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Council passes $2.8 billion FY2012 budget after long day of discussions

Tuesday, September 13, 2011 by Michael Kanin

It took the members of the Austin City Council the better part of an hour to approve the city’s FY 2011 budget last September. It took them the better part of a day to take action on the FY 2012 document on Monday.


After nearly eight hours of discussion, the Council finally approved nearly $2.8 billion in operating expenses for the coming fiscal year. It also gave a collective thumbs-up to $220.4 million in capital improvement expenditures, among other assorted fiscal plans for FY2012.


The day featured more than a handful of deliberative moments as Council members went over such hot-button issues as the Austin Water Utility’s proposed rate stabilization fee and a proposal from Council Member Laura Morrison that would have reduced the amount transferred from the city’s general fund to its transportation department. Much of the action centered on the addition of $1.6 million in new budget items.


However, nothing was as heated as the prolonged debate over the composition and mission of the city’s police force. (See story this page)


With the specter of potential violations of the state’s Open Meetings Act from earlier in the year, and a perennial request from Council Member Bill Spelman for the delivery of more budget information sooner, city budget officials promised an unprecedented level of transparency for this year’s budget debate. As of Monday morning, that meant a rather public version of horse-trading that might otherwise have been conducted in individual Council offices.


This was evident as Council members went back and forth over such seemingly minor details as the addition of new development employees for the city’s Parks and Recreation Department. It was also apparent as Mayor Lee Leffingwell made a lone stand against several items, most notably Council Member Mike Martinez’ effort to reinstate the funding for an Integral Care substance abuse program.


Martinez – and the rest of the Council – favored using the balance of a $1.6 million reserve which had been parceled out as the day moved forward, to pay for that program and a new member of the city’s music development staff. Leffingwell preferred returning it to the general fund, where it would have lowered the city’s tax rate by .05 cents (five one-hundredths of a cent). “I would prefer that we use that money to reduce the property tax rate for the citizens of Austin,” he said.


Spelman pointed out the minimal effect such a return would have. He noted that the difference would be a mere 91 cents a year for the owner of a $180,000 home, which is the median for the City of Austin. “It seems to me that we can afford to do substance abuse…and hire somebody else for the music department,” he said. “If that’s the trade off, I’m comfortable charging an extra buck a year.”


“I respect your opinion on it…and you’re right it is a very small amount,” conceded Leffingwell. “But we could 91-additional-cents-a-year our way on up to doubling our property tax rate.”


The discussion over the Austin Water Utility’s new fixed fee saw more public dealing. The fee was initially pitched as a “sustainability fee,” and was pegged to the utility’s spending on parks and other such items that took it outside of its core mission. That brought objections from some Council members who saw the fee as something of a rate stabilization cost.


Budget Officer Ed Van Eenoo agreed. He told In Fact Daily last week that the charge should really be considered a “revenue stability fee,” a way for the utility to balance out both natural fluctuations in the market and new economic and environmental realities (See In Fact Daily, Sept. 2).


Council Member Laura Morrison proposed reducing the fixed portion of that fee to $4.40 per month. Council Member Chris Riley countered with a proposal that he argued would reduce the impact on low use water customers—and would set the fixed portion of the rate at $3 per month.


Austin Water Utility Director Greg Meszaros told the Council that a larger fixed portion of the fee would be the better move. “The more fixed fees we can recover, the healthier the finances of the utility,” he said.


In the end, the Council sided with Morrison and set the fixed segment of the rate at $4.40. That figure still reduced the income that the utility would see from the fee from $24 million to $17 million, but provided the more stable source of revenue that Meszaros called for.


After the meeting, Meszaros told In Fact Daily that he was “very pleased” that the utility was “successful in getting the Council to support a fee that’s fixed.” “I think the Council struck a good balance between some of the concerns they heard,” he said. “We’re pleased that we’re able to establish a new fixed fee and that it’s going to raise at least $17 million.”

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