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City finance officers report lower revenue projection, $48M in expedited debris funds and water-revenue decline
Summary
Controller and finance staff told a joint Budget & Fiscal Affairs and Economic Development committee that FY2025 revenue projections were revised down after the tax-rate decision, the combined utility system shows a $159M revenue decrease tied to water-billing reforms, and the city received $48M in expedited federal/state debris-removal funding.
The City of Houston's controller and finance directors on Tuesday reported a lower revenue forecast tied to the recently adopted tax rate and provided updates on disaster funding and utility revenue.
Will Jones, financial reporting director in the controller's office, said the controller projects a FY2025 general fund ending balance of $251,900,000, about $64.8 million below the finance department's projection and roughly $61.2 million above the city's 7.5% policy target. "Based on our current projections, the fund balance will be approximately $61,200,000 above the city's target," Jones said.
Finance Director Melissa Dubowski said the office's '3 plus 9' projection shows an ending fund balance of $316,700,000, which she said represents about 12.5% of estimated expenditures exclusive of debt service and pay-as-you-go capital. Dubowski also reported an expenditure projection $12.2 million higher than the adopted budget and attributed a $3.5 million increase in general government to funding operations for housing navigation centers.
Both directors flagged a large decline in utility revenues tied to recent billing changes. "In the combined utility system fund, operating revenues decreased by $159,000,000 primarily due to the implementation of the recent water bill reforms," Jones said, a drop Dubowski repeated and linked to the water billing relief program. Dubowski said Houston Public Works will provide an operational update on that program in the coming weeks.
On disaster finances, Dubowski said the city secured FEMA project obligations for Category A debris work quickly and had received $48,000,000 in expedited federal/state funding as of Sept. 30, 2024, using about $35,000,000 of that advance to pay invoices. She added the state's support is expected to cover much of the local share for debris removal, which the presentation estimated at about $33,000,000; Dubowski said the remaining general-fund share would be roughly $7,000,000.
The committee also heard a status update on a separate Ernst & Young review. Dubowski said the administration has received an initial readout on four workstreams and expects final deliverables in the coming weeks, with plans to present recommendations to the council before year-end.
Public commenters urged attention to transit and tax transparency during the finance discussion. Dominic Mazak recommended exploring Metro passes and pooled fare options for city employees as a greener, cheaper alternative to some city vehicle use. "There's no way you can do that even, car pooling with a city vehicle," Mazak said of the comparative cost.
Doug Smith pressed staff for more detail on property-tax figures and a line item described in the packet as "revenue replacement," noting a year-over-year increase in adopted property-tax revenue. Finance staff agreed to provide supplemental detail to the committee.
The committees had no formal votes. Members asked staff to adjust tax-related revenue assumptions in the next monthly report and to follow up on requested schedule and line-item clarifications. The committee was adjourned with the next budget meeting scheduled for Dec. 3 and the next economic development committee meeting on Nov. 20.
