Council may consider raising fees, fines

The City of Austin is instituting a partial hiring freeze to help offset the loss of sales tax revenue. The “75 percent” freeze will leave 337 city positions unfilled, while giving city management authority to hire for those positions deemed absolutely necessary. The move is expected to save the city about $4 million over the rest of the 2001-2002 fiscal year.

“I do not want you to think that this freeze is without an operational impact,” City Manager Designee Toby Futrell said. “We will be impacting the quality and content of our programs and our services with this cut.” While Futrell noted that Austin was better off than most other major cities in Texas in that there were no layoffs, she stressed the seriousness of the situation to City Council members at Wednesday’s work session. “At this point, we are no longer cutting around the edges. We are impacting the services that we’re providing.”

Futrell said that while there would be “some small clustering of the numbers,” the hiring freeze would affect all departments. Sworn officers of the Police, Fire and EMS Departments would be exempt, but civilian jobs in those departments would be included. The city had previously frozen 148 vacant positions. The addition of 189 positions to that list raises to 9 percent the level of non-sworn positions allocated by the General Fund and Internal Fund.

Earlier this year, the Council voted to help make up the deficiency in sales tax revenues by tapping next year’s property tax revenues. (See In Fact Daily, Feb. 14, 2002, Feb. 19, 2002) Since then, however, sales tax revenues have declined still further. City figures show a 6.4 percent drop over the past five months. That puts the city on track for an overall annual decrease of 3 percent. City Budget Officer Rudy Garza says that while things seem to be stabilizing, there’s no sign of a dramatic economic revival in the near future. His predictions show an average decline in sales tax revenues of .6 percent over the next seven months. “That means, compared to the approved budget, we are going to lose $7.6 million from sales tax revenue,” Garza said. Garza’s economic forecasts were similar to those provided by economist John Hockenyos of Texas Perspectives, Inc., who told the Council that overall growth is expected to be essentially flat for the next year.

To break the tension of presenting so much negative economic news at one sitting, city staff provided Council members with ice cream and Tylenol. “We don’t want you to think this is too bitter a pill,” Futrell said, noting, “I’m getting double aspirin and no ice cream.” Mayor Gus Garcia quickly polished off his tiny serving of Blue Bell vanilla, while Council Member Jackie Goodman let hers sit while digesting some of the numbers provided by staff. Futrell said staff had attempted to locate the less expensive “Hill Country” store brand of ice cream, but were unable to find any on short notice.

To help make up for the revenue shortfall, Council members will likely be asked to consider raising both fees for city permits and activities as well as fines for violating city ordinances. “In many cases,” Futrell said, “some of those have not been looked at for decades . . . and we have never had in place something that systematically talks about an index or increase to those fees and fines.” The Council may also consider a more formal classification of city services. Essentials like police and firefighting would rank as “core services,” while non-essentials would be classified as either “semi-core” or as “service enhancements.” Futrell admitted that ranking the importance of different services had been a complicated and contentious process for staff as they prepared the first draft. She said, “At almost every level there are a lot of ambiguities.”

In the draft document presented to the Council on Wednesday, 62.2 percent of the city’s general fund expenditures were going to core services, with 8.1 percent for semi-core and just .1 percent classified as going to service enhancements. The remaining 29.6 percent was classified as “fund transfer” and was outside of the ranking system.

While budget deliberations for the next fiscal year don’t normally begin until the City Manager issues the Policy Budget in mid-summer, this year the Council will be getting a head start at the urging of the Mayor. “I would like for us to take a more proactive, up front position,” Garcia said. “I want to consider changing that process slightly to have the Council give direction on what we want in the budget.” The Council will receive a five-year budget forecast on May 8th, with budget work sessions scheduled for May 15th and May 22nd.

City, chip maker agree to work together on transition

While city officials are certainly disappointed about Intel’s decision to sell its partially built building at 5th and San Antonio, both sides are now trying to make the best of it. Paul Saldaña, executive assistant to Mayor Gus Garcia, said the mayor was “disappointed, but he understood their position. Now we need to put together a timetable,” for appraising and selling the building.

Fred Shannon, external affairs manager for Intel, told In Fact Daily, “I was enthused by our meeting with the City of Austin this morning,” which resulted in an agreement that “the city and Intel want to move forward as expeditiously as possible.”

Saldaña remarked, “The city will make itself available to assist Intel. The first step in the process is formalizing a transition plan for the sale.” He said he expects the appraisal process to take six to eight weeks. Shannon agreed that doing the appraisal is the first step. After that, he said, Intel would need to contact all those who inquired about buying the building, see who is still interested, and then find out which of those are qualified.

The city produced figures showing that the tax value of the San Antonio Street property has grown from a little more than $3 million in 1999, before Intel purchased the land, to more than $14 million. Intel broke ground on what was to be a 10-story office building in September, 2000. The chip-maker called a halt to construction in March of last year, after the downturn in the technology sector turned severe. Intel has been discussing the matter ever since, said Shannon.

Saldaña points out that Intel has been paying its taxes while considering options for the land, plus a parcel across the street, which was to house the Intel parking garage. That property was worth $2.2 million in 2000 and is now worth about $5.3 million, according to city records.

Intel made its decision to build downtown at the urging of environmentalists and then- Mayor Kirk Watson, who wanted to keep large employers away from the sensitive Barton Springs zone. The other part of that dream was for a “digital downtown,” where young tech employees would live, work and play. Computer Sciences Corp., which completed its buildings as part of a larger deal to stay off the aquifer and provide a new City Hall, is still seeking tenants for its buildings.

When Intel agreed to move its planned Austin HQ downtown, it did so with the City Council approval of a managed growth agreement and an estimated $10 million in fee waivers and avoided capital recovery costs. (See In Fact Daily May 16, 2000)

“ Austin Energy offered Intel electric utility power and coverage of the cost of all electrical distribution equipment. AE also made a commitment to provide additional services to meet Intel’s additional needs,” according to Redevelopment Services documents. The total of those avoided costs is estimated at $7.4 million. Saldaña says Austin Energy will not necessarily make that commitment to the next owner of the building.

That leaves about $2.4 million in approved fee waivers, including site plan and environmental review fees, temporary use of right-of-way fees and water and wastewater capital recovery fees. So far, Intel has used less than $1.1 million of those fees. Of that amount, more than $827,000 is attributed to waived right-of-way fees. If a major employer purchases the property, that owner will be able to take advantage of the remaining $1,253,936 in fee waivers. Saldaña said a major employer would probably be defined as one that would bring at least 500 jobs downtown. He said a company not fitting that definition would be able to go through the Smart Growth process and request fee waivers also. However, those waivers would be considered by the Council during much leaner economic times.

City still looking at various recommendations, as is transit agency

Changes the city will consider to improve downtown mobility could be followed by changes in Capital Metro’s downtown transit services.

Rob Smith, director of planning for Capital Metro, presented an overview of possible changes to Capital Metro’s Finance/Planning Committee last week. Those changes could include developing a centralized transit center downtown. Many larger cities provide a centralized hub for bus routes; Austin might be next in line.

The City of Austin has considered a number of recommendations, including the conversion of a number of one-way streets downtown—such as Brazos, Colorado, San Jacinto and Trinity—to two-way streets. Other choices include adding left-turn restrictions during peak-hour traffic along Congress and on Lamar at Fifth and Sixth streets, although buses may be exempted from those restrictions, Smith said.

Capital Metro’s decisions are intended to parallel the city’s work downtown. The transit company will review options such as moving some bus routes off Congress to Colorado and Brazos. The flow of buses on Colorado and Brazos could also be reversed to improve accessibility. Other options to speed service, such as placing bus stops on alternating blocks, establishing a better alignment of various routes and moving bus stops to provide better access and Americans with Disability Act compliance, are also being considered.

Smith said technical work on the transit options would have to be completed before any final recommendations could be brought to the Capital Metro board. Changes, if approved, would be implemented over a two- to three-year period. Capital Metro also intends to hold public meetings on any proposed changes to downtown routes and services.

Flores asks for recount . . . Democratic candidate Lulu Flores, who lost the District 51 primary runoff race to Eddie Rodriguez last week, has decided to ask for a recount. Rodriguez won by 117 votes . . . Sweating the small stuff . . . Council Member Daryl Slusher gave an indication of just how closely Council members will be scrutinizing the 2002-2003 budget by proposing raising the thermostats in city buildings. “I don’t want to see people around here this summer wearing sweaters,” Slusher quipped. “The last Council member that brought that up was Council Member Lowell Lebermann,” Mayor Gus Garcia responded. Lebermann served three terms on the Council beginning in 1971 . . . Today at City Council . . . The Council will consider funding the lease, purchase and renovation of the School for the Deaf property on South Congress for $5.4 million. The 44-acre property has 14 buildings containing about 112,000 square feet of office space, which the city would use to house staff from the Health and Human Services Department. Currently, the administrative staff is using leased space at a number of locations around the city. The purchase would be financed through a Certificate of Obligation to be issued in September . . . Campaign finance costs . . . Yesterday the City Council did not have time to hear a presentation requested by Council Member Will Wynn on ways to pay for Proposition 1, the public financing initiative for City Council races. That has been rescheduled for today. We already know it will cost money, but proponents argue that it will not cost nearly as much as Wynn and city staff have calculated. According to city documents, the options will be a $2 million tax anticipation note or elimination of some existing programs. Programs deemed optional, and therefore vulnerable to cuts, include graffiti abatement, art in public places, traffic calming and the Austin Music Network, among others . . . ZAP meets briefly . . . With just five members present, the Zoning and Platting Commission met for a little more than a hour Tuesday night, rejecting one discussion case and approving another. Applicant Thomas Calhoun, represented by Jerry Jackson, was seeking a change from GR to CS-1 on a .4-acre tract at 900 East Braker Lane. City planner Annick Beaudet told the commission the request would not be compatible with nearby land zoned for homes and an existing apartment complex. Chair Betty Baker gave Jackson a chance to postpone the case since any of the five could sabotage the requested change, but he wanted to proceed. The commission rejected the request unanimously, with Commissioner Jean Mather making the motion. The site plan for the St Michael’s Episcopal Church, however, was approved, although the request for 15 years to complete the project was rejected. This plan had already received tentative approval when it came up for zoning. Attorney Glenn Weichert represented the applicant . . . Firefighters announce endorsements . . . The Austin Firefighters Political Action Committee has endorsed incumbent Council Members Jackie Goodman and Daryl Slusher and challenger Brewster McCracken, who is seeking to replace Council Member Beverly Griffith in the May 4th City Council election. The organization represents about 800 Austin firefighters . . . Sound ordinance examined . . . City legal staff have been dealing with the issue since last fall and now have a draft ready for public comment. The Austin Police Department held a meeting for downtown residents last night to get their input, and another is scheduled for next week to hear from bands and downtown nightclub owners. APD's Harold Piatt says enforcement of the current noise ordinance as laid out in a 1998 court order is ”unworkable“, resulting in frustrated downtown residents complaining repeatedly about noise from nearby nightclubs with no result. Comments from residents and club owners will be sent to the city legal department before a final re-write of the ordinance is sent to the City Council, possibly in the latter half of May.

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