Author Archives: Bill Oakey

Unknown's avatar

About Bill Oakey

I am retired from the State of Texas as an accountant. I am now an artist in Austin, doing photographic art. I'm also a lifelong music fan and a computer geek.

The Fee Waiver Controversy Gets A Brand New Twist – And It’s A Humdinger!

Leave a reply

By Bill Oakey – November 11, 2015

We all remember the big brouhaha over special event fee waivers that has raged in the press and at City Council meetings over the past couple of years. It’s a twisted tale of a City Council resolution seeking “alternate funding sources” for the multimillion fee waivers for SXSW and other large event promoters. Of course the money to pay for these waivers comes from you and me, the taxpayers.

So, here’s a quick recap. In May of 2014, Mayor Pro Tem Kathie Tovo got a resolution passed unanimously to direct the City Manager to develop a plan to remove the local taxpayers from the fee waivers and pay for them with alternate funding sources. Her suggestions included surcharges on ticket sales and possibly a portion of the Hotel Occupancy Tax. The first resolution deadline of August 2014 came and went with no action. Then a November 2014 memo surfaced, promising a new deadline of August 2015. When that deadline slipped away, I asked for help from a City management contact person.

Mr. William “Bill” Manno in an office called “Management Services” sent me an email this past July 10th, stating that a draft report responding to the Council resolution would be delivered to the City Council by “October, if not sooner.” On Tuesday of this week I emailed Mr. Manno and asked him to please send me a copy of the report.

City politics is a lot like participating in a real life novel of mystery and intrigue. The level of gamesmanship that goes on behind the scenes is stunning. One of my best inside sources at City Hall alerted me today of a fascinating twist in this saga. First, let me mention one quick thing. The City Council accepted my appeals not to include any funding for special event fee waivers in this year’s budget. All along I’ve been hoping that my compromise proposal for alternate funding sources might have a chance.

Well, take a look at these two items coming up on the Council’s Nov. 19th agenda:

67. Approve an ordinance amending the 2015-2016 Fiscal Year Budget to provide funding for public safety during South by Southwest.

( Notes:   SPONSOR – Council Member Leslie Pool )
68. Approve a resolution directing the City Manager to create a long-term plan to address overall public safety during the spring festival season.

( Notes:   SPONSOR – Council Member Leslie Pool )

You will notice one piece of terminology that is conspicuously missing from these items. You guessed it, the phrase “fee waiver” do not appear in the agenda verbiage! Someone with Karl Rove’s knack for political maneuvering decided that “public safety funding” sounds a whole lot prettier and nicer than the dirty old ugly term “fee waiver.” But the end result to the taxpayers is still the same. Instead of requiring event promoters to pay their own fees for City services, or using ticket surcharges or Hotel Occupancy Tax funds, the problem can be solved by simply passing a budget amendment. Let the taxpayers subsidize the additional public safety services.

Since Leslie Pool was not on the Council during the loud public controversy over fee waivers, perhaps she was seen as an easy target by the special interests who have worked behind the scenes to protect the status quo on fee waivers. But the cat is now out of the bag and we still have time to push for adoption of the alternate funding sources originally conceived in the 2014 Tovo resolution.

Here Is My Proposal for Special Event Funding

Compromise Funding Proposal for Special Events By Large For-Profit Companies

By Bill Oakey – November 11, 2015

  1. Do not approve any designated “public safety funding” for special events until a policy is adopted pursuant to Mayor Pro Tem Tovo’s Resolution # 20140501-036. This was the resolution calling for the City Manager to develop an alternate funding plan for special event fee waivers. Please note that Mr. William “Bill Manno” in the Management Services Office made a commitment this past July 10th that a report would be delivered to the City Council by “October of this year, if not sooner.” Providing public safety funding for special events equates to the same thing as granting fee waivers, regardless of whether the “fee waiver” label is used.
  1. Do not approve any multi-year agreements with special event organizers until a non-taxpayer supported funding policy has been formulated.
  1. Ask City staff and the appropriate task force / committee members to develop and recommend a compromise funding strategy with the following three elements:a. A portion to come from the Hotel Occupancy Tax funds. (This would require amending City Code Chapter 11-2, Section (B) (3) that allocates 15% of Hotel Occupancy Tax receipts to the cultural arts).b. Surcharges added to ticket prices for those events. A study could be done to estimate the amount that could be generated from the surcharges at various levels, such as 25 cents, 50 cents, one dollar, etc.

    c. Require the special event companies to pay a portion of their own fees. As a part of this component, the outside companies that piggy-back on SXSW should be required to pay a reasonable fee (or an increase in their current fees, if there are any) when they apply for their permits. SXSW itself may not be entirely to blame for the entire funding gap that has been attributed to them.

Please note that the City’s total service costs for special events exceeds the cost of the current fee waivers. The funding gap was $4.2 million in 2013, per the City Transportation Dept. Report. That’s because the City does not set the fees high enough to cover the actual cost of all services provided. Therefore, the new funding policy that replaces the fee waivers should be formulated sufficiently to completely eliminate any funding gaps. That would result in a zero-cost impact on the local taxpayers. That is what we need. The bottom line is that local taxpayers can no longer afford the cost of the fee waivers. The current fee waiver system is one of the most unpopular programs in all of City government.

Courthouse Dilemma Calls for Creative Solutions

2 Replies

By Bill Oakey – November 9, 2015

New Courts for Families - "We need a safe environment for women and children."

New Courts for Families – “Yikes, the rats! We need a safe environment for women and children.”

Many Travis County taxpayers breathed a momentary sigh of relief after the votes were counted, showing that the $287 million courthouse bonds were defeated. But in the halls of the Travis County Commissioners and in lawyers’ offices downtown, the mood was very close to panic mode. They are all still reeling. A recent law passed by the Texas Legislature places the County in a veritable straitjacket. They are prohibited from issuing any debt for projects in a failed bond proposition for three years.

It is too late now for County officials to ponder what went “wrong.” What needs to happen quickly is a major shift in thinking about the new courthouse.  The voters have spoken. They chose not to spend that amount of money on the type of facility that was proposed. Here are some of my thoughts on how to move forward with new plans for the courthouse:

1. Downsize the Design Ambitions for the New Courthouse

Travis County has probably spent in excess of $10 million on consultants and staff time for the courthouse planning to date. The most basic starting point for any such plan is determining how big of a courthouse that we need. The County staff worked up a report that estimates we would need space for 35 judges and 33 courtrooms between now and 2035. But how seriously did anyone question those estimates? Today we have 19 civil and family courts. It does not appear to me that we have added new courts in recent years at such a rapid pace that a target number of 33 is justified. Do we really need a courthouse as tall as the Frost Bank Tower?

The new courthouse was envisioned to be a state of the art facility with every modern innovation in place. One point in particular caught my attention. The hallways were planned to be several times wider than what exists in the current courthouse. It’s one thing to build something that is less cramped and more safe for those visit the courthouse. But floor after floor of the new building should not require enormously vast hallway space. From an affordability perspective, the taxpayers would probably prefer the building to be much better than the old courthouse, but something less than a Cadillac standard of perfection.

2. Take a Fresh Look at the Security Needs for the New Facility

It is true that family violence, child custody and divorce cases can pose a serious security risk. Abuse victims should not have to ride in the same elevator or sit next to their perpetrators in the hallway. Children especially should have a safe and secure place to stay while in the courthouse. But there are large numbers of civil cases that do not come with the same high level of risk. Think about issues like insurance disputes, eminent domain cases and various other civil matters. Even adoption cases are fairly low-level in terms of security needs. Why couldn’t the building be divided into high security and lesser security sections? It is my understanding that the vast amounts of thick and heavy glass in the construction design contribute the most to the high cost. In a hybrid design scenarios, the internal and external construction materials for the lesser security sections would be much less expensive. Such a configuration could require some judges to move between sections to try different types of cases. If that should become necessary, then so be it. All reasonable measures to bring down the courthouse costs should be considered.

3. Work with the Legislature to Try to Amend the Debt Restriction Law

Three years seems like an unreasonable time to have to wait for another bond election. Perhaps our County officials could work with the Legislature to come up with an amendment to the law for constitutionally mandated functions like building and maintaining adequate court facilities. The sooner the law could be changed is in January 2017. That’s a little over a year away. We could potentially have another election in May or November of 2017. At least that’s better than a three-year wait.

4. Take the Time to Tally Up the Land Sale Revenues and Other Offsets to Reduce the Bond Price

Travis County Commissioners were wise to consider the sale of several County-owned properties to generate revenue to offset the cost of the bonds. However, those sale transactions could not be completed in time for this year’s bond election. Now, however, there will be sufficient time for the properties to be sold before the next bond elections, thus allowing the size of the ballot initiative to be reduced. In addition, County officials should factor in estimates for the potential parking revenues and the lease receipts from private usage of excess space in the building. Another significant revenue stream will come from the sale or lease of the second half of the property that the County intends to put out for bids to private developers. Once all of these revenue sources have been nailed down and summarized, the voters can be presented with a much clearer estimate of the tax impact of a new courthouse.

Is There Any Possible Way to Build a New Courthouse Without Waiting Three More Years?

On the surface, the answer would seem to be no. The financing options appear to be limited to a choice between bonds or certificates of obligation, or else cash appropriated straight out of the annual budget. However, there is one other option that has been used in other places. In Long Beach, California a new courthouse opened in 2013 that was built with upfront funding from a private consortium. The $340 million cost plus interest will be repaid by the State of California over the next 35 years. Of course, Texas does not pay for county courthouses. And I’m not sure if it would be legal for Travis County to bypass the voters and enter into an agreement with private developers to build a large courthouse. It would still be a debt-based transaction and could run afoul of the newly passed law requiring the three-year waiting period.

An Offer of Desperately Needed Help for the Judges and Lawyers

During the recent bond campaign, residents were treated to large glossy postcards featuring pictures of monster-sized rats. These hideous creatures reminded me of the B grade 1959  horror film, “The Killer Shrews” (See the YouTube trailer here, or the entire movie here). While I cannot speak for all of the taxpayers, the County certainly has my personal permission to invest in a few packages of rat poison, if not a friendly call to a pest control service to alleviate the problem. The same goes for fixing the leaky roof. However, I would hesitate to suggest hiring a consultant to develop plans for those endeavors.

Travis County’s HUGE Wake-Up Call – So, Where Do We Go From Here?

6 Replies

By Bill Oakey – November 4, 2015

It is hard to overstate the historic significance of the failure of Travis County’s bond proposition for a new civil and family courthouse. In the 44 years that I have lived in Austin, I can’t think of another time when a major Travis County bond proposition failed. The voters here have consistently approved bonds for new infrastructure, whether it be for roads, buildings on land acquisition. But this time was different…Why?

That is the question that the Travis County Commissioners and their staff should be asking right now. Rather than pounding their fists and insisting that the voters did the wrong thing, they really need to take a few deep breaths and think about why the bond proposition failed. In the minds of the pro-bond fundraising groups there was only one side to the argument – We need a new courthouse, the old one is dilapidated. End of discussion.

The reality is that most Travis County residents do not disagree that we need a new courthouse and that the old one has long since outlived its useful life cycle. But that reality just happens to bump up against another one – affordability. This year’s round of sky-high tax appraisals hit everybody like a punch in the gut. When people are seriously scared about whether they will be able to afford to stay in their homes, their willingness to vote for tax increases becomes severely strained.

So, Where Does Travis County Go From Here?

There is no question that heads are rolling downtown at the County offices. As much as the County Commissioners would like to find a quick solution for the badly needed courthouse, there is a new State law that will probably slow them down. Apparently, a bill that was passed in last year’s Legislative session mandated that counties must wait 3 years after a  bond election to issue any new debt for a project that fails. County officials are working as we speak to determine exactly what their options are for pursuing any construction of a new courthouse.

The Big Missed Opportunity That Helped Lead to the Current Mess

The date was September 10, 2013. The Travis County Commissioners held a regular meeting on that date. Agenda Item # 18 addressed several items related to the proposed new courthouse. The 4th bullet speaks to my recommendation that the courthouse should be conceived as a “national model of cost effectiveness and efficiency.”

From the Commissioners Court Minutes for September 10, 2013

18. Consider and take appropriate action regarding the costs and engineering and architectural features of certain recently constructed civil and/or family courthouses.

Members of the Court heard from:
Belinda Powell, Capital Planning Coordinator, PBO
Roger El Khoury, Director, Facilities Management Department (FMD) Bill Oakey, Travis County resident

Clerk’s Note: Judge Biscoe circulated a memo requesting staff to ascertain certain information regarding recently built courthouses in other jurisdictions.

MOTION: Approve the information listed in Judge Biscoe’s backup memo plus five additional points:

o Delivery method;
o Soft costs and hard costs;
o Any cost reduction measures;
o Strive to achieve a national model of cost effectiveness and efficiency

and;
o Whether Furniture, Fixtures and Equipment (FF&E) are included in the
total cost.

The Motion Passed Unanimously. But What Happened Next?

The answer is simple and most unfortunate – Nothing!

In 2014 I was appointed to the Community Focus Committee for the proposed new courthouse. I was under the impression that this committee would function in an advisory capacity. However, we never performed any advisory role and we never interacted with the County Commissioners. Instead, we attended meetings where we were briefed by the staff and two sets of consultants on the progress and status of the courthouse planning efforts.

I brought up the fact that the County  Commissioners adopted my stipulation that the courthouse should become a “national model of cost effectiveness and efficiency” on at least two occasions. But no one ever brought forth any cost containment strategies. No discussion of alternative cost scenarios was ever presented to us. In fact, our committee was never even briefed on the estimated cost of the courthouse until the same week that it was scheduled to be presented to the Commissioners Court.

Shortly after the high cost of the proposed courthouse was announced, I submitted my resignation from the Focus Committee. It’s too late now, but if the taxpayers’ concerns about affordability had been taken seriously, perhaps the courthouse bond proponents would be celebrating a victory this week instead of wringing their hands in defeat.

Support Chantal Eldridge For 450th District Court Judge

3 Replies

By Bill Oakey – September 10, 2015

In case you haven’t noticed, candidates have started lining up supporters for next year’s Travis County elections. The first step will be to choose your party’s nominees in the spring primaries. In recent weeks I have come to know Chantal Eldridge, who just happens to be the best person running in the Democratic primary for the new 450th District Court Judge position. Not only have I decided to endorse her, but I am quite excited about what she has to offer.

Chantal is a reform candidate, and that’s exactly what we need. I like to describe her platform as “Smart Justice Reform.”  But first, a few words about her background. Chantal brings over 25 years of experience to her candidacy. She has spent the last ten of those years in her own law practice, representing criminal defendants here in Central Texas. Prior to that, she has enjoyed a long career in criminal, civil rights and family law cases involving children. For an extensive look at Chantal’s resume, please check out this link on her campaign website.

A Conversation With Chantal About Her Reform Goals

I sat down with Chantal to talk about her ideas for improving the criminal justice procedures. Here is a summary by topic:

Pre-Trial Release Services – “Right now someone without a permanent address is not eligible for a personal bond. This means that homeless people have to sit in jail to await trial. If they are employed, they often lose their jobs. One of the best ways to keep people out of the criminal justice system is to keep them employed. If they don’t have a permanent address, there is an assumption that they won’t show up. That is not necessarily true. I support allowing homeless people to be eligible for release on bond. As it stands, it costs $50 to $60 per day to keep them in jail, and the jail is being used as a homeless shelter.”

Mental Health Issues – “Travis County has a misdemeanor mental health docket and a mental health public defender’s office for misdemeanors. We do not have a district judge assigned to felony mental health cases. I think there needs to be a felony mental health court. We have one felony mental health prosecutor. But not all of the cases go to her court. Habitual offenders are not reviewed in terms of whether their criminal history is directly related to their mental health issues. I think those cases should be admitted onto a mental health docket.”

Medication Compliance Programs – “The biggest problem with mental health defendants is keeping them on their medications after they are released. Most people are fairly stable when they stay on their medication. But that can be difficult. Homeless people have more pressing concerns with food and shelter. And sometimes people will start feeling better and think they don’t need to stay on their meds. One Austin non-profit is experimenting with a medication compliance program on-site that could serve as a good model if it is proven successful. If it works there, then hopefully we can expand it into other organizations and agencies that work with mental health clients.”

Rehabilitation and Job Training – “When people are placed on probation or deferred adjudication, the focus needs to be on rehabilitation. These people should be evaluated to determine what their basic needs are. Most of these people are poor. They are much less likely to re-offend if we can help them become productive members of society. One area of assistance might be temporary housing. Or, we could help them get enrolled in ACC. There are also apprenticeship programs that accept people with criminal convictions. These basic needs should be given priority over risk-based programs like anger management or substance abuse classes. Right now we do not have enough attention in the court system towards addressing those needs.”

Let’s Get Behind Chantal Eldridge and Ask Our Friends to Support Her!

Please email, Facebook and Tweet this blog link to your contact lists. Chantal is a progressive voice that may not get the rubber-stamped endorsement of the Old Guard political crowd. This is a down-ballot race that would be easy to overlook. So, let’s spread the word about Chantal. We need her reform efforts working to improve the justice system in Central Texas.

You can go to her campaign website with this link. Sign up to volunteer, request a yard sign, and make a donation. Sign up for her mailing list to find out about special events. Let’s get Chantal elected in the primary!

Chantal Eldridge

Chantal Eldridge

It’s Time For Taxpayers To Contact The City Council – Watch Out For The Budget!

2 Replies

By Bill Oakey – August 20, 2015

Many thanks to Council Aide, Michael Searle in Council Member Ellen Troxclair’s office. He provided me with a document that shows the current status of proposed cuts and additions to City Manager’s proposed City Budget. Today it is available online. You can read the details by clicking the link below:

City Budget Concept Menu Aug 20

There Is Good News and Bad News

One piece of good news not noted in the chart is that, according to an information request from  Council Member Troxclair, there are no funds budgeted for special event fee waivers. If this position holds, it will be a major victory. It is long past time for the City to pay for special event services from sources other than local taxpayers.

The bad news is the bottom line. This current “budget concept menu” calls for $30.7 million in increases to the General Fund budget, with only $13.4 million in spending reductions. It should be noted, however, that several of the budget change suggestions from Council members have not been quantified yet by City staff. Those items are labeled, “TBD” – To Be Determined. So, in all fairness, the jury is still out on whether this current menu would offer pain relief to taxpayers or serious indigestion.

A Closer Look At Some Of the Highlights

  1. Item 2.13 – Council Member Troxclair recommends freeing up $9.7 million in Budget Stabilization Reserve funds. This would lead to taxpayer savings.
  2. Item 2.14 – Huge Kudos for Troxclair! This item would end three layers of utility subsidies for “economic development” (giveaways for corporate recruitment) to the tune of $11 million. This would lower our utility bills.
  3. Item 2.4 – Thanks to  Mayor Steve Adler. Debt financing of select capital expenses would free up $12.9 million in reserve funds that could lead to tax savings.
  4. Item 2.3 – Thanks to Council Member Don Zimmerman. Implement a sliding scale for City employee pay raises. This would save a total of $7 million. Why should the fat-cats at the top of the scale get continuous big raises every year, while tens of thousands of Austinites struggle with stagnant wages?
  5. Item 2.2 – Thanks to Mayor Steve Adler. He offers an alternative plan for the tiered pay increases that would save $4.7 million.
  6. Item 2.23 – More thanks to Ellen Troxclair. This item calls for a staff pay increase structure that would save $6 million. We need to press the City Council to adopt either the Adler, Zimmerman or Troxclair plan!
  7. Item 3.3 – Thank you, Mayor Pro-Tem Kathie Tovo. Increase Development Services fee to 100% of cost of service. This would save us $1.4 million.
  8. Item 3.6 – Huge thanks to Council Member Sheri Gallo!. Increase Senior Homestead Flat Exemption to levels comparable to 2005 property valuations.
  9. Item 3.13 – Troxclair again! Freeze utility rates and fees to this year’s levels.
  10. Item 2.18 – Still more kudos to Troxclair. Limit additional police positions to 53. The staff’s ambitious increase in police is too much for one big jump in this year’s budget.

Here Is What You Can Do to Help!

This is our big chance to really make a difference in affordability. We need to let every City Council member know that we want meaningful reductions to the budget without being totally swallowed up by budget increases. In other words, tangible relief in taxes, utility rates and fees.

So, please take the time to email the Mayor and all Council members, using this one-click email link. Then, please send emails, texts, Facebook and Twitter postings to as many neighbors and friends as you have on your lists. If we all join together, we can score a nice victory in the new budget. Time is very short, so let’s get the action started now!

A Challenge To The News Media: Monitor The City Council For Budget Affordability

1 Reply

By Bill Oakey – August 13, 2015

The City Council is now knee-deep into their budget deliberations. All of you reading this are wondering about the answers to some critical questions. These are questions that the news media should be asking the Council members, to find out how seriously affordability is being taken into consideration so far:

  1. How many cost-saving proposals have each of the Council members brought up so far in the  Budget Work Sessions?
  2. Which cost-saving proposals have they recommended so far?
  3. How much money has each Council member asked to be cut from the City Manager’s proposed budget?
  4. Has anyone on the City Council suggested an affordability goal for reducing the budget?
  5. Has anyone on the Council suggested a target for reducing taxes or fees in the budget?
  6. Has anyone on the Council suggested reducing the huge increase in staff in the City Manager’s proposed budget?
  7. Has the Council agreed to use a sliding scale for City Staff pay raises, after City employees received two separate raises this year? Or, do they plan to capitulate and offer all employees 3% raises, including executives with lofty salaries at the top?
  8. Have any of the Council members’ proposals for new spending have been offset with corresponding cuts, to ensure a zero impact on each new funding request?
  9. Affordability was often listed as the biggest issue in last year’s City Council campaigns. Has the importance of affordability been front and center so far in the budget deliberations?
  10. Which Council Members appear to be taking the lead on affordability throughout the budget deliberations?

A Few Bad Signs To Be Concerned About

  1. According to a recent article in the Austin Monitor, the City Manager’s budget proposal would RAISE TAXES ALMOST TO THE LEGAL MAXIMUM! That is called the “rollback rate,” which is an 8% increase over the current zero “effective rate.” Specifically, Marc Ott’s proposal would raise the tax rate to 48.14 cents. The legal maximum rollback rate is 48.26 cents.
  2. We would see some relief from the new 6% general homestead exemption. But the bad news is that the proposed budget does not include any specific spending cuts to offset the revenue gap from the homestead exemption. In other words, taxes would need to raised to make up that difference!
  3. Andra Lim with the Austin American-Statesman wrote a City Hall Blog piece entitled, “5 Things We Learned As Austin Officials Started Hammering Out the Budget.” Unfortunately, three of those five items relate to NEW SPENDING that Council members would like to ADD TO THE BUDGET.  While these programs may be worthwhile, and some appear to be, where are the cuts needed to offset these changes?
  4. Earlier this week, I was at City Hall for a meeting with a City Council aide. While walking down the hall, I encountered another aide who delivered some disturbing news. He told me about a trend that has emerged during the budget talks. Every time someone brings up a plan to cut some part of the budget, another Council member has a pet project ready to absorb that new-found money.

There is a simple three-word message that needs to be conveyed to the City Council:

Remember the Taxpayers!

Remember affordability! Remember the map of the City almost totally blanketed with double-digit tax appraisal increases for this year. Most homeowners will face the 10% appraisal cap, and any difference left over above the cap will be pushed into next year. Probably causing yet another back-to-back 10% increase in taxable value.

The Biggest Obstacle That Taxpayers Face is Business As Usual

It doesn’t take long for new City Officials to become absorbed into the status quo. A good word for that is “INERTIA.” Here is Merriam-Webster’s official definition of “inertia”:

: lack of movement or activity especially when movement or activity is wanted or needed

: a feeling of not having the energy or desire that is needed to move, change, etc.

“Business As Usual” was an appropriate title for the groundbreaking album by the Australian rock group, Men at Work, released in 1981. It stayed at number one on the Billboard music chart for 15  weeks and sold 15 million copies worldwide.

But here in Austin in 2015, we can no longer afford Business As Usual at City Hall!

business-as-usual-4f745d7d29bf1

City Council Approves Taxpayer Impact Statement

3 Replies

By Bill Oakey – August 6, 2015

On Thursday the Austin City Council voted unanimously to approve a proposal by this blog to produce a Taxpayer Impact Statement as part of the upcoming City Budget. This marks a major step forward for truth in taxation. When the final budget is adopted, taxpayers will be able to determine the actual dollar amount of any tax increase for a range of home values at various levels of appraised value increases. The Taxpayer Impact Statement, which will be included in the budget document and published online, will also include the estimated dollar increases City in utilities and fees. An amendment to the resolution calls for a set of “budget highlights” to be listed on the statement.

Many thanks go out to Council Member Elken Troxclair, who sponsored this item as a resolution, and to the co-sponsors, Mayor Steve Adler and Council Members Ann Kitchen and Sheri Gallo. And of course we are extremely grateful to the entire Council for their unanimous approval!

The Next Step Is To Ask Travis County to Follow the Example

On Thursday morning I contacted all five of the Travis County Commissioners and asked if they would consider supporting a similar Taxpayer Impact Statement for their upcoming budget. Commissioner Margaret Gomez was the first to respond, and she has gladly agreed to help. The best-case scenario would be universal adoption by all of our local taxing entities. Once all of their budgets are finalized, we should ask for a combined statement of the impact on taxpayers. I believe that good transparency will lead to a better appreciation of our affordability challenges, and hopefully, an eye toward more prudent budgeting.

American-Statesman Editorial Board Endorses This Reform

Here is an excerpt from their editorial:

WE SAY: AUSTIN CITY BUDGET
Tax deliberations need transparency, sensitivity for homeowners
Posted: 12:00 p.m. Thursday, Aug. 6, 2015

By Editorial Board

“City watchdog Bill Oakey, who writes the “Austin Affordability.com” blog, has put together what he calls a ‘Taxpayer Impact Statement’ that spells out much of that data for city taxpayers. That is a good starting point.”

“And, if all five taxing jurisdictions put together such impact statements that also detail the total taxes and fees taxpayers are shelling out annually to those entities, it might generate the kind of sensitivity — and sensibility — needed in budget and tax deliberations. At the very least, such transparency would illuminate how spending decisions by elected and appointed officials affect taxpayers’ wallets from one year to the next. And that would enable voters to hold their elected officials more accountable”

 

Budget Op-Ed In The Austin American-Statesman

5 Replies

Austin City Budget Needs Affordability Makeover

Wednesday August 5, 2015

By Bill Oakey – Special to the American-Statesman

Every year at this time, Austin homeowners grit their teeth and wonder whether the City Council will remember their skyrocketing tax appraisals as they deliberate on the budget.

This year the tax appraisals were stunning, with double-digit increases as high as 27 percent in some areas. When the newly formed single-member-district City Council asked the city manager to submit a lean budget with responsible cuts, his response was pitifully weak and it suggested closing a fire station. What part of affordability does he not understand?

At the end of July, the city manager issued his official budget recommendation. In Volume One, the word “affordability” appears eight times. But the word “tax” appears 290 times and “fees” 134 times.

Property taxes would go up $40 annually for a “typical” median homestead, with the new 6 percent homestead exemption included. But that “typical” homestead is only valued at $232,272. Many longtime residents in single-family homes haven’t seen tax appraisals that low in about 15 years. Even more disturbing is the onslaught of utility increases and “add-on” fee increases averaging $7.98 per month. For most of the past 40 years, these “add-on” fees were included in our property taxes.

Here are several ideas for cost savings. Each year with our growing economy, we tend to have budget surpluses. The old city council spent nearly all of those in between budget cycles, with little or no public input. A budget is a budget, and any surplus should be used to reduce taxes, unless there is a public safety emergency.

It is long past time for city taxpayers to stop subsidizing for-profit public event companies, like South By Southwest. We could save $4 million every year in the budget with a compromise proposal. City services could be paid from three sources: funds from the Hotel Occupancy Tax, surcharges on ticket sales, and making the event promoters pay some of their own fees.

The council should consider awarding staff pay raises on a sliding scale. The city’s recent across-the-board raises, combined with bonuses and other perks, well exceed the stagnant wages of tens of thousands of other Austinites. Another opportunity for substantial cost savings involves the annual transfer of funds from the Budget Stabilization Reserves. Instead of spending more than $20 million on “wish list” items as the previous council did, the new council should time the purchases of new capital items over several years. Some of the surplus could be used to offset the cost of recent flood-related repairs, thereby cutting the budget and saving money for the taxpayers.

For better transparency, I have proposed a truth-in-taxation plan that includes a “Taxpayer Impact Statement.” This would be a chart that shows tax appraisal values from $100,000 to $1 million, in $50,000 increments. Categories should include the general and over-65 homestead exemptions. There should be columns showing the dollar amount of taxes due and the increase above last year’s amount. Taxpayers should be able to look across the chart and estimate their tax increase, based on various levels of appraisal increases up to the 10 percent appraisal cap. In my discussions of this proposal with both Austin and Travis County officials, some have suggested that the County Tax Office could help by creating a standard format for all taxing jurisdictions.

The city has a flawed policy of cramming the budget process into a few short weeks after the city manager’s recommendation. Travis County begins their budget process in February. The council should consider adopting an earlier schedule for next year. In light of the current tight deadline, they should not accept the city staff’s request to add 347 new positions, compared to only 151 that were added last year. Such a big change should require much more discussion and community input.

The tax-supported general fund has grown 38.9 percent in the last five years. Keeping the budget lean will be necessary if the new City Council wishes to achieve their goal of implementing a full 20 percent homestead exemption over the next few years. This first budget is their opportunity to prove that they are ready to quit talking about affordability and show us some real action.

Oakey is a retired accountant and writes at AustinAffordability.com.

 

Firestorm Erupts Over 100,000 Housing Unit Target Issue

5 Replies

By Bill Oakey – August 4, 2015

The reaction to Monday’s posting on this topic has been swift and fierce. The same reaction fell upon Marty Toohey after his blog posting in the American-Statesman. Austin has indeed hit a tipping point that in some respects mirrors the national divide over wealth inequality and wage stagnation. Your viewpoint on a variety of issues depends on where you sit along the economic divide. Politics also enters the picture. Nationally speaking, I have made my position clear. I am an official Elizabeth Warren Person In Waiting.

As for the uproar over the affordability and sustainability of Austin’s current boom, I would just suggest this question to ponder, What comes after a reckless boom without any foresight or careful planning? Here in Austin, we have seen that movie more than once before. The crash at the end of the 1980’s sent many out of town landlords, well, back out of town for a pretty good while. And a great many of us were not sorry to see them go.

This blog welcomes a wholesome discussion from all points of view. See the comments below. Everyone is entitled to their opinion and everyone else is entitled to agree or disagree. We should do so with passion, but in a polite and civil manner. In my view it is unduly harsh and insensitive to sacrifice a community of several hundred thousand people for the benefit of an encroaching wealthy class. To not expect the citizens who have invested decades of their lives in their community to fight for their homes and their neighborhoods is unrealistic, at the very least. Yes, gentrification can be a natural consequence of “free market forces” or “supply and demand.” But in a democracy, we govern ourselves. We get to decide how we want to interact with our elected officials. And what values we want our elected officials to incorporate into their policies.

We certainly need new housing, and of course we cannot call a halt to all growth. That has never been my argument. The challenge and the controversy involves how to incorporate new housing into the planning process. We need to find some way to allow existing neighborhoods to thrive and co-exist with new housing. The CodeNEXT rewrite of the land development code should complement rather than replace current neighborhood master plans. Developers are pushing hard to build housing with little or no zoning regulations. The wrong kind of planning can lead to gentrification rather than preservation of existing neighborhoods. Housing that is already affordable cannot be torn down and replaced in every corner of the City, if we want to be fair and reasonable to longtime residents. We have seen an abundance of discussion on how and where to build new housing, and even how best to make that new housing affordable. But there is no official policy or planning effort directed toward preserving the existing affordable housing that has not yet been scraped off the lots.

Austin has historically seen battle lines drawn between developers and real estate interests versus neighborhood and environmental interests. We call ourselves a “progressive city” that welcomes diversity and embraces social justice and equality. However, we are not immune to the immense power of money and influence that infects all levels of government. I was both saddened and appalled to learn recently about yet another City ordinance that passed two years ago and then fell into a black hole. In 2012 there was a public outcry after a balcony collapsed at a low-income apartment complex. Investigative reports from the Statesman revealed that Austin had one of the poorest sets of policies and enforcement to help this class of vulnerable residents. The landlords got away with shabby conditions and disrepair year after year. So, the City Council wrote a tougher ordinance and demanded action on enforcement from the City Manager. But guess what…Here we are two years later, and the new ordinance is not being enforced.

Another hot button issue is short-term rentals. Here again, peaceful neighborhoods with hard working residents ate being disrupted by rude, late-night partiers who could care less about anyone else around them. And the  “entrepreneurs” who own the commercial short-term rental properties often get by without proper registration and with wildly excessive occupancy levels at their party-pads. We could just back off and say, “Let the free market rule.” But what kind of “freedom” would that leave for the neighborhood folks who are stuck with the noise and the parking issues. One part of this problem could be solved easily. The City should require that a valid license number be included in every website, blog, social media and print ad listing. But I can only imagine a bitter battle with the special interests over such a simple and logical suggestion.

I will end back where I started by mentioning that Austin is at a tipping point. We simply cannot afford to continue on a path that puts growth for the sake of growth ahead of common-sense planning. Choices will need to be made that will determine whether an “Austin for Everyone” means truly everyone, or just the outsiders without regard to what happens to current residents and their neighborhoods.

One final thought. Whether Austin can defy gravity and keep booming forever depends on its capacity to sustain the costs of the boom. This may sound like a wild idea, but we could…just maybe…consider adding up the total cost of all the plans that Austin, Travis County, CAMPO, Central Health and the other entities have already approved. Then, simply measure that total cost against the taxpayers’ likely ability to absorb it. There isn’t a private business or corporation of any size that would dare embark on an unbridled expansion without careful planning with cost projections and analysis. Cities, on the other hand, are more apt to march their citizens to the edge of a cliff. Before someone finally shouts, “Hey look, we might have a problem here!” Then after the crash, the leaders all sigh and say, “Gee, it’s not our fault. None of us ever saw it coming.”

How Do We Respond To The Developers’ 100,000 Unit Target?

12 Replies

By Bill Oakey – August 2, 2015

While relaxing in a chair a couple of evenings ago, I was hit with an emailed blog posting with the craziest juxtaposition of terms that I’ve seen in a long time:

The Premise: “Austin Rents Are Too High. That Is a Serious Affordability Problem.”

The Cause: “It Is a Simple Problem of Supply and Demand.”

The Solution: “Build 100,000 New Housing Units As Fast As Possible. That Will Magically Make Austin More Affordable.”

The blog posting in question was fired from a cannon on Friday by American-Statesman reporter Marty Toohey. The main theme of the blog is that the Real Estate Council of Austin (RECA) has established a 100,000 target for the number of new housing units that will transform Austin into an affordable city.

At Long Last! Relief is Finally On the Way!

In the old days, the Alka-Seltzer pain reliever ads promised to bring us a lifetime of happiness. Their slogan was “Relief Is Just a Swallow Away.” The Statesman blog posting suggested that Mayor Steve Adler has already swallowed RECA’s affordability potion. But I have to wonder if he read all of the fine print in the warning messages that accompany their prescription.

alka-seltzer

The Number One Goal, In Fact the Only Goal, Is to Build “An Austin for Everyone”

Those of us who attended the Austin Monitor’s CodeNEXT panel discussion on July 27th, got a jaw-dropping introduction to the “come one, come all” approach to meeting the challenges of Austin’s growth. In the most unabashed manner imaginable, panelist Steve Yarak from a group called AURA repeatedly championed the mantra, “Let’s build an Austin for everyone.” His entire storyline from beginning to end was that every facet of Austin planning should focus on bringing as many people here as possible, as quickly as possible. To accomplish that one and only goal, we need to build, Build, BUILD – as many housing units as possible, with reduced regulations and as few zoning restrictions as possible. Build, build, build. Do it now. Do it fast. And don’t let anybody or anything stand in your way.

This unapologetic fervor on the panel was followed by sprinklings of applause, delivered in slices by pockets of followers who had swallowed the potion. Others in the audience who came out of curiosity or to learn how CodeNEXT might affect their neighborhoods, saved their applause for panel members Jim Duncan and Jeff Jack. Both of them have long histories in Austin and hard-earned reputations for balancing the exuberance of growth-at-any-price against neighborhood preservation and the interests of long-term residents.

More Growth at a Breakneck Pace Is the Solution to Affordability…Really?

Let’s put that proposition to a test with this list of questions:

1. Austin has grown tremendously since the 1970’s. Is the city more affordable now than it was in the 1990’s? the 1980’s? the 1970’s?

2. A major push to build more rental units was undertaken last year. Did the increased supply lead to lower rents? (Average rents actually increased 6.6% to $1,172 in the past year).

3. When new luxury housing units are built in older established neighborhoods, do those neighborhoods become more affordable as a result? Or do they become gentrified, with taxes rising so fast that older residents are forced to leave?

4. Transportation is the second leading component of affordability, behind housing. Is transportation more affordable in Austin as a result of rapid growth? Has growth led to improvements in traffic congestion?

5. The fastest growing cities in the country include Portland, Seattle, and several major cities in California. Are any of them more affordable now than they used to be?

Is There Some Way to Address the Challenges of Growth, While Admitting the Realities of Affordability?

Like any other problem in life, the first step toward solving it is to admit that there is a problem. Then that problem needs to be approached with openness, honesty, and a willingness to balance the needs and desires of everyone. Austin has been designated the most economically segregated city in America. It is clearly not affordable for several significant categories of people:

1. People who work for low wages, who need to be paid more for what they do, and who deserve better opportunities for better jobs.

2. Older people on fixed incomes, or who retired from jobs paying much less than today’s market salaries. These people make up a growing percentage of Austin’s population.

3. Long-term residents who struggle to make ends meet, as their neighborhoods become gentrified and they face high transportation costs if they move to the suburbs.

Here Is the Biggest Question That Many of Us Would Like to See Answered In a Positive Way…

Will our new mayor and our first 10-1 district City Council spend as much time and energy addressing the needs of long-term residents and existing neighborhoods as they do in answering to the whims and wishes of big business, the developers and the real estate industry? It takes six votes to pass an item on the City Council agenda. It also takes six votes to defeat one. Everyone has an opportunity to influence those votes and to take note of them after they have been cast.

We also know that five Council members – Greg Casar, Sheri Gallo, Delia Garza, Leslie Pool, and Don Zimmerman will be up for re-election next year.

If anything in this posting leaves you feeling a bit uneasy, don’t take any medication without reading the warning label. As an alternative, you might consider reaching for a drink, while listening to Eddie Noack’s 1959 song, “Relief Is Just a Swallow Away.” (Later recorded by George Jones).