City of Houston Economic Development Committee Meeting - Dec 9, 2025
City of Houston Economic Development Committee Meeting - Dec 9, 2025
The Economic Development Committee convened on December 9, 2025, to review the monthly financial report, discuss a complex transformational financing plan for the George R. Brown Convention Center (GRB) expansion, and consider three amendments to the City Improvement Program (CIP). The committee heard detailed presentations from the Finance and Controller offices regarding fund balances and debt strategies, followed by an update from Houston First on the GRB expansion progress and the annual operating budget. The session concluded with debate and advancement of amendments focused on public transparency, budget stabilization, and CIP project prioritization.
Consent Calendar
- No items were placed on the Consent Calendar; all agenda items were discussed individually.
Public Comments & Testimony
- Doug Smith (West Side): Expressed concern regarding the $52.6 million decrease in property tax revenue due to the flat tax rate and questioned the large projected balance ($500 million) in the DDSRF account; requested clarification on voter-authorized public safety debt definitions.
- Dominic Mazoch: Expressed strong opposition to the GRB expansion without a public vote, questioned the lack of an environmental impact study, and raised concerns about potential conflicts of interest regarding the Metro Chair's position on the Houston First board.
- Lisa Hunt: Articulated strong opposition to the GRB expansion process, stating Houston First failed to conduct a fulsome public engagement process compared to other cities; argued the project lacks a master plan, detailed transportation assessments, and a fully disclosed economic forecast; expressed concern that the closure of six streets is not backed by a written commitment to replace them or fund a two-way Leeland.
- Ruben Garza (Strong Towns Houston): Expressed full support for the transparency amendments, noting they are necessary to prevent unexpected cancellations or redesigns of completed infrastructure and to ensure constituents receive information on budget changes.
- Lisa Hunt (Second Comment): Supported the amendments as a necessary check and balance on the strong mayor system to ensure accountability for infrastructure spending.
- Jack Valensky: Expressed frustration over the mayor's unilateral power to change projects (using a "Sharpie") without community input; argued for mandatory public meetings and transparency, citing the Montrose Boulevard project where community suggestions were ignored and costs increased.
- Alice Liu: Expressed strong support for the amendments, particularly the requirement for public online reporting, while criticizing the administration's lack of transparency and cooperation; noted the inability to access the flood risk portion of the stormwater master plan and the Build Houston Forward project tracker.
- Kevin Strickland: Expressed strong support for the transparency ordinance as a necessary reform to the strong mayor system; presented a list of specific infrastructure projects canceled or radically redesigned by the mayor, citing hundreds of thousands to millions in wasted costs due to lack of oversight.
Discussion Items
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Monthly Financial Report (Oct 31, 2025):
- Director Melissa Dubowski and Controller Will Jones reported a projected ending fund balance of $336.8 million (13.2% of expenditures), which is $17.5 million lower than the Finance Department's projection due to lower revenue estimates.
- Vice Chair Castillo raised concerns regarding the $1.5 million unanticipated increase in GSD and ARA security services; Director Dubowski attributed this to high incidents at BARC requiring additional security personnel.
- Councilmember Flickinger asked about the $2 million increase in miscellaneous revenue; staff clarified this is a reimbursement from Center Point for legal fees regarding rate cases.
- Councilmember Ramirez sought clarification on the $3.3 million rollover from district council service funds, confirming these are unspent funds from the prior year being pulled from the fund balance for current expenditures.
- Councilmember Kamen inquired about the timeline for updating financial policies and the fiscal year start date; staff confirmed they are within the compliance window for policy updates but see no immediate recommendation to change the fiscal year start date despite the complexity of system changes required.
- Councilmember Peck questioned the adequacy of the Budget Stabilization Fund; staff acknowledged it is far below GFOA recommended levels (approx. 16.7%) and expressed support for strengthening reserves when possible.
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GRB Expansion Financing (Houston First):
- Director Dubowski presented a complex financing plan for the $1.186 billion GRB expansion, involving restructuring existing debt and creating new lien levels to secure $1.1 billion in new money.
- Houston First CEO Michael Heckman and CFO Frank Wilson detailed the phased construction approach, safety protocols (OSHA training), and MWBE participation rates (currently exceeding 30%).
- Councilmember Kamen questioned labor standards and sustainability features (LEED Gold, solar readiness); staff confirmed a prevailing wage requirement exists and the project aims for LEED Gold with green roofs planned.
- Councilmember Martinez raised concerns about the coordination of detours with other projects (specifically Teksot) and confirmed that $900 million is included for the Leland project in the construction budget.
- Councilmember Flickinger clarified that extending the average life of existing bonds to shape the debt stack results in "disavings" (higher interest costs over time) rather than lower rates, due to the extension of maturity.
- Councilmember Ramirez discussed the private-sector delivery model with developer Heinzo, emphasizing the goal to "de-risk" the project and avoid delays seen in other cities like Dallas and Austin.
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CIP Amendments (Transparency & Efficiency):
- Amendment 101 (Transparency): Councilmember Ramirez proposed requiring reporting on project delays/cancellations >$100k or 10% of scope, with options for online or monthly reports. Councilmember Thomas and Councilmember Kamen questioned the timing of notices to ensure they occur before costs are incurred, suggesting a need to narrow the scope to City Development Service (CDSF) funded projects to prevent disruption of long-term projects.
- Amendment 102 (Objections): Added language stating a written objection by three council members does not stop work but allows the issue to be brought to full council. Councilmember Davis questioned the practical utility and information flow required for such objections, while Councilmember Ramirez defended the need for constituents to understand reasons for delays (e.g., contractor bankruptcy).
- Amendment 103 (Public Meetings): Allowed three or more council members to hold a public meeting on a project. Councilmember Thomas expressed concern that holding meetings during long-term ongoing projects could cause public confusion or perceived stalling, while Councilmember Peck supported it as a codification of existing rights.
- Councilmember Kamen's Amendment: Proposed strengthening the budget stabilization fund requiring replenishment within 365 days if drawn upon.
- Councilmember Peck's Amendment: Proposed creating a working group to re-evaluate the "worst-first" CIP prioritization formula to ensure fairer distribution of funds across districts.
Key Outcomes
- Advancement of CIP Amendments: The committee voted unanimously to advance three CIP amendments to the full City Council:
- Amendment 101: Requires reporting on significant project changes (>$100k or 10%) with optional online public reporting.
- Budget Stabilization Fund Amendment: Requires replenishment of drawn reserves within 365 days.
- CIP Process Amendment: Establishes a working group to review and improve the CIP prioritization and funding formula.
- Financial Reporting: The committee accepted the monthly financial report for October 2025 and noted the $17.5 million variance from prior projections.
- GRB Financing: The committee received the complex financing presentation for the GRB expansion, with staff noting the transaction is expected to be brought to the full council for approval in early January.
- Next Meeting: The next meeting is scheduled for Tuesday, January 6, 2025, at 10:00 AM to discuss the open space ordinance regarding parks funding.
Meeting Transcript
Economic Development Committee, chaired by Mayor Pro Tem Martha Castax Tatum. Her vice chair is Councilmember Fred Flickinger is he is here, as is my Vice Chair, Mario Castillo. We're also joined by Councilmember Twila Carter, Vice Mayor Pro Tem Amy Peck, staff from Mayor Pro Tem's office, Councilmember Julian Ramirez, staff from District G, Mary Nana Huffman, and Councilmember Abby Kamen. We also have Letitia Plummer staff on virtually and we all have Councilmember Tiffany Thomas who in the chamber as well. So we have a very full agenda today. I am going to let the public speakers for each item come up after the item instead of waiting until the whole end of the meeting. So we'll start with the monthly financial report. So we'll be joined by Melissa Dubowski, Director of the Finance Department and Will Jones, Deputy City Controller. Good morning. You can hear me now, right? Good morning. Good morning, Madam Chair, Council members and staff. I'm here today to present the monthly financial report for the period ending October 31st, 2025. And the general fund, the controller's office is projecting an ending fund balance of $336.8 million or 13.2 percent of expenditures less debt service and pay as you go for FY26. This is $17.5 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 $145.8 million above the city's target of holding, 7.5 percent of total expenditures excluding debt service and pay as you go in reserve. The FY26 beginning fund balance is $67.4 million higher than the FY25 ending uh ending fund balance reported in the June 30 monthly financial report. The increase is due to year-end adjustments to revenues and expenditures that will not be final until the FY25 annual comprehensive financial report is published. Intergovernmental increase by $4.9 million due to higher than anticipated charity care program reimbursements. We have increased our expenditure projection by $4.2 million from the September report with uh significant changes as follows. An increase of $3.3 million in City Council due to prior year rollover allocation, an increase of 0.6 million in bearers departments uh to uh due to prior year unspent city council funds. We are projecting no changes in our enterprise funds from last month uh for the commercial paper and bonds. 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 agencies of 25 percent. From time to from time to time, the city's enterprise credits have exceeded this threshold on an interim basis as they have an undertaken large capital improvement projects or major expansions. And thank you very much. That concludes my report. Thank you, Director. Good morning. This is the four plus eight financial report for the period ending October 31st, 2025. Fiscal year 26 projections are based on four months of actual results and eight months of projections. The variance from the prior month projection is primarily due to a $52.6 million decrease in property tax to reflect the tax rate that was adopted earlier this year. We're also projecting a $4.9 million increase in intergovernmental due to higher than anticipated charity care program reimbursement, as well as a $2 million increase in miscellaneous and other revenue due to higher than anticipated reimbursement from Center Point. For sales tax, we're not making any changes this month. But just to give you an update, the sales tax receipts for the month of September were $78.1 million, which is about $1.2 percent higher than the same period last year. To meet the current estimate of $902 million, the remaining periods need to come in 2.6 percent below the prior year. On the expenditure side, our projection is six million higher than the adopted budget and 4 million higher than the prior month, primarily due to the following. The $3.3 million increase in City Council to reflect prior year underutilization of council district service funds that will be rolled over, as well as $555,000 increase in various department for various unspent City Council funds from the prior year, as well as a $250,000 increase for the finance department's budget estimate for comprehensive cost of service fee study. With those changes, we're currently projecting the ending fund balance to be $354 million, which is about $19 million lower than the prior month and represents 13.9 percent of expenditures, not including debt service and pay as you go. The total fund balance is $163 million above the target of holding 7.5 percent. We're not projecting any forecast changes to the enterprise special revenue or other funds for this month. That concludes my report. Thank you. So the biggest change there is you you've now incorporated the tax rate, which we had to lower by $52.6 million. I'll repeat that $52.6 million lower because we kept the tax rate flat. On the um on the council district service funds, since that, you know, I don't get them, so I know that there's rollovers because of projects. So that's all that is, right? It's just it's just projects that are ongoing that has have to be spent, correct? Correct. Yeah, and it's pretty standard every year, whatever is unspent for April forward.
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