On to our next budget workshop, this time housing and community development department.

So we are joined by housing director Mike Nichols and CFO Tamika Jones.

We've also been joined by Councilmember Tiffany Thomas, who was here the last part of the last meeting, too.

And I think that covers everybody that has been here.

So with that, director, the floor is yours.

I want to thank you so much for your time.

Although we are not the biggest users of general funds, uh, we do have an important depart department, and we feel that the finance area is one of our strengths.

So we'll answer all sorts of questions, but the first set should be fairly easy.

Um page one is the who's controlling areas is our current organizational structure as of April 30th, 2026.

Compared to last year's presentation, HCD has reduced its staff from 183 full-time FTEs to 156, the reduction of 27 people and funding positions within other city departments from 25 to 9, a reduction reduction of 16.

These reductions are primarily attributed to the closeout of our disaster grants and associate personnel, and I hope it has to do with some efficiencies in our various departments.

We really took this to heart as we reduce staff.

Um we're still looking at that and seeing if it impacted our timeliness of our work, but we will continue to work through that.

Um I will turn this over now to Tamika Jones, TJ, and um who again I'm highly indebted to um because as I've come into this department, having a strong CFO has been very important to me.

Good afternoon.

Moving into our presentation, we will move to the next slide.

What we wanted to highlight here for the committee is our strategic alignment with both our general fund allocation as well as our special revenue fund.

So taking a look at, and these amounts are in thousands, taking a look at our 1.2 million, almost 1.3 million in general fund, you will see we have aligned that with the mayor's priority of government that works, as well as the third just over 37 million for our special revenue fund.

We have aligned that with the quality of life mayor's priority.

Next slide.

Next slide.

What we wanted to also highlight to the committee is the housing departments.

Thank you.

Yes, thank you.

Yes.

I don't know that we're really tall, but I'm the shortest one in my house.

She's tall.

She's just the shortest in our house.

Yeah.

Uh, we wanted to highlight for the committee plans to eliminate the gap.

So what this does show is our department's contribution towards the city's initiative with departmental reductions of about 10 percent.

So, due to our limited general fund allocation, we unfortunately do not have a full 10% to give.

Uh however, what we do have available to give is the reduction of our line item related to rent.

Rent is an eligible administrative expense that we are able to seek reimbursement for through either our federal or state awards uh because it is an administrative line item, so we are able to uh reduce that amount on our general fund allocation.

If you take a look at that amount as a total percentage, it's just over eight percent.

So, not a full 10 percent, uh, but it is about an eight percent reduction.

Now moving into our general fund and special revenue fund expenditures.

What you can see here is a comparison between fiscal year 25 actuals along with fiscal 26, where we were with our budget, where we believe we will end up at the end of fiscal year 26, along with what we are proposing our fiscal 27 to be, along with just a variance.

So, as you can see for our general revenue, our general fund, excuse me, we are estimating a 1.2 almost 1.3 uh million dollar allocation.

And then for our special revenue fund, which does support our in-street homelessness initiative, we are estimating and proposing a 37.3 million dollar uh fund balance for fiscal year 27.

And we are projecting to spend the fund balance for both of those funding sources by the end of each fiscal year.

And we typically do a good job of expending the full fund balance.

Let's talk through what some of those categories are within each one of those funds.

So with the general fund, you can see and this is just a comparative also to show you some of those prior fiscal years.

So with the limited general fund, we do cover um personnel.

That personnel does include a portion of our director's time as well as employee exit costs that are non-reimbursable with some of our other funding sources.

If you recall, we are very heavily uh grant funded, uh 99.9% grant funded.

So this is our limited allocation, and so a portion of our director's salary is covered under the general fund as well as our employee exit costs.

Um we are eliminating the office rent as I talked about a few minutes ago.

Uh restricted accounts, uh restricted accounts are those interfund accounts that we um have at the cost of being a city department that makes up the majority of our general fund allocation.

And then our other services and charges.

This is what we have just to reflect the portion of expenditures that are non-reimbursable with our grant funds.

It's just those we we have kept it relatively flat over the prior fiscal years, um, and those come in handy for things that we just can't use our uh federal or state grant funds for.

And then for our special revenue fund at the bottom, we have everything in maintenance and operations.

Um, and again, those dollars will flow directly to those um agencies that help us support our in-street homelessness initiative.

This slide is just a visual representation of what I described on the prior slide.

You can see by fiscal year the comparison for both the general fund and then the special revenue fund.

This slide does show um personnel versus non-personnel breakdown of the expenditures by fund for the special revenue fund.

We are projecting the entire fund balance be used for non-personnel costs, and then for our general fund, you can see the proposed split is going to be 17% personnel costs, and then the 83% is going to be non-personnel, primarily due to our restricted accounts.

Now let's talk through the revenue side.

The revenue side for our general fund um is going to look very similar to our expenditures because we are projecting every dollar we receive in that we are going to spend it.

And so the the comparison will be very similar as I mentioned.

Next slide is a visual representation of what I just covered, both including the in-street homelessness as well as the general fund.

Are there any questions thus far before we move into some of the supplementary information we have to provide?

Go ahead.

If you got more information, do you have more information?

We do have we will have questions, but go ahead and go through everything first.

All right.

So, director, would you like to cover our demographics of our department?

What really just if you just want to focus, if you have some uh financial information, we can read this.

Okay, perfect.

But any financial information.

Yep, let's go to I think this is the slide that we typically get the most questions.

Here's a slide that everyone wants to see, and everyone's always interested in.

So this is our fiscal 27, um, our estimated new awards.

Now remember, this is not our entire portfolio.

This is just the awards that we are estimating that we're going to receive here in the next fiscal year.

So compared to last year, our fiscal 26, the only difference you will notice is DR24.

DR24 has been accounted for in fiscal 26.

Otherwise, all of the other awards are the same.

The dollar amounts of each individual one may have increased or decreased, but all the other awards are the same.

This was a uh pleasant surprise for us in that with all the comments coming from the federal government that we end up with uh essentially the same total dollar amount is uh was a very pleasant surprise.

Again, Hoppa was a little higher in 27 than other years, and we've had and um CDBG was a little higher, but home was a little less.

So overall, it's been a um we were pleasantly surprised with that coming in.

And again, the big the big difference is that of course in FY26, we accounted for the 314 million dollars in DR24 funding for our total amounts.

And otherwise that concludes our presentation.

Great, thank you, Councilmember Ramirez.

Actually, the housing chair answered the question for me, so I'm good.

Okay, great.

Oh, it's waterboarding.

Great, great.

So I have a couple questions on on uh how you pay um administrative costs out of this out of these buckets.

I think there's a percentage that you have limitation, remind me of what that is in C C D B.

Is it the same for all of these programs?

No, so it is different, it is different by award.

So our disaster awards um will all be different by grantor.

So um if you take our DR17 award, that will be different.

Um now for our DR24, it will be five percent.

So it's five percent of the total award.

So you you have to supplement that, correct?

That is and you do that by TURS funding.

That is correct.

So that is the uh we're the only place from which you can we will have to supplement it um through a local funding mechanism.

So their local funding mechanism is either going to be TURS or general fund.

But as you see what we just covered, we have 200,000, which has to cover a portion of our director's salary for time that he doesn't spend working on grants, um, as well as employee exit costs, because those employee exit costs approval.

Reimbursable how staff so let's let's take let's take DR24, and then we can take our C D BG grant um because those will be different, but then also then let's talk Harvey because those also that one will also be different just depending on who the grantor is.

So our DR24 grant, number one, those three grants that I just gave C D BG, DR24, and our DR17, our Harvey grant, all of those are going to be reimbursable, meaning reimbursement only grants.

We spend our money first, we spend our money first, and then we're gonna reimbursement.

We spend our money first, and then we add our money and we ask for reimbursement.

Does it work out?

Does the timing work out?

So it is very sometimes and depending on who the grantor is, it can be challenging to seek reimbursement.

Um you can recall during housing committees presentations where we talked about the difficulty in receiving reimbursement, um, but we managed to work it out with our great partners at the GLO on trying to get reimbursement for staff costs, and it took some time, but we ultimately, you know, were successful in getting reimbursed for majority of those costs.

Is there like an and it's probably different with each grant, but how much extra?

I mean, if you were gonna have it all paid from the grant, like uh if it pays five percent and we have to take from TURS funding, do we need another five percent?

I mean, w what I'm trying to get a sense of how much so it is going to depend.

And so it's a difficult question to answer because we have employees that work on a number of different grants.

So you have employees that are going to work specifically on certain grants and certain activities within a grant.

So you'll have single family personnel, and depending on what their activities are for the next six months.

So let's talk single family.

Right now, they are focused very heavily on DR21 and our HBAP 2.0 programs.

Okay, that's it's too complicated.

It is it is extremely complicated.

I guess what I'm trying to get at is is you it's great to get this money, but I'm uh if it's it, you know, and and then we we are always happy to get the have the TURS affordable housing money, but it's you know, we want to see, you know, as I know the housing chair, we've always wanted to see more done with that, but we understand you got to pay people to execute these grants.

So kind of like how much more I mean what's a reasonable admin cost.

Yes.

And see, and an admin is again just one calculation because when you look at so DR24, it's a five percent admin, but you also have staff costs that are allowed within each individual program, in addition to bless you, the five percent admin.

But then when you look at our Harvey grant, it was a 1.8 percent admin cost.

One, so it's a $15 million admin that has to last what eight years now.

And that was after it was adjusted.

Right.

But you look at our C D B G, our C D B G is 20%.

So it can go up to 20%.

However, do the math, 20% of 24 million dollars is you know, five million dollars when you include program income.

So when you talk about five million dollars per year, and it's it's a very it's a it's it's a it's a complicated uh process to be able to try to summarize it for you.

But I'm welcome to meet with you so that way we can kind of talk about it.

I'd like to add to that because it's um I know this sounds like the sauce is being made, but the way it actually works is TJ cannot go in and change everybody's hours.

Be nice if we could.

Each individual, these are HUD rules, has to put in their own hours.

So it is a management um uh focus, and we have to focus on it all the time.

Are your employees putting in the right code for your hours?

And one of the things that happens is once they run over, they just start hitting CDBG admin, and that money's gone.

Um or what's happening in DR21, we have to be so careful because we're spending a lot of money now getting set up, but again, that money has to last six years.

It's what we spend a lot of time doing.

We have, if you look at our departments, we have a significant number of people in compliance, and a lot of that is just making sure we're dieting every I across every T.

Uh finance, as we talked about, has probably gotten cut too thin.

We may have to add some people back this year because we need to make sure that that's done.

But it is, you know, with 160 employees getting them to fill in the right code.

Is it manual or did they go online and do it?

I mean, is it online?

So we're not like so.

This is so you where you have employees across the city.

Well, we are in some departments, we've learned.

Employees across the city are are are normally accustomed to only using my COH to request time off.

Our employees have to record every hour how it's spent every day.

So we record a full eight or nine hour workday, and we harp on that because that truly does.

It's like um for the attorneys in the room.

Like attorney's bill calls.

Yeah, that's exactly how we do it, or you know, former consultants, that's exactly what we're requiring of our employees per day.

And I would say we're much more efficient at that in the last couple of years, especially since TJ got here than we were in early in uh in DR 17 and the Harvey funding.

And again, that was part of the issues.

Right, right.

And and so how much of the 17.2 million, I mean, I know you don't know exactly um in TERS funding will probably have to supplement if you just base it on what we've been supplementing in other years.

So last year, what we did, if we take a look, last year's TURS appropriation, we used about a third of it to to cover administrative expenses.

So and that's been pretty consistent year over the last several years to be able to cover supplement, some supplement some of our administrative expenses.

That's helpful.

Thank you.

I want to welcome Councilmember Flickinger to the horseshoe, and we'll go to Councilmember Martinez.

Thank you, Chair.

Um, and you know, you started talking about how the sausage is made, right?

Um it's it's something that is it's important for a community at large to understand this.

Um a little bit off of what uh our chair chairwoman was speaking to that admin cost.

What other possibilities are we are we even looking at other things?

Because right now I think we're mostly DR funded for the last I don't know how many years.

It's an unfortunate uh uh situation that happens, but then that's where the money comes in to be able to take care of housing and so on.

One of the conversations I've I've shared with the the uh health department uh director is um what other revenue sources could come in.

Uh we're we're gonna be spending uh a lot of money on homeless uh initiatives, right?

Um are there talks with the you know Harris County uh hospital district to help solidify some revenue source that could be more stable, more consistent.

Um because at the end of the day, this is uh although it's in the city of Houston, quite frankly, we're in the Harris County, and we need to make sure that we start seeing that support.

Uh so is that an opportunity where we can start having some real structural reforms in the in the housing department as well?

I can focus on homelessness just because you started with that.

Obviously, that was a huge expense this year.

It's uh we paid 16 million for a new facility.

We have owe about 133 a year for uh operating 419.

Uh these are big numbers.

We're grateful for the 10 million to for three years for the DR24, but that doesn't pay for the whole thing.

Um so we do have other funding that we're coming in.

We're grateful for the mayor of moving the funding there.

We would like to have more federal funding for homelessness.

And I've been to Washington twice.

The mayor's right we get a lot of love but we haven't seen the dollars yet.

And that's going to be key.

You'll get a chance to see how they do when they put the new NOFO out for the continuum of care that doesn't come to the city but it's to our location I would say the county will be weighing in.

I feel very confident about that.

For example at 419 Harris Health is paying for and and funding and and uh have the employees for the health department of 419 which is a significant amount that would have come out of the city's pocket that doesn't uh the sheriff's department is working there on the hot team I mean on the uh hot IDs and homeless IDs and that's going to be an important part over time we are looking and I spend again we spend a lot of time with county officials talking about their investment particularly in exit housing which is going to be our real weakness going forward and so we look forward to them playing that role um that's the county federal government um we again we'll keep busy with them there's chances that there's funding through the HHS the health department of the federal government through the Department of Justice we haven't seen those dollars yet we have applications for grants and again this we have to have more than fingers crossed we're working through it we just haven't seen those dollars yet and I think that's where again like if if these funding uh is tied to certain strings right whether it's at the federal level or state level how do we become self-sufficient to some extent and having that realistic conversation with the community if you want to end homelessness or if you want to move towards housing right specifically how do we make sure that if it's a priority within the city of Houston how do we ensure that community also understand that those tax dollars need to go somewhere or where do we find that extra funding stream as well so Chairwoman Thomas is continue to ask the question about our bonding capacity for housing that's what other big cities have done and we have to look and see if the opportunities there put through the city or through the Houston Housing Finance Corporation or through the housing alliance housing authority we need additional dollars on housing there's nothing I mean I'm a you've heard me preach this before Houston is number two in the nation from the bottom for housing for people with 30 percent below AMIs we've got to make some changes um I I'm not optimistic about the federal government helping in that area so we have to keep looking to do that but it's going to be essential going forward so we don't have this an additional people not having housing available you're right about the TURS we spend not the TURS and the other dollars the battle the TJ really leads is when you spend money on an employee are you taken away from somebody who needs housing and so that's an ongoing battle with with as you know with city employees they feel like they may need extra help extra hand we are all hands on deck um having efficiency in my department is extremely important to me and we'll keep doing that we one of the things you've looked at in other departments is that they cut we have done the cuts that are necessary and we'll continue to do that because every dollar we spend inside is not a dollar we can spend outside councilmember Thomas um sure um I really was supposed to be here in support for a 25 minute meeting but I think Councilmember Martinez raises a good point and just to reiterate Houston's an entitlement city we receive this direct allocation from HUD so does Harris County they are an entitlement municipality as well and I think from an elevated perspective as elected officials we have an opportunity to make sure that the existing funding stays in place the president's fiscal 27 proposes a zero out of CDBG it proposes a zero out of home that's how we do affordable housing to then get it to the state so I think you know as elected officials we have currency and we have relationships with congressional members to encourage them to move bipartisan legislation but more importantly to make sure that the direct allocations that come stay and we don't have to get in a situation where we're going to a third party state or another entity to get our funding to do what we need to do and I mean I think the housing department is an example of uh making brick with no hay making it happen a very you know limited and and chairwoman you're right you know we would love to see the 17 million go to production and bricks and sticks but um it does that and make sure that we have the staff and the talent necessary to do that to do this work there's a lot of demand on this department to push out a lot for Houstonians um they have to meet a huge need not just our our entitlement programs but disaster right there's a storm a freeze a flood and then they have to deploy that as well so I think you know for where we're at right now they're doing a yeoman's job and we'll be great to have them on the general fund right to allow us to match our money with our mission right we got to get to a point where we match our money with our mission.

There's a storm, a freeze, a flood, and then they have to deploy that as well.

So I think you know, for where we're at right now, they're doing a yeoman's job, and we'll be great to have them on the general fund, right, to allow us to match our money with our mission, right?

We got to get to a point where we match our money with our mission.

But right now, this is our the situation we have, and I think once the city and the counties um comprehensive plan deploys, there may be some opportunities of how we fund things moving forward and how we align our well-intentioned agencies like our finance corporation, our land trust, our land bank, all these entities that kind of you know dance together, but a little bit in silos, they're doing a little some solo work, and so we're trying to get that all coordinated and facilitated in partnership with the department.

So let my people go.

So it didn't work out where for well the pharaoh uh on the county, it is important that we keep pressure on the various county commissioners to put some money, more money into housing.

We're very optimistic, and I think really the work that Gwyn Tillitson's doing, getting the county to have their work and have their own tours, but a big part of that is you know, let's use that money for housing we're available.

Um they're responsible not only for their residents and unincorporated the county, they're responsible for the people here.

Um and uh and chair um another place where I was in a meeting just an hour ago, and they and they spent some time talking about HGAC, you know, this funding there on employment and other things that we've got to figure out how to move that in a um way that meets the population needs.

Um and the same thing in state government, the role the rural counties and cities have been taken care of.

It's it's time.

Totally agree.

Thank you.

Great discussion, colleagues, and I think with that, and there's no one else in the queue.

Do we have any fun from the public?

Doug, would you like to come on up?

He's here, he's coming up.

Thank you, director, and thank you.

Thank you.

TJ, thank you for every everybody in the department.

Um great work.

Thank you.

Keep it up.

Okay, um, I just have to echo what Mike said about Tamika, because I go to most of the housing committee meetings, and as a finance person myself, to see what she has done, particularly as it relates to the state and establishing a relationship to get reimbursement for all of the grant funds that we have to go through.

It's just amazing.

And uh I just wanted you all to know that.

You're not supposed to call it Doug does not give a lot of compliments out, so take that to the bank.

Right.

And the other thing that I wanted to talk about, uh, housing had a meeting uh at the Fantastic Neighborhood Center, I don't know, a month and a half ago or so, to talk about the 27 budget.

And I'm proud to say that they said after the meeting that we had one of the biggest, if not the biggest turnouts for any meeting they've ever had.

Uh and I'm really proud to be able to say that.

Uh A Leaf Cares and the A Leaf gets involved with the things that are going on.

Um and at that meeting, this is a personal ask right now.

That meeting occurred uh on a Tuesday, I think, and on the prior Sunday, uh, 60 Minutes had a presentation on factory-built housing, and it's not what you think about when you think about what it used to be.

Things have improved dramatically, and it's really good stuff.

And I think it would be a really good way to start getting a lot of homes built very rapidly.

And maybe what we start do uh is start with a demonstration and maybe some of the third ward lots that are there.

But I think it's really something I'm pushing it because I want you all to be aware of it.

Uh, and I'm gonna keep pushing it at housing committee meetings uh because I think it's an answer to some of the stuff we're trying to do.

No, I I've seen some of that, and it has what it has way improved.

Yeah.

Um, so you're on to something there, Doug.

Yeah, you wouldn't know that it was a factory built home by the time it gets done.

And things happen so much faster because you don't have the weather delays you have for a stick built home and everything else.

So hopefully you'll all push that.

I'm gonna be pushing it at every housing committee meeting.

So great.

Thank you, Doug.

Thanks for your continued engagement.

Okay.

Lark Allier, come on down.

I guess it's the two of us today.

Um I have been curious about seeing the financial statements for how the expenses are.

That is it called still called Houston Housing Authority, or is it called something else?

Still Houston Housing Authority.

Okay.

I've asked to see those financials and I haven't been given them.

Is there a am I doing something wrong or are they not public or we can certainly inquire about that?

I I I would assume it's a public organization.

Councilmember Ramirez.

Yeah.

Uh it's not a city agency or department, Laura.

It's a separate entity.

And um, you know, I would direct your your questions to the website that's listed in the response to your question.

I don't know if you've seen that, but it's it's now Alliance HTX instead of uh housing authority.

Okay, so that's why I couldn't find it.

Under new leadership.

So thank you.

Sure.

And um we did get some responses to your questions, Laura, so we'll send those on to you.

Um and that was one of the questions, and they have it in the answers.

Alliance H text.

I learned that today.

Okay.

Good to know.

All right.

Now I think we're at the end, unless anyone else would like to speak on housing.

Really appreciate the presentation and the good work of the housing and community development department.

And we will take a break and um finish up with the airports.

We are we're ahead of schedule, so we probably have to wait for uh the airport director a little a while.

But he's oh he's here.

Okay, so uh you know, five or ten minute break, and then we'll be right back at it.