The City Council kicked off its budget talks in earnest last week, with the least grim part of the FY2003 proposed budget — public safety — along with aviation, the Convention Center, and Solid Waste Services. There’s no budget hearing this week; on August 21 and 22 (Wednesday work session and Thursday public hearing), the council will examine the planning and development departments and utilities, and on August 28 and 29 it will tackle parks, libraries, housing, and health care.
While the overall budget is down, General Fund spending — the part funded by your taxes — is actually up slightly from last year’s budget (adopted on September 11 and obsolete within minutes), thanks to public safety, which consumes about 95% of your taxes. Actual spending for the current fiscal year was much lower. The FY2003 budget assumes slight revenue increases, though the fat years of the 1990s are gone forever. If that small growth doesn’t happen, though, this will be another (in City Manager Toby Futrell‘s words) “virtual budget.”
Public Safety
As Futrell has said about 100 times already, police, fire, and EMS have been “held harmless” from cuts taken by most other city departments. All three are putting new “first responders” on the street, in response to major increases in call volume (911 calls were up 8% last year), though they are eliminating vacant civilian positions. The figures for EMS do not include Travis County’s 30% share of the total EMS budget.
Officially, 60 new police officers joined the Austin Police Dept. this year as a condition for receiving the federal grant that’s paying for them, but they won’t actually be hired and funded until FY2003. (We’ve included them in the chart as new employees.) Those cops-on-the-street will be deployed in new North and South Austin commands (see map). The department is also restoring a Central East Austin walking beat, which (in a disturbing trend at City Hall) has a brand name: “Getting to Know You.” “We believe smaller is better,” says Police Chief Stan Knee about APD’s plans to get cops closer to crimes in smaller commands. At APD, the biggest cost-saving change seems to be deploying citizen volunteers in functions formerly performed by paid staff, although the North and South Austin commands may end up saving money.
Like the rest of City Hall, public safety had to cut overhead — by about $5 million — and look for “process improvements” as part of Futrell’s budget-scrubbing mission. For EMS, the big change is very simple: By switching from night to day shift at 7am instead of 9am (a peak time for EMS), it can cut its overtime expenses. Unlike police and fire, EMS actually earns revenue, and certain fees for its services are going up.
For the Fire Dept., as for many city departments, technology is the answer; the FD is going paperless via its Intranet. The overall budget does not include potential salary increases under the firefighters’ new meet-and-confer contract, currently under negotiation. Considering how much police salaries went up in their most recent contract, firefighter pay raises may be a significant line item.
Enterprise Funds
Any city department that is supposed to pay for itself is an “enterprise” fund, but City Hall typically treats Austin Energy and Water and Wastewater (the utilities) separately. That leaves the airport, the Convention Center, and Solid Waste Services.
Solid Waste‘s problems are the least disturbing, being spawned mainly by growth. The department is bucking the trend and adding a bunch of new employees to meet increased demand, even though garbage collection fees haven’t increased since the adoption of the Pay-As-You-Throw program in 1996. Like many city services, Solid Waste operates very expensively; most cities don’t have separate collection programs for garbage, yard trimmings, and recycling, let alone ones that pick all three up on the same day.
The department is funding new crews by drawing down on its reserves, which City Hall says are actually much higher than they need to be. A consultant is helping Solid Waste figure out how to operate more efficiently; the FY2004 budget may include either rate increases or significant changes to services.
Moving down (or up) the misery ladder: Though spending at Austin-Bergstrom International Airport is only down a little from the FY2002 budget, revenue is down a lot — nearly $14 million. On top of the shrinkage in air travel since Sept. 11, parking revenue has been hard hit; new satellite lots have opened around Bergstrom, and security restrictions preventing “meeters and greeters” from going past the checkpoints have led many of us to drop people off curbside instead of parking. More than half of ABIA’s lost income is from parking, a more-or-less permanent reduction in revenue. As well, Austin has a higher-than-average number of short-haul flights (to Houston and Dallas), “and that market just isn’t coming back” to pre-Sept. 11 levels, says Aviation Director Jim Smith.
The airport is still profitable, but a city ordinance requires it to deposit its profits into the Airport Capital Fund to support future improvements and expansions. The FY2003 contribution will be half of what was budgeted for FY2002. “As demand grows and we need a $500 million or $1 billion expansion,” says Smith, “that will call for a greater revenue base than we can justify now.”
Meanwhile, cash-strapped airlines are demanding more and more cost-cutting from airports, particularly expensive ones like ABIA (because it’s brand-new and has a high debt load). “In terms of budget review, you guys are a bunch of weenies compared to what we go through from the airlines,” Smith told the City Council.
The Convention Center depends on its share of the hotel bed tax, which has likewise gone under deep water, down 16% from the pre-Sept. 11 estimate. Meantime, expenses have gone up for both operating and paying off the bonds for the Center expansion and the new Palmer Events Center. The arcane Convention Center accounts allow for cost-shifting, and the department has managed so far to operate with the same number of employees. Its long-term savings strategy is to figure out how to further centralize Center and Palmer operations and cross-train staff to work at either venue.
However, the Center’s big-ticket cost cut has been the $5 million in cash it was going to spend on land for a new parking garage. Instead, the garage will be funded by longer-term debt — if it gets built at all. Downtown Commission Chair (and Planning Commissioner) Chris Riley, one of only three people to speak at last week’s budget hearing, is on a minor crusade to kill the garage. If the Center simply canceled contract parking at its existing garage (among the least-used in all of downtown, according to the city’s recent parking study), he argues, it would have more than enough space to meet the demand without taking another city block off the tax rolls.
This article appears in August 16 • 2002.