Chief Exploitation Officer

To our stockholders:

I call you “stockholders” since, as residents and taxpayers in Houston, you, in effect, own stock in this corporation, the City of Houston, Inc. In the same vein, as mayor, I am the city’s “CEO.” Perhaps it is this similarity that has prompted a few of you, well, more than a few – by actual count, almost everyone – to ask whether I would follow the lead of major U.S. corporate executives and sign a form affirming the honesty of the city’s accounting methods and findings.

Let me state unequivocally that only wild horses could drag me away from signing such a letter. But first let me explain a few items in the attached financial statement for this fiscal year that may cause confusion. The item “mayor’s travel,” which so far this year comes to less than $750,000, was for city-connected business. Studying solid landfills in Napa Valley proved most constructive as did investigating mass transit around Monaco. In a related matter, because of our bid to land the Olympics within the 21st century, I am checking out the competition in western Europe, Palm Springs and several Caribbean islands.

The item “fender bender” for $889.50 was also a city expense in that the accident occurred when I was out, on my own time, looking for “bandit signs,” which we see around town advertising everything from aluminum siding to computer lessons. As you will recall, I made the cornerstone of my last campaign ridding Houston of such visual blights. Those signs stuck in the medians are so distracting we can hardly see the billboards.

There is no point in going over “elocution lessons” since that expense has been thoroughly explained that it helped me speak good. The cost of the mayor’s police escort and bodyguards is not to be made public for security reasons. The item “resume writers” is being revised since the spell check broke. Under “mayor’s office expenses” you will notice that we have accounted for every order for pencils ($32.10), paper clips ($11.88) and erasers ($17.00). The item “miscellaneous supplies ($2.3 million)” is proper under usually accepted accounting principles, which are followed by several major corporations, according to federal subpoenas.

Other items are self-explanatory, such as “fixing potholes – $45.60,” “water pipe maintenance – $89.33” and “the really big picture of the mayor at Bush Intercontinental – $58,500.” The item, “Christmas party – $97,000” is being looked into as is “Kmart Raid – $11,500 with 20 percent off.” All in all, our expenses seem to be somewhat higher than expected, perhaps doubled.

By amortizing the overall under capitalization of the misaccounting factor, I have just learned that a few of our financial statements may be leaning more toward AOL than IBM and could involve the FBI.

As for income, it appears to be slightly below our predictions, roughly by $400 million, but how were we to know Minute Maid’s naming rights would go to the baseball park instead of the Main Library? It was not included in our $40,000 study. Also, our projections on coin-operated police sirens proved overly optimistic. This income shortfall is because the city budget was passed while I was at a conference in Aspen. Had I been here, such smoke and mirrors would not have been used.

As with many other Fortune 500 companies, the city has recently discovered some slight accounting errors. For example, we counted the tax collections from 2004 to 2008 as current income. Also, we may have to re-state earnings for the last 15 quarters. If this happens again, I am going to reduce the annual bonuses in the City Finance Department.

The gap between the city’s income and outgo is still being tallied, although my budget office says the amount will be “stupefying,” which must be an accounting term. Still, we have to put these problems in their proper perspective and realize that we are not alone, as I was telling a grand jury only last week.

But back to the question of whether I will sign a statement attesting to the honesty and accuracy of the city budget. My answer is an emphatic “Probably!”

Your CEO

Lee P. Brown

P.S. Late expense – $490 for wild horses ih