Good morning, everyone, and welcome to the May 19th, 2026, budget and fiscal affairs committee, last day of budget workshops.

I'm Sally Alcorn, chair of the budget and fiscal affairs committee, and we will today have uh we'll be starting off with the controller with his trends report and his departmental workshop to be followed by libraries, and we'll finish up with the HPD.

So really appreciate everyone being here.

Um welcome my Vice Chair Mario Castillo, Councilmember Joaquin Martinez, Mayor Pro Tem Castex Tatum, Councilmember Julian Ramirez, Councilmember Fred Fleckinger staff from Councilmember Tiffany Thomas's office, councilmember Abby Kayman's office, and council member Tarsha Jackson's office.

Good to see you, Controller.

The floor is yours.

Madam Chair, would you mind if we flipped and did the controller's budget first?

That'd be fine.

Let us just skip to those slides.

As we're flipping, good morning, uh council members and staff.

Great to be here with you this morning.

Uh and I know y'all have been going through this, and so thank you for all of the hard work and the attention that you've been paying to uh each of these line items in every department.

All right, so we're gonna get started with the controllers' uh office budget first, and then uh from there we'll move over to our trends report.

So just starting off on slide three, uh, which is the vision for the city controller's office.

Uh, this is unchanged over the past three years, so you've seen this before, but our number one focus is is on accountability, uh cracking down on waste fraud and abuse, and ensuring that Houstonians' tax dollars go uh as far as they can, and that that investment that they're making in the city uh is paying off in their lives and in their communities.

Uh next is transparency.

Transparency goes beyond just a monthly report, a quarterly report, an annual report.

Uh, but from there it's about making sure that this information, which is terribly hard to understand, as you all have experienced over the past couple of weeks, um, that we break that down into plain English as well as plain Spanish and other languages.

Um, and then not only just post it up on the city website somewhere, but put that information at the fingertips of Houstonians.

Um, and so it's important that folks in the community know what's going on, that that is the first step to them, you know, driving the change that they want to see in their community is that they have to have an understanding of what's truly happening.

Um, and then understand what they can do about it.

And so that's this transparency piece, uh, which we take very seriously.

And then finally, innovation, new ideas and best practices, largely driven through our audit division, but also through our financial reporting and the insights that they provide.

Um, it's about making sure that you know we hold ourselves as the controller's office to a high standard, and then by doing that, hold the entire city uh to a high standard to deliver for Houstonians in the way that they deserve.

Uh flipping over to strategic priorities.

Again, this is unchanged over the last three years, uh, but I kind of covered this in uh in what we're doing in terms of vision.

But audit is protecting our tax dollars uh through aggressive audits and also looking into income uh pardon me outcomes with performance audits.

Financial reporting uh is about charting a path to fiscal sustainability by identifying opportunities to increase revenues and decrease costs, uh, to increase transparency, uh, with clear and more relevant communication as we just discussed.

Uh, operations is is moving the trains, right?

Uh, improving the efficiency and operations of how the city flows, making sure that people get their paychecks on time, that vendors and contractors who do their work uh get paid on time as well to keep their small businesses uh in steady operation.

And then treasury is maximizing uh public funds through smart investment.

Uh right now, our treasury is investing about $8 billion dollars in assets in the financial markets, uh, consistently delivering above benchmark returns.

Uh, and those returns you know flow back into uh the various fronts from which they come in the form of interest.

And so um that's a good thing.

And on the flip side, managing the city's debt.

Uh, right now we're sitting in the $18 billion dollar range in terms of debt.

And what I've been explaining, especially in recent workshops, is that the word debt is not necessarily a bad thing on its own, right?

I have a mortgage, probably everyone around this horseshoe does.

So debt itself is not a bad word.

Uh there are some bad aspects of debt.

We can see at the national level, you know, a debt that goes well beyond our GDP, that it becomes problematic at a certain point.

But what Treasury does is manage that debt and make sure that we're borrowing at the most inexpensive rate possible, which delivers millions and millions of dollars of value uh back to Houstonians.

So that's Treasury.

Again, not new here.

We have five divisions audit, executive division, financial reporting, operations, and treasury uh that report in to me, and I report out to the residents of the city of Houston.

Uh all of our office's programs flow into the mayor's priority of government that works.

Uh again, our focus is on making sure that government works and making sure that people know how it works and then driving uh more efficiency and accountability through our local government.

All right, so starting to jump into the actual proposed budget for the city controller's office.

What you're seeing is a 5% increase year over year, uh, and that is three main sources of growth.

Uh number one is the hope increases.

So essentially all, and we'll get over there on the next page.

You know, of our expenses are personnel.

And so when you see folks get a raise, then our budget has to go up to compensate uh for that raise.

Similarly, within our operations division, that's that's what houses all of our interfund costs.

So these are things that we don't control at all and just get charged back to us from other city departments.

Um, and so that has gone up within operations.

And then the final increase that you'll see that's meaningful is within audit, and that is a change of 70 or 80 grand.

And the reason for that is we switched to a new audit software.

The software that we had previously was woefully, you know, uh what's the right word?

Uh, it just wasn't up to you know what what our audit team needed.