Afternoon session of our budget workshops, and we will start off with public works and solid waste and one combined situation.

I see Director Randy Mackay and Samir Salanke, and also I see Director Hassan in the audience.

So we will get started with this presentation, and then we will end the day with the Houston Fire Department.

Um I want to recognize my colleagues who are here, Vice Chair Mario Castillo, staff from Councilmember Caroline Evan Shabazz, Councilmember Twila Carter, Councilmember Alejandra Salinas, Councilmember Joaquin Martinez, staff from Council Vice Mayor Pro Tem, Martha Castax Tatum, Councilmember Julian Ramirez, Councilmember Mary Nan Huffman, staff from Councilmember Abby Kamen's office, and Councilmember Fred Flickinger.

So welcome to all, and the floor is yours.

Director.

Thank you, Madam Chair, Council members.

It's uh it is very exciting to be here today with all of you to talk about this very important pivotal budget.

Before we jump in, I do just want to acknowledge uh seated here in chambers with us many members of our executive team and our finance team who helped make this possible and put this budget together.

Um we couldn't do it without them.

We're so grateful for their contributions and we're we're glad they can join us here.

Um as we start here on this first slide, just as just a little brief overview right now of our executive team.

We often call this the C suite.

Um this consists really of all of the operational service line heads.

And if you go to the next slide, we go into a little bit more detail on what each of those do.

Uh, Chris Butler, our chief operating officer, responsible for utility billing, code enforcement and compliance, which we oftentimes refer to as the Houston Permitting Center, and then transportation and drainage operations, uh, City Engineer OJ McFoy for infrastructure rehab, engineering standards and review, which is a portion of the Houston Permitting Center, as well as uh engineering facilities and infrastructure and design development.

Drew Molly is the city's chief water officer.

Everything in drinking water, wastewater, regulatory compliance, and utility development falls within his purview.

Seated next to me here, Samir Solanke, our chief financial officer.

All things money through public works runs through Samir.

Um, my chief of staff, Rena Vargis, is responsible for the administrative portion of the department, which includes communications, it includes city council liaison office, our strategic initiatives division, uh, everything within uh HR operations relative to the department as well as policy management and legislative affairs.

Kevin Berry is our chief technology officer.

Uh, everything technology, including uh not just information technology but operational technology as well.

You know very well, Director Brian Mason, who's the city's director of the Office of Emergency Management.

He also serves a deputy director in public works, but his responsibilities include emergency management.

He's also responsible for our vast portfolio of facilities across the department, of which there are more than 400, and he's also the executive director of Houston Transstar, which is part of our collaboration with Harris County, Text Dot, and Metro.

And finally, we're so glad to welcome uh Larryus Hassan as the city's chief solid waste officer.

And you know very well what he's responsible for, recycling, heavy trash, regular trash, and many, many complaints, which he handles so well.

Next slide, please.

If you recall last year, we had just uh when we made this budget presentation, we had just gone through the first phase of operational efficiencies and reorganization within the department in FY 2026.

Um we had a focus on reducing both the number of managers with three or fewer direct reports as well as shrinking the management layers within the department.

Uh, at the time, the department spanned more than 13 management layers deep, and we had an initiative to shrink that by nearly half to get it down to seven.

But we also were very focused on ensuring that we had larger teams with managers with more responsibility so that we could accomplish many things.

Uh last year we were able to reduce significantly the number of managers with three or fewer direct reports.

You'll remember in the Ernst and Young assessment, uh, the city had roughly 40 percent, but in public works, that number was closer to 60%.

We shrank that last year down to about 40%, and this year I'm proud to say that we've shrunk that again, and now only about 18% of our managers or supervisors have three or fewer direct reports.

We know that number will never be zero, and that's intentional.

Some of those teams are highly specialized, and it makes sense to be smaller, but we want to make sure that we're very deliberate in how that looks.

We continue to have an operational improvement as we do that.

You'll notice on this particular slide, actually, the total number of managers increased from last year at 679 to 841 this year.

So in other words, we have more operational teams out there, but all of those teams now significantly have more people under them in direct reports.

So that instead of an organization that looks really tall, it looks really, really wide, and that helps us continue to move forward.

Next slide, please.

Highlighting a few additional uh important things that have taken place to note is our 30-day permit pilot, of which many of you are aware.

We started a pilot program within the permitting center to produce residential permits within 30 days.

It's been so successful that's now become a permanent practice.

We were very dedicated on tackling the backlog of water main leaks.

Um the mayor's been very public in documenting how at one point we had more than 1900 active water main breaks at a time.

Today we're closer to 100.

That number, of course, fluctuates on a day-to-day basis.

The infrastructure is in such a condition that it's not uncommon to get 60 or 70 breaks a day.

So we could start this morning at 100 and be at 200 tomorrow, but the important thing is actually that number continues to trend down because we have crews between our internal staff as well as external contractors who tackle it with such alacrity that we're able to move that number in the right direction.

Our goal, of course, is zero.

And more importantly, I want to talk a little bit about workforce replenishment.

Under the voluntary municipal retirement program that was initiated last year, public works uh had about somewhere between four and five hundred employees take advantage of the offer and retire.

It actually meant that as a workforce altogether, the total number of uh active employees in the department was the lowest that it had been in many, many years.

That wasn't necessarily a bad thing, though.

One of the things that when I became director, I identified really quickly as a pain point was that of our 4,000 employees, nearly in a quarter of them, just a quarter, a thousand of them, were administrative uh employees.

For an operational department, that's a big imbalance for us.

We really needed more folks who were focused on the operational side of the house and able to tackle big challenges.

The Vermerpo that was initiated provided us an opportunity to initiate some of those streamlining uh efficiencies and move us in the right direction.

In the last 12 months, uh we've hired 455 people into the department, now tackling those efficiencies.

We've got another 500 on taps.

So, in terms of our workforce, we're moving in the right direction from being at a low point in the total overall headcount to moving in the right direction with the total overall headcount, but the right overall head count in the right place.

Next slide, please.

And so let's look at uh the 2027 performance measures.

If you'll move to the next slide.

As you're aware, the mayor's has four primary uh alignments in which all departments are to make sure that they're aligned with.

Public works aligns with three of those four, the fourth one being public safety, which is not one of the alignments that we are focused on.

However, we are focused on infrastructure, government work that works, and quality of life.

And so I'm gonna briefly go over what our primary KPIs are in each of these categories.

I will note these are not the only KPIs that we measure in these categories, but they're the ones that we'll highlight today.

They're ones that help drive our business.

Next slide.

First and foremost, under uh the infrastructure KPIs is an annual replacement of 3% of our nearly 7200 miles of water transmission and distribution lines.

We know that of those water main breaks that we have throughout the city.

Uh, a study once gave us some good data that about 6% of our water lines were responsible for nearly two-thirds of those breaks.

Now it's not six contiguous percent, right?

So it's all over the place, which which gives you some difficulties in tackling such a challenge.

If you could just say here's the 6% of pipe in this segment to replace, and you could fix your problem, that would be an easy lift.

But instead it's, you know, fractions of percentages of pipe in different spots.

But uh it's also told us that we needed to make sure we were focused on replacing pipe at a regular interval.

Mature utilities replace their pipe at an average of two to three percent per year.

In the city's history, it's only ever been done once at 3%, and that was in the 1980s.

We've had a lot of work to do to catch up and focus on, and we knew that even when we introduced this KPI last year, that we would not attain it this last year.

There's a whole lot of engineering and planning that goes into place before you can start talking about wholesale pipe replacement.

So you'll see actually when we talk about where we're at, we've stayed fairly flat, but we're moving in the right direction, and we'll talk more about that.

Additionally, a thousand lane miles of roads rehabilitated annually.

The previous practice of the city for many many years was to just pick a number of segments of roadway and either completely replace them or just uh asphalt over them.

We've developed a more comprehensive rehabilitation program that looks at the condition of those roads and make sure that we can both get more useful life out of ones that are already there as well as improve the driving surfaces and conditions.

To that end, it allows us to push towards focusing on bigger chunks of our massive street network, which is over 16,000 lane miles of roadway.

You're familiar with the ditch reestablishment program.

This is a program that two years ago we introduced that shrank the timeline for ditch reestablishment by half.

Previously, it was a 10-year program.

It's now a five-year program where the laboring ore in doing uh ditch evaluation has taken place, and now we're focused on the rehabilitation and reestablishment of open ditches throughout the city.

500 miles is our annual target under that five-year program.

450 of those miles are focused on the northeast portion of the town, because more than 80% of the ditches are in that portion of the town, and then 50 miles of the remaining 500 are throughout the rest of the city.

This year we've introduced a new KPI, which is to stripe six million linear feet or to restripe uh existing pavement markings throughout the city.

A constant frustration on the part of many Houstonians is the fact that I might be able to drive on the street, but I don't know where I'm supposed to drive in various conditions.

We know we've got a lot of work to do there, but we are moving in the right direction.

Last year we purchased two additional striping machines to help us with that.

We also brought a number of contracts to this council for which we're grateful for your support and allowing additional contractor support to do it, so we move forward.

Uh and next, of course, is our water meter utility infrastructure, which of course has been a big pain point for many many years.

We launched a new pilot last year to focus and tackle 25,000 meters with new smart meters.

So it's not just the same old infrastructure in the ground, but infrastructure that now moves into the modern era technologically, as well as providing customers with information that is helpful to them in managing their own account.

Next slide.

Under the mayor's priority of government that works, the permitting center's target is to maintain and review at least 80% of construction plans within seven business days.

Again, like replacing our miles of pipe throughout the city, this is a big lift for us, and there's a lot of catching up to be done, but we're moving in the right direction.

Engineering and construction is focused on awarding notice to proceeds within 30 days.

That's a commitment that I made early on when I came in.

We recognize that the longer it takes for us to get an NTP out, the more it costs for us to complete projects.

And it doesn't just cost us, it also costs our valuable partners in the engineering and contracting community.

We know that we need to complete at least 90% of our projects within that approved work authorization time frame for those same purposes.

We have a uh target of completing 90% of floodplain inspections within seven days, and uh it goes without saying that my expectation is that the department responds to all 311 cases within a week.

Some of those are more difficult than others.

Uh we're really good at, for instance, potholes, of which we respond to 99.7 percent of them within the next business day, but others that are usually focused on code enforcement in our neighborhoods sometimes are a little bit more complicated.

Next slide.

On the utility billing side of the house, we want to make sure that we're resolving 99% of our customer requests for relief within 30 days.

Some of these requests are very challenging.

There's data that uh we need to understand and we need to have better access to.

That's why Kevin Barry and his team in uh technology has been so invaluable to us in helping improve business processes and efficiencies.

But we need to make sure that when customers contact us for relief, we can get them a relief as quickly as possible.

And right along with that, you'll have fewer of those complaints if you're really accurate on your water bills, and so 99% accuracy on monthly water bills, of which there are nearly 500,000 each month, is what will help drive us forward.

Next slide.

I'll move through some of these pretty quickly.

We want to make sure that we're resolving water leaks within seven days.

We want to make sure that sanitary sewer overflows are resolved, 95% of them within 48 hours of initiation.

Uh, 10% of our wastewater lines being assessed annually as part of our consent decree requirements, and we feel it's important to continue to keep that uh transparent in the forefront.

We want to make sure that traffic signal malfunctions are responded to within six hours, 90% of those is our target there.

And then with solid waste, a few KPIs that we will work on refining and getting a bit more specific on, but initially we'll talk about tons of tree and yard waste collected, the total number of containers that are replaced uh or repaired, and in the next slide, total tons of heavy trash that are collected, number of curbside recycling stops completed, and drop offs by count.

One of the things that I'm going to commit to you now, and it actually says it on a slide later on, so you got it in writing too.

Um, but we're going to come back to council within the next 60 days with some refined KPIs that are much more specific.

These initial ones that we look at are very much uh output-based rather than outcome-based.

We want to be very specific on outcome-based ones that help improve things like quality of life for individuals and provide us with a little bit more uh responsibility and accountability in how we respond.

And now I'll take a break and turn it over to Samir as he discusses some of the financial metrics behind the budget.

Good morning, council members and representatives.

Uh, we're gonna move to the fund part of the budget presentation, which talks about the dollars.

Uh we're gonna cover HVW from an outcome-based uh budgeting perspective, as Randy had mentioned previously, that looks at the performance measures and aligns the funding with the outcomes.

We do have a lot of material to cover in a very short period of time.

So I'm gonna be mindful of some of our time constraints.

So let's move on to the next slide, please.

This is an overview of the strategic guidance alignment that Randy had just uh covered a little bit, and that looks at the various different programs that are the priorities for the city, and you'll notice that a majority of it is deals with infrastructure, and that makes sense because we are Houston Public Works.

Let's move on to the next slide, please.

This gives an overview of what the expenditures look like from a program prescript uh perspective, all the way from admin services, debt service, engineering construction, permitting center, transfer, so on and so forth.

We're gonna go a bit more into detail into the next slides as we move on into the fund section a little bit.

The first one is the administration and the support um services.

For HPW, this is really our internal administrative functions essential to running the department, such as IT, our finance group, our real estate services, and our facilities management.

Uh please note that this includes also the purchase and the build-out of 1600 Smith building, which most of you are familiar with, as well as the proposed ride of WIFE for fiscal 27.

Let's move on to the next slide, please.

Are you there?

All right, Houston Water, which is the biggest aspect of Houston Public Works.

Uh, this program funds the maintenance and operations of drinking water, wastewater infrastructure.

Last year, the system itself distributed over 188 billion gallons of drinking water and treated 82.4 billion gallons of wastewater.

Wastewater operations is pretty massive.

It has 38 uh water wastewater treatment plants, 365 lift stations, and two wet weather facilities.

Drinking water operations has three surface water plants, which one of them you're mostly familiar with is the Eastwater Purification Plant.

Um we also have 54 groundwater plants and 10130 groundwater wells.

The fiscal 27 budget includes funding for operational needs as well as funding for additional capital equipment.

Next slide, please.

The utility billing program funds all metering and customer service operations related to water bills, as Randy had mentioned previously.

This program currently handles billing and collections for about 488,000 uh connections or customers, wastewater water and wastewater accounts, I should say.

Samir, yes.

Um, we do have lots of time.

We've got two hours actually, for this whole two things.

So I if you could just slow it down just a little bit.

Thank you.

All right, so utility billing again covers billion collection for about 488,000 uh water and wastewater connections.

As Randy had mentioned previously, the water bill improvement plan was implemented last year, and that included about 126,000 accounts.

Move on to the next slide, please.

On the transportation and drainage side, which again focuses on the infrastructure side of it, um, it funds the build Houston program, which we're very familiar with, and the maintenance of the city's transportation and drainage infrastructure.

We're continuing to fund the ditch reestablishment program that was initiated back into uh fiscal 2024, and the FY27 budget includes additional 25 million dollars in contracting capacity for that program as well.

All right, next slide.

On the engineering and construction side, um, this funds the project for delivery of CIP projects, and these are some pretty big numbers here.

The total CIP for the next five years is the probably the largest that we've ever had before.

And for Houston Public Works, we're looking at about 10.8 billion dollars.

And to give you a comparison, San Antonio, their uh five-year CIP is roughly just on the water side, is 3.2 billion.

So on the street and drainage side is 2.7 billion, and then 8 billion for water and sewer, which is pretty massive.

Next slide, please.

Houston permitting center.

This program consists of HBC and the related operation.

Um HBW has integrated several functions of the Department of Neighborhoods, which were absorbed in fiscal year 26, which includes dangerous buildings, neighborhood nuisances, and investigations, sign administration, and banded signs.

These functions consists of about 72 FTEs and will have an 8.8 million impact on the budget.

Transstar is probably the smallest group.

Um, this focuses on the small uh aspect of public safety program, um, it funds the maintenance and upkeep of the Houston Trans TAR Center that provides coordinated innovative transportation and emergency management services to the region.

This is again, um, as Randy had mentioned, a collaborative effort between the city, Harris County, Metro, and the Texas Department of Transportation.

Then we move on to the mayor's office of people with disabilities.

Uh this program funds MOPD, which serves as the primary advocate and rights uh for the needs and rights of residents and visitors with disabilities.

On to the next slide.

And then finally, our new family members, the solid waste management department.

Um it delivers the core collection and disposal services that keep Houston clean and safe.

Beginning in FY27, these essential functions will be integrated into the HPW Combined Utility System Fund.

All right, and this is the bigger aspect.

And when we talked about the infrastructure side of things, this program includes the payment of infrastructure-related debt, transfers to CIP to fund projects, and includes interfund transfers.

And I also want to point out that the DDSRF funds are not issuing any new debt.

It's just paying off old infrastructure related debt from prior years.

That was on the next slide, debt service and interfund transfers.

Yeah.

There we go.

Okay, let's move on to the next slide.

We're going to talk about the uh revenues by program.

Here's a quick overview summary by program.

Uh note that some of the numbers shown here, um, excuse me, the revenues shown here are transfers to and from between different fronts with sort of an internal transfer.

All right, move on to the next slide.

Okay, this is a very high level summary overview.

Please note that these uh dollars shown here are millions because the numbers are just so massive.

Um HPW obviously consists of several different funds.

This is something that you may be more familiar with looking at from a funding perspective.

I'm not gonna call out each and every one of the numbers uh right here because we're gonna cover each of these funds a little bit more in detail as we progress on with the next slides.

Uh please keep in mind that these variances are from the FY26 current budget.

Next slide.

This is a high level overview to give you sort of a snapshot of what the expenditures by fund look like.

Um, of course, the combined utility system or the what water and wastewater utility comprises a bulk of this, and to show you how it's grown over the uh the past several years from FY26 and what we're gonna end up as the estimate to the FY27 proposed at almost $3.8 billion total for Houston Public Works overall.

Next slide.

And this gives you an idea of what the revenues look like for the entire department as well.

We're estimated roughly about $3.5 billion in revenue for the fiscal 27 proposed budget.

We'll talk about that more in a little bit more detail.

Next slide.

General fund side of things, we have a very small portion of general fund within Houston Public Works that consists of our rural estate group, and they're really responsible for real estate land disposition, which is a net revenue generating function within the general fund.

We roughly have about eight or nine FTEs within this organization, and they do a fairly good job of raising revenues by uh disposing of unwanted real estate uh throughout the city, and usually they generate roughly anywhere from 2.5 to upwards of seven million dollars in revenue on an annual basis.

So the expenditures is roughly about one million dollars for fiscal 27.

And on the next slide, you'll see the revenues portion in FY25.

They did generate about 7.6 million dollars in revenue.

We're estimating that they will deliver about almost three million dollars in revenue for 26, and we're keeping the proposed revenue generation at 2.5 million as we move into fiscal 27.

Next slide.

This is a really a revolving sort of fund.

It's called cost recovery.

And as you can see, the way this works is once it incurs any expenditures, it'll charge back to the various uh different funds within public works, and that's how it raises this revenue.

That's why you'll see that the revenues are exactly the same as expenditures.

And this project cost recovery fund supports capital improvement projects.

Included in here are personnel and other operations and maintenance costs.

Uh the revenues and expenses are decreasing uh by about 3.5 million dollars.

It's mainly due to 42 FTEs that were moved to fund 8300 to better align costs for positions not prior primarily working on CIP projects.

Okay, next slide.

We're gonna move on to the building inspection fund, which is also known as the Houston Permitting Center.

And as you can see, the revenues for uh Houston permitting center are increasing from 118 million to 119, primarily driven by higher construction permit revenues by million dollars and planned revenue fees, offset by reduced transfers from special revenue.

Um expenditures are increasing from 123 million to 124.8, roughly about 2 million, mainly due to increase in personnel costs, miscellaneous support service costs, and HPW C US allocation, and non-capital computer equipment costs.

Just want to highlight that the expenditures are higher than revenues, which means that this fund is utilizing fund balance to meet its expenditures.

All right.

All right.

Moving on to the transportation and drainage operations, which contains various different funds, such as 2302, 2310, 23.11, and 2312.

And the funds 2310, 11, 12, are what comprise the build Houston forward program, whereas 2302 is the stormwater fund.

So we focus in on the revenues.

The stormwater fund 23 is mainly funded by the combined utility uh system.

Revenue, the fiscal 27 budget is decreasing.

Uh now we'll go to the expenditure so you get a whole picture of what we're trying to present here.

Uh, first, there was a one-time 20 million dollar uh um allocation that was made in the prior budget, which shows here as a decrease.

Second is the 16 million dollar transfer from the DDSRF fund 2310 is being removed.

Instead, what we're doing is fund 2310's budget will transfer it to the CIP portion.

Could you please slow down?

I'm sorry.

Oh, okay.

So Stormwater Fund 2302 is mainly funded by the combined utility system, which you know as Houston Water.

And I will mention that it shows a decrease of that 41 million dollars, and it's due to three primary things.

The first one was the 20 million decrease that reflected a one-time council budget amendment that was passed in FY26 for the ditch reestablishment program.

And we'll cover that a little bit more on the expenditure side, uh, on the expenditure side too.

Secondly, the $16 million transfer from the DDSRF 2310 is removed.

Instead, what we're doing is fund 2310's budget for the CIP transfer to support the same ditch reestablishment program, is directly going to go to the CIP fund, which is 4042.

So it's decreasing from this side, but we're actually moving it into the CIP fund.

And third, transfers from CUS decreased by 5.9 million due to lower operations and maintenance needs in fiscal 27.

Uh drained charge fund revenues in 2031 are decreasing by $850,000 due to e-billing credit of $650,000 and decreasing drainage charge penalty by $200,000.

Okay.

Talk about that.

And we point that out because now as we move to the next slide and we'll talk about the expenditures, we want to highlight because it looks like on the revenue that we're gonna spend less on those programs.

We're not, we're actually spending significantly more.

So I I don't want, I know it's really confusing when you start to move money from one fund to the other, but part of the reason we're doing it is to actually make this more clear and transparent in future years.

For instance, that 16 million that we're not transferring from DDSRF to stormwater, that's really part of our settlement with Bob Jones and Alan Watson to make sure that we keep those accounts really clear.

So this is setting us up really for a better picture in the future.

Yeah.

So when we move on to the expenditure slide, you will notice just to highlight really quick that that's a pretty big number.

We're in increasing our expenditures in the DDSR funds group by $91 million almost, which is a pretty significant.

This is probably the biggest increase that we've ever had uh in these funds in the history of it.

So stormwater fund again uh we would break it down a little bit further, is increasing by 900,000, mainly due to an 11.7 million dollar increase in funding needed for the demolition of dangerous buildings for the department of neighborhoods, and $8 million increase in personnel, a $2.8 million increase in transfers to $2301 to support department of neighborhood related costs, and is offset by that $20.5 decrease related to that one-time ditch reestablishment budget amendment that was passed in fiscal of 26.

The funds group itself, like I mentioned, is increasing by 90.1 million dollars overall, and that's driven primarily by the 119 million higher transfers to CIP to fund street and drainage rehab projects, including the 16 million for ditch reestablishment, 4.2 million increase for other OM costs, and 2.4 million increase in transferring to general fund to support traffic enforcement programs, which is offset by 36 million decrease in transfer to stormwater.

Again, that goes back just to the reallocation of the funding into the CIP versus uh going to the stormwater fund as well.

Next slide, please.

Uh Houston Transstar, we spoke about this briefly.

It is a collective effort, which the City of Houston has a responsibility of 24% of this budget.

That's a very slight increase uh in the revenues because of a higher contribution for Metro and Harris County.

Expenditures are slightly increasing for Transstar facility maintenance.

We move on to the largest aspect of Houston Public Works, which is the combined utility system, which is the largest fund group.

On the revenue side, 8300 is budgeted to increase mainly due to a transfer in of solid waste department, which is about 29.7 million dollars, which includes the new solid waste fee that we talked about, the $5, which will generate roughly about 24 million revenues.

Um fund 8301 is budgeted to decrease by 5.3 million, mainly due to lower anticipated debt service in fiscal 27.

Um, and we look at fund 8305 is decreasing due to 600,000 lower contributions needed from water authorities, specifically for the loose bayou debt service.

Let's focus on the expenditure side.

Next slide, please.

So on the 8300 side, again, it is increasing by almost 200 million dollars, mainly due to integrating uh solid waste department, also some higher OM costs, including additional maintenance and contractual price increases, which I'm roughly about 57 million dollars.

We did have higher personal costs as well because of the Hope Agreement, which is about 16 million dollars, and we also have some higher restricted account costs of about 13 million and some higher debt service costs of about 8.7 million dollars, and that was offset by low uh a lower transfer that goes into fund 8301 of about 15.3 million dollars.

Um, gonna jump down to fund 8305.

It is budgeted to increase by 62.7 million dollars due to the new right-of-way fee that we're that we've been uh contemplating.

This is roughly about 104 million dollars.

Then the planned purchase and build-out of 1600 Smith, which is about 83 million, and also the solid waste management debt that's taken on by Houston Public Works, which is 17 million dollars, and then higher 311 costs of 2 million, and then 1 million dollars budgeted for City of Houston special events.

This is offset by design and by plan, lowering the pay as you go of 145 million uh from the combined utility system fund 8305.

Move on to the next slide.

This gives you sort of an overview, and if you notice on the net operating funds, you will notice the negative of 220 million dollars.

Um, the the reason that is it's by design and it's by plan, as the director had previously mentioned.

The utility is operated on uh reserves, which is significant significantly higher than what we have our policies to be at 300 days.

We're currently at 550 days.

So the 220.8 million dollars that you see really equals to about 91 days of cash on hand.

So we are still well within keeping with what we have as our internal cash policy as well.

Next slide, please.

Moving on to solid waste management, which is new for all of us.

And so on the highlight side, um, solid waste management is again integrating with Houston Public Works.

Um, as many of you are familiar, we are implementing a new solid waste administration fee to be included in the water and wastewater sewer bills, which is going to be five dollars per month per residential account.

That will raise roughly about 24 to 25 million dollars for fiscal 27.

All right.

Let's move on to the next slide.

And this looks a little bit wonky because again, it's a new department that's been integrated with the public works, so you'll see that the administrative fee accounts for only 24 million dollars worth of revenues.

Um we're proposing a couple of other things on the container lease fee, which is five million.

Other operating revenue is about $3.4 million.

Dumpster permits will generate about $2 million, and the non-operating revenue will be about $261,000.

And of course, the any transfers from this general fund will be zeroed out for fiscal two thousand and twenty-seven.

The next slide.

And the total expenditures for solid waste is at about one hundred and thirty-four million, and like we had mentioned previously.

Uh oh, that also includes a portion of it, which is a sixteen and a half million debt service, which will be funded out of the combined utility system as well.

Um that's your overall presentation on the budget.

We're open for questions.

Thank you.

Great, thank you very much.

A lot of information to cover.

I appreciate your work on this.

I'll go first to council member Thomas.

Thank you.

Hello.

I marked my slides.

Okay, is it safe to say that all of this is pending the vote?

Of course.

Okay, because y'all sound real confident about some things, so I don't know.

Um, I'm always confident, council member.

So, okay, so if we go back, so so the restructuring of solid waste and the new org chart, that is already in.

That is done separate of council action.

Correct.

So, so if the council Let me let me let me let me pause there.

Okay.

There are a number of things that are in flight, sure.

But the restructuring of solid waste is part of the budget package ordinance that's coming to council.

If council were to not vote on that budget, this the budget that's proposed here, then those actions would not take place.

Start from scratch, perhaps.

Okay.

On page on your highlight page, departmental highlights.

I don't have it doesn't have a number, I'm sorry.

Oh, you got it up.

Okay, so box number four.

This is my understanding, because I've heard these numbers in the past, um, that we average about a hundred water leaks from this data point.

From which fiscal year are you quoting this from?

Because I understand, you know, in the summertime, you know, twenty-three, twenty-two, we it we were we were slammed.

I think I had 500 just on the west side itself.

So is this like as of today, or is this in contrast to last fiscal year?

This is this is really illustrative of basically the last 15 months.

15 months, okay.

So about 15 months ago, we were sitting at 1900.

Uh today, I will say we're above 100, but that's as I mentioned, any given day we experienced between 60 to 80, and so tomorrow I expect us to be back closer to 100.

Sure, sure.

Okay, I just want to make sure I'm tracking with that.

Okay, so based on the KPIs, um, there's no comparison of where you rate yourself today.

So those are your stated goals, right?

You would like to have repair 90% of the traffic signals within six hours, which is great.

Um, and so where are we at today since these are already established KPIs, correct?

So many of the KPIs that you're seeing here, for instance, that's a new KPI for us.

It's not one that we have tracked historically.

Uh, I'll tell you right now, we're above 90% as we've been going for the last few months.

Um, but we are not always above 90% at any given point.

So we felt this was a good target baseline to begin at.

Every year I've challenged our team to make sure as we look at these KPIs that we continue to push ourselves forward, right?

So if we hit 90% this year, uh next year it should be above 90%.

I need to call this exterminator.

I did see the budget went out for pest control.

We need it right here.

Put that in the budget.

Um, okay, it's clear.

And then so uh public workshop will continue to come back to present these KPIs and our status metrics of where we're at, right?

Okay, great.

So I know that you talked about the open ditch, and I'm glad that um there's some in, you know, more focus around that.

I want to backtrack an item we passed last week for the work orders for the open ditch.

Um, that's the same item, correct?

To allow the four hundred and fifty.

It's it's it's a group of contracts that support it, but correct.

Sure, the master contract, okay.

So you said 450 will be predominantly it's like districts B, C, I think I and D have the most open, right?

So for the remaining, you said 50 miles.

Yeah, so 500 miles altogether, 450 of it's targeted in the Northeast, which which is 80 percent of the ditches altogether.

And then the because we put it in the newsletter, so I'm asking just to be clear for uh residents to flag that they right that um we need their eyes and ears to then identify, they'll do the same 311, we will route that up.

Y'all will investigate and then see if it matches for that, then a work order will then be issued out to repair.

100%.

And on top of that, council member, I'll tell you within the next couple of months, and we're testing this right now.

We have a number of different interactive maps on operational things that we do within public works.

One of those includes ditch re-establishment that will allow people to look at specific areas in the city, see when was it assessed last, when was it worked on last, and when do we expect to be there next?

The same goes for mowing, the same goes for even waterline repairs.

We want to make sure that we give a lot of information out to the public on where we've been and what we're doing.

Since we have some time, thank you.

This is my last one, and then I'll get back in the queue.

Page 45, we're talking about the C US.

One, um, the investment in the CIP.

The most significant problem in the city's history is to be noted and talked about.

That's really important.

Thank you for sharing that.

Um, but absorbing Don, now possibly absorbing solid waste.

We have our consent decree.

At what point will CUS not be able to absorb um all these departments?

My concern is once the the the web we are weaving in terms of our financial obligation to a C US, and as you know, the combined utility system has always been like that forbidden.

That's the apple we don't buy from.

And so we are taking some chunks of this apple, and so for me, walk me through the comfort level y'all have absorbing these departments, the cost, and then what Houstonians can expect to cover, and are we gonna be able to meet the infrastructure demand and our liability?

Yeah, and I appreciate your question very much.

I'm gonna do my best to hit each of those points.

If I forget you can remind me, um first of all, I'll just say this.

We're very comfortable.

Uh as Samir noted here, the 220 million dollar delta we're experiencing now really represents 96 days operating cash on hand.

Um the models that we see and how uh engineering and project activities have gone through the CUS over the years shows that actually that number continues to grow on a regular basis, whether it's due to interest or anything else.

We also don't need to have 550 days of operating cash on hand, period.

Um our internal policy is 300, that's significantly higher than the city's internal policy of 60 days.

Now I think 60 days is too low for a critical operational department, but 300 days may itself still be a little bit too high of just stocking cash away on hand.

Regardless of the moves that are being made here, we have done that in a way one, where we're ensuring that it does not delay or stop any planned infrastructure projects or even contemplated ones that need to take place.

For instance, this will have no impact on our ability to complete the East Water Plant, which is a which is a tremendous investment.

It has no impact on our ability to complete consent decree obligations of which we have, but it also gives us an opportunity at the same time to make sure that we are prioritizing the things that make the most sense.

The consent decree is a really interesting discussion because when the consent decree was adopted, um effectively the largest part of it was we picked up our wastewater CIP and we just dropped it in there.

And some of those projects have nothing to do with solving sanitary sewer overflows, which is why we have a consent decree in the first place.

It's not to say that maybe those aren't good projects, but it is to say maybe they aren't the right projects for the city right now when we have other infrastructure needs that we need to contemplate.

And if we want to be sensitive to our ability to manage costs for customers, which is I think what you're really getting at, council member.

Then we need to make sure we're prioritizing those projects at the right time and within the right scope.

And with uh making sure that the regulatory bodies that are over uh seeing this, the Department of Justice, the Environmental Protection Agency, that they're in alignment with what really makes the most sense for Houston and which projects we're taking care of.

Regardless of even all of that, we feel very confident that we can deliver on all of our obligations moving forward.

And we've been sure, as we're talking about the rate study currently underway right now, that that is not at the detriment of our single-family customers.

Now, let me talk about that for just a second if I can too.

The rate study that's that's underway with RAFTELUS right now.

We recognize as we look across our broad customer base that there are some that frankly pay more than others pay, and that sometimes is not with respect to their actual water usage.

And I'm talking specifically about our commercial and industrial customers.

A lot of them get really, really good deals.

Um, much more favorable than our single family residents or multifamily residents.

We uh have a very deliberate uh tax strategy on making sure that we right size the way our rates are structured, and that um on top of that, individuals who are the highest users bear a greater proportional responsibility of the costs for the system.

That's one of the reasons why rate studies take so long, of course, is because you've got to take a lot of those factors into account.

But second of all, our next strategy is to not wait five years for the next rate study as well.

Um we're gonna do something right now that's gonna give us a lot of really good data so that when we come back, probably in closer to three years for the next rate study, we will know exactly where we stand and how this is going to work and what additional adjustments need to be made.

I will say the mayor has uh made it very clear to us, and I think he's made it clear to the public that we're going to continue to make sure we're tweaking in the ways that impact us in the right direction.

We don't want to go backwards.

We're super sensitive to the rising costs of water.

I'm glad to say Houston's not the highest in the state, but we're not the lowest, and we're above the middle.

And to continue to be the competitive city that we want to be, we need to make sure that we don't inflate that into a spot where we don't want to be.

So I'm gonna go all the way back to your first question is how comfortable.

I'm very comfortable.

I think that we can do what's being proposed here, and I think that we can be very deliberate about any future proposals as they come forward and make sure that as we uh contemplate those moves, we do it with both um care and transparency.

And council member, finally, just add on to that really quick, you know, on an operational side, we're looking at all different aspects of it.

But some of the other things uh we're looking at as well.

For example, we mentioned it's the council before is the Texas Water Development Board financing.

I don't think most people realize how significant that is for City of Houston to be able to secure 966 million dollars in financing has uh a tremendous impact on the bottom line in terms of how much we actually pay out.

To give you an example, that is the sub-the subsidize our interest rates where we pay a lower than market interest rate.

The amount of money that we will save is about 210 million dollars over those 30 years.

So we're looking at so many different efficiencies within ourselves, even on the financing structures.

For example, the WIFIA program.

We were one of the biggest things uh required on a federal uh side of getting into sort of uh federal funding is the Baba requirement, which is build America by America, and that could be significantly expensive.

We were successful with the wonderful team that we have working with the federal government and getting a bobber waiver.

That will allow us to realize savings on the total project perspective up to 10%, anywhere from three to four hundred million dollars.

So when we're looking at all these different numbers and you know, the the strain that potentially could be put on a combined utility system, we're looking at every other aspect to make sure that we're mitigate that mitigating the risk of putting too much strain on the system.

So we're very comfortable with the budget that we're presenting and over the next couple of years, um uh with all the additional costs that we're taking on.

I was happy to let that go on because I think that's on all of our minds is how this ultimately affects the C US reserves and how it will affect raw water rights.

So really appreciate the lengthy discussion and I'm sure there'll be some additional questions on it.

I'll go next to Vice Chair Castillo.

And I'm reminding the public there's a sign-up sheet if you if you want to talk.

Thank you, Chair, and thank you both for the presentation.

Some of the questions that I had for clarification for ditch reestablishment, you mentioned a couple of things.

So, at what uh when you you take in the additional dollars that you mentioned, what's the final amount we will be funding it in the proposed budget?

So ultimately, what one of the things that we realized this year in ditch reestablishment is we're able to control that cost, we've got a really good idea of what it is.

Um we have over budgeted, in fact, in the past for that, which is allowing us to shift much of that funding over to other drainage needs, such as local drainage program.

So this year, for instance, you know, local drainage program has typically been funded at about 16 million is the baseline per year, and then there's usually a pretty big amendment that comes forward and we adopt it and we move forward.

This year we said, Well, we're just gonna go straight up, we'll start at 40 million, and there's still a nine million dollar carryover, which means 50 million in the local drainage program, the largest we've ever invested in that before, is going to put more projects in the ground in council districts across the city.

At the same time, we're able to effectively take care of the ditch reestablishment program with the funds that are there, which is about a $25 million program.

So $25 million and then $90 for LDP local drainage.

It's $40 for LDP plus the carryover, so $50 for this year.

Got it.

And then on the container lease fee, you mentioned it when you were talking uh the breakdowns.

What's gonna is it is there a change coming with that?

Not that I'm aware of.

So container.

So the container lease, the meant the what Simir mentioned was that the fund itself, it's established right now in the general fund budget as its own separate fund that is collapsed into the C US.

It's just a it's it's a part of the revenue generation for the solid waste.

Got it.

But the fee will remain and yes, it'll just be put into the combining children's system.

Okay, correct.

Um on your workforce replenishment, uh, encouraging to see that you've eclipsed sort of the voluntary retirement numbers.

Where does that leave public works with um replenishing the workforce?

So uh we've got about 900 vacancies right now.

We have 500 of those that we're actively working through and working towards.

If we're able to maintain the pace we maintained last year, that's very encouraging.

If we bring another 500 in this next year, which, in all honesty, it's probably about our capacity to add people, right?

You've got to train them and you've got to get equipment and all sorts of other things.

So we're on the right pace so that in probably the next two fiscal years, we should be at where we need to be, which is the top end of our FTEs, probably about 4500 altogether in the department.

Thank you.

Council Vice Mayor Pro Tempec.

Thank you, Chair.

Um, for the um changeover to the combined utility system.

Is that going to include all of the um technology and everything that we have spent for solid waste department?

So, for example, Rubicon now waste tech for routing, all that is going to be paid for by the C US.

Okay.

Yes.

Um, and with that system, are we using it now?

I know that in the past we spent almost four million dollars on it and it wasn't being used in the department.

You know, that's a great question for Director Hassan.

I don't know.

Give me a thumbs up, thumbs down.

That's a thumbs up.

Okay.

Um, and with that program, um, and I can get with Director Hassan maybe afterwards, but um I'm curious to know if there are going to be changes with the routing um in district A, you know, our heavy trash is primarily fourth week pickup, and there are a whole host of issues because of that.

So I'm hopeful that with all of these improvements and changes that we can look at the whole routing system for the entire city.

Yeah, and if I can, let me feed your optimism.

I I can't tell you how excited I've been since I've come to the city to tackle an operational challenge like we have with Solid waste.

Um our strategic initiatives team has spent the last few months with the solid waste team really digging in and understanding the operations, the processes, the priorities, identifying the gaps.

Um we've got such a wonderful list of things to tackle right away.

Uh I couldn't be more optimistic about the improvement to service we're gonna see across the city.

Everything is on the table.

I'll tell you that much right now.

Everything is on the table.

Um we're not saying no to any idea or any potential opportunity.

Um now we're gonna vet it out obviously, so it's not we're gonna just adopt everything, but we're looking at everything, and that's very intentional.

You know, we've talked about how there's five transfer stations, but only two operate.

Well, if we add one more, that's gonna help.

If we add all five, that's gonna help.

That also helps on the revenue side.

So this comes back to council member Thomas's question about affordability and the C US's ability to maintain this.

I mean, I'll tell you, we've modeled this out where eventually we get to $25 per household per month, which covers it.

But if we do this right, if we do this right, we may not need to get above five dollars because solid waste is a revenue generating machine.

Now I can't do that in the general fund, it's too hard to do it in the general fund for what it needs to do.

But those transfer stations, let's say we had 10 instead of five, which by the way, coming into the CUS.

We have some opportunities there.

You now have opportunities to partner with other folks all across the region where they're paying us to take care of their stuff and get it out of there.

That's how you keep things more affordable.

That's how you drive the cost of stuff down.

And I'll tell you this much too.

The Burns and McDonald's study, which was great for us because it gave us some insights, it assumed that the department as it operates today is efficient.

But we all know that that is not the case.

So if we introduce efficiency, naturally that helps us know that we'll drive costs down as well.

Um, I'm really excited.

There's gonna be a lot of improvements.

Routing is just the tip of the spear.

Thank you.

If you could put them back in the queue.

Sure.

Councilmember Salinas.

Thank you.

And thank you all so much for answering all the questions that my staff sent along.

The answers were very helpful.

Um, I wanted to follow up on a few of those questions that we had, and you spoke about this briefly.

So I want to start first with a hundred and forty-five million dollar reduction in the CIP pay as you go fund.

Um, the response to that question said that there will not be any cut in projects because instead there's going to be an issuance of debt.

So, are you planning to issue 145 million dollars in additional debt to cover that gap?

And if so, is that 145 million already reflected in the budget?

And if not, why not?

So, what we plan on funding the CIP, we look at two aspects of it.

I've you know, you mentioned that.

You know, one aspect is uh financing it over 30 year period, and then a small portion of is usually financed with utilizing cash.

So to answer your first question, no, we're not decreasing any projects.

We're just gonna be utilizing maybe a little bit more debt.

Now, it's we we take a very conservative approach, especially from a budgeting perspective.

Um, we right now we're assuming that we're going to decrease some of the pay-go funding, but as we move forward with the fiscal year, there might be some additional savings that come up throughout the year where we'll be able to have enough amount of funding that we can use increase our pay goal amount uh uh throughout as we move forward with the year.

If that makes sense.

So at the very beginning, we start up with a conservative approach thinking okay, we're gonna maybe use most of it on debt, but as we move forward into the year, we realize some savings through personnel or whatever may be, and we can reallocate that funding to fund the pay goal aspect of it.

Okay, so if I understand your answer, assuming there's not some significant difference in the cost of the projects, there's an additional 145 million dollars that we may be seeking in additional debt.

And my question is is that debt currently reflected in the budget or not?

Is that yes, yes, answer is yes.

So there's a line item right now in the budget for 145 million dollars of additional debt for water and sewer maintenance projects.

You will see it as part of the debt service payments that you saw on the ONM budget price decision.

That it's built into that part of the overall debt.

We've added 145 million dollars.

That's not how that.

So the way that works is it it's um yeah.

Okay, okay.

That number is built into the overall what that debt service payment is gonna be.

That pay go potentially could have been, you know, to pay for let's just uh a full project, for example.

However, instead of doing that, we're gonna spread this out over 30 million, excuse me, excuse me, over 30 years.

So that portion of it is going to be just those, the payment aspect of it over 30 years, if that makes sense.

So we're only including what the payment is going to be for fiscal year 27.

So if we delivered a 145 million dollar project in fiscal 27, that is gonna get the payments are gonna get stretched out over 30 years.

What you're seeing in the debt service is the payment for that one fiscal year.

How much do you anticipate for the upcoming fiscal year for the 145 million dollars?

I'd have to uh do some calculation to get back to you on the exact number for.

I mean, our annual debt payments are roughly about 600 million dollars for the combined utility system.

I would say maybe another five to ten million, roughly just off the top of my head for this additional amount.

Correct.

Okay.

For debt payments for the utility.

For the for the change in the pay as you go fund.

Correct.

Okay.

Um turning to illegal dumping, and again, appreciate you all answering some of the questions we posed.

Um, starting with, as I understand, last year we spent 17.8 million dollars in response to the lawsuit that was filed against us.

And none of that funding will continue this year.

Um, what was that money used for and what projects, if any, will be going away as a result of that loss of funding?

I will get back to you on the answer to that question.

I'm I'm not aware of how they previously ran that part of the operation, how that part of their budget worked, but we'll be happy to get those answers to you.

Can you um tell me how much currently we specifically intend to allocate towards uh education around illegal dumping?

Uh around education itself, I don't have a number for you.

I will say that our efforts in illegal dumping uh need to be more comprehensive than just one individual department, and there's a number of ways that we need to work across the city to develop the appropriate strategy on educating people on what to do and how to do it and where to go uh when they spot those sorts of problems.

Um again, as we dig into this department and as we dig into the operation and the opportunity to improve things, those are items that are on the table for us to flesh out fully.

The screen up here, you guys have to push yourself back in because it's they had a power outage and now it's out of whack.

Um council member Martinez.

Thank you, Chair.

Uh first, I just want to definitely uh give kudos to the increase of number of projects across the city.

Um it's interesting that uh everybody wants you know, whether new payment conditions, you wastewater lines, uh water lines, and that creates construction pain, and it is real.

And uh we've been getting a lot of calls of, you know, there's a lot of movement.

Um my hope is that we can continue to stay on tasks, make sure that those contractors and of course the project uh managers can stay on task to make sure that they can get out of the way as quickly as possible.

But I with that I do want to make sure that as we increase the LDP and ditch maintenance for constituents in general.

Um there's always a formula on how some of these rise to the top.

Of course, there's data driven, but I just want to encourage folks to continue to report to 311.

Uh, we don't know where every pothole is at.

We don't know where every ditch that needs to be maintained is at uh accurately, and so the more that constituents can continue to report, the likely we'll be able to have data that shows that there's a specific area.

Uh District I do have several open ditch uh neighborhoods that we stay focused on and we really try to work through the swap project as well to ensure that we're seeing better drainage in district I.

What I really wanted to uh speak to, and uh some of my colleagues have already kind of spoken to it as well.

It's you know, talking about change, uh it of course it being difficult.

Uh I will say that um since taking office, uh, I've submitted a budget amendment which was for a trash fee.

I will happily not submit a trash fee budget amendment this year because there is a pathway now to ultimately see if there is one needed.

Um I know this is always a difficult conversation for folks to have with community, uh, but unfortunately, fortunately, like it's something that we should be talking about.

We should have been talking about it.

My first year, I remember uh speaking to the solid waste director at that time, asked him when should we have had a trash fee, and he's the responsible as when we started doing heavy trash pickup, which some of y'all might remember when it was, might not, but it's been a while.

Um the other one that I won't do because I want to make sure that we start looking through this operational uh improvements is the on-demand heavy trash pickup.

There was another budget amendment that I wanted us, you know, that I had introduced because again, I think what we were doing in solid waste could have been improved.

We comb every neighborhood every month for heavy trash, whether it's bulk waste tree waste, uh 20 plus percent is actually utilizing the service.

And so my hope is that as solid waste is now within the public works uh department, um, and utilizing the resources that y'all have on the technology side, uh, that we do become better uh efficient.

Uh and really, again, this specific department's auto waste was a priority for me when I decided to run for office.

It's the one that touches everybody at least once a week.

Um, and quite frankly, we were doing uh really bad job.

Um, not to say that the employees are doing a bad job.

It's just as the city has grown, uh, we we were not keeping up with the expectations that we were setting.

Uh, but it does lead me to one budget amendment that I want to make sure that I do bring back again is the uh new residential development one-time fee uh for being able to receive the refuse can, which is about $28.

Um that one in particular, and I've shared this, um, and I'll be back in the queue after this.

Uh, but and I've shared this with um with several constituents is uh over the last three to four years, we've increased the number of uh solid waste customers about I think it was 45,000 new customers.

Uh those new customers weren't paying into a trash fee, like our neighboring smaller municipalities.

But then that's 45,000 new homes that we're going to uh and dropping off a can and actually quite frankly, two cans, the green can and the black can.

And so we really need to figure out ways where we continue to bring in this revenue to uh my colleague uh Councilmember Thomas Point, right?

We want to make sure that we start looking at not increasing, you know, and putting it on the backs of folks, but the reality is that this is something that we need to be looking at, and how much does it have to cost?

I'm thankful about the transfer stations being a conversation where they can actually bring in revenue and might not even have a uh a real trash fee that folks are talking about, but it's not off the table.

I still want to have these conversations as we start looking at how we improve operations for solid waste.

Okay, moving to Councilmember Huffman.

Thank you.

Thank you to public works for all of your hard work, your responsiveness.

We we appreciate everything that you have to do.

I know we've made great strides in um leak reduction and looking at slide five, it was about 1900 leaks per day to down to 100.

And I know back in 2024, I think the number was roughly, you know, because of those water leaks, we'd lost about 34 billion gallons of water back then.

And if you know, or it doesn't have to be exact, but decreasing those leaks from the 1900 to 100, what does that equate to in gallons of water that were have been saved?

How technical of an answer do you want?

Because if it's really technical, we'll have the team get a good answer to you.

But I will say I will say it helps us a lot, and and our biggest and our best indicator of where it helps us is as we evaluate pressure across the water system each day.

When we were at 1900 leaks, we were pumping out north of 550 million gallons per day every single day, and not only would it get worse in the summer, today we're hovering around 450 million gallons per day, right?

That's a big big difference.

And if you I'm sure most of you remember the calls that you would get into your offices about low water pressure, I can't flush again.

We get very little of that now that we can't uh identify as a result of a specific problem in a neighborhood.

There's a break over here, right?

And we get out there and we fix it and and things are fixed.

But we were having pressure problems across the entire city when it was at its height.

Clearly, we know that a lot of extra water was going out.

The way that they evaluate how much water loss we have, which is the term that they use, is really interesting.

Um, there's a specific formula that TCEQ sets out, and that's how they evaluate it.

For our purposes, I'll say I've never been satisfied that we're able to account for everything the right way, though.

For instance, it doesn't tell us how much is going when the fire department has to put out a fire.

It doesn't tell us how much is missing when a contractor hooks up to a hydrant and steals water.

Most people don't realize that uh contractors, if they hook up to a hydrant, there better be a meter on that.

They're supposed to pay for that.

But uh I had a council member very recent, I think it was Councilmember Castillo showed me a picture.

He says, Is this supposed to happen?

I said, nope, because there's no meter there.

And it's difficult for us then to account for that.

But you're right.

Uh two years ago, our estimate was the partnership published this number about 32 billion gallons of unaccounted for water.

That's more than Fort Worth uses in a year.

We're confident that we're losing, in other words, due to unforeseen circumstances, we're losing a lot less than that.

But it is hard, I think, to come up with the right number.

Following up on what you said about you know, contractors coming in and affecting our infrastructure or using our resources, um, you know, say, for example, ATT comes into the neighborhood and lays fiber in the street.

And while they're laying fiber, they hit a water line, and now that has to be repaired along with the street.

How good are we about you know recouping those costs from ATT and these other um people that are affecting our infrastructure, and then the city of Houston has to come back in and fix?

In short, we're not very good at it.

Um, we've been working with procurement actually to look at specific vendors who are really good at that.

And um, there's an opportunity, I believe, coming up here in the next few weeks that SPD's been working through that's gonna help us significantly in the subrogation game, and I mean significantly.

And I think that's just a it's just a natural aspect of how many assets can you dedicate to going and chasing all this down internally.

That's not something we're ever gonna be really good at because our resources are limited.

There's experts out there that can do it.

So your point is so well taken.

We've actually been working on this for a little while because it's not just water lines, it's every time there's a car accident and someone takes out a traffic pole, right?

I mean, our cost to get new um poles and mast arms and the the delay time it takes and the actual expense of them putting up there, sometimes it's three, four hundred thousand dollar repair.

Well, maybe someone who's got some insurance and was involved in that accident can help us out on that.

That's something that we've just not really been super good at as a city at doing.

We want to be better.

Thank you.

Councilmember Ramirez.

Thank you, Madam Chair.

Thank you, Director and Samir for the thorough presentation.

Um I want to take it in a different direction.

So last year you absorbed department of neighborhoods, including code enforcement, right?

Things like um dangerous buildings, which I understand uh we're taking out of the stormwater fund for those dilapidated buildings that are adjacent to uh ditches and such.

Weeded lots, junk motor vehicles, unlawfully placed signs.

Uh in FY 2025, Department of Neighborhoods had 44 and a half FTEs doing that.

Um I don't see a corresponding page in the big budget book uh detailing code enforcement under public works.

Can you tell me where I can find that?

I don't know if it's in the big budget book, but we can certainly get you a breakdown of where everyone sits across the department.

In terms of code enforcement, we've got roughly a hundred inspectors at this point.

Um we are still looking for about 70 more.

Um, so in terms of the vacancies we have available, we're looking towards that.

We are now funding more folks in that department of neighborhoods part of code enforcement than previously.

You noted the 40 were closer to 78 of those right now, I believe.

So that continues to trend in the right direction, but it is a big part of our resource considerations.

Gotcha.

And the 44 and a half, um do you you mentioned you've got a hundred now approximately?

They they do more than just those types of violations I I mentioned earlier.

Is that right?

Yeah, a big part of our consolidation of the department of neighborhoods into uh the permitting center was actually to improve that efficiency.

Whereas previously in public works, we were only focused on commercial enforcement, and Don was in uh focused on residential enforcement.

You know, we'd have people passing each other in the street to do the same thing because we have no zoning in our city.

You'll have commercial and residential in the same spot.

Cross-training, improving the opportunities for those folks to now tackle multiple things in the same block, allows us to get more done.

We're gonna continue to work on developing workforce in that manner.

I appreciate that and and just to reiterate you know we continue to get a lot of complaints about those kinds of things I know all council members uh get them so any improvement uh would be would be much appreciated and I know recently um prohibited yard parking for instance landed on your plate as well um how's that going?

I think it's going well one of the things interesting about prediv yard parking is there's very few actual PYP spots across the city and so sometimes that conversation gets um extended beyond its actual boundaries you know you have to have a specific zone that's designated as PYP our ability to triage that and then to engage with HPD if there's a dangerous circumstance I think has gone very well and and the numbers are trending in the right direction.

Okay let me ask you about uh water bills which are now going to include if this proposal passes of course um a five dollar administrative fee to help fund solid waste I'll ask this question and then go back in the queue uh you mentioned early in regards to earlier in regards to slide number 10 about 500 accounts request bill relief uh on their water bill on a monthly basis now any uh idea how that number may be affected when this five dollar administrative fee goes into effect um I I'm sorry I don't remember saying that we had about 500 on average that that do that that number varies on who's requesting relief in any given month I will say that programs we've introduced have allowed um you know 75 percent of individuals who request assistance to receive assistance on their first call either virtually or on the phone I don't anticipate this additional five dollar fee impacting our operational ability to resolve customer concerns though.

All right I'll go back in the queue Councilmember Fleckinger Thank you Chair.

Life span of a pipe I know it probably varies by type of pipe and all that but what is the average lifespan of the pipe?

You know typically if you're looking at what we're putting in the ground today we want it to last 50 plus years.

Now we've got pipes that are much older than that in the city.

We do have pipes that are over a hundred years old we've got cast iron pipes in Freedmanstown that we know for a fact are over a hundred years old that's why we've had an extended engagement over there to replace them.

But you want to make sure that you're doing things that allow your infrastructure to last a really long time and we hope that that's 50 plus years.

Okay.

You said six percent of the pipes are causing the vast majority of the problems.

About two years ago we did a study that showed roughly two-thirds of our leaks were occurring in six percent of the system.

Okay.

Is there any commonality between those?

I know you said they were spread across the city is a type of pipe type of soil one of the things that we noticed in specific was that asbestos concrete pipes were especially prone to failure right now the other thing that we noticed is also the depth of those pipes.

So as we went through extreme drought over the last few years we're still actually paying for the drought from two and three years ago we used to bury pipe much shallower than we do now.

It wasn't uncommon for you to find in one of those breaks that actually you're maybe only two, three, four, five, six feet below instead of 10, 12, 14 so there are some commonalities that you see across there, but the reality is in a system as big as ours, 7200 miles of distribution system, you're gonna have problems all over the place.

Do we know where the asbestos pipe is or do we find out after we do we do generally know where it is I will say that one of the things that the team has done a admirable job over the last couple years is improving our GIS database to understand the quality the material the uh lifespan um issues that we've had previously stuff that frankly we had not tracked very well in years prior.

And I assume they're moving up on the party, let's the areas that have of course to spy.

Okay.

Um you talked about striping, and we've got internal and contract outside contract we use.

What's more cost effective?

It depends.

Um in many instances, contractors more cost effective because their equipment operates at a better rate than ours does um for uh for some reason.

We've had a lot of equipment problems with internal city equipment.

Now we've been buying new and different equipment to that end.

In fact, we didn't want to keep buying the same stuff that seemed to break down a lot, but also the types of materials that you put down and when they are applied matter.

We've had pilots this year actually where we've started using robotic arms to do some of our striping and painting, which is more safe for our own internal employees.

It actually also means that we don't need to have as many employees on a particular site to do that striping.

So it really depends on where, when, and how, but we have a pretty healthy mix um on who we're using at this point.

Keyword.

They're doing our Eastwater plant.

They're one of the CMARs, yes.

Okay.

I saw where they are exiting the Baltimore Key Bridge because of cost concerns.

Is that raise any red flags?

We had some very detailed and pointed conversations with them about that specifically.

Um it gave us enough comfort.

I don't want to get into their business publicly because it's really their story to tell, but I'll say our concerns were were resolved there.

The media narrative being that they were almost being kicked out, is really not accurate.

It was a matter of this is what was asked to be delivered, and the city of Baltimore no longer liked the time frame and price it would cost.

Yeah, my understanding it was a cost.

In fact, I was at a conference where there was a number of people out there and yeah, and they're kind of curious as to how it ends up when it's all said and done as well.

So if I can go back in the queue.

Councilmember Salinas.

Uh turning back to illegal dumping, and again, appreciate you all answering my questions.

Um, can you walk me through sort of what exactly we've allocated towards, if not education enforcement, um providing additional access specifically towards illegal dumping in this current budget.

Uh what we've allocated in this budget is the operational needs of the department to be able to respond to all trash concerns.

And so we have rolled that into those operational groups.

We haven't broken that out specifically.

There's not an illegal dumping group.

So let me put it that way.

So that's why you don't see a line item for illegal dumping on there.

But the combination of solid waste into public works also allows us to stretch the efficiencies that we've been trying to initiate for the last couple of years, where they oftentimes would require assistance from public works in terms of heavy equipment from transportation and drainage operations, for instance, to come and clean a ditch out with a grade all, so on and so forth.

I think that we will learn a lot over this coming year.

Again, I'm confident that we're able to meet the operational challenges right now.

I'm confident that we'll do a better job than we've done in the past.

But I also know that we're going to learn a lot as we go through this to help us understand what the true cost and what some of those pathways uh are going to be.

More importantly, this is going to give us a wonderful opportunity to ensure that we recognize, especially in the city limits, that we're not alone here, right?

Our county partners are here with us that can play a tremendous role.

We do need assistance from law enforcement to catch bad actors, so on and so forth.

Um, those are things that the department itself is not really equipped to do, and it's gonna require us to team up with others.

Okay, so I just want to make sure I understand last year there was about 1.2 million specifically allocated towards illegal dumping.

This year there is no budget item specifically allocated towards illegal dumping enforcement or education.

Do I have that right?

That's right.

It's actually wrapped up into our operational costs overall.

It's not a decrease in that cost.

But you can't give me sort of any specifics of we're gonna allocate X dollars towards enforcement, we're gonna allocate X dollars towards education or cameras or assignage or anything like that.

Yeah, many of those things are not actually items that we take care of in in terms of that cameras, for instance, is typically handled by a law enforcement agency.

So um we have taken the personnel costs and the time that it takes to remove illegal dumping, and that's what our responsibility is in that challenge.

As I understand the budget has four inspectors uh for responding to 301 calls rela related to waste, three of those are currently unfilled because of vacancies.

Is the plan to maintain four in the upcoming year?

And what's the plan to um fill the three vacancies?

We intend to always make sure that our personnel matches what the need is going to be.

Certainly, if it's taken four for them in the past to respond to that, and three are vacant, we need to fill those three vacancies.

But we have an aggressive um hiring plan in place that we work with human resources to accomplish to make sure that we've got all of the necessary resources.

In addition, being part of the department means that we're able to now share existing resources that also exist as well.

We already have a lot of customer service reps who respond to 311 complaints, and so we'll be able to utilize those in the meantime.

Councilmember Huffman.

Thank you.

So we're talking about implementing a garbage fee in this budget, and right now it's my understanding that the sponsorship program for private trash pickup, that's not going away.

Is that correct?

We do not uh have any plans to take that away.

Okay, and so the sponsorship program right now provides households six dollars per month per household for the trivia private trash pickup, right?

Correct.

Do you know when the last time that number was increased?

I do not.

Okay, but I mean, I don't think they're okay.

So six dollars sounds like it's since the beginning of time.

It's the beginning of time.

Okay, great.

Um and how many households have private trash pickup in the city of Houston?

Do you know?

Um I asked that at 50,000.

I think it's about 50,000.

Okay, 50,000.

And um, and so right now, if somebody wants to get off private trash pickup and go back to city services, um, it's my understanding that the city doesn't have to take those households back, is that right?

You know, I don't know the answer to that question, but uh it's a good question.

I'll be happy to find out.

Okay.

And I think you know, to think in the future, because just like you said, nothing's off the table.

If for some reason, you know, the sponsorship program goes away, um, you know, if we're anticipating that, then at some point we probably need to halt the sign up to be on you know the sponsorship program.

And then also the city, you know, we need to be willing to also take all those customers back on, you know, if something like that happens.

Um I know we talked about the containers being replaced or repaired um whenever they're damaged.

Do we know what the number one reason is?

I know we had you know 30 to 40,000 new homes come in, so those you know, each required cans, but when people are calling in for replacement, is it because they were stolen?

Is it because they were damaged?

Do we have any idea?

I'm sure we do have some data on that.

Do you know?

It's a theft sounds like, okay.

And um, but I'm sure we can get you a more detailed breakdown on those case types.

I will say this is an interesting thing, is we've um explored the complaints into solid waste.

There's something like 38 different 311 case types that are out there.

Um it was staggering when I first saw that, and there's so much overlap in some of those descriptions that it's almost impossible to say, well, what is the real issue there?

And so we're working with ARA to improve the intake system there so that we can better triage and respond to those cases.

Thank you.

And I know that you know, we um because of you know the way records were kept or sometimes you know, we have floods and things like that, and records were taken away that we don't have a clear map of all of the water lines in the city of Houston.

Are we requiring, you know, contractors like say ATT comes out and they have an idea that a water line, you know, is approximately this, you know, far away from the curb and this far down, and then they get in there and realize, oh man, it's actually a lot closer than we thought.

Do we have anything requiring contractors to update the city of Houston when they encounter water lines and things like that?

Uh generally we work with them on those things because usually when they discover that there's a there's a call that's made um in order to triage that.

We um are being aggressive internally, however, to make sure that those things are updated, and we're also exploring what are our responsibilities beyond that.

Um we've talked about perhaps joining the 811 system, for instance.

You know, we're not part of 811, and the reason for that has a lot to do with cost, um, and the cost has got to do with the size of our infrastructure.

If we were to have to go out and respond to every single one of those, it could start to become pretty costly for the department.

But maybe there's a middle ground that we find that also helps us along the way to improve it.

But we've made such a tremendous improvement in our mapping, in our uh asset management here, that we're moving in the right direction.

And even better, as we get aggressive with replacing pipe, you know, upwards of three percent a year, and we're focused on older broken pipes.

Our information is going to naturally get better as well.

Thank you.

Councilmember Romares.

Thank you, Madam Chair.

Director, let me ask you about water rates.

Earlier, it was said that uh you're going to be looking at the water rates that residents pay versus what commercial uh entities pay to make sure that uh we're being fair to Houston residents, and I appreciate that.

Um obviously our water rates are going up.

I got a notice in the mail recently.

My water rates are going up like everybody else's.

Um wondering because you and I have spoken before about the rates that non-Huston residents pay.

My understanding is we provide water to more non-Huston residents than residents.

And I've always wondered well what rates are they paying?

Are their rates going up as well as our rates go up?

That's a that's a big part of the purpose of our rate study.

Many of those customers are contractual in nature, so they pay contract rates that have been negotiated at certain times.

However, most of those contracts also include a mechanism that as we go through a rate study, it allows us to make adjustments to what those rates are.

Um now there's not a one-size fits all.

Some of them are really, really good deals, particularly with the industrial customers, for instance.

There's a few of them that um, I mean, it's almost like it's free.

Um we've got a we've got to fix a little bit of that.

But you're right.

We we serve, I mean, there's two point three million Houstonians here, but overall we think we're responsible for nearly seven million uh people in the region who get their water in one shape, form, or fashion from the city of Houston.

This rate study is what allows us to start the process of evaluating how do we make the right types of adjustments in a way that's fair to both of us.

Some of them it's past due.

And those contracts, by the way, many of them are very long-term.

We're talking 30 and 40 year contracts.

So we have some from way back when that we're still dealing with, and they've had rate adjustments over time when rate studies have taken place, but we still have some that maybe have been signed in the last few years that now have a long um finish point later on, so we need to make sure that we're setting ourselves up for success later on.

Well, totally agree with you with you on that.

And I know we've been having this conversation for a while.

Can can you can you share with us what kind of progress has been made to reevaluating those those rates and those long-term contracts?

So we we engage with RAFTELS as our outside firm that is conducting the rate study right now.

Um we expect the draft, the first drafts of that rate study to come probably in the third quarter of this year as we refine it, and then council will have an opportunity to review and approve any potential changes that are proposed.

We anticipate the beginning of next year.

Appreciate that.

Let me direct you to slide 24, which dealt with um solid waste operations, which are now on your plate as well.

Um, there's some performance measures on the bottom of that page, a number of them.

There are targets listed for FY27, but there are no targets for uh years prior to that.

Um, am I to understand that in prior years there were no KPIs in solid waste or at least not these?

I wouldn't say there were no KPIs, but these are new KPIs proposed for this fiscal year.

Um, and as I indicated in 60 days, we anticipate coming back to an appropriate council committee to present uh refined and updated KPIs that are focused on outcome-based measures rather than output.

These ones, from my opinion, are very output-based.

In a lot of instances, they're not even ones we can control.

Um, for instance, we used to talk about this with the permitting center, right?

Why are we measuring the total number of plans reviewed?

We have no control over who's submitting plans.

I'd rather know how many plans are reviewed within three, five, seven days, et cetera.

We'll make the same and similar refinements for solid waste.

I mean percentage on time collection.

Correct.

That's what I'm really interested in.

That's great.

That's that's much more appropriate.

Um I uh I'll go back in the queue.

Councilmember Fleckinger.

Thank you, Chair.

Um kind of continuing on from what uh councilman Julian was speaking about.

Um, KPIs.

How are we doing on the KPIs?

In terms of development of KPIs.

I mean, you've got annual replacement of 3%, 7199 miles of transmission, or are those new?

They're not new, uh, all of them.

Some of them are new.

For instance, our six million uh linear feet of pavement markings.

That's that's a new one this year.

We've not tracked that previously.

But pipe replacement, you know, last year we did 0.3 percent.

Remember, I said the target's three percent, and we knew going into last year when we set it at 3 percent that it was going to be really difficult, if not impossible, to get to that just because of the capital program necessary to do it engineering and so forth.

This year we're still at 0.3 percent.

Within the next week, we will be launching an RFQ for a program management capacity to effectively take on the responsibility of this waterline replacement program that we believe is going to tremendously accelerate the replacement cycle.

We thought that we could do this in-house.

Um we're not moving as fast as I would like.

And so we partnered with SPD to put an RFQ on the street, and it's coming here very quickly to move this along because we don't have a lot more time to waste.

Okay.

Um reviewing 80 percent of construction plans.

Was that last year's?

That was last year's, and we're moving in the right direction.

We're still far short of 80 percent, I think.

If I remember correctly, we're closer to like 55 percent.

Okay.

But last year we were at 30.

Okay.

Um, so as we talk about improvements to the staff and the organization and what we need to do, the most important thing is we're moving in the right direction, but I want to not just creep along, right?

I want to move, you know, at warp speed in the right direction.

Twenty-five percent improvement is is great progress, but I expect this to be at 80 percent this year.

That is an expectation of our staff.

Uh 90 percent of floodplain inspections.

We do really well there.

Uh we've had staffing challenges in the permitting center there.

As we've increased staffing, that number will continue to go up as well.

But that's a new KPI for this year.

Okay, thank you.

Councilmember Salinas.

Thank you.

Um, going back to illegal dumping, uh, I understand from your team that public works has decided to no longer publicly report KPIs related to illegal dumping cases investigated, resolved, and average days to resolve.

Given what important metrics those are, can you help me understand why we no longer want to make those reports public and if instead we can make a commitment today to continue to make them public?

Yeah, I would I would say uh if that was what was communicated, that is an error because that is not the way, and I think everyone knows that is not the way um I allow our department to run.

We make sure that we are as transparent as possible, and so we will continue.

In fact, that's the point of I mentioned of the new maps that we want to have come out that are interactive for the community.

I want people to know when we mowed their last, um, and I don't want to try and hide behind excuses.

Now we have excuses, and by the way, I don't think excuses are acceptable.

We do have excuses, right?

Our technology isn't particularly good.

We haven't kept very good records.

We're trying to catch up on a lot of things, but that's all they are is excuses.

Our responsibility is to improve that.

So if that was information you receive, I'm a I'm sorry for that.

That's not true.

We will report those things.

That's great to hear.

And so then will you make new KPI projections for those figures?

Because they were not included in this year's budget.

They had been included in prior years' budget.

For example, for um in illegal dumping investigations resolved.

We actually dropped from 64% down to 42% last year.

And so I would hope we set a KPI where we try to not only stop going down, but actually increase what we did two years ago.

Can can you commit to giving us specific KPI numbers for that?

We will we I will ask the team to go back to and get those numbers refreshed.

I appreciate that.

Um, turning to the issue of inspectors, we noted that thing, and thank you for writing some information.

There's over 95 inspector positions that remain vacant.

Are those encompass in the 500 that you hope to fill this year?

Okay.

And then with regards to um the ACs in the solid waste trucks.

Um we were really glad to hear that there is a commitment to fix all current solid waste trucks that do not have AC.

I can't imagine collecting trash in a hundred-degree weather.

So I'm really grateful to hear that.

Um can you talk us a little bit more about the plan for that when those trucks will be taken off uh fleet and what the plan is to maintain reliable services for consumers given I don't know how many trucks this is going to impact?

Yeah, council member, I I uh join with you in both the uh surprise and shock of those types of conditions.

Sadly, it's emblematic of a lot of the conditions that the folks in solid waste management have been dealing with for a long time.

It's not just the vehicles, it's the facilities, for instance.

Um there's a huge investment that has to be made there.

You know, we bought 50 new trucks last year, the largest number of trucks the city's ever bought in its history, but we know it doesn't go far enough because that only represented about a quarter of the fleet, and it didn't actually replace anything, it just allowed us to cycle through some things.

Uh capital equipment is a huge focus for this budget in solid waste for us this year.

When I talk about improving efficiency, part of what I'm also talking about is making sure we have the right equipment.

Um there are areas of town that the vehicles we have right now just are not best suited for, and we need to evaluate what the best way to handle that is.

When we talk a little about, and Councilmember Martinez brought this up about heavy trash, for instance.

You know, there's a lot of communities that pick up heavy trash every single week.

Uh I live in one.

Um it's never missed.

But their equipment and their operation looks completely different from the way the city of Houston does it.

So we're going back to the drawing board and saying, what do we need to do to make sure that we can deliver the same sorts of reliable services everyone else has.

And we talk about the sponsorship program, right?

And and we've had questions about would we think a bunch of people will jump off for a five-dollar trash fee?

Heck no.

Because they're getting on-time trash today, and they don't have those kinds of complaints, right?

They've they've already paid their fee and they've got what's going on there.

They're not going to leave something good for something bad.

Now that question will change.

I promise you, in a little while, when we fix our operation, we start to perform at the same level as everybody else, but we're not there yet.

So we're gonna fix it.

Do you have a timeline or an estimate of how many trucks this is gonna take off?

We've got to work with fleet management.

Ultimately, they're responsible for vehicle repairs, but but I have already begun conversations with procurement with the mayor's office and others about ways that we can aggressively improve that timetable and get it going.

Because as we get hotter outside, we don't want our folks suffering in their vehicles.

Councilmember Ramirez.

Just a few more directors.

Mentioned a container lease fee.

Do we know what that's gonna be?

How much?

Uh the container lease fee is the same as what it's been so far.

Which is remote.

I think it's like a dollar sixty-seven per month.

Okay.

Um, related to that, uh, or solid waste anyway.

Uh recycling contamination rates.

So they're pretty high according to the vendor FCC, 42 percent recently.

Um what is being done to get that contamination rate reduced?

I think that's part of our overall holistic planet refining operations.

Um, there's a lot of things that probably need to take place for us to uh tackle that particular issue.

I'd also say one of the things to tackle is figuring out where else we can also make sure that we're more effective in collection and how we do it.

This really goes even, I think, to Councilmember Salinas's question about uh public education, right?

We need to partner with others about ensuring that they understand this is what you do and how you do it and why you do it that way so that we can get better.

Frankly, no different than the fog program.

We call it fat soils and grease, the fog program we have in the wastewater utility.

We partner with the health department, for instance, to do public education on that aspect of it because that's oils and greases is the number one uh sign of blockages in our wastewater pipes.

So we need to do a lot in terms of not just what we will do, but how we engage with others to help us in the same mission.

Well, I appreciate you taking a look at that because whatever is being done right now, it's it's clearly not working.

And my advice to FCC was you guys take ownership of it, right?

Because it affects your bottom line.

And uh hopefully some arrangement will be worked out there to where uh that contamination rate can be brought down.

Um last thing I'll ask is in regards to the administrative fee, five dollars a month, which is later gonna turn into apparently the garbage fee.

Um, do you know if when we vote on this budget we're only going to be asked to to approve a five dollar a month administrative fee, or is the language going to also ask us to approve a $25 a month fee in three or four years?

My understanding is that the package will be a five dollar fee, and any future increase to that fee will require specific council action.

All right, thank you.

Vice Chair Castillo.

Thank you, Chair.

I want to go to slide 20 for solid waste management.

One of the KPIs, tons of tree and yard waste collected.

Does that include the lawn clipping yard waste?

Um I know that's they say no, no.

Okay.

Um that's been a source of frustration, you know, apart from the bulk tree waste, the bulk heavy trash is the actual lawn clippings leaves.

Um, is there any indication that that will change in the upcoming fiscal year?

Like I mentioned before, everything's on the table for us right now.

Um we've been able to dive in pretty deep so far on how operations are going, but there's still a long ways to go on that.

A lot of what we've done has been internal.

We do anticipate an engaging with some external experts as well to help us evaluate those operations and see where it can take us.

Thanks.

Councilmember Martinez.

Thank you, Chair.

Um, just uh as we're looking at these uh KPIs on the replace and repair, um, I anticip I believe that we have a good understanding of how many refuse cans we have now.

Correct.

Uh yeah, we know how many.

Um, and what I'd like to, you know, is kind of as the next couple months happen.

Uh, it'd be great to know what is that number that we need to be purchasing so that way we don't overpurchase, you know, we can make sure that these dollars are going back into to the work that needs to be had.

Um and then the just the last thing um the on average solid waste was about a hundred million dollars uh for the past few years.

Now we're looking at 134 million dollars.

I also anticipate that that 24 million dollars would help with a lot of the operational challenges that we've had infrastructure as well.

Um you said three months, y'all come back or six months.

I can't remember.

In in two months, my commitment is in two months we'll come back on KPIs.

Um it'd be great to have what that extra additional, you know, 24 million dollars.

And quite frankly, if I'm not mistaken, I think that's what we would we were always telling folks.

At least I was out in communities and civic clubs that in order to write size that department, you really had to fully fund it.

Um, and we're still behind because there's things that you mentioned we've purchased 50 uh trucks, but it doesn't take into consideration the maintenance of those trucks and so on and so on.

So uh in two months, I uh I'm excited about you know what those those uh operational changes are, what the infrastructure uh support that will come as well, and so just kind of teeing it up.

I'm ready to go.

Absolutely, and council member, your point is so well taken.

One of the things that this budget is is tried to do is we we have looked at the past at what's been funded.

I'll say two things.

First of all, um throwing money at the problem isn't gonna solve the problem because we've done that for years.

We've just thrown money at the problem.

However, we also haven't properly budgeted the department to start with in the first place either.

And a lot of the correction you see here and going up to 134 million is looking at in the past, this is really what our trend has been, and there's no reason to think on day one that trends going to stop.

We hope by the end of the year that we're in the right direction and we start to get a better idea of that true cost.

I also want to make sure that we don't forget about the solid waste employees as well.

Um they're working in some conditions right now, of course, that we all know, uh, that definitely need to be improved.

And so as we're looking at, and I say this even about uh, you know, working families, you know, at the at the hotels and GRB, if if there's more funding coming in and understanding personnel is usually the highest cost in every department, we want to make sure that those solid waste employees are also seeing some of the benefit of now having this um you know increase in funding to make sure that that continues to uh bring people to solid waste, but also keep folks in solid waste as well.

Yeah, I agree.

And you will see facilities, um equipment, the essentials of your job is going to tremendously improve in public works.

Thank you.

Councilmember Salinas.

Just a few more questions.

Um talking about the water rate, and I know that sounds like we're sort of suggesting there may be an increase down the road, but do you anticipate that one will be necessary in five years, if not sooner, to support the right-of-way transfer?

The way we've looked at it so far, no, in short.

But um that's the purpose of going through a rate study.

Can you elaborate on why you don't believe there'll be an increase?

We think that the way that the fund balance is traditionally worked for us and at the rate it grows and the way we deliver projects, that um frankly, a change in our policy, the internal policy of how much cash on hand we keep allows us to use whatever those proceeds would be towards the right-of-way fee.

Okay, so do you anticipate as I understand the the internal policy is 300 days?

Is that right?

That's correct.

Do you believe we can maintain a 300-day policy for five years under the current rate, or will that necessitate an increased rate?

Well, we're at 550 now, and it's only grown.

We've been above 300 days for a very, very long time.

Um, having said that, we also know that we have really big capital projects moving forward at you know, the investment, the CIP investment alone is going to accelerate some of those dollars as well.

My my best answer to you at this point is we feel confident in the model that we have that we'll be able to maintain the right-of-way fee with no impact to our customers.

So you just to make sure sorry to be dense to make sure I understand, you believe we'll be able to maintain at least a 300-day cash on hand policy without increasing the water rate for at least the next five years.

I I will I will say one of the things we're doing is looking at what our cash retention policy is.

300 may not be the right number.

Remember, the city's number is 60 days.

We believe it needs to be greater than 60 days.

That's part of our evaluative process, but we believe that whatever number we arrive at is going to be sufficient for us to maintain that operation.

Do you have a sense of what you're looking at if somewhere between 60 and 300?

I don't at this time.

Okay.

Um the mayor mentioned uh in an interview last week that there were issues with holding our recycling vendor accountable, and that was leading to some of the issues related to the high um rate of of materials that we send them that aren't in fact recyclable, and that's why we're not receiving income, even though we have a gross we have an agreement by which we should be receiving income from the contract.

What are the specific issues that we're facing with holding FCC accountable?

I'm not I'm not sure I know to what the mayor was speaking, so I don't think I'm in a position to answer that question for you.

I'm sorry.

Are you aware of any accountability issues we're having with FCC?

I know that we have to work closely with all of our contracts.

Everyone who holds a contract everywhere, there is a level of accountability that we have to have.

I don't know what the specific issues may be with FCC, but I'll say um everyone agrees on both sides, there's always room for improvement.

The city can do better on how we enforce those contracts.

Sometimes the vendor can do better on how we enforce that.

But we need to make sure that we are very clear with what those expectations are going into it because that's what leads us to the best success.

And if I may ask, do you understand that we're currently meeting our obligations under that contract?

I don't know.

Okay.

Staff from Council Member Kamen's office.

Thank you, Chair.

Thank you so much, Director, for your presentation.

We're gonna be submitting some more questions uh in the portal, but just very briefly.

Um, does the FY27 budget include any disaster preparedness contingencies should the city not be reimbursed following a weather disaster, not only with public works, but also with the restructuring of solid waste with storm debris as we've seen in prior years.

Is there anything in the budget related to that?

You want to go?

Kind of goes back to uh we had discussed this previously on the combined utility system.

That really is that policy that we have internal uh to respond to weather-related emergencies and on the other service lines within Houston Public Works.

Um, it it it's not necessarily a fund that's set apart for disaster preparedness.

Um, unfortunately, sometimes it just depends on we have to reallocate funding from one aspect or one area to the other, depending on if the disaster does uh befall us.

Okay, thank you.

And on slide 23, um, for the mayor's office for people with disabilities.

I just noticed in FY26, the full-time employees was six in last year's presentation, but this year it's zero.

Was there restructuring that took place or have they been moved to a different division?

Yeah, so um a portion of MOPD is now funded outside its it's funded by Metro.

And so the department's responsibility on personnel funding has shifted.

We highlighted here because um really the biggest operational part of MOPD is the PAR program and the construction of sidewalks, which we complete for them as those applications are approved.

Got it.

So is there like public work staff that oversee the PAR program that are in like a different division, not technically under this designation, or are they still like with MOPD under Metro?

The delivery aspect is within public works, those are really in our engineering construction teams.

Awesome.

Thank you so much.

Thank you, Chair.

Staff from Council Member Jackson's office.

Hi, thank you.

Um, I didn't see anything about um neighborhood inspections under permitting.

So what what efforts are happening there?

What are the targets?

What are your KPIs for that?

So we do have a number of KPIs, which is found in the backup material of the appendix.

Um, one of the things that we're doing is we're trying to make sure that we respond to all 311 requests, 100% of them within seven days.

That's a biggest part of our enforcement mechanism right now.

In most instances across most programs, we're already really good at that.

We we we hit it.

But some of those, which are ones where we're still trying to get more inspectors into, we're closer to 10, 15 days or so.

Those are our biggest opportunities right now is to make sure that we get eyes on problems as soon as they're reported rather than letting them linger because sometimes that doesn't give us the best data either.

Also, once you do respond, um, you know, there's an escalation.

I also wanted to see something about what happens with, you know, with uh the yellow tag citations.

What are the results?

Because I've heard that a lot of uh citations are getting dismissed.

Um, so I would like to see an improvement on that.

Like how can we uh whatever percentage was dismissed this year, can we improve on it the next year?

Like to show that we're learning on how to do that.

Yeah, I and I think I think there's good data that we'd be happy to get uh as far as the actual process, you know, our part in the process really ends at the citation and then at a court appearance, right?

At a court appearance, um, when our inspector has to testify it moves forward.

What the prosecutor or the judge decides to do with the citation is completely out of our hands, but we would be happy to compile the data and and show you kind of where it's gone so far.

Yes, I would also like to see something about illegal dumping in the KPIs, right?

Either um fewer illegal dumping that we're responding to or where what where is legal dumping originating from?

Like I have my my theories, but I have no data to back it up, right?

That it's construction, that it's landscapers.

If we could track where illegal dumping comes from, then we can solve it.

We can certainly work on that data.

I would like to see that.

Also, in this in this past year, you said that um for uh ditch re-establishment that you didn't spend your fully uh budgeted amount because you had uh spent less.

Can you talk a little bit about where you found the savings and that you did hit the target?

Yeah, you know what's what this is what's really interesting about ditch reestablishment.

We've had the question from a number of people across the community and some council members.

Uh tell us about the specific ditch reestablishment projects.

I'll say this there is uh an understanding on how the term is ditch reestablishment itself is the project.

There's one program.

Now there are work orders that are issued based off of inspections that move forward, and even the inspections themselves are certain work orders.

But our our target, the project itself is 500 miles every single year.

We will again exceed that this year.

Our slides here said we'd had 500, but we know right now, based on where we're going, we will exceed it again this year as we have in years past, and we keep moving forward on that.

Our effectiveness has been um when the program started two years ago, we didn't know really what it would cost.

And so the department kind of came up with a number.

We thought this is what it would be.

There was a huge investment in capital equipment to make it happen that part of it is now passed and as we have improved on the rate and speed of those contracts the cost has gone down we have a good idea of the true cost which is what's reflected in this budget now that means that we're not going to hold funds basically hostage for that port of the program and we can reallocate them to other places like LDP where we know we need to uh perform additional projects themselves separately thank you we have come to the end of the council questions I will spare you my 30 questions I just put it up online um and then thank you you already answered a bunch of my solid waste class questions so um and I publish those questions and answers anybody who cares to be bored to tears to read through them but really can't thank you enough for sitting here for two hours um getting everyone's questions answered we're gonna hear from the public now this is this is a big I didn't want to cut this short in any way because this is the biggest thing happening in this budget um what we're doing in water suit or sewer operating with the right of way transfer which with the subsidizing the solid waste um departments operations with reserves with the new administrative fee so this is this is really the story of this year's budget so want to make sure we we have ample time to get people's questions answered I'll also remind the public or anybody watching you can email I have a question for them on my web on the on my website you can fill out ask questions we'll get them answered by the department um thank you again Randy Samir Director Hassan very very grateful for your service and um looking forward to all the things ahead we'll call our first speaker is Doug Smith.

Good afternoon couple things to start out with uh I heard a discussion about a big change happening in paygo and I didn't catch what that was but it kind of put up a red flag to me and I'd like to have an explanation of what that is I think I think he was referring to uh CUS projects water sewer projects um how much is gonna be debt supported and how much is paygo it was not every time I hear pago I think of the drainage uh yeah right and street renewal weren't that's all pago nothing's changing there thank you okay that's what I was considering yeah DDSRF is what I was concerned about uh in their uh capital excuse me their short-term goals under capital projects fund they talk about executing the current northeast water plant project and they say nothing in their goals about what is a huge project and that's the east water treatment plant and I would think that that would certainly be high in their priority of things they want to address.

And uh secondly under the building inspection fund uh they say launch the metropolitan multi-service center expansion plan my question to that is why isn't that done under GSD?

Why are they responsible I asked some written questions about that so when they answer that question I'll get it to you okay fine and now uh in just looking at the budget and understanding all of the transfers it seems like they're gonna roughly transfer a hundred million dollars for the right of way uh a hundred and seventeen million dollars for uh solid waste and then a completely new project 87 million excuse me 87 million dollars for uh the uh project uh on smith's 1600 smith street so that's over 300 million dollars that's gonna come out of this fund and I'm wondering where that money is gonna come from because I had requested after uh uh BFA meeting uh that uh they have this surplus, and where is that money allocated?

And they came back to me and they said it's all allocated to various projects.

Uh certainly projects like uh C US reserves for operational $500 million dollars three hundred million dollars for fund eight oh three or eight eighty three oh five I don't know what those funds are, but it seems like their cash reserves based on what they sent back to me are all reserved.

So where are they gonna come up with 300 million dollars to fund these new initiatives that they're doing?

Uh secondly or thirdly, I guess.

Uh and again, I have to work from the budget, not the report you got from them.

Uh they say under the DDSRF advalorum tax, it includes 215 million dollar transfer from the general fund for the Jones Watson settlement.

And if you look at the current budget compared to what the proposed budget is, that only increases 30 million dollars.

So I don't understand if they transferred 215 million dollars why that hasn't gone up much much more than it did.

We can ask specifically about that.

And lastly, uh under the three DDRF DDSRF funds over the last five years, 25 through 27, they have collected the revenues that are $1,610 million, and the expenses are $590 million.

So they have spent a billion dollars less than they've collected, and I don't understand why when there's so much that needs to be done.

We've talked about this before.

Yeah, going back to the reserves and the DDSRF accounts.

Yeah.

Vice Mayor Pro Time's favorite topic.

Yes.

Oh hi, yeah.

Thank you, Doug.

Well, to the extent we can, we'll get those answers.

Okay, we Jordan's written them down.

We'll get them got those answers to you.

Okay.

Next, we have uh Bill Kelly.

Thank you, Chair and Council members.

Bill Kelly, on behalf of Environment Texas, is an organization that has been advocating for a solid waste fee.

We are very encouraged to see the administrative fee in the mayor's proposed budget.

Moving solid waste under public works and funded under the combined utility system, has the potential to provide more resources in this badly under-resourced department.

Now, to be clear, the solid waste workers are some of the hardest working employees the city of Houston has.

As noted by the controller's report, the average solid waste worker is working 22 hours of overtime per paycheck.

That means an additional a week's worth of work per month, costing the city money and potentially burning out employees.

We are proud to coordinate our efforts with our uh Hope Union brothers and sisters and want to make sure that both appreciate and advocate on our shared mission.

In the FY 2026 budget, solid waste was cut by over five million dollars.

Solid waste department is charged to provide once-a-week trash pickup, bi-weekly recycling pickup, provide heavy trash and yard waste pickup, and operate various neighborhood drop-off centers.

Under the FY26 budget, that was unrealistic, not sustainable, and applied increasing pressure on the general fund.

I don't need to tell you because three out of every top four 311 clause uh 311 calls uh over the past year had to do with solid waste functions, and I'm sure your offices received the calls as well.

As you review the Burns and McDonald's report, which was finally released on the same day as this budget, you can see how underfunded our solid waste department has become.

In that report, it contemplates the total cost of providing services to $27.28 per household.

This compares with Fort Worth at $25.75, San Antonio at $33.75, a much more realistic uh range with our peer cities.

We believe this is realistic and a vast improvement from the FY2026 budget.

However, just securing resources is not enough.

Listed in the report is the cost of services breakdown for a residential solid waste fee for peer education and outreach.

We talked a little bit about that earlier.

It is listed at.04, literally on the pie chart on page three, it rounds to zero.

Given last year's fiscal year recycling rate of 16%, which is much less than the national average of 34.7%, it's really unacceptable.

Councilmember Carter's resiliency committee meeting with FCC showed the potential for investments that can really make a difference in reducing our forty-two percent contamination rate that Councilmember Ramirez talked about.

I'll skip over here uh because we addressed some of these in the previous conversation.

We should not be asking Houstonians to now pay an administrative fee for services they do not want, and that you as council members haven't voted for.

Under the last administration, and yes, I bear responsibility for this, was an MOU MOU was signed with Exxon and Line Del Bacelle to segregate plastics for their chemical recycling program.

Recent developments at the EPA under the Trump administration have added urgency to this issue under the current interpretation of the Clean Air Act.

Chemical recycling facilities are treated like incinerators and must have strict limits on toxic emissions.

The EPA is proposing to regulate them now as a manufacturing process, which could weaken these protections or even create a regulatory gap where these facilities face fewer enforceable standards.

Oh, well, we're asking about the status of the that whole MOU.

So really appreciate your keep bringing that up, and we are gonna keep asking.

I appreciate it.

Thank you, Councilmember.

Sure, thank you very much.

Next, Jack Belinski.

Thank you for the opportunity.

Um certainly uh councilmember Tom Thomas brought up the concern about public works being just too big and to have too much responsibility, especially bringing code enforcement last year and now solid waste.

Hopefully, this will be a good thing, not a bad thing.

But I have been dealing with since ever since the rainbow crossing has been disappeared by this mayor, that we have been trying to re-establish the Pride Committee Lower West Hammer Banner District.

We've been doing this since October.

And the first hard part was to even find the person in public works who deals with it.

I kept getting sent to the sign administration people.

I'm not anybody's fault.

Certainly want to thank District C for helping us in every part of this process.

But every time we submitted stuff, we are told we need something else.

We need something else.

And then there was just time spans in time spans.

Supposedly, this is now at the director's desk and we're waiting for it.

But then we found out another thing is that we need it to now have the city produce the banners.

In other words, we think this is gonna probably be censorship, that we won't be able to put the rainbow colors up there on a banner district that we've had.

Uh, this was the pride committee's thing, it was established in 2003.

Understandably, paperwork disappears from those those eras.

I was part of Pride when this thing was established, but this is a concern.

This is a small thing, a small thing in the big city, but it is a concern that public works just may be too big.

A second issue is I came home on Saturday and picked up the mail, and here's my water bill.

It's a small townhouse association.

Um, and for some reason we got a seven thousand dollar credit.

And I want I don't want anybody to help me with this.

I want to go through the process of trying to get this fixed the normal way everybody else does.

Uh but I hope this isn't something else that a lot of other people are seeing.

Certainly, we can use that part of the hundred million dollars in our little treasury, but we this is not right.

I don't know why we've got this $7,000 credit.

Um, so certainly the new water meters have helped out a lot.

Absolutely, that's a great thing.

I know the progress is hard for a long time.

Thank you.

Solid waste is in much better shape than it was in the past.

I'm looking forward to things getting much better.

The trucks, in fact, there was an article in the Chronicle the other day for something that was a problem with the county.

They showed a picture of our.

I say our garbage trucks.

It wasn't, it wasn't our fault.

So uh thank you for all this.

Um I think code enforcement's gotten better.

Certainly, there wasn't a budget under Don to do it the correct way.

Um, and we look forward for things getting better.

Thank you.

Thank you, Jack.

Great to hear from you.

Next is Laura Gallier.

To be followed by Rain Eatman.

Hello, um Laura Gallery District C.

I would like to get better answers to Councilmember Selena's questions about uh illegal dump dumping and the KPIs around that.

Um I also wanted to say that when I was uh looking through the checkbook as part of my homework for the budget, I saw where HPW had paid uh 265,000 to flock, which I think of as surveillance cameras, and the director said that there were no cameras, so I would like to get clarification on whether or not there are security cameras in HPW.

And I also just want to say in general that y'all know, excuse me, I wasn't expecting to speak, I didn't remember I'd signed up.

Um, y'all know that I've been to almost every budget workshop that you've had, and um this one seemed to be have the most vague comments, um, nothing to be held accountable to.

Everything was a promise of just wait, we're gonna do great.

I promise you it's gonna be better.

And that's really not acceptable.

Um, for something this big, the biggest thing in the whole budget is that the people needed clarity.

We need good leadership, we need good communication around this, and we didn't get it from this presentation.

Thank you very much.

Next, Rain Eatman.

Good afternoon, everyone.

Um, first I want to kind of start off with a comment um basically stating um my own preference and concern with just doing a flat uh administrative fee in general because there are residents in the city of Houston who are on the razor's edge and they have they have home ownership, but they are on the razor's edge when it comes to dealing with additional fees and with the constant uptick of water fees on top of the right-of-way fee on top of this.

It doesn't feel equitable to just do a flat trash fee rather than um taking the initiative of doing a amendment to do a one cent tax raise on the property taxes that would generate at least 28 million versus the 25 million that the $5 fee would generate.

Um, and I would strongly encourage and admonish any council member to consider making that in um at least an amendment for this upcoming budget just so it could be a little bit more feasible for residents uh moving forward.

Um, and I do not write policy, but I am happy to be a thought partner on that one.

Um I will also echo the sentiments of Miss Gallier.

The the fact that the presentation was given in such a way that solid waste was already incorporated into Houston public works, yet there wasn't a lot of data from previous years of what solid waste was able to do with uh uh tree removal, tons of trash pickup things of that nature that didn't give a lot of confidence in terms of like how they are guiding their metrics, especially considering that there is data on hand that solid waste has been able to produce year after year for budget.

So if there's any way that I mean, I know it's in the 19th hour, but if there's any way that there can be like a readjustment.

In the big budget book or the but the budget that's online.

If you go to solid waste, you will see the KPIs through this year.

Okay.

So you can tell how they're doing up to now.

I think the idea was to kind of rework and rework those KPIs and and information in the 20 in the FY27.

But if you want to look at the FY26 25 step, that's all there in Solid Waste.

Thank you for that.

I really appreciate that.

Okay.

Well, then I won't harp on that portion.

Um, I did have a question regarding um uh accounting for, because I know this is a big problem with uh solid waste and how their trucks tend to break down because of overuse or how old they've been um kept in the system.

Were there any um considerations put towards what does that transition system look like for uh accounting for either repaired or just completely new trucks being brought into the Houston public works system?

Yeah, and and a lot of this is handled by the fleet department.

We had that where we did you can it's gonna we can submit additional questions to fleet specific to solid waste.

And I will tell you a lot of this is handled in the capital budget, um, the buying of which is what we take up right after the operating budget.

Okay.

It's appropriate to ask now because it's it's all the same, it's all the same money, but yes, yes, ma'am, yes, ma'am.

Okay, because I honestly didn't know.

Um, I did have is it okay if I asked one more question?

One more, go for it.

Okay, sorry.

Um so with the combined utility system, um, which the trash fee would go towards has the it has the flexibility to allocate funds to various areas of need, water infrastructure, and sewage.

Can you speak to how the monies are allocated in that uh system and how um dollars are prioritized for let's just say a project for stormwater things of that nature?

The first part of your question was how like how are those because the from what I understand the combined utility system with all of those fees allocated in that budget, it's kind of like an um a budget that can be spent towards each of those areas without like specific percentages assigned to each of those.

I think Samir has specific, I mean there's buckets with there's TDO, there's transportation and drainage operations, there's the water, wastewater projects, there's you know, it's all very, very prescribed.

Okay.

Um it's it and so I can I'm I'm sure we can get you some more detail on on how that money's allocated.

But thank you very much.

Sure, thank you, Rain.

Always great to see you.

Next, Felix Kapoor.

Oh, I'm sorry, sure.

Council um Mary with Councilmember Jackson's office.

Thank you, Rain, for coming.

Um, just really quick, you know, the the instead of doing the property tax, you know, there's only we're only 20 million dollars under the cap, first of all.

And second, by removing it from the general budget, right?

We're cutting the deficit by half.

So that helps also.

So that way we don't have to like lay off a bunch of people and you know so that's that's one that's one reason why the mayor did it this way.

That's from my understanding.

Yeah, I mean, we relieve a hundred and seventeen million dollars from the general fund by placing solid waste into the utility.

The extra the $5 fee will bring in about $24 million.

But so there's two two sides.

If you raise the penny tax or you raise that sub to the cap, you do get the $20 million, which would cover the amount that we're you know getting in the fee, basically, but it wouldn't relieve, I mean, but the the action of putting the uh solid waste into the utility would is the one that gives us the most relief with the hundred and seventeen million dollar.

I think I get most of that, but thank you for the clarification.

Thank you.

Thank you.

Felix Kapoor to be followed by Alice.

Hello, council.

Uh thank you, Solid Waste and Public Works for that presentation.

Um, one quick question I had was regarding the billed Houston Ford ordinance in terms of the amount of money that's allocated to debt.

Um, so according to the ordinance, a hundred fifty million of the advalorium is supposed to go to debt service every year.

Um I think in 24 it was updated that the annual pay in fiscal year 24, the annual payment on the website was updated to about 100 or in the budget was updated to about 135 million, um, so it went down, and then I think in FY25, it was at 73 million last year it was at 151, and this year it's gonna be at 227 million um towards the debt payment.

So I'm asking, I would love an answer now, if possible, like why the significant jump of about 70 million towards the debt payment uh from the DDSRF.

That debt payment has always varied depending on what debt service is in the in the drainage and street improvement program.

I mean, it'll vary.

We've paid off about a billion and a half in debt since Rebuild Houston started.

So my question is it's never gonna be a straight straight number.

But it's never, it's never had that big of an increase.

And it must have just been the way the debt was structured and our debt service payment for the for this particular for FY27 was just higher.

Could we get a answer to that?

No, we can get we could get a breakdown of the debt service.

Second uh second question is um for solid waste and public works.

Like, like was there ever any consideration towards putting this fee that we're charging every resident a flat fee towards the safety of the solid waste workers, which they've organized in this very council room to advocate for as well as their salaries?

We can get you a specific answer, but it's going to go towards the general operations of solid waste, which includes the well-being and and salaries and everything of all of our solid waste workers.

So some of that five dollars is actually going to go directly towards their their and what also that what also the administrative fee allows us to do is to borrow.

I mean, that's a that's a known, that's a set set of funding that we're gonna get in.

Yeah, not just borrowing that that five dollars that's gonna accumulate to 24 million dollars.

Towards the operations of solid waste, correct, Randy Ogensamera.

That's going to be which includes drop, which is mainly personnel and equipment and all of that.

Okay, great.

Um a few other questions I had were um I guess public works said there was 900 vacancies currently, um, with the full transfer of the DDSRF uh looming in the next uh I guess next year or the year after I'm forgetting.

Um what are ways that we could expedite uh hiring in public works so that they are able to handle that extra influx of uh of money coming from the transfer?

I think what I heard uh Randy say was there the our capacities to hire about 500 this year, and beyond that, we we don't have the capacity to add more.

Because it's more than just getting the people um on board at its training and equipment and other things, which will just take additional time.

Okay.

Um that's all I have, and the rest I've submitted uh through your site.

Thank you, Felix.

We'll make sure those get answered.

Um Alice Liu.

Hi everyone.

Um, I have a few questions.

The first one is regarding the uh minimum reserve in the C US.

So the argument that Director Maki has made is that this minimum reserve requirement right now is actually excessive beyond what is actually needed.

Um the controller has been telling a very different story.

Um broadly, there's only 24 million dollars of new actual new revenue in this year's budget.

Um, that's going into this US and 200 million dollars is being taken out of what was formerly being spent on water infrastructure funding.

Um, that means that in this one year alone, that's going to take the city below the minimum reserve of 1.36, and in just five years, um the minimum the reserve will be down to 0.5 billion.

So even beyond this year, say we were to change the minimum um reserve requirement.

Um structurally, this is in balance, and what is the plan to actually replenish that reserve?

Um from an outside perspective, it seems like the only two options would be if inevitably to either increase water rates and increase the revenue going in or actually cutting water infrastructure funding.

There is a really long answer that Stephen David gave at the budget town hall on Saturday to your question.

It's a good one.

Um we can get you a solid answer, but on the solid waste side.

Uh whatever that we end that ends up going up, and we there will be uh, in my opinion, an increase of some sort.

I mean, there will be efficiencies gained, and we'll but we'll have to that's gonna be taken away from the reserves at some point.

The reserves are floating that are subsidizing that solid waste now because we're only charging a five dollar fee.

In the future, as that as as the fee goes up, that reliance on the reserves is going to decrease.

On the right-of-way side, that is coming every year, but as we grow in efficiencies adjust rates based on other things, uh there's a whole bunch of calculations that go into that.

Uh but we're all concerned that we have enough money in the C US reserves.

It's complicated.

We don't none of us want to see those reserves go down to nothing.

You heard the director say he's very comfortable with this, these structural changes.

Um we can roll.

I we will I will send you the the link to where Stephen David addresses this, because it's about a 30-minute answer that he gave in the budget town hall, and we can send you the link.

That was recorded, and we can send you the link.

He goes into a lot more detail than I just did.

Yeah, I would just reserve uh thank you, and I would just urge city counselors to um try your best to fully understand that before committing to a structurally imbalanced budget without understanding the implications in the long term, but thank you.

Um the second question that I had was related to uh staffing.

Um so in the finance department's presentation last week, um, we saw that this year's budget reflects 530 less full-time equivalent civilian workers compared to last year.

That's a 14 reduction, 14% reduction in the civilian workforce.

Will we take a step back and look at the longer trend?

Overall, since 2018, there's been a 26% reduction in the city civilian workforce.

I think this is a huge part of what has been reflected, unfortunately, in a decline in services and also a decline in working conditions by city workers who have been um very urgently describing their conditions of being forced to work overtime and being extremely understaffed.

Um so connecting this to solid waste and public works.

Um I wanted to ask about what the uh what public works' plan is to address um problems with retention.

So it's not just about hiring.

Okay, we're we're over time here.

So let me go to Council Member Flickr.

He said, just had a quick question for you, Chair.

Do you know when the last year was that we had a structurally balanced budget?

We've never had a structurally balanced budget as long as I've been here over 15 years.

Thanks.

But and there's a lot of reasons for that too, uh having to do with long-term obligations.

Long-term like pension and other post-employment benefits.

Every city across the country does not has a not structured across the country has a similar situation.

I mean, I'm not saying that's good, I'm just saying it's never been completely a structurally balanced budget.

Thank you.

Um, and I will keep this fast because I know we're over time.

Um I did just want to point out the chronic understaffing problem, and I'm not seeing the urgency and prioritization reflected in this year's budget.

Um, and I did also want to say that solid waste workers unfortunately have heard directly that this fee is not going to translate into a race.

Um, and that is very concerning.

Um finally, I did want to bring up um the director has claimed that the tree establishment is going to be operate with 20 million dollars less than the yearly funding they've been getting every year so far since it's um since its creation, and um we have a lot of concerns about whether or not that's actually true.

Um they are meeting um their commitments, but I don't understand how almost a 50% reduction in funding is going to not impact their deliverables.

Also, we have taken the liberty to actually go out in Northeast Houston and look at some of these ditches that have been flagged as green, meaning in good condition within the ditch reestablishment dashboard.

Unfortunately, we're seeing these ditches that are marked green are um have brocked or collapsed culverts, they've almost been filled to the brim with water um af over two weeks after the last rainstorm.

Thank you.

Yeah, thank you, Alice.

I've really got to move on to the next person.

But thank you.

I know you've got there are problems with the this reestablishment program, and they're not going to be able to operate with 20 million dollars less in funding.

Thank you.

Thank you.

Jim Tucker.

Good afternoon.

Uh, I was here last week at the Tuesday uh session, and you suggested uh this was gonna be the discussion today, so I wanted to come back and since um our folks had to leave because they had a job to do.

Um I wanted to share uh at least a summary of of what I uh mentioned, and I did send uh copy of my comments to all of your offices.

Uh, first, uh, I've been involved in volunteer groups, community groups, professional groups, and you always get into it because you want to do strategic stuff.

And you get spend all your time doing operations because that has to be done.

We have an opportunity, I think now, while we're rethinking our solid ways to take a clean sheet of paper and look at a system for the remainder of this century.

We're a quarter of the way through this century, and we're probably adding on, adding on a lot of techniques from the prior century.

Uh so let's think about what it could be, and ideally we will get the same or better service for uh less expense.

Uh one thing would be pay as you throw.

I imagine that our landfill charges are volume-based.

And I know a lot of places, including when I drove by River Oaks the other day, use some of the uh 24 and 36 gallon side load uh bins.

Uh I want to keep the the 90 gallon green ones because between my newspaper habit and my wife's uh mail order habit, we seem to fill it up every other week.

So um, do plan for those sort of things, and eventually uh it would be great if we could electrify our truck fleet.

Uh, we talked about maintenance a little bit earlier.

If you wanted to tear up a diesel engine, going 50 feet, stopping idling, going another 50 feet is a good way to do it.

And a few years ago we did have an anti-idling ordinance, which I think was directed more towards the ship channel, but unfortunately, the city is probably violating it every day of the work week.

So, um, I know uh the way we budget, it's hard to upgrade the fleets uh to maybe a more desirable objective, but please strategically keep that in mind, uh, if you would.

And uh lastly, I'm a geologist.

We've got more geos here in Houston than anywhere in the world.

So I'll give you some free consulting.

When you put in those water and sewer lines in the sandbed, put in some gypsum are other calcium source as well because our swelling and shrinking clays, uh, the calcium will fix so the water does not go on and off of the clay layers.

It's a fairly cheap fix, and maybe uh that 3% uh replacement rate uh at the end of 30 or 35 years, we'll have it down to a two percent replacement rate.

So uh thank you for all of your attention, and uh again I sent my remarks last week to your offices.

Thank you, Mr.

Tucker.

Always great input.

I really appreciate your being here.

Um next, Guadalupe Fernandez.

To be followed by Usman Mahmood.

Good afternoon, y'all.

Uh, for the record, Wellar Lupe Fernandez with Bayou City Waterkeeper and resident of District I.

Um, we were actually at the state Senate Water Committee hearing last week where right-of-way utility transfers were discussed.

It's gonna be a very spicy ledge session this year or next year.

Um, but Bayou City Waterkeeper is concerned about these manures that restraining the combined utility system at a time when the city still faces a critical water infrastructure crisis.

We lose enough water per year to supply the city of Fort Worth, and as we presented at council two weeks ago on the consent decree, uh we raised questions around the city's progress in meeting its obligations.

Um although smaller maintenance projects have shown progress, we have yet to see a meaningful reduction in sewage overflows.

We're concerned primarily because the city may not be moving quickly enough on the larger projects at our wastewater treatment plants and list stations.

According to Public Works' own full year tracking, annual sewage overflows r have risen from 1200 in 2022 to almost 1,600 last year.

As we mentioned, if public works can prove that they're making substantial progress on the consent decree and that these funds are truly excess.

Then we believe the city can do more than the bare minimum of the consent decree to reduce sewage overflows and improve our water infrastructure.

This money could instead be invested in the system for proactive repairs, fund a one-water approach for integrated water management, which would actually help public works manage water more efficiently, or fund assistance programs to relieve our lowest income and most vulnerable residents from high water bills or even private sewer lateral repairs.

We're also concerned about the strict legal and policy requirements, including operating reserves, project appropriation, capital rollovers, and regulatory compliance expenses.

The actual uncommitted surplus or reserves appears to be 141 million from my back of the napkin calculations.

If the city plans to extract 220 million for solid waste and right of way, how will the utility cover the remaining balance without structurally overdrawing its required safety cushion?

To give the public true peace of mind, how can the city prove to ratepayers that our water bill money is protecting our water systems first and foremost?

Um we also ask that public works provide this committee and the public a complete itemized breakdown of the current C US cash balance that explicitly isolates required reserves from actual uncommitted discretionary funds before council is asked to vote on this budget.

Um yeah, furthermore, the claim that moving solid waste into public works will create efficiency is highly suspect.

Public works is already struggling with the maintenance backlog of 41 day average weight for water leak repairs.

So we don't think that would make uh projecting what that might look like for our solid waste services.

Um there's a couple more questions I have around these efficiencies that I'm happy to submit in writing following today's presentation.

Please do, and thank you.

And and we've asked about the the report that you've done about the increase in SSOs, and and I do uh it's my understanding that many of those or the majority of those are in private laterals and that the city's SSOs have actually gone down.

No, this is actually public.

Okay, well, we'll get we'll get some clarifications, but that was um when we initially asked about that.

That was uh one of the responses that I remember.

So um some of this is due to private laterals, but we'll we'll get you some more information on that.

Thank you very much for coming.

Thank you.

Usman Mahmood.

Uh good afternoon, uh, counsel and HPW.

Uh yeah, thank you so much uh for the presentation.

Um just referring to page 46.

Um, and I may have missed this as part of the presentation, but it shows the expenditure increase of about 260 million, which is likely coming from the uh uh the solid waste and the right-of-way transfers, um, which would likely be subsidized by the uh CUS fund balance.

Um, but let's say that none of these uh changes happen.

So if the solid waste fee remains the same, the right-of-way transfers don't increase, and if we assume that the fund balance doesn't grow, um the 1.3 billion dollar fund balance is at the 550 day reserve, but to be at a 300 day reserve, it would be uh a little over 709 million.

I hope I did the math right.

Um, and if we have these uh 220 million dollar uh costs that need to be subsidized each year, that gives the C US only a little over 3.2 years before the fund balance hits that uh critical threshold.

So you're gonna have to either increase the admin fees or the other uh uh right-of-way transfers.

Uh otherwise there needs to be clarity on on you know the growth of the fund balance itself.

Um so I would, you know, love to get from public works uh just sort of like this impact forecast of if we keep the right-of-way transfers and the $5 fee flat, then you know what is that uh trajectory uh for the next few years, and then what is the trajectory of the increases of the incremental $5 that was originally proposed, but now it's uh being a little backtracked by assuming that we don't have to increase it all the way.

Um yeah, and uh just one other thing, you know, it's also important to consider that solid waste operations could be increasing each year.

So uh, you know, while we see the deficit now, um, I can I can imagine the the operating cost would be going up.

That means the subsidization happening by the C US fund balance is also going to keep increasing.

So it'd be really helpful to see some data assessment and that impact forecast of you know how the fund balance is being drawn out over time.

I think that's fair.

And Samir and Randy, I think that's a fair point that we'd all like to see if that if that you know kind of some projections out on the reserves themselves under some different scenarios, that would be very helpful.

We'll make sure to get that.

Great, thanks.

That's okay.

Any other speakers on public works or solid waste operations?

Really, really grateful to all of the public who came to speak, to our public works and solid waste employees and leadership who are here.

Uh this was you know two and a half hours, and and it was uh I'm so sorry, fire department.

You guys used to be on the hot seat, but now it's now it's public works and solid waste.

So I'm sorry for the delay in the next workshop, but really appreciate everybody's attention.

Uh, a really good meeting, a lot of great questions, and uh thank you very much for attending.

We'll take a short break and then we'll get started with fire.