Tovo envisions changes to Second Street parking

With budget season approaching, Council members are thinking about what they can do to cut costs and increase revenues in their final budget with an 8 percent tax cap. Because of legislative action, next year’s tax cap will fall to 3.5 percent unless Council goes to voters to seek their approval of a larger increase.

After a lengthy discussion of tax increment reinvestment zones during Tuesday’s Audit and Finance Committee meeting, Council Member Kathie Tovo suggested that the city could save $100,000 in General Fund revenue it pays annually into the Second Street tax increment reinvestment zone, which is known as a TIRZ.

Customers of many Second Street District merchants get two hours of free parking in the City Hall parking garage.

In one example, according to information supplied by the city to Tovo’s office, Milk and Honey Spa on Guadalupe Street across from City Hall provided more than $88,000 worth of free parking to its clients between Oct. 1, 2016, and Sept. 30, 2017. Milk and Honey advertises two hours of free parking at the City Hall garage between 7 a.m. and 5 p.m. on its website. In addition, the spa’s website notes, “the 2nd Street District offers valet after 5:30 p.m. for a $10 flat rate.”

Tovo suggested that some or all of the district’s free parking be eliminated and the resulting money be put into the Second Street TIRZ fund. That fund is used to defray the costs of maintaining area streets, plazas and other public improvements, as well as lights in the district’s trees, according to Deputy Chief Financial Officer Ed Van Eenoo.

Currently that money goes from the General Fund into the TIRZ fund, which is managed by the Economic Development Department. In a March 29 memo, which he discussed at Tuesday’s committee meeting, Van Eenoo explained how each of the city’s four tax increment reinvestment zones work. The other three are Mueller, Waller Creek and Seaholm, and no two operate exactly the same.

The Second Street zone was created in October 2000 and is due to end in 2029. In his memo, Van Eenoo suggested continuing the funding to take care of the Second Street District’s needs, but eliminating the underlying tax zone. Discontinuing this zone would not put more money in the General Fund, he explained, but would eliminate “the legal, administrative and financial reporting burdens associated with maintaining it.”

Tovo told the Austin Monitor that when the parking contracts came up last year, she pointed out that they had been established maybe 14 years ago and that “attitudes toward parking had changed.” While “these businesses are up and thriving and we certainly want them to continue to thrive,” the amount of money the city is losing by not charging those retail customers is substantial, she concluded.

Tovo noted that she had tried unsuccessfully to change the free parking situation in 2017, but she plans to try again. She said, “I’m going to make an amendment to cut that $100,000 transfer, but renegotiate the parking. We could do one hour of parking instead of two, for example.”

Photo by Gary J. Wood made available through a Creative Commons license.

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