT OF A VIEW.
I KNOW WE TALK A LOT ABOUT HOW OUR FUND BALANCE, PARTICULARLY IN, UH, 20 22, 20 23 AND 2024 WAS HIGHER THAN WE ARE TODAY.
UM, WE ADDED INFORMATION TO THE SLIDE IN THE SHADED ORANGE BAR THAT SHOWS HOW MUCH OF THAT FUND BALANCE IS DUE TO THE REVENUE, UH, REPLACEMENT ARPA FUNDING, UM, THAT WE WERE ABLE TO, UM, TO SAVE AND OUR FUND BALANCE, UH, FOLLOWING THE TREASURY DEPARTMENT FORMULA AND WHAT WAS INCLUDED IN OUR BUDGETS.
UM, SO THIS GIVES YOU A HISTORICAL VIEW OF THE FUND BALANCE.
UM, AND FOR THE FISCAL YEAR 27 BUDGET, WE ARE PROPOSING TO, UM, HAVE AN ENDING FUND BALANCE OF $273 MILLION OR ABOUT 10.5% OF EXPENDITURES, NOT INCLUDING DEBT SERVICE AND PAY AS YOU GO FOR FISCAL YEAR 26.
UM, ON SLIDE 46, UM, I KNOW WE'VE HAD A LOT OF CONVERSATION ABOUT, UM, OVERTIME COSTS AND OTHER AREAS WHERE THE BUDGETING MIGHT HAVE, UM, A LITTLE AGGRESSIVE OR CRITICISM ON HOW WE BUDGET.
UM, I KNOW I TALKED ABOUT IT IN MY MOFA LAST WEEK, BUT I WANTED TO PUT A SLIDE ON HERE TO REALLY KIND OF PUT NUMBERS TO WHAT I WAS SPEAKING OF.
SO IN FISCAL YEAR 26, AT THE TIME WE ADOPTED THE BUDGET, WE PROJECTED THAT THE FUND BALANCE AT THE END OF THE YEAR WOULD BE $304 MILLION, OR ABOUT 12% OF EXPENDITURES NOT INCLUDING DEBT SERVICE BASED ON THE FINANCE DEPARTMENT'S CURRENT PROJECTION.
WE SEE THAT FUND BALANCE COMING IN AT $299 MILLION OR 11.3%.
AND THIS IS A DIFFERENCE OF $4.9 MILLION.
SO OUT OF A $3 BILLION GENERAL FUND BUDGET, EVEN THOUGH WE'VE DECREASED REVENUES ON PROPERTY TAXES BECAUSE WE KEPT THE TAX RATE THE SAME, AND EVEN THOUGH WE HAVE INCREASED EXPENDITURES AND OVERTIME THAT WASN'T PREVIOUSLY BUDGETED, WE HAVE OTHER SAVINGS AND OTHER THINGS THAT OFFSET THAT IN ADDITION TO A HIGHER BEGINNING FUND BALANCE THAN WE THOUGHT AT THE TIME OF THE BUDGET.
SO ALL OF THOSE INS AND OUTS, WE ARE ENDING UP $4.9 MILLION DIFFERENT THAN WE WERE PLANNING TO AT THE START OF THE BUDGET.
AGAIN, $4 MILLION DIFFERENCE OUT OF A $3 BILLION BUDGET.
SO WHEN YOU LOOK AT THE TOTALITY OF THE BUDGET AND ALL THE INS AND OUTS, UM, WE'RE REALLY RIGHT ON POINT WITH THAT.
UM, AND I DID PUT ANOTHER, UM, HANDOUT ON YOUR, ON YOUR DESK THAT SHOWS, UM, AS OF THE CONTROLLER'S TRENDS REPORT, UM, AT THE TIME WE DID THE ADOPTED BUDGET LAST YEAR, HIS OFFICE GAVE A RANGE OF ANYWHERE BETWEEN 37 MILLION TO $220 MILLION FOR THE FUND BALANCE.
UM, SO HIS PROJECTION EVEN, YOU KNOW, KIND OF THE CLOSEST ONE TO WHERE WE ARE AT, AROUND 220 MILLION, AND AGAIN, WE'RE ENDING UP AT 299 MILLION.
SO THERE'S ALWAYS A RANGE, RIGHT, UM, WHEN YOU LOOK AT IT.
BUT I THINK THE FINANCE DEPARTMENT DOES A, A GOOD JOB OF LOOKING AT ALL THE DIFFERENT CATEGORIES, ALL THE INS AND OUTS, UM, LOOKING AT CONSERVATIVE REVENUE PROJECTIONS, HOW WE, HOW WE BUDGET FOR EXPENDITURES.
AND AT THE END OF THE DAY, THE BOTTOM LINE, YOU KNOW, THE FUND BALANCE IS GONNA BE WITHIN FOUR OR $5 MILLION BASED ON THE CURRENT PROJECTION.
SO GOING ONTO THE FIVE YEAR FORECAST, UM, AND THIS IS WHERE WE KIND OF GIVE THE OUT YEAR, UM, VIEW OF WHERE WE SEE THINGS GOING.
UM, BASED ON THE FIVE YEAR FORECAST, WE'RE GOING TO SHOW THE PROJECTED
[00:55:01]
GAP, UM, BASED ON A, BASED ON, UH, DIFFERENT, UH, REVENUE GROWTH ASSUMPTIONS THAT YOU'LL SEE, UM, BROKEN OUT IN THE KEY ASSUMPTIONS ON SLIDE 49.IT DOES NOT INCLUDE ANY ONE TIME LAND SALES IN THE OUT YEARS.
IT ASSUMES THAT WE COMPLY WITH PROP ONE AND H LIMITATIONS AND THAT WE KEEP OUR SENIOR DISABLED EXEMPTION AT $260,000.
IT ASSUMES THAT WE, UM, CONTRIBUTE OUR PENSIONS BASED ON THE COST CORRIDOR MECHANISM AND STATE LAW.
UM, AND IN IT, UH, THE EXPENDITURES INCLUDE ALL OF OUR LEGAL MANDATES, OUR STAFFING, AND OUR CONTRACTUAL ESCALATORS THAT ARE CURRENTLY KNOWN.
SO ON SLIDE 49, THIS SHOWS YOU ON THE REVENUE SIDE FOR THE FIVE YEAR FORECAST.
UM, WE'RE ASSUMING PROPERTY TAX VALUATION GROWTH AT ABOUT 1.95%.
AND AGAIN, THAT'S BASED ON THE TAXABLE VALUE GROWTH.
UM, WE HAVE, UH, SALES TAX GROWTH OF ABOUT, UH, 2.4% FOR FISCAL YEAR 27 IN THE OUT YEARS.
UM, FRANCHISE FEE, FRANCHISE FEES TEND TO DECREASE OVER TIME.
SO THAT'S WHERE YOU SEE, UM, ACTUALLY INSTEAD OF INCREASES IN FRANCHISE FEES, IT'S, IT'S A NEGATIVE GROWTH EVERY YEAR.
AND THEN IN OTHER REVENUE GROWTH, UM, YOU SEE A RANGE THAT WE, UH, THAT WE'RE USING BASED IN HISTORICAL GROWTH.
OKAY, SO ON SLIDE 50, UM, THIS LAYS OUT THE KEY ASSUMPTIONS ON THE EXPENDITURE SIDE, UM, WITH THE FISCAL YEAR 27 PROPOSED COLUMN SHOWING WHERE OUR CONTRACTUAL ESCALATORS ARE FOR THE PROPOSED BUDGET.
UM, THE FORECAST FOR THE OUT YEARS IS BASED ON THE, THE KNOWN CONTRACTUAL OBLIGATIONS THAT WE HAVE IN OUR CURRENT CONTRACT.
UM, AND OBVIOUSLY IT'S TO BE DETERMINED ONCE THOSE CONTRACTS END WHAT THOSE ESCALATORS IN THE FUTURE YEARS COULD BE.
UM, ON THE PENSION SIDE, WE'RE ASSUMING THE, UM, THE CORRIDOR MIDPOINT FOR THE MUNICIPAL SYSTEM, AS THEY HAVE NOT YET HIT 90% FUNDED.
THEY'RE ABOUT A 70% FUNDED RATIO.
AND FOR THE FIRE AND THE POLICE PENSION PLAN, UM, THEY'RE OVER 90% FUNDED.
SO WE'RE ASSUMING THE, UM, THE MIDPOINT OF THE CORRIDOR, OR SORRY, THE MINIMUM OF THE CORRIDOR, UH, WHICH IS WHERE WE ARE TODAY.
UM, HEALTH BENEFITS, WE KNOW WE SEE THAT GROWING OVER TIME, SO WE'VE INCLUDED AN ESCALATOR THERE.
AND THEN, UH, OBVIOUSLY THE ASSUMPTION THAT WE HAVE FOR DEBT SERVICE AND FUTURE TRANSFERS TO D-D-S-R-F.
UM, SO ON SLIDE 51, UM, THE GREEN, UH, LINE SHOWS YOU, UH, WHERE WE SEE THE GAP IS TODAY BASED ON SOME OF THE STRUCTURAL BUDGET CHANGES WE'RE PROPOSING.
THE RED LINE SHOWS YOU THE BASELINE BUDGETARY GAP THAT WE'VE BEEN TALKING ABOUT.
UM, AND THE COUNCIL MEMBER, POLLARD, YOU ASKED ME ABOUT, UM, I THINK IT WAS LAST WEEK OF WHERE WE KIND OF SAW THAT FIVE YEAR NUMBER LOOKING.
SO, UM, BEFORE THE STRUCTURAL CHANGES THAT WE'RE PROPOSING, WE SAW THAT FIVE YEAR GAP.
UM, BY THE TIME YOU GET TO YEAR FOUR AND FIVE, YOU KNOW, IN THE FOUR TO $500 MILLION RANGE FOR FISCAL YEAR 27, WE WERE, UH, EXPECTING AROUND A $209 MILLION BUDGET GAP, UM, WITH THE STRUCTURAL CHANGES THAT WE'RE PROPOSING IN THIS BUDGET.
ALONG WITH ALL THE OTHER MOVING PIECES I TALKED ABOUT, UM, THE FISCAL YEAR 27 PROPOSED BUDGET, THE GAP IS, UH, SITTING AT $25 MILLION.
UM, AND AGAIN, UH, ONCE WE DRAW THAT 25 MILLION FROM FUND BALANCE IN THE PROPOSED BUDGET, THAT LEAVES US WITH 10.5% OF FUND BALANCE LOOKING IN THE OUT YEARS.
UM, YOU CAN SEE THE MAJOR, UM, THE MAJOR IMPACT, THESE TWO PROPOSED CHANGES IN THE, IN THE STRUCTURAL BUDGET, UM, PLAN WILL HAVE, IT DOESN'T ELIMINATE THE GAP IN THE OUT YEARS, BUT IT CERTAINLY PUTS IT IN A MUCH, MUCH MORE MANAGEABLE PLACE.
UM, IN FISCAL YEAR 28, IT WOULD HAVE, IT WOULD REDUCE THAT ASSUMED GAP OF 300 MILLION DOWN TO ABOUT A HUNDRED MILLION IN 29, FROM 381 MILLION TO 130 MILLION IN 2030 FROM 446 MILLION DOWN TO 132 MILLION, AND IN 2031 FROM 523 MILLION DOWN TO 172 MILLION.
SO DEFINITELY WE WILL STILL HAVE SOME MORE WORK TO DO IN THE OUT YEARS.
UH, BUT WITH THESE TWO STRUCTURAL CHANGES, IT REALLY RESETS THAT BASELINE, UM, AND WHERE WE CAN GO, UH, IN THE FUTURE.
SO IN TERMS OF ADDRESSING THE GAP IN THE OUT YEARS, YOU KNOW, LIKE I MENTIONED JULY 1ST, WE STARTED ALREADY WORKING ON THE NEXT YEAR'S BUDGET.
UM, WHAT'S NEXT IN THE OUT YEARS? WE STILL KNOW WE HAVE TO CONTEND WITH OUR PROPERTY TAX LOCAL CAP AND THE STATE CAP.
UM, WE KNOW THAT PUBLIC SAFETY, UM, MAKES UP MOST OF OUR BUDGET, UM, AND ON THE GENERAL FUND SIDE, AND THAT IS SOMETHING THAT WE NEED TO, UM, PRESERVE BECAUSE IT'S OF THE UTMOST IMPORTANCE AS WELL AS INFRASTRUCTURE.
WE ALSO HAVE TO KEEP OUR EYE ON POTENTIAL LEGISLATIVE CHANGES.
YOU KNOW, THE LEGISLATURE'S GOING TO, UM, BEGIN MEETING AGAIN BEFORE WE KNOW IT.
UM, AND SO WE ALWAYS HAVE TO KEEP AN EYE ON
[01:00:01]
ANY CHANGES THEY PROPOSE ON PROPERTY TAX AND SALES TAX, ESPECIALLY AS THOSE ARE SOME OF OUR MAJOR STREAMS IN THE SHORT TERM.WE'RE GOING TO CONTINUE TO IMPLEMENT THE RECOMMENDATIONS FROM THE CITYWIDE EFFICIENCY STUDY.
WE'RE GONNA CONTINUE ON WITH OUR HIRING CONTROL, WHICH IS REALLY, UM, MAKING SURE THAT THE DEPARTMENTS HAVE SUFFICIENT BUDGET TO FUND THE POSITIONS THAT THEY'RE SEEKING TO FILL.
UH, WE'RE GONNA CONTINUE TO LOOK FOR COST COLLABORATION WITH OTHER GOVERNMENTAL ENTITIES.
UM, AND IN THE SHORT TERM, OBVIOUSLY WE'RE PROPOSING TO IMPLEMENT THE REVENUE SOURCE BEING THE RIGHT OF WAY FEE, AND THE TRANSITION OF SOLID WASTE INTO THE ENTERPRISE FUND.
REMOVING PRESSURE FROM THE GENERAL FUND IN THE LONG TERM.
UH, WE KNOW WE CONTINUE, UH, NEED TO CONTINUE TO LOOK TO FIND WAYS TO CLOSE THOSE GAPS IN THE OUT YEARS, WHETHER IT'S THROUGH DEVELOPING NEW REVENUE SOURCES, CONTINUING TO IMPLEMENT THE EFFICIENCY STUDY AND COLLABORATING WITH OUR OTHER PARTNERS.
AND ON MY LAST SLIDE, UM, OF MY, OF MY PREPARED REMARKS, UM, JUST A SCREENSHOT OF THE LETTERS OF SUPPORT WE'VE HAD FOR OUR BUDGET PLAN.
UM, I WANTED TO THANK, I KNOW I DIDN'T THANK HIM AT THE BEGINNING, BUT THE MAYOR'S, UM, THE MAYOR'S ADMINISTRATIVE STAFF, UM, OF COURSE THE MAYOR, UM, CHIEF OF STAFF, CYNTHIA WILSON, STEVEN DAVID, JOSH SANDERS, UM, THE WHOLE TEAM.
THEY'VE, THEY'VE REALLY DONE A LOT TO GET US TO THIS POINT AND TO ENGAGE, UM, WITH OUR INTERNAL AND EXTERNAL PARTNERS ON THE BUDGET, UM, IN GETTING IN, GETTING EVERYONE'S QUESTIONS ANSWERED, UM, AS MUCH AS WE CAN BEFORE WE, WE EVEN PROPOSED.
UM, THERE'S ALSO A QR CODE ON THIS PAGE, UM, TO GET TO THE FY 27 BUDGET PROPOSAL WEBSITE.
THAT'S WHERE YOU CAN FIND A LINK TO THE BUDGET BOOK, UM, TO THE DOWNLOAD OF THE RAW DATA FILE FOR THE BUDGET FOR ALL THE DATA NERDS, LIKE, LIKE ME, LIKE US THAT LIKE TO LOOK AT THE EXCEL SPREADSHEET VERSION OF IT.
UM, AND THERE'S ALSO ON THERE THE LINK FOR THE BURNS AND MCDONALD'S STUDY, AS WELL AS A LOT OF OTHER RESOURCES RELATED TO THE FY 27 BUDGET.
SO I ENCOURAGE YOU TO, UM, TO CHECK IT OUT IF YOU HAVEN'T YET.
AND THAT CONCLUDES MY PREPARED REMARKS.
A LOT OF INFORMATION TO COVER THERE.
I DO WANNA NOTE, WE'VE BEEN JOINED BY A FEW OTHER COLLEAGUES, VICE MAYOR PRO TEM, AMY PECK, COUNCIL MEMBER TARSA JACKSON IS ONLINE COUNCIL MEMBER.
CAROLYN EVAN SHABAZZ IS ONLINE COUNCIL MEMBER TIFFANY THOMAS IN CHAMBER MAYOR PRO TEM CASTEX TATUM HERE IN CHAMBER, ALONG WITH COUNCIL MEMBER DAVIS ON, UM, QUESTIONS THE RIGHT OF WAY RENTAL FEE STARTING AT 5%.
IS THERE A PLAN TO ESCALATE THAT IN THE COMING YEARS SIMILAR TO THE, THE ADMINISTRATIVE FEE THAT STARTS AT $5 AND THEN ESCALATES IN COMING YEARS? THAT WOULD BE SOMETHING THAT WE NEED TO, SO I WOULD SAY YES.
AND SO YES, PART OF THAT IS CONTEMPLATED IN WHERE WE SEE RESETTING THE BUDGET GAP ON SLIDE 51.
UM, AN IMPORTANT PIECE TO THAT THOUGH IS IN CONJUNCTION WITH THE BUDGET, UM, LOOKING AT HOW WE CAN BUILD GUARDRAILS INTO THE UTILITY DOCUMENTS.
SO THE MASTER BOND ORDINANCE ALLOWS FOR, UM, THIS RIGHT OF WAY RENTAL FEE TO BE CHARGED.
UH, WHEN WE LOOK AT ALL OF OUR OTHER PEERS AND, AND, UH, AROUND THE STATE, WHEN YOU LOOK AT THEIR MASTER BOND ORDINANCES, UM, THEY SET GUARDRAILS FOR THEMSELVES BASICALLY SAYING, OKAY, YOU KNOW, SAN ANTONIO ELECTRICITY, YOU CAN'T, YOU CAN'T BE CHARGED MORE THAN 14% OF THE GROSS REVENUES.
RIGHT? UM, AND SO WE SEE THAT A LOT OF THOSE, UM, LOOKING AT THOSE PEERS, WE WILL, UH, RECOMMEND PUTTING SOME OF THOSE GUARDRAILS IN PLACE.
UM, SO THAT, YOU KNOW, WE'RE, WE ARE, ALTHOUGH IT CAN CHANGE IN THE FUTURE, THERE ARE THOSE PROTECTIVE GUARDRAILS IN PLACE SO THAT IT CAN'T, YOU KNOW, EXTEND BEYOND WHAT WE THINK IS SUSTAINABLE FOR THE UTILITY.
SO THAT WILL COME IN THE FUTURE WITH A POLICY THAT SETS GUIDELINES.
AND THEN ON THE $5, UH, ADMINISTRATIVE FEE, IS THAT SOLELY TO COVER OR PARTIALLY COVER THE $7 AND 57 CENTS, UM, THAT IS BEING INCURRED ON ADMINISTRATIVE SOLID WASTE COST? OR HOW IS THAT SUPPORTING SOLID WASTE? YES, SO THAT IS A NICE ON SLIDE.
UM, SO THIS IS A, A SNIP STRAIGHT FROM THE BURNS AND MCDONALD'S STUDY.
UM, THEY DO HAVE A SECTION WHERE THEY LAY OUT COMPONENTS OF THE OVERALL COST OF SERVICE.
UM, AND BASED ON THEIR CALCULATIONS, THE ADMINISTRATION PORTION OF THE COST IS $7 AND 57 CENTS.
[01:05:01]
SO THE $5 FEE WILL COVER NOT ALL OF THE ADMINISTRATION, BUT THE MAJORITY OF IT.SO PEOPLE SHOULDN'T EXPECT, UM, YOU KNOW, SALARIES TO GO UP FOR DRIVERS OR, UM, NEW TRUCKS TO BE ORDERED WITH THE $5 FEE.
WELL, PART OF THE, THE ADMINISTRATION ADMINISTRATIVE FEE IS PART OF THE PLAN, RIGHT? THE OTHER PART OF THAT, THE OTHER PART OF THE PLAN WITH SOLID WASTE IS THE SOLID WASTE DEPARTMENT BECOMING A, A DIVISION OF THE HOUSTON PUBLIC WORKS.
SO PART OF THAT IS RANDY AND HIS TEAM HAVE ALREADY BEEN MEETING WITH DIRECTOR HASSAN AND HIS TEAM ON WHAT TYPE OF EFFICIENCY IMPROVEMENTS CAN BE MADE, UM, INCLUDING AUTOMATIC ROUTING.
UM, LOOKING AT THE TRANSFER STATIONS THAT WE HAVE, ONE OF THE MAJOR INITIATIVES THAT WE'RE LOOKING AT, UM, THAT HAS BEEN IN THE, YOU KNOW, BEEN ON THE LIST OF NEEDS FOR QUITE SOME TIME, IS ONE OF THE TRANSFER STATIONS THAT WE HAVE THAT IS NOT OPERATIONAL AT ALL, UM, IS RECONSTRUCTING OR REBUILDING THAT TRANSFER STATION.
SO WITH THAT, ONCE THAT TRANSFER STATION IS BACK ONLINE AND THE DESIGN WORK HAS ALREADY BEEN DONE FOR IT, WE'RE GETTING READY TO AWARD THE CONSTRUCTION CONTRACT, UM, AS WE GET INTO THE NEW FISCAL YEAR.
AND OF COURSE, IT TAKES TIME FOR CONSTRUCTION PROJECTS, BUT ONCE THAT TRANSFER STATION IS UP AND RUNNING, IT WILL ALLOW FOR A MORE EFFICIENT, UM, UH, BASICALLY ROUTING OF THE TRUCK SO THEY DON'T HAVE TO DRIVE NEARLY AS FAR TO, UM, YOU KNOW, START THEIR ROUTE.
MAYBE THEY FINISH HALF OF IT, GO TO THE TRANSFER STATION ON THE OTHER SIDE OF TOWN, DUMP IT, GO ALL THE WAY BACK, RIGHT? SO IT'S REALLY GONNA IMPROVE THAT EFFICIENCY.
SO THAT'S ONE EXAMPLE OF THE THINGS THAT ARE GONNA BE ABLE TO BE ACCOMPLISHED WITH THE SOLID WASTE, UH, BECOMING PART OF THE HOUSTON PUBLIC WORKS.
UM, SO WHEN YOU LOOK AT, WHEN YOU COMPARE WHAT WAS PREVIOUSLY, UM, THOUGHT OR B BUDGETED BASED ON WHAT WE COULD AFFORD FOR THE SOLID WASTE OPERATIONS AND THE GENERAL FUND, YOU SEE THAT AMOUNT, THAT SOLID WASTE IS GOING TO HAVE GOING TO IT ONCE IT'S PART OF THE UTILITY IS A HIGHER DOLLAR AMOUNT.
SO THERE WILL BE MORE RESOURCES GOING, UM, NOT JUST OPERATIONALLY, UM, FROM WORKING TOGETHER MORE COLLABORATIVELY WITH SOLID WASTE AND HOUSTON PUBLIC WORKS, BUT ON THE FUNDING SIDE AS WELL.
THANK YOU FOR THAT, UM, EXPLANATION.
AND THEN ON THE KEY ASSUMPTIONS, UH, YOU TALKED ABOUT THEY'RE ON SLIDE 50, FIRE CLASSIFIED.
ARE WE ASSUMING THE, UH, PAY ESCALATOR IN THIS UPCOMING FISCAL YEAR SINCE WE HAD TO PAY IT IN THE, THIS FISCAL YEAR MM-HMM
SO, UM, IN THE FISCAL YEAR 27 PROPOSED BUDGET, WE'RE NOT PROPOSING, UM, OR WE DON'T SEE THAT WE HAVE NEW ADDITIONAL REVENUES TO COVER THE COST OF THE 3% ESCALATOR FOR 27 IN THE PROPOSED BUDGET.
SO, UH, WE DEFINITELY ARE LOOKING FORWARD TO COLLABORATING WITH THE, UH, WITH THE UNION ON THAT.
UM, BASED ON THE WAY THE LANGUAGE IS WORDED, WE HAVE TO HAVE JOINT EFFORTS BETWEEN THE CITY AND THE UNION TO IDENTIFY REVENUES DEDICATED TO PUBLIC SAFETY AND AN AMOUNT SUFFICIENT TO COVER THE COST OF THE ESCALATOR.
SO RIGHT NOW, BASED ON THE WAY THE REVENUES LOOK FOR THE, UM, FOR THE PUBLIC SAFETY REVENUES, WE DON'T SEE THAT NEW ADDITIONAL REVENUE THAT CAN COVER THAT COST.
BUT THAT'S SOMETHING THAT WE WILL BE WORKING TOGETHER IN THE FUTURE SO THAT ONCE YOU SEE THAT REVENUE IDENTIFIED, THEN THAT COULD BE SOMETHING THAT WOULD TRIGGER THE ESCALATOR, BUT NEITHER THE REVENUES NOR THE OFFSET, THE EXPENDITURES THAT WILL, YOU KNOW, BE OFFSET BY THE REVENUES ARE IN THE BUDGET AS OF THE PROPOSED BUDGET.
I'LL, UM, HAVE SOME MORE QUESTIONS ON THAT WHEN WE HAVE, UH, FIRE FOR THE WORKSHOP HERE, BUT, UH, NEXT UP IS MAYOR PRO TEM CASTEX TATUM.
UH, DIRECTOR, CAN YOU WALK THROUGH, UM, THE ADMINISTRATIVE FEE VERSUS THE GARBAGE FEE? I'VE, I'VE HEARD, YOU KNOW, BOTH, UM, TERMS, UM, THROWN OUT THERE AND I WANT, UH, EVERYONE TO KIND OF UNDERSTAND THE DIFFERENCE OR HOW WE'RE USING ADMINISTRATIVE FEE VERSUS A GARBAGE FEE.
SO THE, THE FULL COST OF THE SOLID WASTE DEPARTMENT'S OPERATIONS AS THEY CURRENTLY STAND, UM, WOULD COME OUT TO ON AVERAGE ABOUT $25 PER HOUSEHOLD PER MONTH.
UM, IF YOU, IF YOU WERE FULLY CHARGING THE COST, UH, TO COVER THE SERVICES FOR THE SOLID WASTE OPERATIONS OF THAT APPROXIMATELY $25, A PORTION OF IT, UH, THE WAY THE BURNS AND MCDONALD'S STUDY BREAKS IT DOWN, UM, SO IS IT JUST BECAUSE WE AREN'T CHARGING THE FULL $25 THAT WE'RE CALLING THE $5 THE ADMINISTRATIVE FEE? WELL, WHEN YOU LOOK AT HOW THE FEE IS CALCULATED, WHEN BURNS AND MCDONALD BUILDS UP THE WHOLE FEE, THEY BUILD UP PORTIONS OF THE FEE THAT EQUAL UP TO WHAT IT WOULD COST TO RUN THE WHOLE DEPARTMENT.
RIGHT? SO THEY BREAK OUT WHAT WOULD BE THE MONTHLY FEE TO JUST
[01:10:01]
DO, UM, YOU KNOW, CURBSIDE, UH, GARBAGE COLLECTION, WHAT WOULD BE THE FEE TO DO THE RECYCLING COLLECTION, RIGHT? WHAT WOULD BE THE FEE TO DO, JUST TO FOCUS ON ILLEGAL DUMPING? AND THEY BREAK DOWN EVERY LINE ITEM OF THE OPERATIONS AND OF THE OPERATIONS IT WOULD BE $7 AND 57 CENTS TO COVER THE ADMINISTRATIVE COSTS OF THE DEPARTMENT.AND SO THAT'S, WHEN WE CALL IT THE ADMINISTRATIVE FEE, THE $5 DOESN'T EVEN FULLY COVER THE ADMINISTRATION, RIGHT? IT'S, IT'S A MAJORITY OF IT, BUT WE'RE CALLING THE $5 AN ADMINISTRATIVE FEE MM-HMM
BECAUSE WE AREN'T CHARGING THE FULL $25, WHICH WOULD BE A GARBAGE FEE COST.
I WOULD SAY THAT ONCE IT GETS BEYOND THIS $7 AND 57 CENTS, THEN IT WOULD BE FOR MORE THAN JUST ADMINISTRATION.
AND THEN CAN YOU EXPLAIN WHY, UM, MOVING SOLID WASTE TO PUBLIC WORKS WAS DETERMINED AS, UM, ADVANTAGEOUS FINANCIALLY? SURE.
UM, SO THERE ARE SOME MORE SLIDES THAT WEREN'T IN MY PREPARED REMARKS.
UH, I DUNNO IF YOU CAN GO TO SLIDE 56.
YOU HAVE THAT, DO YOU HAVE ANYTHING PAST THAT? UM, OKAY.
SO THERE, UM, COULD YOU SEE IF THEY CAN SEND THE VERSION THAT HAS THE APPENDIX SLIDES? UM, SO, UH, BUT JUST GET TO GET YOUR QUESTION.
SO, UM, UH, LOOKING AT THE COMBINED UTILITY SYSTEM MASTER BOND ORDINANCE, UM, THERE'S A SECTION THAT LAYS OUT, UM, WHAT TYPES OF UTILITIES CAN BE CONSIDERED PART OF THE COMBINED UTILITY SYSTEM, UM, BASED ON THAT MASTER BOND ORDINANCE.
IT REFERENCES A SECTION OF THE STATE STATUTE, CHAPTER 1502, UM, THAT LAYS OUT DIFFERENT UTILITIES.
IT TALKS ABOUT WATER SYSTEM, WASTEWATER SYSTEM, UM, ELECTRIC UTILITY, WHICH WE DON'T OWN RIGHT FOR OURSELVES, BUT IT ALSO TALKS ABOUT A SOLID WASTE DISPOSAL SYSTEM.
SO THE IDEA IS THAT THE SOLID WASTE, UH, OPERATIONS OR CAN BECOME PART OF THE UTILITY, UM, IN COMPLIANCE WITH STATE LAW AND THE MASTER BOND ORDINANCE, AND, UM, BE ABLE TO LEVERAGE THE RESOURCES THAT THE COMBINED UTILITY SYSTEM HAS.
UM, THE IDEA IS THAT THE FUND BALANCE OF THE COMBINED UTILITY SYSTEM, WHICH RIGHT NOW IS AROUND 1.2, 1.3 BILLION, UM, COULD HELP SUSTAIN THE OPERATIONS OF THE SOLID WASTE, UM, THE SOLID WASTE OPERATIONS, AND STILL BE ABLE TO KEEP THE FEE TO THE ADMINISTRATIVE PORTION, WHICH IS GONNA START OUT AT $5.
OF COURSE, THAT FUND BALANCE CAN'T LAST IN PERPETUITY, RIGHT? SO, UM, THAT'S WHERE YOU SEE THE IDEA IN THE FUTURE YEARS.
THE PROPOSAL IS TO SLIGHTLY IN INCREASE THAT FEE OVER TIME TO GET TO THE POINT WHERE THE FULL COST IS RECOVERED, UM, BY THE USERS.
AND THEN, UH, MY OTHER QUESTION IS, UM, THERE WAS CONVERSATION ABOUT A REVIEW BY COUNCIL BEFORE IT GOES UP ABOVE THE $5.
WHAT, WHAT WAS THAT PLAN OR THOUGHT PROCESS? MM-HMM
SO THIS BUDGET, THE PROPOSED BUDGET IS BASED ON THE $5 MM-HMM
UM, EVERY TIME WE LOOK AT A FEE, STARTING A NEW FEE, INCREASING A FEE, WE HAVE TO DO SOMETHING CALLED A COST OF SERVICE STUDY.
SO THAT'S WHAT THE BURNS AND MCDONALD'S STUDY SHOWS THAT, UM, YOU KNOW, THE $5 FEE IS SUBSTANTIATED BY THIS STUDY.
UM, EVEN THOUGH YOU HAVE A COST OF SERVICE STUDY, UM, CITY ORDINANCE GOVERNS WHAT CERTAIN FEES CAN BE, A LOT OF FEES ARE ON THE CITYWIDE FEE SCHEDULE WHERE THEY GO UP BY INFLATION, OTHER FEES COME BACK TO COUNCIL FOR REGULAR REVIEW, FOR CHANGE AND UPDATE.
SO THE ORDINANCE THAT'S GONNA COME FORWARD WITH THE BUDGET, UM, IS GOING TO ESTABLISH THE FEE AT $5 AND FUTURE INCREASES TO THE FEE WOULD HAVE TO BE DONE BY CITY ORDINANCE.
IF PEOPLE HAVE PRIVATE TRASH PICKUP, WILL THEY BE EXEMPT FROM THE $5 ADMINISTRATIVE FEE? YES.
SO THE $5 ADMINISTRATIVE FEE IS ONLY GOING TO APPLY TO THE 400,000 HOMES THAT CURRENTLY HAVE THE RESIDENTIAL COLLECTION.
AND WILL THE $6 REBATE STILL REMAIN INTACT FOR PEOPLE WITH PRIVATE TRASH? YES, THAT'S PART OF THE BUDGET FOR THE $6 REBATE TO REMAIN INTACT.
UM, THAT'S SOMETHING THAT I THINK CAN BE CONSIDERED IN FUTURE BUDGETARY CYCLES, BUT FOR PURPOSES OF THIS BUDGET, IT'S CON IT'S CONTEMPLATED TO CONTINUE IN THE FISCAL YEAR 27.
COUNCIL MEMBER POLLARD, THANK YOU CHAIR, AND THANK YOU DIRECTOR FOR YOUR PRESENTATION.
THANK YOU TO YOUR ENTIRE TEAM, UH, WHO PUT FORTH THE EFFORT TO HELP WITH THE PRESENTATION.
UM, GOING BACK TO PAGE 16, THE
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$5 FEE, WHICH IS A PART OF THE $7 AND 57 CENTS OF ADMIN, WHAT CONSTITUTES ADMIN, BECAUSE YOU BROUGHT, AND THEN WHAT, WHAT ARE THE OTHER, UM, LINE ITEMS THAT MAKE UP THE $25 THAT WOULD ACTUALLY GO TOWARDS TRASH COLLECTION? TRYING TO FIND A GOOD PAGE IN THE BURNS AND MCDONALD STUDY? IT'S A LONG STUDY.I'M SORRY, IT MIGHT TAKE ME A MINUTE.
LET'S LET HER COME BACK TO THAT.
IF YOU WANNA GIVE THAT TO ONE OF YOUR STAFF MEMBERS AND GO ON WITH YOUR NEXT QUESTIONS.
AS, AS IT RELATES TO THE MASTER BOND ORDINANCE YES.
DOES THE CURRENT, UM, ORDINANCE ALLOW FOR RIGHT AWAY FEES? UM, THE CUS AS, AS OPPOSED TO THE CITY ATTORNEY EARLIER, IS PAID FOR THROUGH BONDS.
THE BONDS HAVE SPECIFIC LANGUAGE FOR THE BOND HOLDERS, BUT WE HAVE TO REFINANCE ON THOSE BONDS TO CHANGE THE LANGUAGE.
AND IF SO, COULD THAT IMPACT OUR CREDIT RATING WITH HAVING TO GO BACK TO THE BOND HOLDERS WITH NEW LANGUAGE? MM-HMM
UM, BEFORE THE BUDGET WAS PROPOSED, WE, UM, DID SOME, ALONG WITH OUR INITIAL OUTREACH TO COUNCIL MEMBERS AND MEMBERS OF THE COMMUNITY, WE ALSO DID SOME INITIAL OUTREACH TO THE RATING AGENCIES TO EXPLAIN TO THEM OUR THOUGHT PROCESS FOR THE PROPOSED BUDGET.
UM, WE HAVEN'T RECEIVED ANY NEGATIVE FEEDBACK FROM THEM ON THAT, ALTHOUGH THOSE WERE REALLY, YOU KNOW, PRELIMINARY CONVERSATIONS.
SO NOW THAT THE BUDGET'S RELEASED, WE'RE GONNA HAVE MORE DEEP DIVE CONVERSATIONS WITH THE RATING AGENCIES.
UM, SO THAT'S ONE PIECE OF YOUR QUESTION.
THE SECOND PIECE, AS IT RELATES TO THE LANGUAGE, UM, IN THE MASTER BOND ORDINANCE, I HAVE, UM, WE HAVE ERIC WYNN FROM CITY LEGAL, UM, WHO WE'VE HAD HIM WORKING OVERTIME AS WELL.
UM, LOOKING AT ALL OF THESE, UM, ALL THESE PROPOSALS, UM, HE CAN PROBABLY SPEAK TO IT BETTER THAN I CAN.
UM, BUT THE MASTER BOND ORDINANCE, UM, DOES CONTEMPLATE, UM, THINGS CALLED ANY LAWFUL SYSTEM PURPOSE AND WHAT IS CALLED THE BOTTOM BUCKET.
SO THE, THE RIGHT OF WAY FEE WILL BE PAID OUT OF WHAT WE CALL THE BOTTOM BUCKET, WHICH IS TO SAY, AFTER ALL THE BOND OBLIGATIONS ARE PAID, ALL THE OTHER OPERATING EXPENSES OF THE UTILITY IS PAID.
THERE'S A BLOW OF FUNDS IN THE ORDINANCE.
UM, AND THE MASTER BOND ORDINANCE DOES CONTEMPLATE THAT.
BUT I'LL LET, UM, ERIC FILL IN THE, THE LEGAL DETAILS.
AND COUNCIL MEMBER, IF I UNDERSTAND YOUR QUESTION CORRECTLY, I THINK YOU'RE ASKING WHAT THE BOND HOLDERS HAVE AS RIGHTS, UM, WITH RESPECT TO THE CITY'S BEING ABLE TO LEVERAGE AT THIS RIGHT OF WAY FEE.
IS THAT ACCURATE? YEAH, I MEAN, THE BOND HOLDERS, UM, ARE INVESTING IN, THE BOND HOLDERS ARE INVESTING IN THE CUS BASED ON SPECIFIC LANGUAGE.
THAT SPECIFIC LANGUAGE AT THE MOMENT, I DON'T THINK CONTEMPLATES, UM, RIGHT OF WAY FEES BECAUSE WE HAVE NOT DONE THAT AS OF YET.
UH, SO WOULD THE, WOULD THE BOND LANGUAGE HAVE TO CHANGE, WOULD THEN LEAD TO A REFINANCE OF THE BOND, AND THEN WOULD THAT LEAD TO A CHANGE IN THE CREDIT RATINGS? SURE.
UH, WE ARE CONTEMPLATING A POTENTIAL, UM, BOND TRANSACTION WITH AN ACCOMPANYING BOND HOLDER CONSENT MECHANISM.
UM, BUT WITH RESPECT TO IMMEDIATELY BEING ABLE TO DO A RIGHT OF WAY TRANSFER THE BOND, UH, THE MASTER BOND ORDINANCE ALREADY CONTEMPLATES A POSSIBLE MECHANISM TO DO THAT.
UM, I THINK, AS MELISSA ALLUDED TO, THERE IS A GENERAL FLOW OF FUNDS FOR HOW YOU CAN SPEND CUS REVENUES THAT'S CONTEMPLATED FOR UNDER THE ORDINANCE.
YOU DON'T NEED TO AMEND IT, YOU DON'T NEED TO GET BONDHOLDER CONSENT, YOU JUST DO WHAT THE FLOW OF FUNDS SAYS YOU CAN DO.
AND IN THIS PRIORITY OF HOW YOU CAN SPEND CUS REVENUE AT THE VERY BOTTOM, UM, OR WHAT SHE REFERRED TO AS THE BOTTOM BUCKET, THAT'S BASICALLY THE CUS FUND BALANCE.
UM, THIS IS AFTER OPERATIONS AND MAINTENANCE HAVE ALREADY BEEN PAID.
THIS IS AFTER THE BOND HOLDERS HAVE HAD THEIR BOND FUND, UM, FULLY PAID, WHICH MEANS THAT THE DEBT SERVICE PAYMENTS ARE TAKEN CARE OF.
AND AT THE VERY BOTTOM BUCKET, YOU HAVE THIS CATEGORY CALLED THE GENERAL PURPOSE FUND, WHERE THE CITY IS ALLOWED TO PAY FOR, UM, ANY NUMBER OF CATEGORIES IN THERE.
AND ONE OF THE CATEGORIES IS CALLED
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ANY LAWFUL PURPOSE OF THE SYSTEM, AS THE CITY MAY DETERMINE, UM, AT ITS OWN DISCRETION.SO AS LONG IT'S A, IT'S AS LONG AS IT'S A LAWFUL PURPOSE OF THE CUS, UM, THE CITY CAN SPEND CUS REVENUES TO PAY FOR THAT PURPOSE.
AND THIS WOULD BE, YOU KNOW, THE UNDERLYING JUSTIFICATION FOR THE RIGHT OF WAY FEE.
IF YOU WANNA GO AHEAD WITH THE ADMINISTRATIVE, AND THEN WE'LL PUT YOU BACK IN THE QUEUE WHAT, WHAT THE BURNS AND MCDONALD'S THING SAID.
AND I WANTED TO ADD ONE THING TO WHAT ERIC SAID WHEN ERIC SAID, ANY LAWFUL SYSTEM PURPOSE, UM, FOR THE UTILITY, THERE'S A SECTION IN STATE LAW ALSO IN, UM, CHAPTER 1502 THAT TALKS ABOUT THE TRANSFER OF A UTILITY, UH, TRANSFERRING MONEY TO THE MUNICIPALITY'S GENERAL FUND.
UM, AND SO IT, IT ALSO FOCUSES ON THIS CONCEPT IN STATE LAW, WHICH IS HOW OUR UTILITY IS GOVERNED IN THIS, UM, CHAPTER 1502, UM, ON THE ADMINISTRATION FEE.
UM, THERE'S MORE DETAILS ON PAGE THREE DASH TWO OF THE BURNS AND MCDONALD'S STUDY AND THREE DASH THREE OF THE STUDY, UM, THAT LAY OUT HOW MUCH THE ADMINISTRATION IS AS A COMPONENT OF, OF THE OPERATIONS OF THE SYSTEM.
BUT I MEAN, ADMINISTRATION IS, ADMINISTRATION IS WHAT IT SOUNDS LIKE, RIGHT? LIKE OVERHEAD FOR, UM, STAFF, UM, TO PAY INVOICES, TO COLLECT REVENUES BILLING, LIKE SO WILL IT GO.
SO IT DOESN'T GO TOWARDS ACTUAL GARBAGE COLLECTION OPERATION SERVICES, IT GOES ONLY TOWARDS ADMINISTRATION, BACK OFFICE ADMINISTRATION OVERHEAD.
SO IT'S SAFE TO SAY THEN RESIDENTS WHO ARE PAYING THIS INITIAL $5 UNTIL IT GETS INCREASED OR WHEN IT GETS INCREASED, THEY WON'T SEE AN IMPROVED TRASH COLLECTION SERVICE.
IS THAT SAFE TO SAY? I WOULDN'T SAY THAT, NO.
SO WHAT WOULD YOU SAY? I WOULD SAY THAT THERE'S THE ADMINISTRATION FEE, THAT'S A PIECE OF IT.
THE SECOND PIECE IS THE REORGANIZATION OF THE DEPARTMENT INTO THE PUBLIC WORKS DEPARTMENT.
SO THEY'VE ALREADY STARTED ON WORKING ON THINGS LIKE, UH, ROUTE AUTOMATION.
THEY USED TO, OR MAYBE IN SOME CASES STILL DO, I'M NOT THE EXPERT OF OPERATIONS, BUT WORK OFF OF PAPER ROUTE MAPS VERSUS DYNAMIC ROUTING THAT CAN BE DONE, UM, SIMILAR TO A WAY LIKE A FEDEX OR AN AMAZON.
DOES THAT HAVE TO DO WITH THE $5 FEE? SHE, SHE DESCRIBED A LOT OF THIS IN OUR PRESENTATION, UH, THAT A LOT OF THE, THE OPERATIONAL EFFICIENCY, A LOT OF THE OPERATIONAL GAINS ARE GONNA BE BY VIRTUE OF PUTTING IT INTO THE UTILITY.
NOT SPECIFICALLY ABOUT THE FEE, BUT LET ME PUT YOU BACK IN THE QUEUE.
SO IN MY SIX YEARS OF SERVICE, THERE ARE PROBABLY ONLY THREE VOTES THAT I STILL THINK ABOUT.
UH, ONE OF THE VOTES OF THE 2021 CONSENT DECREE.
SO, UH, AND WE NEGOTIATED THAT DOWN.
AND WE WENT TO HOUSTONIANS WITH A VERY PRESCRIBED METHOD OF HOW WE WERE GONNA ADDRESS CONSENT DECREE.
HERE'S THE SCHEDULE, HERE'S THE FEE, THIS IS WHAT YOU CAN EXPECT.
THEN HERE COMES A RATE STUDY, AND THEN IT WAS LIKE 8% THROUGH THE GAME OFF.
UH, THEN WE JUST HAVE AN INCREASE EVERY APRIL ONE AND EVERY CIVIC CLUB MEETING, EVERY HOA MEETING I GO TO, PEOPLE ARE STILL TALKING ABOUT WATER BILLS AND HOW THE FEES, UM, THEY CAN'T AFFORD THEM.
RIGHT? UM, SENIORS WERE, WHO HAD A $50 WATER BILL, NOW THEY'RE DEALING WITH SOMETHING ELSE.
UM, THIS REMINDS ME OF CONSENT DECREE IN THE SENSE OF, YOU KNOW, DO WE HAVE A PROMISE THAT WE WILL NOT HAVE TO GO BACK TO HOUSTONIAN SAYING, OH, WE'VE DONE ANOTHER STUDY.
WE LOOKED AT WHAT OTHER CITIES HAVE DONE AND THEY INCREASE THEIR FEE 3% EVERY YEAR.
SAN ANTONIO DOES IT, BECAUSE THIS IS WHAT REMINDS ME OF THAT, UH, CHAIRWOMAN YOU WERE, WE VOTED IN SUPPORT OF THAT, AND I KNOW WE DELAYED THAT VOTE SIX MONTHS BECAUSE WE VOTED ON THAT IN THE MIDST OF THE 2021 FREEZE.
AND I REMEMBER TALKING TO MAYOR TURNER ABOUT THAT.
I REMEMBER VICE MAYOR PRO TEM EVEN RAISING ISSUES AROUND THE FACT THAT PEOPLE WERE TRYING TO FIGURE OUT DEALING WITH THE PANDEMIC AND THE LOSS.
AND WE FIND OURSELF IN VERY SIMILAR ECONOMIC TIMES WHEN PEOPLE ARE MAKING FINANCIAL DECISIONS.
SO IS THERE A PROMISE? BECAUSE I VOTED IN SUPPORT OF THAT AND I STILL STAND BY THAT, BUT I'M ALSO, I ALSO STILL MEET THOSE CONSTITUENTS THAT ARE DEALING WITH THAT FINANCIAL BURDEN.
IS THERE A PROMISE FROM THE ADMINISTRATION THAT WE WILL NOT GO BACK TO HOUSTONIANS AND SAY, AH, I KNOW IT'S $25, BUT WE'VE DONE ANOTHER STUDY AND NOW IT'S 35 AND WE'RE GONNA SCALE UP IN THE NEXT FIVE YEARS.
SO THE RATE STUDY, THE WATER RATE STUDY IS SOMETHING THAT IS IMPORTANT TO THE BOND HOLDERS.
SO, UM, COUNCIL MEMBER POLLARD ASKED ABOUT THE BOND HOLDERS.
THE RATE STUDY IS SOMETHING THAT, UM,
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AS YOU KNOW, BECAUSE WE ENGAGED A NEW CONSULTANT, RALPH TEIS, UM, WHOSE CONTRACT CAME TO CITY COUNCIL SOME MONTHS AGO, UM, HAS ALREADY STARTED ON THE FUTURE WATER RATE STUDY.AN IMPORTANT PART OF THIS PLAN AND THE $5 ADMINISTRATIVE FEE THAT WE'RE TALKING ABOUT, RIGHT, IS LOOKING AT THE CURRENT BALANCE OF THE COMBINED UTILITY SYSTEM AND SEEING THAT THE UTILITY CAN SUPPORT THE OPERATIONS OF THE SOLID WASTE DEPARTMENT, RIGHT? BUT OVER TIME, THAT THAT SOLID WASTE, THE $5 REALLY TO BE SUSTAINABLE FOR THE UTILITY TO SUPPORT IT, THAT FEE DOES NEED TO GO UP SO THAT IT'S NOT TIED TO THE FUND BALANCE OF THE UTILITY PERMANENTLY.
AFTER WE, RIGHT, AFTER WE HIT THE, THE $25 IN ORDER TO HAVE ANY TYPE OF FEE, THERE IS A COST OF SERVICE STUDY AND THE, LIKE THE BURNS AND MCDONALD'S STUDY.
RIGHT? AND ANOTHER PIECE THAT WE HAVEN'T EVEN HAVEN'T TALKED ABOUT TODAY, BUT IT'S BEEN SOMETHING THAT WE'VE TALKED IN SOME OF THE BRIEFINGS ABOUT, UM, ARE SOME OF THE WAYS THAT PUBLIC WORKS IS ALREADY WORKING WITH SOLID WAYS TO BECOME MORE EFFICIENT IN THEIR ROUTING, RIGHT? THE ROUTING, THE OPERATIONS OF THE TRANSFER STATIONS, THE FACT THAT WE ONLY HAVE TWO OPERATIONAL TRANSFER STATIONS, AND I MENTIONED THAT THIRD ONE COMING ONLINE THAT WILL HELP WITH OPERATIONS AND ROUTING TRANSFER STATIONS ARE ALSO A POTENTIAL REVENUE GENERATING OPPORTUNITY DIRECTOR.
I'M TRACKING WITH YOU ON THAT.
BUT AFTER, ONCE WE HIT OUR $25, IS THERE A PROMISE FROM THE ADMINISTRATION THAT WE WILL NOT HAVE TO GO BACK TO HOUSTONIANS TO SAY, AH, WE'VE, WE NEED TO INCREASE ANOTHER 3% ON THIS, ON THIS $25.
ALTHOUGH WE TOLD YOU $25 OVER FIVE YEARS, BECAUSE THEN WE'RE, YOU KNOW, WE WE'RE STUCK HOLDING THE BAG.
MOST OF OUR FEES ARE AT LEAST RELATED TO A CPI ESCALATOR, I MEAN, IN THE FUTURE.
SO COUNCIL MEMBER, FROM THE PERSPECTIVE OF MAYOR WHITMEYER DURING HIS ADMINISTRATION, THE CAP IS GONNA BE $25.
UH, WHAT DIRECTOR DEBOWSKI IS REFERENCING IS THAT ANY INCREASE BEYOND $25 WOULD HAVE TO BE SUPPORTED BY A RATE STUDY.
AND I THINK THE THING THAT WE CAN ALL GET BEHIND.
SO THE ANSWER IS NO, THERE IS NO PROMISE, UNLESS THE ANSWER IS THERE IS A PROMISE.
WE ARE NOT GOING TO GO ABOVE $25 DURING MAYOR WHIT'S ADMINISTRATION UNLESS THERE'S A RATE STUDY UNLESS YOU COME BACK.
'CAUSE WE DO A RATE STUDY FOR THE WATER MAYOR WITH MARSH COMMITMENT IS THAT WE'RE NOT GOING ABOVE $25 UNLESS WE DO A RATE STUDY.
I'D LIKE TO REFERENCE THE THING THAT I WOULD LIKE TO REFERENCE, AND THIS IS AN IMPORTANT THING TO, TO FRAME OUT, IS THAT WE DO NOT BELIEVE THAT THE $25, THE $25 CALCULATION THAT WAS MADE DURING THIS ANALYSIS NECESSARILY ASSUMED THAT THE DEPARTMENT WAS EFFICIENT.
AND WE DO NOT BELIEVE THAT THAT IS TRUE.
I DON'T THINK ANY OF Y'ALL BELIEVE THAT THAT IS TRUE.
SO WHAT WE DO EXPECT TO OCCUR IS THAT AS $25 IS HIGHLIGHTED AS THE COST OF THE DEPARTMENT TODAY, WE BELIEVE THAT THE COST OF THE DEPARTMENT WILL DECREASE OVER TIME BECAUSE WE'RE GONNA BE DRIVING MORE EFFICIENCIES INTO IT.
IT'S ONE OF THE REASONS WHY I'M A LITTLE HESITANT TO SAY $25 BECAUSE IT'S THE MAX.
WE THINK THAT IT'S GONNA BE CHEAPER.
AND THEN THE CONVERSATION THAT WE DO FULLY EXPECT Y'ALL TO HAVE IN THE NEXT COUPLE OF YEARS AS WE CONTEMPLATE GOING FROM FIVE TO $10, IS IF IT TURNS OUT THAT THE ACTUAL COST TO ADMINISTER TO THE ACTUAL COST OF A GARBAGE FEE IS LET'S SAY 19 OR $20.
INSTEAD, WOULD THIS COUNCIL PREFER TO KEEP IT AT 25 AND ADD A SECOND GARBAGE DAY DURING THE WEEK, OR MAYBE DO RECYCLING MORE OFTEN, OR MAYBE DO HEAVY TRASH? THAT IS A POLICY DECISION.
THAT IS NOT SOMETHING THAT WE'RE CONTEMPLATING ON DOING WITH THIS BUDGET.
THANK YOU DIRECTOR AND THE ENTIRE FINANCE DEPARTMENT.
THIS IS A HUGE LIFT AND, UH, QUITE AN ACCOMPLISHMENT.
SO I APPRECIATE ALL YOUR EFFORTS ON THIS.
SO I WANNA START BY ASKING YOU, UH, ABOUT THE BUDGET GAP SLIDE, WHICH IS 51 IN THE OUT YEARS.
THE GREEN LINE, UH, MUCH MORE FAVORABLE THAN THE RED LINE OBVIOUSLY, BUT IN FY 2029, A REVISED GAP 132, UH, MILLION, DOES THAT ASSUME A $10 ADMINISTRATIVE OR GARBAGE FEE, WHATEVER YOU WANT TO CALL IT? SO THIS ONLY LOOKS AT THE GENERAL FUND, SO IT ASSUMES IT'S, IT'S NOT EXACTLY BAKED INTO THIS NUMBER BECAUSE IT ASSUMES THAT THE ENTIRE COST OF THE SOLID WASTE OPERATION IS NOW OUTSIDE OF THE GENERAL FUND.
SO THE FIVE CHANGE FROM $5 TO $10 WOULD IMPACT THE UTILITY, NOT THE GENERAL FUND.
LET ME ASK YOU ABOUT, UH, UH, WELL ONE OF THE TWO CENTER PIECES OF THE PLAN IS SOLID WASTE BECOMES, UH, UTILITY GETS DESIGNATED AS A UTILITY.
DOES THAT HAPPEN SIMULTANEOUSLY WITH THE PASSAGE OF THIS BUDGET? OR ARE WE TO CONSIDER THAT IN AN, IN A YEAR OR TWO? YES, IT'S GONNA, THAT THE PROPOSAL IS TO HAVE IT HAPPEN SIMULTANEOUSLY WITH THE BUDGET.
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UH, SORT OF A PAGE OUT OF THE BURNS AND MCDONALD RATE STUDY.THERE'S MENTION ON THAT SLIDE.
UH, IF THE CITY, IF THE CITY CHOOSES TO TRANSITION TO A SPECIAL REVENUE FUND, BLAH, BLAH, BLAH, BLAH, IF SWMD BECOMES A COMBINED UTILITY, SO, SO WE'VE MADE THE, THE ADMINISTRATION HAS MADE THE DECISION WE'RE GONNA GO THE UTILITY SYSTEM ROUTE, NOT THE SPECIAL REVENUE FUND ROUTE.
UM, HOW DID, HOW DID THE ADMINISTRATION, UH, SETTLE ON A 5% OF GROSS REVENUE RIGHT OF WAY FEE AS OPPOSED TO SOMETHING ELSE? MM-HMM
UM, SO WE'VE BEEN WORKING WITH THE PUBLIC WORKS DEPARTMENT TO DO A LOT OF INTERNAL MODELING, UM, TO LOOK AT WHAT THE UTILITY COULD REASONABLY AFFORD GIVEN THEIR, UM, CURRENT FUND BALANCE, THEIR CURRENT DAYS, CASH ON HAND, THEIR CURRENT DEBT SERVICE COVERAGE RATIOS, ALL OF WHICH ARE IMPORTANT PIECES TO KEEP AN EYE ON.
UM, AND ALSO LOOKING AT THE, UM, THE EXISTING NEEDS OF THE WATER AND WASTEWATER SYSTEM.
SO MAKING SURE THAT IT WAS SOMETHING THAT WAS AFFORDABLE, UM, BASED ON THE LARGE CAPITAL IMPROVEMENT PLAN THAT THEY HAVE TO PUT FORWARD WITH THE EAST PLAN AND THE CONSENT DECREE THAT COUNCIL MEMBER THOMAS MENTIONED, UM, AS WELL AS THE OPERATIONAL NEEDS OF THE UTILITY.
UM, THEY DO HAVE ALSO AN AGGRESSIVE PLAN ON, UM, WATERLINE REPLACEMENT, AS YOU KNOW, UM, AND ANDY CAN SPEAK BETTER TO THE NUMBERS THAN I CAN, BUT, UM, THEY'VE DONE A LOT OF, UM, REPAIRS AND REDUCING THOSE WATER MAIN BREAKS.
SO CONTEMPLATED TOGETHER WITH ALL OF THOSE OTHER THINGS, MAKING SURE THAT THE UTILITY, UH, IS STILL MEETING ITS OPERATIONAL GOALS AND THE CAPITAL PROJECTS IT NEEDS TO DO.
UM, WE FELT THAT A 5% FEE WAS SOMETHING THAT WAS AFFORDABLE AND SUSTAINABLE FOR THE UTILITY FOR FISCAL YEAR 27.
SO IS THERE A, A CAP? 'CAUSE I SEE FROM SLIDE 19, IT GOES ANYWHERE FROM SAN ANTONIO WATER 4% TO SAN ANTONIO CPS 14% MM-HMM
UM, THERE'S NOT A CAP CURRENTLY IN OUR ORDINANCE.
UM, THAT IS SOMETHING THAT WE'RE LOOKING TO, UM, CONTEMPLATE AS HAVING PART OF THE MASTER BOND ORDINANCE, UH, TO MAKE SURE THAT THERE ARE GUARDRAILS IN PLACE, UM, TO MAKE SURE THAT IT'S AFFORDABLE AND SUSTAINABLE FOR THE UTILITY.
THANK YOU DIRECTOR FOR THE PRESENTATION.
UM, FOR THE ADMINISTRATIVE FEE, DOES MOVING THE SALT WASTE, UM, DEPARTMENT OVER TO THE BIN COMBINED UTILITY SYSTEM HAVE ANY IMPACT ON THE, UM, PROP ONE AND H CAP? LIKE DOES IT CHANGE THE CPI AT ALL? I KNOW IT'S THE LESSER OF THAT OR 4.5%, BUT I'M JUST MAKING SURE THAT IT DOESN'T CHANGE ANY CALCULATION THAT WOULD THEN RAISE PROPERTY TAXES IN ANY WAY.
SO, UM, THE, THE WAY THAT THE PROPERTY TAX, UM, CAP WORKS IS BASED ON THE PROPERTY TAX COLLECTIONS FROM THE PRIOR YEAR, NOT NECESSARILY WHAT YOU EXPEND IN THE PRIOR YEAR, BUT MORE SO ON THE REVENUE SIDE.
SO IT DOESN'T, UM, IT DOESN'T CHANGE THAT CALCULATION.
UM, FOR LONG-TERM LIABILITIES, UM, WHAT IS THE MOST RECENT ESTIMATE FOR DEFERRED MAINTENANCE? I KNOW WHEN WE TALKED ABOUT IT LAST YEAR FOR FY 26, UM, DEFERRED MAINTENANCE FOR CITY FACILITIES WAS ESTIMATED TO BE $760 MILLION AND 1.4 BILLION OVER THE NEXT FIVE YEARS.
HAS THAT NUMBER CHANGED AT ALL SINCE LAST FISCAL YEAR? SO, UH, GENERALLY GSD WOULD, UM, PROVIDE AN UPDATE ON THAT, I THINK IN THEIR, UM, IN THEIR DEPARTMENT BUDGET WORKSHOP.
UM, ONE THING THAT IS GONNA BE A MAJOR CHANGE AND PROBABLY WON'T BE REFLECTED THIS YEAR SINCE THEY ARE STILL, UM, ON THE BOOKS, IS AS WE GET READY TO MOVE TO 1600 SMITH, ALL THE DEFERRED MAINTENANCE ASSOCIATED WITH 1200 TRAVIS AND SIX 11 WALKER, UM, YOU KNOW, THOSE ARE GOING TO BE, UM, BUILDINGS THAT WE MOVE OUT OF.
SO DON'T HAVE TO TACKLE THOSE HUNDREDS OF MILLIONS OF DOLLARS OF DEFERRED MAINTENANCE.
SO I WOULD SAY GSD CAN, CAN GIVE A BETTER UPDATE ON THAT.
BUT AGAIN, KEEPING THAT PEACE IN MIND ABOUT THE MOVE TO 1600 SMITH MAY NOT BE IN THOSE FIGURES YET.
UH, MADAM DIRECTOR, THANK YOU FOR YOUR PRESENTATION.
VERY INTENSE AND CERTAINLY COVERED A QUITE A BIT, AN AREA, UM, AND, UH, CERTAINLY FOR ALL OF THE TEAM THAT WORKED WITH IT.
UM, IN HELPING US TO UNDERSTAND SOME OF THIS, I WANTED TO ASK A QUESTION CONCERNING SLIDE 24, UM, ON THE GENERAL FUND BUDGET.
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UH, EARLIER YOU MENTIONED THAT PART OF THIS WAS GONNA BE 75 OFFICERS PER CLASS.YOU WERE INCREASING IT TO 75 POLICE OFFICERS PER CLASS.
CAN I ASK THE QUESTION, HOW MANY DO WE AVERAGE NOW? WHAT'S THE AVERAGE? I I ATTEND THEM, YOU KNOW, AS WELL AS THE FIRE, AS MANY AS I CAN.
SO WHAT IT, THIS IS GOING TO THE PROJECTION WAS TO INCREASE IT, THE 70 AVERAGE OF 75 NEW RECRUITS, RIGHT? MM-HMM
SO DO YOU KNOW WHAT THE AVERAGE IS NOW? UM, I DON'T HAVE THE AVERAGE PER CLASS.
UM, I KNOW THAT WE BUDGET 75 CADETS PER CLASS.
UM, AND THAT OVERALL PERCENTAGE THAT WE'VE SEEN GRADUATING HAS INCREASED.
I KNOW WE WERE GETTING TO THE POINT EVEN, YOU KNOW, TWO AND THREE YEARS AGO BEFORE THE NEW CONTRACT, UM, THAT, YOU KNOW, WE WERE GRADUATING CLASSES THAT WERE MAYBE NOT EVEN HALF FULL.
I'M SPEAKING OFF THE TOP OF MY HEAD.
UM, BUT WE ARE DEFINITELY SEEING A HIGHER GRADUATION RATE OVERALL.
SO WE ARE PROJECTING THAT, UM, BASED ON THE FIVE CLASSES AND 75 CADETS PER CLASS.
UM, YOU KNOW, WE DON'T ASSUME THAT EXACTLY ALL OF THEM WILL GRADUATE, BUT WE RIGHT.
BUT WE ARE COMING TO ABOUT 375 NEW CADETS BY THE END OF THE YEAR THAT WILL GRADUATE.
AND THAT AND THAT, AND THAT WOULD BE GOOD IF WE COULD MEET THAT GOAL.
IT WOULD BE EXCELLENT IN REGARDS TO, UM, WITH THE TURNOVER THAT WE EXPERIENCED.
AND THEN 11 FIRE CADET CLASSES IS INCLUDED IN THAT GENERAL BUDGET, RIGHT? YES.
SO, UM, THIS BUDGET INDICATED HERE INCLUDES A, A FUND BALANCE DRAW DOWN FOR 27.
UH, OBJECTIVE IS TO WORK ON THE EFFICIENCIES, UM, EXPENDITURES FOR THE, FOR THE NEXT YEAR.
LIKE I MENTIONED, WE
UM, TO TRY TO, AS WE KNOW, WE STILL SEE THOSE BUDGETARY GAPS IN THE OUT YEARS THAT WE NEED TO TRY TO CHIP AWAY AT.
WELL, I, I JUST WANTED TO COMMENT 'CAUSE I THOUGHT THAT WAS A VERY GOOD OBJECTIVE, YOU KNOW, TO BE, 'CAUSE WE KNOW IT ROLLS QUITE INTO THE OTHER ONE.
UM, I THINK FIRST AND FOREMOST, JUST WANNA SAY, UH, GREAT JOB TO YOU AND YOUR TEAM ON THE BUDGET.
UM, UNDERSTANDING THE DEFICIT.
WE'RE LOOKING AT SOMEWHERE AROUND 174 AND NOW, UH, ONLY 25 MILLION.
I THINK IT SAYS A LOT ABOUT WHAT THE WORK IS THAT IS REALLY BEING DONE.
UM, AND JUST WANT TO, YOU KNOW, I KNOW WE'RE TALKING ABOUT WHAT THIS $5 ADMINISTRATIVE FEE, UM, IS, IS SETTING UP.
UH, BUT I THINK IT'S IMPORTANT TO ALSO UNDERSTAND THAT, YOU KNOW, CHANGE IS DIFFICULT, RIGHT? UM, UNDERSTANDING HOW WE REIMAGINE A DEPARTMENT THAT HAS HISTORICALLY BEEN UNDERFUNDED.
UM, YOU KNOW, QUITE FRANKLY ON THE OPERATIONAL SIDE HAS BEEN, YOU KNOW, REALLY IGNORED AS WELL.
TRUCKS THAT WE'RE HAVING OUT IN THE, ON THE STREETS, 12, 10 TO 15 YEARS WHEN THEY SHOULD BE FIVE TO SEVEN, UH, TRANSFER STATIONS THAT WE COULDN'T ACTUALLY BE BRINGING IN REVENUE.
SO, YOU KNOW, IT'S IMPORTANT THAT, UH, WHEN WE START RE REIMAGINING WHAT CITY GOVERNMENT LOOKS LIKE, UH, TO KIND OF TAKE A STEP BACK.
AND AGAIN, THE QUESTIONS ARE GONNA COME UP.
AND ALTHOUGH THIS IS NOT AN OFFICIAL TRASH FEE, UM, I AM EXCITED ABOUT IT BEING A PATHWAY TO RIGHTSIZING SOLID WASTE DEPARTMENT.
UM, AGAIN, WHAT THAT LOOKS LIKE ULTIMATELY AS A, AS A TRASH FEE IF IT WERE TO COME TO FRUITION, UH, PENDING ALL THE OPERATIONAL, UM, EFFICIENCIES THAT ARE GONNA BE COMING FORWARD AND POSSIBLY EVEN REVENUE THAT THAT COMES FORWARD.
UM, WE STILL HAVE TO HAVE THESE DIFFICULT CONVERSATIONS BECAUSE WE'VE KNOWN THAT FOR A LONG TIME.
UH, THE A HUNDRED MILLION DOLLARS THAT WE'RE UP TO RIGHT NOW IS NOT ENOUGH FOR SOLID WASTE.
UH, SO, UM, I THINK, YOU KNOW, WHEN THE CONVERSATIONS COME UP AS WELL, UH, WHEN IS THE RIGHT TIME TO TALK ABOUT A FEE OR THE REVENUE CAP? I THINK NO ONE AROUND THIS HORSESHOE FEELS LIKE IT'S EVER THE RIGHT TIME.
UH, BUT QUITE FRANKLY, IT'S IMPORTANT THAT WE HAVE THAT CONVERSATION MORE AND MORE AND MORE.
UM, YOU KNOW, THE, THE WATER FEE, UH, THAT WAS VOTED ON IN 2021, I DON'T THINK IT WAS THE RIGHT TIME EITHER.
AND I'LL TELL YOU RIGHT NOW, MY WIFE GETS UPSET WITH ME WHEN SHE SAYS, LOOK, THE WATER BILL IS ALMOST DOUBLE.
UH, BUT IT WAS SOMETHING THAT WAS NEEDED.
THE CONSENT DECREE IS WHAT PROMPTED THAT.
UM, BUT THAT WAS BECAUSE OF DEFERRED MAINTENANCE THAT UNFORTUNATELY, UH, PAST ADMINISTRATIONS WERE KICKING THE CAN DOWN THE ROAD.
AND SO, UM, I THINK MY, THE HIGHLIGHT THAT I LIKE TO BRING, UH, TO FOLKS' ATTENTION IS THE FIVE YEAR FORECAST.
UM, TO SHOW IT, UH, REALLY ADDRESSING, UH, REALLY LONG TERM FINANCIAL STABILITY TO SOME EXTENT, KNOWING THAT THERE IS STILL WORK TO BE DONE.
IT SHOWS THAT THERE'S WORK TO BE DONE WITH THE FI, THE FIVE YEAR
[01:40:01]
FORECAST.UM, I'D LIKE TO SEE OTHER EFFICIENCIES.
UH, ONE THING THAT I'M GONNA BE LOOKING AT IS THE PARKS DEPARTMENT FOR ME, UM, THE SCOPE OF SERVICE SHOULD BE MOWING, MAINTENANCE AND DE LITTERING THESE EXTRA SERVICES.
AND I SAID THIS BEFORE, I'M A A PROPONENT OF AFTER SCHOOL PROGRAMMING, BUT THERE'S SOME THINGS THAT GOVERNMENT JUST CANNOT DO.
AND I THINK IT'S IMPORTANT THAT WE START FINDING NON-PROFITS TO BE ABLE TO BE HOUSED IN SOME OF OUR FACILITIES, SPECIFICALLY PARKS, UH, THE PARKS, UH, COMMUNITY CENTERS TO ENSURE THAT, UM, AS WE ALL KNOW, THAT PERSONAL COST IS USUALLY THE HIGHEST IN IN OUR BUDGET.
HOW DO WE START, UH, REDUCING THAT, THAT, UH, COST AND FINDING WAYS WHERE WE'RE LEVERAGING PARTNERSHIP AND CONTINUING TO MOVING THAT IN THAT PATHWAY.
UM, AGAIN, UM, AND I GUESS ONE QUESTION THAT I HAVE IS THE 5% RIGHT OF WAY RENTAL FEE.
YOU KNOW, IT'S, IT'S DONE ACROSS THE STATE.
WHY, WHY WEREN'T, WHY WEREN'T WE DOING IT PRIOR TO THIS YEAR? UM, I KNOW IT'S SOMETHING THAT, UM, DIRECTOR PAEZ, UM, HAS BEEN, UM, TALKING ABOUT AND CHAMPIONING.
CHAMPIONING SHE SAID FOR, IS SHE HERE TODAY? 20 YEARS.
UM, BECAUSE THEIR DEPARTMENT OVERSEES THE FRANCHISE FEES, WHICH IS A VERY SIMILAR FEE.
UM, I FIRST STARTED LOOKING AT IT WHEN I WAS IN THE FINANCE DEPARTMENT BACK IN 2018 AND 2019.
UM, AT THAT POINT IN TIME, THE UTILITIES, UM, FUND BALANCE WAS NOT NEARLY AS HEALTHY AS IT IS TODAY.
THEIR DEBT SERVICE COVERAGE WASN'T AS HEALTHY AS IT IS TODAY.
UM, AND IT, IT WAS UNDER SERIOUS CONSIDERATION IN 2019.
UM, UNFORTUNATELY COVID HAPPENED.
FORTUNATELY, WE GOT A LOT OF ARPA AND CARES FUNDING THAT REALLY SUSTAINED US THROUGH FISCAL YEAR, UH, FINISHING OUT FISCAL YEAR 20, 21, 22, 23, 24, UM, UNTIL NOW WE'RE FINALLY OUT OF THOSE ARPA FUNDS.
AND SO I THINK THAT WAS A BIG PIECE OF IT, UM, OF, UH, IT'S BEEN OUT THERE.
IT'S BEEN OUT THERE AS AN IDEA.
IT'S BEEN LOOKED AT, UM, MANY TIMES AND SET TO THE SIDE BURNER MANY TIMES.
UM, AND I THINK, UH, YOU KNOW, WE'VE DONE A LOT OF THE LOW, LOW HANGING FRUIT AND IT'S, IT'S NOW THE TIME.
I KNOW MY, THE TIME EXPIRED, I JUST WANNA SAY REIMAGINING WHAT CITY GOVERNMENT LOOKS LIKE IS IMPORTANT.
UM, ESPECIALLY BECAUSE WE'VE SEEN DEFICIT FOR OVER 10 YEARS.
UM, AND JUST REALLY KICKING THE CAT DOWN THE ROAD.
SO, UH, THANK YOU FOR THE WORK AND I LOOK FORWARD TO THIS PATHWAY TO REALLY MAKE SURE THAT OUR FINANCES ARE MORE SUSTAINABLE.
IT SPEAKS ABOUT, UM, PROPERTY TAX PROJECTIONS.
WE ARE 20 PROJECTING TO BE $20 MILLION BELOW THE PROPERTY TAX CAP.
WHY WOULDN'T WE TRY TO MAXIMIZE AND GO TO THE CAP MAX MM-HMM
UM, IN ORDER TO COLLECT THE FULL PROPERTY TAX CAP BASED ON PROPOSITION ONE AND H UM, BASED ON OUR ASSUMED VALUATION THAT WE'RE SEEING FROM THE APPRAISAL DISTRICTS, WE WOULD HAVE TO INCREASE THE TAX RATE ABOVE THE 51 CENTS.
UM, SO TO COLLECT AN ADDITIONAL 20 MILLION WOULD BE PROBABLY AROUND A PENNY ADDITIONAL OF TAX RATE.
UM, SO, UM, YOU KNOW, THAT'S, THAT'S ONE PIECE THAT WE FEEL THAT, UM, YOU KNOW, NOW IS, IS NOT THE RIGHT TIME TO RAISE THE PROPERTY TAX REVENUE, UM, A PENNY.
SO WE DON'T WANNA RAISE THE PROPERTY TAX CAP BY A PENNY SO THAT THE CITY CAN GET ADDITIONAL $20 MILLION WHEN THE MAYOR CONSISTENTLY SAYS THAT THE CITY IS BROKE AND THAT WE NEED TO FIND REVENUE SOURCES.
ONE OF THE ISSUES, UH, THAT WE FACED, AND YOU SAID THIS EARLIER IN YOUR TODAY'S PRESENTATION MM-HMM
THAT THE PROPERTY TAX CAP HAS BEEN A CHALLENGE FOR US.
THAT ARGUMENT IS GONNA BE DIFFICULT TO MAKE IN THE FUTURE FOR US TO SAY THAT WE'RE UNDER THESE RESTRICTIVE CAPS.
IF WE DON'T EVEN REACH THE MAX OF OUR CAP WHEN WE HAVE THE OPPORTUNITY TO, THOSE WHO OPPOSE LIFTING THE CAP WILL SAY, YOU GUYS DON'T EVEN NEED TO LIFT THE CAP BECAUSE YOU DON'T EVEN REACH THE CAP IN YOUR CURRENT BUDGET.
AND I THINK THAT IS A SLIPPERY SLOPE TO GO DOWN.
'CAUSE YOU'RE GONNA HAVE TO FIND ONE PATH TO THE OTHER.
WE CAN'T SAY THAT IT'S A CHALLENGE FOR US, AND THEN AT THE SAME TIME, DON'T MEET THE MAX OF THE CAP.
AND ESPECIALLY IF THERE'S GONNA BE A SHARED SACRIFICE OF ONE PENNY THAT CAN ATTRIBUTE TO $25 MILLION OF NEEDED REVENUE.
UH, I THINK THAT IS SOMETHING, UH, THAT WE NEED TO LOOK AT AS WE, UM, SHIFT SOLID WASTE INTO THE CUS.
[01:45:01]
CURRENTLY DOES THE CUS PAY FOR MM-HMMSO, UM, THE CUS RIGHT NOW IS, UH, THE COMBINED UTILITY SYSTEM IS THE WATER AND THE WASTEWATER SYSTEM.
UM, SO RIGHT NOW, UM, AND I MENTIONED IT A LITTLE WHILE BACK, UM, THAT THERE ARE, UM, OBVIOUSLY THE OPERATING BUDGET OF THE COMBINED UTILITY SYSTEM, SO FOCUSING ON THE WATER MAIN BREAKS, UM, THE SANITARY SEWER OVERFLOWS, WHICH HAVE LARGELY BEEN TAKEN CARE OF, WHICH WERE PART OF THE CONSENT DECREE, UM, ALSO THE EAST PLANT.
UM, THOSE ARE ALL THINGS THAT ARE CONTEMPLATED AND UC PLANNED FOR IN THE, IN THE CAPITAL IMPROVEMENT PLAN.
SO ONE THING I WAS, UM, UM, TALKING ABOUT ADDRESSING TO COUNCIL MEMBER RAMIREZ'S QUESTION IS THAT THROUGH LOOKING AT THIS 5% RIGHT OF WAY FOR THE CUS, UM, THAT'S REALLY BASED ON MODELING WHAT WE THINK THE AFFORDABILITY FOR THE SYSTEM CAN BE SO THAT THEY CAN CONTINUE TO TAKE CARE OF THE EAST PLANT AND MOVE FORWARD WITH THAT.
UM, REPLACEMENT, UM, INSTITUTE THE CAPITAL IMPROVEMENT PLAN, UM, THAT LOOKS AT, I MEAN, YOU KNOW WHAT'S IN THE CAPITAL IMPROVEMENT PLAN.
THERE'S A LARGE LOT OF LARGE CAPITAL PROJECTS, BUT ALSO FOCUS ON THE OPERATIONAL NEEDS OF THE DEPARTMENT.
LIKE, UM, UH, THE ONGOING MAINTENANCE OF THE WATER AND THE WASTEWATER SYSTEM THAT'S ALREADY CONTEMPLATED AS PART OF THE BUDGET.
SO ALL OF THOSE CRITICAL SERVICES FOR WATER WASTES, WATER MAINTENANCE, WE'RE, WE'RE GOING TO BE SHIFTING SOLID WASTE INTO IT TO DRAW DOWN OFF THAT MONEY.
IS THAT CORRECT? TEMPORARILY OUT OF THE FUND BALANCE OF THE UTILITY.
BUT WHEN YOU LOOK AT THE PROPOSED BUDGET FOR THE UTILITY, YOU STILL SEE ALL OF THOSE OTHER ONGOING OPERATIONAL NEEDS ARE STILL CONTEMPLATED IN THE OPERATING BUDGET THAT'S PROPOSED FOR THE WATER AND WASTEWATER.
WE, WE, WE ARE DRAWING DOWN OFF OF THE CUS.
SO THE, THE MONEY THAT WAS THERE FOR WATER WASTEWATER MAINTENANCE, ALL THOSE CRITICAL NEEDS THAT YOU JUST DISCUSSED, WE'RE DRAWING DOWN OFF OF THAT TO FAITH FOR SOLID WASTE.
DO YOU HAVE THE, THE SLIDES THAT HAVE THE APPENDIX SLIDES NOW? CAN YOU GO TO SLIDE, UM, 54.
SO ON THIS SLIDE, THIS SLIDE SHOWS FOR THE COMBINED UTILITY SYSTEM WHERE THE DEBT SERVICE COVERAGE RATIO HAS GONE OVER TIME.
UM, SO YOU CAN SEE THAT, UM, PER OUR MASTER BOND ORDINANCE, WE NEED TO HAVE A COVERAGE RATIO IN THE 1.1, 1.2 TIMES RANGE.
UM, WHEN WE DID THE RATE STUDY LAST, UM, WE CONTEMPLATED A, A COVERAGE RATIO BETWEEN 1.2 TO 1.3 TIMES.
RIGHT NOW THE COVERAGE RATIO SITS AT, UH, OVER TWO TIMES 2.15 TIMES.
SO HAVE PEOPLE BEEN PAYING TOO MUCH INTO IT? NO, NO, THEY HAVEN'T BEEN PAYING TOO MUCH INTO IT.
UM, THEY HAVE BEEN PAYING BASED ON WHAT THE, THE COST OF SERVICE IS.
SO AS I MENTIONED, THERE IS STILL A LARGE LOT OF OPERATIONAL, UM, NEEDS OF THE SYSTEM THAT'S CONTEMPLATED FOR IN THE BUDGET AND THE CAPITAL IMPROVEMENT PLAN, WHICH HAPPENS OVER TIME.
A LOT OF THE FUNDING THAT COMES IN FOR THE UTILITY, UM, IS TO PAY FOR SOME OF THOSE LARGER CAPITAL PROJECTS.
SO FOR EXAMPLE, UM, LAST WEEK AT BUDGET AND FISCAL AFFAIRS, I PRESENTED ON A, UM, A LOAN THAT WE'RE GONNA GET FROM THE TEXAS WATER DEVELOPMENT BOARD WHERE WE'RE ABLE TO ACHIEVE LOWER COST OF BORROWING.
UM, HALF OF THAT LOAN IS A FORGIVABLE LOAN, SO IT'S $16 MILLION THAT WE'RE GETTING AS A FORGIVABLE LOAN FROM THE STATE.
THE REST OF IT IS 0% BORROWING.
SO A LOT OF THINGS THAT, UM, WE'RE DOING ON THE FINANCING SIDE WHERE WE CAN HAVE A LOWER COST OF BORROWING IS BRINGING DOWN THE OVERALL COST TO SOME OF THOSE LARGER PROJECTS, WHICH FREES UP RESOURCES.
SO I GUESS MY, MY QUESTION THOUGH IS THE CUS PAYS FOR CRITICAL INFRASTRUCTURE NEEDS TO WATER WASTEWATER.
WE ARE SHIFTING SOLID WASTE THERE TO DRAW DOWN OFF THAT.
AND THEN WE ARE CHARGING THAT SAME SYSTEM FOR A RIGHT OF WAY FEE.
SO YOU'RE TAKING MONEY AWAY FROM ALL THOSE CRITICAL, YOU'RE STILL GOING AHEAD? NO, NO, BECAUSE YOU'RE STILL GONNA SEE THOSE PROJECTS IN THE CAPITAL IMPROVEMENT PLAN MOVING FORWARD AND YOU'RE STILL GONNA SEE THOSE OPERATIONAL NEEDS AS PART OF THIS PROPOSED PROJECT.
WELL, WHY DO WE HAVE SO MUCH MONEY TO DO THAT WITH COUNCIL MEMBER POLLARD? I'VE, I'VE ASKED THE SAME QUESTIONS YOU'RE ASKING EVERY WHICH WAY, BECAUSE I'VE BEEN A BIG PROPONENT FOR KEEPING INFRASTRUCTURE, MONEY AND INFRASTRUCTURE.
I HAVE BEEN, UM, CONVINCED THAT THESE ARE EXCESS RESERVES NOT BEING USED FOR ALL OF THE ABOVE.
ALL OF THE THINGS YOU'RE TALKING ABOUT, THE WATER WA THE, WHAT ERIC DESCRIBED IN THE, IN THE, UM, IN THE, IN HIS EXPLANATION, WE'RE TAKING CARE OF WATER WASTEWATER OPERATIONS, WE'RE TAKING CARE OF OUR FIRST AND SECOND LIEN DEBT, AND THEN WHAT'S LEFT WE HAVE ABOVE THE DEBT COVERAGE RATIO AND THAT THOSE ARE THE FUNDS THAT WE ARE USING.
AND I HEAR YOU, BUT OVER THE LAST YEAR OR TWO, I'VE ALWAYS BEEN HEARING AND EVEN BEFORE THAT, THAT WATER AND WASTEWATER INFRASTRUCTURE IS, IS, IS IN NEED OF AS MANY
[01:50:01]
RESOURCES AS POSSIBLE.AND WE, WE HEAR THAT TIME AND TIME AGAIN.
SO EITHER, EITHER THAT WASN'T TRUE OR PEOPLE ARE PAYING INTO A SYSTEM WHERE WE HAVE ALL THIS EXCESS THAT THEY REALLY DID NOT NEED TO PAY INTO AT THAT RATE BECAUSE WE HAVE SO MUCH EXCESS THAT WE'RE ABLE TO DO ALL OF OUR CURRENT NEEDS AND HAVE ADDITIONAL MONEY TO PAY FOR OUTSIDE NEEDS.
SO IF WE ARE TO DO THIS AND JUSTIFY THIS, THAT'S BASICALLY SAYING WE HAVE MORE THAN ENOUGH MONEY FOR OUR WATER AND WASTEWATER INFRASTRUCTURE PROJECTS THAT WE, WE DON'T HAVE TO SAY THAT THAT'S A CRITICAL OR DIRE ISSUE ANYMORE.
'CAUSE WE'VE BEEN MAKING IT SEEM AS IF WATER AND WASTEWATER INFRASTRUCTURE HAS BEEN A DIRE ISSUE HERE AT THE CITY, STEVEN.
UM, I THINK THERE, THERE'S A LITTLE BIT, YOU'RE HIGH HIGHLIGHTING A, A GOOD NEWS STORY ABOUT THIS.
UH, BUT TO ANSWER YOUR DIRECT QUESTION, WE ARE CONTINUING TO, UH, ENGAGE IN ALL OF THE EXPECTED CAPITAL IMPROVEMENT PROJECTS.
WE ARE NOT DEFUNDING OR DELAYING ANY PROJECTS AND WE ARE NOT GOING TO, UH, WE ARE NOT GOING TO RESTRICT ANY OF THE OPERATING MONEY THAT WE ARE DOING.
SO THERE'S TWO SLIDES, UH, BEFORE YOU, AND I'LL MAKE SURE THAT YOU HAVE, I BELIEVE THAT Y'ALL ALREADY HAVE THEM, BUT I'LL DOUBLE CHECK TO MAKE SURE.
THE FIRST ONE IS THE COMBINED UTILITY SYSTEM DEBT COVERAGE, DEBT SERVICE COVERAGE RATIO.
SO AS MELISSA DESCRIBED IN A SCENARIO WHERE WE HAVE TO HAVE, WE HAVE 100 HOT DOLLARS OF DEBT, WE ARE REQUIRED BY OUR BOND HOLDERS TO CARRY $125.
SO WE ARE MORE THAN COVERING OUR DEBT OBLIGATIONS.
AND ON THE OPEX SIDE, ON THE OPERATING SIDE, WE KEEP THREE, WE ARE KEEP AS A POLICY 300 DAYS OF OPERATING RESERVES.
THE QUESTION THAT I THINK YOU'RE ASKING IS WHY DO WE HAVE THAT? ARE PEOPLE PAYING TOO MUCH? AND THE ANSWER IS NO.
WHEN THE RATES WERE SET IN 2019, IN 2019, THEY, THEY CALCULATED IT BASED ON THE COST OF THE DEPARTMENT AND THE COST TO DO THE WORK AT THAT TIME.
SINCE THEN, UNDER RANDY AS CHIEF OPERATING OFFICER AND THEN RANDY AS DIRECTOR, THAT DEPARTMENT HAS BECOME MORE EFFICIENT.
HE HAS DRIVEN EFFICIENCY INTO THE WORK ORDERS SYSTEM, INTO ROUTING, INTO THE PERFORMANCE METRICS.
SO WE DON'T NEED ADDITIONAL MONEY FOR WATER AND WASTEWATER IS WHAT YOU'RE SAYING.
WE DON'T ARE YOU SAYING WE DON'T NEED ADDITIONAL MONEY FOR WATER AND WASTEWATER? THAT ANALYSIS IS DONE DURING A RATE STUDY, WHICH WE'RE IN THE MIDDLE OF RIGHT NOW.
AND SO YOU, WHAT YOU'RE ASKING IS YOU'RE ASKING ME TO GET AHEAD OF A FINANCIAL CALCULATION, WHICH I'M NOT GONNA DO.
I'M ASKING, I'M ASKING YOU 'CAUSE YOU STEPPED UP TO THE MIC IN A PRESENTATION THAT'S NOT YOURS.
AND I'M ASKING YOU, ARE YOU SAYING THAT THAT EXCESS MONEY WE DIDN'T, WE DON'T CURRENTLY NEED FOR WATER AND WASTEWATER INFRASTRUCTURE? NO.
UM, MAYOR PRO TEM CASTEX TATUM.
MY QUESTION IS, UM, WHEN WE TALK ABOUT THAT 5% ON THE RIGHT OF WAY, IS THERE ANY VERSION OF THERE BEING A COST PASSED TO HOUSTONIANS OR CONSUMERS IN ANY WAY? SO THE RIGHT OF WAY FEE, WE'RE TALKING ABOUT THE RIGHT OF WAY, THE 5%, RIGHT.
UM, AS ERIC DESCRIBED, IT'S CONTEMPLATED FOR FISCAL YEAR 27.
IT'S GONNA BE COMING FROM THE BOTTOM BUCKET.
SO THE BOTTOM BUCKET COMES AFTER THE DEBT OBLIGATIONS, THE O AND M EXPENDITURES.
UM, AND IS REALLY WHAT'S CONSIDERED, UM, I'M GONNA USE THE WRONG LEGAL WORD.
MAYBE ERIC SHOULD HELP ME FILL IN.
BUT TO ANSWER YOUR QUESTION, IT'S AFTER ALL OF THE OTHER OBLIGATIONS OF THE SYSTEM.
SO THE ANSWER'S NO
SO I, I WANT, I WANNA ASK RANDY IT THAT QUESTION, BECAUSE YESTERDAY, SOMEBODY ASKED THAT QUESTION AND YOU GAVE A RESPONSE, AND I THOUGHT I UNDERSTOOD IT BETTER.
BUT TODAY, I'M, I'M STILL CONFUSED THAT 5% RIGHT AWAY.
UM, IS THERE ANY VERSION OF AN ADDITIONAL COST BEING PASSED TO CONSUMERS THE WAY IT'S SET UP, THE WAY WE HAVE CONTEMPLATED IT HERE? NO.
AND THAT'S BECAUSE IT'S BEING DRAWN FROM THAT BOTTOM BUCKET AS IT IS TODAY.
THE BIGGEST SHIFT THAT WE'RE MAKING INTERNALLY INVOLVES INTERNAL FINANCIAL MODELS THAT WE HAVE.
FOR INSTANCE, YOU KNOW, CITY ORDINANCE SAYS WE KEEP 60 DAYS OF CASH RESERVE.
STEVEN WAS TALKING ABOUT THIS.
THEN WE SET AN INTERNAL DEPARTMENTAL POLICY THAT WENT TO 300.
TODAY, THE FUND HAS GROWN TO 550.
PART OF THAT HAS TO DO WITH THE WAY THE DEPARTMENT HAS APPROPRIATED FOR ITS PROJECTS.
LOOK, OUR CAPITAL PROJECTS ARE ENORMOUS.
THEY'RE NOT YOUR TYPICAL $2 MILLION, THREE,
[01:55:01]
$3 MILLION PROJECTS HERE AND THERE.THESE ARE TENS OF HUNDREDS OF MILLIONS OF DOLLARS.
AND THE DEPARTMENT'S POLICY HAS BEEN TO APPROPRIATE ALL OF THAT UPFRONT FOR A PROJECT THAT MAY TAKE 10 YEARS TO DELIVER BECAUSE OF THE SIZE AND SCOPE OF THAT PROJECT.
WELL, THAT MONEY NOW SITS THERE AND THESE FUNDS CONTINUE TO GROW AND WE BUILD INTEREST UPON IT, AND IT DOESN'T GO ANYWHERE.
SO A BIG PART OF WHAT THIS SHIFT IS, IS IT'S US ALSO ADJUSTING OUR INTERNAL FINANCIAL POLICIES TO MAKE SURE THAT WE'RE USING THE MONEY WISELY AND WE'RE NOT MAKING SURE THAT WE APPROPRIATE TOO MUCH UPFRONT, WHICH THEN DIMINISHES OUR APPROPRIATIONS CAPACITY LATER ON.
THAT REQUIRES US TO GET DIFFERENT AND MORE TYPES OF COMMERCIAL PAPER ALONG THE WAY SO THAT WE CAN BE EFFECTIVE IN HOW WE SPEND IT.
THERE COULD CERTAINLY BE A TIME IN THE FUTURE, NOT DURING THIS ADMINISTRATION, WE CONTEMPLATE, BUT THERE COULD BE A TIME INTO THE FUTURE WHERE A RATE STUDY SAYS THAT WITH THE RIGHT OF WAY FEE, YOU'RE GONNA HAVE TO HAVE A DIFFERENT COST STRUCTURE THAT'S GONNA CONTEMPLATE ALL OF THE INFRASTRUCTURE PROJECTS.
SO THAT WE HAVE ALREADY COMPLETED TO THIS POINT.
BECAUSE AS WE UNDERGO THE RATE STUDY WITH REF TELUS RIGHT NOW, ONE OF THE THINGS MELISSA AND I HAVE MADE VERY CLEAR TO THEM IS IT IS VERY IMPORTANT AND CRITICAL TO US THAT WE ARE SENSITIVE AND DO NOT RAISE THOSE RATES ON SINGLE FAMILY RESIDENTIAL.
THAT WE LOOK AT THE HOLISTIC PICTURE OF HOW RATES ARE STRUCTURED.
WE MAKE IT IN A WAY THAT PEOPLE CAN UNDERSTAND AND RECREATE THE WATER BILLS, SOMETHING THEY CAN'T DO TODAY.
THE FORMULAS ARE OVERLY COMPLEX, FOR INSTANCE, THAT WE MAKE SURE THAT WE REPRIORITIZE THE RIGHT TYPES AND SCOPE OF PROJECTS THAT WE HAVE WITHIN THE DEPARTMENT.
YOU KNOW, WE TALKED ABOUT THE CONSENT DECREE A WHOLE BUNCH TODAY.
IT'S BEEN BROUGHT UP OVER AND OVER AGAIN.
UM, THERE ARE PARTS OF THAT CONSENT DECREE THAT WE'RE OBLIGATED TO THAT DON'T MOVE THE NEEDLE ON THE PURPOSE OF THE CONSENT DECREE.
IT'S OUR RESPONSIBILITY NOW AS COLLECTIVE LEADERSHIP TO MAKE SURE THAT THE CITY'S PUTTING ITS RESOURCES TO THE BEST AND MOST EFFECTIVE USES THAT IT POSSIBLY CAN.
THIS IS ONE OF THOSE IF WE WANNA, SO WE AREN'T GOING TO SEE WHEN, WHEN THIS, WHEN THIS GOES INTO EFFECT AFTER THE BUDGET PASSES OR WHEN EVERYTHING HAPPENS.
NOW, UM, RESIDENTS HAVE AN ADDITIONAL FEE BECAUSE OF THIS RIGHT OF WAY.
UM, DIRECTOR, LET ME ASK YOU ABOUT SOMETHING EASY OVERTIME.
UM, I KNOW, I'M, I'M, I SHOULDN'T JOKE ABOUT IT, BUT, SO SLIDE 24.
THERE'S A BULLET POINT IN THERE THAT SAYS, BETTER REFLECTION OF WHERE OVERTIME WILL END UP.
CLASSIFIED POLICE 6.6 MILLION, CLASSIFIED FIRE, 9.1 MILLION.
SO LET'S, LET ME ASK YOU ABOUT FIRE.
SO, UH, 9.1 MILLION IN THE FISCAL YEAR 27 BUDGET FOR FIRE OVERTIME.
WHAT, WHAT HAVE WE SPENT SO FAR IN THIS FISCAL YEAR ON, ON FIRE DEPARTMENT OVERTIME? THE ESTIMATE FOR FISCAL YEAR 26 IS 82.6 MILLION.
NOT, OBVIOUSLY NOT ALL OF THAT HAS BEEN SPENT YET, BUT THAT'S OUR PROJECTION FOR THE ENTIRE FISCAL YEAR.
NOW, I DON'T MEAN TO SAY THAT WE THINK THAT FIRE IS GOING TO SPEND 9.1 MILLION MORE THAN THE 82 MILLION ON OVERTIME.
WHAT WE'RE DOING IN THE BUDGET IS PROPOSING A BUDGET FOR OVERTIME THAT MORE CLOSELY REFLECTS WHERE WE SEE THE ACTUALS COMING.
UM, SO WE'VE HAD A LOT OF CONVERSATION ABOUT THE HORSESHOE OF, WELL, WAIT A MINUTE, YOU ALL YOU DID WAS BUDGET THE EXACT SAME AMOUNT AS YOU DID LAST YEAR FOR OVERTIME THIS YEAR, BUT YOU KNOW THAT THE ACTUALS HAVE COME IN HIGHER.
WHY ARE YOU CONTINUING TO BUDGET BUDGET THAT WAY? SO WE PUT OUR THINKING CAPS ON AND CAME UP WITH A METHODOLOGY THAT LOOKS AT PRIOR YEAR ACTUALS, UM, OVER A FIVE YEAR PERIOD, AVERAGING THOSE OUT, HOW THAT COMPARES TO THE BUDGET, HOW MUCH BUDGETARY SAVINGS WE'VE HAD IN OTHER PLACES TO OFFSET THAT TO COME TO THE FIGURES THAT WE PROPOSED IN THE BUDGET.
THAT WE THINK IS, UM, IS A, A REFLECTION THAT REFLECTS, UM, THE, THE TOTAL AMOUNT OF OVERTIME TO BE CLOSER TO WHERE WE THINK THE ACTUALS WILL END AT THE END OF THE YEAR.
SO, SO THE ADMINISTRATION IS SUGGESTING THAT BY THE END OF Y 27, UM, WE WOULD'VE SPENT 9.1 MILLION ON FIRE OVERTIME.
UM, WHAT THE $9 MILLION FIGURE IS, IS THE FISCAL YEAR, AND I SEE THE, THE BULLET DOESN'T HAVE ALL THE DETAILS OF COURSE.
UM, BUT THAT THE FISCAL YEAR 27 PROPOSED BUDGET HAS $9 MILLION MORE IN OVERTIME THAN THE FY 26 ADOPTED BUDGET HAVE.
AND WHAT WAS THAT ADOPTED BUDGET FIGURE FOR FIRE? THE FY 26 ADOPTED BUDGET FOR OVERTIME WAS 43.5 MILLION.
SO THIS WILL BRING THE TOTAL FY 27 PROPOSED BUDGET TO ABOUT 53 MILLION.
SO WE KNOW IT'S NOT ALL THE WAY UP TO THE 82.6 MILLION THAT THEY'RE SPENDING THIS YEAR, BUT AGAIN, UM, WE ANTICIPATE THAT WE COULD HAVE SAVINGS IN OTHER AREAS TO OFFSET, IN ADDITION TO THE FACT WE'RE GONNA HAVE THE MORE CADETS COMING ONLINE WHERE EVEN THE FISCAL YEAR 26 PROJECTION FOR OVERTIME IS LOWER THAN THE 25 PROJECTION FOR OVERTIME.
[02:00:01]
WE ALREADY KNOW THAT WE'RE MAKING IMPROVEMENTS.UM, I SAY IMPROVEMENTS, IMPROVEMENTS IN TERMS OF THE AMOUNT THAT WE'RE SPENDING ON OVERTIME.
UM, BUT AS WE, UH, RECRUIT AND RETAIN MORE, UM, CLASSIFIED, UM, AND THIS COVERS BOTH FIRE AND POLICE, UH, THE IDEA IS THAT AS YOU HAVE MORE, UM, UM, CLASSIFIED FIREFIGHTERS AND POLICE OFFICERS WORKING ON STRAIGHT TIME BECAUSE OF MINIMUM STAFFING, THERE'S LESS OF A NEED FOR OVERTIME.
DAVID MENTIONED EARLIER THAT WE DON'T NEED ANY OF THAT EXCESS MONEY FOR ADDITIONAL WATER WASTEWATER INFRASTRUCTURE PROJECTS.
IT'S EXCESS BASED ON THE FINANCIAL MODELING THAT WE'VE BEEN WORKING TOGETHER WITH SAMIR AND HIS TEAM, AS WELL AS OUR OUTSIDE FINANCIAL ADVISORS, LOOKING AT THE CAPITAL IMPROVEMENT PLAN THAT WE NEED TO IMPLEMENT TO COMPLETE THE CONSENT DECREE TO DO ALL THE OPERATIONAL NEEDS OF THE WATER AND WASTEWATER SYSTEM.
WE BELIEVE THAT THE 5% RIGHT OF WAY FEE AND, UH, OFFSETTING THE COST OF THE SOLID WASTE OPERATIONS THAT'S NOT COVERED BY THE ADMINISTRATIVE FEE, UM, THAT ALL THOSE PROJECTS AND ALL THOSE OPERATIONS CAN CONTINUE.
SO WHEN I WAS AT THE EAST WATER, I THINK PURIFICATION PLANT THE PLANT MM-HMM
I WAS TOLD THAT THE NEW BUILD OUT FOR THAT WOULD COST AROUND $4 BILLION.
THAT EXTRA BILLION DOLLARS THAT'S SITTING THERE OR EXCESS MONEY, WE COULDN'T USE THAT TOWARDS THIS BUILD OUT.
WHERE, WHERE WILL WE NOW WE BE GETTING MONEY FOR THIS $4 BILLION BUILD OUT MM-HMM
SO THE EAST PLANT, WE, YOU WERE THERE, YOU'VE SEEN IT'S A MASSIVE OPERATION MM-HMM
THAT PROJECT IS GOING TO TAKE ANYWHERE FROM DON'T MISQUOTE.
WELL, I MISQUOTE MYSELF SEVEN TO SEVEN TO NINE YEARS, LET'S SAY TO FULLY REPLACE THAT.
SO AS WE'VE SEEN THAT THE FUND BALANCE AND THE UTILITY FUND GROW OVER TIME, AND AS REVENUES CONTINUE TO COME IN, THAT FUND BALANCE IS GONNA CONTINUE ON INTO THE FUTURE.
THE FINANCING OF THAT PLANT, UM, ABOUT $900 MILLION OF IT IS GOING TO BE THROUGH THE TEXAS WATER DEVELOPMENT BOARD BORROWING, UM, THE COST OF THAT BORROWING USUALLY FROM THE TWDB, THE RATE IS AROUND 2% INTEREST.
PREVIOUSLY IN OUR MODELING, BEFORE WE KNEW WE HAD THE TWDB LOAN, YOU KNOW, WE WERE LOOKING AT SOMEWHERE IF WE ISSUE OUR OWN DEBT, 4%, FOUR AND A HALF PERCENT INTEREST.
SO THERE ARE SAVINGS THERE IN TERMS OF THE WAYS THAT WE'RE DOING THE FINANCING FOR THAT PROJECT THAT FREEZE UP RESOURCES.
BUT WE HAVE THIS ADDITIONAL EXCESS MONEY SITTING THERE NOW THAT WE WOULDN'T HAVE TO GO BACK TO GET OUTSIDE INVESTMENT TO COVER THAT.
COULDN'T WE USE SOME OF THIS MONEY TOWARDS THIS HUMONGOUS BILL FOR THE, THE TREATMENT PLANT? I WOULD SAY THAT IT'S, I WOULD SAY THAT IT'S NOT, UM, IT'S NOT, THE IDEA OF CAPITAL FINANCING LONG TERM ASSETS IS THAT YOU ARE NOT ASKING PEOPLE TODAY TO PAY THE COST OF AN ASSET THAT SOMEONE 20 YEARS FROM NOW IS GOING TO USE.
I WOULD SAY THAT IT WOULD BE GOOD TO FINANCIALLY, FINANCIALLY PLAN ON USING THE MONEY THAT YOU ACTUALLY HAVE TODAY WITHOUT HAVING TO LEVERAGE THAT FOR THE FUTURE TO PAY FOR WHEN YOU DON'T KNOW WHAT THE FUTURE IS.
SO IF WE HAVE MONEY TODAY, IT'S LIKE HAVING MONEY IN MY OWN ACCOUNT TODAY AND SAYING, I DON'T WANT TO USE THIS.
I'M GONNA GO PUT IT ON CREDIT OR, OR, OR DEBT.
WELL, I'M GONNA HAVE TO PAY THAT I OFF IN THE LONG RUN PLUS INTEREST, I'M GONNA BE PAYING IN THE LONG RUN MORE WHEN STEVEN DAVIS SAYS, WE DON'T HAVE ANY ADDITIONAL USE FOR THIS MONEY.
IT'S JUST SITTING THERE AS EXCESS WHEN WE COULD PUT IT TOWARDS A FIVE, $4 BILLION TREATMENT PLANT THAT PEOPLE HAVE SAID IS RUNNING OR BEING HELD TOGETHER BY DUCT TAPE.
JUST LAST TOPIC HERE, DIRECTOR, AND THANK YOU FOR GOING THROUGH ALL OF THIS.
I KNOW IT'S, UH, CAN'T BE EASY, UH, BUT ON POLICE OVERTIME.
SO, UM, IT LOOKS LIKE IT'S BEEN INCREASED 6.6 OVER THE ADOPTED, UH, 26 BUDGET MM-HMM
WHICH WAS 14.8 IF, IF I HAVE MY NUMBERS RIGHT.
WHICH MEANS THAT FY 27, UM, IT'S PROPOSED TO SPEND 21.4 MILLION ON POLICE OVERTIME.
AND IN FY 26, THIS, THIS FISCAL YEAR WE'RE ALREADY PAST 30 MILLION AS I UNDERSTAND IT.
IS THAT RIGHT? UM, ROUGHLY, YES.
UM, AGAIN, I WANT TO, AND THAT, THAT'S JUST ONE, ONE PIECE
[02:05:01]
OF THE BUDGETARY PUZZLE, ALTHOUGH I KNOW IT'S ONE WE TALK ABOUT A LOT.I WANNA BRING YOU BACK TO SLIDE 46 THAT SHOWS THE VERY BOTTOM LINE OF OUR OVERALL FUND BALANCE AND BUDGET FOR THE CITY.
SO EVEN WITH THESE MOVEMENTS THAT YOU'RE TALKING ABOUT, UM, IN FISCAL YEAR 26 AS IT RELATES TO OVERTIME SPENDING, WHEN WE LOOK AT THE TOTAL BUDGET, WE REALLY LOOK AT THE BOTTOM LINE, WHAT'S LEFT IN FUND BALANCE, AND WE SEE THAT FROM THE TIME WE ADOPTED THE BUDGET TO OUR CURRENT PROJECTION, WE'RE ONLY $4 MILLION VARIANCE.
SO EVEN WITH THOSE, YOU KNOW, OVERTIME COSTS THAT ARE ABOVE THE LINE ITEM BUDGET FOR OVERTIME, WE HAVE SAVINGS IN OTHER AREAS, UM, STRONGER BEGINNING FUND BALANCE, MORE SALES TAX REVENUE, ALL THESE THINGS THAT OFFSET EACH OTHER TO COME TO THE SAME BOTTOM LINE THAT WE ADOPTED THE BUDGET AT.
AND, AND, UM, THAT, THAT IS A GREAT POINT.
AND, YOU KNOW, I ASKED ABOUT POLICE OVERTIME.
I HOPE NO ONE ACCUSES ME OF WANTING TO DEFUND THE POLICE.
I JUST WANNA BE CLEAR, I DO NOT WANT TO DEFUND THE POLICE.
WE'RE NOT DEFUNDING THE POLICE, BUT I, I WOULD LIKE TO SEE EVERY CITY DEPARTMENT RUN EFFICIENTLY.
AND SO AS WE GO THROUGH THESE WORKSHOPS, YOU KNOW, I'M, I'M HOPING TO HEAR, UH, WHAT THE FIRE DEPARTMENT AND THE POLICE DEPARTMENT SAY ABOUT HOW THEY'RE GONNA REDUCE OVERTIME FROM, FROM THIS CURRENT, UH, FISCAL YEAR.
MADAM CHAIR, JUST QUICKLY THE QUESTION, UM, THE, THE, THE, THE, HAVE THERE BEEN ANY CONSIDERATION IN REGARD TO SOLID WASTE AND ALSO PICKING UP TRASH FROM MANY PRIVATE COMPANIES AS ADDITIONAL THAT HAS BEEN BROUGHT OUT? MATTER OF FACT, I WAS ON THE RIDE ALONG AND ONE OF THEM DRIVERS WAS TALKING ABOUT THE SAME THING AND HE'S WORKED IN OTHER CITIES, WHETHER IT'S HEB OR WALMART OR WHATEVER, WHICH WOULD BE A REVENUE INTO THE CITY, UM, WITH OTHER COMPETITIVE COMPANIES.
HAS THAT SOMETHING THAT THE ADMINISTRATION OR THEM HAVE TAKEN THOUGHT ABOUT, YOU KNOW, THROUGH, THROUGH SOLID WASTE? UM MM-HMM
YOU KNOW, DAVID, YOU CAN HELP ME.
UH, WE'VE ABSOLUTELY CONTEMPLATED THAT.
WE'VE ALSO CONTEMPLATED SOMETHING CALLED MANAGED COMPETITION.
SO IS, SAY AGAIN, MANAGED COMPETITION.
SO THIS IS WHERE WE WOULD EXPECT THE SOLID WASTE DEPARTMENT TO COMPETE AGAINST PRIVATE, UH, SOLID WASTE FRANCHISES, UH, THAT WORK THROUGHOUT THE CITY OF HOUSTON.
THINK OF THE BIG ONES THAT, YOU KNOW, WASTE MANAGEMENT REPUBLIC, ET CETERA.
UM, WHAT WE WANT TO FOCUS ON, AT LEAST FOR RIGHT NOW, IS STABILIZING THE RESIDENTIAL SERVICE THAT WE PROVIDE.
WE ABSOLUTELY HAVE THAT AS POTENTIAL PLANS MOVING FORWARD THAT WE WOULD OBVIOUSLY DISCUSS WITH THIS BOT.
THAT WAS ONE OF MY BUDGET AMENDMENTS FROM LIKE 2020
MANAGED COMPETITION WITH IN, IN A, IN A QUADRANT.
WELL, WHAT I CAN TELL YOU ABOUT MANAGED COMPETITION COUNCIL MEMBER DAVIS, IS THAT, UH, WE'VE HAD TWO CONVERSATIONS, UM, AN AN INFORMAL TYPE OF CONVERSATION WITH THESE VENDORS.
THE BIG ONES, UM, AND I WON'T NAME THEM HERE, BUT, UH, IN WHICH WE SAID, WHAT WOULD IT TAKE FOR YOU TO COME AND COMPETE WITH SOLID WASTE? AND THERE WERE THREE THINGS THAT THEY SAID THAT THEY WOULD HAVE TO HAVE, AND TWO OF THEM WERE DIFFICULT TO SWALLOW.
THE FIRST WAS THEY WOULD WANT A 10 TO 15 YEAR CONTRACT.
AND THE REASON WHY THEY WOULD WANT THAT IS BECAUSE THEY HAVE TO GO IN DEBT, UH, ISSUE DEBT TO PURCHASE NEW SOLID WASTE TRUCKS TO SERVE HOUSTONIANS.
AND THE USEFUL LIFE OF TRUCKS IS ABOUT SEVEN YEARS.
AND SO THEIR DEBT WOULDN'T BE ABLE TO GO ANY LONGER THAN SEVEN YEARS.
NUMBER TWO IS THEY TOLD US THEY COULD TAKE AT ABOUT A MAXIMUM 50 TO 60,000 RESIDENTS.
WELL, WE SERVE 400,000 RESIDENTS.
RIGHT? SO WE WOULD HAVE TO CUT UP THE CITY INTO EIGHT TO 12 DIFFERENT SECTORS AND HAVE EIGHT TO 12 DIFFERENT VENDORS DOING TRASH SERVICE AROUND THE CITY.
AND THE THIRD, AND THIS BECAME THE MOST SIGNIFICANT PROBLEM, WAS THAT THEY ALL WANTED TO NAME THEIR CUSTOMERS.
THEY WANTED TO PICK THE NEIGHBORHOODS THAT WERE FAVORABLE TO THEM ON ROAD WIDTH, ON LACK OF DITCHES, ON DIFFERENT TYPES OF STUFF.
AND SO THOSE WERE THE THREE REQUIREMENTS THAT WHEN WE FIRST GOT INTO OFFICE TWO AND A HALF YEARS AGO, AND THEN ABOUT SIX MONTHS AGO, WE HAD AS A CONVERSATION WITH THEM.
AND SO MANAGED COMPETITION IS ABSOLUTELY SOMETHING THAT WE'RE LOOKING AT.
IT IS A CHALLENGE, UM, TO FIND SOMEONE WHO CAN CARRY 400,000 CUSTOMERS.
WELL, I, I THINK IT'S SOMETHING THAT WE, WE DEFINITELY NEED TO CONSIDER AROUND THE SHOE.
AND I, I'M, I'M HOPING THAT THAT COULD BECOME A, UM, AN ASSET.
THIS, THIS IS MY LAST QUESTION 'CAUSE I KNOW Y'ALL ARE READY TO GO.
UM, AS, AS IT PERTAINS TO THE, THE CUS, AGAIN, WITH THE CONSENT DECREE, DON'T WE USE THE CUS TO PAY OFF OUR OBLIGATIONS FOR THE CONSENT DECREE? YES.
SO WOULDN'T WE NEED THAT ADDITIONAL MONEY TO PAY OFF THOSE DEBTS SOONER? SO THE CONSENT DECREE PROJECTS THE MAJORITY OF THE ONES THAT CAN BE FUNDED WITH, UM, OPERATIONS
[02:10:01]
AND MAINTENANCE, THAT WORK HAS BEEN COMPLETED.THOSE ARE THE ONES THAT ADDRESS THE SANITARY SEWER SEW SANITARY SEWER OVERFLOWS IN THE NEIGHBORHOOD, WHICH WAS THE BASIS FOR THE CONSENT DECREE.
WHAT'S REMAINING ON THE CONSENT DECREE HAS TO DO WITH LARGER WASTEWATER PLANT CONSOLIDATION PROJECTS.
THOSE ARE PROJECTS THAT, THAT ARE CONTEMPLATED FOR IN THE CIP THAT YOU WOULD NOT TRADITIONALLY SPEND CASH RESERVES ON, BUT YOU COULD, YOU COULD ALSO, BUT YOU COULD NOT GET A MORTGAGE.
COULD CASH ELIMINATE NOT HAVING TO USE LEVERAGE AS MUCH DEBT AS NEEDED WITH ADDITIONAL INTEREST TO PAY FOR THOSE SAME PROJECTS? CORRECT.
SO I, I'LL END BY SAYING THAT THE ADMINISTRATION FEELS THAT THIS IS THE BEST PATH FORWARD FOR THE 27 PROPOSED BUDGET THAT WE COULD, IF WE DIDN'T USE THESE OTHER ITEMS AND THESE STRUCTURAL CHANGES, SOME OF THE THINGS THAT WE WOULD HAVE TO LOOK AT DOING, FOR EXAMPLE, THE NUMBER OF GENERAL FUND EMPLOYEES THAT WE HAVE.
IF WE HAD TO FIND $200 MILLION OF GENERAL FUND SAVINGS JUST BY CUTTING EXPENDITURES, THAT'S THE EQUIVALENT TO ABOUT 2000 EMPLOYEES.
WHEN YOU REMOVE POLICE AND FIRE FROM THE GENERAL FUND FUNDED EMPLOYEES EQUATION, THERE'S ONLY ABOUT 4,000 OF THEM.
SO WE WOULD HAVE TO GET RID OF HALF OF THE GENERAL FUND EMPLOYEES TO FREE UP AS MUCH MONEY AS WE HAVE WITH THESE TWO STRUCTURAL CHANGES.
LAST QUESTION ON PAGE 53, YOU HAVE LETTERS OF SUPPORT FROM ALL THESE ENTITIES MM-HMM
WERE THEY GIVEN THIS BUDGET BEFORE? WE WERE, BECAUSE I JUST GOT THE BUDGET YESTERDAY.
SO HOW ARE THEY ABLE TO SEND LETTERS OF SUPPORT? ALL OF THE COUNCIL MEMBER OFFICES WERE, UM, INVITED TO BRIEFING SESSIONS.
WHAT I'M ASKING ABOUT IS NOT THE BRIEFING SESSIONS MM-HMM
WERE, WERE THEY GIVEN PRIVY TO THIS BUDGET BEFORE WE WERE TO SEND IN THESE LETTERS OF SUPPORT? NO.
WHAT BRIEFINGS? UH, THE PRIVATE SECTOR, OR EXCUSE ME, THE, UH, THE ADVOCACY GROUPS THAT WE BRIEFED RECEIVED THE SAME BRIEFING AS COUNCIL MEMBERS.
WE OFFERED THE BRIEFING TO COUNCIL MEMBERS FIRST, AS YOU KNOW, YOUR OFFICE RECEIVED THAT BRIEFING.
I'M, I'M NOT ASKING THAT ALL, ALL I'M ASKING IS HOW DID THEY SEE THIS BUDGET BEFORE WE DID? NO.
SO THEIR LETTERS OF SUPPORT ARE BASED ON BRIEFINGS BEFORE THEY ACTUALLY SAW THE BUDGET.
THEIR LETTERS OF SUPPORT ARE PREDICATED ON THE TWO BIG FISCAL ACTIONS THAT WE'RE TAKING, WHICH IS THE SAME BRIEFING WE GAVE COUNCIL MEMBERS.
THAT'S MY MY QUESTION IS, THEIR LETTERS OF SUPPORT ARE REFLECTIVE OF THE BRIEFINGS NOT ACTUALLY SEEING THE ACTUAL BUDGET.
CHRIS, WITH COUNCIL MEMBER SALINAS'S OFFICE.
THANK YOU MADAM CHAIR AND THANK YOU DIRECTOR AND FOR YOUR WHOLE ENTIRE TEAM'S WORK.
UH, MY QUESTIONS REGARDING THE ADMINISTRATION FEE.
WHAT FISCAL YEAR DOES THE ADMINISTRATION ANTICIPATE IMPLEMENTING A REDUCED OR DISCOUNTED RATE FOR SENIORS? LOW INCOME RESIDENTS WHO PROBABLY WOULD NOT BE ABLE TO AFFORD THE FEE WHEN IT PROGRESSIVELY REACHES $300 A YEAR BY FISCAL SCHOOL YEAR 32.
AND THEN KIND OF BUILDING ON THAT, DOES THE ADMINISTRATION INTEND TO DEVELOP, UH, LIKE A DISCOUNTED RATE STRUCTURE AS THE FEE PROGRESSIVELY INCREASES? SO AS IT REACHES THIS RATE, THE DISCOUNT WILL BE X AMOUNT.
UM, THAT'S SOMETHING THAT'S NOT CONTEMPLATED FOR FISCAL YEAR 27, SINCE THE FEE'S AT $5, WE HAVE LOOKED AT OTHER, UM, OTHER CITIES AND HOW THEY DO SOME OF THOSE, THOSE, UM, REDUCE OR DISCOUNTED FEES FOR, UM, FOR EXAMPLE, OVER 65 OR, UM, YOU KNOW, DIFFERENT, DIFFERENT SUBSETS OF THE CUSTOMERS.
UM, IT IS SOMETHING THAT WE FEEL WILL NEED TO BE STUDIED AND WILL NEED TO BE DISCUSSED AND ULTIMATELY BECOME PART OF ANY CHANGE TO THE FEE IN FUTURE YEARS BY CITY COUNCIL.
BUT IT IS SOMETHING THAT, UM, OTHER CITIES DO, DO AND DO CONSIDER.
UM, THAT BEING SAID, WHEN WE LOOKED AT THE OTHER CITIES, EVEN THEIR REDUCED, UH, OR DISCOUNTED FEE IS STILL ABOVE THE $5 FEE.
SO IT'S SOMETHING THAT, UM, DEFINITELY, UM, WE PLAN TO STUDY IN THE FUTURE, AS, YOU KNOW, AS THE FEES COME FORWARD IN FUTURE YEARS.
BUT THERE'S NO SPECIFIC YEAR IN WHICH THE ADMINISTRATION'S INTENDING TO BRING IT UP? NOT AT THIS POINT.
IT, IT WOULDN'T BE IN 27 OR, OR, OR 28 FISCAL YEAR 28, SINCE IT'S THE $5 AT THAT POINT.
UH, EXCELLENT WORK BY THE FINANCE DEPARTMENT.
I HEARD IT WAS EVEN LATER THAN FOUR IN THE MORNING THAT YOU LEFT THIS PLACE.
SO REALLY APPRECIATE ALL OF YOUR HARD WORK.
JUST, UH, MOST OF MY COLLEAGUES HAVE COVERED A LOT OF WHAT I WANTED TO ASK ABOUT.
BUT DID I HEAR YOU SAY THAT THIS YEAR'S $5 AMOUNT AND POTENTIALLY NEXT YEAR'S $5 AMOUNT WOULD JUST BE PASSED THROUGH THE B THE BUDGET ITSELF, BUT ANY INCREASE WOULD HAVE TO, UH, BE ACCOMPANIED BY A FEE STUDY AND A COUNCIL ORDINANCE VOTE? CORRECT.
BUT THIS YEAR OR NEXT YEAR, IT WILL JUST BE PART OF THE BUDGET.
[02:15:01]
THAT MAYBE IS A QUESTION FOR LEGAL.I KNOW THAT THIS YEAR'S ESTABLISHING THE FEE AND THE $5 WILL BE AS PART OF THIS YEAR'S BUDGET, UM, POSSIBLY NEXT YEAR'S AS WELL SINCE IT'S THE SAME DOLLAR AMOUNT.
BUT ANY INCREASE TO THE FEE WOULD HAVE TO BE, UM, YOU KNOW, MAKE SURE IT'S STILL WITHIN THE COST OF SERVICE.
HAVE FEE ANALYSIS AND HAVE THE IN ORDINANCE.
DO YOU WANNA WEIGH IN, ERIC, IS THAT CORRECT? YEAH, I THINK WHAT THE, UM, THE FEE STUDY RIGHT NOW CONTEMPLATES IS THIS SCHEDULED INCREASE IN THE ADMIN FEES FOR 27 THROUGH I THINK 32.
SO WHAT WE ARE PROPOSING, WHAT WE WOULD PROPOSE IS A BUDGET ORDINANCE THAT LAYS OUT THAT SCHEDULE OKAY.
SO IT'LL JUST BE PROPOSED TO BE ONE VOTE.
ON SLIDE 32, WHEN, UH, THE, THE REV CAP, THAT, THAT JUST CONTEMPLATES THE, THE CITY LOCAL IMPOSED REV CAP OR THERE ARE CHANGES TO THESE NUMBERS IF YOU WOULD, UM, YOU KNOW, IF YOU WOULD A ADD IN THE STATE REV CAP, I KNOW YOURS, OURS IS USUALLY LOWER MM-HMM
BUT DOES THAT YIELD ANY KIND OF DIFFERENCE IN THESE NUMBERS? IF WE LOOKED AT BOTH REV CAPS? SO IF WE, IF WE HAD GONE ABOVE THE LOCAL CAP AND GONE UP TO THE STATE CAP, THE, THE FOREGONE REVENUE WOULD HAVE BEEN LESS THAN THE 2.9 BILLION.
THE STATE CAP IS, IT'S ONLY BEEN A COUPLE YEARS THAT THAT'S, YES.
AND THERE'S, UM, IT REALLY STARTED IMPACTING US IN 2021.
AND THE STATE CAP IS A LITTLE BIT, ALL THE CALCULATIONS ARE DIFFERENT, BUT THE STATE CAP CALCULATION SORT OF BUILDS ON ITSELF.
IT LOOKS AT YOUR PRIOR YEAR'S REVENUES AND INCREASES THOSE.
SO THE LOWER YOUR PRIOR YEAR REVENUES, THE LOWER YOUR CAP'S GONNA BE NEXT YEAR.
SO IT KIND OF KEEPS, UM, BUT THESE NUMBERS PRETTY MUCH SATISFY BOTH CAPS? YES.
AND THE RECYCLING SPECIAL REVENUE FUND MM-HMM
IS THAT NOW IN THE C US? I MEAN, HOW, HOW'S THAT? SO THERE ARE TWO SPECIAL REVENUE FUNDS, UM, ASSOCIATED WITH THE SOLID WASTE DEPARTMENT, THE CONTAINER LEASE, SPECIAL REVENUE FUND, AND THE RECYCLING SPECIAL REVENUE FUND.
SO, UM, AT THE SAME TIME AS THE BUDGET, UM, THE, THERE ARE GONNA BE ORDINANCES THAT, UM, SEEK TO, UH, CLOSE OUT THOSE TWO FUNDS AND TRANSFER THE REMAINING FUND BALANCE TO THE COMBINED UTILITY SYSTEM BECAUSE THOSE OPERATIONS, THE, THE EXPENDITURE SIDE IS GONNA GO TO THE UTILITY AND THE REVENUE SIDE OF THOSE FUNDS IS GOING TO GO TO THE UTILITY AS WELL.
IT WON'T BE ANY KIND OF SPECIAL FUND WITHIN THE UTILITY.
IT'LL JUST BE, IT'LL BE PART OF THE COMBINED UTILITY SYSTEM FUND.
WE'RE GONNA MOVE TO PUBLIC SPEAKERS, COLLEAGUES, ADDITIONAL QUESTIONS ON, ON ANYTHING ON THIS PRESENTATION, PLEASE PUT INTO SHAREPOINT AND WASTE QUESTION.
I THINK IT, YOU KNOW, IF YOU, AS FAR AS YOUR QUESTIONS, GO TO SEND THEM TO WHERE YOU THINK THE BEST ANSWER IS GONNA COME FROM.
I MEAN, IF IT'S A FINANCIAL RELATED, DEBT RELATED REV CAP RELATED FINANCE QUESTION, SEND IT TO FINANCE.
IF IT'S REALLY DIGGING INTO THE D AND THIS IS SOMETHING I'M GONNA REALLY APPRECIATE ABOUT THIS BUDGET.
WE, WE SPEND SO MUCH TIME ON THE GENERAL FUND AND WE DON'T DIG INTO THE, THE CUS, BUT BOY, WE'RE DIGGING INTO THE CUS THIS TIME AROUND.
SO, UM, THAT, YOU KNOW, SEND, SEND THE QUESTIONS TO WHATEVER DEPARTMENT AND THEY'RE GONNA GET YOU ANSWERS.
I WILL START WITH PUBLIC SPEAKERS AND AGAIN, THANKS TO THE FINANCE TEAM, REALLY APPRECIATE YOUR HARD WORK.
JACK VALINSKI IS FIRST, AND I DON'T KNOW HOW SHE PULLED ALL THOSE FACTS OUT THERE.
UM, ONE OF THE THINGS WE CAN CUT IS A $60,000 PODCAST.
UM, GOING BACK TO COUNCIL MEMBER POLLARD'S QUESTION, IT JUST DOESN'T MAKE SENSE.
IF WE HAD ALL THIS MONEY IN THE WATER FUND, WHY DIDN'T WE USE IT FOR BREAKING PIPES THAT ARE BROKEN? I KNOW I SAT AND GOT CALLS FOR YEARS ABOUT BROKEN PIPES THAT DIDN'T GET FIXED IN A LONG TIME AND MANY OTHER ISSUES.
AND WE HAD A CONSENT DEGREE THAT WE HAD TO TAKE CARE OF.
SO IF WE HAD THIS EXTRA MONEY, THERE'S BEEN A PROBLEM.
WE SAT HERE LAST YEAR, WE WERE TOLD THAT THE BUDGET WAS BALANCED.
IT'S NOT, IT WAS NOT BALANCED THIS YEAR, WE KNOW THAT.
SO WE DUG MORE INTO THE RESERVE RESERVE.
ARE WE GONNA DO THAT AGAIN? WE'RE TOLD ABOUT THE OVERTIME ONLY INCREASING A LITTLE BIT.
IS THAT TRUE? WE DON'T HAVE A WE DON'T HAVE A HISTORY OF THAT.
BUT STILL GOING BACK TO THE FACT THAT WE HAD ALL THIS MONEY IN THE WATER FUND AND IT WAS JUST SITTING THERE IS REALLY A PROBLEM.
[02:20:01]
THANK YOU.UM, WE'LL, WE'LL CALL HER AGAIN OR IF OKAY.
LAURA, ARE YOU ON? SHE SUBMITTED A LOT.
COUNCIL MEMBER ALCORN AND THANK YOU TO THE CITY OF HOUSTON.
AND ALSO, AGAIN, I ECHO WHAT EVERYONE'S BEEN SAYING HERE.
HUGE SHOUT OUTS TO THE FINANCE TEAM FOR ALL THE INCREDIBLE WORK THAT THEY'VE DONE.
UM, YOU KNOW, UH, AS PEOPLE MAY KNOW, I'M WITH AN ORGANIZATION CALLED STRONG TOWNS HOUSTON SUB, UH, SUBSIDIARY OF THE NATIONAL NON-PROFIT STRONG TOWNS.
WE LOOK AT, UH, CITY FINANCIAL STABILITY FROM A MORE HOLISTIC STANDPOINT.
SO WHILE A YEAR TO YEAR BUDGET IS DEFINITELY IMPORTANT TO BE TALKING ABOUT, WE DO UNDERSTAND THAT HOUSTON IS IN A LARGER FINANCIAL CRUNCH.
UH, THE STRONG TOWNS FINANCE DECODER, WHICH I'M HAPPY TO SHARE, SHOWS THAT HOUSTON'S NET FINANCIAL POSITION AS OF 24 IS ABOUT NEGATIVE $14 BILLION.
AND I THINK ONLY TICKED UP A LITTLE BIT TO ABOUT NEGATIVE 13.
SO WE ARE FACING SOME LARGER STRUCTURAL ISSUES.
UM, HAVING SAID ALL OF THAT, I DO APPLAUD THE, UM, THE FINANCE TEAM FOR COMING UP WITH SOMETHING LIKE THE RIGHT OF WAY FEE.
IT IS AN INTERESTING WAY TO TAKE A LOOK AT THE HIDDEN COSTS, UH, OF OUR CURRENT SPRAWLED OUT INFRASTRUCTURE.
BUT IT DOES FALL A LITTLE SHORT IN A FEW WAYS.
IT'S GEOGRAPHICALLY BLIND IN THE SENSE THAT A DENSE BLOCK IN MIDTOWN WILL BASICALLY HAVE TO PAY THE SAME RATE AS A LARGER, MORE COST INTENSIVE SUBURBAN DEVELOPMENT.
UM, YOU KNOW, AUSTIN AND SAN ANTONIO DO CHARGE THESE RIGHT OF WAY FEES, BUT SOMETHING THAT AUSTIN DOES THAT I THINK THE CITY SHOULD CONSIDER, IF NOT THIS CYCLE, THE NEXT CYCLE IS, UH, WHAT'S CALLED THE TRANSPORTATION UTILITY FEE.
UH, THAT IS ESSENTIALLY TREATING THE STREET NETWORK AS A UTILITY.
THE CITY OF AUSTIN RELIES ON THE INSTITUTE OF TRAFFIC ENGINEERS TRIP GENERATION RATES.
I THINK THAT'S OUTDATED BECAUSE THAT'S THE SAME BOOK OF, UH, BAD TRIP GENERATION RATES, WHICH SPAWN PARKING REQUIREMENTS.
INSTEAD, WE SHOULD CONSIDER SOMETHING MORE LIKE A RIDE OF WAY CONSUMPTION, UH, YOU KNOW, TYPES OF DEVELOPMENTS USING STREET FRONTAGE, IMPERVIOUS COVERS, CURB CUTS.
I HAVE A LITTLE ROUGH ESTIMATE HERE, BUT, YOU KNOW, SINGLE DETACHED FAMILY HOMES WOULD HAVE TO PAY A LITTLE BIT MORE THAN MORE DENSE, UH, MULTI-FAMILY USES TIGHTER TOGETHER.
AND THE BASIC THEORY IS THAT THE MORE SPRAWLED OUT INFRASTRUCTURE EATS UP MORE OF, MORE OF, OR EXCUSE ME, MORE SPRAWLED OUT DEVELOPMENT EATS UP MORE OF CITY INFRASTRUCTURE AND SHOULD BE PAYING A FEE AS SUCH BACK TO THE CITY.
UM, YOU KNOW, SOME ROUGH ESTIMATES FROM SOME NUMBERS THAT I CALCULATED SHOWED THAT IT WOULD ACTUALLY HAVE ROUGHLY ABOUT 200 MILLION IN, UH, YEARLY, UH, REVENUES AS OPPOSED TO THE 100 MILLION PROPOSED SAVINGS FROM THE, UH, CITY'S RIGHT OF WAY.
UM, YOU KNOW, THE CITY ALREADY HAS THIS DATA THROUGH THE DRAINAGE, UTILITY, GIS UH, HCA HAS THE FRONTAGE AND WE CAN COVER, UH, WE CAN DISCUSS THE IMPERVIOUS SURFACE COVER.
THE GIST IS THAT, UM, AGAIN, WE'RE TRYING TO ENCOURAGE THE MORE EFFICIENT STYLE OF DEVELOPMENT THAT DOES NOT EAT UP TOO MUCH OF OUR INFRASTRUCTURE AND ENCOURAGE MORE DENSE, UH, SAFER DEVELOPMENT THAT IS MORE SUSTAINABLE IN THE LONG RUN.
I'M HAPPY TO TALK ABOUT A-T-U-F-A LITTLE MORE.
I UNDERSTAND THERE'S SOME CURRENT LEGAL HEADACHES ABOUT AUSTIN'S ONLY BECAUSE, UH, THERE WAS A LAWSUIT ABOUT WHETHER IT'S A TAX OR A STREET MAINTENANCE FEE.
I THINK THE WAY THAT, UH, A, A TRUE RIGHT OF WAY TUF TRANSPORTATION UTILITY FUND SHOULD BE CONSIDERED A STREET MAINTENANCE FEE.
AND YES, I'M A LAWYER, BUT I'M NOT GIVING LEGAL ADVICE, BLAH, BLAH, BLAH, BLAH, BLAH.
UH, I HAVE TO BE VERY CAREFUL ABOUT THAT
SO, BUT I DO THINK THAT, UH, SOMETHING LIKE A A RIGHT OF WAY, UH, TRANSPORTATION UTILITY FUND SHOULD BE CONSIDERED BY THE CITY.
IF NOT THIS YEAR, THEN DEFINITELY NEXT YEAR.
UM, THANK YOU, UH, MELISSA AND THE FINANCE TEAM FOR PUTTING THAT TOGETHER.
UH, THAT MUST HAVE BEEN GRUELING TO PUT TOGETHER.
AND, UM, NOW WE HAVE A WHOLE DOCUMENT TO SHARE.
UM, A FEW QUESTIONS THAT I HAD, PARTICULARLY IF THE FINANCE TEAM IS AVAILABLE.
UM, AND IF NOT, IF SOMEONE ON COUNCIL COULD ANSWER THE QUESTION, THE BIGGEST QUESTION, YEAH, WE'RE NOT GONNA ASK THEM TO ANSWER 'EM RIGHT NOW, BUT WE'LL, WE'LL GET, WE'LL GET 'EM DOWN AND WE'LL GET YOU ANSWERS.
UM, BIGGEST QUESTION I, AND I WANNA THANK, UH, THE COUNSELORS ON HERE WHO ARE ASKING VERY SPECIFIC AND, UH, STRAIGHTFORWARD QUESTIONS.
[02:25:01]
KNOW, I THOUGHT THERE WEREN'T A LOT OF DIRECT ANSWERS THAT WERE GIVEN, SO I WANTED TO ACKNOWLEDGE THAT, UM, AS WELL, UH, AS STUFF LIKE MAKING SURE FEES OVER TIME DON'T THEN JUST GET PASSED ON TO RESIDENTS OR ENSURING AND GETTING A DIRECT ANSWER ON LIKE, HEY, THIS $5 FEE ISN'T ACTUALLY GOING TOWARDS PAYING SALARIES OR IMPROVING SAFETY EQUIPMENT, WHICH WE'VE HEARD IS A, IS SOMETHING SOLID WASTE WORKERS THEMSELVES HAVE SAID THEY, THEY'VE NEEDED, AND I'M PRETTY SURE THEY'RE NOT GONNA BE REALLY EXCITED ABOUT SEEING A $5 FEED NOT COME TO HELP SUPPORT THEM DIRECTLY, UH, TO DO THEIR JOB OR TO, UH, FEEL SUPPORTED BY THE CITY.UM, IN THE CURRENT WAY IT'S CONSTRUCTED, I DON'T KNOW WHAT PAGE IT'S ON IN THE, UM, PROPOSED BUDGET, BUT THERE'S LIKE A TABLE THAT SAYS QUALITY OF LIFE AND THE OTHER, THE MAYOR'S OTHER PRIORITIES.
AND IT SHOWS THAT, UM, QUALITY OF LIFE IS BEING REDUCED BY 16%.
AND SO I HAD A QUESTION ON, AND IT'S THE ONLY PIECE THAT'S, THAT IS BEING REDUCED.
IT'S NOT ON THIS, UH, PRESENTATION, BUT IT IS ON THE MAYOR'S PROPOSED BUDGET.
I'M TRYING TO FIND THE PAGE THAT IT'S ON, BUT I DID HAVE A DIRECT QUESTION ON LIKE, WHAT COMPRISES THAT NUMBER? 'CAUSE THAT'S, I DON'T KNOW IF YOU JUST LOOK AT IT UP.
I'LL, I'LL LOOK AT THAT CHART.
UM, DO YOU KNOW WHICH CHART I'M REFERENCING? WELL, WE'LL FIND IT, BUT USUALLY QUALITY OF LIFE DEPARTMENTS ARE LIKE PARKS, LIBRARY HEALTH, YOU KNOW, KIND OF DEPARTMENT.
UM, BUT YEAH, THAT, THAT WAS PRETTY ALARMING TO ME.
UH, AND THEN, UM, A FEW OTHER QUESTIONS JUST TO CONFIRM.
THE PROPERTY TAX RATE, LIKE THE MAX THAT WAS PROP POSSIBLE OVER PROP ONE VERSUS WHAT WE HAD, THE DIFFERENCE IS 20 MILLION, IS THAT CORRECT? YES.
LIKE IF, IF WE STAY AT THE 51 50 1 CENT, YOU KNOW, WE COULD GO TO, TO RAISE A PENNY AND THAT WOULD BRING IN 20 MILLION.
AND THEN, UH, ONE FINAL THING ON THE CUS, LIKE, I THINK THERE DESERVES TO BE A VERY SPECIFIC EXPLANATION.
UM, JUST LIKE COUNCIL MEMBER POLLARD WAS TRYING TO REALLY GET, UH, THAT'S VERY, VERY DIGESTIBLE FOR RESIDENTS, UM, AS WE ARE THE ONES IMPOSING THIS FEE.
'CAUSE RIGHT NOW THIS FEE IS JUST GOING TOWARDS, UH, CUSHIONING A DEFICIT, UH, THAT WAS LARGELY CREATED BY THIS ADMINISTRATION AND BY EVERYONE ON THIS COUNCIL BY VOTING TO GIVE $820 MILLION, UH, TO POLICE WITH MONEY WE KNOW WE DIDN'T HAVE.
UM, SO I, I'M VERY CURIOUS TO KNOW LIKE WHAT THE PLAN IS TO EDUCATE THE MASSES ABOUT THIS CUS 'CAUSE THAT'S SOMETHING I'VE GOTTA DO.
AND RIGHT NOW THERE'S NOT A LOT OF DIRECT ANSWERS OR SOME GOOD INFORMATION THAT'S DIGESTIBLE FOR RESIDENTS, UM, THAT, YOU KNOW, DON'T HAVE THE SPACE AND TIME TO BE HERE AT CITY HALL 'CAUSE THEY'RE WORKING OR TAKING CARE OF THEIR KIDS.
AND THEN ONE LAST THING, UH, AND THANK YOU FOR THAT EXTRA TIME.
EXTREMELY CONCERNED ABOUT THIS MONEY BEING DIPPED INTO FURTHER AS THE CITY IS NOW CONTINUING ITS TREND OF PULLING RESTRICTED FUND DOLLARS TO PAY FOR OTHER SERVICES, YOU KNOW, SEE THE AVALOR TAX.
SO VERY CONCERNED ABOUT THAT 5% THAT IT'S TAKING AWAY ACTUALLY BEING INCREASED OVER TIME EITHER WITH THIS, DEFINITELY WITH THIS ADMINISTRATION, IF NOT WITH FUTURE ONES, AS WELL AS, UM, WANTING, WANTING TO KNOW, LIKE WE HEARD RANDY YESTERDAY TALK ABOUT THE FUND WILL BE REPLENISHED.
WHAT IS THAT REPLENISHMENT RATE THAT IT'S GETTING ON? LIKE I THINK SOMEONE SAID IT MIGHT BE GAINING INTEREST, LIKE IF YOU'RE TAKING 5%, IS IT BEING REPLENISHED BY 10 AND THEN KIND OF YEAH.
ALL, ALL GOOD QUESTIONS AND ALL WILL BE COVERED, UM, AT THE BUDGET WORKSHOP WITH PUBLIC WORKS.
AND THAT'S A MONDAY THE 18TH AT TWO 30.
UH, SO, AND YOU KNOW, THAT'S, THAT'S ALL PART OF THE EDUCATION IS TO THE WORKSHOPS, THE, THE YOU'LL, YOU WILL BE ABLE TO ASK EVERY WHICH QUESTION OF, UH, PLEASE LET ME KNOW ONES YOU WANT US TO ASK.
AND, AND WE'LL, WE'LL GET, WE'LL GET THAT GOING.
WE HAVE A, WE HAVE ACTUALLY A, A THING ON OUR WEBSITE IF THERE ARE SPECIFIC QUESTIONS YOU WANNA KNOW AND WE'LL SUBMIT THOSE AHEAD OF TIME, YOU KNOW, WE'LL HOPEFULLY GET QUESTIONS OUT TO PEOPLE IN WRITING.
UM, YOU KNOW, THERE'S A LOT TO LEARN IN THIS BUDGET.
LIKE I SAID, WE SPEND A LOT OF TIME ON THE, IN THE GENERAL FUND, BUT NOT AS MUCH IN THE COMBINED UTILITY SYSTEM.
SO WE'LL REALLY BE DIGGING INTO THAT.
THOSE ARE ALL GOOD QUESTIONS AND, AND WE'LL BE DIGGING INTO THAT.
AND WE ALSO HAVE THE, OUR TWO BUDGET TOWN HALLS THAT WE'LL BE DOING TO EDUCATE THE PUBLIC AND ALL OF THAT.
ON THOSE QUESTIONS, SHOULD I SUBMIT THEM THROUGH THE FORM THAT YOU SENT ME, JORDAN? OKAY.
I'VE BEEN, I WALKED A COUPLE BLOCKS OVER.
SO ANYWAY, GET, UH, A COUPLE OF THINGS ABOUT THIS BUDGET THAT I AM, I'M A LITTLE BIT CONCERNED ABOUT.
[02:30:01]
I BROUGHT THIS UP BEFORE METRO STARTS AS BUDGET PROCESSES FOR OCTOBER 1ST, FOUR OR FIVE, SIX MONTHS IN ADVANCE.AND THEIR BUDGET IS NOWHERE NEAR THE C HOUSTON'S BUDGET.
IF Y'ALL GONNA START ON JULY THE FIRST, I THINK THE BUDGET PROCESSES SHOULD START FEBRUARY THE FIRST SO THAT YOU HAVE MORE TIME TO REALLY NOW MR. POLLARD, I LOVE THE WAY YOU DRILLED THAT.
THAT WAS EXCELLENT THAT I LOVE THAT.
SO WHERE ALL YOU OF US A HORSESHOE AS CITIZENS CAN, CAN DRILL TWO, THEY WERE TALKING ABOUT, UH, CONTRACTING OUT CITY SERVICES.
I THINK FOR AREAS LIKE KINGWOOD THAT'S UP IN MONTGOMERY COUNTY, NORTH OF OVAL, IT'S KINDA LIKE AN ISLAND OF ITS OWN.
AND I THINK WILLOWBROOK MALLS ANOTHER PLACE, MAYBE THAT'S SOMETHING WE ACTUALLY NEED TO LOOK AT, IS CONTRACT OUT THOSE SERVICES TO THE, TO THE LOCAL PEOPLE, FIRST RESPONDERS THERE, PROVIDED THEY HAVE THE SAME LEVEL OF SERVICE AS IN THE MAIN PART OF THE CITY.
AND THEN WE BRING ALL THAT EQUIPMENT BACK INTO THE CITY, INTO THE CITY PROPER.
I THINK THAT NEEDS TO BE DONE.
AND TWO, I KNOW WE'RE DOING THE GRB, BUT I HAVE SOME MORAL PROBLEMS WITH THAT.
UM, NUMBER ONE, THE SOFI STADIUM COMPLEX IN LOS ANGELES IS PRIVATELY OWNED.
THE PRIMARY STOCKHOLDER FOR THAT IS THE OWNER OF THE LA RAMPS.
I THINK THERE IS MONEY TO BE MADE IN THE HOSPITALITY BUSINESS, BUT I DO NOT THINK A CITY SHOULD BE IN THE PROCESS OF BEING, UH, IN A BUSINESS.
I THINK WE NEED TO HELP BUSINESSES, BUT WE SHOULD NOT BE HELPED IN A BUSINESS.
AND TWO, THAT WITH THE CHURCH AND SOME MANAGEMENT DISTRICTS, THEY HAVE THEIR OWN BUDGET, BUT IF THEY EVER GO UNDER YOU WHO THE BACKSTOP IS HORSESHOE.
AND I THINK THAT NEEDS TO BE REALLY, REALLY LOOKED AT.
WHAT HAPPENS IF ONE OR ONE OF THESE GROUPS FAILS, THAT IS SOMETHING THAT NEEDS TO BE LOOKED AT.
ANOTHER THING THIS BUDGET IS NOT LOOKING AT IS WHAT HAPPENS IS THERE'S A SHORTFALL FROM THE WORLD CUP GAMES HERE.
UH, YOU KNOW, THERE, YOU KNOW, NORMALLY WE HAVE A CONVENTION OR SOMETHING.
NORMALLY THE CITY OR, UH, HOUSTON FIRST IS GUARANTEED SO MUCH INCOME IT LOOKS LIKE NOW WITH FIFA, IT'S NOT GOING TO PAY US THE FAIR AMOUNT OF MONEY.
IT'S GONNA COST THE CITY METRO, TERRACE COUNTY TO OPERATE THESE GAMES.
AND I THINK THAT NEEDS TO BE LOOKED AT FURTHER WHEN WE, WHEN WE PUT OUT A BID FOR A, FOR AN EVENT, THAT WE GET OUR FAIR MONEY BACK.
THE BELL HAS HAS RUNG, BUT THANKS.
OKAY GUYS, BEFORE WE ADJOURN, LET ME JUST REMIND YOU BUDGET WORKSHOPS BEGIN MAY 12TH WITH FINANCE FLEET AND GSD.
UH, AGAIN, UH, PLEASE USE SHAREPOINT FOR WRITTEN QUESTIONS.
UM, FINANCE TEAM, MY HAT IS OFF TO YOU.
UM, MELISSA SITTING UP HERE FOR TWO AND A HALF HOURS BEING GRILLED.
UM, SO BIG HAND OF A BIG ROUND OF APPLAUSE FOR APPLAUSE.
AND IF THERE ARE NO OTHER COMMENTS, THIS MEETING IS ADJOURNED.