Budget and Fiscal Affairs Committee Meeting - June 2, 2026

Chair Sally Alcorn convened the Budget and Fiscal Affairs Committee meeting on June 2, 2026, at 9:00 AM. Members present included Mayor Pro Tem Martha Castax Tatum, Vice Mayor Pro Tem Amy Peck, Councilmembers Joaquin Martinez, Twilight Carter, Mario Castillo (Vice Chair), Joe Panzarella, Julian Ramirez, and staff from Councilmembers Tarsha Jackson, Mary Nana Huffman, Tiffany Thomas, and Pollard. Councilmember Willie Davis was also in attendance. The meeting covered the monthly financial report, upcoming financial transactions, community budget survey results, the annual Kinder Houston Area Survey, and proposed amendments to the open space ordinance.

Monthly Financial Report

• Controller's Office (Will Jones and Melissa Dubowski, Finance Director) projected a general fund ending balance of $276.5 million (10.4% of expenditures, less debt service and pay-as-you-go) for FY26, which is $23.5 million lower than the finance department's projection. The difference was attributed to lower revenue projections, primarily $16 million from the TURS municipal service charge recalculation (moving from 2017 to 2021 property values).
• Finance Department projected an ending fund balance of $300 million (11.3% of expenditures), noting a small increase of $100,000 from higher-than-anticipated land sales. Sales tax receipts for March were $89.2 million, 4.47% higher than the same period last year and $7.9 million above budget. The department maintained a conservative sales tax estimate of $920 million, noting remaining periods need to come in about 3% below prior year.
• Councilmember Julian Ramirez noted the $23.5 million discrepancy between the two projections and inquired about the municipal service fee recalculation. Director Dubowski explained that the fee, previously based on 2017 values, is being brought up to tax year 2021 values, and the revenue impact is now being reflected in the general fund. Councilmember Ramirez suggested a deeper dive into the municipal services fee calculation.
• Public speaker Doug Smith expressed difficulty understanding the late-fiscal-year projection gap and questioned the practice of holding large unspent balances in the DDSRF. He also pointed out a discrepancy in hotel occupancy tax bond refunding figures ($1.3 billion in refunding bonds vs. $516 million outstanding the prior year).

Upcoming Financial Transactions

• Melissa Dubowski presented two upcoming transactions:
  1. Tax and Revenue Anticipation Notes (TRANS) Series 2026: An annual short-term borrowing to manage working capital due to timing differences between property tax collections (peaking Dec-Feb) and even expenditures. A competitive sale will be conducted in August, with terms presented to council in July. Closing is planned before the fiscal year-end.
  2. Combined Utility System Commercial Paper Expansion: To fund the capital improvement plan (including East Plant and consent decree projects), the finance working group recommends adding $500 million in capacity. Morgan Stanley was selected as the provider after a request for term sheets. An RCA will be brought to council in July.
• Chair Alcorn asked whether the new administrative trash fee (expected to generate ~$20 million) could be used as collateral for borrowing. Director Dubowski confirmed it becomes revenue of the combined utility system and can back revenue bonds.
• Public speaker Dominic Mazat urged more public engagement on the budget, including evening hearings, earlier budget process start (e.g., February), and greater transparency. He supported the Kinder Institute survey but noted the budget process felt "irrational." Councilmember Ramirez agreed with starting public engagement earlier.

Two Cents Budget Survey (Kinder Institute)

• Presented by Dan Potter (Director, Houston Population Research Center) and research analyst Dylan Simberger. The survey was conducted April 14 – May 27, 2026, with 920 responses via an open-access, convenience sample distributed through meetings, social media, and word-of-mouth. Responses came from all 11 council districts, though participation varied (e.g., District C had high turnout).
• Key Findings:
  • Top priority for increased spending: Infrastructure (roads, drainage, water pipes, electric grid) – 80% of respondents wanted more spending; 96% opposed cuts.
  • Other high priorities for more spending: Solid waste management and programs addressing homelessness (~60% each).
  • For decreased spending: 25% supported less spending on Houston Police Department; 20% supported less on Houston Fire Department, economic/workforce development, and housing programs.
  • When forced to choose (if budget cuts were necessary): Most respondents were okay with cuts to economic/workforce development (70% okay), but infrastructure was off-limits (only 10% okay with cuts). Parks and recreation had a 50-50 split.
  • Public safety spending (if more must be spent): Top choices were mental health/homelessness programs (70% support more, with 30% wanting "a lot more"), followed by police investigations and patrols (~60% support more).
• Willingness to pay fees: Only a garbage fee had majority support (two-thirds of respondents). The sweet spot for monthly fee was $5 (half of supporters chose this amount). Other fees (parks, public safety, libraries) did not reach majority support.
• Councilmember Alcorn noted the survey is a convenience sample, not scientific, but still instructive. Councilmember Thomas highlighted alignment with the Consolidated Annual Action Plan (CDBG). Councilmembers Martinez and others discussed the need to increase fees across departments and to leverage state/federal partners. Councilmember Peck and Flickinger thanked for the data. Councilmember Davis asked about district distribution; Chair Alcorn said the appendix breaks down by district.
• Public speaker Laura Gallier suggested breaking down infrastructure preferences similarly to public safety (e.g., bike trails vs. health clinics) and criticized the framing of public safety spending as a forced increase. She also noted resistance to the survey from some residents.
• Public speaker Sarah Raymond criticized the low response rates (29 per district in some cases) and asked about FIFA reimbursement funds used for police special services. Chair Alcorn said they could check.

Kinder Houston Area Survey (45th Annual)

• Presented by Dan Potter. Survey conducted via the Greater Houston Community Panel with almost 9,000 residents from Fort Bend, Harris, and Montgomery counties (representative sample using incentives). The report focused on economy, environment, and social connections.
• Economy: Job optimism saw the largest single-year drop ever in Fort Bend and Montgomery counties, and the second-largest in Harris County (behind only 1982-83 oil crisis) – a 29 percentage point decrease. The Houston area added fewer than 20,000 jobs in 2025, well below projected 70,000. The economy was identified as the biggest problem by about 25% of residents, up significantly. Crime/safety, housing cost, and traffic were other top concerns.
• Environment: Despite a relatively calm 2025 for natural disasters, concern remained high across all income levels for flooding, wind/hail, freeze, and extreme heat. Concerns about contaminants (aging pipes, lead, illegal dumping, clean drinking water) were high, with significant income disparities but still majority concern even among high earners. 70% of residents are moderately to extremely concerned about the environment's effect on their health.
• Social Connections: The survey explored the benefits of knowing one another, personal/professional networks, and social cohesion. Key example: 91% of Republicans and 97% of Democrats support universal background checks for gun sales (a unifying issue, not divisive as often perceived). Social connections were strongly correlated with greater economic mobility (85% control over finances if connected vs. 36% if not), better physical health (60% good health if high social cohesion vs. 41% if low, comparable to income gaps), and greater perceived safety (83% feel safe walking alone at night if high social cohesion vs. 58% if low). Income did not significantly affect sense of safety after accounting for social cohesion and general feelings of safety.
• Councilmembers Carter, Alcorn, and others thanked the presenters. No public comments on this item beyond the general public comments already addressed.

Open Space Ordinance Amendments

• Presented by Planning Director Von Tran and Parks Director Kenneth Allen. The amendments bring the ordinance into compliance with Chapter 212 of the Texas Local Government Code (effective Jan 1, 2024). Key changes:
  • Adopt a lower fee cap (not greater than 2% of median household income).
  • Transition multifamily to fee-only; collect fees at certificate of occupancy; establish an appeal process.
  • Allow up to 30% of fees collected in a sector to be used in other sectors (previously had to stay in the same sector).
  • Extend obligation timeline from 3 to 5 years; transfer fund management authority from Parks Board to Parks Director.
• The ordinance was approved unanimously by the Planning Commission on May 28, 2026, after a public hearing period with 13 comments – none objecting to the text, but six recommended increasing the fee-in-lieu ($700, unchanged since 2007). Chair Alcorn stated she intends to bring a separate amendment to raise the fee later this summer, after stakeholder engagement. She noted CPI suggests ~$1,113 and appraised values ~$1,400, but state law caps at ~$1,260.
• Councilmember Ramirez asked about coordination with TIRS districts. Director Allen explained all expenditures require council appropriation and are tracked centrally. The 30% cross-sector flexibility mirrors the sidewalk fee-in-lieu practice. Mayor Pro Tem Castax Tatum confirmed the origin of the 30% figure.
• Councilmember Martinez supported the changes and raised concern about park maintenance funding (suggested average maintenance per park is ~$1,200). Director Allen noted the fund cannot be used for general maintenance, only new improvements or major replacements. Martinez noted parks like Walter Jones lack programming due to poor facilities.
• Public speakers:
  • Doug Smith supported but asked for detailed reporting on expenditures; Chair Alcorn noted a report is on her website.
  • Vanessa DeLeon Diaz (Friends of Columbia Tap) highlighted inequities: Sector 14 (Memorial Park) collected over $21 million in developer fees, while east-side sectors with higher poverty collected a fraction. Private conservancy revenue is also skewed: 73% goes to wealthy areas. She urged council to interrupt this cycle.
  • Taylor Valley Presley (Coalition for Environment, Equity, and Resilience) supported the amendments but urged prompt action on raising the $700 fee, unchanged since 2007.
  • Karina Espinosa (Friends of Fonde Park) noted lack of management district in her area and requested a covered area and community center. Councilmember Martinez confirmed Brookline Park is on the list for improvements.

Key Outcomes

• The committee voted unanimously to advance the open space ordinance amendments favorably to full council. (Motion by Mayor Pro Tem Castax Tatum, voice vote, no dissent.)
• Chair Alcorn announced a special called meeting on Monday, June 8, 2026, at 10:00 AM to review the proposed FY27-31 Capital Improvement Plan (CIP).
• No other formal votes were taken; the reports and presentations were informational.
• The next regular BFA meeting is to be rescheduled due to the July break.