CITY MEETINGS
City Council
public session:
Tuesday 2 p.m.
(Call 713-2471840
to sign up to speak)
Business session
Wednesday 9 a.m.
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Sales tax and cuts balance current budget |
After nine months of projected shortfalls that once totaled more than $20 million, the FY04 budget is balanced. Technically, the budget is always balanced as required by the charter. (See article below on Appropriations Ordinance.)
Good news is always easy to deliver. And I was especially glad to present this upbeat monthly financial report to City Council as we begin work on the mayor’s FY05 budget.
The budget gap shrank from $5.9 million reported just last month. The change is due to healthy growth in sales tax revenues and a small increase in the property tax projection. The sales tax projection is up by $6.4 million from a month ago to $342 million for the year.
Lest the public think the current budget was saved by sales tax alone, I would like to commend Mayor Bill White for judiciously trimming the budget this spring and Mayor Brown for major cuts last fall
The April sales tax check (for taxes collected in February) totaled $28.1 million, a whopping 24% higher than the February 2003 check. At first glance, this would appear to be the big bump we were hoping to experience from the Super Bowl. A closer look indicates otherwise.
MORE
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Water and sewer bond rating upgraded
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Both Moody’s Investment Services and Fitch Ratings have upgraded the bond rating for Houston’s water and sewer system debt.
The city is in the process of refinancing $3.2 billion of water and sewer system debt as part of a broader plan to create a combined utility system. The refinancing, coupled with a water and sewer rate hike of about 9%, will channel about $150 million into stormwater drainage improvements over the next three years.
Moody’s Investment Services has assigned an A2 rating to the first lien refunding bonds, or new bonds. This is an upgrade from A3. Moody’s has also upgraded the rating on $1 billion of existing junior lien bonds not included in refinancing.
These junior lien bonds are now rated A1, up from A3. Fitch Ratings upgraded the junior lien bonds to A+ from A. The new bonds will retain an A rating from Fitch.
In announcing the ratings, Fitch Ratings stated, “The A rating reflects the breadth, growth and diversity of the service area, the sufficiency of the system’s water resources to the year 2035, and the adequate debt service coverage and liquidity for system debt.”
“This is confirmation of the strength of the city’s water and sewer system,” said City Controller Annise Parker. “The bond deal is expected to occur on or about May 18. We expect the ratings upgrade will help in securing favorable interest rates that will result in savings.”
The refinancing will consist of $1.8 billion of fixed rate bonds and $1.4 billion of adjustable rate bonds. The bonds will be secured by revenues from the new combined utility.
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Budget workshops May 25 - June 10
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Workshops for the Fiscal Year 2005 budget are scheduled for May 25-June 10 in City Council chambers. Department heads discuss their budgets with City Council members in 30-minute workshops that are open to the public.
Mayor White has announced that he will present the budget May 19 before the Council meeting.
City Council is scheduled to conduct its first public budget hearing at 1:30 p.m. June 15 before the weekly public session and discuss the budget at the Wednesday business session.
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Money Matters
Money Matters can be seen at 2 a.m., 8 a.m., 2 p.m. and 8 p.m. Mondays on the Municipal Channel (Warner Cable 16, Kingwood 14, TCI 16, Phonoscope 2 and TvMax 20.)
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If you have trouble reading this newsletter, you may also read it online at: www.ci.houston.tx.us/ citygovt/controller
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Appropriations ordinance passes |
This is the one point during the year when the administration and my office must agree on budget numbers. Without agreement, I can’t certify the appropriations ordinance.
Each June Council approves a budget and an interim-spending plan based on a percentage of the prior fiscal year’s budget. The interim-spending plan remains in effect until the General Appropriations Ordinance is submitted to council.
This can occur at any time during the fiscal year. In recent years, however, it's occurred later and later in the fiscal year because of uncertainty about revenue streams. The Controller’s Office has always recommended a more conservative approach to budgeting to help eliminate that uncertainty.
I am agreeing to certify a General Appropriations Ordinance for the general fund in the amount of $1.395 billion. This is about $11 million less than the budget of $1.406 billion adopted last June. The decrease reflects spending cuts put in place by the administration last fall when it became apparent projected revenues would not support the budget approved in June.
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Show explores FY05 budget gaps |
Fiscal Year 2005 budget gaps as well as financial trends and taxes highlight this month's Money Matters. The monthly Controller's Office Municipal TV show also features the work of the Controller's Financial Reporting Division. Controller Parker is joined by Council Member Mark Ellis, Deputy Controller Susan Bandy and accountant Melanie West.
The June show will examine the Fiscal Year 2005 budget that is scheduled to be presented to City Council May 15.
Money Matters can be seen at 2 a.m., 8 a.m., 2 p.m. and 8 p.m. Mondays on the Municipal Channel (Warner Cable 16, Kingwood 14, TCI 16, Phonoscope 2 and TvMax 20.) |
