Austin is so strapped for cash that city leaders are, metaphorically speaking, going through the couch cushions for change. They\u2019re finding millions of dollars approved by taxpayers in past bond elections that are still waiting to be spent.\u00a0\u00a0\u00a0\u00a0<\/p>\n
Last week, city staff shared with City Council\u2019s Audit and Finance Committee the sums remaining<\/a> from money collected for bonds approved in 2012, 2016, 2018, 2020, and 2022. When totaled, the funds exceed $600 million. Most of that money will still be spent on its intended purposes, Council Member Ryan Alter told the Chronicle, but some will be left over. \u201cIt could be anywhere as low as $3 [million] to $5 million and as high as $60 [million] to $80 [million],\u201d Alter said. \u201cIt just depends on how much we want to move the pieces around.\u201d<\/p>\n The pieces Alter refers to are the individual projects for which the bonds were approved. When city residents vote for a bond, it is to pay for physical developments like sidewalks, parks, and roads. The ballot language for the bond elections describes what the city wants to build. If the residents vote to approve a project, the city sells bonds to investors, who loan the city money to build it, typically on a 20-year note. The investors receive interest payments and, when the project is complete, the initial sum they loaned out. The payments come from property taxes that are called \u201cdebt service\u201d<\/a> on annual tax bills.<\/p>\n Austin has a longstanding policy of only asking for bond elections once every six years, as city staff pointed out at recent Audit and Finance Committee meetings. However, that policy has been repeatedly violated, to use Mayor Kirk Watson\u2019s term, over the last decade. City leaders called four bond elections from 2016 to 2022, all of which were approved by voters.\u00a0\u00a0<\/p>\n Until recently, it was assumed that Council would call another bond election for November of this year. In January, city staff shared a list of $700 million<\/a> worth of capital improvement projects the city wants to undertake. The projects include creating sidewalks, trails, and bike paths; acquiring land for flood control; and expanding a fire station and a police substation in North Austin, among other things.<\/p>\n But since last fall\u2019s defeat of the property tax increase called Proposition Q, the chances that Council would request a bond election have dropped. Council Member Krista Laine admitted she was skeptical of the idea at the Jan. 14 Audit and Finance Committee meeting. Watson questioned it in his Watson Wire newsletter<\/a> two weeks later, writing that city leaders should use \u201cdisciplined thinking about whether we need a bond election.\u201d<\/p>\n The Watson Wire also introduced a framework that the mayor calls a \u201cdecision tree<\/a>\u201d for determining when to call a bond election. The decision tree factors in things like a project\u2019s urgency, how much money the city has on hand, and whether there are unspent funds still remaining from previous bonds. Watson said that he wants the city to appropriately size bond packages so they can actually be delivered within six years. He also mentioned that city policies state that city leaders shouldn\u2019t consider a bond election until there are only two years of funding left on the projects which have already been approved.\u00a0<\/p>\n Austin Financial Services Department Director Kim Olivares recommended at the Jan. 14 meeting<\/a> that the city put off a bond election until 2028. OIivares presented data showing that the \u201cdebt service\u201d portion of property owners\u2019 annual tax bills is going to climb significantly over the next several years. Olivares said that the average property owner currently pays $450 a year to pay off the city\u2019s debt. In 2030, the same property owner is projected to pay $614 \u2013 and that\u2019s if no further bonds are approved. If the city were to approve an additional $750 million in bonds, Olivares said, the property owner would owe an additional $108, or a total of $722.\u00a0<\/p>\n With these numbers in mind, Ryan Alter told the Chronicle he is leaning against voting for a bond election this year. He is hoping instead to find enough unspent money, mostly from the 2016 and 2018 bonds, to address the city\u2019s critical needs. He noted that city staff provided Council with a list of 66 projects<\/a> last July that they thought could be funded with new bond money, and that they organized the projects by priority. He asked staff at the Feb. 3 Audit and Finance Committee meeting if they could use the same rubric to judge the projects still pending from past bonds to determine how important they are today.\u00a0<\/p>\n Council Member Marc Duchen, who has become Council\u2019s resident fiscal hawk, told us he is open to reallocating or even deauthorizing funds from previous bonds on a case-by-case basis, although he would prefer that the remaining bond money be spent on the projects for which it was authorized. But he warned that spending on capital improvement projects like Cap and Stitch<\/a> and the $1 billion dollar expansion<\/a> of the city\u2019s wastewater treatment plant will increase taxes in coming years. He is concerned that the higher taxes will drive Austinites out of the city.\u00a0<\/p>\n \u201cThis is a real contest between making sure that we\u2019re investing in the urgent and necessary projects that people are expecting us to, but also keeping the city affordable for people,\u201d Duchen said. \u201cI think we\u2019ve got to balance out how we think about the prior bonds, the future bonds, and the existing projects to make sure that people feel like we\u2019re not placing an undue burden on their ability to stay here.\u201d<\/p>\n