City Controller Annise Parker wants to save the city $800,000 a year by eliminating paper payroll checks and advice statements and requiring city employees who still receive paper checks to use direct deposit either to a personal bank account or a city-issued stored value payroll card.

The City Council's Fiscal Affairs Committee just approved  the proposal and forwarded it to the full council.

"We have been working on this for some time to ensure a smooth transition, " she said. " Employees who now receive a paper check should experience minimal changes and can still immediately withdraw the entire amount if they choose. "

20% of employees directly affected

Under the two-stage plan, the approximately 4,400  employees who receive paper payroll checks will be instructed to either designate a direct deposit account or receive a payroll card. The card can be used like a debit card even if it's not connected to an individual bank account.

The city would save time and money on bank account reconciliation as well as stop payments and replacement of lost checks.  Employees would experience none of the disruptions or delays in payroll during natural disasters.

In Phase 2, the city will stop distributing paper facsimile “advice” statements to all 22,100 employees. The City Controller's Office processes more than 574,000 payroll transactions annually. Each transaction requires printing, folding, addressing, sealing and distributing a check or payroll advice. The cost  of printing and distributing each check and advice is about $1.40, or $800,000 a year. Payroll information would be available to employees on-line.

Employees get used to pay card

Although the city cannot legally require existing employees to accept direct deposit, the city can compel existing employees to take a pay card in lieu of a paper check, Parker explained.  The controller also noted that other organizations with mandatory direct deposit and pay card systems report that employees prefer pay cards to paper checks once they get used to them.

Once all employees have transitioned to direct deposit either to a bank account or to a pay card, the next step will be to use the the city's ERP financial system to make payroll advices available on-line via the city's Intranet system.

Although the city is already operating in a new fiscal year under a new budget,  the size of the FY06 surplus could fluctuate before all the numbers come in.

City Controller Annise Parker told the City Council Finance and Administration Committee recently that current projections indicate the city will close the current fiscal year with almost a $30 million surplus.

The good news appears in the current Monthly Financial and Operations Report (MFOR), which covers the period ending May 31.

Strong sales tax revenues - up 23% over this time last year - continue to fuel the surplus. Other revenues are also exceeding expectations: telephone franchise and cable TV fees, limousine permits and charter tour fees as well as miscellaneous revenues, largely due to a number of land sales. Fines and forfeits jumped about $750,000 due to higher than expected revenues for library fines, other interest income and miscellaneous fines and forfeits. The final good note involved a $420,000 increase in industrial assessment revenues due to increased delinquent collections.

Like a sailor with a strong wind to his back, Mayor Bill White is taking advantage of the city's robust economic health to restore funding to traditional budget scapegoats like Health, BARC, Parks and Libraries while continuing to increase funding for Police and Fire, including seven new police cadet classes and pay increases for firefighters.
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City Controller's Perspective_____________

The mayor's $1.65 billion FY07 general fund budget, which began July 1, restores funding levels in departments that experienced painful cuts in recent lean years. Parks even got a much-needed boost with the addition of two major parks – the new downtown convention center park and a 5,000-acre Lake Houston Park.

BARC INCREASES

The budget boosts funding for the Bureau of Animal Regulation and Care (BARC) by at least $170,000. This is long overdue. He just hired a progressive new BARC director from Dallas, Kent Robertson (right), to increase adoptions and reduce the city's horrific euthanasia rate. (BARC is still the most affordable adoption center – only $45. (713-238-9600, www.houstontx.gov/health/BARC/ ).

HIV/AIDS FUNDING

The city's HIV/AIDS funding finally got a similar boost. It's been stuck below $300,000 for several years and remains one of the lowest – if not the lowest – of any major city. Both At-Large Council Member Sue Lovell and District D Council Member Ada Edwards worked hard to increase funding to $1 million.

Budget surplus. I love the sound of the words. But I have to keep
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