A Ten Year Plan for the City of Houston: A

Transcript:A Ten Year Plan for the City of Houston: A:
A Ten Year Plan for the City of Houston: A Plan for Fiscal Sustainability and Economic Growth David Eichenthal Managing Director, PFM Group Consulting Presentation to Houston City Council Budget and Fiscal Affairs Committee April 18, 2018 Project GOALS Develop a financial and fiscal blueprint for Houston’s future Develop specific strategies and initiatives to achieve City goals in a fiscally sustainable and affordable manner. Review current operations – “as is analysis” – and assess opportunities for change to best practices Led by PFM and including both local and national experts on local government, operations and finance Developing the Ten Year Plan PFM TEAM Develop baseline assumptions and scenarios in concert with Finance staff and local economists Multiple interviews with department heads and staff on current operations and finance Meetings with community stakeholders identified by Mayor’s office Multiple meetings with members of Council and staff Benchmarking analysis and best practices review Development of baseline scenario and final list of initiatives WHAT WE DID While the fundamentals of the Houston economy remain in place, the City must carefully track and monitor the impact of Hurricane Harvey and update the underlying economic and population assumptions of the Plan. The City should focus first on the impact of Harvey on property assessments and baseline revenue projections. The City should re-evaluate the scope, fiscal impact and timing of the initiatives. The need for new investment identified in the Plan should be evaluated in the context of the opportunity to not just build back aspects of the City’s infrastructure, but build it back in a way that enhances the City’s overall resiliency. The analysis of tax burden needs to be re-visited, in part because it was based on estimates that may have changed or be changing in response to Harvey The City also needs to carefully assess the impact of potential state and federal aid on the ability to recover, rebuild and on the City’s operating costs. Some Principles After harvey: the ten year plan Reducing Costs There are opportunities to reduce, eliminate or curb growth in current costs through changes in the way that Houston does business. The current set of recommendations would result in a minimum of $300 million in savings over the course of a ten year period. Houston cannot achieve fiscal sustainability through budget cuts alone. There is a need for new revenue. Our pre-Harvey projection was that the lifting of the