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2010: The year in review

Wednesday, December 22, 2010 by Michael Kanin

Austin began 2010 with optimism and ended on the upswing – but it was a bumpy ride in between.


The city had its share of budget belt-tightening; still, some surveys tagged Austin as the best place to ride out the recession. It also moved ahead on transportation, with the first-ever urban rail system finally up and running and citizens approving some $90 million in bonds that will shape the future of the city’s transportation system. And last year’s police-involved shooting and attendant legal cases continued to divide the community.


This time every year, In Fact Daily sits down with city leaders and gets their opinions on the major stories of the past year. This year we asked Mayor Lee Leffingwell, Mayor Pro Tem Mike Martinez, Council Members Sheryl Cole, Laura Morrison, Chris Riley, Bill Spelman, and Randi Shade, along with City Manager Marc Ott, what they thought about 2010.


Here’s what they told us:


Austin’s Economy and the 2011 City Budget


Despite being declared a nirvana in a sea of economic despair, Austin saw its share of economic challenges. But most of the city’s leaders were upbeat about how the city rode out the recession and where it is headed.


Mayor Leffingwell said city leaders worked hard to create and keep jobs in Austin.


“Economic development was one thing I spent a lot of time on,” he said. “I was proud of what we were able to do working with the city Economic Growth Department and the Chamber of Commerce, State of Texas, and all our other partners. I think we’ve made some significant economic incentive agreements with companies like Hanger Orthopedic, Facebook, Legal Zoom, and Sun Power.”


Leffingwell said that the city’s economic development staff concentrated on recruiting technology companies, with an eye to diversifying that technology into medical technology, digital technology, and clean-energy technology.


“We’ve brought in companies in all three of those areas at this point,” he said. “Also, Samsung was a big deal. They renovated their existing FAB so that they are now the biggest state-of the art manufacturer in the Western hemisphere. And now they are in the middle of a $3.6 billion capital improvement project for other kinds of chips that will create 500 new jobs, along with 1,000 construction jobs while the project is under way.”


The mayor called 2010 “a pretty good year. Our unemployment rate has dropped from 7.1 percent to 6.8 percent, and (that) represents the creation of 18,000 jobs in the Central Texas region.”


Mayor Pro Tem Martinez called 2010 a “huge” year, especially the way the city dealt with a very big hole in its budget.


“We started the year with projected shortfalls up to $28 million,” he said. “And when you’re looking at something like a $28 million shortfall, it starts to cut at the core services. Fortunately, the economy in Austin didn’t crater as much as it did in other parts of the country, so we remained relatively healthy in terms of our local economy, and that allowed us to close the entire budget shortfall, maintain our priorities, hire 100 firefighters, 50 police officers, and 40 paramedics. And for the first time since 2006, we did not go all the way up to the rollback rate on the tax rate.”


He said that was a pretty significant accomplishment. “It took a lot of work on staff’s part — the city manager did a lot of community meetings. Obviously, the Council was also engaged with the community on making those budget adjustments and final tweaks. I think that was a significant issue again. It looks like in 2011, if things continue the way that they are, we’ll be coming out of this recession and see some sales tax growth in the next year.”


Council Member Shade said the city did a good job of selling itself.


“We started the year with Facebook and Hanger, then LegalZoom.” she said. “What I think has been interesting about that is that these were all companies looking for, in some instances, their first location out of their corporate headquarters, and in the case of Hanger, a new corporate headquarters after being in Maryland for years. Austin showing up high on people’s list is a great thing. “


Council Member Morrison said the city’s budget planners did a good job of doing more with less.


“We’re in a recession and a time of great need, so it’s a time of less resources,” she said. “It could’ve been a lot worse. But it’s really frightening that they’re looking at a $30-50 million budget gap. To me, we got through it okay. One of the ways we got through that was by saving $1 million in our HHS department. And staff has been working with me to take that savings and actually spend it on the needs, because the needs didn’t go away; they just got less funding. I think that’s real important.”


Council Member Riley said he was very pleased with the city’s economic performance over the past year.


“At a time when the whole world is struggling with recession, we’re actually doing pretty well here,” he said. “We just got rated one of the best economies in the country. Our employment grew by 3.2 percent; that seemed to be the most important thing.”


City Manager Ott said the past year’s success is partially attributable to hard work done on economic issues during the previous two years.


“The biggest issue for me since I arrived (in early 2008) has been the financial challenges this city has faced, as have other cities throughout the country,” he said. “I’ve focused, along with my staff, a lot of time and effort trying to make sure that Austin comes out on the other side still very viable on a lot of different levels. I think we’ve done that pretty successfully.”


“The first two budgets I did we were suffering mightily because of declines in sales tax. You know, we had at least a full year, if not more than that, of declining sales tax revenue. Then, in the course of a little more than the past year, we’ve seen the uptick in sales tax revenue, which is helpful to us in terms of the budget the Council adopted back in September.”


Transportation Issues (Bond Issues, Metro Rail)


Austinites are still spending a lot of time going nowhere on the area’s freeways, but 2010 was significant in that tangible progress was made toward improving the situation. Voters approved $90 million in transportation bonds designed mostly to get traffic moving on area roads but that will also fund several alternative ways of getting around. Capital Metro, after more than two years of delays, finally got its Red Line rail system up and running between Leander and Downtown Austin.


Council Member Spelman said the 2010 bond package will pave the way for a more comprehensive package planned in 2012.


“I’m very happy we were able to come up with bonds that the public could see value in and were able to vote for,” he said. “I think it’s going to move us in the direction of what I expect to be the big bond election package in 2012 or thereabouts. I think this improved our chances of passing a train system in 2012.


“The fact that we got a positive vote means the public can see, even in difficult times, that we are going to be good stewards of their money. I think it’s good we got a positive vote for something which is very much a part of our multi-modal system.”


Riley sees passage of the bond package as a watershed moment in Austin transportation.

“I think as we look back 2010 will be viewed as a time when we shifted gears on transportation and made some real progress on developing a multi-modal transportation system,” he said. “Getting the Red Line up and running was important but also getting voter approval and getting a significant victory at a time when the country was really feeling skeptical about progressive policies in general.”


Leffingwell said he and other city leaders spent a lot of time and effort to pass the bonds.


Proposition One was a landmark transportation bond proposal, which for the first time offered significant sums of money for alterative forms of transportation,”  he said. “It was still 57 percent roads, but we began to take on transportation as a system instead of just individual roads. And it was a good, solid victory, and hopefully it will set a good precedent for the one we are planning in 2012.”


Ott agreed: “Part of the message there — even though for some, the $90 million was controversial — was approval of a wide range of transportation-related issues,” he said. “I think it sends a strong and positive message about the need to rethink our perspective, the community’s perspective on transportation. It’s not just about roads. It is, in my opinion, about first of all looking at a regional perspective. Solutions have to arrive in the context of a multi-modal, ideally, seamless transportation system.


“I think that’s part of the message of the $90 million, and I think that’s incorporated into the balance of the discussion — that conversation that I hear the mayor and the Council having collectively. I think that’s the right conversation for them to be having on that.”


Martinez, who chairs the Capital Metro Board of Directors, said this year’s vote bodes well for the future.


“It did get some opposition.” he said. “There were some folks who believed that 47 percent of the projects not being roads is not transportation. We didn’t agree with that. We believe that transportation has multiple facets — sidewalks, trails, and other pedestrian- and bike-friendly infrastructure are certainly a part of that.


“And I was pleased with the outcome. I think it showed us that at least a majority of the citizens understand and agree that a multi-modal transit system is not just about roads. We can build roads from here on out and we’re still going to be a heavily congested city. So we have to look at transportation holistically, and I think we did that in this bond package.”


Martinez added that a larger rail system seems much closer than it did a few years ago.


“I think you’re going to see something very similar in the 2012 bond initiative,” he said. “This conceivably laid the groundwork for a potential urban rail project referendum in 2012. “


Below in Part II, city leaders look at issues such as the construction of Water Treatment Plant 4, the city’s Public Safety budget, the failure to settle the lawsuit over the Nathaniel Sanders shooting, Permanent Supportive Housing for the homeless, and other topics.

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