[Budget and Fiscal Affairs on July 13, 2026.]
[00:00:16]
QUICK, WE JUST HAVE, UH, THE MONTHLY FINANCIAL REPORT ON THE AGENDA.
SO THAT'S NEW AND DIFFERENT, BUT DON'T, DON'T GET USED TO THAT.
WE'RE GONNA STACK 'EM UP IN THE FUTURE.
SO I WILL HAVE, UM, WILL JONES, UH, FROM THE CONTROLLER'S OFFICE AND MELISSA DEBOSKY, PLEASE JOIN ME.
AND IN AROUND THE HORSESHOE WE HAVE MY VICE CHAIR, MARIO CASTILLO, STAFF FROM COUNCIL MEMBER TWILA CARTER'S OFFICE STAFF FROM COUNCIL MEMBER ALEJANDRO SALINAS'S, OFFICE VICE MAYOR, PRO TEM AMY PECK'S, OFFICE MAYOR PRO TEM MARTHA CASTEX TATUM'S OFFICE.
UH, COUNCIL MEMBER JULIAN RAMIREZ IS HERE.
STAFF FROM COUNCIL MEMBER MARY ANNE HUFFMAN AND JOE PANZELLA'S, UM, OFFICES ARE HERE.
SO WELCOME EVERYONE AND WE WILL GET RIGHT TO IT.
I STILL LIFT THAT A LITTLE BIT.
OKAY, WELL, GOOD MORNING, UH, MADAM CHAIR.
AND THE GENERAL FUND, THE CONTROLLER'S OFFICE IS PROJECTING AN ENDING FUND BALANCE OF 276.5 MILLION OR 10.4% OF EXPENDITURES, LESS DEBT SERVICE AND PAY AS YOU GO FOR FY 26.
THIS IS 23.5 MILLION LOWER THAN THE PROJECTION OF THE FINANCE DEPARTMENT.
THE DIFFERENCE IS DUE TO A LOWER REVENUE PROJECTION THAN THE FINANCE DEPARTMENT.
BASED ON OUR CURRENT PROJECTIONS, THE FUND BALANCE WILL BE APPROXIMATELY 77.3 MILLION ABOVE THE CITY'S TARGET OF HOLDING 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE IN PEGO.
THERE ARE NO CHANGES, UH, TO OUR REVENUE AND EXPENDITURE PROJECTIONS FROM LAST MONTH'S REPORT.
WE ARE GEARING UP FOR OUR FINAL MO FAR NEXT MONTH, WHERE YOU'LL SEE, UM, A LOT OF THE CHANGES I WILL NOTE IN SALES TAX.
WE ARE SEEING IMPROVEMENTS THERE.
SO IN FOR THE, THE RECEIPTS FOR MAY WAS UP 7.1%.
UH, SO WE WERE DEFINITELY GOING UP ON OUR, UH, SALES TAX PROJECTION NEXT MONTH.
BUT FOR THIS MONTH, NO CHANGES.
UM, ON THE ENTERPRISE FUNDS FOR CONVENTION AND ENTERTAINMENT, UH, THE OPERATING REVENUES INCREASED BY 0.5 MILLION DUE TO HIGHER PARKING REVENUE.
NON-OPERATING REVENUES INCREASED BY 4.5 MILLION, PRIMARILY DUE TO HOT.
AND AS A RESULT, OUR OPERATING TRANSFERS ALSO INCREASED BY 6.9 MILLION.
WE'RE PROJECTING NO CHANGES, UH, FROM THE PREVIOUS MONTH'S AMOUNTS IN THE REMAINING ENTERPRISE FUNDS FOR THE COMMERCIAL PAPER AND BONDS.
THE CITY'S PRACTICE HAS BEEN TO MAINTAIN NO MORE THAN 20% OF THE TOTAL OUTSTANDING DEBT FOR EACH TYPE OF DEBT AND A VARIABLE RATE STRUCTURE AS OF MAY 31ST, 2026.
ALL OUTSTANDING DEBT IS WITHIN THAT THRESHOLD.
UM, AND BEFORE I CONCLUDE MY REPORT, I DO WANNA RECOGNIZE OUR CONTROLLER INTERNS THAT WE HAVE HERE.
IF Y'ALL CAN PLEASE STAND IN
UM, I'VE BEEN TALKING TO 'EM A LOT ABOUT STRUCTURALLY BALANCED BUDGET, THE MONTHLY FINANCIAL REPORT, THE BFA COMMITTEE.
UM, SO WE KNOW ONCE THEY LEAVE HERE, THEY'LL BE READY FOR ANYTHING 'CAUSE WE WE'RE COVERING IT ALL.
I ALSO WANNA RECOGNIZE THAT COUNT.
WE'VE BEEN JOINED BY COUNCIL MEMBER F FRED FLICK AND, OKAY, GOOD MORNING.
THIS IS THE 11 PLUS ONE FINANCIAL REPORT FOR THE PERIOD ENDING MAY 31ST, 2026.
FISCAL YEAR 26 PROJECTIONS ARE BASED ON 11 MONTHS OF ACTUAL RESULTS AND ONE MONTHS OF PROJECTIONS FOR THE GENERAL FUND.
THE REVENUE PROJECTION IS 12.3 MILLION HIGHER THAN THE ADOPTED BUDGET, AND REMAINS UNCHANGED FROM THE PRIOR MONTH.
UM, THE RECEIPTS FOR THE MONTH OF APRIL WERE, UM, 4.87% HIGHER THAN THE SAME PERIOD LAST YEAR, AND ABOUT 9% HIGHER THAN BUDGETED.
UM, AND SINCE THAT TIME, WE ALSO RECEIVED THE MAY SALES TAX RECEIPTS, UM, AS MR. JONES MENTIONED, UH, WHICH WERE ALSO ABOVE BUDGET, UM, AND HIGHER THAN THE SAME PERIOD LAST YEAR.
SO PROBABLY IN NEXT MONTH'S REPORT WE'LL MAKE A REVISION TO OUR, UM, ESTIMATE ONCE WE SEE HOW, UM, HOW JUNE COMES OUT.
ON THE EXPENDITURE SIDE, THE PROJECTION IS 117.2 MILLION HIGHER THAN THE ADOPTED BUDGET, BUT REMAINS UNCHANGED FROM THE PRIOR MONTH.
UM, AND SO, UM, SINCE WE'RE NOT MAKING ANY CHANGES FROM THE PRIOR MONTH, THEIR PROJECTED ENDING FUND BALANCE IS ABOUT 300 MILLION, UH, WHICH REPRESENTS 11.3% OF ESTIMATED EXPENDITURES, NOT INCLUDING DEBT SERVICE AND PAY AS YOU GO, UH, AND THE ENTERPRISE SPECIAL REVENUE AND OTHER FUNDS.
UM, THESE ARE THE FOLLOWING CHANGES FOR THE CONVENTION ENTERTAINMENT.
OPERATING REVENUES INCREASED BY 537,000 DUE TO THE HIGHER THAN ANTICIPATED GARAGE PARKING REVENUES.
[00:05:01]
REVENUES INCREASED BY 4.5 MILLION DUE TO THE HIGHER THAN ANTICIPATED HOTEL OCCUPANCY TAX AND DELINQUENT HOTEL OCCUPANCY TAX COLLECTIONS.AND AS A RESULT, UH, THE OPERATING TRANSFERS INCREASED BY 6.9 MILLION, UM, IN THE ASSET FORFEITURE FUND.
REVENUE INCREASED BY 700,000 DUE TO HIGHER THAN ANTICIPATED CONFISCATIONS.
UM, AND THAT INCLUDES THE, CONCLUDES THE, UM, THE FINANCIAL PART, UM, OF THE TALKING POINTS.
I JUST WANTED TO TOUCH ON, UM, SOME GOOD NEWS THAT WE RECEIVED ABOUT TWO WEEKS AGO NOW FROM S AND P.
UM, SO THE FINANCE WORKING GROUP HAS BEEN, UM, UH, MEETING AND TALKING WITH OUR CREDIT RATING AGENCIES.
AND SO S AND P HAD THEIR, UM, ANNUAL REVIEW OF THE GENERAL OBLIGATION CREDIT, UH, WHERE THE COMMITTEE MET AND, UM, MADE THE DECISION TO REVISE OUR, UM, OUTLOOK ON OUR GENERAL OBLIGATION CREDIT FROM NEGATIVE TO STABLE.
UM, THE STABLE OUTLOOK SIGNALS THAT, UH, S AND P UH, BEING THE RATING AGENCY, THEY'RE AN INDEPENDENT THIRD PARTY THAT EXAMINES THE CITY'S CREDIT WORTHINESS.
UM, IT SHOWS THAT THEY HAVE GREATER CONFIDENCE IN OUR FINANCIAL DIRECTION AND OUR ABILITY TO MAINTAIN, UM, FISCAL STABILITY.
SO AS, AS WE ALL KNOW, WHEN WE WENT THROUGH THE BUDGET PROCESS, UM, THEY FELT THAT OUR BUDGET, UM, TAKES STEPS TO ADDRESS THE STRUCTURAL FINANCIAL CHALLENGES THAT WE HAVE IN OUR FUTURE, DEMONSTRATING OUR FINANCIAL STRATEGIES AND CREATING A MORE, UH, SUSTAINABLE FOUNDATION FOR THE FUTURE.
UM, OF COURSE, THEY CONTINUE TO LOOK AT OUR CREDIT AND MONITOR OUR FINANCIALS.
THEY FOLLOW THE MONTHLY FINANCIAL REPORTS.
UM, AS I MENTIONED IT WAS OUR ANNUAL SURVEILLANCE, SO THEY WILL BE, YOU KNOW, REVIEWING OUR CREDIT ON AN ANNUAL BASIS, UM, IN ADDITION TO ANY TIME WE DO ANY BOND TRANSACTIONS.
SO IT'LL CONTINUE TO BE AN ONGOING CONVERSATION WITH THE RATING AGENCIES.
UM, BUT I JUST WANTED TO READ A LITTLE SNIPPET FROM, FROM THEIR REPORT, UM, WHERE THEY SAY THAT OUR OUTLOOK, UH, REFLECTS OUR EXPECTATIONS THAT THE CITY BY MAKING SUBSTANTIAL CHANGES TO BOTH REVENUES AND EXPENDITURES WILL MAKE SIGNIFICANT PROGRESS TO ADDRESS THE BUDGETARY GAP IN FISCAL YEAR 27.
HOUSTON'S DEBT AND LIABILITIES BURDEN IS MODERATE WITH ELEVATED FIXED COSTS, BUT HAS REDUCED CONSIDERABLY IN THE PAST DECADE FOLLOWING THE MAJOR PENSION REFORM INITIATIVE.
SO A LOT OF THINGS THAT WE'RE CONTINUING TO BUILD ON THAT, UM, YOU KNOW, WE'VE BEEN WORKING ON FOR, UM, EVEN, YOU KNOW, THE PAST 10 YEARS WITH THE PENSION REFORM.
SO, UM, GOOD NEWS COMING OUT OF S AND P, UM, IN THE LAST COUPLE WEEKS.
ANY QUESTIONS FROM MY COLLEAGUES? THIS MONTH'S REPORT WAS PRETTY STRAIGHTFORWARD AS THEY NOTED.
UM, MOST OF THE CHANGES WILL BE REFLECTED NEXT MONTH, BUT, UM, WE HAVE COUNCIL MEMBER RAMIREZ FIRST IN THE QUEUE.
THANK YOU MADAM CHAIR AND THANK YOU BOTH FOR THE PRESENTATIONS AND I AGREE THAT'S GREAT NEWS ON THE CREDIT OUTLOOK, UH, DIRECTOR AND SO KUDOS TO THE FOLKS IN THE ADMINISTRATION RESPONSIBLE FOR THAT.
SO, UM, I NOTICED THAT, UH, THERE IS A VARIANCE ON, IN THE REPORT ON PAGE NINE, INTERGOVERNMENTAL, UM, 16 MILLION.
IS THAT RELATED TO THE TIMING OF THE TURS TRANSFERS OR WHAT, WHAT IS THAT? YEAH, THAT'S THE, THE DIFFERENCE BETWEEN OUR PROJECTIONS ON THE MUNICIPAL SERVICE FEE.
SO A COUPLE OF MONTHS AGO, FINANCE INCREASED THAT PROJECTION.
UH, WE'RE STILL WORKING WITH THEM BEHIND THE SCENES TO GET A BETTER UNDERSTANDING OF WHAT WENT INTO THAT PROJECTION AND MOST LIKELY WILL COME UP NEXT MONTH.
SO, SO YOU BELIEVE, UH, YOUR, YOUR PROJECTIONS WILL COME UP TO MEET YEAH.
UM, AND SO, UH, DIRECTOR DEBOSKY AND, AND, UH, WILL, YOU BOTH TALKED ABOUT, UH, INCREASE IN SALES TAX, UH, REVENUE.
UH, AT SOME POINT I SUPPOSE WE, WE WILL GET A REPORT ON, UM, HOW WE FARED, UH, REVENUE WISE, UH, RELATED TO WORLD CUP EVENTS AND SO DO ANY EXPECTATION OF WHEN THAT WILL BE? SO WE RECEIVED THE SALES TAX, UM, RECEIPTS TWO MONTHS IN ARREARS.
SO IT'LL BE UNTIL ABOUT TWO MONTHS AFTER THE CONCLUSION OF THE EVENT, MIXED BEVERAGE TAX.
WE USED TO GET A REPORT QUARTERLY, NOW WE GET IT MONTHLY.
SO AGAIN, THAT'S KIND OF ALONG THE SAME TIMING AS THE SALES TAX.
LIKE TO WELCOME STAFF FROM COUNCIL MEMBER WILLIE DAVIS' OFFICE AND TASHA JACKSON'S OFFICE.
UH, COUNCIL MEMBER FLICKINGER.
UH, YEAH, IT WAS GREAT NEWS ON THE OUTLOOK.
DOES THAT TRANSLATE INTO LOWER BORROWING COSTS? REALLY WHAT IT MEANS IS THAT, UM, OUR BORROWING COSTS ARE HOPEFULLY GONNA KIND OF STAY AROUND WHERE WE EXPECTED THEM TO BE.
UM, BORROWING COSTS ARE KIND OF A FUNCTION OF HOW THE MARKET IS AND OUR CREDIT RATING TOGETHER.
UM, IT DEFINITELY GIVES US MORE CERTAINTY, BUT, UM, FOR SURE IN THE LONG RUN, YOU KNOW, WITH THE, WITH THE CREDIT BEING MORE STABLE, IT WILL DEFINITELY HELP US TO KEEP OUR BORROWING COSTS, YOU KNOW, AS LOW AS POSSIBLE.
UH, ALSO, UH, THE ASSET FORFEITURE,
[00:10:01]
IT WAS UP BY 714,000.DO YOU KNOW IF THERE WAS ANYTHING SIGNIFICANT IN THERE THAT I WOULD HAVE TO GET THE DETAILS ON EXACTLY WHAT IT IS.
I MEAN, WE CONTINUE TO, TO MONITOR THE PROJECTIONS AND WE'LL HAVE A, A MORE COMPLETE NUMBER IN, IN THE NEXT MONTH'S REPORT AS WELL.
SEEING NO MORE QUESTIONS FROM COLLEAGUES, WE WILL GO TO PUBLIC COMMENTS.
WE HAD ONE PERSON SIGN UP, DOMINIC MAZO, I DON'T SEE HIM HERE, BUT ANYBODY ELSE IS WELCOME TO ADDRESS ANY OF YOU INTERNS WANNA COME ASK A QUESTION, NOW'S YOUR TIME.
THERE'S GOTTA BE A BRAVE ONE OUT THERE.
NEXT MONTH EVERYONE WILL BE A QUARTERLY MEETING.
UH, THIS WILL BE THE END OF OUR, WE'LL KIND OF SUM UP THE FY 26, UH, FISCAL YEAR.
SO WE WILL HAVE THE OVERTIME, YOU KNOW, LIKE WE'VE BEEN DOING EVERY QUARTER.
WE'LL HAVE AN ANALYSIS OF OVERTIME AND THEN STARTING IN SUBSEQUENT QUARTERS, COUNCIL MEMBER RAMIREZ, WE WILL BE TAKING UP THE, THE ALL THE EXPENSES, UM, IN THE QUARTERLY REPORTS.
AND WHAT I MAINLY WANNA FOCUS ON IN THOSE QUARTERLY REPORTS AS, AS OVER TIME, UM, TRACKS HIGHER THAN WHAT'S BUDGETED.
I WANT TO SEE WHAT THE OFFSET IS, IS BASICALLY WHAT WE'RE GOING TO BE LOOKING AT, UM, WHAT THE OFFSET IS AND ANY OTHER, UM, ABNORMALITIES WITHIN, UM, DEPARTMENTAL BUDGETS, UM, KIND OF WHAT THE OFFSETS WILL BE.
SO WE'LL BE TAKING A LOOK AT THAT ON THE QUARTERLY REPORTS, BUT SEEING NO OTHER QUESTIONS OR COMMENTS, I AM HAPPY TO REPORT WE ARE ADJOURNED AT 10:13 AM SO EVERYBODY GO GET TO WORK ON MONDAY.