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Bellaire CFO: city remains structurally balanced; third-quarter report flags new drainage fund and pending state funding
Summary
Bellaire’s CFO reported the city is structurally balanced through the third quarter of FY2025, highlighted stronger-than-expected water revenues, noted that the drainage utility fund is still normalizing and said staff is planning for timing uncertainty around $54 million in state drainage funding.
Terrence Beaman, Bellaire’s chief financial officer, presented the city’s third-quarter financial report for fiscal year 2025 (period Oct. 1, 2024–June 30, 2025), telling council the city is “structurally balanced” and on track to meet its 60-day reserve requirement for several years.
Beaman said the general fund is projected to close the year about 2% over the adopted budget and “we're projecting to end the year about 3% under the adopted budget” on expenditures, in part because of vacancy-driven savings. He highlighted that as of Aug. 1 the number of vacant positions had fallen from 11 to 7 and noted public safety vacancies were low — “there was only 1 vacant police officer as of August 1.”
On enterprise operations Beaman said water revenues are projecting roughly 5% above budgeted revenue for the year. He attributed part of the revenue performance to a recent rate/tier study by Welldan and to late-fee revenue. He also briefed council that enterprise fund expenses were projecting to end the year about 7% under budget largely because of vacancies and a temporary suspension of a City of Houston “take-or-pay” requirement related to a water-line break earlier in the year.
Beaman described the drainage utility fund as new and “built in arrears,” noting the fund’s 12-month accounting cycle explains why year-to-date figures look under budget now but are projected to normalize by year end. He said drainage fund expenses are projected about 3% over budget (roughly $4,700) under current estimates.
On debt, Beaman said the city’s debt picture remains manageable: the presentation referenced an outstanding debt balance near $92 million and noted recent issuance/retirement activity (paid off roughly $6.8 million and issued about $7 million). He confirmed certificates of obligation are included in the debt presentation and said debt-service collections were strong — the city “pay at 99.8% of the levy” in his reporting.
Beaman and other council members discussed a $54 million state contribution toward the Cypress Ditch/drainage project. Beaman said the city is meeting with financial advisors and staff to plan contingencies and timing, acknowledging uncertainty about when state funds will be delivered but assuring council that the city’s finance team will structure debt/payments to meet obligations if timing shifts. He described a meeting scheduled for the following Friday with the city’s financial advisor and senior staff to review options.
Beaman also reported capital projects underway including the public works facility and the Beller Lift Station review (HDR work orders 3 and 4), described a pending reimbursement issue related to solar panels (awaiting a federal registration number for reimbursement), and summarized investment strategy and benchmarks (TexPool and treasury bill benchmarking).
Council members asked follow-up questions about water meter splits (sprinkler/irrigation meters), the status of take-or-pay suspension with Houston, the reimbursement for solar panels and timing for state drainage funds. Beaman committed to provide additional detail where available and to incorporate updates into the FY2026 budget adoption.
