Monthly Archives: April 2014

American-Statesman Editorial: Austin Affordability Issue Needs An Action Plan

BY BILL OAKEY – SPECIAL TO THE AMERICAN-STATESMAN

Oakey is a retired accountant and writer of the blog AustinAffordability.com.

April 4, 2014

“Affordability” has become a popular catchphrase for several years now. We hear it often in local political campaigns and public gatherings. Now it is the time for an aggressive, proactive approach to addressing the problem and finding solutions. My suggestion is to establish a group of public officials and citizens with topical expertise to work together in a formal problem-solving effort. It’s time for some folks to roll up their sleeves and make real progress.

The issues are complex and daunting, but one thing is clear. We simply cannot afford business as usual at City Hall or the other local governmental entities. Here are just a few examples of fiscal discipline and accountability gone awry:

• Since February, the Austin City Council has given away millions of dollars in fee waivers, including $756,000 to South by Southwest and $6 million to the University of Texas for road realignment near the new medical school.

• Last year the city spent a $14 million budget surplus with no formal citizen review.

• The city routinely raises property taxes close to the 8 percent legal maximum every year. But they obscure the truth by hiding behind the tax rate. Rising property values provide an easy cover for tax increases.

• Citizens wishing to speak at 4:00 p.m. city budget hearings are often kept waiting for up to six hours. A reform for that madness is 30 years overdue.

• Twice in the past year, Travis County commissioners have sidestepped voter approval for controversial road projects.

As noted in a recent American-Statesman editorial, the owner of a $185,133 Austin home faces an estimated increase in taxes and fees from $6,981 to $8,327 by 2019. That is the combined impact from the city of Austin, Travis County, the Austin school district, Austin Community College, and Central Health. People living in neighborhoods with significantly higher home values will be hit much harder.

Better coordination among local jurisdictions would be a helpful step to lessen the taxpayer impact of large-scale capital projects. Priorities should be set, and perhaps bond issues could be scheduled less frequently. Everyone in public office needs to take a “big picture” approach to all spending, and not assume that every wish list item is a must-have. Not when too many citizens face budget cuts of their own and the possibility of having to sell their homes and leave Austin.

The affordability problem extends well beyond taxes and fiscal prudence. Some owners of our treasured local businesses have complained loudly about onerous and expensive permits for remodeling and expansion. Why couldn’t some of the regulations that don’t involve critical public safety or environmental concerns be reduced or eliminated? I long for the good old days when letters sent from City Hall bore the slogan, “Austin, The Friendly City.” How about bringing that back, for existing residents and not just the tourists?

A recent Leadership Austin breakfast discussion on affordability touched on a housing problem that begs for a solution. Why is there hardly any multi-family housing being built for moderate-income people? The vast majority of it is large-scale and luxury priced. City planners and policymakers need to identify and fix whatever disincentives exist for building smaller projects with affordable units. At the same time, we should not demolish every remaining apartment complex for low- and middle-income renters. We risk losing our population diversity.

Failure at the local level to address affordability concerns could trigger an ominous overreaction from the Texas Legislature. The anti-government fervor from some state officials could lead to strict controls on cities and counties, forcing cuts to badly needed services. Where we do need help from the Legislature is in closing the giant loophole that allows commercial property owners to get tax appraisals at below market value.

Affordability encompasses taxes, housing, transportation and other important areas. Our best hope for finding solutions and making progress towards implementing them is to bring some people to the table and get to work.

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Why Does The City of Austin Give Away Millions of Dollars in Fee Waivers?

By Bill Oakey – April 3, 2014

No matter how hard I try, I can’t get this off my mind.

On March 27th, the City Council let $6 million slip through the taxpayers’ fingers with fee waivers for a road realignment project for the new U.T. medical school. Ever since then I have been bothered by one simple question.

Why?

The answer is nowhere to be found on the main page of the March 27th City Council Agenda. The topic is listed as Item 13 under “Consent Items.”  But after wandering through the legal jargon, I found no mention of the $6 million in forgiven fees lost to the taxpayers.  So, come with me and I’ll show you how to look under the stones and find where the dollars are buried:

1. Go to this link to find the list of 2014 City Council Meeting dates.

2. Click here to find the PDF documents related to the March 27th meeting.  The first file is the Agenda.  You can skip over that since we know that Item 13 is the one we need.

3. Please scroll down to the list of agenda item numbers that is laid out like a calendar.  You are all doing great.  We are almost there!  Now click on Lucky Number 13.

4. Click on the file that says, Agenda Backup: Fiscal Note.  Voila!  Here is a summary of the fee waivers, with the bottom line total of $6,038,186.  Just below the total, you will see a somewhat disturbing statement, “The amount of $6,038,186 reflects a conservative estimate of the fees based on the projected work that could be required to complete this project.”

What We Are Left With At the End of the Journey

Thank you for joining me in this intriguing quest for the facts behind $6 million of your money.  One more statement posted at our last stop on the journey is worth noting:

“Waiving fees for this event results in unrealized revenue for the Transportation Fund, Austin Water Utility, and General Fund. Although budgeted revenue for fees is based upon historical data and not necessarily upon specific events, the waiver of these fees reduces potential revenues that could be realized. Revenue for this project was not budgeted in FY 2014, therefore the waiver of these fees will not impact current year revenue projections.”

Oh my goodness.  What a huge relief!  The $6 million in revenue that we are losing was not included in this year’s budget.   I guess nobody would miss it, it’s only money.

Maybe that explains one other cryptic statement that I found.  In the document titled, “Recommendation for Council Action” for March 27th, here is a direct quote:

“There is no unanticipated fiscal impact.  A fiscal note is not required.”

It was nice of them to provide a fiscal note anyway.  And it’s comforting to know that since this year’s budget did not “anticipate” the $6 million in fees, we don’t need to worry about it!

But Just On the Chance That Somebody Does Care About This…

I met with Mayor Leffingwell on Monday, March 31st.  One of my written recommendations was for the City to provide better transparency to the public on meeting notices regarding both large expenditure items and large revenue losses, including fee waivers.   More specifically, I asked him for a policy that would require those meeting notices to address that one simple question about fee waivers…

Why?

In the case of the $6 million, I waded through every document, exhibit, schedule, addendum, note, and attachment without finding any justification.  Which makes me wonder, does the City have a written policy that governs the awarding of fee waivers?  If not, I have asked the City Council for that as well.  The policy should be referenced on the Council meeting notices, next to any fee waivers given, along with the criteria that were met before granting the waiver.  And by default, all required fees should be collected, with the waivers being highly justified exceptions, where the taxpayers at large receive something in return.