Budget and Fiscal Affairs Committee Meeting - July 8, 2025
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Budget and Fiscal Affairs Committee Meeting - July 8, 2025
The Budget and Fiscal Affairs Committee of the Houston City Council met on July 8, 2025, chaired by Sally Alcorn. The agenda included the monthly financial report, a presentation on property taxes by Harris County Tax Assessor-Collector Annette Ramirez, and an update on DR24 disaster recovery funding. Public comments were also heard.
Public Comments & Testimony
- Laura Gallier urged the committee to reallocate CDBG funds away from police and generators toward housing and other community needs, citing the one-year anniversary of Hurricane Beryl and recent Hill Country tragedy. She questioned the prioritization of police funding and asked where the CDBG survey was being publicized.
- Becky Smith, Texas Director for Clean Water Action, expressed support for the increased housing allocation but raised concerns about ambulance purchases, arguing that safe housing reduces emergencies. She requested transparency on administrative overhead costs across all program line items.
Discussion Items
- Monthly Financial Report: Deputy Controller Will Jones reported a projected general fund ending balance of $370.1 million (14.3% of expenditures), while the Finance Department projected $408.7 million (15.8%). The difference is due to lower revenue projections by the Controller. Property tax revenues increased by $13.5 million due to higher collections, and sales tax receipts in April were 6.2% higher than the same month last year. The Finance Department noted that Moody's affirmed the city's credit rating with a stable outlook. Councilmember Flickinger questioned the forecasting methodology, and Councilmember Thomas asked about bond market volatility. The Ernst & Young efficiency study (category management initiative) has started.
- Property Tax Presentation: Tax Assessor-Collector Annette Ramirez detailed the property tax lifecycle, including appraisal, protest, assessment, collection, and delinquency. She highlighted that 96% of taxes are collected by June 30. New initiatives include a prepayment plan (ACH) starting in 2026, allowing taxpayers to spread payments over 6-10 months, and a new vendor (PayIt) for online payments. The city's total taxable value is $324 billion, with 45.5% residential and 29.5% commercial. Ramirez discussed homestead exemptions (e.g., over-65 exemption reduces tax on a $250,000 home from ~$5,000 to $738) and the impact of PFCs/HFCs on tax exemptions. Councilmembers raised concerns about heir properties, voter registration accuracy, non-reporting of PFCs, and tax sale delays.
- DR24 Funding Update: Stephen David and Michael Nichols presented a revised draft action plan for $314 million in disaster recovery funds. Following public feedback (327 attendees, 39 comments), the plan now allocates $50 million to housing ($20 million for single-family repair, $30 million for multifamily repair), reduced from $41.2 million in emergency response/public safety and $8.8 million in FEMA match. The remaining budget includes $151 million for power generation resilience, $15.3 million for emergency response (ambulances, high-water vehicles), $8 million for vegetation management, $15.7 million for administration, and $200,000 for planning. The revised plan will be submitted to HUD by August 19, with approval expected in October 2025. Councilmembers discussed criteria for fund use, the need for collaboration, and oversight.
Key Outcomes
- No formal votes were taken during the meeting. The revised DR24 action plan is scheduled to come before City Council on July 23 or July 30, 2025, for approval.
- The next Budget and Fiscal Affairs Committee meeting is set for July 29, 2025, at 10 a.m.
Meeting Transcript
Members of the public, my name is Sally Alcorn and I am chair of the budget and fiscal affairs committee. Welcome to our July 8th, 2025 meeting. We have a good agenda today. I'd like to welcome our Harris County tax assessor collector, Annette Ramirez, who will be presenting later. Very happy that she'll be talking through property taxes, which is our biggest source of revenue. So I think we could all could stand to learn a lot about how property taxes are collected and the timing of all of that. So that will be later. We will start as usual with the controller and finance director for the monthly financial report. Before they get started, I want to welcome Vice Mayor Pro Tem Amy Peck, Councilmember Abby Kamen is joining us virtually, Councilmember Fred Flickinger, Councilmember Tippany Thomas, Councilmember Julian Ramirez, Councilmember Twila Carter, and then we have staff from Councilmember Carolyn Evans Shabazz, Councilmember Mario Castillo, Mayor Pro Tem Martha Castex Tatum, and Councilmember Plummer. So welcome all. And with that, we will start. Hi, Will Jones. Nice to see you, Deputy Controller. You may begin. All right. Good morning, Madam Chair, members of City Council and staff. I'm here today to present the monthly financial report for the month ended May 31st, 2025. In the general fund, the controller's office is projecting an ending fund balance of $370.1 million or 14.3 percent of expenditures less debt service and pay as you go. This is $38.6 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 $175.8 million above the city's target holding a $7.5% of expenditures excluding debt service. We have increased our revenue projection by $16 million from the May report. Property tax increased by $13.5 million due to higher than anticipated collections. Interest income increase by $2.3 million due to higher than anticipated interest earnings on deposits and investments. On our sales tax, we are holding our sales tax projection studied this month at $903 million. We did increase our projection last month. The April sales tax received came in about 6.2 percent higher than the same month last year, marking the second consecutive month of a strong performance last month increased by 7.3 percent. So to reach our 903 million projection, the final two months would need to average a negative uh growth of 3 percent. On the expenditures, our projections are unchanged uh from last month. So moving on to the uh enterprise funds. Again, we are projecting no changes uh from the previous month in our enterprise funds. For our commercial paper and bonds, uh the city's practice has been to maintain no more than 20 percent of the total outstanding debt for each type of debt in a variable rate structure, which is in line with the rating agency's guidance of 25 percent. From time to time, the city's enterprise credits have exceeded this threshold on an interim basis as they have undertaken large capital improvement projects or major expansions. Uh, thank you very much, and that concludes my report. Thank you, Director. Good morning. This is the 11 plus one financial report for the period ending May 31st, 2025. Fiscal year 25 projections are based on 11 months of actual results and one month of projections. For the general fund, the revenue projection is 96.3 million higher than the adopted budget and 27.9 million higher than the prior month. The variance from the prior month projection is due to a $14.3 million increase in sales tax due to higher than anticipated sales tax receipts, as well as a $13.6 million increase in property tax due or due to higher than anticipated collections. For sales tax, I know I mentioned in the last couple um months that we were, of course, we always monitor the sales tax on a monthly basis. And uh this month we decided to increase the projection. Um as Deputy Controller Jones mentioned, the sales tax receipts for April were strong. They were at $75.1 million, which is 6.19% higher than the same period last year, and about 6.8 percent higher than budget. So to meet the finance department's current estimate of 907 million, the remaining periods would need to come in um flat to the prior year. On the expenditure side, the expenditure projection is 61.2 million higher than the adopted budget and remains unchanged from the prior month. So uh together with the revenues and the expenditures, we're projecting the ending fund balance to be 408.7 million, which is 27.9 million higher than the prior month, and 15.8 percent of estimated expenditures, not including debt service and pay as you go. That fund balance is 214 million above the target of holding 7.5 percent. For the enterprise special revenue and other funds, uh we're not projecting um any changes uh for uh for sorry for the enterprise funds, we're not projecting any changes, but for the asset forfeiture fund, uh we're projecting an increase to revenue uh by $900,000 due to higher than anticipated confiscations. Um the report also includes uh the monthly disaster report um in your copy and as well as the copy that's online.
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