Naked City

Illustration By Doug Potter

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Bottom-Line Blues

Council members are predicting that the next month of budget deliberations will be the most boring in recent memory. Not because the draft budget produced by City Manager Jesus Garza already gives them what they want, but because all are resigned that no one is getting any allowance for pet projects. On Aug. 2, Garza told the council that the expected sales tax revenue for the coming year was again down 5.5% from original projections ($7.7 million from the city budget over two years).

Yet general fund revenue is still expected to grow this year, if only 2.7%, so why has the city found it necessary to go on a cost-saving binge? The truth is more than just a political slogan: Growth doesn't pay. As the economy softens, the infrastructure and public service expansions the city has been adding to keep up with mushrooming housing developments are beginning to outstrip the returns -- and next year, expenditures are expected grow more than twice as fast as revenues. Garza put the brakes on city spending in January, saving a reported $19 million, and council members are praising him for his foresight.

There is the perennial question of whether the city's electric utility, Austin Energy, could contribute more revenue to the general fund. The percentage of its revenue AE gives the city is at an all-time low -- reduced in recent years to help AE improve its bond rating -- and Austin's growth has pushed the utility's revenues up a healthy 6.4% this year. But AE wants the council to pass an ordinance to allow the utility to shield more of its financial information from public view, and Mayor Kirk Watson and the city manager have made it clear that they won't support additional transfers from AE until that work is done.

In June, the mayor dangled a list of projects and initiatives before the council -- affordable housing for Raul Alvarez, Colony Park for Beverly Griffith and Danny Thomas, library improvements for Will Wynn, neighborhood capital investments for Jackie Goodman -- that he said he hoped could be funded through some "creative" budget wrangling. Since the bulk of any untapped revenue would almost have to come from AE, the message was plain: Play ball, and we'll see what we can do.

But the council seems disinclined to push the utility for more money, for fear that it could weaken AE under next year's deregulation. "I'm very reluctant to try and play the AE card," says Wynn. "We owe our ratepayers as much diligence as possible. That house has to be in very good order in very short order."

Wynn says he doesn't know yet where he'll shake out the "series of six-figure" investments he'd like to make for city libraries, but hopes something can be done. "Our library system is nowhere near what it can and should be," he says. So far, Wynn's modest proposals constitute the most ambitious public initiative anyone has been willing to put on the table.

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This Week in Council ...

South Austin business owners watching the news back in June likely got the impression that the council had decided to widen South First and South Lamar streets and that heavy equipment would soon be scraping away their parking lots. That's because the council voted to include proposals to add two lanes to those streets in the regional transportation plan for the state transportation department. Less widely understood, however, was that members also said they'd never agree to those projects, and only put them in the plan so the streets could continue to qualify for any federal and state dollars available for other improvements (road segments are only eligible to receive money for any kind of improvement if they are listed in a regional plan).

Council Member Daryl Slusher says it's time to end the public confusion and remove South First and South Lamar from the plan entirely. "I just think it's a very remote possibility we're going to get any sidewalk money from the state during that time, anyway," says Slusher. Right now, the prospect of holding out for a few million in transportation funds seems less important for members like Slusher, whose term is expiring next year, than protecting their political flanks. It's no secret that some potential council contenders are starting to nip, spreading the message that this council voted for widening projects that could destroy commercial corridors in South Austin. But if Slusher is keen to score a few political points, will other council members want some of that action, too? Mayor Pro Tem Jackie Goodman fought to pull Manor Road from the transportation plan, and other council members also had objections. Could some streets get pulled that would have qualified for funding in the near future?

"I'm not looking forward to dealing with it," Will Wynn says of Slusher's proposal, up for discussion Aug. 9. "Frankly, it seems to me that if we start piggybacking a lot more city streets onto Daryl's idea, we're probably increasing the likelihood of hitting some conflict with potential funding within the next year."