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Public Works: DDSRF shows carryover commitments; no clear unencumbered surplus for new projects
Summary
Public Works staff told the Budget and Fiscal Affairs Committee the Dedicated Drainage and Street Renewal Fund (DDSRF) has significant carryforward commitments and planned capital work that in practice consume most available cash, limiting immediate spare capacity for new allocations without reprioritizing the CIP.
Houston Public Works officials briefed the committee on the Dedicated Drainage and Street Renewal Fund (DDSRF), explaining how the fund’s mechanics, carryforward commitments and capital appropriations affect available cash and project delivery.
Chief Financial Officer for Public Works Sameer Solanki and Senior Assistant Director David Wardlow said the DDSRF, created in 2010 to fund street and drainage capital work, receives four revenue sources: ad valorem property tax transfers, third-party funds (Metro and TxDOT), the drainage utility charge (on water bills), and developer impact fees. Solanki said the city has paid about $2 billion in pre-rebuild debt and has roughly $449 million outstanding in that category.
Wardlow explained that cash reported in the special-revenue fund does not directly show the program’s contractual commitments because capital appropriations sit on the capital side of the ledger. "We don't appropriate when we come to you to approve a construction contract or a design contract, we're not allocating directly against the funds in that special revenue fund," Wardlow said. He compared the approach to a credit arrangement: cash sits in the special revenue fund, capital appropriations are recorded on the capital side, and invoices draw down cash as pay estimates come due.
That accounting difference means the DDSRF can show a sizable "restricted but not committed" ending balance while the capital program already has planned work and carryforward commitments that exceed available cash. Solanki and Wardlow said that for FY26 the DDSRF shows large carryforward balances and planned transfers to capital (for FY26 they cited about $151.4 million in M&O and operating transfers), and that projects in the CIP and contracts routed for council approval (RCA routing) will further use available capacity.
Vice Mayor Pro Tem Amy Peck requested clearer breakdowns of the $187 million figure shown as "restricted but not committed," asking for detail on how much of that is unplanned versus carryforward or already-committed capital. Wardlow and Solanki said that the available cash number is functionally tied to what has been appropriated on the capital side and that if council wishes to redirect funds to a high-priority project (for example, Spring Shadows), staff would need to reprioritize or delay other planned projects.
Ending: Public Works staff offered to provide additional detail on the FY25 carryforward, RCA-routing commitments, and the planned CIP pipeline so the council can evaluate whether and how to reallocate DDSRF capacity; staff signaled that under the current CIP there is little immediate unencumbered surplus available for new projects without reprioritization.
