Tag Archives: cost of living

The Human Face of Austin Affordability

By Bill Oakey – April 14, 2014

This all happened quite unexpectedly.  I stopped into a local restaurant for a nice hot breakfast and to kill some time before a meeting at City Hall.  It was Monday, so just to make some idle chat, I asked my server the simplest of questions, “How was your weekend?”

Her response told me something about Austin affordability that I must have known somewhere inside of me.  But in the next few moments it was all out in the open.  She will remain anonymous, but she is very real.  And of course, there are many others like her.

“I just finished my 13th straight day of working,” she commented.  “I have two jobs, and on each of those 13 days, I worked 10 hours.”  Needless to say, she did not have the kind of fun weekend that you might read about in the Chronicle.  I then asked her if she had gotten a chance to check out South By Southwest when it was in town.  That’s when I discovered that hers was a story that needed to be told.

Yes, she made it to a music event on the East Side, but somehow she injured her ankle and could not find any convenient transportation back to where she lived.  I had read about the multiple-hour waits for cab rides.  In this case, the only faster option was a pedicab.  For a cool $60.00 fare.

I decided to email her some additional questions.  She told me that she moved here from Toronto in 2012.  Here are some excerpts from her reply:

“Affordability is going to be an issue anywhere you live, but I think Austin is feeling some very strong growing pains. The sudden massive increase in demand for housing, combined with a seeming lack of oversight and rent control is one of the largest issues I’ve witnessed.  Everyone I know who lives in an apartment complex faces yearly rent increases. There seems to be no limit to how much landlords can raise the rent.  Most of my friends have had to move out due to such increases.”

“My other major issue is transportation: the recent changes made by Cap Metro have been very negative for me. I live near S. Congress and Ottorf, which has seen a decrease in service for the local route and increased service and pricing for the express route, as well as a detour in the route.  Basically, I’m forced to pay more money for decreased service on a route that takes me out of the way I used to take.  It’s a significant price increase, too.  A $30 monthly pass used to get me onto any bus.  That’s been increased to $33 but service has been deceased so much that I’m forced to pay $49.50 for the less convenient but necessary premium pass.”

“Other than during election time, I don’t really keep track of local politics.  Mostly because it’s kind of depressing.  It seems like Austin has been sold to developers to do what they want with it.  I fully support creating more housing.  There’s obviously a strong demand.  It’s just too bad that the only buildings going up are hotels and million dollar condos.  It’d be nice to see more housing go up that is meant for average Austinites.”

“A final thought on affordability – Austin is known for being an art hub.  It’s a place where artists can work as a bartender/server/barista and still focus on their art.  Instead of going to new York or L.A and struggling all the time to make ends meet.  Austin provides an environment that is encouraging and livable.  A rising cost of living will drive that community away from Austin, taking away a big part of the city’s character.”

If our local officials do not pay enough attention to what longtime residents have to say, perhaps they will take note of how our city looks to some of the newcomers.  There is a human face behind all those demographic facts and figures.  And she casts a long shadow over Austin’s uncertain economic future.

Advertisements

A Possible Breakthrough for the City’s $14 Million Budget Surplus

By Bill Oakey – April 7, 2014

In the middle of the night, an idea came to me for the $14 million budget surplus…Transfer it to the Water Utility to help cover their severe revenue losses.This could help the City in several ways:

1. Protect ratepayers from high rate increases as an ironic “punishment” for water conservation.

2. Sustain or hopefully improve the Water Utility’s AA- bond rating from Fitch Rating Service.

Consider this quote from the Fitch Bond Rating Service dated June 3, 2013:

“INCREMENTAL DECLINE IN RATE AFFORDABILITY: The city’s water and electric utilities maintain autonomous rate-setting authority. However, AWU’s combined rates are somewhat high relative to income levels, and moderately-sized planned rate increases needed to boost financial performance could ultimately lead to rate fatigue.”

And this quote, especially the last clause in the last sentence:

RATING SENSITIVITY

“IMPROVED FINANCIAL METRICS: The continuation of AWU’s efforts to steadily improve its financial metrics will be critical to maintaining the current rating. Fitch considers AWU’s stated financial targets to be positive, particularly the improved reserve levels, and any deviation in achieving its financial forecast over the next few years will result in downward rating action.”

Here is a link to the full Fitch rating statement:

http://www.businesswire.com/news/home/20130613005835/en/Fitch-Rates-Austins-TX-611MM-Water-Wastewater#.U0KQrSe9KK0

The question now is whether transferring the money from the City’s General Fund to the Water Utility is doable.  It is perfectly legal to go the other way.  When the utility makes a profit, they routinely transfer part of it to the General Fund, just like Austin Energy does.

Stay tuned for updates on this important affordability development…

AISD’s Financial Quagmire – Is This Their Perfect Storm?

By Bill Oakey

October 6, 2013

You have probably seen the news reports that AISD has lost student enrollment this year.  They lost around 1,200 students for a variety of reasons, most notably the lack of home affordability in Austin.  The median home price here is the highest of any major city in the state, at $227,600.  That figure is very misleading however, since so many central city neighborhoods haven’t seen home prices that low in about 20 years.

Where Have Urban Austin’s Children Gone?

District officials should have seen the enrollment drop coming, but instead their demographer predicted a 250 student enrollment increase.  Perhaps AISD bureaucrats should consider reading an Austin affordability blog.  The migration of families with children to the outskirts of Austin is nothing new.  We all witnessed the plans for closing Zilker Elementary and some other schools just two and a half years ago.  At that time, the Austin American-Statesman ran a captivating story entitled, “Where Have Urban Austin’s Children Gone?”

Neighborhood parents rose up to successfully protest the school closings, but the handwriting was on the wall.  Then there is the whole question of the reputation of Austin schools and where people choose to live in hopes of finding the highest quality schools.  Affordability plays a wicked role in that battle, since some of the most affordable homes are in sections of town with low student achievement. On top of that, there has been a growing trend of low-income families fleeing to the suburbs because of high inner-city housing costs and high property taxes. But increasingly, more and more middle class families are leaving for the same reasons. Austin is fast becoming a destination for luxury homeowners, with fancy condos and townhouses mixed in with oversized McMansions.

A Legacy of High Spending and Top-Heavy Administration

In my taxpayer advocacy days of the 1980’s, I ofter referred to AISD as the Austin Inefficient School District.  I clearly remember that they typically maintained the highest per student costs in 8 out of 11 categories among the largest districts in the state.  Just four years ago in 2009, I met with then superintendent Pat Forgione and a couple of the board members to discuss AISD’s property tax rates.  That year they called for a “tax ratification election,” which is a State sanctioned local option for school districts to ask voters for a supplemental property tax increase.  This brings the total annual increase above the normally allowed cap.

In my meeting with the superintendent, I was told that the tax increase was necessary to keep teacher salaries competitive.  And that if those salaries ever fell too far behind,  it would be nearly impossible to catch up, given that the State Legislature does not fund schools adequately.  The local tax increase option passed with no organized opposition.

Fast forward to 2013.  We are clearly not living in the same Austin anymore.  The voters’ surprising defeat of two out of four school bond propositions in the spring was not the first cost related AISD issue to hit the newspapers this year.  Back in January, the American-Statesman reported that the number of administrators with six-figure incomes has increased 63% in the last five years.  A large chunk of that occurred in a single year, when the number of six-figure bureaucrats jumped 25% between 2012 and 2013.  It’s as if AISD feels compelled to join the private sector in extending the ever widening gap between rank and file workers and the privileged executives at the top.

The Winds Gather for the Perfect Storm

AISD teachers and staff did receive a pay raise for the new 2014 fiscal year that began this month.  However, the raises are not permanent since the funds were drawn from reserves.  So, how can the district restore funds for teacher pay raises next year?  The answer is another tax increase election on top of whatever regular tax increase would come in the 2015 budget. Nothing much will be happening to spook taxpayers next fall, other than three overlapping bond proposals totaling at or above a billion dollars.

AISD faces a daunting financial quagmire in the coming years.  If student enrollment continues to decline, the revenue loss of $7,400 per student would trigger a confounding question.  What could they do abut it?  This year alone, the district stands to lose $8.6 million.  If high living costs and high taxes are driving families away, raising taxes even higher to cover their losses would only make the problem worse.

District Judge John Dietz, who presides over the highly complex Texas school finance lawsuit will resume the trial in January, based on new evidence.  The Legislature restored much of the school funding that had been cut in the 2011 legislative session.  The State has vowed to appeal any court decision that awards more money to the schools.  In fact, the school funding bill that passed in this year’s session was crafted precisely in a manner that would help win the appeal.

If AISD finds itself back to square one, with declining student enrollment and no local appetite for increasing property taxes, they could be headed for financial trouble.  This is not a good time for that to happen, especially since the recently elected school board ran in opposition to the management decisions and personality of Superintendent Maria Carstarphen.

We can only hope that the new board can muster the gumption to steer the district in a direction of leaner spending.  At the same time, they need to restore the confidence of parents that their children will receive a quality education, while fostering an administrative attitude that welcomes citizen input instead of arrogantly rejecting it.

Come and Relax In a Downtown Austin Hotel

By Bill Oakey

October 2, 2013

If you have friends or relatives who have not been to Austin lately, now would be a great time to invite them.  The Austin City Limits Festival runs for two weekends, beginning this Friday.

You should recommend a ten-day stay to your visitors.  The best downtown hotels are only charging $320.00 per night.  So, you could soak up some sun at the festival, which has very little shade, and relax in the hotel at night.  The room rate for the 10 night stay is only $3,200.00.

It is not too late to get a VIP pass for next weekend’s music fest.  This weekend is already sold out.  A VIP pass is only $1,050.00, so why not bring the entire family?  If you would rather enjoy platinum VIP passes, the kind folks at the festival will gladly accommodate you at 888-519-0382.  You will be pleased to know that I have already called to check on the pricing.  Platinum VIP passes are only $3,600.00 apiece.

To assist your friends and save them some time, I can advise you on the perks that come with each type of festival pass.  With the regular VIP pass, you get VIP parking, as long as you purchase a minimum of four passes, which comes to only $4,200.00.  The other perks include gourmet happy hours and air conditioned restrooms.

If you prefer the platinum VIP pass, you will enjoy flushable air conditioned restrooms, access to a VIP Lounge in a tent, plus on-site concierge service and highbrow seating.  A free shuttle from downtown is included, but parking is not mentioned in the offer.  These passes would be ideal for a family of four, since the total price would be only $14,400.00.

For your convenience, I have itemized the hotel and festival options below.  Keep in mind that single day festival tickets are not offered this year.  And since we’re talking about Austin, I assume that you would not be interested in any category below VIP status:

1. 10-Day Downtown Hotel Stay Plus 3 Day VIP Festival Pass

Single Person – Only $4,250.00

Couple – Only $5,300.00

Family of 4 With 2 Hotel Rooms – Only $10,600.00

2. 10-Day Downtown Hotel Stay Plus 3 Day Platinum VIP Festival Pass

Single Person – Only $6,800.00

Couple – Only $10,400.00

Family of 4 With 2 Hotel Rooms – Only $20,800.00

My sincere apologies for not getting this posting done soon enough for you to invite your friends to attend the festival for both weekends.  But you can ask them to mark their calendars for next year.  They can plan to bring a family of four to ACL Fest 2014, stay for 10 days and enjoy Platinum VIP passes for both weekends for only $32,000.00.  (Please be advised that this amount is based on 2013 rates and is subject to change).

Open Letter to Travis County Commissioners – Roads Alone Will Not Solve Problems in Precinct 4

By Bill Oakey

September 19, 2013

Amid the tumultuous debate this week over whether and how to fund road expansions in Southeast Travis County, a big question has been largely overlooked.  Will new roads address the broader concerns of the underserved, mostly Hispanic residents in Precinct 4?

Most of the discussion has centered around the hot button issue of whether the expansion of Kellam Road and Elroy Road stands as just another subsidy for the Circuit of the Americas racetrack.  This week, the Austin-American Statesman published two opinions suggesting exactly that.  Vance Facundo, an F1 fan whose social media forums draw 6,000 followers, raised several interesting questions.  He doubts whether the massive growth projections for the area will pan out, and even cited reasons why the crowds for upcoming F1 races may not be sufficient to warrant the large scale road expansions.

Then on Wednesday evening, the American-Statesman editorial board weighed in.  They declared that all other claims aside, rushing the roadwork though with an unorthodox approach that bypasses voters serves only the interests of the racetrack owners.

That brings us back to Tuesday’s Travis County Commissioners Court meeting and the emotional comments by numerous speakers.  One that stands out in my mind came from Brigid Shea, who is running for a seat on the Court next year.  She spoke directly to the needs of the residents of Precinct 4, many of whom live below the poverty line.  Using an earlier cost estimate for the roads of $25 million, she listed several social service program items and numbers of potential affordable housing units that could be obtained for that sum of money.

This afternoon, seeking to put all of the issues into perspective, I sent the following message to the Travis County Commissioners:

Dear County Commissioners:

I fully understand the difficult challenges you are facing with the Southeast roadway expansion issue.  My sense from watching Tuesday’s discussion is that most of you prefer a shared approach with other funding partners.  At the same time, Commissioners Gomez and Davis are justifiably concerned about the divide that has kept the underserved population in Precinct 4 waiting too long for services that are overdue.

Let me suggest that the shared funding approach for the roads will help make more money available to serve those needs.  It will also reduce or eliminate the public perception that the roads are just a subsidy for COTA. Like it or not, public perception carries over into election campaigns.  On that battlefront, reason and sound policy give way to negative energy.

The Court would do well to tap into the community voices across boundary lines who know and care about best practices for underserved populations.  We need to address job training, affordable housing, and post high school opportunities for the folks who need them.  No one understands that better than the many businesses, large and small, who need a well-trained and educated workforce.

So, please take this opportunity, while the subject of needs in Precinct 4 is in the air, to address the broader issues as well as the roads.  The more productive and successful we can be across the divide, the better chance we will have to eliminate it someday.

(Ladies and) Gentlemen, Start Your Engines!

By Bill Oakey

September 17, 2013

My second beer tonight came from one of those sampler packs, and unfortunately, it wasn’t very good.  But at least I got a chance to wind down from one of the wildest and wooliest public meetings I’ve experienced in quite some time!

The topic at hand was the F1 road expansion project for Southeast Travis County.  There were only a handful of citizens on hand to speak.  But it was quite lively.  If politics were defined as a spectator sport, today’s showdown at the races would certainly qualify as an event for the record books.

Let’s get one thing straight before going any further.  How did the vote turn out?  Did they vote to approve the roads using certificates of obligation, and to do so without voter approval? Not exactly.  Did they vote to approve Commissioner Bruce Todd’s alternate proposal to create a stakeholders committee to review the road needs and funding options and report back in six weeks?  Not exactly.

Well then, you might ask, what did they vote on?  All I can tell you is, I would sure like to know the answer to that myself.  I sat through the entire thing, and actually came away more confused than enlightened.  One thing is clear.  There won’t be another attempt at a decision until next Tuesday.

So, let’s start with the beginning of the meeting. Commissioner Margaret Gomez made an impassioned appeal for better road repairs and maintenance in Precinct 4, which includes the town of Elroy where the COTA racetrack is located.  She spoke eloquently of years of neglect for her underserved constituents there.  Even without the racetrack, she insisted, some of the roads are not safe for families and their schoolchildren.  After she spoke, a few of the family members, with toddlers on their laps, approached the table in front and addressed the commissioners with their concerns.

There was also a very lengthy staff discussion of the roads, which eventually included the total estimated price tag of $33 million.  Note that the price has gone up considerably since just last year, when most estimates never reached $20 million.  Expansions of Elroy and Kellam Road were the ones up for a vote.

All but one of the citizen speakers questioned the rush to approve the roads without first determining what other funding partners could be brought to the table.  Former Commissioner Sarah Eckhardt spoke intelligently and articulately as always about economic development and the need for “getting it right” on road projects as opposed to just getting it done.

One highlight of the afternoon was a near-meltdown of a personality clash between Gerald Daugherty and Cathy Olive, president of the Elroy Neighborhood Association.  She insisted that the section of Kellam Road up for discussion is actually part of Circuit of the Americas Boulevard.  After pausing to catch his breath, Daugherty backed away from a full scale fight with Olive, but it was obvious that a history of bad blood exists between the two.  Cathy Olive’s closing comment was that road crews were out there today “spreading black goo” to try to cover up cracks in the brand new pavement that was just put down before last year’s race.  She questioned the quality of the work done then, and wondered whether taxpayers can expect anything better the next time around.

My suggestion was that whatever health and safety issues involved in any of the roads in Precinct 4 should be dealt with on their own merits, and the necessary repairs and maintenance should be brought up to date as soon as possible.  As for the larger scale road expansions to benefit the racetrack, I recommended that the commissioners reach out to COTA for funding support.  I mentioned their repeated offers to share the costs during the period of January through April of last year.  To top it off, I asked them to approach COTA “at the highest levels” and ask them to become a major partner in other areas as well, such as sponsoring job fairs and a job training center.  I don’t think it would hurt to ask them to rebrand themselves as a high profile “good neighbor” corporate citizen.  Who knows, they might just go for it.  No one will ever know if they don’t ask.

Brigid Shea, who is the frontrunner for next year’s vacant seat on the Court, spoke up for the taxpayers and the need to keep the public’s ability to pay in mind when jumping into large scale expensive projects.  Both she and Susan Moffat recommended Bruce Todd’s proposal for a six week committee review.

Each commissioner weighed in with their thoughts.  It became clear right away that Commissioner Gerald Daugherty would vote with Gomez on her plan to approve a fast track approach to building the roads, through the Central Texas Mobility Authority.  Judge Sam Biscoe and Commissioner Bruce Todd stood in favor of a slower, more methodical approach with the stakeholders committee.  That left Commissioner Ron Davis as the swing vote.

Davis laid out his feelings about the longstanding community divide, which he stated was very much alive and well.  Like Ms. Gomez, he spoke of the need to equalize the treatment of an underserved population in Precinct 4.  He wanted to vote yes on the Gomez motion, but only if a shared funding plan would be included.

From that point forward, everything became about as clear as mud.  Commissioner Gomez made several attempts at a motion, each time followed with several attempts at friendly amendments.  And there was at least one substitute motion.  In the end they finally voted to come back and try again next week.

It’s what they actually intend to accomplish between now and next week that is not clear, at least not to me.  Bruce Todd spoke of merging his plan with Margaret Gomez’s and possibly getting a unanimous vote.  Hopefully, that means a cost sharing plan with several other partners besides Travis County.   When I was speaking, I asked one critical question.  Is it possible to use the fast-tracking approach offered by the Central Texas Mobility Authority with voter-approved bond financing?  The answer I was given was yes.  We can only hope that no one forgets that option when the horse trading resumes again next week.

Is Fiscal Responsibility a Taboo for Democrats?

By Bill Oakey

September 16, 2013

A recent article in the Austin American-Statesman grabbed my attention and made me ponder that question.  I thought we were long past the notion that cutting governmental budgets and making life more affordable for taxpayers was somehow restricted to Republicans.

Here’s how the conversation got started.  Travis County Commissioner, Gerald Daugherty, happens to be a Republican.  In the ongoing budget discussions at the Commissioners Court, Mr. Daugherty took the time to prepare an alternative budget.  His plan would only spend $5.6 million more than last year, and all of that money would come from increases in construction revenue.  The staff’s proposed budget would spend $40 million more.

Some of Commissioner Daugherty’s cuts may be considered controversial, such as eliminating an across the board pay raise for County employees.  But he also questioned the need to hire more middle managers in one department, and he listed quite a few items that he would either cut entirely or reduce in funding.  He made another list of items he would support if comparable cuts could be found in other places.  It’s a worthwhile gesture, even if not everyone would agree with some of the specifics.

The community-wide focus on affordability has elevated the need for politicians of both parties to work aggressively to hold down tax increases and look for innovative ways to find efficiencies.  A recent American-Statesman article about Commissioner Daugherty’s alternative budget raised the specter of old ghosts that apparently still haunt the Commissioners Court.  Some commissioners commented that Democrats could not be expected to match Daugherty’s enthusiasm for voting no on so many budget items, or campaigning to reduce taxes.

Well, here’s my response to that.  Halloween is coming.  It’s time to cast out the old ghosts from the past and think in terms of modern times.  Democrats are capable not only of practicing fiscal responsibility, but even doing it better than Republicans.  How about the fact that the United States was well on its way to eliminating the budget deficit under Bill Clinton? We had a robust economy.

Some final thoughts about Gerald Daugherty.  I am sure that I would not agree with all of his votes.  But then I would probably say that about most anybody else in office.  Commissioner Daugherty supports funding for social service programs to help the less fortunate in the community, although often at a lower level than the proposed budget.  But consider this.  He made personal site visits to every non-profit that requested funding under this year’s budget.  That’s something that even Democrats in his precinct position have not done.

So, when it comes to fiscal responsibility, as well as compassion, there are lessons that can be learned from both parties.  The most important one is that Austin and Travis County need more cooperation and focus on affordability.  And that means tossing out old fashioned notions about either party being able to lay claim to any strategy that will get us there.