Houston City Council Joint Budget & Economic Development Committee Meeting - August 20, 2025

The Joint Budget and Fiscal Affairs and Economic Development Committee met on August 20, 2025, to receive presentations on the Tax Increment Reinvestment Zone (TIRZ) budget overview and schedule, and on the Minority, Women, and Small Business Enterprise (MWSBE) policy update. The meeting was chaired by Councilmember Alcorn (Mayor Pro Tem) and was held in person and virtually, broadcast on HTV.

Public Comments & Testimony

• Doug (public speaker) expressed concern about potential new fees (trash fee, property tax cap changes) and suggested that the city should first maximize the use of TIRZ funds from prosperous zones (Memorial City, Uptown, Midtown, Upper Kirby, downtown) to spread money citywide before asking citizens to pay more. He also urged drawing more funds from Metro before approaching citizens. He characterized the situation as "the rich get richer and the rest of the city suffers."

Discussion Items

1. TIRZ Budget Overview and Schedule (Presented by Assistant Director Jennifer Curley, Mayor's Office of Economic Development)

• The presentation covered the authorized use of TIRZs under Chapter 311 of the Texas Tax Code, with 27 active TIRZs in Houston. Financial partnerships exist with Harris County, Houston ISD, Spring ISD, Aldine ISD, Houston Community College, and Lone Star College. Harris County recently began participation in several TIRZs and renewed the downtown interlocal agreement through 2043.
• The proposed FY2026 TIRZ budget totals $205 million, with allocations: $96.5 million for street projects, $44.6 million for flood remediation, $22.6 million for pedestrian infrastructure, and $21 million for parks and green space. The five-year total for all projects is $936.3 million.
• The project development process includes: City Council approval of the project plan and reinvestment zone financing plan, then coordination with Houston Public Works (HPW) and the Mayor's Assistant Chief Policy Officer, followed by district council member meetings, then City Council budget approval. After approval, the TIRZ team proceeds through design concept report (DCR), 30%/60%/90% design plans, bidding, and construction (typically two years).
• Councilmember Alcorn (Chair) expressed concern about project delays and asked about streamlining the process. Curley acknowledged delays, especially with property acquisition, and said the office coaches engineers and assists with HPW to move projects faster.
• Councilmember Ramirez asked why TIRZ budgets come months after the fiscal year begins. Curley explained that the schedule follows the city's CIP process and requires coordination with HPW and the Mayor's office, and noted that first-year adjustments for new administration and council members cause delays. She also clarified that the project plan (step one) can come to council at any time and is separate from the annual budget.
• Councilmember Martinez emphasized the importance of TIRZs for infrastructure in underserved areas, especially District K. He asked about bond capacity renewals—Curley stated that TIRZs must spend existing capacity before new bonding is approved, typically one or two requests per year. On TIRZ expansions/annexations, the city is near the 25% cap (approximately 23-24% used), but there is room by value. Requests are prioritized based on projects. He also asked about keeping affordable housing dollars within TIRZ zones; Curley noted that only petitioned TIRZs (Hardy and Fifth Ward) are required to set aside one-third for affordable housing, but other TIRZs can enter into agreements with the city or partner with Harris County.
• Councilmember Flickinger followed up on annexation and extension, noting the cap and that extensions affect future constraints. Curley explained that extensions require justification for long-term projects.
• Councilmember Alcorn asked about the Ernst & Young audit of TIRZ spending, noting the initial five-week phase has taken longer. She requested that findings be shared before approving budgets in September. Curley said she would follow up with the administration. Councilmember Alcorn also noted that TIRZ audits already include detailed spend schedules.
• Councilmember Castillo asked about the affordable housing fund (Fund 2409) and whether a similar fund could be established for parks. Curley said it would require an agreement, but TIRZs cannot pay for maintenance—they can build parks, and management districts could handle maintenance.

2. MWSBE Policy Update (Presented by Director Celynthia Hoard, Office of Business Opportunity)

• The presentation was based on the disparity study conducted by MGT Consulting using FY18-FY22 data. The study found that 72% of city spend went to non-minority/non-women firms, and 29% to MWSBE firms. Areas of no disparity (where aspirational caps will be used) include: Hispanic Americans in construction and professional services, Asian Americans in professional services, and non-minority women in goods.
• New proposed caps based on market availability: Construction: Hispanic American cap at 16%; Professional Services: Asian American cap at 6%, Hispanic American cap at 7%. Other groups with significant disparity retain full participation. The caps are aspirational, not quotas, based on legal precedent (Croson, 1989; Engineering Contractors, 1997).
• New programs announced: Veteran and disabled veteran small business certification (based on SBA certification with local presence); certification flexibility for disabled business owners; automatic migration of MBE/WBE firms to SBE status (effective January 1); a mentor-protégé program; rotational contracts (small recurring work orders); and a Small Business Reserve (SBR) program allowing departments to set aside up to 20% of procurement expenditures ($100,000-$500,000 per contract) for certified small businesses to compete only among themselves.
• Community feedback received led to planned initiatives: increased outreach with HPW, a financial expo (partnering with Councilmember Davis), enhanced data tracking dashboard, and "Coffee and Contracts" meetups for primes and subs.
• The lawsuit challenging the city's MBE program is pending; the disparity study provides current defensible data.
• Councilmember Martinez thanked Director Hoard for extensive community engagement and asked when feedback will stop being accepted. Hoard said feedback is never closed, but policies will be set in September for training; adjustments can be made as needed.
• Councilmember Davis highlighted the financial symposium planned for October to connect small businesses with banks and bonding companies, noting the Community Reinvestment Act. He emphasized the need for fairness and access to capital beyond city funds.
• Councilmember Ramirez requested data on firms that have graduated from NACE codes (which Hoard agreed to share) and asked for access to data confirming the caps (Hoard directed to appendices in the disparity study report). She also asked about minority women not fitting into the non-minority women category. Hoard explained that the WBE category includes all women, but the disparity study separates non-minority women because minority women are counted first as minorities. Data on minority women is available in the awards report. She confirmed no separate category for minority women exists.
• Councilmember Carter also requested the number of certified professional service firms by ethnicity, particularly Hispanic and Asian. Hoard agreed to send the data to all council members.

Key Outcomes

• No formal votes were taken during the committee meeting.
• The committee will continue to receive updates on the TIRZ budget schedule and the Ernst & Young audit findings before September approvals.
• The MWSBE policy changes are expected to be finalized in September, with departmental training through fall and full rollout targeted for January 2026.
• The next scheduled special joint committee meeting will be on Tuesday, August 26, 2025, at 2:00 p.m.