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Controller projects $413.4 million year‑end general fund balance; revenues revised upward
Summary
City finance staff told the Budget and Fiscal Affairs Committee the City of Houston expects an ending general fund balance of about $413.4 million for the year ending June 30, 2025, and described revenue and expenditure changes across funds, timing for Dedicated Drainage and Street Renewal Fund transfers and the schedule for OPEB trust deposits.
The City of Houston's controller's office told the Budget and Fiscal Affairs Committee on July 29 that it projects a June 30, 2025, general fund balance of $413,400,000, roughly 16% of estimated expenditures excluding debt service and pay-as-you-go items. Deputy Controller Will Jones said the controller's projection is $8.3 million lower than the finance department's earlier estimate, driven primarily by a lower revenue projection from one category.
The controller reported a net upward revision of $41 million in revenue projection from the prior month. Key line-item changes included a $17.5 million increase in property-tax receipts tied to prior-year adjustments related to TERS '24, a $7.8 million increase in transfers from other funds for prior-year reimbursements, and smaller increases across charges for services, industrial assessments and intergovernmental reimbursements. Jones said the general investment pool yield rose to 4.081%, which helped investment revenue estimates.
Why it matters: the projected ending fund balance is about $219.3 million above the city's stated 7.5% target. Finance officials said the year-end totals will remain subject to change until the city publishes its FY25 comprehensive annual financial report later this fall.
Finance staff also walked the committee through enterprise-fund variances. Aviation operating revenues were projected lower by $16.1 million because of weaker terminal-rental and landing-fee receipts, while operating expenses at several enterprises declined because of personnel savings and delays in noncapital purchases. The combined utility system showed a $61 million drop in operating revenues offset by substantial expense reductions tied to slower capital and equipment spending.
Committee members asked about the Dedicated Drainage and Street Renewal Fund (DDSRF). Council Member Sally Alcorn and others questioned why transfers to capital projects were lower than expected in the current projection. Finance staff said the apparent reduction is a timing issue: project payments have been committed but not yet expended, and an additional $16 million transfer tied to the Jones settlement begins in FY26. "As those capital projects progress, it'll be used to pay those projects in the coming years," the controller's office told the committee.
On pensions and retiree health funding, staff said an actuarial contract extension will appear on the next council agenda to preserve ongoing actuarial services required by state law. Separately, the committee heard the OPEB (other postemployment benefits) trust deposit schedule: $75 million committed over five years, with $10 million planned for FY26 and incremental increases in subsequent years to reach $20 million in year five.
The controller noted that some FY25 expenses and revenues continue to be processed and that the numbers will be finalized in the annual report expected this fall. No formal votes were taken during the committee discussion.
