July Cover Story 2010
City Controller, Ron Green Talks About the City Budget and Duties of His Office
The Houston Contractors Association was pleased to welcome Mr. Ronald Green, Controller for the City of Houston, as our speaker at this month’s membership luncheon. Controller Green is no stranger to the association, having successfully served as an At-Large City Council Member for three terms. Controller Green recently stepped into his new position previously held by, Mayor Parker.
Controller Green thanked the audience for letting him speak today and stated that he had only been in this position for six months now, but that he was focused on improving the system and getting people more involved. He stated that he would put a new emphasis on letting people know what it is that the City Controller’s office does. Mr. Green stated that his office is not just about payments for contractors. Most people out there do not know what we do stated Green. “Although I am no longer on the Council side there are still services my office provides and ways that I can assist you.”
Mr. Green spoke about the relationship between the Controller’s office, the Mayor’s office and City Council. Mr. Green stated that the transition over from Council to the Controller’s office was an easy one for him since he was chair of the Council Finance Committee and gravitated toward financial issues while on council. As an At-Large Council Member, you don’t have a district to worry about so you can concentrate on bigger issues, it is the same in the Controller’s position. Controller Green stated that one difference between the two offices is that here he does not have a vote on issues. This is not a bad thing said Green, it meant that I didn’t have to vote on the water rate increase that recently passed, Green said jokingly. The Controller then stated that he agreed with the increase saying that we need to pay for infrastructure and this was a needed increase. He assured those in the audience that as an elected official he has to live in the City and has to pay the same taxes and live under the same laws as everyone else. As an example he showed a parking ticket that he received prior to this event showing that he gets treated just like anyone else.
Controller Green stated that at the City, June 30th was the end to the fiscal year and that council has already adopted the FY 2011 budget. The budget, according to the Controller, was increased somewhat, but is still a workable budget sitting at around $2.1 billion on the general fund side. The CIP has another $2.1 billion for a total budget of $4.2 billion. That is a big deal said Green and my office wants to make sure that you get a fair value for the money you are paying into the system. Looking at the relationship between the Controller and the Mayor’s office, Mr. Green stated that his office is the more conservative office when it comes to financial projections for the city. “My office will not book the funds or transaction until we receive the check.” The administration’s role is to plan, said Green, to plan out and determine where they think the money will come from. According to the city Charter, the budget will be balanced, but it is my office that sometimes has to give the bad news. Controller Green used the example of land sales that the Mayor’s office says will bring in $22 million this fiscal year, he disagrees that they will bring that much in the current economy.
The good news according to the controller is that we are finally starting to see an uptick in sales tax revenues. Mr. Green stated that for those who are not familiar with the breakout of where the city gets its funds, about 60% comes from property taxes. The Controller stated that most of the property values in the city declined this year reducing the funds available to the City. Sales tax has been down for the past year, however this is the most elastic part of the city’s budget. Mr. Green stated that he was concerned about the BP oil spill in the gulf and the economic affect that it will have on the area. He stated that we will see a downturn in the oil and gas business, but we will probably fare better in the long run than most areas because that is what we are built on in Houston. With an increase in sales taxes starting to be realized, this will go a long way in helping the city hit its budget and reduce the number of things that will have to be cut at the end of the year if the economy does not pick back up.
Controller Green next explained the roles that his office plays in the City. He stated that while he does not vote on specific projects, he does certify that each project has the funding to proceed. Once funding is approved, then it is voted on by Council for final approval. The controller’s office from there makes sure that your checks are issued out on a timely basis, usually about 30 days from submittal. Controller Green stated that he is working on a new project that will allow the city to do direct deposits into contractor accounts. The city has already started this process with about 15,000 city employees. The Controller’s office is currently encouraging contractors to sign up for the automated vendor payment program. By doing so it will speed up the payment process and get you your money faster, said Green. This process also frees up the city because now they don’t have to worry about lost checks or fraud and saves the city money by making the process paperless.
There are other divisions within the Controller’s office that handle things other than payroll. According to Mr. Green the treasury division has about $13 billion in debt that it oversees. This is the money that is used to cover the CIP, stated Green. This department is tasked with overseeing the debt and finding ways to reduce that number. On the investment side, the Controller’s office oversees approximately $2.2 billion worth of investments which are all overseen by in-house personnel. Even without using an outside consulting firm, this group has been showing a decent profit of about 4%. The auditing division oversees process and financial audits of city departments and departmental policies. This practice of internally auditing city policy has been very beneficial and has saved the city both time and money. The order of the day in the City of Houston is becoming more efficient, finding ways to save money and more effectively delivering services. According to Controller Green, there are still a few more financial quarters out there where the outlook will not be good, and while Houston will fare better than most other cities, we still need to be prepared. The good thing is that the City has forward thinking people who are putting plans in place. Departments are right-sizing, going through to see if they have the appropriate staffing levels, if they are hiring in the right areas, and if personnel can be better utilized elsewhere. The Controller stated that there was no direct hiring freeze at the city, but that positions are being reviewed to determine the necessity of replacing that individual, or whether it should be left vacant. Positions are being deleted through attrition said Green.
Looking to the future, Controller Green stated that Houston is still growing, we expect the economy to get better, and there are more people are moving here than ever before. According to statistics from the U-Haul Corporation, more people are doing one way truck rentals to Houston than any other destination in the country. That is a good economic indicator for the city, said Green. For the contractor that means that the city is going to have to grow to keep up with this expected influx of residents. That means more roads to build and more infrastructure to put in place to keep up with all this new growth.
