ARA FY27 Budget Workshop – City of Houston – May 14, 2026
ARA FY27 Budget Workshop – City of Houston – May 14, 2026
On May 14, 2026, the City of Houston held a budget workshop for the Administration & Regulatory Affairs (ARA) department. Director Paez and CFO Valerie Barry presented the proposed FY27 budget, outlining a mandated reduction of 7.31% ($833,173) achieved by eliminating seven vacant positions and cutting all travel, training, and education funds. The presentation covered ARA's eight program areas, revenues, performance measures, and fund details.
Public Comments & Testimony
- Doug, a member of the public, requested a breakdown of in-house vs. contract spay/neuter surgeries performed by BARC and suggested that ARA partner with neighborhoods to expand spay/neuter services, noting that a local program had already served over 2,000 animals.
Discussion Items
- Budget Presentation: Director Paez reviewed each program area (Administrative Services, Animal Services, 311, Executive Oversight, On-Street Parking Management, Regulatory Permitting, Risk Management, Debt Service/Interfund Transfers), highlighting expenditure changes, FTE counts, and performance KPIs. Key points included:
- BARC is fully staffed with only three vacancies, a turnaround attributed to effective shelter leadership; the transfer from the general fund increased by $1.3 million to cover full personnel costs.
- ARA's general fund revenue collections of nearly $170 million are projected to decrease by $1.8 million, mainly due to declining telephone franchise fees.
- A new BARC adoption center, funded by a voter-approved bond, is expected to open in 2029 with a formal announcement and groundbreaking by end of 2026.
- Council Questions:
- Vice Mayor Pro Tem Amy Peck asked about per capita funding for BARC compared to other large Texas cities; Director Paez noted that FY25 comparisons were available in the appendix but FY27 data was not yet compiled.
- Councilmember Mary Nan Huffman inquired about the location of $100 million from a water utility franchise transfer; Director Paez clarified it likely would not pass through ARA and offered to follow up.
- Councilmember Huffman also requested a detailed breakdown of spay/neuter surgeries (in-house vs. contract) and costs, which Director Paez agreed to provide.
Key Outcomes
- No formal votes were taken; the workshop was informational.
- Director Paez committed to sending council members the requested data on per capita funding comparisons and spay/neuter surgery breakdowns.
- The proposed FY27 ARA budget includes a $16.9 million budget for BARC (with a $14.8 million general fund transfer), $18.3 million for the 311 call center, and $20.6 million for Park Houston.
- ARA will continue aggressive auditing and field enforcement to offset declining franchise fees, with $900,000 in delinquent fees expected to be collected in FY26.
Meeting Transcript
Okay, we're gonna move to our ARA budget workshop. We have Director Paez and Valerie Barry here to present, and I'll turn the floor over to you. All right, thank you. Good afternoon. We're here to present the ARA FY27 proposed budget. With me is Valerie Berry, our chief financial officer, and our entire executive team. Let's begin on slide number three. So ARA is organized around three eight unique programs that align with the strategic objectives of this administration. Slide four, please. So I showed you the previous slide because it matches what you see in the budget book. But actually, ARA's programs span multiple city priorities, and the reason that I inserted this slide was so that so that you'd see that, for example, animal service is both a quality of life issue and a public safety issue. The main takeaway here is that our programs are not just in one specific priority. Next slide, please. All city departments were directed to submit reductions of up to 10% of our adjusted general fund budget, and to explain what that reduction would mean. ARA's reduction for FY27 is 7.31% of our budget or about $833,173. This reduction includes the elimination of seven positions as well as all of ARA's travel, training, and education budget. All seven positions were vacant, so we do not need to do layoffs to meet our target. Next slide, please. And this slide summarizes the expenditures for all of the funds that are administered by ARA. The general fund is in green at the very top. As I said, our budget reduction is $833,000, which is 7% of our budget. But although our budget was cut, you do see a small increase here. That's the net increase in general fund expenditures because remember, this year all of the departments got the FY27 hope across the board raises, which I'm sure you've all heard about, as well as restricted accounts increases. And for ARA, we also had an increase in the transfer to bark, which comes in which comes into the general fund as an expenditure. So you do see a small increase for that for that offset against the $833,000 decrease. In the Park Houston special revenue fund, you see a net decrease in expenditures, and that again is the net decrease resulting from mandatory personnel and restricted account increases against the transfer to the general fund, the payment for debt service for parking meters, and their allocation allocation for indirect cost recovery. Similarly, the increases that you see in the BARC special revenue fund are the mandatory increases in personnel and restricted accounts. In the property and casualty fund, you have a 2.9 net decrease. So this decrease is the total of all of those mandatory increases for personnel and restricted accounts against significant reductions in our premium for property and casualty insurance. And finally, the increase that you see in Central Services Revolving Fund is attributable to the ARA 311 HPW water customer service merger. The increase in the fund looks large because historically ARA only budgeted things like postage and employee parking and metro passes in the Central Services Revolving Fund, and now we have 183.5 employees that are budgeted here. Next slide, please. And this chart shows you our expenditures for fiscal years FY25 through 27. General fund expenditures are in green at the bottom. Special funds, Bark and Park Houston are in red, and the revolving funds are at the top in blue. The detail behind this chart is on the next two slides. Next slide, please. This is the detail behind the bar charts on the previous page. The top block is the general fund with a budget of 29.6 million dollars. Interestingly, the biggest chunk of our general fund budget is the transfer to BARC, which is 50% of our general fund budget or 14.8 million dollars this year. Personnel is 35% of our general fund budget, and the other 15% is our contractual obligations and restricted accounts. In the second section, you see BARC's budget for FY27, it's $16.9 million dollars. The majority of that comes from the 14.8 million dollar transfer to BARC. This year, the mayor did approve a $1.3 million dollar increase in the transfer to BARC. And in the BARK budget, $72% is allocated for personnel. And finally, the breakdown for Park Houston reflects that personnel is $41% of their budget, 20% is the transfer to the general fund, and the remainder is their contractual services. Next slide, please. Next are our two revolving funds, risk management and central services. At the top is the breakdown for ARA's portion of the property and casualty fund. The total budget for this fund is almost $39 million, almost $30 million.
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