Houston Fire Department outlines FY26 budget dip, cites overtime cuts, staffing and World Cup demands

Houston Fire Department (HFD) Chief Tom Munoz told the City Council that the department's proposed fiscal 2026 budget would fall about $31.5 million, or roughly 5%, from the current year, reflecting expected personnel savings and lower classified overtime costs while preserving base pay and restricted account support.

Munoz said 87% of the department's budget is dedicated to public safety, 10% to government operations and 3% to quality-of-life programs. He described planned reductions and offsets: a $253,000 cut to the administrative services program that will lower overtime available for special events, expected reimbursement revenue of about $375,000 for FY25 from event organizers, and continuing negotiations with partners for the 2026 World Cup to seek reimbursement or other monies to offset event-related costs.

The chief said a voluntary municipal employee retirement payout program affected civilian staffing: 36 civilians were eligible for the program; a net departure of seven eligible employees produced a reported personnel-cost reduction of about $750,000 and prompted the department to absorb duties and reassign workloads. Munoz said the HFD warehouse and logistics were among the most affected civilian areas, raising concerns about possible delays in supplies, inventory inaccuracies and higher civilian overtime in that division.

On staffing, Munoz said HFD had 99 civilians supporting its classified ranks and cadets as of April 30, and that net civilian headcount stood at 91 after the retirement program. He told the council the department expects to add classified personnel in the coming years: an anticipated net increase of 75 classified positions in FY25 and an estimated net increase of 200 in FY26, which the department expects will reduce reliance on overtime.

The department presented a personnel-versus-nonpersonnel breakdown for the FY26 proposal: Munoz said about 88% of the proposed HFD budget would go to personnel and the remaining 12% to supplies, services and restricted accounts. He outlined six departmental programs under outcome-based budgeting: emergency response and rescue; community fire prevention and risk reduction; firefighter health and safety; executive services; administrative services; and debt services and interfund transfer.

Munoz highlighted operational measures and priorities: continued focus on recruitment and retention, expanding firefighter wellness and mental-health supports (including two staff psychologists and rebuilding a critical-stress management team), and community fire-prevention work such as inspections, juvenile fire-stopper referrals, smoke-alarm installation drives and public education efforts. He said the department expects to handle more than 300,000 EMS incidents this year and referenced planning for increased demands during the World Cup and other major events.

Revenue risks were a recurring theme. Munoz told council members that ambulance fees account for about 59% of HFD's FY26 revenue budget and that state legislation, identified in the presentation as Senate Bill 24-76, has favorably affected collections to date but poses uncertainty going forward. The presentation estimated a potential $13.3 million decrease in ambulance revenue tied to the possible expiration or change in that law; the chief said that would be the largest driver of a roughly $12.8 million (10%) overall revenue decline the department showed between FY25 estimates and the FY26 proposal.

Council members questioned the assumptions underlying a large planned reduction in budgeted overtime for emergency response (from about $78.5 million in the FY25 estimate to roughly $39.2 million in the FY26 proposal). Munoz and HFD staff said the overtime reduction rests on two factors: expected increases in classified headcount (they cited a projected FY26 net increase of about 200 classified positions) and improved staffing and data-driven deployment (dashboards and command-level monitoring). The department said it has already begun seeing rehiring: two rehire classes returned former firefighters this fiscal year, with a third planned.

Council members also pressed on capital and equipment timelines. Munoz said the department always seeks to purchase ambulances; council members were told a transport ambulance is currently estimated at roughly $345,000, with lead times of about 18 months for transport units and two to 2.5 years for pumpers and ladder trucks.

On grant and disaster funding, council members asked whether the department had an estimate of how much it relies on federal grants and whether the FY26 budget accounts for unreimbursed disaster response costs. Munoz and staff said the department tracks grant programs such as UASI and AFG but that uncertainty at the federal level complicates projections; the chief gave an example that an earlier freeze generated about $3.8 million in overtime costs that were not reimbursable. HFD staff said they do not budget for disaster costs and instead monitor overtime throughout the year and seek reimbursements when possible.

The presentation closed after the chief reviewed performance measures for response times, incident counts, prevention and wellness, and fielded council questions about overtime, staffing, equipment procurement and revenue assumptions.

The report did not include any formal council actions or votes during the HFD presentation. The department provided the slides referenced in the meeting and staff indicated further detail would be in the appendix and in follow-up responses to council questions.