City budget staff projects $8 million surplus for end of FY 2012

More than most cities, the City of Austin appears to be seeing the benefits of a nationwide economic recovery. According to city budget officer Ed Van Eenoo, and a set of very rosy financial projections, the city is set to end the 2012 fiscal year with a surplus of $8 million.

Van Eenoo offered the happy news yesterday as part of his quarterly budget update to the City Council’s Audit and Finance Committee. Though the city’s fire and emergency services budgets suffered from a shortage of field personnel – and thus a high cost of overtime – the rest of the city’s operations made up for that shortfall.

Council Member Laura Morrison drew a link between the national economy and Austin’s now-happy fiscal projections. “The big picture takeaway for me is that the projections that we’re moving out of the difficult economy are on track here,” she said.

Van Eenoo cited figures that illustrate a dramatic uptick in development revenue and sales taxes. Income from the former category comes in the form of permitting fees. He noted that, in addition to the fact that the city now expects $2.8 million in additional income from those charges, the number of residential building permits pulled is at its highest since 2006.

 

“So far, year-to-date, we’re up 143 percent in regards to residential building permits,” Van Eenoo said. “This isn’t all of our permits but we like to follow this metric because we think it’s one of the metrics that’s most reflective of the state of the economy, and the state of the housing market.”

Sales tax figures were also up significantly. Indeed, with a projected year-end figure of $158.7 million, Van Eenoo pointed out that city sales tax numbers would finally surpass the previous high in sales tax revenue first set back before the 2008 start of the economic downturn. “It’s taken us nearly four years just to get back to the level of revenue we were at in fiscal year 2008.”

The limited amount of bad news in Van Eenoo’s report came from the city’s Fire and EMS departments. There, a dramatic increase in vacancies had forced each department to spend just under $1 million in overtime costs to keep units appropriately staffed. “What we’re experiencing now is actually a higher level of attrition than we actually anticipated,” Austin Fire Department Chief of Staff Harry Evans told Council members. “We have over 300 people in the department that have more than 20 years of service. In the past 10 days we’ve had eight retirements.”

 

Evans predicted that it could take anywhere from three to five years for the department to graduate enough cadets to fill its vacancies.

According to Van Eenoo, the Austin Police Department had largely avoided a similar budgetary fate. Despite retirements in its own ranks, APD shed a set of internal triggers that demanded it fully re-staff each of its retirement vacancies. Indeed, current projections have APD coming in roughly $2.1 million under budget for FY2012.