Monthly Archives: September 2014

Can The New City Council Define The Affordability End Game?

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By Bill Oakey – September 19, 2014

Over the past several months I have had some fascinating conversations with a lot of smart and sophisticated people about Austin’s affordability problem. Everyone agrees that it is quite serious, and everyone agrees that solving it will not be an easy task. So, what are the steps that the new City Council would have to follow if they actually wanted to make real, quantifiable progress in solving the problem?

1. Define the Problem – That’s the first step in the scientific method. We need a detailed survey showing where the low income and moderate income Austinities live. We need charts that show details about income levels, types of jobs held by different demographic groups, etc. And we need to list the specific categories of affordability issues, such as taxes, debt, housing and rent costs, utility costs, transportation costs, building and construction costs, etc.

2. Planning, Planning, and More Planning – The only way out of any type of problem of this magnitude is to develop specific plans to target the problem. Austin is swimming in plans right now, and some of them contain numerous references to “affordability.” However, there are no real plans designed specifically to make Austin more affordable or to address the root causes of progressively worsening unaffordability.

3. Action Plans With Goals, Performance Measures, Milestones and Result Tracking – Plans by themselves only represent wishful thinking unless they are backed up by concrete actions that turn lip service into proven results. How many new low income housing projects did Austin lose each quarter throughout the year? How many did they gain? How much of a budget surplus did the City have at the end of each quarter? How much of that money was pledged to reduce taxes and fees or lower utility rates? Part of the objective here is to determine what questions to ask, and then what specific steps are needed to address each one. Those steps need to be incorporated into the action plans.

4. Combined Regional Financial Forecasts – The City, County, AISD, ACC, Central Health, Capital Metro and CAMPO need to meet regularly and discuss their future plans and how much those plans will cost. Every plan that every entity currently has in place needs to be scrutinized for feasibility. It is absurd for any organization to publish a plan with completely unattainable projections. The Capital Metropolitan Planning Organization’s 2040 Transportation Plan calls for $1.2 billion in spending every single year for 25 years in a row. Eighty per cent of the funding has to come from local funding sources. There is no way in hell that Austinites will be able to afford anything close to that amount. So, the people who publish these various plans need to sit in front of each other at a table in the same room. They need to look each other in the eyes and explain out loud how they expect to get the money to pay for each of their plans. If they determine that the costs are too high, they simply need to revise the plans. Period. And they can do that by setting priorities and making realistic assumptions. Everyone needs to be constantly reminded of the tagline for this blog – “Let’s Put the Public’s Ability to Pay Into Austin’s Planning Process.”

5. Address the Cost of Growth and the Gentrification Issues Head On – There is no question that the exaggerated hype over Austin and the extremely aggressive growth rate is unsustainable. The current path that we are on will lead to an unprecedented boom and bust scenario if our leaders do not take steps to prevent it. Sometimes it can be difficult to stand up to the special interests and say no. But it is absolutely essential to the City’s future for us to consider how much capacity we have in terms of roads, water, land, and other resources as we consider how much growth we can accommodate at what pace. No private business would ever take the risky “build first and ask questions later” approach that Austin has followed for many decades. Gentrification is another issue that can be measured and quantified. We need to look at the impact of the CodeNEXT plans on existing neighborhoods. One of the best ways to insure that neighborhood plans are protected is to expand the Land Development Code Advisory Group to include equal representation between neighborhood members and industry members. And we need to establish road impact fees to help make growth pay for itself. We cannot afford to continuously increase taxpayer and ratepayer expenditures for recruiting new businesses to Austin. That is a private industry responsibility.

The bottom line in planning for growth comes down to a very simple concept. Our growth rate and the cost of growth need to be set within the context of what is sustainable. Our current policies that allow for all growth in all places all the time at breakneck speed are not sustainable and cannot be allowed to continue.

The New City Council Will Have to Hit the Ground Running

The new City Council will need to be prepared for the one of the toughest challenges that the City has ever faced. There are no off the shelf remedies for an affordability problem on the scale of what we have in Austin. The issue will require lots of innovative thinking and bold strategies. If it turns out that no other city has ever even thought about developing a comprehensive Affordability Strategic Plan, then let us be the first. Every candidate needs to be thinking about it now. Because the hard work will begin the moment after the swearing-in ceremony is completed in early January.

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If We Don’t Like What’s Happening To Austin, What Should We Do?

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By Bill Oakey – September 12, 2014

We often hear statements made about Austin as though they were carved in stone. “Austin is This” or “Austin is That.” And we are expected to march along, blindly accepting whatever Austin “is” or whatever it is being turned into.

But what if the majority of citizens have a different desire for what they want Austin to be? Is there anything we can do to change the status quo? Well, I can assure you that if I did not have the heartfelt belief that we can do something to change the status quo, this blog would not exist and you would not be reading it right now.

I’m going to paint an analogy that feels a whole lot like what Austin residents have been subjected to in the last few years. Suppose you went to work one morning and the boss unexpectedly called you into his office. He announces that your entire division at the company is being outsourced. Over the next six to eight months, your assignment will be to train your replacements. But let’s add one more little piece to this analogy. The boss tells you that in order to accommodate the good folks who will be taking your place, he will need to dock your pay significantly so that you and the others in your division will shoulder the cost of the transition.

In other words, you have just been told that it’s only a matter of time before you are kicked out of your office. And to add insult to injury, you will foot the bill to pay the cost of bringing your replacement into the workplace that you have enjoyed for the past twenty odd years. Sound familiar? All you would have to do is substitute “neighborhood” for “division,” “home” for your job, and “city” for your company. The people who control the planning and policies of Austin are working hard to convince you that the “right thing to do” is to abandon your home and your neighborhood so that some people you have never met can come in and take it over. And on your way out, you can kindly leave a check for your share of the expenses of the upgrade of your neighborhood.

Hardly a day goes by that I don’t hear somebody say, “Well, the population is going to double by the year so-and-so” and we just “have to start somewhere” to make the investment needed to accommodate all of the new people. We are expected to be good little soldiers and head down to the polls on November 4th and vote to double our bond debt for the new urban rail system. If we don’t like the route, that’s not a problem. This is only the first phase of a citywide system that will cure all of our traffic problems. Never mind that the price tag for a citywide rail system would be $8 billion to $10 billion.

Is There Anything We Can Do to Change the Status Quo?

Indeed there is, but it will not be easy. After the new City Council is sworn in, we need to let them know that “Austin” is not just a page in a banker’s ledger book or a real estate broker’s portfolio. It is a place where living and breathing people already have homes, families and jobs. There are numerous words that politicians and power brokers use to describe their aspirations for Austin. One of those is “competition.” Austin is supposedly in constant competition with other cities for the next corporate tax handout. Well, what if the people told the politicians that we would rather be in “competition” for an affordable place to live?

A word that you will hear very seldom if ever is “capacity.” What is the public’s financial capacity to pay for an endless parade of plans and projects to turn Austin into a completely different and unaffordable place? Do you suppose that there just might be some practical limit on how much a homeowner should be expected to pay for property taxes? I submit that there is a limit, since we know that many Austinites have already clocked out and left for more affordable pastures. For those of us who remain, how much more in property taxes can we absorb? A $10,000 annual tax bill? $12,000? $15,000? Who knows where it will all end up if we stay on the path that we currently find ourselves on.

Within the context of capacity, we have transportation experts who can measure our road capacity. It is not terribly difficult to predict how long it might take for certain roadways to reach total gridlock. So, what do we do about that? The boneheaded planners who conjured up the limited-access “Lexus Lanes” on Mopac certainly did not help matters any. And do you really think it’s a good idea for the City Council to approve a PUD along MoPac with more retail square footage than Barton Creek Square Mall? If we thought real hard about it, we might just realize that the plans in place could be revised under the new Council to help preserve our neighborhoods.

Attempting to go up against the well-funded and firmly entrenched powers-that-be who pull the strings on City decision-making will not be easy. But the new 10-1 Council system is our best chance in a very long time. There have been plenty of extensive discussion on various reforms that could be enacted to set Austin on a more financially sustainable path. But one fundamental concept underlies all of those reforms:

Citizen involvement in the planning process.

Until we convince our elected leaders that we and our neighbors are entitled to a seat at the table during major planning sessions, and that our input must be included in the published reports on the plans, then we can only expect more of the same. Healthy doses of Inclusiveness, transparency, and financial accountability are essential ingredients for any reform package that will tilt the balance of future opportunity and prosperity back toward the existing residents who helped make Austin the desirable place that it is today.

Guest Editorial – City Budget Slaps Taxpayers; Reforms Needed

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Oakey: New council needs to look at budgeting overhaul

Posted: 6:00 p.m. Wednesday, Sept. 10, 2014

By Bill Oakey – Special to the American-Statesman

It’s as if somehow the City Council never got the message, even though the message has been echoed loud and clear across the city. The taxpayers need relief. Austin has an affordability problem.

The budget that the City Council adopted has landed with a thud. Taxes are going up again. Oh, they heard the message from the taxpayers all right. But the sad fact is that they just don’t care. This City Council simply never met a spending opportunity that it didn’t like. If 50 people split up and walked into each of their offices tomorrow with 50 new spending proposals, council members would put all of them on the next agenda and then add a few more of their own. Affordability is apparently just a word to them, something to repeat when they are out in the community but to completely ignore while they are on the dais.

I have had the opportunity to meet with many of the candidates running in the 10 new council districts, as well as for mayor. I have recommended some crucial financial accountability and transparency reforms. To start with, the city should stop playing games with budget surpluses and inflated departmental budgets padded with unfilled staff vacancies. We need quarterly reports with budgeted versus actual revenues and expenditures posted to the city’s website. And we need to limit unfilled vacancies to no more than 5 percent of the workforce as Portland, Ore., does, instead of the 9.7 percent that is currently allowed in Austin.

The existing policy on budget surpluses is to wait until February to announce the amount of any budget surplus from the previous fiscal year that ended Sept. 30. For two years in a row, we have had surpluses of $14 million. In 2013 the council blew through that amount in a few minutes with no public input or anything else resembling normal budget scrutiny. Council members were about to do the same thing this year when outraged citizens, including myself, bombarded them with emails begging them not to spend the surplus. This time they held off on spending the $14.2 million, but only temporarily.

That surplus was quietly tucked away, and the council never mentioned it again. When I contacted them and asked about it last week, I was told that all but a few million of it “was absorbed into the new budget.” My specific suggestion during the spring to transfer the money to hold down the water rate increase was ignored. The loud chorus of citizen appeals to use the surplus for tax relief was also ignored. When I asked council members to revise the written policy on spending budget surpluses to include taxpayer relief as a specific option, the request was denied.

Throughout the year the potential exists for the city to run up a budget surplus. Current rules allow departments to spend money from staff vacancies on other projects. We definitely need serious reforms, such as the Honolulu policy that places funds for unfilled vacancies under the control of a central office, to be disbursed only as needed.

We need a new City Council that listens to the people and takes affordability seriously. There is more to serving in that job than generating costly new plans for every spending opportunity under the sun. If you went online and downloaded all the corridor gentrification plans, forestry and trail plans, etc., you would get dizzy trying to add up all the costs. If city leaders don’t find some way out of business as usual, the people who live here and our local economy will suffer. Let’s hope that the new council not only hears the affordability message but acts on it as well.

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

Can The New City Council Meet The Affordability Challenge?

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By Bill Oakey – September 10, 2014

Every taxpayer in Austin must be wondering what is wrong with our current City Council. The new budget that they just adopted reflects a huge problem. In the face of ever growing public concerns about affordability, they thumbed their noses at us and raised taxes and fees anyway. What in the world were they thinking? Then I started thinking about it, and began pondering a very real possibility.

Can public officials develop a spending addiction just like an alcoholic, a problem gambler, or a drug addict? Apparently here in Austin, they can. The tremendous forces of inertia and momentum behind business as usual at City Hall are so strong that neuroscientists should consider studying them for inclusion in their scholarly journals.

I haven’t prepared a complete twelve step program for the current Council because I don’t think they can be helped. The worst offender is Mayor Lee Leffingwell. He stood before the Council and issued what sounded like a valiant appeal to lower the tax rate further in the budget discussions. This after he spent many months spearheading the Project Connect effort to bestow upon us the largest tax increase in modern Austin history.

What the New City Council Will Have to Do

1. We need an Affordability Strategic Plan

Austin has an electric generation plan, a drought management plan and any number of other plans to achieve various goals. I say it is past time that the City adopt a formal Affordability Strategic Plan. Unless they put a label on it and tackle it like the major public issue that we all know it is, then business as usual could easily creep back in and infect the new Council’s progress.

2. The Affordability Strategic Plan needs specific goals and objectives.

These should be laid out, published and adhered to. This process needs to be done in a formal way, complete with milestones and quantifiable measurements.

3. The Imagine Austin Plan needs to be reviewed and modified to take affordability into account.

The various “corridor plans” that have sprung forth under the auspices of Imagine Austin and CodeNEXT should be recognized for exactly what they are – Corridor Gentrification Plans. By definition, any plan that takes a neighborhood such as the East Riverside area or Airport Boulevard and purports to “improve” them in a manner that systematically displaces existing residents is not only a gentrification plan, but it is an obvious plan by design to make Austin less affordable. Consider another simple science analogy. If you toss a bunch of flammable chemicals together and light a match to them, you shouldn’t be surprised if you get an explosion. Not only do these new corridor plans cause gentrification and contribute to unaffordability, but the added insult is that we the taxpayers are expected to pay tens of millions of dollars in debt payments for infrastructure upgrades for each new “corridor.” And that’s over and above the cost of any rail systems.

4. Instead of creating new gentrification plans, develop strategies to improve neighborhoods while retaining existing residents.

Since we know that there is no shortage of new people coming to Austin to seek luxury housing in newly built high density “activity centers,” then facilitating more of those should not be our top priority. Instead, we need to pay homage to the existing residents who for many years have helped make Austin the desirable city that it is today. We need to work with other cities and various national organizations to seek out ways to make existing neighborhoods safer and more attractive for current residents. Note that I am not advocating that City leaders sit around and talk about this concept. I am actually suggesting that it become a written element of a comprehensive Affordability Strategic Plan.

The Airport Boulevard Master Plan, based on two consultant studies, has been delayed. As I understand it, the Burnet Road Gentrification, oops – “Corridor” – Plan has apparently been pushed ahead of it. The new City Council should take a good long look at the number of low to moderate income residents in the Airport Boulevard neighborhoods. These are people who would benefit tremendously from the convenience of the nearby hub of Austin Community College at Highland Mall. Instead of pushing these residents out and replacing them with electric powered bike riders from California, why not preserve their affordable housing and offer them a shot at participating in the “economic miracle” of Austin’s future.

There are many more ideas on how to improve affordability for the good people who already call Austin their home. It will be both challenging and exciting to try the new City Council on for size and see if they are adaptable to a post Business-As-Usual political era. To me, one of the fundamental changes that needs to be made is that Austin should define its mission.

We need to fall back on the community values that used to guide us before the special interests took complete control of all policy making. In the early 90’s, citizens like Brigid Shea, Bill Bunch and Mary Arnold did not stay up all night at the historic public hearing on the SOS ordinance to usher in a future tainted by unaffordability. Max Nofziger did not lay down his flowers and take his grassroots fervor to City Hall just to see it devolve into a factory for real estate speculators and bankers seeking to make Austin a single page in their ledger book.

There are few if any examples of a successful community the size of Austin that could prosper and thrive with only one class of people. We have it within our power to keep Austin a lively and sometimes funky community that represents the interests of a sustained diverse culture. The challenge for the new City Council will be to stand up to the special interests when they are meeting downtown, and then walk among us in their ten districts and make us be proud to have them as our leaders.

Why The City Council Has Lost All Public Confidence

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By Bill Oakey – September 5, 2014

When you go around Austin these days, how many people do you run into who talk about what a great City Council we have? Come to think of it, have you ever heard anybody say that in the last ten years?

Well, why would that be? Let’s start with a simple question. If your city has a major problem and it is being talked about at every single civic function, wouldn’t you expect your city leaders to do something about it? Wouldn’t you expect them to at least organize some sort of major effort to solve the problem. In the case of affordability, they have done nothing of the sort.

The sad fact of the matter is that our current City Council members do not get affordability. After all this time, they are still not willing to give it anything more than lip service. Because of that, they have lost all public confidence. Most of us are just waiting for them to leave and make way for a new Council that will listen to the people. This Council has proven over and over again that the only thing they know how to do is business as usual.

Lots of us have attempted to delve into the affordability problem, and we have done it in great detail. One of the obvious starting points is the City Budget. We were told way back in February that the City had a $14.2 million budget surplus. A strong citizen outcry pushed back against efforts by some Council members to spend the surplus. We succeeded and none of the surplus has been spent. At least not yet.

But that is soon about to change. I just learned this week from sources at City Hall that all but $3.3 million of the surplus has “gone into the current budget.” And what about the remaining $3.3 million? The word I got on that is this: “The 3.3 million could be allocated for one-time critical funding needs.”

So, here we go again. They wrote a budget one year ago this month that they were satisfied with. Then a large amount of surplus money came in. The reason so many people contacted them and asked them not to spend it is obvious. We have an affordability problem. Got that? Let me pretend for a moment that I am on the City Council. Affordability? Oh, yes. That’s that word that everybody talks about. We are expected to say that we care about it. Not do anything about it, but just write about it in memos from time to time and mention it in public from time to time. That’s all the City Council members think they have to do.

For that reason and many others, there is absolutely no reason to vote for either Sheryl Cole or Mike Martinez for mayor. Where were they when the opportunity came to transfer the budget surplus over to the Water Utility to hold down the upcoming rate increase? Where were any of them when the opportunity came to use all of the surplus to hold down next year’s tax increase? Or to hold it in reserve and apply it next year towards a homestead exemption? I just have to wonder what they think affordability means. Maybe it means nothing to them at all. Apparently so. We will have to wait until next January for any hope of accountability for our tax dollars.

The credibility problem is compounded by the fact that nobody has any confidence in Capital Metro. Today they announced that ridership has dropped this year and is projected to drop again next year. Why? They attribute it to fare increases. Hmmm. So, now we are expected to go out and vote for a massively expensive rail system that will be managed by Capital Metro. And by the way, the City Council is hoping you will forget about who will manage the system. You’re supposed to think of the great and wondrous Project Connect. Those are the folks who came up with the brilliant, but actually warmed over idea of running a rail system from East Riverside to Highland Mall. When you get to Highland Mall, you will run into the passengers who are just arriving from the nearby eastern corridor on the Red Line. Makes a lot of sense, doesn’t it?

It’s very sad that we have to put up with a lame duck City Council for four more months. They will not be missed when they go. In meeting with the many candidates who are working to take their places, I keep hearing that they really do want new ideas. They say they are not satisfied with business as usual. The expectations for them are pretty high. But, considering the fact that things couldn’t get much worse, I would say that we have something to look forward to. It will be up to us as citizens to let them know from their fist day in office that simply applying lip service to affordability will not get the job done.