Rebecca Underhill, assistant to the city manager/budget officer, gave a report on how Hurricane and Tropical Storm Harvey affected the city’s funding at the last regular City Council meeting. This week she gave a presentation on how the storm affected the city budget and her findings.

As of Jan. 31, 2018:

• The city spent $12,024,103 on debris pickup. The funding sources are the Federal Emergency Management Agency and the state.
• The city spent $4,402,576 on personnel costs. The funding sources are FEMA and city funds.
• The city spent $4,950,240 on equipment. The funding sources are insurance, debt and other city funds.
• The city spent $800,004 on other expenses. The funding sources are FEMA and city funds.

For debris, expenses to date should be funded at 100 percent. Some private property debris removal will not be funded.

Employees will receive inclement weather pay for their scheduled hours they could had attended pertaining to personnel costs. In addition to inclement weather pay, nonexempt essential personnel will also be paid their hourly rate for working in the event of severe inclement weather.

Under equipment, the cost of the total damage fleet is $24.8 million. To date, $4.9 million has been spent to replace damaged vehicles and equipment. The total equipment purchases authorized to date is $6.78 million. The insurance received to date related to equipment and vehicles is $1.3 million. It is actual cash value, not replacement cost.

The potential additional funding necessary to replace all damaged equipment could exceed $15 million.

Twenty-four buildings, more than 60 lift stations and other facilities such as parks, pools, etc. were affected. There were covered with flood, property and windstorm policies at replacement cost. To date, the city has received $2.7 million in flood policy payments.

Three buildings are under repair with the Texas Municipal League: Fire Station No. 6, the Bob Bowers Civic Center and the library. City funds required to complete facilities repair, which are undetermined at this time, could exceed $2 million.

The city will be responsible for insurance deductibles, expenses that are not covered, upgrade costs and mitigation projects. FEMA funding will be available to assist with a city match required of 10 percent to 25 percent.

The Fiscal Year 2018 budget included the use of $7.5 million in operating balances and $8 million in capital project fund balances (reduction in savings accounts).

The total balance projected at Sept. 30, 2017 was $49.876 million. The total balance projected at Sept. 30, 2018 will be $34.626 million.

Furthermore, water utility revenue is not expected to meet budgeted revenue by as much as $3.3 million. Sales tax revenue may exceed the budget by $1 million. The net impact will further reduce projected balances by $2.3 million.

Looking forward to the FY 2019 budget, Harvey’s potential impact on property tax revenue could be $1 million and industrial district revenue by $1.8 million.

No additional fund balance to use totals $7.5 million with a potential reduction in revenue for FY 2019 of $10.3 million.

Thus, the potential funding shortfalls are:

• Harvey personnel expenses $1.9 million
• Harvey equipment replacement $15 million
• Harvey property costs $2 million
• FY 18 budgeted revenue shortfall $2.3 million
• FY 19 revenue shortfall $10.3 million

Underhill said the steps taken so far are to review all equipment purchases to look for savings. Additionally, $3.7 million was budgeted in FY 2019 for new and replacement equipment.

Vacant positions are under review and will be held open if possible.

The FY 2019 budget process will begin earlier this year in April and all departmental budgets will be “greatly scrutinized” for savings that will not impact service delivery to the citizens.

Other options to consider are to raise revenue and to defer/delay the capital projects programmed in the capital fund, she said.