Council meetings to consider utility fund, rail ballot, flood buyouts

The Austin City Council will hold two special called meetings this week, one Thursday following the Council Committee on Austin Energy, and one Friday at 1p.m.

Thursday’s meeting includes consideration of whether to allow the utility to transfer $30 million from its operating fund to its strategic reserve fund. Staff has requested the action in order to comply with the utility’s financial policies for reserves.

In addition, Mayor Lee Leffingwell explains the second item relates to the rail bond election. He said it is not to change any of the ballot language, “but to document our intent that this money would be used for the 9.5 mile route that we’ve been talking about ad infinitum.”

Friday’s meeting could be much more contentious because of jockeying between Mayor Pro Tem Sheryl Cole and Council Member Mike Martinez, both of whom are running for mayor. Cole and Council Member Bill Spelman are rumored to have called the meeting.

The bone of contention is options for flood buyouts along Onion Creek and Williamson Creek. Martinez has proposed using money from the drainage utility fee and increasing that fee to cover the buyout cost, estimated at $78 million. However, there are legal problems with that option because the city lost a court case related to charging the same fee for apartment units as it does for single-family homes.

“I’m calling a special session of the City Council to discuss the options openly,” Cole said. “We need to talk options, including an increase to the drainage fee as well as the use of general obligation bonds approved by voters, and then make the best policy decision possible.”

Martinez is moving away from his plan to increase the drainage fee to pay for the buyouts.

“Raising the drainage utility charge would not be the best option at this time,” he said. “The court ruling we recently received requires city staff to review our policy related to the charge, which could potentially lead to structural changes.”

Martinez is instead calling for a 0.006-cent increase to the property tax rate, saying it would generate the required revenue needed to buy all the damaged properties while still lowering the overall tax rate.

Leffingwell said it is likely he will not be available for Friday’s meeting because he has an important dental appointment. However, even if he were to attend, the mayor said he has “a lot of reservations” about the entire proposal. Given the legal situation, he said, he would not support using the drainage fee, but he also does not want to put the item on the November ballot with the rail bond proposal.

The item seems likely dead on arrival as a ballot item because Council members already have concerns about support for that issue. Another item could just give opponents one more argument against doing anything this Council wants. However, they could decide to roll the amount into the property tax assessment, as Martinez has suggested.