By Bill Oakey – May 13, 2014

I was enjoying the gentle breeze while waiting at a table outside Jo’s on Second Street last week when City Council Member Mike Martinez showed up for our meeting.   He introduced two new critical words into the Austin affordability discussion…

Vacant Positions

Mr. Martinez said he was concerned that City Manager, Marc Ott, had left too many vacant positions in the City Budget.  How many is too many?  Well, how about 900 of them?

As I mentioned in my recent blog posting, the City Council has a big problem on its hands, going into the new budget cycle that begins in earnest within a couple of weeks.  They need to double down on affordability if they expect to gain any hope of confidence among beleaguered taxpayers.  So, what are they doing with 900 vacant positions on the books?

Such a large number of vacancies can add up to quite a bit of money.  And once it’s in the budget, those funds can easily be shifted to other purposes by the individual departments.  As it turns out, this very same issue began brewing in the City of Honolulu in 2010.  In their case, it was 1,000 vacant positions that added up to almost $40 million.  See “City Budgets $38.8 Million for 1,000 Vacant Positions” in the Honolulu City Beat.

There was great debate in between the luaus, and it took their city three years to resolve the issue.  Questions were asked about why that much money was “borrowed” from the taxpayers, and whether some of it was being used as a slush fund.  After all, once money finds its way into the budget, people can always find a way to spend it on something other than what it was originally intended for.  As a veteran accountant, I can tell you that one can accomplish such a switch by changing an object code, a cost center, or some other designated code.

Last year Honolulu abandoned the practice of allowing individual departments to “manage” large sums of money budgeted for vacant positions.  Those duties were assigned to a centralized staff person, who now disburses unused funds for approved hiring purposes.  The funds are held in a provisional account.  And they don’t keep $40 million on hand.

While at Austin City Hall yesterday, I asked City Council Member Kathie Tovo to please look into this issue.  I also asked her one important question.  Can departments spend money allocated for vacant positions on other things?  Her answer was simply…

“Yes.”

I have also learned that some members of the City Council attempted to address this problem during last year’s budget deliberations.  As of last August 1st, there were 934 unfilled staff vacancies, with only 76 of them posted for applicants to apply, according to the Austin Business Journal.  So, in September the City Council approved the new fiscal year 2014 budget.  Some of them thought they had fixed the problem with the huge pile of taxpayer money being posted to the books as “unfilled positions.”

Come January 10th, City Manager Marc Ott sent a memo addressed to all departments heads.  In it, he states that there were no less than 900 vacant positions, and he concedes that is “quite frankly, far too high.”  What happened to the “fix” that the City Council thought they had done?

I concur with the Honolulu Council Member who had this to say about huge piles of taxpayer money being stacked up for vacant positions and potentially being spent for other purposes:

“In essence, it’s a no interest loan in favor of the city,” said Anderson. “The city is saying, ‘We took your money this year, no we didn’t use it, thanks a lot for letting us borrow it, and no you can’t have it back.”

As of today, we do not know what has happened to the extra money that was bottled up at Austin City Hall in early January.   But we do know that we paid for it in the property tax bills that we sent to the Travis County Tax Office.

I have asked the City Council for a full accounting from every department on the status of all funds originally allocated for vacant positions since the beginning of this fiscal year last October 1st.  And I have also asked them to consider adopting the Honolulu model of assigning the duties of disbursing vacant position funds from a centralized office.  That office should report the status of these funds to the regular meetings of the City Council’s Audit and Finance Committee.

I am reminded of the fishing trip that my parents took us on when I was a young child.  As we were about to leave the driveway, my mom asked me to do something.

“Billy, please run back in and grab the thermos bottle.  And rinse it out first.”  When I pulled the thermos bottle out of the cupboard and popped the cork off, I gagged and took a few steps back.  Somebody had put it away the last time when it was still full of milk.  Needless to say, it didn’t smell very good.

Something doesn’t smell right today down at City Hall.  And somebody needs to do something about it.