Category Archives: General Affordability Updates

If This Is A Chess Game, What Is The Next Move?

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By Bill Oakey – June 2, 2014

If you often feel like a pawn in somebody else’s chess game, you are not alone.

The Players are looking down at Us from their perches on the upper floors of the tall towers. Those towers are all over the country, and even in some places overseas.  They can see us on their super-HD computer screens.  I’m not talking about literally seeing us through the cameras on our computers.  I’m talking about the figurative representations of us.

They are the kings and the queens, the rooks and the knights.

We are the pawns.

The City of Austin is just one ledger on one page in their impressive portfolios.  Of course, there are more of these viewing stations in downtown Austin than there are in New York, California , and Dubai.  But the objective is the same.  Move the pieces on the chess board around.  And try to outwit the opponents.  Try to make as much money as they can as fast as they can.  If only those gosh darned pawns didn’t get in the way sometimes!  They could make even more money.

We are the little dots seen slogging through the crowded streets, trying to get to work, to the grocery store, or perhaps over to Barton Springs, if only we could find a parking place.  And then slogging back home again to get some rest.  Before getting into the game all over again the next morning.

The Players have to be pretty worried right now.  Our tax appraisals were not a pretty picture. The news media is telling them that we have been observed acting restless.  So, what does that mean?  What will They do if We fall victim to the simple laws of economics?  No amount of maneuvering on the chess board can change the fact that we only earn X amount of income.  We can only afford so much in taxes.  We can only afford to vote for X number of bond elections.

The economy is part of the game too, but it is a Silent Player.  Just like Mother Nature is silent. You can’t do anything about the weather.  And when the economic scales get tipped out of balance, it becomes a desperate race against time.

Can The Players find enough new pawns to replace the estimated 40 current pawns who are leaving Austin every day?  Can they build enough self-enclosed “apartment communities” where the lowest rent for a one bedroom apartment is $1,375 per month?  These places have secured club rooms, open terraces with views, green lighting, and DNA testing for dogs.  You read that right.  If you find dog poop on your doorstep, THEY know whose dog did it. They have everybody’s dog’s DNA.  (I’m not making this up!  I saw it last night).

They want you to sell your single-family house so they can scrape it off and add another “apartment community” to their portfolio.

But what will happen to Them if the economy and Mother Nature don’t cooperate?  They have to scrambling to find a solution to the drought problem.  (I have to wonder how They feel about the proposed 30% water rate increase, with a new “drought fee” added to it).

Reports keep popping up in the news, stating that too many of Us are have stagnant wages and we can’t keep up with the costs of living in Austin.  So, I will end with the same question that I started with.

If this is a chess game, what is the next move?

Another Huge City Management Failure – The 911 Call Center Fiasco

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By Bill Oakey – May 29, 2014

Update: Please see City staff response at the end of this posting.

In two recent blog postings, I pointed out the fact that the City operated from last summer through the end of December with over 900 vacant staff positions funded in the budget.  And yet, here we are eight months into the fiscal year with the 911 Call Center seriously understaffed.  The workers are so severely stressed that they have a 20% turnover rate for call takers and 25% for dispatchers.  Overtime costs are soaring, citizen wait times for emergency calls have increased, and the City Manager has allowed the situation to continue.

For the past two years in the budget process, the Emergency Communications Division, which is under the Police Department, has requested more staff.  Both times the requests were denied. Now, as we approach the third budget cycle, we learn that finally, a new City report is forthcoming that will highlight the seriousness of the issue.  The Public Safety Commission will include this topic on their agenda at their June 2nd meeting.

On yesterday’s news broadcasts, a KXAN investigative report based on seven months of research spelled out the troubling details.  You can watch the KXAN video and read about it here.  The broadcast revealed high amounts of staff absences for sick leave and stressful overtime requirements.  It is not cost effective to operate a critical public safety office in such a manner. Having to constantly rehire and train new people does not serve the taxpayers well.  Especially in an environment where over 900 citywide staff vacancies were fully funded in this year’s budget.

It is long past time for someone at City Hall to step up and deal with this problem.  How much worse does it have to get before they take action?  This issue illustrates one more reason why we desperately need new leadership, both at the management and City Council levels.

Update: City Staff Unmet Service Demand Dated May 20th

As part of the annual budget process, City financial staff has made a recommendation for 61 new non-sworn police staff positions.  These include some new staff for the 911 Call Center, although the exact number is not specified.  See Page 33, Item 5 in the staff recommendation. This provides hope that some relief may be coming in October.  In the meantime, at the Citizens Forum on Saturday, I will ask the City Council to transfer at least $1 million in surplus funds to pay for new staff between now and the end of September.

Hold On To Your Wallets – Here Comes ACC!

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By Bill Oakey – May 28th, 2014

When it comes to local entities that impact your property taxes, Austin Community College often flies under the radar.  They do not garner nearly the publicity nor the public scrutiny that Central Health, Travis County, or the City of Austin gets.

But now the cat is out of the bag and all of that is about to change.

Richard Rhodes, the President and CEO of ACC is calling for a November bond election to the tune of just under a half billion dollars – $475 million, to be exact.  This article in today’s Austin American-Statesman tells the story.

It’s as if all of the dictionaries in all of the libraries at ACC somehow had the word “affordability” stripped out of them.  Even if that were the case, where has Mr. Rhodes, the advisory panel that recommended the huge bond package, and the ACC Board of Trustees been lately?  If they have been anywhere near the City of Austin, they must know that taxpayer here are tapped out.

In the laid back days of the 70’s and 80’s, the governmental entities had a standard process for bond proposals.  They would appoint a citizens advisory panel and ask for suggestions on what would make a good bond package.  The wish list items would quickly pile up, and the committee would recommend nearly all of them.  Why not, they figured.  Austinites always approve bond elections.

The tide began to turn last year.  AISD was shocked into reality when half of their bonds failed at the polls.  This year, the public’s appetite for big spending projects is even less than it was a year ago.  Affordability has risen to the top tier for virtually every candidate running in the new 10-1 district City Council races.

The smartest thing ACC could do is cut their construction and renovation wish list by half or two-thirds.  Then it might have some chance of passage.  Otherwise, they will be set back by another year or longer, causing their most critical needs to be delayed.

What ACC is up against is the very simplest of all economic realities.  People can only afford what their incomes and their budgets will allow.  In a local environment where realtors are telling their neighbors that far too many Austinites are having to sell their homes because they can no longer afford to live here, everyone needs to sit up and take notice.

Since ACC, for whatever reason, has not gotten the message, you can help with that right now.  Send an email message to Richard Rhodes, their President and CEO, using the link below:

mailto:rrhodes@austincc.edu

Huge Rate Increase Could Cripple Austin’s Water Utility

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By Bill Oakey – May 21, 2014

If you have been recently stunned by the tax appraisal notice on your house, how would you feel about a 30% increase in your water rates next year?  And then, how about a new “drought fee” on top of that base rate increase?  As hard as that sounds to swallow, it is actually possible unless the City Council listens to citizen appeals to take other measures to help the Water Utility.

On May 7th, the Austin American-Statesman published a sobering article that details the scenarios for what seems like unimaginable rate shock coming to City water customers.

“The utility plans to increase its base water rates next year, resulting in a monthly bill of $49.12 for the typical homeowner, up from $38.35 this year — a 30 percent jump.”

And that’s just the beginning.  While you are reading this, a new committee is reviewing options for calculating the new “drought fee” that would accompany the base rate increase.  Below are the five options being considered.  Be sure to keep reading to the end, because there are some ways that the City can avoid clobbering the ratepayers with such punitive and onerous rates.

Options for the Proposed Drought Fee

Option 1

Fee of $1 (Stage 3) or $2.75 (Stage 4) for every 1,000 gallons that any customer (a home or business) uses.

Fee for typical homeowner (who uses 7,000 gallons a month): $7 (Stage 3) or $19.25 (Stage 4)

Total water bill: $56.12 (Stage 3) or $68.37 (Stage 4)

Option 2

Different fees for each type of customer (single-family homes, apartment complexes, smaller businesses and larger companies/agencies) for every 1,000 gallons used.

Fee for typical homeowner: $5.18 (Stage 3) or $18.41 (Stage 4)

Total water bill: $54.30 (Stage 3) or $67.53 (Stage 4)

Option 3

Similar to Dallas’ program. For residential customers, fee would kick in only if they use more than 11,000 gallons per month. All nonresidential customers would pay a fee regardless of how much water they use.

Fee for typical homeowner: $0 (Stage 3 or Stage 4)

Total water bill: $49.12 (Stage 3 or Stage 4)

Option 4

Different fees for homes and businesses; fees also based on amount of water used.

Fee for typical homeowner: $5 (Stage 3) or $22.50 (Stage 4)

Total water bill: $54.12 (Stage 3) or $71.62 (Stage 4)

Option 5

Different, flat fee for each type of customer (single-family homes, apartment complexes, smaller businesses and larger companies/agencies).

Fee for typical homeowner in Stage 3: $4 (Stage 3) or $12 (Stage 4)

Total water bill: $53.12 (Stage 3) or $61.12 (Stage 4)

How Can the City Help the Water Utility and Avoid the Devastating Rate Shock?

Earlier this year, the City announced that there was a $14.2 million budget surplus in the General Fund.  Readers of this blog rallied to the defense of taxpayers and convinced the City Council not to spend this surplus.  I have made a proposal to the City Council, asking them to transfer the budget surplus to the Water Utility to help hold down any forthcoming rate increase.  (See the previous blog entry, “A Possible Breakthrough for the City’s $14.2 Million Budget Surplus.”)

In addition, the budget surplus should be even higher by the time the City Council begins budget deliberations early next month.  I have asked the Council to itemize the large amount of leftover funds from 900 unfilled staff positions that were funded in the current year’s budget.  Unless most of those positions have been filled since early January, then the City should have an additional surplus that could be transferred to the Water Utility.  For long-term accountability to the taxpayers, I have recommended that the City follow the policies of other cities, such as Honolulu and Portland.  These cities do not allow individual departments to stockpile large amounts of money from unfilled positions.  The danger is that the money can easily be spent for other projects.  We need better oversight of taxpayer money, and the City Council needs to exercise its authority over the budget process.

The final option that the City can use to help the Water Utility is to sell some unused and unneeded land that the was purchased by the utility.  Why should ratepayers be saddled with huge rate increases, while the hot summer wind blows over many acres of unused property that the City could sell for a handsome profit?

How Does the Fitch Bond Rating Service Feel About Our Water Rates?

The Fitch Bond Rating Service has made their position clear in their May 19th review of the Water Utility’s bonds.  Below is an excerpt from their report:

DECLINING RATE AFFORDABILITY

“Fitch considers AWU’s combined water and wastewater rates somewhat high relative to income levels of city residents, and in comparison to other large urban systems. Although rate hikes on a combined percentage basis have been fairly modest over the last several years, the city’s total monthly residential bill currently amounts to about $88, equal to an above average 2.1% of median household income.”

“The Rating Outlook for the series 2014 bonds and outstanding parity water and wastewater revenue bonds is revised to Negative from Stable.”

Now, we just have to wonder…Is anybody down there at City Hall listening…?

The Big Set Of Numbers That Don’t Add Up – City Projects 33.6% Property Tax Revenue Increase!

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By Bill Oakey – May 19, 2014

The City of Austin has released a very strange set of numbers.  Maybe you can help me figure them out.  if it’s just me who’s crazy, then the rest of you can breathe easier and I’ll go find something else to do.

On April 24th, the City’s financial staff released a Five Year Financial Forecast for all City departments.  The strange phenomenon that I discovered involves the number of new employees projected to be added annually for each department.

Let’s Look at How the City Introduces the Numbers

Here is a brief introduction to the staffing projections, taken from Page 7 of the report:

Staffing Projections

“Staffing costs represent the single largest component of the City’s Budget, and an accurate projection of future staffing levels is essential to forecasting expenditure growth. This section details existing positions and projected changes in the City’s Financial Forecast. ”

My comment:  Take careful note of the portion that I underlined in the first sentence.  You will want to come back later and read it again.

Now Let’s Look at Their Description of the Numbers

From Page 7, Third Paragraph:

“Staffing projections for General Fund departments do not include any positions required to implement new programs or enhance service levels. However positions have been included to address service demands arising from newly annexed areas, a growing population, and the opening of new facilities.”

My comment:  Those sentences sound a little fuzzy.  But not nearly as fuzzy as the numbers.

Now Let’s Take a Look at the Numbers…Click each link below:

Five Year Staffing Projections – Page 8

Five Year Staffing Projections – Page 9

Here Comes the Brain-Twister…Do These Numbers Make Any Sense?

The following City departments are projected to see no change at all in staffing levels for six years in a row, including this year:

Animal Services, Fire (Non-Sworn), Health & Human Services, Parks & Recreation, Planning & Development Review…(Really?), Police (Non-Sworn), Austin Convention Center, Economic Development, Juvenile Case Manager Fund, Neighborhood Housing & Community Development, Parks & Recreation – Golf, Traffic Safety Fund

These City departments are projected to see no change in staffing levels over the five years from 2015 – 2019:

EMS (Non-Sworn), EMS (Sworn), Austin Transportation –  Parking Management, Austin Transportation – Transportation Fund, Aviation, Child Safety, Public Works – Capital Projects Management, Public Works – Transportation Fund. (Note: The last two departments each lose staff from 2014 to 2015)

Of course, there are several departments that are projected to see increased staffing levels. These include the new downtown library, police and fire, Austin Energy and the Water Utility. The Water Utility’s staffing numbers look pretty disturbing, considering the fact that Austinites have heeded the call for conservation and are using less water.  Even further usage reductions are forecast over the next five years.  And yet, the Water Utility plans to add 136.75 new positions, second only to the 187 for new police officers.  The forecast suggests that the drought will continue, but it blindly assumes that water restrictions will remain at Stage 2.  For an explanation of the projections for the Water Utility, see Pages 29 – 31 in the City report.

What’s the Bottom Line for You As a Taxpayer?

How About a 33.6% Increase in City Property Tax Revenue…

The official projections for tax, utility and fee increases do not look good.  On Page 17 of the report, you will see that home appraisals are forecast to increase by at least 5% each year.  You can see the ominous progression of increasing taxes here:

Five Years of Escalating Tax Increases

The most shocking thing about this chart is that it shows Austin’s total property tax revenue increasing a staggering 33.6%, from $355.3 million to $474.8 million!  The tax rate, which would cost you more even if it stayed the same, is projected to steadily increase. Then you have to pile on utility rate increases, a parade of add-on fee increases, and all the other area taxes that you pay.  As scary as that sounds, the stark reality is probably much worse.  If anyone believes the projections that all those City staff positions will remain flat for five to six consecutive years, can we talk about that bridge that I have for sale?

The best solution to this strange conundrum of numbers that don’t look reliable is to work with our new City Council candidates and ask them to commit to much better transparency and accountability in the whole process of budget, planning, audit and finance.  The oversight role of the City Council and their authority over the budget is crucial.

Beyond that, the current City Council should take a good hard look at whether they should continue to rely on the current City Manager, or send him on his way and appoint an interim manager to take his place.  A six month internal transition before the new City Council takes office might be the best first step to getting the City’s fiscal house in order.

Coming Monday: A Big Set Of Numbers That Don’t Add Up – Except To A Disaster Waiting To Happen

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By Bill Oakey – May 16, 2014

If I had kids in the house, I would be having a good little talk with a fifth grader.  Sometimes fresh young minds can see things that are right in front of them that we can’t see.  In this case, I have stared at the same set of numbers several times, only to discover that they don’t add up.  The passing of the weekend will not cause those numbers to make logical sense, any more than rubbing my eyes and looking at them again could.

But I can tell you one thing for sure….

You are going to find them very interesting.

So, bookmark this blog.  If you are using a portable device, add it to your home screen as an icon.  (That nerd sitting next to you can show you how to do it).

Have a good weekend.  Don’t use too much water.  And don’t forget to pay your electric bill.

Try listening to the new album by Martina McBride…You won’t be able to listen to “Come See About Me” without wanting to get up and dance.

See you on Monday.

Could Austin Be Headed For Another Budget Surplus?

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By Bill Oakey – May 14, 2014

Just two months ago, Austin taxpayers narrowly escaped a stance by some City Council members to dip into a $14.2 million budget surplus.  Thanks in part to the efforts of readers of this blog, citizens spoke out and the money did not get spent.

Now it appears possible that we could see an additional budget surplus, just in time for the annual budget discussions that will commence early next month.  The new surplus could arise from stepped up efforts to reduce the high number of staff vacancies still remaining in the current fiscal year’s budget.

In my message to the City Council on Monday, I urged them to cut back and regulate the number of unfilled positions.  Since then, even more information has come into focus on that issue.  The City Manager and his top budget staff have been very inconsistent in their handling of vacancies, and in their response to Council Members’ attempts to cut taxes by reducing them.

Last Summer’s Battle of the Bulge In the Budget

A great boxing match took place late last summer, when Council Member Mike Martinez took center stage on the issue.  See the Austin Chronicle article, “City Budget: Open Season On Vacancies,” from last August 23rd.  Martinez stepped into the ring, gunning for victory in one of the final rounds in the annual face-off with the staff.   But it may not have been an even fight.  Martinez was outnumbered and out-maneuvered, or so it seemed.  One by one, budget staff came out swinging, and they parsed the 930 citywide vacancies into categories.  Blow after blow was struck at the heart of any attempt to reduce the cost of the unfilled jobs.

The math that was used in that hot summer standoff conflicts with a new spin on essentially the same set of numbers, just five months later.  The official line from last August was that the City’s overall average vacancy rate was 5% to 8%.  On January 10th of this year, the same City Manager (Marc Ott) cited a vacancy level of 900 positions and labeled that number “quite frankly, far too high.”  This time a new kind of math pegged the vacancy level at 9.7%.  (A relevant paragraph from the City Manager’s January memo will be attached to the end of this posting).

But here’s what’s interesting.  When you peel back the surface coating of the numbers and look a little deeper, suddenly you see a whole new picture.  Between October 1st when the new budget took effect and January 10th, the needle had barely moved on the total number of vacancies.  So, at that point, a little over 25% of the fiscal year had passed without any of those staff funds needing to be spent.   Even if all of the vacancies were filled by February 1st, only two-thirds of the fiscal year would be left by then.  So, what happens to the leftover budgeted funds?

A hint can be found in the January City Manager’s memo…

“Long-term vacancies not approved to be filled will be eliminated or repurposed in the upcoming budget process to meet other priorities.”

We can only wonder how much money is actually left over and “repurposed” each year.  Other cities have established reasonable levels of staff vacancies.  Portland’s is about 5%, according to this article in the Portland Oregonian.

What Will It Take to Finally Fix the Problem?

What will it take for all of this money that is being juggled around to be accounted for in a more transparent manner?  The answer can be summed up in one simple statement:

The City Council must exercise its authority over the budgeting process, and not concede another inch on a prudent set of fiscal directives to the City Manager.

Here are a few friendly suggestions on how they might go about doing that:

1. Ask for a full accounting of all unspent funds from vacant positions from all City Departments.  Consider asking for regular updates on a quarterly basis.

2. Label those funds and post them to the City’s website on a chart that the citizens can see.

3. Include in the same chart a listing of surplus funds from the previous budget from increased sales taxes and user fees.

4. Establish a clear policy on how leftover funds from vacant positions can be allocated.  The Council may decide that some departments have backlogs and should receive additional funding.  Or that some funds should be transferred to one of the utilities to hold down a rate increase.  Or set aside to reduce taxes in the next budget.  But, however the process is set, it should be much less fuzzy and squiggly than the system we have today.

The bottom line now is that we should be in line for a budget surplus in excess of the $14.2 million that was announced in March.  Hopefully, we will be allowed to see exactly how much it is and where it ends up.

The City Manager’s January Budget Memo

Below is the key paragraph on staff vacancies from City Manager, Marc Ott’s January 10th memo to Department Directors.  The subject of the memo was “FY 2015 Budget Planning.”

“Another area that we must closely examine in the months ahead is how we manage and budget for our vacant positions. As of the end of December, there were more than 900 vacant non-uniformed positions across City departments. This represents a City-wide civilian vacancy rate of 9.7%, which, quite frankly, is far too high. Nearly 400 new positions were approved by Council back in September with the adoption of the fiscal year 2014 Budget. It is imperative that these new positions be filled as soon as qualified candidates can be identified so that we can fulfill the many new initiatives and service enhancements to which we have committed. With respect to longer term vacancies, effective immediately, all positions vacant more than 180 days will be frozen and will require both ACM and City Manager approval to fill. This review process will remain in place at least through the end of June, when it will be reevaluated. Long-term vacancies not approved to be filled will be eliminated or repurposed in the upcoming budget process to meet other priorities. Moreover, I have directed budget staff to reassess how we budget for vacancies with an eye towards better aligning budgeted vacancy savings with actual long-term trends.”

New Survey Says It All – Austin Is Headed For Very Serious Trouble

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By Bill Oakey – May 9, 2014

Yesterday veteran Austin pollster, Peter Zandan, released the results of a survey called “The Zandan Poll: Voices of the Austin Community.” These words rose from the page upon my first glance at the report:

65% of Austinites are dissatisfied with the cost of housing

59% of them are dissatisfied with the cost of living

You can read a summary of the survey here.  And see the full report here.

Not surprisingly, the typical media response to the survey incorporated lots of spin.  That was easy to do because there were plenty of “feel good” responses about Austin as a city.  KUT’s website trumpets the poll with the cheery headline, “Austinites Optimistic About City’s Future.”   Two important words were left out of that statement.  A more accurate telling would read “Very Young Austinites Optimistic About City’s Future.”

Even the numbers for the respondents aged 18-35 are far from universally rosy.  67% of them say that Austin is headed in the right direction.  But 19%, almost one in five, say that the City is headed down the wrong track.  Among the 35+ age group, the numbers are most disturbing.  Only 46% say that we are headed in the right direction, while a whopping 37% say that we are moving down the wrong track.

Mr. Zandan should be commended for producing this survey at his own expense.  His goal was to start a conversation about where Austin is headed and the challenges that the community faces.  No amount of media spin can wipe away the underlying concerns about affordability.  Traffic and water are highlighted as well.  The most positive results from the poll indicate that people love Austin and would like to remain living here.  They would recommend our city to their friends as a fun place to live.  And, yes, Austin’s “weirdness” also fared well in the survey.

It is unthinkable to me that anyone with the power of the pen would not publicize all of the concerns expressed in such an important report.  The trend lines for Austin’s future do not look very encouraging.  If 59% of Austinities are not happy with the cost of living today, how in the heck are they going to deal with it five years from now?  We have two basic choices.  We can either pretend that Austin is one big party town, go out and enjoy the drunken binge of full throttle growth and festival fun, and not worry about the huge hangover that looms over it all.  Or, we can step out of denial and admit that bold, innovative, and decisive action is our only hope to avoid some sort of highly volatile boom and bust cycle.

As I have stated before to our elected officials and those seeking to replace them – your most ominous opponent is the quiet inertia of business as usual.  The path that we are on now is literally unsustainable on many levels.

The young hipsters of today’s Austin will be looking for houses to raise their own families in a few short years.  They will step across the line of that survey into the 35+ age column.  What fate will await them at that point?  Perhaps our status quo growth model will try to push them out and replace them with a fresh batch of new young hipsters.  But by that time, the prospective newbies may have already seen the handwriting on their virtual reality screens.   Those may show scenes of a few white-gloved ladies on Congress Avenue, escorted by guys who just stepped out of their lamborghinis.  But the screens may also show an eerie calm on the street.  Where did the rest of the people go?  And who put those boards on all the store windows?

Does Anybody Know a Rocket Scientist? We May Need Their Help

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By Bill Oakey – May 7, 2014

Nobody ever said that fighting City Hall was easy.  I just happen to be bold and / or crazy enough to try.  The victories are few, but very sweet.

This time I’m asking for a little help – from a rocket scientist.

Here’s the deal.  One of my proposed reforms has languished for nearly 30 years.  Everybody should get one proud notch on his belt in a lifetime.  So, here’s how I’d like to earn mine.

Win a reform of the City Council agenda process, so that citizens don’t have to wait six hours to speak at public hearings.

I lost that battle in 1987.  But I stood my ground and fought valiantly, sitting in the Council chambers waiting hours for my turn to speak on the proposal.  The Metro section headline in the next morning’s paper read, “Agenda Reform Proponent Kept Waiting.”

And I’m still waiting, nearly 30 years later.

So, I’m ready to call in a rocket scientist for help.  Perhaps she could measure the trajectory of each weary citizen as they navigate the voyage to and from the City Hall restrooms.  Or, she could track the velocity of the motorized wheelchairs that disabled citizens move about during their extended stays into the wee morning hours.

Maybe she could even stand beside me and help propel me to my proudest City Hall victory of a lifetime.  It would indeed be a sweet victory.  Not really for me, but for the next generation of City Hall visitors who want to participate in making Austin the best place to live.

Should the City Council Wave Goodbye to Special Event Fee Waivers?

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By Bill Oakey – May 5, 2014

Once upon a time when Austin was a much smaller city, our local officials did not hesitate to waive the fees for all kinds of special events for things like parades and festivals that benefited the community.  These fees cover everything from park maintenance to permits to security and law enforcement services.  Today, as Austin has grown into an international destination, the cost of managing crowds and handling a host of other festival related functions has grown exponentially.  Many of the fees for those services are still being waived, even for companies that are not dedicated to charities.  And much of the cost to do that comes right out of our property tax bills.

At the April meeting of the Austin Neighborhoods Council, Police Chief Art Acevedo received a thunderous round of applause when he made an appeal for canceling future fee waivers for the SXSW Festival.  This year’s tab for those waivers came in at $756,000.  As Acevedo pointed out, the Police Dept. must compete with other departments for scarce budget dollars.  And when funds are not available to pay for extra police at major public events, neighborhood patrols must be reduced and crime intervention is placed at risk.

Is It Time for a New Special Events Fund?

Last week City Council Member Kathie Tovo put forth a comprehensive and quite innovative resolution to create a new Special Events Fund.  Tovo’s co-sponsors on the resolution were Bill Spelman and Mike Martinez.  This new fund would either supplement or potentially reduce large fee waiver draws from the General Fund, thus saving taxpayers some money and eliminating gaps in funding for parks and police.  Possible sources for the new fund could include ticket surcharges for event patrons, as well as expenditures from the hotel and bed tax.

There are several components of the adopted resolution that reflect a wise effort to plan and review the concept carefully.  These include soliciting input from citizen boards and commissions, and asking City staff to review special event procedures from other cities.  The specific aspects of both large and small events will be reviewed.  In addition, the resolution asks for new guidelines and a matrix to evaluate fee waiver applications for large events.  You can read the resolution here.

It is not clear from my initial reading of the resolution whether the proposed fee waiver guidelines in combination with the new Special Events Fund would result in eliminating most of the waivers.  That certainly appears to be the goal.  But here’s my question.  If enough money is generated from the new fund, wouldn’t the festival organizers apply for a portion of those funds and then use the money awarded to pay the required City fees?   Ticket surcharges turned over to the City would also negate the need for waivers.  I plan to address those questions and some others at a City Hall meeting next week.  It looks like some taxpayer relief may be finally headed our way on this issue.