Council: New Matrix for Economic Incentives

Adds wage standards to construction & development agreements

Council: New Matrix for Economic Incentives

The headline action at last week’s City Council meeting was the revision of the economic incentives program to require a living wage floor (currently $11/hour) and prevailing wages for construction workers on all incentive-based projects – that is, when companies have applied for economic incentives for locating or building in Austin.

To a degree, the 6-1 vote (only Mayor Lee Leffingwell dissented) was a foregone conclusion, as a Council majority had appeared to indicate support for the measure at the Tuesday work session. Moreover, more than 250 people had registered support for the proposal at Thursday’s meeting (not all of them wishing to speak), with only four in opposition. Notably, opponents included spokespeople for the Greater Austin Chamber of Commerce and of contractors’ associations, who fear a too-rigid incentives matrix might discourage companies from applying altogether; at the work session, Leffingwell said he believes the new program will be a “job-killer.”

That argument was rejected by the majority and by the proposal’s sponsor, Council Member Mike Martinez, who noted that companies have continued to apply for incentives even as this new policy took shape. During the nearly three hours of public testimony, overwhelmingly defending the proposal, representatives of the Workers Defense Project and Austin Interfaith spoke out in strong support, and the outcome seemed never in doubt.

But there was plenty of angst over the details, and specifically whether the wage requirements still might discourage some potential projects, to the particular detriment of difficult-to-employ, low-wage workers. CM Chris Riley suggested an amendment that would allow Council exemptions in particular cases; once that amendment carried, the whole package (which also includes in the matrix domestic partner benefits and health insurance, with potential exemptions) passed shortly thereafter.

Beyond the wage issue, Martinez himself had raised the question earlier about protecting small subcontractors from the burdens of upfront higher pay for their employees. Along with the incentives program revisions, Council passed a resolution directing the city manager “explore the feasibility” of a guaranteed loan program for small, minority- and women-owned businesses that might buffer higher wage scales in the incentives programs. It will be some time before staff returns with its findings on that possibility.

In other actions, Council finally killed the much-debated overnight trails bicycle pilot project, but not before rifts on the issue raised tensions on the dais. When the pilot was begun earlier this year, Austin Police Chief Art Acevedo was deploying overtime officers to patrol the trails, and rather than continue to “bleed overtime” funding Acevedo said he would soon reassign District Representatives (who interact with neighborhood organizations) to fill the gap. CM Riley, who had sponsored the project, and representatives of biking organizations had protested – to no avail – that the additional patrols were unnecessary. Council was getting publicly pounded for spending money on handful of nighttime bikers (as estimated by APD), despite arguments from bicyclists that many Downtown nighttime workers were using the trails rather than ride on dangerous streets at closing time.

The debate sparked a Council dispute over whether Council members were attempting to override management discretion about police staffing, and at Thursday’s meeting, Martinez (echoed by Riley) indirectly accused management (and perhaps sidelong, the mayor) of effectively sabotaging the pilot by insisting on unaffordable police patrols. Nevertheless, the program has been killed for now – with the possibility that a compromise proposal, that would open segments of the trails near particularly dangerous streets, may return to Council later.

Other Council actions: Council approved a new special events ordinance, but on first reading only, and with a new subcommittee to tweak the rules, not likely to return for at least a few months; approved finally the hefty increase in Austin Water water and wastewater impact fees on new construction (simultaneously eliminating the “desired development zone” standard); initiated an Asian-American quality of life review, with results and recommendations to be reported back in six months.

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City Council, Lee Leffingwell, economic incentives, Mike Martinez, Chris Riley

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