Controller Hollins says no. Mayor Whitmire seems likely to go ahead anyway.
Houston Controller Chris Hollins has warned Mayor John Whitmire’s administration about potential financial challenges the city could face if it were to appeal a state appellate court ruling requiring the city to put hundreds of millions more dollars toward street and drainage projects.
The yearslong lawsuit started after engineers who helped create a charter amendment affecting how Houston funded street and drainage projects sued the city, arguing that the way officials were calculating funding projects under the amendment was illegal.
In April, the 14th Court of Appeals ruled in the engineers’ favor and told the city it needed to put roughly double the amount of property taxes it currently puts toward its streets and drainage projects. Whitmire’s first budget put only $135 million in tax dollars toward drainage, but the lawsuit’s plaintiffs have said the court-ordered figure would need to be about $100 million more.
City Attorney Arturo Michel previously said the city plans to appeal the case to the Texas Supreme Court, which returned the case to a lower court last year before it found its way back to the 14th Court of Appeals. Drainage dollars will be allocated under next year’s budget in the case the court rejects the motion.
City Attorney Arturo Michel previously said the city plans to appeal the case to the Texas Supreme Court, which returned the case to a lower court last year before it found its way back to the 14th Court of Appeals. Drainage dollars will be allocated under next year’s budget in the case the court rejects the motion.
Michel has said the city wouldn’t feel a financial impact as a result of the lawsuit until the next budget in 2026. But if the city lost the lawsuit again, Hollins told the City Council on Tuesday, the city would have to pay back $110 million to $120 million immediately, creating another “big potential expense” in this year’s budget, which already is stretched thin.
“We have to be clear about in the instance that if we were to lose that lawsuit — which we’ve now lost twice in a row on it — how we cover that for the current fiscal year,” Hollins said.
Hollins also questioned Michel’s logic on the city not having to foot the bill this year.
“I haven’t seen any legal standing for that position,” Hollins said. “So we just need to be prepared and have an understanding, again, of how that cost is going to be covered on the downside scenario.”
See here and here for the background. The argument from City Attorney Arturo Michel is that if the city waits till the last minute to file, then given the likelihood of briefings and the Court’s slow pace of proceedings, there probably wouldn’t be a ruling until the end of this fiscal year. As such, any negative effects from an adverse ruling could be dealt with in the next budget. That may be true, and delaying expenditures via various technical means is a tried and true budgetary strategy in Texas (very much at the Legislative level, as Mayor Whitmire knows well), but I didn’t see an argument in there that the city had a shot at winning their appeal, which makes me a little skittish. I Am Not A Lawyer and I don’t know how these things go, but my general world view is that you keep fighting when you have a shot at winning or you have no other choice. I’m not sure that applies here. Am I missing something?