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Controller: Houston projects $344.2M general fund balance but warns of $230M structural shortfall
Summary
At a Finance Committee meeting, Controller Collins reported a projected FY2025 general fund ending balance of $344.2 million, noted a $230 million structural shortfall in the current budget, and said unrestricted net position shows a significant deficit driven largely by pension liabilities.
Controller Collins reported to the Houston Finance Committee that the office projects an ending general fund balance of $344,200,000 for fiscal year 2025, but warned the city faces a $230,000,000 structural shortfall that must be addressed in the next budget cycle.
"Based on our current projections, the fund balance will be $154,800,000 above the city's target of holding 7.5% of total expenditures excluding debt service and pay-as-you-go in reserve," Controller Collins said, adding that the shortfall requires a realistic plan to achieve structural balance without sacrificing services.
Collins also highlighted larger-picture fiscal measures: the city's government-wide assets and deferred outflows exceeded liabilities and deferred inflows by $8.9 billion, a $1.3 billion increase from the prior year, driven largely by enterprise funds such as the airport and the combined utility system. But he cautioned that the city's unrestricted net position remains deeply negative—"the unrestricted deficit currently stands at nearly $5,000,000,000"—largely because of pension obligations and other legacy liabilities.
The controller reiterated the city's long-standing debt management practice limiting any single type of outstanding debt in a variable-rate structure to no more than 20% and reported the city's unhedged variable-rate exposure remains well below that threshold as of Nov. 30, 2024.
Collins also told council members the city's annual comprehensive financial report for fiscal year 2024 was filed on the municipal and bond-disclosure portal on Dec. 17 and that a transient posting issue on the city website was corrected within hours. He noted the upcoming depository-banking contract (three-year term with two optional years) will appear on next week's agenda and that his office is preparing a no-tag memo because the current contract expires Jan. 25.
The presentation included an offer from the controller to work with the mayor, council and stakeholders to map out steps to close the structural gap; the committee asked no formal questions beyond procedural clarifications. The meeting adjourned without any formal vote on the matters presented.
