City management plans tax cut, 3.5 percent employee raise

City management’s plan for the FY2015 City of Austin budget contains a 0.7 cent property tax reduction, a 3.5 percent raise for city civilian employees, and limited fee and tax increases.

 

According to city figures, the monthly increase for taxes and fees for the median homeowner is roughly $13 per household. That’s using an assessed property value of $193,453. The City Council is currently hearing a report from budget writers on their projections for next year’s budget.

 

Unsurprisingly, the greatest increase for homeowners comes not from property taxes but from their water bills. The estimated average monthly increase for Austin Water Utility customers is $4.84. Austin Energy customers will see their bills go up on average about $1.69 because of fuel charges, fees from ERCOT, the state grid operator, and funds to help low income customers pay their bills, according to Deputy Chief Financial Officer Ed Van Eenoo.

 

Van Eenoo said next year’s property tax rate is projected to be 0.4927 cents per $100 valuation, down from the current rate of 0.5027 cents.

 

The new budget includes pay for 59 new police officers. Van Eenoo said the police budget takes up 42 percent of the General Fund; the Fire Department expends 19.3 percent and EMS 8.7 percent, for an annual total for public safety agencies of 70 percent. Each member of the sworn ranks in those departments can expect a 1 percent raise next year. That’s because the police and EMS unions have a contract with the city. The firefighters and the city are still at an impasse on a contract but they are unlikely to get more than their fellow public safety officers.

 

The budget also includes a measure that has proven contentious within multiple city departments: A dramatic management-mandated reduction in the city’s open vacancies rate. Though that action supports repeated calls from Council Member Mike Martinez to eliminate long-term vacancies during last year’s budget process, sources across city departments told the Monitor that the implementation of the cuts forced quick action on hiring decisions that might otherwise have taken longer.

 

Those sources declined to go on record.

 

In a January 2014 memo, van Eenoo spelled out the new policy. In it, Van Eenoo told the city’s department directors that “effective immediately, all positions vacant more than 180 days will be frozen in Banner (the city’s personnel system). Due to the number of positions to be frozen, this process will take place over the next 2 business days.”

 

Van Eenoo also outlined a review process that mandates “ACM and City Manager approval” for any position affected by the memo. He added that the new policy would be in effect “at least through the end of June.”

 

In a congratulatory April 22 memo, City Manager Marc Ott extolled the process. “In December, there were more than 900 vacant civilian positions across the city, equating to a vacancy rate of 9.7 percent,” he wrote. “Beginning in January, we embarked on an aggressive program of reevaluating positions that had been vacant in excess of 180 days.”

 

Ott continued: “Through your diligent efforts, I am pleased to report that of the 237 long-term vacancies reviewed, 187 have been filled including 11 temporary-to-permanent conversions, 23 are currently in the interview process, and 27 have been identified for potential elimination or repurposing in the upcoming budget process.”

 

That department heads can use vacancies to stash funds needed for other uses is openly acknowledged.

 

When asked about the process, Council Member Bill Spelman said Wednesday, “When Betty (Dunkerley) was the chief financial officer, say you had a good idea, she’d say, ‘I think I might be able to help you with that.’ The metaphor of choice was the ‘shoe box’ with cash. That cash was from vacancy savings. She would just cannibalize the money and I think that was true for a lot of the departments for a long time. They’d have vacancies which they were pretty sure they weren’t going to be filling (so they could) free up some cash so if a need comes up,” he said.

 

Spelman said that practice is now mostly a thing of the past.

 

“What this is doing, theoretically, is taking that away from them. They don’t have that flexibility. I don’t know all the ramifications of all this,” he said. “If a department head needs something, they’ll have to go back to the budget office. On the other hand, it means that the budget is a bit more of an honest budget because we’re not going to have money left over at the end of the year that wasn’t spent and we didn’t have emergency needs come up.”

 

Still, one source told the Monitor that some long-term vacancies are not necessarily simply holding pens for tax dollars. Indeed, some positions can take months, if not years to fill, especially for more specialized fields.

 

Budget staff is briefing Council members on their budget proposals at a work session this morning. The budget-making process will continue through September.