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FRIDAY, FEBRUARY 21, 2003

Futrell promises cuts in management jobs along with rank-and-file

City Council members got some harsh economic news at Thursday’s budget retreat at Zilker Botanical Gardens. Sales tax revenues are not rebounding, while property tax revenues are expected to be down for the first time in over a decade. Mayor Gus Garcia said he expects the City Council to bridge the $77 million budget gap with “heavy reductions and a little tax raise.” An accountant, Garcia has budget savvy, not just with the city’s budget, but with family budgets too.

The Mayor pointed to figures showing that the total tax rate for city residents is lower than the rates paid by residents of Dallas, Houston, San Antonio and Ft. Worth. If Austinites only paid city taxes, that would mean more, he noted. Austin’s current rate is 45.97 cents per $100, but when county and school district taxes are added, the bottom line is $2.57—still lower than all the others. However, that translates to 6.3 percent of the average citizen’s income. While Houston taxpayers pay at $2.96 per $100 for all taxing authorities, the bill is only 4.3 percent of their income on the average.

Travis County and Austin Independent School District taxes are higher than comparable entities, he said. “This is not the city,” bringing in the money, Garcia said. “But, really, it doesn’t matter. The county rate is almost four times as much as average and AISD almost twice as much,” but that doesn’t help the family trying to pay those bills.

City Manager Toby Futrell summed it up. “We have the lowest tax rate in the state, but the highest tax bill . . . It’s so simple and so hard—cut or raise—or a combination of the two?”

City departments are already looking at cost-cutting measures, ways to improve efficiency and possible new revenue sources as part of the Innovation Initiative Futrell launched. The program began this month to encourage employees to evaluate their department’s daily procedures and search for ways to improve them. Department heads will categorize the different ideas submitted by staff and forward them to the Budget Office next month.

A cost-of-living raise for most city employees will likely be a casualty of the budget crunch, and Futrell predicts employees will understand the pressures facing the Council. “Employees tell us they are interested in keeping their jobs, and that pay is secondary,” she said. “As part of the $77 million gap, we will probably take the cost-of-living increase off the table.” And while the city managed to avoid layoffs during the current fiscal year, Futrell says there are no guarantees that layoffs will be avoided next year. But she did promise that the rank-and-file would not be the only city employees to feel the pain of budget cuts. And after 25 years with the city, she said she knows every single employee who will lose his or her job if the workforce is cut.

A sweeping review of the city’s management structure is underway, with the possibility of consolidating some departments. “Over the last ten years, we added eight departments. That’s not surprising, because in a boom time there’s a lot of specialization that happens,” Futrell said. “What we’re going to try to do now is move that back in.” In the event of layoffs, Futrell also set a goal of reducing management by 10 percent of the roughly 96 executives that report to her. “If employees lose their jobs this year, we will all share part of that burden,” she promised.

Continuing meet and confer process could bankruptc city, Futrell says

As the painful reality of a slumping economy and increased demands plays out, the city’s management team will be challenged by the City Council and the public to keep city services level with little or no tax increase. That hardly seems possible given a projected $77 million dollar shortfall and the demands of homeland security, more and more people falling below the poverty level, and the desire of most Austinites to maintain service at all libraries, recreation centers and parks. Yesterday Assistant City Manager Laura Huffman outlined one idea that might cut some significant costs for the city—the public safety premium.

That premium, said Huffman, would cap raises for uniformed police, fire and EMS employees at a flat two percent above whatever raise other city employees received. For example, in a year when city employees receive no pay increase, such as FY2004, emergency personnel would receive two percent more than the previous year. But in a year when city employees receive a two percent increase, sworn personnel would see a four percent rise in their salaries. “The public safety premium also recognizes that the city cannot continue to pay between $6 and $11 million per year for meet and confer contracts,” which is the usual negotiating tool between city management and fire and police officers, Huffman explained.

The meet and confer process means that representatives of uniformed fire and police personnel negotiate contracts with city management, usually for a three-year period. Mike Sheffield, president of the Austin Police Association, says, “We go in there and negotiate pay, benefits and working conditions, with emphasis on pay.”

City Manager Toby Futrell later explained that the city has negotiated two three-year contracts with police and two with fire employees. The next fire department contract is under negotiation, with those employees receiving a two percent raise while the matter is up in the air.

“We have spent $100 million,” on those four contracts, Futrell said. “It’s going to bankrupt the city if you continue to do this.”

What city management is proposing is that all those uniformed personnel receive the premium and the city will have “evergreen” management rights. Those rights would include whatever rights the city already has—and the city would not ask for more. The two percent salary boost “acknowledges that public safety has particular hazards,” Futrell said, but the city can only pay so much during tough economic times. Under the current contract, police are receiving a three-percent pay increase every six months. The raises are now a permanent part of police pay, she said. Futrell said she did not intend to scrap the process of meet and confer. Every three years, the city would still have such negotiations, but there should not be any expectation of raises above the premium until the economic picture improves—perhaps five to seven years from now.

Futrell told the Council, “We have been having these discussions with the associations. All are aware of what we are facing and that meet and confer would be very difficult to continue in these economic times.”

Sheffield acknowledged that he had had some informal conversations about the premium idea and said,” I’m not opposed to taking a look at it. I’m kind of guarded about saying I agree or disagree. We are also are very aware of the realities of the economy and the situation as it is right now.”

During yesterday’s meeting, Council Member Daryl Slusher asked how much Austin’s public safety and health budgets have increased since 9-11 and how much the city has received in federal funds.

At the time, Futrell did not have those numbers, but said, “You will see the increase has outstripped what we’ve been able to get in federal funds.” Last night Futrell said the city spent an additional $18 million for homeland security costs and received between $5 million and $6 million from the federal government. That includes a $4 million police grant, about $1 million for the health department and $500,000 for the Office of Emergency Management.

Save Waller Creek . . . Political consultant and fundraiser Alfred Stanley says he is forming a committee to oppose refunding bonds set aside to build the Waller Creek Tunnel through downtown. Stanley has already filled out the paperwork to create a specific purpose political committee and appoint himself treasurer. Some supporters of the Long Center for the Performing Arts—particularly attorney Pete Winstead—have argued that the $25 million in bonds for the tunnel are insufficient but could help the Long Center raise more private funding. Supporters of the proposition were hoping to put the item on the May ballot, but need approval from the City Council first . . . Keep Austin normal . . . That phrase is apparently the slogan of mayoral candidate Dale Reed. Reed, who has run for Mayor once before, must have high hopes for his candidacy this time. He placed an ad in last week’s Austin Chronicle that mostly proclaims what he’s against and asks for donations beginning at the $10,000 level. That would appear to be a violation of the City Charter, which prohibits donations in excess of $100. However, Assistant City Attorney John Steiner declined to comment on the matter. Steiner said he could not be in the position of playing referee with election rules. However, one member of the city’s Ethics Review Commission said he would be bringing the ad to the attention of other members before the next commission meeting . . . New place 5 candidate . . . Clayton Stapleton has joined the cast of the Place 5 show. Candidates for Place 5, the seat currently held by Council Member Will Wynn, include Brewster McCracken, Robert Singleton, Lee Leffingwell, Margot Clarke and Carl Tepper . . . Smoke free happy hour Tuesday . . . The Tobacco-Free Austin Coalition is sponsoring a smokeless happy hour from 4 to 7pm Tuesday at Cuba Libre Bar on Colorado, next to Alamo Draft House. For more information, visit www.SmokeFreeAustin.org or call 919-1733 . . . DAA luncheon next week . . . The Downtown Austin Alliance still has seats for its quarterly luncheon featuring Mitch Nichols, President of Nichols Gilstrap, Inc., at noon Wednesday at the Marriott at the Capitol, 701 East11th Street. Nichols’ address is titled, The Sixth Street Opportunity. An expert in maximizing tourist potential, the DAA says Nichols “has assisted communities across the country and is viewed as a leader in analyzing and recommending the components (e.g. recreational, retail, attractions, lodging, etc.) that maximize a tourist destination’s economic development potential.” Reservations are available until 5pm Monday: rsvp@downtownaustin.com or call 469-1766.

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