A Day of Dickering

Bonds Take Center Stage Over Budget

by Jenny Staff and Mike Clark-Madison

At its marathon work session on Wednesday, August 5, the City Council was supposed to exchange one protracted headache - authorizing the lineup for the September mega-bond election - for another, the annual Long March toward adopting a new city budget. But as the day wore on, it appeared the council would be stuck with both headaches at once. Indeed, councilmembers and watchers seemed to pay scant attention to the presentation of the overall 1998-99 budget proposal, and the more detailed presentation from the first round of city department heads, because their minds were on the last-minute political arm-twisting and hand-wringing over the bonds. We'll have more details on both fronts next week, but for now, here's what transpired Wednesday.

The Budget

Wednesday AM: Deals are being brokered in the cafeteria, in hallways and in side rooms throughout the Town Lake Center.

photograph by Kayte VanScoy

The $1.55 billion 1998-99 proposed budget, stressed City Manager Jesus Garza, "tries to accomplish what the council wishes ... to meet the diverse needs of our dynamic and ever-growing community." (That growth includes what the city manager referred to, without apparent irony, as last year's "routine" annexations.) You may be happy to know that, as "customers" (not "citizens"), we are all very satisfied, according to the de rigeur surveys and focus groups, with the city's performance in these challenging times. "Austin is moving in the right direction," Garza said, "and we want to maintain that course."

With a $5 billion jump in the property tax rolls and an 11% projected hike in sales tax collections, there's little pain in Garza's budget. The one major cut to have spawned public outcry in the month since the budget was previewed - the slashing of hours at the Austin History Center - has now been reversed. So, as budget cycles go, this one should pass without much citizen outcry.

But there deserves to be citizen interest, since the fiscal 1999 budget includes a welter of big, new stuff whose specifics are pretty darn vague. Starting at the top of the budget batting order, there's Austin-Bergstrom International Airport, scheduled to open in May 1999, which is such an unknown budget quantity (it will both cost more and earn more than Mueller, but how much?) that the Aviation Department labeled its budget figures "guesstimates."

Then there's the Austin Convention Center expansion, which is barely more than a talking point now, but which by this time next year will be a visible hole in the ground. There's the Smart Growth Initiative, the Downtown Initiative, the new Housing Initiative, the Homeless Initiative, and the list goes on. And this doesn't include the fiscal ramifications of any of the proposals for the September bonds.

Right now, the will of the council is that all this initiative-ing will be free of discernible fiscal impact, but that doesn't normally happen. Though Garza took pride in holding the line on property taxes - the new budget sticks to the effective rate, which is 51.42 cents per $100 assessed valuation - the same can't be said for other fees and rates.

Water and wastewater rates will go up 5.4% overall, their highest jump since 1989, mostly (the utility says) to pay for the land acquisitions authorized by Proposition 2 on last May's bond ballot. The drainage fee, which supports the Watershed Protection department, has been kept constant for two years, but is slated to jump next year by 21%. And - in one of those minor fee increases that manages to attract everyone's interest - the airport's taxi surcharge is going up from 50 cents to one dollar.

At least some of the fiscal muddiness attached to the panoply of new council initiatives derives from the still-turbulent status of the September bonds. And even projects that don't directly relate to the bonds - like the Convention Center - are likely to go unexamined unless, or until, the bond controversies resolve themselves. Which leads us to Part II of the August 5 biathlon.

The Bonds

The theory about peace and harmony coming to reign indefinitely at City Hall, floated most recently in this very space, has turned out to be premature. What looked like the apex of goodwill for this council in the Cedar Avenue agreement turned out to be the calm before the storm, as debate over the contents of the bond package dissolved the council into two warring factions. The recent 7-0 majority that's Smart Growth-ed its way into the hearts of most Austinites turned on itself, with each side charging political and ego plays on the part of its rivals. At issue was a topic that, in days gone by, regularly caused a ruckus in Austin city politics: the preservation of green space and its development into city parks.

The sides were drawn over the weeks leading up to this day: Beverly Griffith, Gus Garcia, and Willie Lewis supported the full package recommended by the Citizens Bond Advisory Council (CBAC), in particular an ambitious program to purchase land for "Destination Parks" and greenways around town. On the other side, Daryl Slusher, Bill Spelman, and Mayor Kirk Watson were anxious to add a few new projects in Public Works and Public Safety, and willing to sacrifice some of the Destination Park program to get there. Jackie Goodman had emerged as the swing vote, but was keeping mum about her feelings. The day of negotiations that preceded Wednesday's work session saw several versions of the proposed bond package sailing back and forth between the two divided camps (see chart); both sides were said to have exaggerated their positions in order to allow for negotiating room, with the effect of widening a previously minor divide between them.

It turned out to be a cliffhanger, too: Unable to come to an agreement, the council adjourned the meeting without a decision, and the great bond controversy of 1998 lived to fight another day. Herewith, a blow-by-blow account:

All Morning: City Manager Jesus Garza is presenting the proposed budget to the City Council, but the real news is unfolding outside the room. Deals are being brokered in the cafeteria, in hallways, and in side rooms throughout Town Lake Center. Councilmembers and aides huddle in almost every possible permutation, hoping to make a deal before the bond package comes up on the council agenda. If the bond players can reach an agreement in private, consensus went, the council won't have to air the kind of dirty laundry that might provide ammunition for any potential opponents of the bond issue. But the consensus they're seeking never arrives.

2:30pm: About half an hour into the afternoon session, councilmembers Daryl Slusher and Bill Spelman unveil their newest counterproposal, over which they and their aides (along with the mayor's office) had labored late into the night Tuesday in a makeshift War Room set up in Spelman's office. (Mayor Kirk Watson, who figures largely in the development of the counter-proposal, remains silent and scribbles diligently on a yellow legal pad.) The plan, billed as an effort to increase investment in traffic improvements and park development, while keeping the bond package within the financial limits proposed by the CBAC, is deemed controversial for what it leaves out: primarily, about $8.5 million of the much-talked-about $45 million that the bond committee recommended for greenways and destination parks. The counter plan adds to the bond package $15 million for traffic light synchronization and almost $30 million in road reconstruction, as well as $22 million for the combined emergency center collaboration with county and other governmental entities. The plan also invokes a never-before-used city financial policy which recommends that 20% of capital projects be financed with cash from the general fund. Essentially, this is the same plan that had been released previously; it now competes with a Griffith/Garcia/Lewis proposal which includes just about all the new items as well, but with only very minor cuts to the CBAC program.

3:15pm: Beverly Griffith begins questioning Parks and Rec Department staff, seeking to demonstrate that the destination parks should be fully funded with the originally proposed $45 million. Prominent among her reasons is east-west equity. The west side currently has 30,000 acres of park and other preserved land, she says, while the Eastside has only about 5,5000 acres. Quoting Save Our Springs leader Robin Rather, Griffith admonishes the council that "no generation has ever been sorry that the previous generation bought land." Griffith asks why the Slusher/Spelman/Watson proposal (which seeks to increase funding for park development) cut $2 million in development funds from Colorado River Park, which Griffith says is considered the "last great urban park in America."

4pm: Parks and Rec director Jesus Olivares comes under cross-examination. The dispute centers on how to find the appropriate balance between land acquisition and parks development, and which strategy would best attract development to the Eastside, specifically to the desired development zone. Griffith advocates preserving "a spine of nature in what's going to become a highly industrialized area." Buy the land now while it's available and affordable, she says; it's not going to get any cheaper. Spelman opines that the bonds ought to include enough money to develop the parkland the city purchases: "You ought to have parks at the end of [the life of the bonds], and not vacant lots." Parks don't have to be developed all at once, counters Griffith. Zilker Park wasn't, she adds, pointing out that the pool was bought in 1917, followed by acquisition of the rest of the park in 1932-33. And, Griffith says, development of the park didn't even begin for another five years.

4:45pm: Watson breaks his silence, assumes his trial lawyer persona, and grills Olivares, leading him through a series of questions designed to show that the city's bond money is best spent on parks we can develop now instead of later. The two kick around the development needs of the Colorado River Park, and agree that six years after its purchase, citizens wanted more than just basic development on the site. Watson surmises that any new destination parks acquired by the city would be held to similar standards.

5:15pm: The cookie trays are depleted and the complimentary beverage bins empty of everything but Pepsi and Sprite, and the council recesses one more time. Some members retreat to cozy corners with advisers and sympathizers; others move the dais debate out into the hallways to fight another round. And members of the media and other council watchers, dazed and confused, wander Town Lake Center, searching for clues as to how it will all turn out.

6:30pm: Following comments from city staff on the proposed combined emergency center, the council gives up and resolves to take up the bond package again tomorrow at the regular council meeting; having cleared the rest of their agenda of all but the consent items, they will no doubt hammer out a bond proposal by the end of the day. More next week.

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