Houston Using Federal Aid to Avoid Pandemic-Related Furloughs

Houston will tap federal coronavirus relief money to prevent furloughing city employees and exhausting its rainy day fund in the upcoming budget, Mayor Pro Tem Dave Martin announced at a City Council meeting Tuesday.

The city will use a portion of the $404 million received through the CARES (Coronavirus Aid, Relief, and Economic Security) Act to help address a $169 million shortfall under an updated budget proposal for the fiscal year that begins July 1, Martin’s Chief of Staff Jessica Beemer said in an email.

The move comes as Texas’ largest city continues to grapple with the one-two punch of slumping oil prices and the pandemic’s economic impact on city finances.

Photographer: Aaron M. Sprecher/Bloomberg via Getty Images

The Houston skyline.

City Council member Sallie Alcorn said in a telephone interview that using federal money enables Mayor Sylvester Turner (D) to remove the maximum 10-day furloughs for 3,000 city employees envisioned under a previous budget proposal. It also will enable the city to reestablish $15 million in a rainy day fund that otherwise would have been tapped dry during hurricane season, which started Monday. The money is typically used to address major disasters.

A virtual public hearing on the proposed budget is scheduled for Wednesday. Council members are expected to vote on the proposal June 10.

City finance officials at the budget meeting indicated $19 million in federal funds will be used for the current fiscal year and $36 million for the next budget cycle starting July 1, Alcorn said.

To contact the reporter on this story: Paul Stinson in Austin, Texas at pstinson@bloomberglaw.com

To contact the editors responsible for this story: Tina May at tmay@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com