We'll move on with our Human Resources budget workshop in chambers.

We have Vice Mayor Pro Tem Amy Peck, staff from Councilmember Jackson's office, and Councilmember Cayman's office, as well as Councilmember Thomas's office, Councilmember Mary Nan Huffman, Councilmember Julian Ramirez, staff for Councilmember Martinez, and also Councilmember Carter.

And we've got a copy of the presentations here.

Director Cheeks and Carla Coleman is.

Are you all ready?

Okay.

I'll turn it over to you.

Thank you so much.

Good afternoon, Chair, Vice Chair, and Council Members.

I am pleased to present the FY 2027 proposed budget for the HR department.

Next slide.

We have a lot going on in HR, and I would be remiss if I didn't introduce my phenomenal executive staff that has accomplished so much this fiscal year.

Just to give you a few examples.

Also from the Texas Municipal Human Resources Association, we were awarded the Human Resources Impact of Honor Award for our 2026 to 2030 people strategy for the cities with populations over 25,000.

With this team, we will continue to make notable achievements in the upcoming fiscal year.

Team, would you stand?

I'll be partnering with my CFO Carla Coleman on this presentation.

Without them, this presentation would not be fought, would not be possible.

With the finance team, please stand.

Council members, I'd like to let you know that the Human Resources Department has completed its 2020 to 25 people strategy with the implementation of our employee and labor uh portal.

So we're very excited about that.

So now the FY 2026 and 2030 Human Resources people strategy marks a bold and intentional step forward for our department.

As we present this budget, we do so with strategy that is real, relevant, and designed to elevate the way we serve the city.

This plan reflects more than operational priorities.

It presents our shared commitment to innovation, excellence, and meaningful connection.

We are also aligned to turn the curve.

That is our commitment to continuous improvement, forward thinking, and leadership.

We are more than just policies and procedures.

We are champions of a people-first culture that values every employee's journey from recruitment to retirement.

HR is committed to creating an environment where employees feel supported, heard, and empowered to grow.

Therefore, this budget is not only a financial plan, but also an investment of our people, our partnership with our clients, and our future as beacons of excellence for human resources in the city of Houston.

With that said, we will now present the HR's proposed FY27 budget, which has a combined total of 558 million, including five programs all aligned with the government that works initiative.

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Council members, last year, HR began contributing to close the gap by restructuring and our consolidated functions.

This year we have achieved an additional $3.4 million in savings.

This includes $3 million, a $3 million reduction in contingent workforce services across two contracts, as well as $400,000 in operational savings through our partnerships with kids, and a shift to virtual professional development, which has significantly reduced HR's travel expenses.

Good afternoon.

Thank you so much.

So now we see the proposed expenditures for HR.

And as you can see, we operate out of five funds: the Central Service Revolving Fund, Workers' Compensation Fund, which are the chargeback funds for HR, and the Health Benefit and Long-Term Disability Fund, which are internal services fund.

For fiscal year 2027, as director was saying, we are proposing a budget of 558 million, which is an 11 million increase or 2% increase compared to the 26 budget.

The primary drivers of this budget are the rising health benefit cost, higher workers' compensation claims, expanded citywide training and upskilling efforts, and the consolidation of four precisions for the learning and development functions of the GSD and Fleet Department.

In addition, these increases are partially offset by the reduction of temporary personnel expenses, lower Medicare and supplemental plans due to better negotiated contract and a slight decrease in long-term disability claims.

Overall, this is a modest and targeted increase that reflects our current budgetary pressures while continuing to manage our expenses responsibly.

And as you see in the chart, health benefit budget represents the largest share of HR's budget at 83%, followed by the central revolving fund, 9%, and the workers' compensation fund at 8%.

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This chart gives us visibility into where the personnel and operational costs are concentrated in HR's budget, and the personnel expenses for the HR is $43 million, which is 8% of HR's total budget.

The remaining 92% or $515 million.

It's categorized as non-personnel cost, and it's worth noting that the largest share of these non-personnel costs are tied to claims and plan related expenses.

This is approximately 89% of that.

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This slide breaks down our budget across five programs, and this slide highlights the cost drivers mentioned earlier.

The largest increases in benefits program, primarily due to the rising health care cost, and especially in the CIGA plants.

This increases are partially offset by lower Medicare Advantage plans, supplementary plans due to better negotiated contracts, and a slight decrease in long-term disability plans because we have lower claimants this year.

Occupational risk management program increased mostly due to higher claims.

The workforce training and upskilling program reflects expanded citywide training initiatives, including the four additions of the consolidation of the learning and development functions for GSD and the fleet department.

This increases are partially offset by lowering the personnel spending within the HR client services program.

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The benefits administration program funds the medical and pharmacy plans, supplemental plans, such as vision, dental, life insurance, dependent care, flexible spending, two Medicare Advantage plans, wellness, EAP, and the long-term disability plan.

Program performance is measured through five KPIs focused on employee engagement, preventive care, wellness participation, and cost management.

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HR client services program delivers compliant, timely, and accurate HR services with a focus on recruitment, hiring efficiency, workforce planning, and departmental support.

The four KPIs for this program measures recruitment effectiveness, employee retention, workforce stability, and overall performance accountability.

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Occupational risk management program focuses on workplace safety, hazard reduction, employee safety training, and return to work support for injure employees.

The five KPIs evaluate how effectively the program reduces workplace injuries response to incidents and minimizes operational disruption.

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The summer job program provides young people ages 16 to 24 with the skills and hands on experience that prepares them for future employment for the city.

The two programs KPIs focuses on skill development and overall program experience.

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Workforce training and upskilling program supports employee development through leadership training, performance management, and innovative learning strategies designed to strengthen organizational performance.

The four KPIs measure leadership development, employee engagement, and effectiveness of workforce training initiatives across the departments.

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The next two slides focus on revenues, and because the HR is not a revenue generating departments, our revenues are primarily tied to the cost recovery of the services and the benefits that we administer.

For example, the benefits administration revenue are supported by the employees, the retirees, and the department's premium contributions, as well as the long-term disability rate charge to each departments per head count.

And the central revolving fund, occupational risk management, and workforce training and upscaling revenues are recovered through direct chargebacks to the city departments for the services we provide them.

Overall, the 27 proposed budget reflects a 7% increase over the 26 estimate, and the drivers are the same as the one explained in the previous slides.

Next slide, please.

This slide shows revenue by program highlighting the proposed budget drivers, the same as we discuss in the expense by program slides, and it has the same drivers as well.

Next slide.

And this concludes our presentation.

Thank you very much for the presentation.

We'll move on to questions.

Um I want to start with the FTEs that are in the proposed budget.

So we see an increase, workforce training and upskilling, client services, occupational risk management, what's uh driving those increases.

So there's no increases, but in the uh workforce training and upskilling due to the consolidation of GSD and the fleet department.

When do we do budget to budget?

And there's, you know, three from GSD and one from FMD.

The other ones we we maintain flat from the current FY26 budget.

So what's what's coming over from Fleet and GSD and to human resources?

Learning and development functions.

Yes.

Got it.

Thank you.

Do we have any questions?

We have Councilmember Ramirez.

Yes, thank thank you for the presentation.

And we we did submit some questions, so I'll just uh piggyback on to what our chair asked about uh FTEs.

So if our count is correct, uh total is up about 30.

And and if I understood your answer, that's due to what uh is being transferred over from fleet.

Is that right?

So so council member, the my actual budget did not increase by 30 FTEs.

My actual budget only increased by four FTEs.

Uh those were uh one person from Fleet and three people from the general services department.

So um what we wanted to do was take the time out to explain to you in writing via your question to explain to you exactly what happened, but I just want to make sure that we only increase from last year to this year, we only have an increase of four FTEs.

That's okay.

Yes, sir.

But we will explain that to you, why you saw it like that.

Yes, sir.

Thank you.

Thank you.

Seeing no other questions, we will move to a public comment.

Do we have anyone that would like to provide any public comment today?

No, okay.

Well, thank you all very much for the presentation.

Um we will now uh adjourn.

Before we adjourn, I do want to remind folks our next budget workshop will be tomorrow, May 15th.

We'll start at 9 a.m.

with Parks Department, 10 a.m.

Department of Neighborhoods, 11 a.m.

legal department.

Thank y'all very much.

Thank you.