Council approves $3.9 billion budget

Twelve hours after kicking off its final day of budget deliberations, City Council gave approval to a roughly $3.9 billion budget, including approximately $1 billion of General Fund spending.

Council approved a 7.9 percent tax rate increase, just below the 8 percent “rollback rate” that would allow taxpayers to challenge the rate via referendum. As a result, taxes and fees for the average household with a $305,000 home will rise $151 per year.

Both the budget and the tax rates to fund it were approved 8-3, with Council members Ora Houston, Jimmy Flannigan and Ellen Troxclair in dissent.

Since the great majority of the budget consisted of continuing funding for existing services, notably police, fire, emergency medical services, parks and libraries, most of the debate in recent days has centered on what to do with several million dollars of extra funds identified by staff.

On Wednesday, Council set about whittling down the list of small projects that it had compiled on Tuesday that would have put the city roughly $3.5 million over budget. That was partially accomplished by a motion introduced by Council Member Greg Casar that pared back the proposed increases to a number of programs, including after-school programs, parent-support specialists in schools, translation services and Affordable Care Act enrollment efforts.

Mayor Pro Tem Kathie Tovo’s efforts to boost funding for homelessness services were also approved, including withdrawing $1.2 million from the city’s budget reserve to fund a permanent supportive housing program that seeks to leverage additional investment from private entities.

Council also voted unanimously to use $1.2 million from Visit Austin (formerly the Austin Convention and Visitors Bureau)of Hotel Occupancy Tax revenue to cover security-related costs at South by Southwest, therefore liberating that much money from the General Fund for other uses.

Troxclair, who led the effort to reallocate funds from the Austin Convention Center and Visit Austin in order to reduce pressure on the General Fund, celebrated the moment by thanking her colleagues and city staff for making the effort possible. “This is a big moment. This didn’t come easy,” she said, referencing a policy decision that Mayor Steve Adler had at first vigorously opposed.

Troxclair’s delight quickly turned to outrage, however, after Adler recognized Casar, who introduced a motion to use $580,000 of that money to boost funding to many of the same programs that his previous motion had reduced funding for.

The mayor, said Troxclair, had told her that he was going to allow her to offer a motion to return the $1.2 million to taxpayers. Adler replied that she still could – after the vote on Casar’s motion. “If this passes I won’t have the opportunity to do that,” she argued, asking if she could offer a substitute motion. Adler denied her request, saying that the motion was not germane to what Casar was proposing.

The heated procedural debate between Adler and Troxclair became even more complex when Council Member Alison Alter chimed in from the other end of the dais with her own substitute motion to put the $580,000 in the city’s budget reserve. “Your difficulty is with what now?” asked the flummoxed mayor, who also rejected Alter’s motion.

After further back-and-forth over procedure, Council voted to approve Casar’s motion, with Troxclair, Alter, Flannigan and Houston in dissent.

Troxclair then motioned to essentially undo some of the prior committed spending and instead put $1 million toward reducing the property tax rate and $200,000 toward increasing the senior exemption.

Adler said that he wanted to keep taxes low but could not support the level that Troxclair proposed. Troxclair ridiculed the notion that $1 million out of a $1 billion budget was too much. “This is the absolute very least we can do,” she said, before she was joined by Flannigan, Houston, Alter and Council Member Ann Kitchen in support of her defeated motion.

The senior exemption fared better, however, with all but Casar, Tovo and Council Member Delia Garza voting in favor.

A subsequent motion to commit the remaining $420,000 to taxpayers also passed with a one-vote majority. Troxclair, Kitchen, Adler, Alter, Houston and Flannigan voted in favor, while Garza, Casar, Tovo, and Council members Pio Renteria and Leslie Pool voted against.

A separate motion to approve fee increases for electricity, garbage pickup and the Code portion of the “Clean Community Fee” that will total $3.70 more per month for the average homeowner was also approved, with only Troxclair and Renteria opposed.

Earlier in the long day, Council’s first vote was to cut $200,000 from the Development Services Department budget so it could be reallocated to health and human services needs.

Kitchen first proposed to cut $600,000 from the department’s funding for permits and inspections for telecommunications services, such as Google Fiber and AT&T. That change would have eliminated seven of the current 14 telecom employees.

After some confusion about whether the city had signed an agreement with Google promising expedited service and what impact cutting half of the telecom inspection budget might have on the city’s reputation as a tech-friendly city, Assistant City Manager Robert Goode stepped forward.

Goode said he had been involved in the negotiations when Google picked Austin as the second city in the United States to have Google Fiber. He said there was no doubt that the city and Google intended that Google would get expedited permitting and inspection and the contract used the word “expeditious.”

Casar then made a motion to amend Kitchen’s proposal to cut only $100,000 from the telecom section and take $100,000 from the money Council set aside on Tuesday for 51 new positions in development services.

Troxclair, Flannigan, Alter and Adler said they were opposed to both of the cuts. The vote to redirect $100,000 from the telecom permitting funds was 7-4.

Flannigan said he voted against the reallocations from development services because Council had already agreed to have a conversation later about those cuts. Although he was wavering on the telecom reallocation, once he heard from Goode that the city had promised expedited permitting, he decided he could not vote for that either.

Houston voted against allocating money from development services the Council had decided to hold in reserve the previous day. She told the Austin Monitor that although she voted to cut $100,000 of telecom money, she voted against taking money from the Development Services Department’s budget for new development review inspectors before Council had a chance to discuss it further.

Troxclair told her colleagues she could not vote for cutting the money for Google. “Part of the reason that we have such a thriving city is that we’ve had such great job opportunities and economic development because we’re a great city for tech. … Working with real estate clients, people are excited when we see a house and we have Google Fiber in the neighborhood. I understand and appreciate everybody’s trying to do their best to find money wherever they can but I just don’t think … that arbitrarily cutting this money sends the right message.”

Adler praised Google, and eventually he said that he had received information that it would be OK with the company if they cut $100,000, not the $600,000 that Kitchen initially proposed.

This story has been corrected. We originally reported that the $1.2 million reallocated to SXSW security costs came from HOT taxes when, in fact, that money came from the Visit Austin budget. Photo by John Flynn.

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