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Council passes ‘permanently slimmed’ FY 2009-10 budget

Tuesday, September 15, 2009 by Michael Mmay

The City Council unanimously passed the Fiscal Year 2009-10 city budget on all three readings, breezing through the votes in record time – the meeting lasted less than an hour – with all the Council members taking the time to thank city staff, public safety unions and each other for coming together to pass a budget in such a tough economic environment.


Mayor Lee Leffingwell summed up the feeling well in his official statement. He said that he was “proud to say we have approved a budget after months of diligent work by the community and city staff. This work includes a transparent process of town halls, public presentations and open budget hearings.”


Of course, the celebration could be premature, if the economy takes another nose dive. But City Manager Marc Ott stressed that the budget has been permanently slimmed, as opposed to making temporary cuts. “We started with 175 vacancies in the city administration,” he said. “Now 105 of those are gone. They’ve been eliminated. So we won’t have to recover those in future years.”


And City Budget Officer Ed Van Eenoo said that city sales tax revenues dropped ten percent over the past year, and the budget assumes it will drop another five percent over the coming year. “We are prepared for it to fall further,” he says, “but it could level off and we’ll be ahead for next year. Better yet, it may recover. If it drops more than 5 percent, which would be a 15 percent drop from last year, then we’ll to come back to Council to adjust the budget.”


In fact, the cuts were not as deep as expected just a few months ago. There were so many people challenging their property tax appraisals that the city had to plan based on estimated property tax revenues. When the totals finally came in, the city had $643,000 more than it expected. The delay also meant that Council could not adopt the new tax rate Monday, because of the “Truth in Taxation” state law. So, the Council ratified the new tax rate – 42.09 cents per $100 valuation – a five percent increase over last year’s rate of 40.12 cents per $100 valuation. The Council will hold another public hearing on the rate on September 27, and then vote whether to adopt the rate on October 1.


The city also inadvertently benefited for this summer’s sweltering weather – one of the hottest on record. Originally, the city had predicted that Austin Energy would transfer around $100 million to the city. But because of air conditioners running on overtime, the utility made more than expected, and transferred an additional $1 million to the city. This allowed the city to take some of its more unpopular cuts off the table: a plan to mandate furloughs and drop incentive pay (also known as SIP). “There are some suspicions that we just found an additional million so we could put SIP back in the budget,” said Ott. “It’s not true. There was greater use this summer, and therefore a greater transfer.”


The only change made by Council during the budget meeting was over the amount the city would charge to pick up the large 90-gallon trash cans. Right now, it costs $16.50. City staff had originally proposed charging $18.20, but had amended the amount down to $17.15. Council Member Laura Morrison made a friendly amendment to raise the amount back to $18.20, which was accepted and passed by the Council.


Council Member Chris Riley also took a moment to call attention to the change in water rates. The city, in order to discourage waste, charges different amounts for water depending on how much a resident or business uses. Under the new budget, the city has created a new, fourth tier that it charges those who use the most water. It has also raised the amounts charged to the third tier of water users. Riley said there’s an ongoing debate about the best way to convince Austinites to save water. “I’m not proposing any changes now,” he said. “But I want to see increased scrutiny of these rates. I look forward to working with our (water conservation) task force and staff to see if adjustments need to be made during the year. It’s an ongoing effort.


There will likely be other changes to the budget during the year. In interviews with In Fact Daily, Council Members Riley, Mike Martinez and Laura Morrison all expressed support for an additional inspector for the Neighborhood Housing Department, dedicated to inspecting low income housing to insure accessibility for the disabled.


And Martinez added a few other items to his wish list, including an increased scrutiny over the city’s travel budget, and trying to find the money to fund an additional EMS demand unit.


Both Riley and Martinez said the unit is critical if the city is going to meet a new goal of responding to 911 calls within 8.5 minutes, 30 seconds faster than the current goal of 9 minutes. “We are setting ourselves up for failure,” Martinez said. “We are not bringing on any more units and we know there will be more calls. Hopefully, the economy will come back and we can gain some momentum to where we will have flexibility at midyear to make some adjustments.” Riley said he is hoping there is a way to address the EMS question without further Council action.


Morrison said she was also hoping to find some money for construction site inspectors.


These items on Council Members’ wish lists will have to wait, for the economy to improve and sales tax to come rolling in.

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