Austin @ Large: Money and Power

Where Austin's city budget is concerned, the two really do go together

Austin At Large
After all the fussing, this unusually busy summer – over toll roads and rail lines and access TV and hospital reserve funds and West Campus height limits (and swift boats and hurricanes and Olympians and the Fires of Zell) – the upcoming last lap of City Hall's annual Budget 500, for years the biggest event on the warm-season news calendar, seems very dreary indeed. This very week, the City Council will assemble on three successive days, dutifully slog through a script of motions prepared in advance by staff, sign off on City Manager Toby Futrell's fiscal 2005 spending plan, and go home until October.

Options for a September surprise seem dim indeed; a flurry of interest in raising the city's minimum wage to $10/hour now seems becalmed, and the firefighters still have an asterisk next to their line item pending the onset of their collective-bargaining talks. Those could translate into large sums of money later in the fiscal year, but they consume little political capital now, that being a resource the current City Council feels it cannot squander.

Hence a risk-free summer of budget hearings that really have been as soporific as "budget hearings" are (inaccurately) supposed to be, almost completely free of serious fiscal questions from either council or community. Which is too bad, even if we must respect Austin's apparent desire, expressed on so many fronts, to stay safe, continue in healing mode, and leave the hard (but, of course, more rewarding) decisions to the next council.

We've been saying this for a while, it is true, but that doesn't make it less important. Nobody's hair is on fire (except maybe Mayor Will Wynn's) to really reorganize city government and service delivery from the bottom up, but eventually somebody will have to do it. Just as some future set of city and county leaders will have to put their grade-school egos aside and consolidate the two bureaucracies – a goal that the hospital-district imbroglios suggest is further away than ever. (Those flaps also suggest that city and county leaders have – or have been allowed – an amazingly distant acquaintance with the fiscal proceedings of their own organizations, but that's a different issue. Or maybe it isn't.)

How Much Cash Can a Cash Cow Cache?

There's another reality, faintly discernible in this year's budget, that will be blindingly apparent to future councils – the city's complete financial dependence on Austin Energy, which pays for everything, and we do mean everything, in the city General Fund other than public safety (which consumes all of your taxes, sales and property). Elsewhere, the budget contains further withdrawals from the AE cash machine – to pay for the city's economic development office, to fund construction of City Hall's new, highly touted 3-1-1 call center, to fund workforce development and child care subsidies.

The utility this year will also absorb the city's air-quality program – orphaned by Futrell's dismembering of the Transportation, Planning, and Sustainability Department – which has something to do with generating electricity, unlike other AE baubles, even though it has a lot more to do with transportation, and has typically been managed as such. Even more germane, of course, is the city's renewable-energy initiative, so proudly led from Austin Energy. This year's budget ups AE's solar ante to $2.5 million – $1 mil each for residential and commercial rebates for solar installations, the rest for public-sector arrays. That's real money, but not when compared to all the nonenergy things Austin Energy funds with its revenues.

Solar advocates are caught, as always, in a bind – wanting to honor AE's genuine commitment to clean power while reality-checking the degree to which this commitment is revolutionary or industry-leading. They suggest, ever so politely, that the current level of AE investment will not get the city to its ambitious goal of generating 15 megawatts of solar power by 2007. At last week's budget hearing, various advocats called for next year's solar budget to be hiked to $15 million. They are likewise concerned about the way that the money is being spent, but we'll defer that inquiry until the (near) future. Austin Energy has replied that, as much as they want to integrate solar into their portfolio, they need to do it in a cost-effective manner, which is why they're working on a "comprehensive value" study to determine how much solar is really worth per kilowatt, and until that's done, last fall's much-hoopla'ed goals are still a bit tentative.

Look, but Leap

Now, I don't remember such a community dialogue taking place before AE built a new power plant fired by natural gas, whose cost has ballooned and taken electric bills along for the ride, but never mind that for now. The question at hand is not whether solar, or for that matter wind or biomass or other renewable energy resources, is cost-effective compared to "brown energy." If and when it is (as wind has now become), Austin Energy and its customers can make the rational choices economists talk about, and there would be little need for a "goal" to increase our renewables portfolio.

Wanting to be the clean-energy capital of the world, however, and on that platform build an industry of the future in Austin, is a different matter – not a "rational" but an aspirational choice, one that requires goals to drive investments that by definition aren't "cost-effective" in the present context, and decisions that must be made for, rather than within, Austin Energy. Which brings us back to the Budget 500. Investing in a clean-energy initiative that, whenever the City Council talks about it, sounds pretty big-picture will, if not sooner then later, need to be weighed by City Hall against all the other, nonenergy, nonaspirational things AE funds in the current city budget.

This will not be easy, since by definition changing Austin's energy model means changing AE's business model, and the current utility transfer represents a significant disincentive to such change. Nobody is suggesting that the utility transfer go away, or that Austin Energy (and any other fiscally robust city enterprise, if ever again we have one) not help fund Austinites' quality of life. But when we talk about the risks that have defined AE's go-kinda-slow approach to clean energy, we must remember where those risks lie – not within the utility, but within the General Fund.

In many ways, the clean-energy saga resembles the rail-transit saga, as the latter has played out over at Capital Metro, also a perennial ATM for local government. As should be clear to all by now, the bruising battles over rail are really battles over money – funds that Cap Metro detractors would like to spend on other things. Hence we now head to the polls to vote on a system that even Cap Metro acknowledges is but a tiny little baby step, though we have a rock-solid community consensus supporting more transportation choice. We likewise have a consensus that large-scale investments in clean energy are worth the cost. Eventually, City Hall will have to face down the obstacles that may keep those investments from happening. end story

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City Hall, city budget, Austin Energy, renewable energy, clean energy, solar energy, solar rebates, utility transfer, Toby Futrell, Will Wynn

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