Budget committee reviews $16.7 billion five-year capital improvement plan

Houston finance officials briefed the Budget & Fiscal Affairs Committee on the proposed five-year Capital Improvement Plan (CIP), describing a $16.7 billion program that combines public improvement projects, the Build Houston Forward (formerly Rebuild Houston) street and drainage program, enterprise-funded utility projects and component-unit projects such as tax increment reinvestment zone (TIRZ) work.

The presentation, delivered by the finance team, described the CIP as a “rolling five-year plan” that is updated annually and remains a live document as priorities and emergency needs change. The finance presentation broke the plan into four parts: the Public Improvement Program (largely paid for through general fund-supported debt service), Build Houston Forward for street and storm projects (funded by the drainage utility and developer impact fees plus other sources), enterprise funds (water/wastewater and airport systems), and component units (TIRZs, Houston Parks Board, Houston First, Houston Zoo). Finance estimated the total CIP at $16,700,000,000 and said the combined utility system accounts for the majority of the increase year over year.

Major line items and funding highlights included: municipal courts building construction ($112 million, with approximately $42.4 million in FEMA reimbursements subject to availability); two new fire stations (40 and 104); an increased fleet commitment ($246 million, up from $225 million last year); technology projects including the 3-1-1 system and SAP S/4HANA; Build Houston Forward street and traffic funding totaling about $1.49 billion (including $750 million for citywide street and traffic rehabilitation, $492 million for thoroughfares and collectors and $121 million for local streets); and storm drainage funding totaling about $1.16 billion (with $775 million for neighborhood drainage, $480 million for reconstruction, $70 million for local drainage, $100 million for a stormwater action team and $125 million for roadside ditch reestablishment). The Build Houston Forward section also highlighted Lake Houston Dam spillway improvements ($128 million) and the North Canal ($124 million).

On enterprise projects, the combined utility system was presented at roughly $8 billion. The wastewater program was listed at about $3.8 billion (including $1.1 billion for wastewater treatment plant service-area work), and the water utility at about $4.3 billion. The East Water Purification Plant appears as the largest single water-system allocation in the CIP with $2.1 billion shown in the current window; finance noted the plant’s total project estimate is roughly $4.2 billion and that not all costs fall inside this CIP timeframe. The airport system CIP was listed at about $2.7 billion, with IAH terminal modernization ($923 million), Terminal B redevelopment and a Skyway people-mover among the largest projects.

Finance also reviewed external funding sources and assumptions: federal grants (U.S. DOT/FHWA projects totaling about $122 million), HGAC TIP funds estimated at $224 million, FEMA/TDM hazard mitigation grants and other federal grants (about $110 million targeted to several major drainage mitigation projects), and an assumed CDBG-MIT allocation of roughly $73 million. For Build Houston Forward debt and pay-as-you-go calculations, finance said it used an assumption for the DDSRF/ad valorem calculation aligned with a modified injunction approved by the court on 05/30/2025.

Officials said the city has paid down roughly $2 billion of street-and-drainage debt to date (about $1.3 billion in principal and $692 million in interest) and currently shows outstanding debt of about $442 million (about $369 million principal and $73 million interest). With debt service reduced, more general-fund transfers can move to pay-as-you-go projects; finance said the plan programs an additional $16 million to DDSRF in fiscal 2026 and $48 million in fiscal 2027 relative to the pre-settlement calculation, and programs the full 11.8¢ in FY 2028 and beyond.

Council members pressed for more granular information. Vice Mayor Pro Tem Amy Peck asked for bond-capacity and timing; finance said planning for a new bond election would begin in FY 2027 under the current CIP and that material need for a larger bond appears in FY 2028. Multiple council members requested district-by-district breakdowns and staff said they would circulate a council-district report after the meeting and follow up with client departments and the general services department for project-specific questions.

Parks and component-unit funding drew repeated questions. Finance told the committee that approximately $132 million in parks spending appears in the CIP (all funds), with about $100 million in FY 2026; some state allocations for about 10 parks (which finance said were confirmed in the state budget after CIP print deadlines) are not fully reflected in the printed book. Council members requested itemized lists explaining which park projects and which funds (bonds, TIRZ, grants, philanthropic contributions or fund 4035 developer park-in-lieu money) support each project. Finance said fund 4035 currently shows about $8 million programmed for park acquisition in the CIP.

Council and staff also discussed large utility and water-infrastructure financing. Finance confirmed the city expects to use Texas Water Development Board loans and other low-cost financing for a portion of the East Water Purification Plant and that federal and state programs could be available pending implementation rules and voter action on a statewide ballot measure referenced in the presentation.

Several projects the administration described as additional or “bonus” funding were discussed but not all were counted in the printed CIP book because of timing: Lynchburg pump-station funding (initial $100 million), $50 million for Lake Houston dredging (finance said it is included in the book), $60 million for a Lake Livingston dam item and $10 million noted for police patrol cars (200 cars) — finance said some of those items were not included in the printed CIP at the time of publication and would be reflected in the city’s active CIP once finalized.

Public comment and committee takeaways: public commenters urged greater transparency for component units and for projects tied to Houston First and downtown infrastructure, and asked for more neighborhood-led engagement on underserved areas. Pastor Deb Bonario Martin of Friends of North Houston said, “The city's budget has failed to consider Houston's deserts with long standing concerns impacting quality of life and social determinants of health.” Lisa Hunt, an organizer with People for Polk Street, encouraged the council to seek clearer, public reporting from component entities about design and budget work for downtown projects that may generate unbudgeted city costs.

Next steps and deadlines stated at the meeting: the finance team asked council members to submit CIP amendments by the end of the week (amendments were due Friday, June 13), and the administration scheduled final council consideration for the June council meeting (the presentation referenced June 17 for a council agenda item). Staff committed to circulate a district-by-district breakdown and to follow up with departments on specific projects and grant allocations.

No formal committee votes were recorded in the transcript excerpt; the meeting consisted of the CIP presentation, council questions and public comment.