Message from the Manager
Fiscal Year 2018-19 Budget
Dear Mayor, Mayor Pro Tem, and members of the City Council:
It is with great pleasure that I present you with the Proposed Budget for Fiscal Year 2018-19. This document represents a significant milestone in the reshaping of our city government around the shared values and vision set forth in your newly adopted Strategic Direction 2023 plan for Austin. The document you are about to review looks very different than those of years past. Gone is the heavy emphasis on incremental changes to individual department budgets and minutiae-laden performance data focused largely on individual department inputs and outputs. In their place you will find a document that has been entirely restructured to better present the City’s budget in the context of your six adopted strategic outcomes. And it’s not only the budget’s presentation that has changed¾the manner in which staff went about crafting this year’s budget recommendation has been refreshingly different as well. From the very beginning of this year’s budget development process the thrust of our efforts has been on soliciting and addressing the Council’s policy priorities. From increased funding for public health programs and Quality of Life initiatives to the second-lowest operating tax increase in the past eight years, this budget is truly a reflection of your values.
The All Funds budget for FY 2018-19 is $4.1 billion, a $156 million increase over the prior year. This amount includes the staffing and resources necessary to keep pace with the service demands of our rapidly growing city. Since 2008, an astounding 216,000 more individuals call Austin home. That equates to nearly a 30 percent increase in population over the past decade. It is critical to the ongoing success of our community that we continue to “right-size” the organization to meet the service demands of our growing population. In total, this budget includes 407 new positions, spread across the six strategic outcomes, to not only keep pace with the demands of growth but also to provide the staffing capacity necessary to advance many of your policy priorities.
The General Fund budget for FY 2018-19 of $1.0 billion is balanced and structurally sound at a tax rate increase that is 4.9 percent above the State-defined effective operations and maintenance rate. What this means is that taxpayers should expect to pay about 4.9 percent more in taxes to the City this year, for operations and maintenance expenses, than they did in the prior year. The truth is, many taxpayers will see an even smaller increase due to Council’s action in June to increase the general homestead exemption from 8 percent to 10 percent of eligible property value. Taking this exemption into account, staff projects the tax bill for a non-senior owner of a median-valued home in Austin will increase by $5.12 per month. It is worth noting that more than half of this year’s projected tax increase is the result of rising debt service requirements from voter-approved bond programs. Looking to our enterprise departments, the Transportation User Fee is increasing $1.27 per month while all other enterprise base rates are remaining flat. In total, a typical Austinite is projected to experience a slight 2 percent bill increase for City services in FY 2018-19.
Earlier this year, the City Council participated in a facilitated work session to establish budget priorities for the next 2-3 years. Your top ten funding priorities organized by outcome were:
Economic Opportunity & Affordability
- Skills and capability of our community workforce (including education)
Health & Environment
- Accessibility to quality health care services, both physical and mental
- Climate change and resilience
- Accessibility to quality parks, trails, and recreational opportunities
- Accessibility to and equity of multi-modal transportation choices
- Fair administration of justice
Culture & Lifelong Learning
- Vibrancy and sustainability of creative industry ecosystem
Government that Works
- Condition of City facilities and infrastructure and the effective adoption of technology
The budget before you makes meaningful investments in each of these crucial service areas that I am confident will result in tangible performance improvements. In the Economic Opportunity and Affordability Outcome, $40.2 million will be spent by Neighborhood Housing and Community Development in FY 2018-19, which includes fully funding the transfer to the Housing Trust Fund at $5.3 million for the first time since Council last revised the calculation. The budget builds upon the $26.3 million in on-going expenditures in service of individuals experiencing homelessness and invests an additional $3.1 million in bringing assistance to this vulnerable community. In addition, renovations in progress at the Women and Children’s Shelter are planned to be completed in FY 2018-19 at a total cost of $7.0 million. The Health and Environment Outcome includes an additional $4.5 million for public health services and social service contracts. Our pools and aquatic programs will also be receiving a much needed and long overdue influx of funding totaling $1.8 million that will greatly improve pool maintenance and programming. In regards to Government that Works, major accomplishments include funding for facility maintenance at the full amount of $6.5 million called for in our financial policies and $8.0 million for the continued implementation of a new human capital management system. The Culture and Lifelong Learning Outcome includes $1.4 million for building renovations at Austin Studios and $400,000 for the Art Space Assistance Program. These highlights and many more are described in more detail in the Budget Overview section of the budget.
Another important directive from Council that significantly influenced the development of this budget was a complete rethinking of how we incorporate recommendations from our Quality of Life Commissions. Staff and the commissions met this task head-on with enthusiasm and I am pleased to report that this new collaboration has tremendously advanced our understanding of the many Quality of Life issues affecting the daily lives of communities that have waited too long for their concerns to be prioritized by their local government. In total, this budget includes $6.2 million of new funding for Quality of Life initiatives compared to only $827,000 in FY 2017-18. Moreover, the majority of funds included in this year’s budget are part of the City’s recurring operating budget as opposed to the predominant application of one-time funds last year. This means that this year’s funding will continue into future budgets as a starting point, where it can be built upon as we learn more about which Quality of Life programs prove to be the most successful.
This budget continues to invest heavily in public safety services with funding for 33 additional police officers and 16 additional fire fighters that are needed for the opening of the new Onion Creek fire station later this year. Since the first 10-ONE Council took office in January 2015, the budgets for our three public safety departments have increased by a collective $107.6 million, or 18% percent. During this time we have added a total of 83 police officers, 68 fire fighters, and 67 paramedics to our sworn ranks. Taking a look ahead, the budget includes funding for the expedited development of two much-needed fire stations at Moore’s Crossing and Travis Country. These stations have been identified by the Austin Fire Department and Austin Fire Association as the two highest-priority fire stations in the City. One final note with regard to public safety: I firmly believe that a longer-term conversation about police staffing levels needs to occur in the near future. However, that conversation must be informed by a successful conclusion to the ongoing labor negotiations process. The plain fact of the matter is that the number of officers we as a City can afford to hire is inextricably linked to the level at which those officers are compensated.
With planned spending of nearly $1.0 billion in FY 2018-19, our capital improvements program is an essential part of how we fulfill your vision of Austin being the most livable city in the nation. For the second year in a row, two-thirds of our capital spending is concentrated in three departments; Aviation, Austin Energy, and Austin Water. The Aviation Department’s passenger growth continues to drive the need for facility expansion to meet customer and airline demands. Spending on the 2016 voter-approved Mobility Bond is also accelerating. Initial design work is underway on nine critical corridors and preliminary engineering on eight more, as addressed in the adopted Corridor Construction Program. Substantial increases in spending on regional and local Mobility Bond program projects are projected over the next two to three fiscal years. Additionally, a potential $925 million General Obligation Bond election in November 2018 could further increase capital spending later in FY 2018-19 and beyond as Council considers major new investments across seven propositions: Affordable Housing, Transportation Infrastructure, Parks and Recreation, Flood Mitigation and Open Space, Libraries and Cultural Centers, Health and Human Services, and Public Safety.
This budget represents a significant departure from the business model of the past. Our business and financial decisions are now laser-focused on advancing the strategies and metrics outlined in Strategic Direction 2023, with the end in mind of our entire community quickly experiencing tangible improvements across each of the six outcomes. I want to express my sincere gratitude to the City Council, community members, City Boards and Commissions, and City staff for embracing this new strategic vision and for their enthusiasm and hard work in reimagining our budget process to support that vision. The budget before you is a critical first step on the path to transforming the inner-workings of our local government in service of a better Austin for everyone. But this is just the beginning. As we move forward more changes will come that will restructure the organization in ways that further operationalize your strategic priorities. I am excited by the opportunities that lie ahead for Austin and I very much look forward to working with each of you on transforming your collective vision for the City into a reality.