Houston IT Proposes $161.4M Budget for Fiscal 2027

Houston Information Technology Services (HITS) has proposed a $161.4 million operating budget for Fiscal Year 2027, a spending plan shaped by public safety technology needs, cybersecurity consolidation, cloud migration and the continued centralization of IT services across city departments.

The proposal, presented during a May 15 budget workshop before the City Council’s Budget and Fiscal Affairs Committee, is up from the department’s current $145.7 million budget, a 10.8 percent increase. City Chief Information Officer Lisa Kent, who announced her retirement at the meeting, told council members the increase includes contractual costs, added technology needs for the Houston Police Department, the consolidation of Houston Airport System cybersecurity and the transfer of Houston Public Library IT into the central technology department.

Kent said the department’s budget would be largely flat without those new or expanded areas. Setting aside the Houston Police Department consolidation, proposed reductions and anticipated contractual increases, the department would be less than 1 percent above last year’s budget.

A major part of the proposed increase is tied to police technology. HITS submitted a $6.8 million budget request to equip new police cadets with technology including body cameras, cellphones and software licensing. The department also listed police-related expenses for cellular service, Microsoft licensing, records management, body-worn camera maintenance, Microsoft SQL Server licensing and CrimeTracer, a data analysis tool recently approved by the City Council.

The proposed budget also reflects continued consolidation of technology functions. Houston Airport System cybersecurity is moving into the department’s budget at $811,000. Houston Public Library IT is being consolidated into HITS at $2.2 million, bringing 14 full-time-equivalent positions into the department effective July 1.

Kent said the department’s 19 programs align with four of Mayor John Whitmire’s strategic priorities. About 49 percent of the HITS budget supports infrastructure, 40 percent supports public safety, 11 percent supports government that works and 1 percent supports quality-of-life priorities.

The department also highlighted several cost-reduction measures, led by more than $2 million in telecom-related savings. Those reductions include a planned 10 percent cut in cellular subscriptions for most departments, lower rates under a new cellular contract, reductions in legacy telephone lines and savings tied to modernization of the city’s network circuits.

Other reductions include savings from Microsoft 365 negotiations, a move to third-party Microsoft support, a new electronic signature agreement, reduced SAP licenses and an improved license structure for Microsoft Dynamics.

Cybersecurity remains a budget focus. The department cited costs for threat intelligence software, anti-ransomware capabilities and citywide cybersecurity awareness training. Kent told council members that Texas law requires local governments to reach at least 85 percent annual cybersecurity awareness training compliance to remain eligible for state-managed grant funding. Houston’s completion rate was 86.2 percent in October, she said.

The city’s cloud and data center strategy also drew questions from council members. Kent said Houston plans to maintain one leased data center, one city-owned data center and a continued push to move more services to the cloud. The city also plans to expand capacity at the Houston Emergency Center, which Kent described as a “quasi data center” that needs additional facility-related enhancements.

Houston previously reduced its leased data center footprint from two facilities to one as it moved more services to the cloud, Kent said.

The department also pointed to its next-generation network project as a key infrastructure effort. Kent said the city is working to complete the network redesign before the World Cup, with goals that include stronger capacity, redundancy and security. Major network-related expenses include $900,000 for network equipment warranty and replacement support and $2.2 million for a network and telecom software license enterprise agreement.

Enterprise applications remain a sizable part of the department’s spending. Kent identified major costs for geographic information system annual licensing, SAP, UKG Kronos time and attendance, HR1, electronic signature tools, contract and procurement management licensing, ServiceNow, GovQA, talent management and the city’s contingent workforce portal.

At the end of March, the department completed the Houston Police Department’s migration into the citywide Microsoft tenant. Kent said the change gives city users better visibility into Teams availability, SharePoint sites and unified email naming. Police users have moved from houstonpolice.org email addresses to houstontx.gov addresses.

Council members also asked about efforts to reduce manual data entry and automate internal processes. Kent cited the Houston Police Department’s planned move to an electronic employee scheduling system that will feed into the city’s Kronos timekeeping system and payroll system. She described the work as a “big heavy lift” because of the department’s size and existing manual processes.

The city’s artificial intelligence work was another topic of discussion. Kent said progress on Houston’s AI road map has not moved as quickly as the department would like, but a new performance, innovation and architecture group in the director’s office will help build an AI governance function.

Kent said the city must balance governance with the ability for departments to use AI tools. She said the work will require participation from HITS groups and the department’s business customers to establish guardrails for responsible deployment.