City Manager’ Proposed Budget s
Fiscal Year 1998-99
August 5, 1998
Mayor and Members of the City Council: I am pleased to transmit my Proposed Budget for Fiscal Year 1998-99. Our vision for Austin is to be the most livable community in the country. The question is, how do we know when we are there? The answer is complex. We have an abundance of wonderful attractions here in Austin, some of which you’ find illustrated on the cover of ll this document and throughout. We must do everything within our power to protect these Austin treasures – treasures which help attract an estimated 100 people a day to the Austin Metropolitan Area. Further, these new citizens of Austin join our existing residents to create a very diverse population, and in that population is a diverse set of needs. In this Proposed Budget, we strive to maintain our quality of life by meeting these goals.
Focus on Basic City Services
Austin is growing at a rapid pace, a trend that is expected to continue. Based on the latest census data from 1996, Austin is the 22nd largest city in the country. And, with the approximately 28,000 people we annexed in December 1997, we estimate that Austin has surpassed even that ranking to as high as the 18th largest city in the country. That growth not only means more citizens, but a greater demand for core City services.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 1 s
For Fiscal Year 1998-99, we are once again focusing on critical Public Safety needs, including: r Finalizing the transition for our Emergency Medical Services System to an Advanced Life Support System -- $131,500. r Second-year funding for a three-year market study pay adjustment for EMS uniformed personnel -- $842,000. r Four positions for the Communication Center for EMS at a cost of $143,000. r $139,500 for EMS Capital equipment replacement, including portable radios, monitors and defibrillators. r Full-year funding for an EMS station at Anderson Mill Road and Nene Drive in Northwest Austin to serve the newly annexed areas -- $448,500. r Approximately $5.7 million for both the Fire Department’ and Police Department’ s s Meet and Confer contracts. r Opening three fire stations: Oak Hill in Southwest Austin (March 1999), Four Points in Far West Austin (April 1999) and Anderson Mill/Nene – (April 1999) -- $1.5 million (incremental cost for FY 1998-99). Two of these stations, Anderson Mill/Nene and Four Points, will serve the newly annexed areas. r Starting three new APD cadet classes and commissioning 138 officers with full staffing by September 1999. r Reallocating $2.8 million within the Police Department’ budget to fund Traffic s Safety initiatives. r $657,000 for the purchase of 18 patrol sedans and related vehicle equipment to support 43 Federal grant-funded police officers. r Providing $524,000 for additional vehicles and equipment to support the new neighborhood-based organization in APD. I am especially pleased about APD’ move to what Police Chief Stanley L. Knee refers s to as neighborhood-based policing. Through this re-organization, additional resources and support positions are proposed for the neighborhood patrol team, so that most crime problems can be investigated and solved at the neighborhood level. The goal of this new emphasis is to reduce crime and, just as important, residents’fear of crime as patrol officers and detectives become more involved and knowledgeable about the areas, residents and businesses they serve. Ultimately, we want Austin to surpass its current ranking of 29th to become one of the 10 safest major cities in the United States.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 2 s
In addition to this, the Police Department has a target of decreasing its average emergency response time from more than 10 minutes to nine minutes. The rapid growth Austin is experiencing also has highlighted our need to grow in a responsible manner. Without planning, our quality of life will erode. The Austin City Council launched its Smart Growth Initiative in February 1998 to achieve a number of goals. Managing how and where the City grows was one of the primary focuses. To help accomplish this, nine new positions are recommended in this Proposed Budget to support efforts within the Planning Division of the Planning, Environmental and Conservation Services Department. Employees within this area will focus on urban design, long-range planning and neighborhood planning. Another key goal of the Initiative is to improve the City’ development process. s Approximately $300,000 is proposed to fund equipment and salaries for seven temporaries and four engineer associates, all permit reviewers, as well as two additional reviewers that would focus on mechanical and plumbing permits. The additional personnel would help reorganize and expedite permit review. Over the long-term, a number of specific planning studies and projects will be completed to implement the Smart Growth Initiative. These efforts will be designed to build a new foundation for growth, which sustains Austin’ social and physical fabric by: s Ø Designing with pedestrians and transit in mind. Ø Creating incentives for infill and revitalization. Ø Integrating land-use and transportation planning on a regional scale. Ø Building a long-range Annexation Plan. Ø Enhancing economic development through Downtown initiatives. Ø Empowering neighborhoods. p
In addition, basic core services funded through this Proposed Budget include: Ø Continued construction of the Austin-Bergstrom International Airport, opening in May 1999. Ø Preparing for redevelopment of Robert Mueller Municipal Airport. Ø Funding for maintenance and replacement of crosswalks, pavement striping, raised pavement markings and meter stalls.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 3 s
Ø Completion of a three-year program to replace meters in the Downtown area. Ø Repair and construction of sidewalks in the vicinity of schools. Ø Funding for Americans with Disabilities Act curb ramps and sidewalks and for removal of architectural barriers in City buildings. Ø A $230,000 increase in the Watershed Protection Department for Maintenance Inspection; the Planning and Engineering Program; the Storm Sewer Discharge Pollution Prevention Program and Emergency Spills; and the Pollution Complaint and Response Program to enhance service delivery and account for increased demand due to annexation.
We also realize that, in our ever-changing society, the government must provide a continuum of services for our community -- services that help strengthen the foundation for all of our residents. These include efforts to help the homeless, housing initiatives and improvements to our library and parks systems. Initiatives that support our efforts in these areas include:
Homeless Issues: Ø Support for the Homeless Self-Sufficiency Initiative, including funding a program with Travis County for $368,000 to contract for substance abuse detoxification and treatment. Ø Community Development Block Grant funding of $500,000 for the design and development of an emergency shelter for homeless men.
Housing: Ø Development of a more coordinated continuum of housing services, which includes: Homeless services, public housing, emergency shelter, transitional housing, assisted housing, rental housing, first-time homebuyer assistance and owner-occupied assistance. Support for these projects will come through grants and general funds, totaling $7.9 million.
Ø Providing new funds in the amount of $1.4 million for business expansion and revitalization of targeted commercial redevelopment areas, including the 11th
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 4 s
and 12th street revitalization project and the Central City Entertainment Center. Ø Creating approximately 55 jobs and small business development through the Neighborhood Commercial Management Program and other economic development programs which offer low-interest loans, micro-lending services and other activities -- $250,000. Ø Increasing expenditures for workforce development by $525,000 – for a total of $875,000 -- to help establish a trained and skilled workforce for our community.
Library: Ø Efforts to improve customer satisfaction through an increase in the Library system’ materials and processing budget, including its reference collection, s by $210,000. Ø Opening the Ralph W. Yarborough Branch Library to replace the leasedspace North Loop Branch in late 1998 -- $201,000. Ø $441,000 to enhance security presence systemwide, extend hours for telephone information services, increase computer support staff, provide for needed maintenance services and increase circulation staff where needed.
Parks Ø An increase in youth program funding by $152,000 and one Full-time Equivalent (FTE) due to expansion of services at the Buttermilk Activity Center and the addition of youth programming at the Knights of Columbus facility. Ø Continue the enhanced funding of playscape repairs with $300,000. Ø Funding of $31,000 and one FTE for a new collection management system to manage the George Washington Carver Museum’ 14,800 items. s Ø $64,000 for the operations and maintenance of the Montopolis Sportsplex.
Year 2000/Technology Needs
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 5 s
Although perhaps not often considered a core need, technology has become an increasingly important tool in assisting us with our day-to-day operations. For Fiscal Year 1998-99, we have the opportunity to fund critical technology needs, including preparing for the Year 2000. In this proposal, $3.5 million is recommended in departmental operating budgets to replace specific software and hardware in departments. Another $3.5 million is proposed in the General Government Capital Budget to address Year 2000 requirements. Why is all of this necessary? On January 1, 2000, the century date change will require computer software and embedded chips to recognize a four-digit date field, many of which were designed and manufactured with a two-digit date field. This means that when January 1, 2000, comes, those systems could likely no longer function. These non-compliant assets must be replaced, fixed or discarded to ensure continuation of services, particularly those that have a direct impact to the public’ health, safety and welfare. s Organizational Health While we strive to better our service delivery and meet the needs of our community, we cannot overlook the driving force that accomplishes this goal every day: Our workforce. Through the Proposed Budget, we are doing what we can to ensure that we can recruit and retain a skilled workforce. For the second year, we are requiring 16 hours of training annually per employee as part of the Success Strategy Performance Review. Part of achieving this goal is offering training in a variety of areas, including computer classes. Further, our Human Resources Department will complete the comprehensive Market and Classifications studies begun last fiscal year. These studies were undertaken to provide our employees with competitive salaries. Not only do we want to make sure we provide competitive salaries, we also want to help employees in the lowest salary classifications make progress toward a living wage. As a result, we are proposing $155,000 for the General Fund to increase the minimum wage for regular City employees to $7.40/hour beginning in October and increasing to $8.00/hour in April. We are also continuing our performance-based pay system, Pay-For-Performance. As part of this program, every City employee has a Success Strategy Performance Review in place. Employees who have met or exceeded expectations will receive a wage adjustment. Some other key workforce issues we are addressing in this Proposed Budget include: Supervisor Skills Development; Conflict Management; Employee Organization Partnerships; and Performance Measurement Systems, with the Success Strategy Performance Review system the primary tool.
Revenue Assumptions, Proposed Expenditures
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 6 s
I am pleased to present this Proposed Budget for Fiscal Year 1998-99 at the estimated effective tax rate of 0.5142 or 51.42 cents per $100 taxable assessed value.
Current Tax Rate 54.01¢
Peveto Tax Rate 52.73¢ Effective Tax Rate 51.42¢ Proposed Tax Rate 51.42¢
This represents a 2.59-cent decrease from this current fiscal year’ tax rate of 54.01 s cents – a rate that is one of the lowest property tax rates among the major cities in Texas.
Property Tax Rates Of Major Texas Cities
Per $100 Assessed Valuation
57.98 65.16 66.50 92.00
Source: The Financial & Administrative Services Department
What will the new effective rate mean for homeowners? The value of property on last year’ tax roll went up an average of 4.9%. If your house went up less than that, you s will see a tax decrease. If the value went up by the average, your taxes will stay the same as what you are currently paying this Fiscal Year.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 7 s
The certified property tax roll is $32.5 billion, which represents an 18% increase.
Proposed Rate Increases and Fees
We are proposing no electric rate increase for FY 1998-99. However, we are seeking a 5.4% increase in our Water/Wastewater rates. This increase is necessary for debt defeasance associated with the May 2nd Bond Election and passage of Proposition Two, as well as costs associated with annexation and general customer growth. For the average single-family user, this will mean a monthly increase of $2.38; and for the average commercial ratepayer, this will mean $16.40 more per month. We are also proposing an increase in the Drainage Fee. Although the proposed 21.25 percentage increase may seem high, for the average residential ratepayer, it will mean an increase of only seventy-eight cents -- from $3.67/month to $4.45/month. For the average commercial ratepayer, it will mean an $8.41 increase per acre -- from $39.59/acre to $48.00/acre. Debt service and funding for the initial stages of the Walnut Creek project associated with the approval of Proposition 3 from the May 2nd Bond Election as well as implementation of Phase One of the Watershed Master Plan will be funded through this increase. The Transportation Fee is designed to fund preventive maintenance on 10% of our street network – calculated in lane miles -- on an annual basis. Attaining this goal will limit the number of lane miles that fall from satisfactory into failed condition. A 3% increase is necessary for Fiscal Year 1998-99 to keep up with inflation and ensure that we meet our annual goal for preventive maintenance on 408 lane miles -- 70 lane miles of overlay and 338 lane miles of sealcoat.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 8 s
Lane Miles of Street Maintenance
350 300 250 200
49 64 31
Overlay Sealcoat 337 338 253
FY 95 Actual FY 96 Actual FY 97 Actual FY 98 Estimate FY 99 Proposed
Source: Infrastructure Support Services, City of Austin
This increase will raise the average residential fee from $2.94/month to $3.03/month and the commercial fee from $14.70/acre to $15.14/acre, multiplied by a trip generation factor.
S ingle Family Residential Rates
$3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $FY 95 FY 9 6 FY 9 7 FY 98 FY 99 proposed $1.70 $2.19 $2.19 S in g le F a m ily R e s id e n t ia l Rates $2.94 $3.03
Source: Infrastructure Support Services, City of Austin
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 9 s
The City’ Operating Budget s
The proposed Operating Budget totals $1.52 billion. The General Fund, $360.7 million, comprises 23% of the budget and is funded primarily by sales tax revenue, transfers from City utilities and property tax revenue. The Enterprise and other funds comprise the remaining 77% and are funded by customer user fees and other userelated revenue. Although sales tax revenue often proves unstable, we have enjoyed tremendous growth this Fiscal Year and have increased our projection for FY 1998-99 sales tax revenue by $3.0 million since the five-year Financial Forecast in April. Overall, for Fiscal Year 1998-99, we estimate sales tax will experience a 16.6% growth over the current year budget and a 6% growth over our current estimate for this year, providing the single largest source of revenue for our general government operations. Additionally, we expect $72 million in transfers from the utilities and approximately $61 million in additional General Government revenue from development and other growthrelated fees. Operating revenue sources and uses for all funds are illustrated on the following charts.
1998-99 Sources of Funds - All Operating Funds ($1,522 million)
Other Revenue 20% Property Taxes 11% Sales/Other Taxes 7% Aviation 3%
Water & Wastewater 14%
Electric Utility 45%
Source: City of Austin Financial Services Department
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 10 s
1998-99 Uses of Funds - All Operating Funds ($1,522 million)
G.O. Debt Service 5% Other Expenses 16%
General Fund Operations 23%
Electric Utility 19%
Water & Wastewater 9% Revenue Bond Debt Service 19%
Electric Fuel 9%
Source: City of Austin Financial Services Department
Highlights of Basic City Services
Other basic needs met by the Proposed Budget: Health and Human Services' budget: r Supports workforce development funding of $875,000 to pay for employable skills training and job development and placement assistance. r Supports a substance abuse treatment package as part of the Homeless SelfSufficiency and Responsibility Initiative in the amount of $368,000. r Provides $354,000 to pay for necessary computer equipment and software to bring all equipment into Year 2000 compliance. r Proposes $13,000 to fully support the Juvenile Offender Training Program. r Funds six additional shelter and field staff for the Town Lake Animal Shelter to provide quicker processing of animals and to provide additional leash law enforcement as part of the No Kill Millennium Initiative -- $150,000.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 11 s
Library's budget provides: o Continuing support for the John Henry Faulk Central Library, the Austin History Center and 19 branch libraries, including $201,000 for the opening of the Ralph W. Yarborough Branch Library in late 1998. Funding of $583,000 to complete installation of a systemwide network, for technology improvements related to Year 2000 compliance and for upgraded computers for the Library’ automated system. s An increase of $358,000 for a number of library services, including: Ø Increasing hours of operation for the telephone reference service at the John Henry Faulk Central Library from 40 to 72 hours -- $92,000. Ø $47,000 for enhanced security presence systemwide. Ø Additional circulation staff throughout the system in the amount of $159,000 to reduce waiting time for customers. . Parks and Recreation funds: r Continuation of the playscape and playground maintenance program with funding of $300,000. o o o $152,000 in additional funding for youth programs. An additional $367,000 for the opening of the Central City Entertainment Center. $64,000 for operations and maintenance of the Montopolis Sportsplex.
Public Works and Transportation focuses on: o o o o Capital Budget funding of $1 million to remove architectural barriers in City buildings. Repair and construction of sidewalks in the vicinity of schools -- $175,000. Completion of the third and final year of parking meter modernization $273,000. An additional $1 million in the Capital Budget for ADA curb ramps and sidewalks.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 12 s
Highlights of Enterprise Operations
Aviation's budget: o o Prepares for the redevelopment of Robert Mueller Municipal Airport. Continues construction at the site of Austin-Bergstrom International Airport for opening in May 1999.
The budget for the Convention Center: o o o Begins the expansion of the Convention Center through the voter-approved twocent increase in the Hotel Occupancy Tax. Projects continued strong growth in Hotel Occupancy Tax collections for FY 1998-99, $3.1 million more than FY 1997-98. Estimates a $2.3 million increase in total revenue from all sources for the Convention Center Department from FY 1997-98.
Solid Waste Services: r Anticipates $978,000 in additional revenue from customer growth -- $769,000 in garbage revenue and $209,000 in anti-litter revenue. r Increases funding for the Geographic Information System that will improve routing capabilities and enhance citywide computer support -- $178,000. r Provides $148,000 for tools and equipment, such as replacement garbage carts, recycling bins and mobile radios.
The Water/Wastewater Utility provides for: r An increase of $200,000 for water conservation and reuse in an effort to reach 10% reduction of water demand on peak days. r A $2 million increase for the Utility Customer Service Office billing system.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 13 s
The City’ Capital Budget s
The Capital Budget includes appropriation (the legal authority to spend funds) to support the approved capital projects and reflects the input received from the Planning Commission and additional public hearings. It contains requested appropriations for new projects, additional appropriations for previously approved projects and any requests to revise prior year appropriations. Unlike the Operating Budget, which authorizes expenditures for only one fiscal year, Capital Budget appropriations are multi-year and last until the project is complete or until changed by Council. That is why the Capital Budget is used for construction projects and major expenditures that may require longer than a 12-month period to complete. Like the Operating Budget, the Capital Budget is divided among a general government section, which is primarily tax-supported, and an enterprise section, which is supported by the revenue of the City's enterprise operations.
New Appropriation $39.1 million
Spending Plan $111.3 million
New Appropriation $72.8 million Spending Plan $200.3 million
General Government Capital Projects
New appropriations for the general government section total $39.1 million for 1998-99 and assume a $33.4 million tax-supported debt sale. Combined with appropriations from previous years, the general government funds expect to spend more than $111 million in 1998-99.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 14 s
Highlighted projects on which funds will be spent include: o Public Safety: Ø Fire/EMS stations at Anderson Mill/Nene and Four Points. Ø Fire station at Spicewood Springs Road. Ø EMS station at Berkman Drive/Gaston Avenue. Ø South Austin Police Substation. Ø Emergency communications radio trunking. ADA building improvements, ramps and sidewalks. Building maintenance Citywide. Parks and libraries: Ø Ø Ø Ø Ø Ø o o o Urban trails. Central City Entertainment Center completion. Montopolis Sports complex completion. Playscapes renovation. Windsor Park Library completion. Completion of additional parking at Pleasant Hill Branch Library.
o o o
Year 2000 compliance. Flood and erosion control efforts at Little Walnut and other area creeks. Saltillo Plaza construction.
Enterprise Capital Projects
The City's various enterprise funds are proposing new capital appropriations of $72.8 million including: o o o o o o Aviation -- $5.7 million. Golf Fund -- $2.1 million. Solid Waste Services -- $10.1 million. Wastewater Utility -- $30.6 million. Water Utility -- $15.9 million. Watershed Protection -- $8.4 million.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 15 s
Combined with appropriations from previous years, these funds expect to spend more than $200 million in 1998-99. Highlights of the projects scheduled for next year include: o o Aviation Ø Completion of the Austin-Bergstrom International Airport. Convention Center Ø Design and site work for the expansion of the Center. Golf Fund Ø Completion of the Roy Kizer Golf Course Master Plan and major improvements to all municipal golf courses. Solid Waste Services Ø Brush Processing Center completion. Ø Vehicle facility construction. Ø Completion of the South Austin Transfer Station. Ø Purchase of both automated collection and recycling trucks. Water and Wastewater Utilities Ø Green Water Treatment Plant Safe Drinking Water Act, Phase 2 improvements. Ø Ullrich to Green Water Treatment Plant transmission main. Ø Howard Lane east transmission main. Ø South Austin Regional expansions and improvements. Ø Hornsby Bend improvements, Phase 1. Ø Service to annexed areas. Ø Utility infrastructure rehabilitation.
r Watershed Protection Ø Design of Walnut Creek improvements. Ø Continued urban watershed and erosion control retrofits. Ø Implementation of Phase 1 of the Master Plan. Ø Waller Creek Tunnel engineering.
Changes from the Draft Policy Budget
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 16 s
Since the presentation of the Draft Policy Budget, we have made some minor adjustments. However, I did want to highlight one significant change: r We are proposing to reinstate the hours for the Austin History Center -$213,000. The original proposal was to reduce the regular hours of operation from 72 to 30, to bring its operation more in line with what other history centers around the country provide. However, due to concerns raised about the recommended change, we are proposing to reinstate the hours at the Center. We will continue to work with the History Center’ Board during s the course of the year to determine what changes are appropriate to ensure that we continue to provide services in the most effective and efficient manner possible.
Proposed Budget Highlights
In summary, my Proposed Budget for Fiscal Year 1998-99: o o o Helps improve the City’ municipally owned utility’ competitive edge through a s s reduction in the electric utility transfer to the General Fund from 10.1% to 9.1%. Recommends a property tax rate of 51.42 cents, a decrease of 2.59 cents from the current tax rate. Proposes a 3% increase in the Transportation Fee to ensure that the City keeps up with inflation and meets the annual goal to fund preventive maintenance on 10% of our street network. Allows for : Ø A significant move towards neighborhood-based policing. Ø Increased funding for workforce training. Ø An initiative to address the issues of our homeless population. Ø Support for the newly annexed areas. Ø Increased financial commitment to the library system. Ø Competitive salaries for the City workforce. Ø An approach to transportation issues that addresses the environmental impact and facilitates alternatives to single-occupancy vehicles.
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 17 s
Ø Increased staffing in both long-range planning and the development review process to support Smart Growth and the Neighborhood Planning initiatives. Ø Funding vehicle replacement and preventive street maintenance. Ø Necessary computer replacement to be compliant for the Year 2000. Ø More opportunities for affordable housing.
Open, Honest Process
I want to thank the City Council, City employees and all of our departments for the hard work that has gone into producing this Proposed Budget. We have been able to fund many core services and enhance our service delivery through this proposal. I look forward to hearing from our citizens and having further discussions with the Council as we move toward the adoption of our Budget for Fiscal Year 1998-99 in September. We also will have a Bond Election in September that will ultimately have an impact on our Budget for several more years to come. The debt service that will be associated with that Bond Election, should voters approve the projects, has yet to be determined. However, it is important that we keep in mind that once the Council sets the ballot, we will have to address the impact of not only the debt service, but also future operations and maintenance of any new facilities that may be approved. Further, the projects that ultimately appear on the ballot should complement what we are trying to accomplish not only for Fiscal Year 1998-99, but again, for several years to come. It is certainly something for all of us to keep in mind as we move forward in the Budget process.
Jesus Garza City Manager
1998-99 Proposed Budget, City Manager’ Letter of Transmittal, Page 18 s