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      Budget 101: How to read the city budget
Summer's here, but inside City Hall, it's budget season. The new fiscal year (FY2008) begins July 1. Mayor Bill White has just presented his proposed annual budget to City Council. If talking about municipal finance makes your eyes glaze over, stop reading now.

The City Controller's Office does not produce the budget. One of the mayor's responsibilities is to present an annual budget to council. The Controller's Office does, however, review it and attempt to advise council on issues or areas of concern. The office also certifies that it is balanced and complies with recent charter amendments limiting revenue increases.

Finally, the office produces its own income projections and provides independent analysis of certain budget trends in a report presented shortly after the mayor's budget reaches council. Start with this link to the controller's trends report for a very high level snapshot of income and expense trends: www.houstontx.gov/controller/invest-reps/trends2008.pdf .

In a budget as complicated as Houston's, it is very difficult to get a concise summary. In very broad terms, the budget is divided by types of income, and, within those income categories, by general areas of expenditures. Most people focus on the General Fund (tax-supported income) portion of the budget. The other major income categories are the three enterprise funds (Aviation, Convention Facilities and Combined Utilities), Special Revenue Funds and Debt. 

Within the General Fund, the departments are grouped together by expenditure function. If you wanted to see the Fire Department budget, for instance, go to www.houstontx.gov/budget/08budadopt/index.html , scroll to the General Fund category, find the Public Safety Departments category, and click on Fire. If you'd like to see a summary of General Fund income and expenditures, go to that same link, scroll to the General Fund category, and click on Fund Summary.

A good introduction to the budget can be found in the executive summary that the Finance and Administration director and the city controller present to council each month. The full document is called the Monthly Financial and Operations Report (MFOR). It's a place to start before you tackle the full budget. You can easily read the entire thing. MFORs and the Trends Report are available on the City Controllers' webpage: http://www.houstontx.gov/controller/index.html.


    Controller urges city to cut ties to Sudan

City Controller Annise Parker has sent a memo to the city's three pension fund directors requesting that they don't invest in firms that invest in Sudan, target of world condemnation for genocide in Darfur.

The City Controller's Office has reviewed the city's $2.3 billion in investments and found none in foreign firms doing business with Sudan. Many public and private entities across the country have taken similar steps. While US companies cannot directly do business with Sudan, some invest heavily in foreign firms that do. This week, President George W. Bush barred more than 30 companies owned or controlled by the Sudanese government from doing business with the US.

" I intend to ensure that this remains the case as long as the killing continues in Darfur," Parker said.

Parker sent memos to the Houston Municipal Employees Pension system, the Houston Police Officers' Pension System and the Houston Firefighters' Retirement and Relief Fund asking them to review their portfolios and divest of anything with ties to Sudan.

The controller noted that several City Council members, mainly Ada Edwards, have asked council to take an official stand against the violence much like council did in 1986 when it passed a measure opposing apartheid in South Africa

"As was the case in 1986, we have a responsibility to do what we can to end atrocities in Darfur," Parker said.


    Controller praises 99-year lease compromise

City Controller Annise Parker applauds the favorable purchase agreement worked out between the city and the Center Serving Persons with Mental Retardation that allows the center to continueits invaluable work at the 6.7-acre West Dallas Street campus.

"Fortunately, reason replaced rhetoric so the center can provide critically important services in exchange for paying $6 million for property now valued at more than $20 million," Parker said. Several months ago, Mayor Bill White declared the center's 99-year, $1-a-year lease invalid because it violates a 30-year lease limit set by City Charter. The only other 99-year lease involves the Center for Hearing and Speech, adjacent to the Center Serving Persons with Mental Retardation near Allen Parkway.

Parker said she hopes a similar agreement can be worked out with the Center for Hearing and Speech, which occupies three acres.

The letter of intent provides that the city will finance all of the $6 million purchase price on these terms:

·    Fifteen year loan;
·    Interest free for three years then interest only;
·    Five percent interest starting in fourth year;
·    Secured by first mortgage lien on the property;
·    The city can transfer the loan after three years.

The Foundation for the Retarded agrees to make "commercially reasonable efforts to prepay the seller's note or refinance the loan after 3 years at a comparable rate."

 
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Projected surplus grows to $33 million

The city's robust projected FY07 surplus jumped another $15 million this month thanks in large part to a FEMA refund for the city's Hurricane Katrina and Rita expenses.

Houston City Controller Annise Parker reported that the current Monthly Financial and Operating Report (MFOR) projects a $33 million increase in General Fund undesignated reserves compared to $18.1 million reported last month. This is the net result of a $13 million increase in projected revenues and a $1.9 million drop in expenditures.

Revenues

•     Intergovernmental revenue rose $8.8 million because of FEMA repayment for city expenses during Hurricanes Katrina and Rita.
•     Projected phone franchise fees are $2.9 million higher.
•     Interest income jumped $2 million due to continuing higher cash balances.
•     Other Taxes increased $575,000 because of third quarter mixed beverage tax receipt from the state.
•     Projection for Miscellaneous/Other revenues dropped $6.4 million.

Expenditures

•   An increase of $3.6 million for computers and IT expenses was transferred from General Government to departments so bookkeeping accurately reflects the final Appropriations Ordinance.
•    General Government decreased $2.8 million due to decreases of $2.4 million in Contingency's, and $1.5 million in Elections because of county's participation in the May 12 election.
•    Claims and Judgments increased $1.1 million.
•    Building Services budget rose $830,000 to reflect recalculation of electricity costs.


TV show spotlights mosquito control
Shorts, T-shirts, sun screen, bug repellant. OK, you're ready for summer. But do you know it's more important to use bug spray if you go out at night than during the day?

For details, join Houston City Controller Annise Parker as she takes us behind the scenes at one of the country's most comprehensive and cutting edge mosquito control units on this month's Money Matters.

Special guest is Dr. Rudy Bueno, director of the Harris County Mosquito Control Division (who'll also explain why the county, not the city, fights mosquitoes). Tune in Mondays at 2 and 8 a.m. and 2 and 8 p.m. on the Municipal Channel (Warner Cable 16, Kingwood 14, TCI 16, Phonoscope 2 and TvMax 20).