City controller warns of shrinking fund balance, highlights overtime and settlement risks in trends report

The City Controller presented a trends report to the Houston City Council that flagged a projected decline in fund balance and multiple budget risks tied to overtime, settlement exposure and uncertain federal reimbursements for disasters.

The controller said general fund revenue (excluding other sources) is projected to increase by just over $20 million in the proposed budget, driven primarily by an anticipated nearly $80 million increase in property-tax revenue that the administration is projecting at the voter-imposed revenue cap. That projection, the controller noted, implies choices about the tax rate and local revenue assumptions.

The trends report underscored a large variance between budgeted and actual overtime: last year the city budgeted $65 million for general-fund overtime but spent about $130 million. In the proposed FY26 budget the controller said overtime was budgeted at $58…