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.

Um and I did want to uh share a bit of good news that we received, I think it was the week before last.

Um we had our annual surveillance with Moody's uh rating agency.

So um over the last couple weeks, we um well actually the last couple months, we've been sharing information with the rating agencies on the proposed budget, our five-year forecast, um, the Ernst and Young efficiency study that we underwent.

And we have regular dialogue with the rating agencies throughout the year as we execute bond transactions.

Um two weeks ago we found out uh Moody's went to their credit committee, and Moody's has affirmed the City of Houston's um credit rating and kept our outlook as stable.

So um kudos to uh my team, the entire finance working group that helps to educate the rating agencies with our um you know our facts and the the latest information.

They do always monitor the monthly financial report um and uh definitely follow this committee closely.

Um I did want to give kudos to the team on that.

Um so that concludes my report.

Thank you very much.