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City offers $15M funding plan for SAVES

Wednesday, September 30, 2020 by Ryan Thornton

In the absence of sufficient state and federal economic relief for Covid-19, the city has identified four potential local funding sources totaling $15 million for the Save Austin’s Vital Economic Sectors (SAVES) effort. If approved by City Council this week, the financial assistance would be split among local child care providers, music and arts venues, and restaurants and bars.

Instead of a single SAVES fund, the city is recommending creating three $5 million funds: a music venue preservation fund, a legacy business relief grant and a child care provider relief grant. At Council’s work session Tuesday, Ed Van Eenoo, the city’s deputy chief financial officer, said the $15 million could include $6 million from the planned Human Capital Management System replacement project, $4.8 million from the Pay for Success fund, $3.7 million from temporary use of right-of-way fees and $500,000 from the Fiscal Year 2021 Capital Rehabilitation Fund.

“We really do need federal help in order to deal with the scale of this challenge … but we can’t wait for the federal help,” said Mayor Steve Adler. “I hope we can get this work started and started quickly.”

Van Eenoo said the proposed funding sources are the most appropriate of the available options. The $4.8 million from Pay for Success was added to the fund in Fiscal Year 2020 to help soften the impact of the 3.5 percent tax cap into the future; the $6 million designated for the Human Capital Management System replacement could be replenished in a future budget cycle without impacting the project timeline; the $3.7 million in temporary use of right-of-way fees could be mostly made up by increases in other Transportation Department fees without significant impacts to department operations; and the $500,000 reduction to the $7.3 million Capital Rehabilitation Fund will still leave funding for the most critical facility infrastructure needs.

After consideration, the city determined that several of the funding options included in Council’s resolution were too challenging, either because they were not appropriate sources or because it would require too much time to resolve the various logistical issues. Among these were revenue from alley and street vacation sales and encroachment agreements, sales tax and General Fund reserves, and Hotel Occupancy Tax and other convention center revenues.

Despite the city’s recommendations, Council still wishes to further explore many of these options, including the revenue from alley and street vacation sales and encroachment agreements, which Council Member Kathie Tovo said could bring in around $30 million for the program.

Tovo and Council Member Ann Kitchen agree that HOT revenue would also be an appropriate source for some portion of the city’s impacted music venues. Kitchen, who previously proposed using some of those dollars to create a $10 million Visitor Information Center Acquisition fund to purchase at-risk venues, plans to bring a related item to Council’s Oct. 15 meeting.

“It is clear that we can use HOT dollars for visitor information centers,” Kitchen said. “The question is not whether or not we can use those dollars, but what would be the parameters that are necessary within the law around that.”

Veronica Briseño, chief economic recovery officer, said the city is also working on a temporary revision to the Chapter 380 program that would expand fee waivers and reductions to provide relief to participating service industry businesses.

Adler encouraged residents to contact elected representatives outside of the city in the coming months, noting that Gov. Greg Abbott is sitting on about $5 billion for Covid-19 relief that will expire at the end of the calendar year if not used.

“That’s money that could really help in this situation and so … I think it’s really important that we get that money spent,” Council Member Alison Alter said.

As a next step, Council Member Leslie Pool said the city needs to respond immediately to the urgent economic need, identifying where the money is coming from, which businesses and musicians will receive the funds and how much they will need to get through the next six months.

“We seem to be talking around the problem and it’s a lot of words,” Pool said. “But the fact is we need to get financial assistance to the folks who are the music in Austin and who are the food in Austin because music and food is what has crafted our brand – that’s why people come to Austin.”

During that process, Mayor Pro Tem Delia Garza said only businesses paying employees a living wage – roughly $16 per hour – should be considered eligible for the relief program.

Photo made available through a Creative Commons license.

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