By Jo Clifton
The city’s immediate financial outlook is looking more optimistic due to a strong rebound in sales tax collections, increased development, and City Council and city management’s efforts to slow the growth of city cost drivers over the last three years, according to Budget Officer Kerri Lang.
However, city budget writers are also anticipating a budget shortfall for Fiscal Year 2026-27. As Lang wrote in a memo to the mayor and Council, “Fundamentally, while the city has made important strides in bending its cost curve to a more sustainable level, and record levels of sales tax receipts are helping to delay imbalances in the short term, work remains to be done to achieve long-term structural stability in the General Fund.”
In 2019, state law reduced the amount by which cities, counties and other taxing entities could increase property tax rates without voter approval from 8 percent to 3.5 percent. Lang anticipates the city’s General Fund expenditures will increase by 4 percent annually over the next five years without adding any programs or significant increases in staff.
(City of Austin)
The major increased expenditures in the General Fund are related to personnel costs, such as salaries and health insurance, as well as a larger contribution to support services, which includes Finance, Purchasing, Computer Technology, Human Resources, Payroll, fleet maintenance, fuel and other citywide allocations.
The city pays for General Fund expenditures from property and sales taxes, transfers from city utilities, and revenue from franchise fees, development fees, forfeitures and penalties, inspections and interest.
Staff members are also recommending that the General Fund increase its contribution to the Liability Reserve Fund to bring it back up to 14 percent, the level set forth in city financial policies. The fund fell below the 14 percent level due to expenses the city incurred as a result of the Covid-19 pandemic and Winter Storm Uri. Although the city has been working to get reimbursement from the Federal Emergency Management Agency, city officials do not expect to receive it by the end of this fiscal year, Sept. 30. The Austin Monitor asked a city spokesperson to find out exactly how much they were requesting from FEMA but did not get an answer before deadline.
Though the memo did not mention the matter, the city is also facing a number of lawsuits filed by protesters who were injured during demonstrations related to racial justice.
Sales tax is the second-largest source of city revenue, after property taxes. Because of the city’s strong rebound from the pandemic-related downturn, sales tax is projected to be $314.5 million for this year, nearly 13 percent higher than budget writers anticipated. Austin Energy and Austin Water are expected to transfer $160.4 million to the General Fund, which is what financial staff had previously projected.
Lang warned, “Although a very modest surplus is projected for FY 2023, if these funds are used to fund ongoing expenditures, projected deficits in FY 2027 and future years will expand.”
Staff members are proposing a property tax rate that will result in a monthly property tax bill from the city of $150.60 for the “typical residential ratepayer” for FY 2023, approximately $6 per month more than the FY 2022 bill. That rises to $195.63 a month in FY 2027, a 6.3 percent increase over the five-year period.
(City of Austin)
By Jonathan Lee
The Planning Commission was split Tuesday on whether to help save an eclectic lakefront estate from demolition by zoning it historic amid concerns over tax breaks and the likelihood that a previous owner participated in segregation as a business owner.
The property in question, known as the Delisle House, is located at 2002 Scenic Drive in Tarrytown. The main house, with Spanish and Modern influences, was built in 1923 by Raymond Delisle, an optician. A Gothic Revival accessory apartment was built in 1946. The current owner applied to demolish the structures in order to build a new home.'
Historic preservationists, for their part, overwhelmingly support historic zoning, which would preserve the buildings in perpetuity. The Historic Landmark Commission unanimously voted to initiate historic zoning in July, citing architectural significance, landscape features and association to historic figures. City staffers recommend historic zoning, calling both structures one-of-a-kind examples of vernacular architecture.
Tarrytown neighbors have also banded together to stop the demolition. Many have written letters, and a few spoke at the meeting. “How could anyone buy this property with the intent of destroying it?” Ila Falvey said. “I think it’s an architectural treasure.”
Michael Whellan, an attorney representing the property owner, said that the claims made by preservationists are shaky. The buildings are run down, he said, and have had substantial renovations. A structural engineer hired by the owner said any attempt at preservation would involve tearing down and rebuilding – an undertaking Whellan said would likely cost millions.
Whellan also argued that any historical significance derived from the property’s association with Delisle and longtime owner C.H. Slator is dubious. “These men are not noted for any civic, philanthropic or historic impact,” he said.
What’s more, according to Whellan, Slator likely participated in segregation as the owner of the Tavern on North Lamar Boulevard between 1953 and 1960.
A city staffer, however, said she found no evidence to support the claim. “We would never landmark a property where a segregationist lived, or there was a racist person,” Kimberly Collins with the Historic Preservation Office said.
Commissioner Awais Azhar couldn’t support historic zoning in part due to lingering uncertainty about Slator. “Focusing on that factor is not here to disparage an individual or family. It is not about playing the race card. This is an important assertion for us to consider as Planning commissioners,” Azhar said.
Commissioner Carmen Llanes Pulido said that allegations of racism should come as no surprise. “We’re talking about white male property owners in the 1950s, in Austin, on the west side – and of course they were racist,” she said. But she argued that allowing the house to be demolished based on these grounds does nothing to help people of color who have been harmed by racism and segregation.
The question of tax breaks was also controversial. Michael Gaudini, representing the property owner, said that the tax breaks associated with historic zoning would exacerbate inequality by shifting property tax burdens to less affluent communities. City staffers estimate that the property, appraised at $3.5 million, would get either a $8,500 or $16,107 property tax break annually, depending on whether a homestead exemption is applied.
Commissioner Grayson Cox preferred the commission focus not on tax breaks but on whether the structures merit preservation. “To me, nothing in the historic preservation criteria lists, is this person deserving of a tax break or not?”
Azhar, on the other hand, said he plans to propose a code amendment getting rid of city property tax breaks for historic properties.
The commission fell one vote short of recommending historic zoning, with six commissioners in support and three opposed. Azhar and commissioners Claire Hempel and Greg Anderson voted against.
The odds of City Council zoning over an owner’s wishes are slim. Nine out of 11 members must vote in favor, and there have only been a handful of such cases over the past several decades.
What's new in Austin food & drink this week:
- Nau's Enfield Drug closing after losing their lease. Did McGuire Moorman Lambert buy the building, with its vintage soda fountain?
- Nixta Taqueria Chef Edgar Rico named to Time Magazine's Time 100 Next influencer list, after winning a James Beard Award earlier this year.
- Question: From what BBQ joint did pescatarian Harry Styles order food this week?
- Austin Motel is opening the pool and pool bar Wednesday nights in October for Freaky Floats.
- Vincent's on the Lake closing due to "economic conditions and low water levels [at Lake Travis]."
- Cenote has closed its Windsor Park location. The East Cesar Chavez location remains open.
- The Steeping Room on N. Lamar has closed.
- Local startup It's Skinnyscored new financing for its gluten-free pasta business.
- P. Terry's opened a new location in Kyle, at 18940 IH-35.