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The latest report on city finances

A little light reading for you.

Mayor Sylvester Turner

Even after Mayor Sylvester Turner’s landmark pension reforms, the city of Houston is on pace to spend $1 billion more than it will take in over the coming decade, and must cut spending and raise revenue bring its annual budget into balance, according to an exhaustive new report.

Failing to do so, the authors state, risks letting the city inch toward insolvency with all the symptoms that accompany such a fiscal crisis: Worker layoffs, an erosion in police staffing, fewer library hours, decaying parks facilities, a hollowing out of the city as the suburbs boom.

The analysts from Philadelphia-based consulting firm PFM did not shy away from controversial recommendations, including some that would dramatically restructure city government.

Among dozens of other reforms, the authors suggest Houston should:

  • break up its mammoth Houston Public Works department and consolidate its finance, procurement, human resources, and information technology staff;
  • cut the $9.5 million annual subsidy to the Houston Zoo roughly in half;
  • shrink the Houston Fire Department by up to 845 positions through attrition and lengthen firefighters’ work weeks; reduce the number of fire stations; hire civilians to do fire inspections and take 911 calls; and raise ambulance fees;
  • hire civilians for the Houston Police Department to enable cops now doing administrative tasks to get back on patrol; free up officers’ time by arresting fewer low-level offenders and writing more tickets; use civilians to conduct crash investigations and issue non-moving traffic tickets; consolidate with Metro’s police staff, and, perhaps, local school districts’ too;
  • cut health benefits for active and retired city workers; and
  • submit trash pickup, building maintenance and street repairs to “managed competition,” giving all or part of each task to city departments or to private companies, whichever submits the most efficient proposal.
  • City Council hired PFM for $565,000 in 2016, Turner’s first year in office, to craft a 10-year financial plan. Turner made clear in comments last week, however, that he views some of the recommendations as impractical.

“When you talk about structural changes, just because it’s identified doesn’t mean it’s easily done. It’s not about taking a report and just implementing it,” he said. “There are some things that, from my vantage point, yes, we will accept. There are some things that are going to require additional study. There are some things that will be more long term. And then there are some things that we’ll never get there.”

The report is here; it’s quite long, but the executive summary is only 16 pages, so read that if you want a feel for it. At first glance, a lot of it sounds reasonable and even doable. I appreciate the fact that they recognize that revenue is part of the equation and that removing the stupid revenue cap would go a long way towards alleviating the problem. Some actions could be done by Mayoral fiat, some by Council action, and some will require negotiations with third parties and/or legislative approval. It’s always possible that a report like this becomes little more than a doorstop, but I think we’ll see at least some of it happen.

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  1. Steve Houston says:

    Given the full report is almost 200 pages, I don’t see many bothering to read it, even people interested in local politics don’t typically bother to read more than a few sentences. 😉 To make matters worse, when the Hurricane impacted properties are appraised this year, the projected increase they were expected to have will vanish, the propaganda publication by the police handed out at city council last week indicates they are about to start negotiating raises, the firemen are still expecting incredible raises and that voting proposition of theirs isn’t going away, and they refuse to budge on much of anything so they’ll go nuclear at moving to more shifts while adding hours, and given pension cuts I don’t see many employees ready to embrace healthcare increases.

    The move to use civilians in place of classified personnel is probably a good move except some of those spots are used to put the walking wounded or less qualified behind a desk where they won’t hurt anyone, HFD unlikely to give up having their expensive firemen stop dispatching to replace with cheaper labor costing a third as much. Put forth ideas to phase out the TIRZ program, any zoo subsidies, any duplicated services the county offers, and things of that nature and people might be more receptive to ditching the revenue cap but even then, I wouldn’t count on it. People are already expecting the city and county to engage in massive flood control projects using other people’s money…

  2. Bill Daniels says:

    Thank goodness the last administration got all those bike paths built before the city went belly up.

  3. penwyth says:

    I hope that we can get in a “conservative” municipal government that won’t care about quality of life issues and will simply focus on lowering the overwhelming “tax burden”!

  4. Manny Barrera says:

    Pen by tax burden, I take it you mean property taxes? The City is capped so blame the Republicans they still control those departments. Oh, I thought Republican are conservative? What is the deficit for the federal government going forward? Those are “Conservatives” managing the budget. The County “Conservatives” are spending how much on the Astrodome after we the people that vote said no.

    Certainly can’t mean sales tax, as all you have to do is go to a smaller city, we have them within and outside the city limit.

    I don’t believe that we should spend money on hike and bike, but that is a very very small amount of money of the City budget. By quality of life, I take it you mean (By quality of life) get rid of most of the police and fire that make our lives safer?

  5. Manny Barrera says:

    Link to we voted no,

  6. penwyth says:


    I was being facetious.

    No matter the insignificance of the amount, yet importance of the subject, the conservative mantra should always be to “lower the tax burden” irrespective of the actual type and % of taxation.

  7. David Fagan says:

    Which ‘decaying parks facilities’ are they referring to when Buffalo Bayou Partnership is part of TIRZ #3, Memorial Park is part of Uptown TIRZ, the revenue of the new rugby facilities is going to be managed by The Dynamo and those funds are only allowed to be used at that park, making it a virtual TIRZ. Where is the study of what happens when cities relinquish and defer tax money to private entities? Obviously, blaming city workers over and over again is not the answer, because the city will always say it is in a short fall. Do a study on tax money used by TIRZ and find out more about that. Is there a public safety cost in the TIRZ agreement with the city? If not, then it should be no wonder the cost of public safety goes up. TIRZ cause more use of public services with no contribution. Is that aspect of revenue studies covered in the new report? Are TIRZ mentioned in the report?

  8. I believe 17% of all property tax revenue goes to the TIRZ. I also don’t think that TIRZ was ever mentioned in the report. I would have to say that TIRZ have the support of both Democrat and Republicans. I don’t support them but I as usual am in the minority. Tough financial times are coming.

  9. Jules says:

    I’m against TIRZ’s too.

    Is TIRZ money outside the Revenue Cap?

    doing a search on the report using “TIRZ” return no results.

  10. Bill Daniels says:

    I’m against the TIRZ’s also. Perhaps that is one issue most of OtK can agree on, for a change?

  11. david fagan says:

    Jules, I’m no financial professional, but the Revenue Cap allows the TIRZ to flourish. The point of view is that the Revenue Cap saves homeowners money on property taxes when the revenue that would be collected in a given area goes toward a TIRZ. A TIRZ is managed by a management board who decides how these tax dollars are used. So, some could say when city council members allow a TIRZ, they allow someone else to do their job. Every TIRZ has a financial statement which is public knowledge. Examining these statements reveals some interesting concepts in tax dollar use. Another interesting examination is who gets paid to ‘assist’ the TIRZ boards with their management responsibilities. All of this comes at a price. These people who sit on the TIRZ boards are doing this out of the generosity of their heart, I’m sure. The question is, if we are paying City Council to do a job and that job is sub-contracted to someone else, how much does that actually cost the tax payer? This TIRZ concept is spreading I was reading where Pearland is putting one together. There is one place I have found in the report that mentions TIRZ and it is the report that TIRZ revenue will grow 10% per year for all ten years of the report. If this is tax dollars going into these TIRZ, shouldn’t it be revenue to the city?

  12. Jason Hochman says:

    @David Fagan, thanks for putting the link about PFM, which raises the question of do they make recommendations based on the situation, or to please the people who pay them. Because, in this case, they seem to say everything that Mayor Turner has in his limited repertoire is a great idea. Raise taxes. Cut the fire department. Although Mayor Turner inherited a bad situation, he has cost the city with his segregationist policies, and the federal lawsuits that have generated rulings against the City. Meanwhile, little is said about council member Steve Le who donated the boat to the fire department from his own money.

  13. David Fagan says:

    A point this report also makes, and instead of being focused so much on cutting public services, is the reduction of special revenue funds. Also, the explosion of TIRZ, enterprise zones, tax abatements, and industrial zones have grown with the troubles of Houston. If these are ‘economic developments’, then where is the cost analysis on these? There needs to be more oversite on these programs, because the PFM report states that o overseeing these types of programs is a problem and the tax dollars funneled into these programs are unable to be used elsewhere in the city. It should be no wonder that these budget issues come up, because useful tax dollars are hoarded by these programs. The PFM report states these types of programs do not allow tax dollars to be used where it is needed.