Council: The Numbers Game

Council in a box on budget decisions

There's no City Council meeting this week – the next regularly scheduled meeting is June 8 – which should give everybody on the dais (as well as the departmental staff regularly standing at attention in Council chambers on Thursday mornings) a chance to get some other work done. Highest on the agenda is budget preparation, the subject of regular Wednesday work sessions for some weeks.

The most recent such session, May 17, took most of the day to review a handful of vexing subjects Council is considering as it awaits the city manager's proposed budget, which won't be formally presented until early August. The list included:

1) public safety spending;

2) the reserve fund policy;

3) a potential "tax swap" with Austin ISD;

4) potential Council priorities for new initiatives.

The nature of the current tight budget situation is reflected in the fact that the group – working from 9am to roughly 3pm – didn't really dig into Item No. 4, since the first three discussions largely re-emphasized how little money will be available around the edges of the projected budget ("Something's Gotta Give," May 12).

The big question over at AFD is the ongoing cost of excessive overtime.

The extended public safety discussion began by considering whether a "percentage cap" – that is, an upper limit on the percentage of General (Operating) Fund spending allotted to public safety – might be advisable or at least feasible. Right now, public safety spending (police, fire, emergency medical services) tops out at 68% of the GF budget, with the Austin Police Department accounting for 40%. In FY 2015, that public safety total increased from about 62% to its current 68%, but most of the increase reflected an accounting change (allocating more departmental support funding to individual departments).

Budget staff presented comparisons to other Texas cities (Dallas and San Antonio) to provide council members a feel for other solutions – but essentially concluded that because of differences in city departmental organizations, public safety jurisdictions, and even budgeting categories, the comparisons are not terribly helpful. "We've talked sometimes about wanting to have an apples to apples comparison," said Deputy Chief Financial Officer Ed Van Eenoo. "I've been telling folks this isn't even a fruit to fruit comparison. This is something like breakfast tacos to apples."

So, although Dallas (60%) and San Anton­io (64%) are nominally "lower" than Austin in public safety spending percentages, since those departments have different responsibilities and the cities' budgets are structured differently, the comparative numbers don't reflect equivalent expenses. It's worth noting that APD funding alone (40%) is closer in percentage terms to the police departments in Dallas (39%) and San Anton­io (37%) – but Van Eenoo cautioned that those numbers as well might only compare "apples and bananas."

Council members poked at the numbers a bit, but Mayor Steve Adler summarized the overall problem facing the group: "It seems arbitrary to pick a percentage. At the same time, it seems arbitrary when we're having ultimately the discussion between, do I spend this last dollar on health and human services or on public safety? ... So I'm not sure what the right answer is as we're going into the budget process."

This was all preamble to specific presentations from APD, Austin Fire Depart­ment, and Emergency Medical Services, which reiterated not only that public safety is expensive, but that it's not getting any cheaper. For example, Council is in principle committed (beginning last year) to adding more police officers, but has yet to find the money to do so substantially. Last week, the "Dashboard Report" from the Com­mun­ity Advancement Network reflected that the local crime rate declined a remarkable 25% from 2011 to 2015; that report was released almost simultaneously with a public survey from the Greater Austin Crime Commission (featuring a board of local tough-on-crime VIPs) that Austin residents want more police officers. (The Council discussion also noted more recent numbers, not unique to Austin, of increasing crime rates – no doubt incoming emails to council members will be featuring the statistical debate.)

The big question over at AFD is the ongoing cost of excessive overtime, a direct consequence of the 150 or so vacancies attributable to 1) a history of racial discrimination in hiring; 2) a recent spike in retirements; and 3) the 2014 Department of Jus­tice consent decree which assumed direction of the hiring process, and slowed the process to a crawl. On May 18, with considerable misgivings, Council approved moving $3.5 million from reserve funds to cover this year's additional overtime (for a total of about $6.1 million), and expects to be spending at least that much in the FY 2018 budget.

The most optimistic projection from AFD brass of when hiring might catch up to the vacancies (thus diminishing overtime costs to sustainable levels) is 15 months. Van Eenoo told the Chronicle this week that three years is more reasonable, and that the budget staff must plan accordingly. That means the additional $3.5 million this year, and comparable numbers in next year's budget, "unless everything goes perfectly" with the DOJ oversight and upcoming cadet classes.

Beyond these nuts-and-bolts (trucks-and-sirens?) considerations, budget staff would like to see a deeper reserve policy (15% of GF vs. the current 12%), and indulged Council's blue-sky notion of an AISD tax swap that would substitute city sponsorship of some district programs, in theory allowing the district to lower its rate and avoid some state recapture. (Last year, the city did directly underwrite some school programs AISD could not afford.) Unfortunately, the potential swap procedures are legally complicated, it's not certain they would do much to lower Austinites' overall property tax burdens, and the sky – represented by the projected city revenues – is currently not spectacularly blue.

Over the next several weeks, while council members ponder these problems, they plan to use some work sessions (not yet scheduled) to plunge into potentially swampier waters: the process, substance, and progress of CodeNEXT. Should be fun.

This graph shows the percentages of public safety spending within the General (Operating) Fund from 2014 to 2017, currently at 67.6% in all. The fluctuations in 2015 and 2016 primarily reflect changes in accounting procedures rather than spending: allocating some support funding to departments in 2015, and adding Neighborhood Housing and Community Development to the General Fund in 2016 (thus enlarging the total GF).

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City Council, Steve Adler, Greater Austin Crime Commission, Ed Van Eenoo

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