FY 2015 budget features small jumps in property taxes, fees

City budget writers are proposing a 2.2-cent decrease in property taxes for Fiscal Year 2014-15 but because the valuation on many properties has gone up, most property owners will still be paying higher taxes, according to Chief Financial Officer Elaine Hart.

Staff is proposing a rate of 48.09 cents per $100 valuation, higher than the effective rate, which would generate the same amount of revenue as last year’s rate brought in. The effective rate would be 45.85 cents because property values have increased so much.

That is the information City Council members – fresh from their monthlong vacation – are hearing as they meet for a budget work session this morning. Deputy Chief Financial Officer Ed Van Eenoo briefed the media Wednesday on what his staff would be presenting today.

According to staff, the owner of a median priced home will pay an estimated $12.13 per month more for city services in FY2015 than he or she is currently paying. That takes into account a $1.19 per month increase in the city’s property tax, a projected $2.62 hike on the water bill and an additional $4.67 on the electric bill because of increased fuel charges, as well as increases in other fees.

The city figures that the same median homeowner will pay $162 a year more for taxes to all jurisdictions, making the overall cost of government jump from $4,138 to $4,300. That includes Travis County, Central Health, Austin Community College and Austin Independent School District.

It is not yet certain what that median home price is because both the city and the county considered suing the appraisal district over its valuations. Those actions have been put on hold. However, it is expected to be several thousand dollars higher than last year’s average homestead of about $183,000.

Hart shared some good news for city employees and retirees. Even though the city will be paying more for their health insurance, those bills for employees and retirees will remain the same. The typical civilian city employee can expect a 3.5 percent raise in October and will be able to take home that amount because their insurance fees are not going up, he said.

Police and EMS employees have a contract with the city that governs their salaries. They are expected to get a 1 percent salary hike. The city is currently negotiating with the firefighters union and hopes to reach agreement on a contract with them soon. If they do reach such an agreement, budget writers have already figured a 1 percent raise for them.

The proposed budget also includes a total $5.8 million salary market increase for some Austin Energy and information technology classifications, following a salary market study.

The proposed budget also reflects an overall increase in the Police, Fire and Emergency Medical Services departments, which together make up nearly 70 percent of General Fund department expenditures.

The Austin Police Department’s proposed net budget is projected to increase by $13.8 million, or 4.7 percent. APD will be hiring 59 new police officers to keep pace with growing city and service demands, effective April 1, 2015. Effective Oct. 1, 2014, it is also creating 38 civilian positions, 21 of which will be in the 911 call center. The city has been under pressure from public safety advocates to beef up 911 operations. “They are proposing to fund those positions without any additional resources,” Van Eenoo said. “And that is the direction the manager gave back in January. I think the Police Department is one of the primary departments that took that approach.”

The Fire Department’s proposed net budget is projected to increase by 5 percent. That includes taking on the salaries of 36 existing firefighter positions, which were previously paid for using grant funds, totaling $2.1 million.

EMS will be taking on a $500,000 increase in its budget in order to transition commanders from a 48-hour workweek to a 42-hour workweek.

The Health and Human Services Department’s net budget is projected to increase by $2.6 million, or 6.1 percent. The department plans to hire 18 new sanitarians to step up restaurant inspections. They will be able to do that as a result of a projected $1.1 million increase in revenues from increased fees.

All of the city’s utility fees are set to rise. In all, the average household can expect to pay $12.13 more in fees, per month. That figure includes the Austin Energy increase. It also includes a $2.62 monthly increase from Austin Water Utility. Even with that increased revenue, the water utility has had to make substantial cuts, in large part because conservation measures have cut water use.

To help balance out water revenue, the city has also proposed some restructuring that Mayor Lee Leffingwell pushed in early budget talks. The utility has long been at least partially responsible for the Sustainability Fund, Balcones Canyonlands Preserve wild lands preservation costs, Homeland Security costs and hazardous incident reimbursements. Moving those programs to the General Fund will free up an additional $7.5 million for the water utility. It will also move about $2 million in costs from Austin Resource Recovery to the General Fund.

In total, the shifts will increase General Fund expenses by $10.9 million next year.

“It’s not really a change in the total dollar amount, it’s a change in who’s paying for things,” said Van Eenoo. “Obviously, it puts an upward pressure on the tax rate, but it’s helping us keep our utilities structurally sound and help them keep their rates lower than they would otherwise be.

Overall, Austin Water Utility is poised to cut close to $30 million from their budget from last year. The utility is also set to save money by cutting vacant positions and delaying a number of capital projects.

The city is also proposing a 60-cent increase in monthly drainage fees, which are proposed despite a recent court ruling that the fee was applied unfairly.

“That’s the plan at the moment, then we’ll have to react to the lawsuit as it gets reviewed,” said Van Eenoo.

The 60-cent increase does not include a proposed $78 million home buyout proposal, which would temporarily increase fees by 75 cents per month in order to buy homes in the Onion Creek floodplain that were affected by the Halloween Floods. If the plan is approved by City Council that debt service would not kick in until 2016, explained Van Eenoo.

The budget also predicts increased costs associated with the addition of four City Council offices that are coming with the change to Austin’s new 10-1 system. The budget office is predicting that those offices will cost $1 million next year, for 16 positions (one council member and three support staff positions for each new office.) That will be the cost for nine months of 2015. The new offices are expect to cost $1.2 million annually.

That is not the only cost of change, of course. In addition to renovations already underway and new office space already procured, the city is also budgeting $770,000 to the City Clerk’s office for elections and the inevitable runoffs.

Editor Jo Clifton and reporter Tyler Whitson contributed to this report