The City Can Save $4 Million Every Year – But There Is a Huge Mountain To Climb

By Bill Oakey – July 10, 2015

In the last few weeks I have met with several City Council offices. One of my top cost-saving priorities is to replace taxpayer-funded special event fee waivers with alternate funding. In May of last year, the City Council passed Resolution # 20140501-036 directing the City Manager to review options for this alternate funding. The intent and the deadline were crystal clear:

“The City Manager is directed to present the proposal for the special events fund and fee waiver process by August 7, 2014 to allow Council to consider the proposals as part of the City’s budget process.”

We now know that last August’s deadline came and went with no formal response to the resolution. So, we have a critical policy issue and very possibly a legal one as well. When the City Council passes a resolution and it is signed and placed into the public record, does it carry the force of law? You would think that a change to the substance and intent of a resolution, or a change to the deadline for directed action would require another public vote by the City Council. This is certainly true of City Ordinances. Is there any provision in the City Charter or the City Code that addresses required actions to amend a resolution? Is there a process in place to follow up on the status of resolutions to ensure that they don’t fall through the cracks?

Not only does the City need to establish a clear set of policies and procedures for timely implementation and amending of resolutions, but the process needs to be made transparent to the public. It would be most helpful if the Council Members, their staffs and the public could go online and check the status of a pending ordinance or resolution. It is my understanding that Council Member Ann Kitchen is interested in pursuing a model that is similar to the one that it is used in the Texas Legislature. And I am looking into resolution tracking systems that have been adopted in other cities.

Here’s what can happen when no one on the outside can see what the insiders are doing with a Council resolution. I found an undated City Manager’s PowerPoint presentation on the City’s website that reveals that they were attempting to comply with the May 1, 2014 resolution on special events funding. Slide # 17 in the presentation shows that 30 Texas cities use funding sources other than fee waivers to support special events. Most of those cities use Hotel Occupancy Tax funds. In the PowerPoint, the staff was told to bring back a funding plan for Council action in time for the resolution’s August 2014 deadline.

But sometime between this presentation and November of 2014, a major intervention took place behind the scenes. Without a vote of the City Council directing him to do so, the City Manager issued a memo to the Council on November 7th. This memo addresses a completely new approach to handling large special events. Although no detailed backup is provided, the aspect of alternate funding sources is dropped from the discussion. The central topic has shifted from single-year contracts with large event promoters to multi-year agreements. Under that arrangement, the local taxpayers could very well find themselves locked into the status quo system of funding special events with fee waivers.

Keep in mind that last November the old City Council was still in office. Here is what the City Manager related to them in his memo:

I have directed staff to take the next several months to gather the necessary information to develop recommendations that can be evaluated as we begin discussion of the upcoming FY2015-2016 budget process.”

So, it appears that the City Manager and his staff are operating on a path to action that is, at the very least, unclear to the public and unclear to the newly elected City Council members. In my meetings with them, I have found no one who is aware of what the City Manager’s staff is working on with respect to the November memo. In another twist, I have been informed that the question of how to fund City services for special events will be taken up by the Parkland Events Task Force. When you click the link to their page, you will notice that they have not held any meeting yet, and in fact the City is still accepting applications for new members. In addition, the primary function of the task force is addressed in a completely different resolution.

My efforts are focused on a compromise plan to pay for special events from three sources: The Hotel Occupancy Tax, surcharges on ticket sales, and requiring the event companies to pay a reasonable portion of their own fees. I have asked the City Council to set an early 2016 deadline for studies and discussions of the new funding formula. In the meantime, I have asked them not to fund any fee waivers for large for-profit events with local tax dollars in the new budget.

We have a new City Council that wants to find cost-savings in the budget. They have also promised a high level of public engagement and better transparency. Later this month when the Council members get back to town, I will post a link for you to email them and ask them not to include any local taxpayer funding for special events. It’s a golden opportunity to save $4 million per year in recurring expenses. But it will never happen unless they commit to a firm timetable to establish a new funding formula. And whatever path the City Manager’s Office is taking on the matter needs to be clarified and communicated to the City Council.

Update on July 10th, 11:53 AM

I just received the following email from Mr. William “Bill” Manno, City of Austin Management Services, Corporate Special Events Program Manager. This information request was forwarded by Mayor Pro-Tem Kathie Tovo’s office.

Mr. Oakey,

The presentation you referenced was one I made for the very first stakeholder group meeting for the specific purpose of getting the conversations started.  It is in no way the final report to this Resolution and should only be used as a reference as to how this process was started.  The response to Resolution is currently being drafted and will be sent to Council by October, if not sooner.  The research mentioned in that presentation was done by interns and was limited to identifying cities that in some way use HOT funds for events.  I have staff currently doing more in-depth research as to how they actually apply those funds.  This information will be included in the report back to Council.

Resolution No. 20140501-036 included the following language:

“WHEREAS, the City collected approximately $54.8 million from hotel occupancy taxes in Fiscal Year 2012 and these collections from Austin hotels are used to fund the Austin Convention Center, the Austin Convention and Visitor’s Bureau, and the City’s Cultural Arts Program; and

WHEREAS, the City’s Music Commission has recommended that City Council explore other funding mechanisms for special events, including considering whether anticipated increases in hotel occupancy taxes could support special events costs;”

Therefore, the report will discuss other cities’ use of HOT funds, however, it will be Council’s decision as to what aspects of alternative funding mechanisms they wish to move forward with.

Please feel free to contact me directly should you have further questions.  Until the report is finalized and presented to Mayor and Council, it would inappropriate to release any portion of the report.

Thanks,

Bill

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