Proposed FY 2018 Budget Presentation Highlights

Office of Business Opportunity FY 2018 Proposed Budget Presentation May 23, 2017

Organizational Chart

FY 2018 Department Initiatives Initiative Mayor 's Priority Complete Communities Plan Houston Strategy Champion learning. Partner with others, public and private. Nurtures safe & healthy neighborhoods. Spend money wisely. Revamp the Turnaround Houston Initiative to increase its efficacy and reach in the targeted communities. Engage all necessary internal and external partners/stakeholders to conduct a disparity study in the areas of Professional Services, Goods, & Non-Professional Services and Construction. Expand the Liftoff Houston Annual Business Plan Competition to include online workshop offerings on various topics and conduct in person workshops in various communities. Enhance existing capacity building initiatives such as Mentor Prot g , Build Up Houston, and the New Venture Program. Sound Financial Management Complete Communities Champion learning. Partner with others, public and private. Supports our global economy. Complete Communities Champion learning. Partner with others, public and private. Supports our global economy. Improves City's service delivery. Transition clients to the online certification application to improve efficiencies in the certification process. Host the Annual Meet the Buyer Forum and the Champions of Diversity Awards Ceremony. Service and Infrastructure Service and Infrastructure, Complete Communities Connects people and places. Supports our global economy. 3

Revenues By Funds ($ in thousands) Variance FY 18 Prop/ FY 17 Est $ $ $ $ $ $ $ FY 16 Actual $ $ FY 17 Budget $ $ FY 17 Estimate $ $ FY 18 Proposed $ $ % Fund Change 0.5% 0.5% 0.0% 0.0% 0.0% 0.0% 0.5% 1000 2424 144 125 864 125 126 1 6 1,130 1,175 1,181 - - - - Total $ 1,274 $ 989 $ 1,300 $ 1,307 7 4

FY 2018 Revenues Highlights The FY 2018 budget for Fund 1000 reflects a 0.5% increase from the FY 2017 budget estimates. This equates to a $645 increase. FY 2018 s budget for Fund 2424 reflects a 0.5% increase from the FY 2017 budget estimates. This equates to a $6,000 increase in revenue for FY 2018 due to the amount of interest that is anticipated to be collected for the Pay or Play Program. It is also projected that more contractors will opt to pay into the Contractor Responsibility Fund in FY 2018 if the requirements for mandatory insurance as stipulated in the Affordable Care Act is removed. 5

Expenditures By Funds ($ in thousands) Variance FY 18 Prop/ FY 17 Budget $ $ FY 16 Actual $ $ FY 17 Budget $ $ FY 17 Estimate $ $ FY 18 Proposed $ $ % Fund Change 1000 2424 2,835 633 3,049 872 2,959 872 3,049 747 - 0.0% (125) (14.3%) Total $ 3,468 $ 3,921 $ 3,831 $ 3,796 $ (125) (3.2%) 6

FY 2018 Budget Expenditures Net Change (in thousands) FY 2018 General Fund Budget Expenditures Net Change to FY 2017 Current Budget Notes FY 2017 Current Budget Operating Budget Restricted Budget FY 2017 Current Budget $ $ $ 2,873 175 3,048 1 Explanation of FY 2018 Incremental Increase/(Decrease) Operating Budget Adjustments Budget reduction initiatives Personnel budget utilization savings Subtotal Operating Budget Adjustments % Change from FY 2017 Operating Budget $ (86) (50) (136) (4.7%) 2 3 4 Contractual or Mandated Adjustments: Pension Allowance Health Benefits Hope Allowance Contract Escalation Rental Increases Electricity Natural Gas Other Restricted Accounts Subtotal Contractual/Mandated Increases $ $ (56) 9 31 - - - - 153 137 5 6 FY 2018 Proposed Budget Operating and Contractual Adjustments $ 1 FY 2018 Proposed Budget $ 3,049 0.0% 7 % Change from FY 2017 Current Budget Notes: 1. Restricted budget includes service chargeback accounts for items such as fuel, electricity, IT accounts, etc. 2. Budget reduction initiatives include a 3% shared sacrifice reduction of $86,000. 3. Personnel budget utilization savings include an additional reduction of $50,000. 4. % Change from FY 2017 Operating Budget reflects a total budget reduction of 4.7%. 5. Other Restricted Accounts include HITS' Application Services, Data Services, Voice Services, Voice Equipment, Voice Labor, GIS Revolving Fund Services, Insurance Fees, Interfund HR Client Services, KRONOS Service Chargeback, etc. totaled $153,000. 6. Subtotal contractual/mandated increases include pension allowance, health benefits, Hope allowance, etc. totaling $137,000. 7. % Change from FY 2017 current budget reflects a 0% change due to the fact that the 4.7% decrease in OBO's operating budget was absorbed by the increase in the HITS' Application Services Fee. 7

FY 2018 Expenditures Highlights The FY 2018 budget for Fund 1000 reflects a 0% change in expenditures from the FY 2017 estimated budget. In the proposed FY 2018 budget, OBO s operating costs declined by 4.7%. This decrease however, was absorbed by the increase in HITS Application Services fee. FY 2018 s budget for Fund 2424 reflects a $125,000 decrease. This resulted in a 14.3% decrease from the FY 2017 estimated budget. A significant amount of this decrease is due to budgetary adjustments in the Emergency TeleHealth Navigation (ETHAN) Program s change of Scope for year 2 of the program. 8

OBO Functional Organizational Chart (in thousands) OFFICE OF BUSINESS OPPORTUNITY FUND 1000 29.5 FTEs $3,049 OBO Solutions Center Certification and Compliance 3.9 FTEs $318 25.6 FTEs $2,732 Provides free business assistance and monitors business creation and job development by systematically tracking clients. Consists of Certification and Designations, Contract Compliance, Department Services and Administration. 9

OBO Functional Organizational Chart (in thousands) OFFICE OF BUSINESS OPPORTUNITY FUND 2424 2 FTEs $747 Contractor Responsibility Fund 2 FTEs $747 Provides oversight of the Pay or Play Program and is responsible for program revenue collections, administrative operations, financial oversight, and monitoring of funds. 10

Questions 11

Appendix Department Demographic Breakdown (Gender & Ethnicity) FY 2017 Accomplishments 12

OBO Staff Demographic Breakdown White Males, 2 White Females, 1 Asian Females, 1 Hispanic Males, 1 Hispanic Females, 4 Black Females, 15 Black Males, 7 13

Department FY 2017Accomplishments BUILD UP HOUSTON In January 2017, the Office of Business Opportunity partnered with Houston Community College to launch the 3rd Cohort of Build Up Houston. In its second year, seven certified firms participated. In May 2017, eight small business owners will graduate from the program. Build Up Houston is a comprehensive, seven month program designed to increase the capacity and success of small businesses in the construction service industry with doing business in the City of Houston. The program utilizes curriculum provided by Interise, a non-profit organization, focused on helping established small business owners take their companies to the next level for continual growth and success. Interise has an award-winning curriculum developed and refined by working hand-in-hand with small business owners and national business experts. Interise has established themselves as a proven leader in educating and training established business owners to grow their businesses. INTERAGENCY MENTOR PROT G PROGRAM (IMPP) The City of Houston, Metropolitan Transit Authority of Harris County, Houston Independent School District, Port of Houston, Houston Community College, and the Houston First Corporation have teamed together for the 5th year of the Interagency Mentor Prot g Program (IMPP). IMPP exists to strengthen effective working relationships and fosters long term stability between established firms and local agencies with emerging historically underutilized businesses. The goals of IMPP is to enhance business skills and broaden the base of historically underutilized businesses by providing the knowledge and experience of established firms. This year s program began on May 2nd with 20 certified firms. Over 160 applications were received for the 2017 cohort of the IMPP. 14

Department FY 2017 Accomplishments Cont d TURNAROUND HOUSTON In March 2016, Mayor Turner kicked off a series of resource fairs to address the barriers to employment that many Houstonians face. OBO, in collaboration with the Houston Health Department, various other City departments, community resource agencies, organizations, and employers, offer participants access to job training, resume writing, tattoo removal, social service agencies, educational institutions, counseling, and intervention to help hard to employ Houstonians turn their lives around. Since its inception, essential services have been provided to nearly 1,200 Houstonians. In FY 2017, a total of four Resource Fairs were conducted that yielded 724 attendees. ECONOMIC DEVELOPMENT DIVERSITY DASHBOARD EDD D The Office of Business Opportunity worked with the Economic Development Office to design the Economic Development Diversity Dashboard (EDDD), an application created to allow external agencies and organizations to report the participation of certified and Hire Houston First firms. The system is currently available and allows each TIRZ to enter their own data. Automated MWSBE Participation Reports are available in the EDDD System for TIRZ. SUPER BOWL LI OBO partnered with the Super Bowl LI Host Committee to promote their opportunities in the small business community, with a focus on Minority and Women Business Enterprises (MWBE) within the Houston area that were ready and able to perform work on contracts for the 2017 Super Bowl. To ensure that businesses were able to take advantage of this unique opportunity, OBO certified 68 firms for the Super Bowl. The Mayor s Office of Special Events was charged with monitoring utilization and contract awards. 15

Department FY 2017 Accomplishments Cont d LIFTOFF HOUSTON! In the first half of FY 2017, $30,000 was awarded to three participants in the City of Houston's Business Plan Competition. In its fourth year, Liftoff Houston! held 18 workshops that provided training to 839 individuals. This initiative is funded by Capital One Bank. Liftoff Houston! will launch again in June, 2017. Virtual Legal Lab VIRTUAL LEGAL LAB In FY 2016, OBO partnered with Vinson & Elkins, LLP to create the Virtual Legal Lab - a program that affords small businesses the opportunity to have one-on-one skype sessions with a licensed attorney to answer legal questions that they may have about their business. The program has hosted four Legal Labs so far in FY 2017, with a total of 30 small business owners participating. DISPARITY STUDY The Office of Business Opportunity, in collaboration with the Legal Department, hired a consultant to conduct a Citywide Disparity Study covering five years of City procurements. The Study will evaluate the extent of marketplace discrimination, if any, against minority-owned, women-owned, and disadvantaged businesses, as it relates to their participation on City of Houston construction and professional services contracts, as well as procurement of goods and services. The Study is estimated to be completed in the first quarter of FY 2019. 16

FY 2018 Performance Measures Fund 1000 Customer Measures Priorities FY 16 Actual FY 17 Budget FY 17 Estimates FY 18 Estimates New Certified Firms Services & Infrastructure 257 400 400 400 New Hire Houston First Designations Services & Infrastructure 460 250 250 275 Turnaround Houston Complete Communities 750 Liftoff Houston! Business Plan Competition Complete Communities 500 Labor Standards Services & Infrastructure 60% Business Process Measures Priorities FY 16 Actual FY 17 Budget FY 17 Estimates FY 18 Estimates Certification Processing Timeframes (days) Services & Infrastructure 90 90 90 90 MWSBE Contract Participation Construction Services & Infrastructure 22% 34% 34% 34% MWSBE Contract Participation Professional Services Services & Infrastructure 41% 24% 24% 24% MWSBE Contract Participation Purchasing Services & Infrastructure 15% 11% 11% 11% 17

FY 2018 Performance Measures Fund 1000 (Cont d) Business Process Measures Priorities FY 16 Actual FY 17 Budget FY 17 Estimates FY 18 Estimates Expenditures: Adopted Budget vs Actual Utilization Sound Financial Management 97% 98% 97% 98% Revenues: Adopted Budget vs Actual Utilization Sound Financial Management 118% 100% 100% 100% 18

FY 2018 Performance Measures Fund 2424 Customer Measures Priorities FY 16 Actual FY 17 Budget FY 17 Estimates FY 18 Estimates Business Process Measures Priorities FY 16 Actual FY 17 Budget FY 17 Estimates FY 18 Estimates Ratio of Play Option Contracts Services & Infrastructure 65% 65% 65% 65% Expenditures : Adopted Budget vs Actual Utilization Sound Financial Management 59% 98% 100% 98% Expenditures : Adopted Budget vs Actual Utilization Sound Financial Management 197% 100% 136% 100% 19

Thank You 20