Houston IT department seeks $143 million for FY26 as consolidation and public-safety needs drive gap in capital plan

HITS Director Lisa Kent told Houston City Council members during a presentation that the department’s proposed Fiscal Year 2026 operating budget is about $143 million, a 38.8% increase largely driven by the consolidation of IT staff from the Houston Police Department, Parks and Recreation, Legal and parts of Public Works into the Technology Services Department (HITS).

Kent said the consolidation creates a larger operating budget while also exposing a substantial gap between the city’s capital-improvement requests for technology and the available CIP capacity. "We won't be able to close that gap with just efficiencies," Kent said, urging both the administration and council to address the shortfall for public-safety technology.

The nut of the presentation was that consolidation both raises the HITS budget and highlights unmet capital needs. Kent said HITS now manages 18 programs; roughly 53% of HITS operating costs support infrastructure, 36% support public safety, and 11% support “government that works.” She told council members the department’s FY26 ask reflects the addition of roughly 90 funded HPD IT positions transferred into HITS and other personnel moves that raise the department’s baseline costs.

Kent outlined a package of efficiency measures intended to reduce costs without cutting core services. Those measures include downgrading 6,000 of the city’s roughly 21,000 Microsoft 365 licenses for eligible frontline workers to a lower-cost license (a change Kent said would save about $2.1 million), eliminating duplicated software (Kent cited transition from Tableau to Power BI and put enterprise-app reductions at nearly $569,000), trimming wireless and telecom waste (about $1.282 million in identified telecom reductions), and reducing travel and out-of-town training budgets ($60,000 in HITS travel reductions). Kent said some of the telecom reductions came from identifying billing errors and unused devices, including 236 devices assigned to departed employees and roughly 1,783 devices showing zero usage in a 30-day period.

Kent cautioned that efficiencies alone will not meet the city’s capital needs. In the Fiscal Year 2026–2030 CIP requests HITS received roughly $169.7 million in technology project requests; Kent said available capacity is far lower and that public-safety technology requests make up about 52.9% of the five‑year ask (about $90 million), compared with roughly $52.7 million of available capacity for the entire CIP over the same period. "That $90,000,000 need, just for public safety, is almost double the available capacity for the entire city," she said.

The presentation included program-level detail and recurring operating costs: Microsoft enterprise agreement licensing was listed at about $8.5 million; Azure cloud services at $1.8 million; SAP annual licensing at $1.8 million; GIS licensing at $2.5 million; and the CAD (computer-aided dispatch) application licensing and maintenance at about $1.1 million annually for the Houston Emergency Center. Kent said HITS’ personnel make up a smaller share of its budget than in many general fund departments (about 32% personnel vs. 68% non-personnel/service costs) because HITS is a central service revolving fund that bills consuming departments for services.

On personnel, Kent described two related pressures: voluntary employee retirement incentives and a built-in vacancy factor used in budgeting. She said 98 employees across the consolidated groups were eligible for the voluntary retirement option and 24 accepted (a 24% acceptance rate for the combined group). Kent and HITS staff said they would likely need to restore some critical positions through standard personnel processes after the budget is adopted, and that the department currently budgets with an explicit vacancy factor that reduces the funded FTE count below rostered positions.

Kent described findings from an Ernst & Young efficiency study the city commissioned: HITS has a larger-than‑best-practice span of control in places and lower total IT headcount relative to peer cities. She said the department is redesigning its organization to address span-of-control and to create dual career tracks that let technical staff advance without becoming people managers.

Kent reviewed major program areas where HITS expects to add staff because of consolidation and service needs: Houston Fire Department IT (HFD) staffing increases to 16 funded FTEs in FY26 to support modernizing records and emergency alerting systems; Houston Police Department IT appears as roughly 90 funded FTEs being consolidated into HITS, with HITS noting both efficiency opportunities and transfers of certain vacant positions to other departments; municipal courts support, network services, telecom, radio communications (HITS operates 54 radio towers and reported roughly $2.3 million in radio revenue from about 37 partner agencies), and the citywide enterprise applications group that supports SAP, time-and-attendance, e-signature, public‑information‑request portals and other platforms.

Kent also described cybersecurity and emerging technology governance work. She highlighted the security operations center run with Dr. Mitchell and said the cybersecurity program budget includes enterprise security licensing (about $2.8 million), PCI monitoring (about $395,000), cyber threat intelligence product ($495,000) and anti-ransomware capability ($240,000). On artificial intelligence, Kent said Microsoft’s Copilot chat will be included in the city’s Microsoft 365 subscription and that HITS is preparing governance and user guidance in line with Executive Order 144 to limit risk and provide review processes for departmental AI use: "Copilot chat ... is included in our 365 subscription," Kent said, and she added HITS is drafting AI user guidance and an AI governance process.

Council members pressed on several operational items during a question-and-answer period: Council Member Abby Kamen thanked the HITS team for supporting city operations across departments, noting cybersecurity briefings should be handled in closed session for security reasons; Vice Mayor Pro Tem Amy Peck confirmed that $2.4 million in the operating budget was listed to continue operating the existing HPD records management system while HITS supports HPD in implementing a new RMS; and other council members asked about CAD procurement (Kent said a vendor selection has been made, the CAD RFP is in contract negotiation, and she expects a contract to come to council in the coming months with an 18–24 month implementation timeline).

Kent closed by urging council members to consider the full, total cost of adding sworn personnel and other public-safety capacity, including the technology and licensing costs that follow any new cadet class or firefighter class, and offered to provide further briefings and appendix materials she referenced in the presentation.

The presentation moved on to public speakers after the HITS discussion concluded.