Monthly Archives: April 2014

We Need One More Vote From The Austin City Council

By Bill Oakey – April 27, 2014

My longtime friend, Shudde Fath, who has served on the City’s Electric Utility Commission since 1977 and is approaching her centennial birthday needs our help.  A victory on this issue may take a group effort.  But she deserves all the credit in the world for discovering the problem.

In a nutshell, Shudde did some research last year and discovered that Austin Energy no longer charges the full amount that it costs to hook up a new home or business to the electric system.  What that means is that the rest of the ratepayers, people like you and me, are having to subsidize the new hookups that come on line.  Until Shudde made the discovery, there was no hookup fee at all, and there hadn’t been since sometime back in the late 1980’s.  As of today, a very small fee has been added for the new hookups, but it is not nearly enough to recover the total cost.

On this Thursday’s City Council agenda (May 1st), Item 41 is a resolution directing City staff to implement full cost recovery of the new hookups, as part of the Fiscal Year 2015 City Budget that takes effect this coming October 1st.   Here is a link to the resolution for Item 41.

The City Council member that we have to thank for this item is Kathie Tovo, who received the Above And Beyond Award last week.  Her co-sponsors are Laura Morrison and Mike Martinez.  So, we just need one more vote.  You can send an email to Mayor Lee Leffingwell, Mayor Pro Tem Sheryl Cole, and Council Members Chris Riley and Bill Spelman by clicking this single link.  Then Tweet and Facebook this blog posting to your friends.

If you are an Austin American-Statesman subscriber, you can read an endearing article about Shudde Fath, entitled “97-Year-Old Woman Still Monitoring Austin’s Electric Rates.”


CARY Fundraiser Is A Good Investment Featuring A Great Speaker, Piper Kerman

By Bill Oakey – April 26, 2014

One way to approach affordability is through prevention of costs that would hit taxpayers in the future.  Saving Austin’s youth from a life in prison accomplishes exactly that.  Not to mention the fact that improving kids’ lives is rewarding in and of itself.

The Council On At-Risk Youth (CARY) is hosting its 8th Annual Distinguished Speaker Dinner on Wednesday May 7th.  You should plan to come and listen to a presentation by Piper Kerman, author of the bestselling book, Orange Is The New Black: My Year In a Women’s Prison.  The event, to be held at the AT&T Conference Center, will begin at 6:00 PM with a reception including music and a silent auction.  This will be followed by a dinner and the featured speaker.

For a direct link to purchase tickets, click here.  To read more about the event and the sponsorship levels, click here.

In her memoir Orange is the New Black: My Year in a Women’s Prison, Piper Kerman recounts the 15 months that she spent in the Danbury Correctional Facility for a crime she had committed ten years prior as a very brief, very careless dalliance in the world of drug trafficking. Compelling, moving, and often hilarious, the stories of the women she met while in prison raise issues of friendship and family, mental illness, the odd cliques and codes of behavior, the role of religion, the uneasy relationship between prisoner and jailor, and the almost complete lack of guidance for life after prison.

The memoir was adapted into an original Netflix series of the same name by Jenji Kohan, creator of Showtime’s Weeds, and was recently renewed for a second season. It has been called “the best TV show about prison ever made” by the Washington Post and was lauded by Time’s TV critic James Poniewozik for “the stunningly matter-of-fact way it uses the prison to create one of TV’s most racially and sexually diverse–and as important, complex–dramas [and] contrasts the power and class dynamics inside the prison with those outside the prison.”

This week’s Austin Chronicle features a really good writeup about the CARY benefit by Amy Smith.  In it, CARY’s development director, Heidi Gibbons, talks about one of their successful efforts called the PeaceRox Program, targeting middle school students.

“We’re using a proven curriculum called aggression replacement training that involves coaching [the students] on social skills, anger control, empathy, role playing, and lots of counseling,” The students complete the program by working on a community-oriented project. “We try to work with their parents, which is hard because it’s often a single parent who’s working a couple of jobs,” Gibbons said. But the program’s track record speaks for itself: “What we are doing here in Austin will reduce the prison population – keeping kids in school, helping them get through school, have a life, and not make bad choices.”

Let’s spread the word about this and hope that lots of people make the right choice and decide to attend the event on May 7th.

And The Winner Is…Kathie Tovo

By Bill Oakey – April 24, 2014

Last night during an affordability presentation to the Austin Neighborhoods Council, I had the privilege of recognizing someone with a well deserved award.  Kathie Tovo and her Policy Aide, Shannon Halley, have been more responsive and attentive to the details of affordability issues than anyone else on the Austin City Council.  Not only that, Kathie’s actions have spoken louder than words.  She worked with City Staff to find an alternative to spending the budget surplus for funding a worthy project for a senior citizen recreation center.  And her office stayed in touch throughout the week that increasing the Over-65 and Disabled Homestead exemption came up for a vote.  She steered it past an uncertain fate, all the way to a welcome victory.

Giving an award is one of the fun parts of an otherwise treacherous process.  Along with it comes the endorsement for Kathie for District 9 in the upcoming City Council election.  You can see the award below.  Click to enlarge it.

Tovo Award


Goodnight…And Pleasant Dreams, Plus Other Updates

By Bill Oakey – April 21, 2014

Last Friday night I spent a cool and very pleasant evening at the Lenoir Wine Garden on South First Street.  It was an Authors Party, sponsored by the Austin Public Library Friends Foundation.  In addition to the opportunity to mingle with literary standouts such as Elizabeth McCracken,  I happened upon a chance meeting with noted psychologist and Austin resident, Dr. Gemma Marangoni Ainslie.  Little did I know at the time that my curiosity would lead to…

Goodnight…And Pleasant Dreams!

A Google search for a few of the intriguing folks on hand for the party turned up a disturbing New York Times article.  You might be better off reading this in the morning, rather than right before bed.

Entitled, “The House of Your Dreams,” the article was published in 2009 during the height of the real estate bust and economic collapse.  “Foreclosure, eviction and an uncertain real estate market are providing material for disturbing dreams and nightmares about home, which has an especially powerful place in the psyche,” the story begins.

As I continued reading, I began to discover an eerie parallel between the housing collapse of the Great Recession and the feelings of hopelessness felt by many Austinites as they struggle to hold onto their homes today.  Just yesterday, a realtor in my neighborhood told me that quite a few of her clients are sellers who can no longer afford to live here.

Back to the article, here is another interesting quote.  “At a time of collective angst and fear of economic insecurity, psychologists say more patients are recounting stressful dreams that revolve around the theme of home.”

Some psychological studies suggest that people’s dreams reflect actual real life situations that they can act upon as a result of what they learn from their dreams.  Austin’s own Dr. Gemma Marangoni Ainslie, whom I met at Friday’s party, cautions against taking dreams too literally.  “Things are not necessarily what they seem to be,” she stated in the NY Times article.  In her view, dreams are simply “clues about personal struggles and ongoing conflicts.”

As you turn down the sheets tonight, try not to think about Austin affordability.  Goodnight…and pleasant dreams.

Presentation to the Austin Neighborhoods Council on Wednesday

On Wednesday April 23rd, I will give a presentation at the Austin Neighborhoods Council meeting at approximately 7:53 PM at the Austin Energy Building, 721 Barton Springs Road.  The title is “Affordability –  Goals And Reforms to Maintain Austin’s Economic Diversity.”

“Above and Beyond” – The First Award From This Blog

Stay tuned for an upcoming announcement.  The first ever award will be presented to a public official who has demonstrated outstanding leadership in the face of the inertia of Business As Usual.  She has definitely gone above and beyond her peers.  It will be a happy occasion, but the time and place have yet to be determined.  (As you probably already guessed, the tittle for this award was inspired by the classic Harlan Howard song, first reaching number three by Buck Owens in 1960, and then number one by Rodney Crowell in 1989).

Paul Robbins – Measures Needed To Control Austin Water Rates

Austin’s critical water situation is an important element of affordability.  Veteran energy and water activist and author of the Austin Environmental Directory, Paul Robbins, weighed in recently with this guest editorial in the Austin American-Statesman:

Robbins: Austin needs to take measures to control water rates

Posted: 12:00 a.m. Saturday, April 12, 2014


Austin’s cost of living is soaring, and one reason is its water costs. Water rates are falling into a dangerous pattern. It’s called a “death spiral.” Costs go up, inducing market pressure to drive consumption down, eliminating revenue needed to pay fixed costs. So rates go up again, causing consumers to cut back further, and the spiral gets steeper.

At the same time, the Central Texas region is afflicted with record drought, so consumption is heavily discouraged. Water rates will go higher to make up for even more lost revenue.

Austin’s water utility boasts that its conservation efforts have lowered consumption 17 percent per person between 2006 and 2013. This seems impressive until you consider water rates went up 70 percent in the same time period. In fact, between 2000 and 2014, water rates went up 123 percent and wastewater rates went up 130 percent. Inflation only rose 36 percent.

And brace yourselves. It has been announced that by 2019, water rates will need to be increased another 31 percent and wastewater rates another 15 percent. This is despite cutbacks planned for next year’s budget and recent hook-up fee increases for new buildings of almost 200 percent.

The planned increases may not stop here. Due to the drought, the utility is shopping for new water supplies. To give you an idea of the relative cost, groundwater sold by one potential supplier to an Austin suburb is 30 times the price Austinites pay for Colorado River water.

Why are costs so high?

  • The biggest reason is capital investment and debt, much of it coming from growth. About 52 percent of your water/wastewater bill is related to capital improvements. An example of this is the half-billion-dollar Water Treatment Plant No. 4, which began construction in 2010. Judging from the utility’s recent forecast, Austin will not need its capacity for 17 years. Because it is a wasted asset, it will literally cost more to turn on the plant than to leave off.
  • There were poor decisions regarding asset management. The “profit” from the land sale of the former Green Water Treatment Plant site was put back into enhancements for the site’s redevelopment instead of lowering water costs. Other property, such as the retired Govalle plant on Lady Bird Lake, sits almost unused.
  • The water utility is one of the largest energy users in Austin, consuming enough electricity to power 17,000 homes. Yet it has no energy conservation plan and is buying wind power at 39 percent more than it cost the electric utility to purchase.
  • The utility’s profit, the transfer to the General Fund, has more than doubled since 2000, while water consumption is roughly the same.

Until the debt works its way out of water rates over time, Austin may not be able to do much to lower them. But through fiscal discipline and real conservation efforts, it can mitigate future increases.

There are a host of small cost-saving measures that can add up. These include: reducing General Fund transfers; postponing the operation of the new treatment plant until it is needed; buying and conserving electricity at an affordable cost; selling unneeded assets and using the profits to buy down debt; using leak-resistant polyethylene pipe; using “smart” utility meters to reduce labor costs and water loss.

There are several strategies that need to be implemented instead of purchasing new supplies. One of the most basic is to fully implement the water conservation plan approved by the City Council in 2007. This would be greatly enhanced if the conservation program was moved out of the debt-strapped utility, which has a conflict of interest saving water.

In addition, Austin has a reclaimed water system that is barely used, as well as access to Barton Springs flows into the Colorado River that might be routed to a treatment plant.

Austin would be foolish to ignore the affordability of its water any longer. Wall Street has a word for cities that have reached the height of fiscal hubris: Detroit.

Robbins is an environmental activist, consumer advocate, and author of “Hard to Swallow,” a report on Austin’s high water costs.

A Little Bit of History On Truth In Taxation

By Bill Oakey – April 17, 2014

Is it possible to make a duck walk without looking like a duck and quack without sounding like a duck?  In politics, yes, it is definitely possible.  Especially when dealing with that dreaded word that all politicians despise, TAX.  With property taxes, they must find a way to massage the thing, so that it looks like it hasn’t gone up since the year before.  So, how do they play that game downtown at Austin City Hall?

It’s really pretty simple.  They just don’t talk out loud about the percentage of a tax increase at all.  What they do talk about is the tax rate.  During boom times like we are in right now, property values are galloping upward.  So, using simple math, you know that the tax rate can stay the same, while your property tax bill will be higher if the tax appraisal on your home has gone up.

As recently as Thursday afternoon April 17th, I was told by one City Council member during Citizens Communications that the City complies with State law on property tax disclosure.  He is technically correct in that their public hearing notices published in local newspapers comply with State law.  But during annual budget deliberations, the City actually starts the process with a revenue assumption that raises taxes to the legal maximum of 8%.  The final adopted budget may come in below that amount by a couple of percentage points.  But what you will hear in the news media and from the City Council dais is how little they have adjusted the property tax rate. Little or nothing is spoken verbally about the true percentage of the tax increase.

Let me demystify it for you.   There is something officially called the “effective tax rate” that would result in a zero tax increase, when applied to the total value of all the property on the City’s tax rolls.  State law allows cities to raise taxes up to 8% above the effective rate.  That maximum amount is called the “rollback rate.”  Anything above that level could trigger a citizen initiative to roll the rate back.  (See the City’s official guide called, “Adopting a City Budget and Property Tax Rate Training).”

What do they have in store for this year’s budget cycle?  Well, here is one key sentence in a memo to the City Council from Deputy Chief Financial Officer, Ed Van Eenoo, dated February 28, 2014:  “City management has communicated its intent to present a proposed fiscal year 2014-15 Budget that maintains the property tax rate at 50.27 cents per $100 of assessed value.”  (See Conclusion, second sentence).  In other words, staff plans to “hold the line” on the tax rate, while collecting all the money that comes in from raising taxes on homes and businesses that receive big tax appraisal increases.  In order to not raise taxes when property values increase, they would have to lower the tax rate.

Last fall when the City Budget was adopted, KUT reported this headline story, “2014 Austin City Budget Holds Line on Tax Rate.”  The implication was that taxes were not going up.  But in fact, because of large appraisal increases, we did have a tax increase.  But the percentage increase above the zero “effective rate” was not readily disclosed beyond the required public hearing notices.  Better disclosure in the budget document with my proposed “Taxpayer Impact Statement” may not happen until we elect a new City Council in November.  

Now for a final bit of history.  I am the culprit who dragged out my old Sears typewriter in 1987 and went to my State Representative and State Senator and proposed the Truth in Taxation law that I was reminded of today by one of the City Council members.  Below is the cover page for House Bill 328, which established the State law.  It was signed by Governor Bill Clements on June 17, 1987.  Click the image below to enlarge it.

H.B. 328_HR

Let’s Get to Know Steve Adler

By Bill Oakey – April 16, 2014

As I waited for the appointment at Cafe Josie’s on Monday, I had no preconceived notions about Steve Adler.  Most of us have heard by now that he is running for Mayor.  The other primary “heavyweight” in the race is current City Council member, Mike Martinez.  I had met Steve briefly on two other occasions, and was quite curious to meet him and learn about him.

Prior to the meeting, I had emailed him 10 candidate questions on affordability.  That list has gone out to several announced candidates in various district races.  When Steve arrived at the table, he opened a portfolio with my question list ready for discussion.  But before getting into that, he pulled out a spreadsheet that he had obtained by doing some research at City Hall.  He had picked up my cue on an unexplained $6 million fee waiver for U.T. that was mentioned in this blog.  Steve discovered through Council Member Bill Spelman’s office that the City has since renegotiated that fee waiver down to $3.57 million.  This is welcome news on a cost savings for the taxpayers.

Like me, Steve believes that the City needs a fee wavier policy that is fair and consistent.  There are plenty of challenges and unanswered questions on this affordability topic.  But progress is being made.

Steve and I had a very interesting and cordial meeting.  His background as an attorney in civil rights cases and cases defending workers sounds impressive.  On current City issues, he agrees with me that citizens should not have to wait six hours to speak to their elected City leaders at Council public hearings.  And his interest in the various affordability issues seems encouraging.  A decision on an endorsement from this blog in the mayor’s race will come after careful consideration of the leading candidates.

Mr. Adler does not have a well established name in all of the circles of local civic activism.  But he has lived in Austin since 1978.  It would be my recommendation that folks should try to attend forums and organizational meetings where Steve will be speaking.  I plan to ask him if he would be interested in setting up one or more town hall meetings, so that plenty of people can get to know him better.

The Human Face of Austin Affordability

By Bill Oakey – April 14, 2014

This all happened quite unexpectedly.  I stopped into a local restaurant for a nice hot breakfast and to kill some time before a meeting at City Hall.  It was Monday, so just to make some idle chat, I asked my server the simplest of questions, “How was your weekend?”

Her response told me something about Austin affordability that I must have known somewhere inside of me.  But in the next few moments it was all out in the open.  She will remain anonymous, but she is very real.  And of course, there are many others like her.

“I just finished my 13th straight day of working,” she commented.  “I have two jobs, and on each of those 13 days, I worked 10 hours.”  Needless to say, she did not have the kind of fun weekend that you might read about in the Chronicle.  I then asked her if she had gotten a chance to check out South By Southwest when it was in town.  That’s when I discovered that hers was a story that needed to be told.

Yes, she made it to a music event on the East Side, but somehow she injured her ankle and could not find any convenient transportation back to where she lived.  I had read about the multiple-hour waits for cab rides.  In this case, the only faster option was a pedicab.  For a cool $60.00 fare.

I decided to email her some additional questions.  She told me that she moved here from Toronto in 2012.  Here are some excerpts from her reply:

“Affordability is going to be an issue anywhere you live, but I think Austin is feeling some very strong growing pains. The sudden massive increase in demand for housing, combined with a seeming lack of oversight and rent control is one of the largest issues I’ve witnessed.  Everyone I know who lives in an apartment complex faces yearly rent increases. There seems to be no limit to how much landlords can raise the rent.  Most of my friends have had to move out due to such increases.”

“My other major issue is transportation: the recent changes made by Cap Metro have been very negative for me. I live near S. Congress and Ottorf, which has seen a decrease in service for the local route and increased service and pricing for the express route, as well as a detour in the route.  Basically, I’m forced to pay more money for decreased service on a route that takes me out of the way I used to take.  It’s a significant price increase, too.  A $30 monthly pass used to get me onto any bus.  That’s been increased to $33 but service has been deceased so much that I’m forced to pay $49.50 for the less convenient but necessary premium pass.”

“Other than during election time, I don’t really keep track of local politics.  Mostly because it’s kind of depressing.  It seems like Austin has been sold to developers to do what they want with it.  I fully support creating more housing.  There’s obviously a strong demand.  It’s just too bad that the only buildings going up are hotels and million dollar condos.  It’d be nice to see more housing go up that is meant for average Austinites.”

“A final thought on affordability – Austin is known for being an art hub.  It’s a place where artists can work as a bartender/server/barista and still focus on their art.  Instead of going to new York or L.A and struggling all the time to make ends meet.  Austin provides an environment that is encouraging and livable.  A rising cost of living will drive that community away from Austin, taking away a big part of the city’s character.”

If our local officials do not pay enough attention to what longtime residents have to say, perhaps they will take note of how our city looks to some of the newcomers.  There is a human face behind all those demographic facts and figures.  And she casts a long shadow over Austin’s uncertain economic future.

A Possible Breakthrough for the City’s $14 Million Budget Surplus

By Bill Oakey – April 7, 2014

In the middle of the night, an idea came to me for the $14 million budget surplus…Transfer it to the Water Utility to help cover their severe revenue losses.This could help the City in several ways:

1. Protect ratepayers from high rate increases as an ironic “punishment” for water conservation.

2. Sustain or hopefully improve the Water Utility’s AA- bond rating from Fitch Rating Service.

Consider this quote from the Fitch Bond Rating Service dated June 3, 2013:

“INCREMENTAL DECLINE IN RATE AFFORDABILITY: The city’s water and electric utilities maintain autonomous rate-setting authority. However, AWU’s combined rates are somewhat high relative to income levels, and moderately-sized planned rate increases needed to boost financial performance could ultimately lead to rate fatigue.”

And this quote, especially the last clause in the last sentence:


“IMPROVED FINANCIAL METRICS: The continuation of AWU’s efforts to steadily improve its financial metrics will be critical to maintaining the current rating. Fitch considers AWU’s stated financial targets to be positive, particularly the improved reserve levels, and any deviation in achieving its financial forecast over the next few years will result in downward rating action.”

Here is a link to the full Fitch rating statement:

The question now is whether transferring the money from the City’s General Fund to the Water Utility is doable.  It is perfectly legal to go the other way.  When the utility makes a profit, they routinely transfer part of it to the General Fund, just like Austin Energy does.

Stay tuned for updates on this important affordability development…

Tweet Tweet: Goes Live on Twitter

By Bill Oakey – April 6, 2014

Starting today, you and your friends can watch the fast moving developments on Austin Affordability by following us on Twitter.  In any twitter app, just search for @AAffordability.  Or use your browser and go to

The push for affordability reforms and researching the path to winning those victories promises to be a bumpy, but always exciting ride!  We have a City Council election on the horizon, with 10 new districts and a brand new mayor.  Which ones will we be able to trust on affordability?  You wouldn’t want to miss this adventure, and you wouldn’t want to deny your friends the opportunity to come along.

Just remember this. “Business As Usual” was appropriate for the rock group, Men At Work, as the title for their landmark album in 1982.  It was number one for 15 weeks.  But here in Austin in 2014, we can no longer afford business as usual at City Hall!