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City Manager says Council must make tough choices this month

Thursday, May 9, 2002 by

A $68 million debt is forcing city staff to find a new direction on the budget process, asking the City Council to make tough choices before a draft budget draft is presented. City Manager Toby Futrell told the Council yesterday, “In January we provided you with an estimated gap. That gap between estimated revenues and expenditures is in line with the projected financial forecast . . . This is the most significant gap ever presented to Council.”

Only a half hour before Budget Director Rudy Garza presented its five-year forecast to Council members, the city learned that sales tax revenues were down more than 11 percent for March from last year, a blow the city was not anticipating. Futrell painted a dire budget picture for the Council, stressing the importance of balancing long-term revenues and expenditures.

Council input usually comes on the back end of the budget process, after a draft budget presentation in late summer. This year, Council members will be making major policy decisions on priorities before the City Manager presents the budget draft. Futrell described the decisions as creating a framework for decisions in what she calls a “tough year.”

“In lean times, we need to do things differently,” Futrell told the Council. “That includes the budget process.”

That means serious cuts, although city staff was not willing to go as far as talk of layoffs. The city’s current financial forecast—likely to be revised with the new sales tax figures—projects revenues of $449.4 million against expenditures of $517.3 million. That’s based on a projection that keeps all services at status quo and maintains regular anticipated pay raises. The gap is the largest the city has ever faced in a budget cycle. Mayor Gus Garcia said, “The last time we faced this was about 1988, and the aftermath of that budget has been something that has cost us a lot of money,” referring to maintenance that was deferred during that period.

Garza pointed out that public safety costs—which also took a $16 million hit from the recent police meet-and-confer agreement—represent 51.6 percent of the budget. That translates to more than 97 percent of the city’s sales and property tax revenues going to public safety concerns. And those figures, he pointed out, do not include the anticipated cost of a meet-and-confer process with Austin firefighters this year. The balance of expenditures in the budget must be covered with the fees being collected by the city, Garza said.

The Council will take the next two Wednesday as retreats to set priorities on the budget. Futrell said the Council would address how the city should use one-time revenues, what should be done with the Austin Energy transfer and what kind of decisions need to be made on the property tax rate and the issue of employee pay raises. No one can point the finger this year and suggest the cuts come from someone else’s budget, Futrell said.

“You have to approach budgeting differently,” Futrell said. “There are not enough ‘other fellows’ to go around in lean times.”

One strategy Futrell wants to avoid is using this year’s ending balance to cover the gap between revenue and expenditures. The city will end this year with $29.8 million. While Futrell recognizes that some of that money will cover the budget shortfall, she emphasized that a one-year replacement of funds does not solve recurring costs. Pay for a line item this year with the excess, Futrell said, and it would be likely that revenue shortfalls would require freezing the expenditure in following years. The city can no longer expect sales tax and developer fees to rescue them.

“We need to start trying to wean ourselves away from that ending balance,” Futrell said.

City staff is proposing some incremental increases in utility rates —most negligible—but Mayor Pro Tem Jackie Goodman, for one, is opposed to any fee increases.

After getting direction at this month’s retreats, the City Manager and her staff will be hard at work on budget problems, aiming to present a proposed budget to the Council on July 31. The budget will be approved in September.

Commission planning no recommendation before June 18

Environmentalists and Circle C homeowners angrily left the Zoning and Platting Commission meeting Tuesday night after waiting three hours to speak on a series of proposed rezonings for Stratus Properties in far southwest Austin. There were several requests to postpone the cases for at least 30 days, but the commission went ahead with an initial staff presentation and began what promises to be a lengthy public hearing. More than 50 people signed up to speak on the zoning cases. The public hearing will continue at the ZAP meeting on May 21st, with the commission attempting to make a decision on the rezoning requests at its June 18th meeting. Commissioner Michael Casias said he would be out for town for several weeks during the interim.

Before reaching a decision on that schedule, the commission split on whether to postpone any discussion for a month. Commissioners Joseph Martinez, Angular Adams, Jean Mather and Niyanta Spelman all wanted to grant the neighborhood requests for a postponement, while Commissioners Keith Jackson, Michael Casias, Diana Castañeda and Chair Betty Baker were in favor of hearing the case. Commissioner Vincent Aldridge was absent. Since there were not five votes in favor, the motion for a postponement failed.

Neighbors in opposition to the zoning changes had to wait while the commission took up the rest of the items on their agenda, allowing those interested parties to have their cases heard instead of delaying them until late in the evening or the next meeting. As the night wore on, it became evident that the air-conditioning system in One Texas Center was not set to accommodate the large number of people packed into the third-floor conference room. That agitated many members of the audience, who were already upset at what they perceived as mistreatment from the city. By the time Commission Chair Baker called for public testimony after 9pm, she had to request several times for the audience to remain calm Jackson urged Baker to at least begin the public hearing, even though the meeting was scheduled to end at 10pm. “Let’s let some neighbors who want to speak come up and speak,” Jackson said. “They’re about to die out there.”

According to Bill Bunch of the Save Our Springs Alliance, some neighborhood groups have been left out of the lengthy negotiations between Stratus, the City of Austin and other neighborhood groups regarding the future of the land the company owns around Circle C. But the city did not set up the discussion among the various stakeholders. “You’ve heard about this stakeholder process,” Bunch told commissioners. “We asked the city to mail notices to everyone down there. They refused. As a result, a whole lot of people never knew about it.” John Larkin, President of the Cherry Creek on Brodie Lane Neighborhood Association, said his group had been omitted. “We didn’t hear anything about this,” he said. “We don’t have any information.” Larkin said the documents the group had received from the city were difficult to decipher, and he also believed some of the cases were not numbered properly. “We don’t want the impression, the feeling or the sense that we’re being railroaded.” In addition, representatives from the New Village of Western Oaks said they had not been included, possibly because they were confused with the Village of Western Oaks, which was included in the process.

The land is currently zoned Interim Rural Residential, and the company is requesting a change to remove the “interim” designation. Those zoning requests are moving through the process along with the terms for a proposed settlement between the city and Stratus that could clarify the company’s rights to develop the land.

The 1,253 acres are in the Barton Springs watershed. However, under House Bill 1704 Stratus could pursue legal claims that would exempt the property from current development restrictions. That measure, passed by the Texas Legislature, was designed to grandfather rights for developers when cities alter their regulations. Under the proposed settlement, instead of meeting tract-by-tract requirements for impervious cover, Stratus would be allowed to increase impervious cover on some sites while decreasing it on others. That would allow for massing of development to build an office tower, a neighborhood retail center and up to 900 multi-family units instead of simply building single-family homes.

The proposed massing has prompted the opposition of the SOS Alliance. “When you get to move it around and mush it around, you end up with a whole lot more development,” Bunch said. He also found himself trying to convince the ZAP Commission to consider items other than whether the proposed development would comply with the SOS ordinance. “This is not a water quality case,” he said. “This is a zoning case. There’s a confusion between the water quality issues, which are relevant, and more other relevant zoning issues, traffic issues, compatibility issues and infrastructure demands.”

Kirk Mitchell and dozens of Circle C homeowners accompanied Bunch. They’ll get to present more of their opposition at the commission’s May 21st meeting. But the commission’s decision to delay a final vote on the zoning cases until June 18th means it will not make it before the City Council until after Betty Dunkerley takes her place on the dais.

Public hearing set for 6pm tonight

City staff made one last presentation on the Seaholm Master Plan to the Council yesterday before the plan is presented in a public hearing at today’s meeting.

The current goal is to incorporate the general concept of the Seaholm Master Plan into the city’s overall comprehensive plan. That broader approach could allow city staff to delay resolving questions about the Pfluger Bridge connection across the Seaholm property and the possible $10 million relocation of Cesar Chavez until after the plan is approved.

Urban Design Officer Jana McCann reviewed those projects at yesterday’s work session. The master plan comprises 10 separate projects estimated to cost $35.4 million. Half of the proposals are for roadway and bridge improvements and would fall under CIP projects. The total—of which $13.2 million could come from future federal grants—would be matched by a $65 million investment from the private sector. The master plan could be implemented by 2005, if all goes according to city timetables.

Sherri Wagner, a public attractions consultant hired by the city, said a number of issues remain to be addressed in the conversion of the Seaholm Power Plant into a public attraction. Those issues include how the project would fit with the surrounding downtown landscape, how pedestrian, bicycle and vehicle access to the property can be improved and allowances for long-term expansion if the venue is successful. An economic feasibility analysis also has been developed for the site to explore its possible revenue generation.

ROMA Consultant Jim Adams walked Council members through the plan, pointing out the various strengths of the downtown locations and the concerns of the cycling community. Tonight’s hearing on the Seaholm Master Plan is scheduled for 6 p.m.

You ain’t seen nothin’ yet . . . The few dozen people who lost out on voting in Saturday’s City Council election were frustrated, and rightly so. However, it’s clear that those votes would not have changed the election results. Those who think that electronic balloting will solve all or most of the problem should look at voting in Dallas County and San Antonio. According to the Dallas Morning News, Dallas County officials are doing an audit to try to retrieve electronic votes that were not counted from Saturday’s election. Dallas County was in charge of elections for more than 20 governmental entities, some quite small, so just a few votes would make a big difference. For example, a City Council race in De Soto is up in the air because only 14 votes separate the apparent winner from his opponent. In another even smaller town, the difference is five votes, and in Balch Springs, the apparent victor holds a one-vote lead. In San Antonio, voters and the parties are in court over certain Election Day precinct closures where someone forgot to put up a sign directing voters to the correct voting location. The House Committee on Elections, chaired by State Rep. Debra Danburg, D-Houston, has set up subcommittees on improving recruitment, retention and education of Election Day workers and is considering the feasibility of centralizing administration of all elections at the county level. The committee is also considering whether the county should set up permanent polling locations for all elections to reduce voter confusion. Another committee is assessing procedures used for recounts . . . Many were called, many gave . . . Council Member-elect Betty Dunkerley called to say her campaign workers contacted ALL of her prior supporters, not just RECA members. Dunkerley was happy to report that she has received about $22,000 in contributions since Monday’s surprise withdrawal of Council Member Beverly Griffith . . . . . . Attention city contractors . . . The City Council has been quietly rejecting contracts when they see what they believe is insufficient minority subcontractor participation. There are a number of Water & Wastewater Department contracts and contract amendments on today’s agenda that will apparently not receive approval on consent. Mayor Gus Garcia and Council Member Danny Thomas, in particular, want to know if the businesses involved have done everything they can to use MBE/WBE subs, particularly from the African-American community . . . Energy Incubator hosts reception . . . The Austin Clean Energy Initiative and the Clean Energy Incubator at ATI are holding a reception to talk about economic development opportunities in Austin and Central Texas for renewable technologies. The party is next Tuesday from 4:30 to 7:30 pm at Serrano's Symphony Square, 1111 Red River. The program is scheduled for 5pm. To RSVP, send your name and company to info@austincleanenergy.org Sponsors include AngelouEconomics, the Austin Business Journal, AustinXL, Bracewell & Patterson LLP, Corkran Energy LP, Conservation Services Group, Good Company Associates, PricewaterhouseCoopers, TKO Advertising, and Analects-Ink, in partnership with the Austin Idea Network, Technical Business Network and the Texas Solar Energy Society.

© 2002 In Fact News, Inc. All rights reserved.

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