Hearings on Mayor Annise Parker’s proposed budget for fiscal year 2014 (which starts July 1) got underway this week, to a somewhat uneven start. Tuesday saw presentations from the departments of planning, public works and engineering, and housing and community development (links go to video of the presentations). Wednesday hearings covered the departments of health and human services, administration and regulatory affairs, neighborhoods, and the city controller’s office.
In a move that had some council members and staff shaking their heads, council handled the city’s largest department, public works, and its $1.8 billion budget, in 24 minutes, and spent 80 minutes on the housing department, whose budget will draw just $1.3 million from local sources (and the rest from federal and state grants). Six of the 16 members were present for the public works talk; 11 showed up for housing.
Granted, just $35 million of the public works budget comes from the general fund (which is fed mainly by property and sales taxes and which gets the most scrutiny); most of the rest comes from the combined utility system, which is supported by customers paying their water bills, not taxes.
Public Works projects that it will treat 460 million gallons of water per day, collect and treat 239 million gallons of wastewater per day, manage 535,000 utility accounts, work on 3,600 miles of storm sewer, 2,750 miles of roadside ditches, 1,365 miles of bridges and 15,763 miles of streets, process 19,500 commercial building plans and 8,000 residential plans, and manage 110 construction projects and 65 professional services contracts.
Public Works Director Daniel Krueger got through his data-laden 24 slides in about 17 minutes, then took questions, all of them from Budget and Fiscal Affairs Committee chairman Councilman Stephen Costello. Costello’s queries about the department’s projected deficit of $54 million led to a classic bureaucratic exchange between the two engineers that is best watched on video (start at 17:40).
Essentially, Krueger said the department has projected deficits in the past and has ended the year with a surplus, and he said the budget reflects the amount he is allowed to spend, not what actually will be spent, a comment he repeated in an interview today:
“We will be very careful as we operate through the year to make sure not only are we actually operating in a manner that our expenditures won’t exceed budget, but we will yet be mindful of how revenues are doing as we go through the year so that we operate with what we have to operate with in reality,” he said. “We are operating responsibly, we are operating as good stewards of public money, and I would tell you we wouldn’t be having this discussion if this department, as well as the city of Houston, didn’t operate transparently. But operating transparently means there’s a lot of numbers out there that can be misunderstood.”
Councilman Dave Martin, who has extensive accounting and budgeting experience as a managing director for Marsh, was absent on business during Krueger’s presentation, but repeatedly expressed frustration at public works’ numbers during Wednesday’s budget hearings. Krueger’s presentation showed revenues of $1.33 billion and expenses of $1.38 billion, but the budget book distributed to council and the media earlier this month lists the department’s budget at $1.8 billion.
Martin said in his 30 years of budget analysis he’s never seen two documents more confusing than the public works and health department presentations.
“Public works, I think we need to spend about 10 hours to get to their numbers, because they don’t match. I thought Health and Human Services was bad — that’s even worse,” he said.
In interviews Thursday, Krueger, finance department director Kelly Dowe and Public Works Deputy Director Susan Bandy said the gap between the numbers in the department’s presentation and in the budget book are explained by the absence of internal fund transfers, which were left out in order to show expenditures only once with the aim of decreasing confusion. If council members were confused anyway, Krueger said, the budget workshop is just one point of communication between the department and council.
“I would just say we presented it differently. It does correlate to what’s in that book. We’re not making up anything new here,” Krueger said. “It’s presented in a different form, and it’s presented in a different form because Kelly’s page reflects the budgets by fund, and at budget workshop they want to hear from those who are responsible for one or more funds how you’re exercising your responsibility.”
As for the projected deficit, Krueger said several fund balances are projected to shrink at the end of the fiscal year by about $21 million (the rest of the projected deficit is covered by the general fund portion of the department’s budget). Key initiatives that will draw down those funds, Krueger said, include efforts to modernize computer systems that process permits, pushing as many capital projects as possible using Rebuild Houston funds, and completing a citywide survey of open ditches and culverts to get better data about how to maintain and repair them.
Wednesday’s budget hearings also sparked confusion over the health department‘s presentation. Director Stephen Williams said the confusion likely was due to his attempt to reflect the department’s full activities, including grant funds, which typically are not reflected during the city budget process. The main budget book shows the department with a $81.7 million budget (of which $55.8 million is general fund), but the presentation showed total costs of $145 million.
The largest increase in the health budget is $8.5 million related to the state’s Medicaid 1115 waiver program, an effort that is directing health care dollars to local governments that propose initiatives to deliver care in better ways. That cash contributes to a nominal 26 percent increase in the general fund budget over last year, Williams said, but the department is being given those dollars to spend.
Costello called the department’s slides “misleading,” and wondered if Williams could clean up the charts and present again.
“There’s a feeling I’m getting right now and that feeling is, ‘Trust me, our numbers are accurate, just pass the budget,’ and I don’t operate that way,” Martin said. “I want to do this the right way.”
Not all presentations provoked furrowed brows.
The planning department has a $11.7 million budget, $8 million of which comes from the general fund. As slide 4 in the above link shows, the department is seeing an increase in platting activity, and proposes to hire four positions to help handle the load, director Marlene Gafrick said, adding that additional reviews required by a recent reform of the city’s development rules also will require more staff time. Gafrick said the department also plans upgrades to the My City application in the coming fiscal year.
Controller Ron Green sailed through quickly, with his $8.4 million budget that, after contractual increases (union pay raises, pension and health insurance costs) is roughly flat compared to last year, other than the addition of two auditor positions.
ARA‘s budget is proposed at $55.8 million, $26 million of which is in the general fund.
Director Tina Paez said the department hopes to answer 311 calls in 90 seconds (down from actual answer times of 111 seconds in 2012 and 96 seconds in 2013), to keep wait times in the city permitting center at 15 minutes, to issue 41,183 commercial permits, 116,908 burglar alarm permits, and 206,240 parking tickets — up from 202,297 in the current fiscal year and 201,341 the year prior — and to have 75 percent of them paid (up from 72 percent the last two years). At the Bureau of Animal Control and Regulation, ARA expects to take in 25,493 animals and see 13,511 (53 percent) leave the shelter alive.
The Department of Neighborhoods‘ $11.3 million budget is a 7.6 percent increase over last year, mostly due to union raises and funding to supplement federal funding for code enforcement (which makes up 57 percent of the department’s budget). Director Katye Tipton said the department hopes to handle 33,000 citizen complaints, serve 2,000 youths in anti-gang efforts, raze 600 dangerous buildings and secure another 150, and to cut 7,000 overgrown lots.
We’ll post video and presentation from Thursday’s hearings as they are available, and will monitor the rest of the hearings scheduled next week.