Austin City Council Work Session Transcript - 4/8/2025 Title: ATXN-1 (24hr) Channel: 1 - ATXN-1 Recorded On: 4/8/2025 6:00:00AM Original Air Date: 4/8/2025 Transcript Generated by SnapStream ================================== Please note that the following transcript is for reference purposes and does not constitute the official record of actions taken during the meeting. For the official record of actions of the meeting, please refer to the Approved Minutes. [9:00:56 AM] Good morning everybody. It's 9 o'clock on April 8th, 2025, and I will call to order this City Council work session. We are meeting in the City Council chambers which is located in city hall at 301 West second street in Austin, Texas and we have a quorum of the Austin City Council. Present members. We have two items on the agenda. One item is the presentation of the City's five year financial forecast, And the other one is an item related to the I-35 cap and stitch design options update. We'll go in that order. So the first item will be the presentation of the City's five year financial forecast. And I'll recognize the City Manager. >> Thank you, mayor, and good morning, mayor and council. Today, our staff will provide a briefing on the city's five year financial forecast. This is our financial forecast. This is our first discussion of many as we continue to work on the development of the 2026 proposed and the fy 2027 plan budgets. This forecast describes the headwinds the city's general fund will be facing in the coming years, as we continue to grapple with the challenges of a 3.5% property tax revenue cap and the continued slowing of sales tax revenue growth. Although the current forecast projects deficits in the coming weeks and months as we receive the official roll notices from the area, appraisal districts and additional sales tax information, staff will continue to refine these assumptions. We will also continue to rigorously work to identify areas across the city that can be reallocated as it relates to some of our available funding and prioritized to ensure we are addressing the highest priorities of this community and the city council. While this presentation will [9:01:57 AM] While this presentation will focus on the general fund, each enterprise fund department has completed a financial forecast that is also included in the report, and we are available to answer enterprise fund questions related to any of these departments as well. With that, I will turn it over to Carrie Lang, the director of the office of budget and organizational excellence, and Eric Nelson, acting deputy director, to walk us through the financial forecast. Carrie. >> Thank you, city manager. I'm Carrie Lang, the director of the budget and organizational excellence office. I'm glad to be with you all today. We will begin talking about our financial forecast. As the city manager said, and I'll just go ahead and jump into the presentation. By starting just talking through the things that we're going to discuss today, starting with our agenda. We're going to walk through the presentation focusing on the general fund. I will provide an update, a financial update of [9:02:59 AM] update, a financial update of where we are on fiscal year 25. Then we'll briefly go over the timeline for the budget process over the next couple several months. Then we'll kind of talk through what we're seeing as citywide, the assumptions for citywide cost drivers for the forecast, talk through the general fund, and then we'll jump into our capital improvement program, the highlights from that program. And finally, we'll discuss the policy discussions that we have in place. >> If I might interrupt just real quick for those that are here, that it's my understanding that we have one person that wants to speak. And I'm going to ask what I was planning on doing on both of these is have the presentations first, and then let people speak so that they would they would also get the benefit of the presentation before they spoke. But since we only have one speaker and I don't know the name, but I'll ask, do you want to speak beforehand so you might leave, or do you want to stay and hear the presentation and then speak? >> Mayor. The speaker is remote [9:04:01 AM] >> Mayor. The speaker is remote and they have not called in. >> The answer to that question. Thank you. Thanks for letting me interrupt. >> Thank you. So we'll start with the fiscal year 25 estimate. What we're seeing so far. When we look at our revenue for fiscal year 25, we are anticipating an overall revenue shortfall of 5.7 million. This is primarily due to the anticipated sales tax revenue for this year, based on what we're seeing through four payments of sales tax, we anticipate a 1.5% growth over last year, and that will result in a $77.9 million shortfall for sales tax revenue. Our other revenue, our other tax revenue, which is similar, our alcohol beverage sales revenue, is also showing a decline for fiscal year 25. However, we are seeing with the ems department, they are projecting a $4.1 million higher than estimated reimbursement. And that's primarily due to the [9:05:01 AM] primarily due to the efficiencies that they've identified are putting into place in their billing unit. Moving forward to expenditures for fiscal year 25. We are looking at our general fund departments, and right now we are not projecting any savings at the moment for the general fund departments. They are anticipating coming in at budget based on what the spending to date. And as we prepared for this forecast presentation and some of the reasons why we are anticipating them coming in at budget is because of their reduced vacancy savings, as the city has really pushed departments to hire and to reduce that vacancy rate. We're seeing that they are now, you know, we've had we've had successful hiring efforts, which means that their vacancy savings is lower than what what was budgeted. And then some of the inflationary pressures that we're seeing across the city is making increased expenses across all expenditure lines. While we aren't showing savings at this moment, we will continue to work with the departments over the [9:06:02 AM] with the departments over the next several weeks and months to identify if there are more savings available or savings identified, as well as kind of refining the numbers as we get further into the fiscal year to see what changes we can make to those current year estimates for the departments. Moving forward to fiscal year 26. This is the budget timeline that we have in place. And as we're right now talking through the forecast, we want to really start off by thanking departments for the work that has been done thus far to get us to this point. We recently received the recommendations from the boards and commissions. Those were due on the 31st. And so my team is working to distribute those to the departments so they can be analyzed and considered for what to how that impact will be for the budget process. We will come back to the council in July, on July 15th to present the proposed budget. And then from there there are several work [9:07:04 AM] there there are several work sessions planned, five in particular plan to discuss budget. We have the public hearing on July 31st and then of course, budget adoption will be August 13th through 15th. Over the next several slides, I will walk through our citywide cost drivers and assumptions that were used for creating this financial forecast. Beginning with the personnel and benefits. When we look at our assumptions for the forecast, we assume a 5% increase in the city's contributions to health insurance. We're also assuming a 3.5 civilian wage increase for next fiscal year, with the forecast for civilian wages. Assuming a 3% increase over the life of the forecast period, we have, the police and ems wage increases based on the established contracts that are [9:08:04 AM] established contracts that are in place for those two associations. And then we do have a placeholder for fire negotiations that are commencing in the next couple of weeks and months. And so we for the anticipated cost for those negotiations. Living wage is also a 2% increase based on consumer price index data. And following the policy that's in place on considering our living wage increases. And then we have increases to our coworkers and April's retirement systems. And these are based on the city's legacy, the legacy liability payments and contracted or legislated increases that have to happen for those pensions. And we also put in a placeholder with the hopes of the fire pension being approved or going through the state legislation this year. And finally, over the over the last several months, the human resources department has completed some market [9:09:06 AM] has completed some market studies that will have some impacts in fiscal year 26. And we are planning for the citywide market study for fiscal year 27. Looking across our shared allocations. We have our internal services departments that provide services to support the entire city. We anticipate a 7% increase for our support services fund. And as you all know, that houses our human, our corporate offices, our human resources, financial services, city council, city manager's office, so that that support services function, we anticipate increasing the 7% in fiscal year 26. And then for the out years, we are assuming a 5% increase in those in each of those out years for our communications and technology management, our it department, we are anticipating a 10% increase in fiscal year 26 for the forecast. And then that is going to reduce to a 5% [9:10:07 AM] is going to reduce to a 5% increase in the rest of the forecast period. Fleet maintenance is a 5 to 7% increase over the life of the forecast. And then fuel. We're anticipating a 3% increase for the remainder of the forecast period. Moving on to the general fund forecast, we will begin with a discussion of our revenue, and I'll turn it over to our acting deputy director, Eric Nelson, to walk you through our revenue assumptions. >> Hey, good morning, council members. I just wanted to begin by providing some context over about the last 15 years for general fund revenue sources and their growth over time. The main story here is you can see that property tax is really the base that our general fund is built on, and to a lesser extent, sales tax. It's property tax that's that's funded the expansion and cost drivers in the general fund. In our recent history. Looking forward to fy [9:11:10 AM] history. Looking forward to fy 26. We're forecasting a 3.4% increase in overall general fund revenue. That's about $49 million. You can see that property tax will continue to expand as a share of that total revenue. We'll go into more detail about all of these assumptions, but we're expecting a slight decline in other revenue. Pretty weak growth in sales tax. And we're getting a big increase from our utility transfers. Starting off with those utility transfers, you can see that we've become really a lot less reliant on those transfers over the last 10 or 15 years. They stand at about 12.5% of our total revenue in this current fiscal year, as a result of growth in their customer base and demand and some recent rate increases, we expect that to tick up. But stabilizing at about the 13.6% level by the end [9:12:11 AM] about the 13.6% level by the end of the forecast period, which again is significantly below where we were ten and 15 years ago. Other revenue is a big basket of smaller revenue sources. It's a lot of the fees charged by our departments, fines assessed by the municipal court, franchise fees for use of our right of way, interest earnings and some other smaller revenue sources. The numbers in red are distorted years where we were affected by covid shutdowns, but we've recovered above and beyond our prior highs. I also do want to mention that fy 24 was a little bit distorted due to the receipt of receipt of some FEMA reimbursements and some accounting changes that made that year disproportionately high. Generally, we don't see a lot of strong growth in this revenue source, and the primary [9:13:12 AM] revenue source, and the primary story here is that we have interest earnings that are extremely high now due to relatively elevated interest rates. But as we forecasted, those will decline over time. That offsets almost all of the growth in the other revenue sources in this category. As recently as fy 21, interest earnings for the general fund were only about $1 million. And in the most recent fiscal year, they were $28.3 million. So we get some pretty wild swings in interest, and we have to forecast conservatively into the out years. Moving on to sales tax. This provides some history of our results over the past 20 years. Austin has had extremely strong returns in sales tax over this time period. You can see that in the ten years leading up to the covid pandemic, we averaged almost 6% growth a [9:14:13 AM] averaged almost 6% growth a year. We had one only slightly down year as a result of covid and then a massive recovery and more. More recently due to inflationary pressures and economic uncertainty. We've seen sales tax really level out. And those growth rates barely stay in positive territory. Looking forward we're forecasting very conservative growth rates. But they're justified by the economic uncertainty we're experiencing and the uncertainty about the medium term growth prospects for the nation and the city. And I'd also just note that even if we get those seemingly low numbers, the ten years ending in fy 30 would still average at over 5% a year. Because because of that massive spike during covid. We work with John Hawkins at txp as our economic consultant to help us understand broader economic [9:15:16 AM] understand broader economic conditions and also dial in our sales tax forecast. He's going to continue to work with us throughout the spring as we develop the proposed budget. But his initial indications show a lot of economic uncertainty. I'm sure you've all seen what's happening in in equity markets. Inflation continues to be a factor. The fed seems uncertain about the near-term direction of interest rates. More locally, we're not seeing a lot of job creation. We're seeing a slowdown in building which bears on future sales tax growth. And while higher prices due to tariffs may help in the very short term because higher price levels would would lead to more sales tax revenue, they're also going to offset demand in people's behavior. So the net effect of that would be lower sales tax. Just digging into some of our more short term results in sales tax, we're actually on the surface doing [9:16:17 AM] actually on the surface doing fairly well this year. We need to get to 3.7% to make our budget number. And year to date, we're at 3.9%. However, that's mainly due to some positive one time adjustments, for instance, for audit collections. But we dig into the current collection trend, which shows just the month to month. Retail sales and what we're bringing in. And that's only trending at about 0.2% this year. So when we weigh those two factors and look at adjustments being likely to regress to the mean over the rest of the year, we come up with a year end estimate at about 1.5%, and the chart at the bottom shows the ups and downs we're experiencing, basically hovering around 0 or 1% where there's no clear trend and certainly no indication of strong, consistent growth with our current collections. Moving on to property tax, I want. Our [9:17:21 AM] on to property tax, I want. Our context. Of course, the city of Austin is not the not the only entity that assesses property tax in our region. Aisd or the school district in your area is the largest assessor of property tax bills for the typical Austin homeowner. Their school districts almost 50% of that bill, whereas the city of Austin's under a quarter. You can see the most recent year over year change coming into fy 25, where the total tax bill is increased by over 13% for our typical homeowner. And some of that is driven by disproportionately high increases for aid in Travis county as a result of tax rate increases. So that skewed the number up last year. I want to preface this slide by saying these numbers are based on conversations with tcad, but they're very preliminary due to the timing of our forecast. Some [9:18:23 AM] the timing of our forecast. Some years we're able to see what the notice roll is going to look like. In some years we aren't. This year we're not. Those numbers are going to come out later this week or in a couple of weeks. However, we did have initial conversations with tcad about what we're likely to experience, and we think we can outline some of the dynamics we're likely to see in this coming year. Tcd's initial indications are that property tax values on our roll are actually going to decline in the neighborhood of about 10%, and that's due to market conditions, and also because they continue to experience record levels of protest and record levels of value loss as a result of those protests. The overall property value doesn't hurt the city because we have a revenue cap, and so our rate can adjust. However, what really affects the marginal revenue for the general fund is that new property taxable value. Last year, we had [9:19:23 AM] taxable value. Last year, we had a record $5.4 billion added to our rolls. And this year, tcats projecting that will only be at about 40% of that, which is about 2.2 billion. And just for context, in fy 26, that 3.3, that $3.2 billion difference is about $11 million in general fund revenue. So that's a major factor for us. Another consequence of the decline in values is it will drive the rate up, the property tax rate up. You can see our projected impacts on our non-senior and senior homesteads. That's based on our projection of what the median value will be. We're expecting those medians to come down. But another dynamic that we're seeing with the initial indications from tcad is that one commercial values are likely to decline in their market value more than residential, and two, much of the homestead properties [9:20:27 AM] much of the homestead properties have capped value due to the 10% assessed value increase cap from prior years. Over 50% of our non-senior homesteads have some cap value, and over 75% of our senior homesteads have cap value. So what that means is, even if market values decline, their their taxable value may not decline that much because of the effect of that prior year cap. And that's going to mean that we're they're going to experience a little bit higher increase in the projected property tax bill. I know this is a lot of numbers on on this slide. It shows our projections for the rate. Again, you can see it would be a significant increase in the rate itself because of that projected decline in property values. It translates into about $30 million of new general fund revenue. But actually we're expecting our debt service [9:21:28 AM] expecting our debt service requirements to increase by more than that by almost $36 million. And that's as a result of selling debt associated with the number of voter approved bond initiatives we've had over the past ten years or so. When we compare when we factor this slide in with the previous slide, that debt increase is responsible for about 40% of that total increase for the typical homeowner that we're projecting. This also shows the impact of our payment to the Austin transit partnership, which is another component of our tax rate. We wanted to provide some additional context about the effect of the 3.5% property tax cap. As I said in the initial slide in this section, property tax is really the base on which the general fund has been built. And over the last five years, we've been restricted in our ability to [9:22:32 AM] restricted in our ability to continue to build that base. And so this slide shows what our theoretical total property tax capacity would be had sb two not taken effect. And if we had gone to the 8% voter approval rate in each year since, and had we done that in fy 25, we would have budgeted almost 161 million more dollars in property tax revenue. >> And members, I want us to complete this before we start asking questions. But I do want to interrupt right here, because at the audit and finance committee meeting the other day, there was a question about the role that that cap has had, and I probably created the confusion, or at least I'll take the blame for it. But it sounded like what was being said was that in one year that amounted to $160 million in in a difference it had, we used 8%. [9:23:34 AM] difference it had, we used 8%. And I. What he's pointing out here is that it had you had we done it had the city done 8% on an annual basis that the compounding and the way that all plays out would have been at the end of that period of time in that year, $160 million difference. But the number that it the difference between 3.5% and 8% as a number is not $160 million. And so since there was confusion, I even saw it reported that the way we talked about that in the audit and finance committee, I just wanted to I'm real pleased you have this slide because I think it's much clearer. But I just want to call attention to that. I'm confident that you're also going to tell us what that what each percentage counts later on so that we'll be able to do that math ourselves. >> Sure. Yeah. You're exactly right. This reflects the effect of the compounding over just [9:24:35 AM] of the compounding over just five years. It adds up quickly. It's like getting 3.5% or 8% in your savings account or your 401 K. And I can tell you right now. >> We're trying not to use the phrase 401 K right now. >> Sorry. >> Too soon. Yes, yes. Thank you. >> Every additional percentage above the no new revenue of no rate is $6.9 million. And so if we went to 8% just this year, it would be an additional $31 million, which is over twice what we're expecting the year over year to be in general fund in property tax otherwise. And I'm going to kick it back over to Carrie to start talking about general fund expenditures. Thank you. >> Would you mind repeating that 6.9 million. That's correct. >> Thank you. So. >> So as we start, before we start going into the details of the expenditures, we wanted to kind of talk through the sources [9:25:35 AM] kind of talk through the sources and uses of the general fund. Eric talked through the different revenue sources that we have. And when we look at the general fund as a whole, of course property tax is our largest revenue source. Then we rely on sales tax, which is the least stable but our second largest source. And then we have utility transfers and other revenue, which are about the same amount. When you look at the overall revenue that we have, looking at that outer circle, how we use our, our, our revenue, how we how we expand our expenditures or use our expenditures across the city, across the general fund. You will see that, of course, public safety takes up about 65.2% of our general fund expenditures. And then we when we look at that, compared to our sources, you see through this chart that you're looking at property tax, sales tax. By the time we get through our four public safety departments, that's all a property tax. And two thirds of sales tax that are expended, [9:26:36 AM] sales tax that are expended, comparatively speaking. So the remaining 34.8% of the general fund is funded through things like the remaining parts of sales tax, our utility transfers and other revenue. This just shows how the expenditures play out compared to the revenue. When we in practice, of course, we everything goes into the general fund and is dispersed out for appropriations across the departments. So when we look at our base cost drivers that are impacting the general fund in particular, there are several things that that we made assumptions on are including as as our base cost drivers, the first will be and the largest is salary and benefit increases. As we mentioned earlier, we had some assumptions, some cost driver assumptions citywide. And that is the 3%, 3.5% wage increases as well as the increased needs payments to our [9:27:38 AM] increased needs payments to our pensions, our cause and April's pensions. And then we also have our insurance increases included in that. The support services, all of our internal services increases, resulting results in a $17.4 million increase for fiscal year 26. And then from from a departmental perspective, we did include funding to continue operations of the eighth street homeless shelter at 3.5 million, as well as departments have several contractual increases that we needed to make sure we're funded based on those contractual obligations for regular business rent technology increases supplies across the departments. We're seeing those inflationary impacts across the department. And then there are the annualized costs for positions that were added in fiscal year 25. So we did a lot. We did partial year funding for about 56 or 57 positions in this fiscal year. We're annualizing [9:28:38 AM] fiscal year. We're annualizing those costs across for fiscal year 26. So making sure those those positions have full year funding, that's 2.1 million. And over the several over the last several years, we've talked about when the fire department will have their ladder apparatus come in and be delivered. We anticipate that being delivered in June of 2026. And so we included the staffing for that particular ladder. There is another ladder, another new ladder that is anticipated in fiscal year 27. And so you'll see that additional ladder, additional. >> Additional funding. >> At least they're saying funding. >> It's party. Check testing okay. So we are anticipating that additional ladder being funded in fiscal year 27. And [9:29:39 AM] funded in fiscal year 27. And then finally, the last update for the base cost drivers is the change in the Travis county booking interlocal. There's a net increase of $2 million. We are showing some savings in the municipal court department to offset the change of magistration that will be managed by by Travis county, but the increased costs of our portion of that will be added. And so that's a net $2 million increase. Moving forward to our our financial forecast. And what what all of this conversation means, we've shown this this chart since sb two was put in place in 2019. And it continues to be the major conversation that we have about the general fund. With the restrictions that we have with sb two, the general fund has a structural imbalance. Our revenue is growing slower [9:30:40 AM] Our revenue is growing slower than our expenditures. This is more evident now that the federal stimulus dollars have gone away. And we're just looking at where we're sitting with with our property tax revenue. And as our sales tax continues to. Stay flat, not grow, then it's showing the impacts that we're having as as we look at these base cost drivers across the city, as I mentioned, our baseline cost drivers, we aren't we don't have any enhancements in those cost drivers. This is just the cost of doing city doing business for the services that we are continuing to have today. And over the next several weeks and months, as we prepare the proposed budget, staff will work, of course, to come back with a balanced plan. Proposed budget for fiscal year 26 and a balanced planned year in fiscal year 27. As such, these deficits will change of course, as we get into the proposed budget. But with the current assumptions [9:31:42 AM] with the current assumptions that we have in place, we're showing a $33.4 million deficit in fiscal year 26, growing to 79.9 million by the end of this forecast period. So now I want to just talk about some of the changes that have happened or that took place over between our planned fiscal year 26 and what you're seeing before you in fiscal year 26 as the forecast, when we when you all approved the budget in in August of last year, we had a balanced planned fiscal year 26. But as we look at some of the declines that we've seen over the sales tax and mixed beverage tax, that is a $21.7 million lower projection than what we originally had in the planned year for fiscal year 26, as well as based on initial conversations with tcad anticipated lower property tax revenue for the coming fiscal year. That in place with the. We [9:32:42 AM] year. That in place with the. We do have some improvements, though. As I mentioned earlier, ems is anticipating additional revenue because of the efficiencies and the new positions they've received in that department. So we are anticipating increased revenue from ems of 4.1 million. And then because of our general fund transfer from Austin energy, that is changing back to the 12%. If you remember, a few years ago, we reduced it to 11.6%. We return it to that 12% for fiscal year 26, and that's a $1 million increase to our revenue. When we look at our assumptions, we are assuming increased costs for wages and benefits. As I mentioned, we are assuming a 3.5% civil civilian wage increase compared to the 3% that was originally planned. And then when we're looking at our changes in both our [9:33:44 AM] changes in both our contributions to health insurance as well as some shift differential pay, that is resulting in a 4.1 million net increase, and then the Austin police association contract. That contract, if you all remember, was approved after the budget was approved in August. That contract was approved in October. This 2.1 million is what we anticipated based on that contract. When we had the conversation in October, looking at citywide allocations, those allocations did increase 6.1 million more. Again, that's for our internal services departments, which includes support services, fleet as well as many of our internal services such as city council, city manager's office, the law department. Those are some of the increases that we're anticipating. And then at the departmental stage, I mentioned earlier, the eighth street homeless shelter, contractual cost increases, the new ladder that is anticipated for fiscal year 26, as well as the changes to the Travis county Ila [9:34:47 AM] to the Travis county Ila contract. When we look at general fund reserves, we anticipate ending the general fund reserve at 12.7 million, excuse me, at 17.2%. At the end of fiscal year 26, we are anticipating receiving FEMA reimbursements in this reserve calculation. And so when we look at what we anticipate in fiscal year 25, in this current year, based on the information we have today, we are anticipating 12.7 million. We have an additional amount of 9.6 million of FEMA reimbursements in fiscal year 26. These are covid related reimbursements, as well as winter storm Mario. We as you all know, we don't have control over the timeline on when we'll actually get these reimbursements. And so we'll we're working closely with our, our, our consultants and the emergency management department to try to understand better, but that will impact the potential [9:35:47 AM] that will impact the potential reserves balance. If those if those reimbursements do not come in as planned, and the surplus of 2.5 million that we're anticipating above the forecast, it doesn't reflect our current gap that we just discussed, nor does it assume any one time expenditures. And so as we pull all this information in that 17% will fluctuate based on the changes that we make through the proposed process. Moving forward and having a quick discussion on the American rescue plan act and the impacts that we anticipate over the next several years, is really looking at. And I sent a memo out on Friday to kind of discuss the arpa funds and the amount that has been expended and where we are with that spending so far, per federal guidelines, the city did encumber or spend all the [9:36:48 AM] encumber or spend all the dollars as of December 31st of 2024. We had to at least have all the funds encumbered, and we were successful in doing so. And then we are working to make sure that those encumbered dollars, the 32 million that's remaining, is expended by the December 31st, 2026 timeline. Right now, most of the of those projects, most of them were one time in nature. There are about ten projects that are ongoing in nature that are not included in our baseline budget. And I think that's going to be a conversation on what the impacts of those ongoing potential ongoing programs will be and how we will be able to make adjustments accordingly. I will note that there I believe there have been some questions about whether or not we made some capital investments through arpa funding that have resulted in ongoing needs, and we have not all the capital projects that were funded through arpa were were rehab projects for pecan [9:37:49 AM] were rehab projects for pecan pecan groves and the bungalow, I believe. And those already have the ongoing operating dollars needed to continue those programs. And again, I will I will mention that in our current forecast, our baseline cost drivers do not include any of the funding to continue the arpa programs that are currently in place. So as we think through and talk through what this looks like, what this structural imbalance looks like for the city, just reiterating that the 3.5% revenue cap causes challenges for us to look to, to continue to have a balanced budget over the next several years. We will continue to have those imbalances as we try to work through what this decreased revenue looks like, as we see what's happening with the decreased sales tax revenue as well. We are working with departments to look at service prioritizations. We started a [9:38:52 AM] prioritizations. We started a process this year to really have departments look at what their core services were and what services or programs they may be providing that are furthest from their core, or that may not be as effective as they once were. So we're working with departments on that. We are we are really looking at departments to identify additional savings across across the general fund, and to see where we can find efficiencies across the city to kind of curb those increases in expenditures over the next several years. And then finally, we'll continue the work that we do annually to see where we can increase our recovery of cost of service in our fees. And so we work with departments to really look at what changes they need to make in their, in their fees, their general fund fees to offset the cost of providing those services. We have eight enterprise departments and the financial forecast report includes a full forecast for [9:39:53 AM] includes a full forecast for each of those eight enterprise departments. We have detailed that information in the appendix of this presentation. However, we aren't going to go through each each enterprise as far as what their forecast is. I will say that when we look at the enterprise departments and we hone in on what their their forecast fee increases are, when we look at the typical residential ratepayer, we notice that for fiscal year 26 is a 2.5% increase compared to this current fiscal year, at $297. You'll see over the major fees that are included in our in our enterprise departments. Austin energy is anticipating a decrease in their fees for the typical ratepayer. That is, when we look at the total impact that is offset by Austin water's increase, as well as transportation user fee increase. But the overall increase when you look at all of [9:40:54 AM] increase when you look at all of the enterprise departments is 2.5% over this fiscal year. When you compare that to what we've seen over the last five years, we were at 5%. So we are still lower than our five year average. And then I want to the next few slides are going to talk about our capital improvement program. When we look at this plan here, this is the spending plan that was approved in the fiscal year 25. Proposed and approved budget. And we will give an updated spending plan for in our next proposed budget that will go through fiscal year 30. The teams are working on that updated plan as we speak. And but when you look at this chart, it reflects the spending that we've done since 2020. You'll see the increased spending that you'll see. And many of those things are the increase, the increased programs for aviation. Austin water has a growing capital improvement program. The other includes the convention [9:41:56 AM] other includes the convention center. And so you'll see that increase as well as our CEOs, our contractual obligations and our our voter approval programs. And over the life of this plan, you see that increase spending in 20 begin in 25 and 26. And it will start ramping down as as the convention center is planned to open later in this first forecast period, as well as the planned completion of the current voter approval bond programs. So when we look closely at our public improvement bonds or our voter approved bonds, this gives a history since 2006 of the bond programs that we've had in place, showing the programs that were approved, as well as the two programs that failed in, in by the voters. And so you'll see that over the last 20 years, we've had eight bond programs, four of them being in the last [9:42:56 AM] four of them being in the last ten years. And I'll talk a little bit more in the next slide about what what the spending looks like for that bond. But we are still spending down on on the bonds beginning in 2016. This slide talks through those individual bond programs, the spending that has taken place since 2006. And you'll see that we have 100, 1.38 billion authorized but unused public improvement bonds. 2016 still has a portion, that is, that you'll see as we go through the years that are closer to where we are now, 2022 still has a large number. That was a housing bond that we was approved in 2022, and the housing department is leading those efforts. But this just shows a history of where we are, the amount of dollars that have been expended, what is still encumbered, and those unobligated dollars that that we still have for each bond program. So now we'll just talk a little bit through what we're [9:44:01 AM] a little bit through what we're seeing as far as some of the council priorities that have come across are come to staff on through resolutions or items from council as of or since January 2024, we received 41 resolutions that we believe have a potential financial impact. As of today, those resolutions are not included in the base forecast. This slide here just gives a sample of some of the resolutions that are included. The full list is in the financial forecast report. And we know that it's just continued conversations on what areas or what what resolutions, what direction needs to be further prioritized as we go through this, through this budget process. Similarly, we have some of the amendments that were approved in fiscal year 25 as one time amendments. There are 15 of those that do not have ongoing funding. They were one time request. And so when we [9:45:02 AM] time request. And so when we look at those one time amendments that have funding for this fiscal year, it's 12.5 million. These items are not included in the base forecast either. And so we have we need to have further discussion on which of these programs are potentially ongoing in nature or need another one time impact, depending on the availability of funds. Thank you for your time, and I'm happy to answer any questions that you all may have. >> Thank you. Why don't we? I know I think the speaker is on the phone now. Why don't we take the speaker? >> Ian Wilson on b1. >> Just a moment. We're waiting for. They're unmuted now. >> Hello. Yes, please go ahead. >> Thank you all for I guess generally I just wanted to thank the city for being so [9:46:03 AM] the city for being so transparent in its process, and I specifically want to thank the city manager, Broadnax, for engaging the public, the public information meetings he's held are truly wonderful. It's always inspiring to see our public servants do such diligent and thoughtful work. I know there are a huge number of competing demands on our city's resources, and I know that there's lots of feedback about how you all spend the various taxpayer dollars. And I just wanted to specifically thank you all for taking all of these issues so up to so thoughtfully, as well as city manager Broadnax for taking such a forward thinking approach. So I just wanted to thank you all for your efforts. >> Thank you. >> Mayor. Those are all the speakers for b1. >> We're all going to have to take a little break. That's such a nice testimony. Everybody pause. Yeah, okay. Thank you very much. Councilmember qadri, [9:47:03 AM] very much. Councilmember qadri, followed by council member Ellis. >> I don't know if we should take a break or if we should adjourn the meeting. >> Yeah, yeah. Let's get while the getting's good. Yeah. >> Thank you, mayor, and I appreciate Carrie and Eric for their presentation. I have a few questions based off of the slide deck. One is almost just for clarity for the public. Since we passed the last budget in August, there's been an increase in expenditures for fiscal year 2526 by about 8.1, $18.7 million, and in a decrease in revenues by 14.8 million, leading to about 33.4 million deficit for fiscal year 2526. I just want to confirm that that's that that's accurate. >> That's accurate. >> Okay, great. That was an easy question. Question number two on on pages eight and nine of the report that had come out April 4th, it breaks down the $18.7 million in expenses. Can you [9:48:04 AM] million in expenses. Can you clarify how these expenses are different than the expenses listed as covered expenses in the financial forecast presentation that we got on on the October 8th work session of last year on slide 16, and specifically those expenses listed as covered expenses, and I'll list them out. They listed wages for civilian and sworn labor agreements. They listed health insurance and pension contributions. They listed allocations for it fleet and support services. They listed social service funding, including expanding homelessness response efforts. They listed part opening new and expanded facilities, grounds maintenance, and illicit fire and ems station openings. >> Yes. So the major changes are the assumptions made between. The civilian wage increases. So during the proposed budget, when we when the proposed budget was [9:49:06 AM] we when the proposed budget was approved, the planned budget included a 3% wage increase for civilians. As far as the forecast, there's a 3.5% assumption for civilian wage increases. There are additional costs related to the various pensions. So coast, the city of Austin employee retirement system has legacy liability payment, additional city required contributions. That's about 3.6 million. The Austin police association also that that retirement system has additional city contributions at 2.1 million. Excuse me, 1.8 million. In October, with the approval of the police contract, there was a $2.1 million increase based on that contract approval for fiscal year 26. That was not part of the approval process. And then some of the citywide allocations. We do our best to kind of hone in what those allocation costs are [9:50:07 AM] what those allocation costs are going to be. But across the citywide services, it our internal support services costs, fuel fleet maintenance costs, as those departments and funds see increases in their costs that is passed on to other departments, including the general fund. And so those increases are are some of the main increases. Again, when you look at some of the departmental changes, all the things that were mentioned as far as the part positions, the investments that we did in fiscal year 25 for. Those are still included in the base. However, operation for the eighth street homeless shelter, we needed to add the dollars to make sure we had full annualized operational costs covered for the homeless shelter. And in previous years when we transitioned and begin using operating that shelter, we had [9:51:08 AM] operating that shelter, we had savings in other areas that that covered those costs. Well, we don't have those savings anticipated for fiscal year 26 that we need. We need to make adjustments. And then, as I mentioned, various departments are seeing contractual increases and just the increase in doing business. And so we're seeing some we received some notice from several departments of contractual obligations that will require us to increase some of their funding for, for those. And then the areas that we are that, that we already we anticipated, but we thought that it would be in fiscal year 27. We thought the latter for the fire department that it would come in 27. So we had that planned for fiscal year 27 outside of the plan year. When we received notice that that would come in June of 2026, we made adjustments to include that cost. >> Great. Thank you for that clarification. And then my last question is, could you break down the $21.7 million decrease in anticipated revenue from [9:52:10 AM] in anticipated revenue from sales and mixed beverage taxes? Okay, yes. >> So we were assuming higher levels of growth for both of those revenue sources at the time. We put together the plan budget and they're kind of related. They're both consumption and consumer spending related. And so we've we ended fy 24 a little bit below our estimate. And then we've continued to see lower than budgeted results in terms of the growth we're experiencing in both of those sources. You know, the numbers are are large, but the base is so large. So that $21 million is only a little bit over. Is because of the erosion in what we're seeing in the results. And our budgeted growth rate, I think was 3.5%. And now we're projecting only 1% [9:53:12 AM] And now we're projecting only 1% growth in in fy 26. And so that's the vast majority of the swing. >> Got it. Thank you. >> Thank you. Council member council member Ellis followed by the mayor pro tem and then council member harper-madison. >> Thank you. Mayor I've got a high level question. This one's about slide number 14, which is the general fund revenue source sales tax. Slide over 25 years, if I can do the math correctly, what if the numbers come back lower? I'm looking at 2008 and seeing a -9.5%. Obviously everyone remembers 2008 and the economic downturn that happened during that time. So what happens if numbers start pushing into the negative as we see the layoff of federal employees and other sorts of situations where it's making it harder for people to be able to buy things and to be able to pay that sales tax in [9:54:15 AM] be able to pay that sales tax in its entirety. How do we make our budget flexible enough to be able to absorb something like that? Is it a one time cost versus ongoing cost? You know, when we approve the budget, it's, you know, baked in saying, here's what the allocations are going to be. How do we make sure that this is flexible enough to safeguard us from an economic downturn? >> I think some of the things that that we would really need to look at, and we've kind of talked about this over the years, is what things can we fund on a one time basis? I think what we will be charged to do as, as a staff is really look at what efficiencies we can identify and implement over the next several weeks, months or years to help help us in lowering our curve of how, how how our expenditures grow. And so I think those are two of the things that, that we can do. [9:55:15 AM] things that, that we can do. Excuse me if there is a large decrease in similar to what happened in 2008, 2009, I think we'll we'll have to make some tough decisions on what things we may no longer be able to do, or what shifts we need to make as an organization. So those are three of the things that we'll probably be looking at. But in the meantime, to remain flexible, if we have things that we can fund on a one time basis, as we identify those efficiencies across the city and across the general fund, that will help us in in our response should that happen. >> Okay. And I'm imagining to the line of questioning about contracts, there might be some strategies where some contracts just don't get out the door as quickly, and we start having to space out the allocation of funds that way. I'm imagining that that may be something that's considered, especially as you get closer to the end of a fiscal year and you start seeing sales tax not coming back at the at the rate that we were expecting it to. And then my follow up question will be, can you talk about the reserves that [9:56:17 AM] you talk about the reserves that we have unused liability reserve or budget stabilization reserve dollars and how those come into play in different in different aspects of budgeting? Are they ever tapped into for situations like not having the same level of money coming in as was expected? >> So our reserves are used for emergencies or if there's an economic downturn, we that's the budget stabilization reserve part. We are charged with providing a balanced budget where our current revenue covers our current expenditures. And so we that will be the first charge. But if there is a big shift or a large decrease in revenue because of economic downturn, we can use our budget stabilization reserve. We would and then we would have to work on, of course, replenishing that in a timely manner to get back to our policy levels. >> Okay, okay, that's all I have [9:57:18 AM] >> Okay, okay, that's all I have for now, but really appreciate the detailed information that you've been able to present to us. >> Thanks. Councilmember mayor pro tem, followed by council member harper- madison and council member duchen. >> Thank you. Thank you for today's presentation. It was a sobering update, but critical update for us to receive to understand the financial outlook for our city. I, you know, hearing that we anticipate closing out this fiscal year with a $5 million deficit. That to me seems manageable. I appreciate sounds like our managers and administrators are making the adjustments necessary for us to address that deficit. Hearing that we anticipate a $30 million deficit for next year is deeply concerning, especially at a time where we, our community, is experiencing federal funding cuts. We just learned last week at the public health committee meeting that we have a $15 million cut in public health and services that we're providing our community, and we can only anticipate more. So, colleagues, [9:58:19 AM] anticipate more. So, colleagues, I know that we are going to we find ourselves in real financial pressure for this upcoming budget cycle. And the needs of our community are are great, and they are increasing as more services are cut at the federal level. One of the questions I have is around the FEMA reimbursements. We learned just this week that a grant that we had anticipated, a $50 million grant that we anticipated for flood mitigation out in southeast Austin, has been cut with the projection that you just outlined here, you anticipate, I think it was 12 million and FEMA reimbursements for next year. You know what? What is the risk with that? And how how are we appropriately accounting that there might not that that reimbursement might not come through? And are there any other reimbursements that we're expecting from the federal government that we should also keep on our radar as at risk? >> I think that we recognize the [9:59:20 AM] >> I think that we recognize the risks that happens with with the changes that are happening at the federal level. When we started seeing these expenditures that are covid related, that are winter storm water related, we included those in our in our forecast assumptions based on what we've historically seen from from FEMA and the reimbursement and reimbursements that they've already given us to date. I don't think our our consultants and our team has received any indication that the covid related reimbursements are when the storm water would not be reimbursed. We've we've received understanding that we're going to we're still working through and having conversations on those reimbursements. However, if those changes happen, it would be an impact to our reserves. We would see our reserves dip below the policy reserve level, and we would have to work on what adjustments we would need to make, whether it [10:00:22 AM] would need to make, whether it be in fiscal year 26 or a plan over the life cycle of the forecast to return our our reserves to the appropriate balance. So it doesn't have to be a one time fix that we have we have to do in one year, but we need to we will have to create a plan on how we would get those reserves back up to the levels that they needed to be. >> Wright I would just ask that we continue to have the regular updates on the reimbursements, as we're made aware of any changes of review or or cuts or at risk so that we are communicating back out to austinites about the chaos and confusion that is happening at the federal level. The other question I had was around. About our debt increase is responsible. I think 40% was the number given was responsible for the tax rate increase. Can you elaborate on that point? And can you also share when we take a look at the debt that we take on [10:01:24 AM] look at the debt that we take on as a city, what is the distinction between general obligation bond debt versus certificate of obligation bond debt. >> I can certainly handle the first part. So trying to find the slide reference for you. So if you look back on slide 18 and we're projecting that $197 increase in the typical residential property tax bill, the increase in debt requirements, and therefore the debt rate is responsible for about 40% of that increase. >> And as we increase debt requirements, is there a significant difference between a co debt versus geo debt? >> There's not a significant difference. Council non voter approved debt is referred is referred to as certificates of obligation. It's a type of general obligation debt backed by the full faith and credit of [10:02:24 AM] by the full faith and credit of the city's taxing authority. Public improvement bonds are what the voter approved debt are called. It's just another form of general obligation debt, backed by the full faith and credit of the city's taxing authority. The rates we get when we go to the market to issue those bonds are essentially identical. The only real difference is that under state law, certificates of obligation have some restrictions on them, that the public improvement bonds of voter approved debt do not. So, for example, with certificates of obligation, you can't do economic development with certificates of obligation. And every year there's more bills being filed that would put further restrictions on the non voter approved portion of the debt. But but from a bond issuing standpoint, they're they're the same type of instrument same rates. Yeah. >> Thank you. And my last question is around the living wage increase I am appreciative that and colleagues just want to highlight I think well let me [10:03:24 AM] highlight I think well let me confirm I just want to confirm that in October will be at the $22 minimum wage for the city of Austin. Is that right? >> I'm checking on that. I believe so, but let me make sure. Thank you. Yes. >> Perfect. And so and I appreciate that for the next fiscal year, that we are part of the policy that we adopted in increasing the minimum wage for the city of Austin, included, that year to year increase based on the cpi. And so I'm pleased to hear that that is being factored in for the next fiscal year. So I just wanted to highlight that as included in the base budget for next year. >> Thank you. Yes, thank you. Mayor pro tem council member harper-madison, followed by council member duchen and then council member Laine. >> Thank you, Mr. Mayor, I appreciate it. I wanted to first of all just say thank you. I know how much work you guys put into this. There's that that that period of months where y'all don't sleep. And so I just I want to be the first to just really say thank you so much for [10:04:25 AM] really say thank you so much for putting in these tireless hours. This stuff is super important. And our decision making is influenced by the materials you all provide us. I wanted to say, I think it's super interesting of all the things to have a decrease in revenue expectations, alcohol in Austin of all the things. Right. But I tell you what, I was actually doing some research around the sobriety, the sobriety high school that I'm looking to keep moving forward on even into, you know, when I'm a layperson civilian, after my term is up and the numbers are pretty shocking. So somewhat like 31% of people went from consuming, on average, one drink per week to 13 drinks per week. People's numbers of alcohol consumption went up daily by number of drinks. Types of drinks. Winos turned into alkies beer drinkers. It was just like a wild thing. But that said, because the numbers had continued to increase into 2022, people just assumed that this was the new us. And then right around 23 people took those new [10:05:26 AM] around 23 people took those new year's resolutions and were tapping out. They're like, bro, I'm done. I you know, I was like a 19 year old for the last two years. I'm tired. And so, like, getting sober really is through the roof. Sobriety brands are one of the biggest industries to take off. And so I just wonder if this is going to be a continuation of that, given our previous ability to anticipate high numbers around those revenue generators, I wonder what the plan is for shifting as we shift around people's cultural changes, including propensity to move towards substance use or away from substance use disorder, which I think is a really interesting problem to have. So there was that. And then that said that got me thinking about. So I'm always doom and gloom in my head. I shoot straight to what's the worst possible scenario here? Listen, y'all, a formative experience like mine will teach you how to figure out how to be beyond resilient and figure it out when the thing hits the fan, because it always does. That [10:06:28 AM] because it always does. That said, I'm always going to what's the worst possible case scenario? I just don't feel like we do that. And so sometimes when I'll ask questions, I'm like, all right, so when this goes bad and y'all know it will, and everybody's like sunny optimism I, I kind of want to what it is it to our detriment to produce a budget something for us to look at that's like highest risk assumed modeling like if everything if the devil himself walks through second and lavaca this morning, what do we do like I'm I'm I would love to have the worst possible case scenarios numbers in front of me because what it feels like I'm doing otherwise is picking apart sunny optimism numbers or hoping for the best. Or things have been bad before, but we probably won't get there again. And this isn't from y'all. This is what projections look like. It's kind of made up numbers, right? And so I just I think I would have a better way of looking at the picture with real practical, [10:07:29 AM] picture with real practical, pragmatic. Somebody's going to get bad news. There are programs and services that will suffer by way of the result of us having finite resources, people, and everybody's going to have to get with it. At the same time, we're all going to be disappointed. I want that kind of information to go off of when I'm making decisions as we go through these line items. >> So to your first point, when we look at revenue, we do project out based on what we're seeing in the in the. >> Trends. >> The trends that we're seeing. And mixed tax revenue. It follows the trends of sales tax. And so as that continues to stay flat, we mix beverage revenue. Excuse me taxes. We anticipate that it will be similar when we look forward in the next several years based on what we're seeing with sales tax trends when it comes. >> Can I ask a quick follow up? Yeah. >> So along those lines, if we do see that there's some substantial change to revenue [10:08:31 AM] substantial change to revenue that we could in past years anticipate bringing in, do we proactively seek out other opportunities for revenue generation in its place? >> We've researched what other opportunities are out there. We there are some limitations on what revenue opportunities we have for the general fund, because we want to make sure we're not double taxing people in these revenue in any potential revenue possibilities. And so we have done research. We often look at what our fees are. That's one of the first things we look at to see if we are setting our fees at an appropriate level. But have we identified additional funding opportunities to date? No, we have not. Okay. When we look at the next, I guess, the doom and gloom, I think that's some of the conversation. >> For budget considerations. >> Say that again. [10:09:31 AM] >> Say that again. >> I said bad news bear budget considerations. >> That's that's been staff's charge. And part of our conversation that we've we've started having with sb two being in place. That's why we created the chart that shows what the potential deficits could look like, because we've known since 2019 that moving forward, it will be harder and harder to balance the general fund based on these the revenue structure that we currently have, I think over the last several years, it's those the thoughts and the ability to balance have been distorted because of the changes that have happened, because of the federal stimulus, because of the big spike up in sales tax. So that didn't give us an ongoing realization of what the impacts we are living with now moving forward. This this is. Base line. I don't want to say doom and gloom, but the [10:10:33 AM] doom and gloom, but the realities of where we are today, and I think that it is going to be continued conversation about what are the priorities of the city, what things do we need to continue doing, and what things do we need to consider doing a little bit differently? >> Thank you. I really. >> Appreciate that. And for what it's worth, I think if because I think generally speaking, we have a long way to go with shifting how we communicate with the general public. I really, you know, appreciate that caller being expressing gratitude. But for what it's worth, we could do better. And so moving forward, that's one of the things that I'm really just trying to figure out how to convey more accurately. You know, folks I think are mature enough to recognize that they're going to get bad news. Everybody doesn't get a puppy every Christmas. But also, some of these things really do directly affect quality of life. So like thinking about some of those outcomes and where you need to shift your dollars is so real to some folks that it's not, you know, like an arbitrary consideration. This is real. And [10:11:34 AM] consideration. This is real. And so I just it would be helpful, I think, if the city could, as an entity, communicate as one. I feel like there isn't a lot of consistency amongst myself and my colleagues in terms of how we discuss prioritization, and I think it's difficult sometimes for the general citizenry to recognize that we all represent independent districts, individual parts of the city. So the 46mi S that's district one, in theory, is my charge. And so I'm going to lead with what does district one need. But the truth of the matter is, I think if we never did so before, since 2014, becoming a single member district body, we really need to consider what it looks like when we all move in unison. Again, thank you. >> Thank you councilmember. Councilmember duchen, followed by councilmember Laine and then vela. >> Thanks for your tremendous effort putting this all together and sharing it. I just have, I think, two questions. One is regarding the improvement bonds that are currently authorized but unissued. I'm looking at [10:12:34 AM] but unissued. I'm looking at page 34 and my question is that's the same number I think that's listed in the 2025 budget, the 1.38 billion. This says it was updated or figures as of February 2025. What's the process for updating those numbers so that we've got because I can't imagine that in the last whatever it is, 8 or 9 months, we haven't spent bond money. >> So we pull from the financial system. What changes have been made or what expenditures, expenditures have happened. But when you think about $1.38 billion, there may have been some, you know, smaller changes. We'll see a lot of change with the convention center going into, oh, this is pbs. I'm sorry. We'll see. We'll continue to see changes as as these programs go forward. So they may be in the design phase. There [10:13:36 AM] be in the design phase. There may be, you know, depending on where they are in in the project plan phase, we will have that update that we're working with departments on for the proposed budget. I can I can work with the team to see if we can give an additional update sooner. I just know that it takes some time to kind of go through each of those projects to see what, what progress has been made, but let me work with the team to see what kind of updates we can have, and maybe send something out in the next coming up there. Is it you say something? >> Well, I just want to add one thing on the specific to the 1.38 billion. That's the bonds that the voters have authorized that we haven't issued yet. We do an issuance once a year. The next time that number will come down is in September. >> Got it. >> Okay. A lot of expenditures have happened since then, but we don't issue the bond. When the expenditure happens. We do them once a year after the expenditures have happened. >> Okay. So it sounds like I can look at two different figures. The figure you're talking about that gets updated once a year in September. And the figure that Kerry's talking about that update more frequently. Yeah. [10:14:37 AM] update more frequently. Yeah. Yeah. May be able to get a sooner update on relative to what's actually been expended. >> Yes. >> Okay. Second question. So thank you for that. Second question is the arpa dollars. First of all, do we maintain anything like a dashboard or a way to get information about the current status of those? I know we issue a yearly report, I think, but is there any kind of public facing dashboard that helps us understand the current status of that spending? >> We do not have a dashboard for arpa. >> Okay. Is it possible then to get you mentioned in the report two things. One is the impacts of 18.1 million of the operating costs of arpa dollars that were spent to expand service levels. Is it possible to get more information about those $18.1 million? Yes. Costs that are ongoing. >> In in the memo that I sent out, I believe, last Friday and [10:15:39 AM] out, I believe, last Friday and we can make sure it's sent so that everyone can send out again if everyone hasn't received it, we walk through the programs that are ongoing in nature, and that includes items like the marshaling yard shelter that includes public health has a nursing program that that assists new mothers, that was expanded through through arpa. There is some dollars in the economic development department, some a few programs that were that are expanded services. But that the memo that I sent out and we'll make sure is added back to your to your inbox. It details some of those programs and where they are with with operating. >> Okay. That'd be great. I'd appreciate that. I can go back and look at the report from the [10:16:40 AM] and look at the report from the memo from last Friday. And the second piece to that is you mentioned that all the capital projects through arpa don't have any ongoing expenses. Can you help me understand what that means? Because I understood that there are some programs that we did spend money on, some capital projects. >> So through arpa, which is state local, I think it was resource funding. There was about $11 million that are appropriated for capital projects. Those dollars were used for re rehabilitation of pecan groves and the bungalows, which are already operating and have all the dollars, the contractual dollars required to keep those those facilities in operation. There are no additional capital spending through that arpa program. >> Okay, so the 11.1 million of the dsh capital expenses is those two projects, and they're already being operationally [10:17:42 AM] already being operationally funded elsewhere. Yes. Got it. Thank you. >> Thank you. Councilmember. Councilmember Laine, followed by councilmember vela. Councilmember alder. >> Thank you so much for this presentation. It's really helpful to have it as as I'm newer on the dais and okay, I have a few comments and it will lead up to a question. So this was a really good presentation on where we are. And I fundamentally think that we must make our decisions based on where we are now. And it has been a shifting landscape and where we are is sobering. We've got the arpa cliff funding. We've got best case scenario with federal funding is destabilization, which is already a big impact. Worst case is really significant losses in areas that our city really values and our community needs. We've got a state level increasing actions that increasingly tie our hands as it relates to revenue. We have a likely recession that will impact other sources of revenue [10:18:42 AM] impact other sources of revenue and then other other big projects that that will impact our revenue, like the convention center closing. This is this is a lot going on. And so in the light of that, I'd like to speak to my own priorities as I see them as it goes to spending. I think we need to be as careful as we can be as a city, not to tie our own hands. We have a lot of ways that our hands are tied, but if we commit to too much that we are the only. If we commit to too much, then we're left holding the bag. It will make it even worse for us than it needs to be. So I am concerned with looking very closely at the feasibility of our large projects that we're not yet committed to, so that we can avoid that type of hand tying. And I also would like to speak a little bit to where I think our focus should be as a city. And I'm echoing a lot of [10:19:43 AM] city. And I'm echoing a lot of what I've heard. I'm just stating my support for it. First, delivery of capital projects that voters have already passed. I mean, we need to get better at that, and it is hard and we need to deliver those things. People will feel them coming and the money's already committed. We can't get better at something when we're trying to do too many big things at the same time. That's one two efficiency, efficiency, increased efficiency. I heard that in your presentation. It's extremely important to me, but we need to talk about it, not in terms of and I'm not saying that anyone here today did, but I have heard it, you know, in some cases not in terms of, you know, we need more audits. We need to work on efficiency. That translates into actual cost savings, because what's in our control is what we can work with. And so when I look at the large parts of the budget, public safety is a huge part of our spending. I see, and I congratulate ems on the work that they have done to create [10:20:43 AM] that they have done to create more efficiencies and meet our community's needs in ways that actually translate into cost savings. And I think it's really important to find those same levels of efficiency with police opportunities for efficiency with police and fire and overall public safety. Those efforts to have the right equipment and staff arrive for the call. This is a huge part of our budget, and so it can translate into something that can really help us. Transportation is an area where if we can't reach where we need to go in the in a reasonable amount of time, it will impact our own ability to deliver everything real estate, land development, permitting, new building, but also renovations and what our individual property owners try to do. I know it is a big lift to create efficiencies, but if we don't have enough, you have to spend a little bit of money and dedicate some resources there. And if we don't have enough flexibility to put into [10:21:45 AM] enough flexibility to put into those improvements, they will not translate back to the savings that we have to find, and we have to find them, because so many of our other sources are, are are closing off to us or becoming destabilized. So I fully support the efforts to increase efficiency. And it some of the gis that, you know, other areas that really support the work of our city. While we have been working on large projects and, and working on the central parts of our city, a lot of growth and shift in our demographics have occurred in the last five years. And while we do need to deliver all of that, we also need to have the resources available to meet the needs that have been arising in the last five years, and that includes shifts in our outlying areas because, you know, as it has gotten more expensive centrally, people have moved out, our workers have moved out, and we've got to have enough [10:22:45 AM] and we've got to have enough budgetary flexibility for that. So and finally, I'll say some of the larger projects that that we have considered, one of the things that makes them feasible and they have to be feasible, or else we'll be left holding the bag at a time when we are continuing to be constrained. Is diversity of revenue sources. And I believe that in looking in some of the places in the city and some of the communities and areas and where growth has happened, we can identify programs that will improve quality of life and can therefore attract new funding sources, but only if the city of Austin has the ability to seed those projects. And I'll give just a couple of examples. 620 goes in the outlying part of Austin, it happens to, in some parts be at one side is the city of Austin, the other side is cedar park. It's a txdot roadway. Campo works in that area. Wilco has some taxing [10:23:46 AM] area. Wilco has some taxing authority in there. There's a lot of opportunity, I think, to bring some of what Austin cares about and what our community needs to that area through diversified revenue sources and collaboration. Another example is the lakeline station area there. It's already a red line station. We have a need for affordable housing, child care, near transit, senior housing. There is vacant land still available for development there. There's quite a large tract of land available not far, that is both near lakeline station and Howard Laine. If we have some resources available to focus on creating momentum in some of these areas where we already have transit infrastructure, we can attract also private development to those areas because it would be highly in demand. And I think we would find some more affordable [10:24:46 AM] find some more affordable housing coming up there. And then the other piece that I'd like to say is a lot of what we're facing in terms of instability is services, not infrastructure, that our community experiences as an extremely urgent need. And it is very challenging in the absence of it, frankly, to raise children in a way that was and youth in a way that will then become the most productive and happy contributors to our, our society that we need. I'm talking about things like the Arbor cliff, the and its impact on homeless services, cuts with Austin public health, how this impacts child care, those sorts of things. And it is it's really important to me that while we prioritize certain infrastructure, we also have money that will fund services that our community can feel immediately. And working on childcare and affordable housing [10:25:46 AM] childcare and affordable housing in many ways and more fully utilizing the resources that we've already funded, especially in outlying areas, can help us do that. Okay, so leading into my question. It has to do with the property tax revenue, with new property taxable value being a very big factor in how much revenue we can generate from property tax. I am wondering how let's see. We have certain we have a lot of etj, a lot of etj that now has increased ability to de-annex from the city of Austin, creating inefficiencies for us at a time that we're looking for efficiencies. Many of these etj areas, or at least certainly some that I have seen, are buying back significant amounts of their services from Austin, or some already have sewer lines and all of that. I mean, not they have already become densely populated, more urban, suburban type of development. And they're [10:26:48 AM] type of development. And they're buying back all these services and they're not taxed. I am wondering how long it's been since we've looked at areas where annexation may make sense financially, and is that an avenue that could help to bring in new property tax revenue that isn't dependent on new building at a time that the climate and market aren't aren't leading in that direction? Too much all at once, I know. >> Well, I'm still about ten minutes back, but what I would suggest is that that requires some form of annexation plan and would require us to engage in a process where we look at what the legislature has done over the past several sessions, including what the legislature is looking at even right now. And really, we're not prepared to do that on a five year forecast meeting. Thank you. >> Maybe I could just say simply that that annexed value is [10:27:48 AM] that that annexed value is treated like new property value and that it's not subject to the cap. But of course, then you'd have to weigh that revenue against the cost of providing services to the annexed area. >> And picking up their debt. It would require it would require an engagement in a planning process that would need to be updated based upon. And I'll say it again, what the legislature has done with regard to even allowing for there to be elections before people, you know, people are annexed, that sort of thing. It's a far more complicated thing than it used to be in terms of saying, we just want to annex someplace and we probably should never say ever that we want to annex just so we can pick up their taxes. >> You just said it. >> And for the record, we didn't. >> We didn't. I will add on that I see some creation of inefficiency that residents in [10:28:49 AM] inefficiency that residents in our neighborhoods feel. >> That has certainly been part of the reason many of us have argued for years against certain types of legislation that might be passed. But one of the things that gets said at the Texas legislature is that cities annexed just so that they can pick up their tax base. And I know you didn't mean to imply that and would never say something of that nature, but that's we're not prepared to have an annexation discussion on a presentation of a five year forecast. >> You are correct. I did not mean to imply that. And thank you. >> Councilmember vela followed by council member alter. >> Thank you mayor. Just some quick questions. The $5 million in additional health care costs, those would be citywide for all. I'm sorry. This would be for general fund health care. Employee health care expenses. Is that so? >> That is a citywide cost [10:29:49 AM] >> That is a citywide cost driver. But that is the general funds portion. Got it. 5% is the overall increase. >> And are the are any of those costs? Are we absorbing those costs as part of the general fund, or are we passing any of those costs on to our employees in terms of raised, you know, premiums, anything like that? >> That is the city's contribution. We're still talking through any any plan changes. And I don't anticipate that that would be an increase to the employee. But I'm not at this point. I'm not aware I'm not sure. >> Just wanted to clarify that if possible and appreciate that. I hope we can absorb those costs and not pass them on to our employees. And then I know that there were some big numbers around the property tax revenue, that the total taxable value is going to drop, I think I believe 10% or so was the amount. And I just want to make sure that I'm reading this correctly. That will result in about was it a $2.7 million reduction in [10:30:51 AM] $2.7 million reduction in anticipated property tax collections? >> Yeah. So the 2.7 was it 2.72.9 something. Yeah. In there somewhere. That's my revision from the fy 26 plan to this fy 26 forecast. And that actually has more to do with tweaking that new construction number than it does with the overall decline, because again, our rate will just adjust to get the revenue we're entitled to, whatever the values. But that new construction value is what really drives marginal increases in revenue for the general fund. >> Okay. Got it. So I mean again, just trying to understand it. We're still going to have an increase in property tax revenue. But the projected increase is down about 2.72 points. So correct okay. Got it. Again just wanted to clarify that the expenses that we are, the ongoing expenses that we are going to continue to carry over, that includes the eighth street [10:31:54 AM] that includes the eighth street shelter. It does. Let me rephrase that. Does it include the marshaling yard? >> It does not include the marshaling yard at this moment. The marshaling yard was one of the arpa programs that we discussed a little bit earlier. The eighth street shelter was never arpa funded. It was funded through operational savings in the general fund. >> Okay. And I found your your memo. And it looks like the vast majority of the ongoing arpa funding dollars are homelessness related. Correct. I'm I'm looking at $8 million for the marshaling yard, $3 million for northbridge and southbridge shelter. And is that for the operation operating costs of the northbridge and southbridge. Okay. And then a $2 million for street outreach initiatives, and then $2 million for community based emergency shelters. So it looks like the vast majority of the ending arpa dollars is [10:32:55 AM] the ending arpa dollars is homelessness related initiatives that, of course, we need to discuss that. But I my sense of the dais would be that we are highly likely to want to continue. I mean, I know I do not want to close the doors of the marshaling yard and send 300 people in the street. The vacancy rate. I saw that we're down to 10.2% on the citywide vacancy rate. What is that down from? What was our peak vacancy rate? I would imagine during covid, sometime or shortly after covid. And I know that's not one just out of curiosity kind of I remember we were at 15 for a long time, but I feel like it was at one point in the 17% range. >> We were in the 17% range, and that's our highest amount. >> Well, so I just wanted to highlight that because that's a huge accomplishment. I mean, you cannot deliver city services, quality city services without employees. And when you're, you know, at a 17% vacancy rate, that's a real pinch for everybody. So again, I'm glad to [10:33:57 AM] everybody. So again, I'm glad to see that the wage increases and just the general kind of in hiring environment at the city has improved. So much. Out of curiosity, what is a normal vacancy rate for the city of Austin, broadly speaking? In other words, where do we want to get in terms of our vacancy rate? >> I don't have that information. I think I would have to ask our human resources department if they could give us that information. I don't up here comes Susan. She's coming down. >> She jumped up off a fast. If she doesn't have the answer. Yes. >> Good morning. Good morning. The normal vacancy rate a real goal is in the single digits. It's under 10%. And that's our goal to get there. We're about 9% right now. And we have had a really successful career expo [10:34:59 AM] really successful career expo just last week that we were able to do on the spot interviews and hires about 33 positions. We filled from that and counting. So we are definitely going in an excellent direction. And the goal in any public sector organization, especially in a municipality, would be about 7 or 8%. >> Perfect. >> Okay. >> Thank you very much. Then this is a question specific to the airport, but I saw that the airport is predicting a rather substantial revenue operating revenue boost from what's in the financial forecast, it said, was a renegotiation of expiring leases and whatnot. I was just wondering, I don't know if the airport director is here. I don't see her, but I'd like to dig into that and just understand that a bit. >> Hello. Good morning. Rajiv [10:36:04 AM] >> Hello. Good morning. Rajiv Thomas, chief financial officer with the aviation department. So the increase in the operating revenue is really driven by the change in rate methodology as we are negotiating the new use and lease agreement, we are changing to a different rate methodology than what we had since 1999. So that is giving a substantial increase in revenues that will kind of cash fund some of the capital projects that we are going to embark on in the next five years. >> Great. And my next question was, what are we going to use all that extra revenue at the airport for and that so you answered my second question before I even had it asked. Thank you very much, I appreciate that. >> Thank you, sir. >> And last question, and again, I feel like you answered this question before, but it's an important question. And I want to continue to highlight it is what was the average increase in property tax revenue before the 3.5% cap. And again my, my, my recollection was it was in that kind of 6% range, 7% range. [10:37:05 AM] kind of 6% range, 7% range. Again, I just want the public to understand that it was completely normal operations in the past to take, you know, 5%, 6%, 7% of our property tax increase and that holding the line at 3.5%, as we have for multiple years, is really unusual. And we just there has to be just a response to that. We cannot continue at 3.5%. Revenue increases when our expenses are going up at 3.9% or so, just with the basic cost of inflation, just with just trying to maintain existing services, much less expand services, which so many of our constituents want. >> We're pulling it up. >> Hold on. No problem, no problem. And I you know, again I know we're we're this isn't the tra conversation per se. But it another important data point just moving forward and thinking [10:38:05 AM] just moving forward and thinking about the future of the city and maintaining quality operations, being able to attract employees and pay them well and be able to fund the services that that people in Austin really expect. So again, I know we're going to have a good long conversation about that. But I tell you, you know, the indicators sure seem to be all pointing in one direction as far as I'm concerned. >> In the five years preceding sb two, we were an average of 7.3% above what was then called the effective no rate. >> Got it. Thank you very much. >> Thank you. Councilmember. Councilmember alter. >> Thank you very much. Kind of picking up where councilmember vela left off, we talked about this a little bit in the audit and finance committee. But if you just start looking at 2019 on when the tax caps were put into effect, inflation over that five year period is 23%. The 3.5% revenue cap allows us to [10:39:07 AM] 3.5% revenue cap allows us to increase about 18%. So already from a purely inflationary perspective, we are at a 5% imbalance, which means we can't even do the things we have been doing, let alone account for the population that's moved here. Account for meeting services that have been under invested for a very long time. So we had problems before we even arrived here today. 3% inflation just last year. So once again, that's right around the 3.5%. And I think when we get news like this that, you know, feels very doom and gloom, we have no money. The natural reaction is to hunker down, pull back. But we have seen historically that this is the exact time we need to invest in people. If you look just most recently as it related to the covid pandemic, the reason we [10:40:09 AM] covid pandemic, the reason we didn't fall into a recession and crash as an economy was because the federal government, you know, president Biden, invested heavily into our communities. Arpa allowed not only for us to continue to do things, but allowed for us to serve the thousands of people who would have otherwise become homeless or who already were homeless, not to mention public health needs and economic development needs. So we know the federal government is not going to do it. We know the state's not going to do it. And so I think it is incumbent upon us to recognize that, yes, times are tough and we need to be responsible with the dollar, but we're the last line and we had better recognize that. I also think looking at when we look at our our property tax growth [10:41:11 AM] our our property tax growth question, you talked about the compounding effect. So as we as a body consider when, if and when we want to do a tree. Earlier means you get more compounding. Is that correct statement. >> Yes. >> Okay. Just like if we had done it in year one, we would have compounded off of that. Then if where we are today, I do have some bouncing around questions from the slides. You inspired many a question. So you forgive me for some of the disjointed nature of this, but on I want to start on slide eight. You talked about one of the cost drivers being fleet. We heard in the environmental committee just last week that there is an opportunity of all [10:42:12 AM] there is an opportunity of all the potential investments we could make as a city to reduce our environmental footprint, our greenhouse gas emissions, fleet electrification was one of them. And what stood out, I think, more than anything in that was that it was actually a cost saver. Right. We're not spending money on gas or electric vehicles require less maintenance because they have less moving parts. And so the estimate was that we would actually reduce fleet costs by electrifying more. So where and maybe this is a question for fleet, not for you, but where are we in moving to electrification? Where are are those savings something that or those opportunities, something that could allow for greater savings in that cost driver? >> I don't have that detailed response I know the fleet department is working on. They have a plan for identifying what areas of our fleet can move [10:43:13 AM] areas of our fleet can move toward electrification, and have been working towards that. This assumption is based on the current fleet that we have and what it would cost to provide service or provide continue to provide service and maintenance for the current fleet. I would I would assume that as we transitioned the fleet that we can to electrification, then those those numbers, those assumptions would change. But I don't have that detail. We can follow up with fleet and have them give a response. >> And I think that's something that we'd like to dive into more in the committee as well. But, you know, really bending these cost curves, right? We cannot continue to skyrocket our costs. We need to bend the curve down. And electrification is a huge way we can do that. When you we talked about the living wage, the salary increase. I'm just trying to clarify in my mind right now, our minimum wage is 2163, right. [10:44:13 AM] 2163, right. >> Yes. >> And that is so that's our our lowest wage. If we raise all wages by 3.5%, that minimum wage will go up by 3.5%. Is that correct? >> That should be correct, yes. But the living wage is not. That does not account. No, that's not correct. It doesn't account for the civilian increase. That's separate. >> All right. Now I'm confused. >> The living wage policy that's been in effect since we moved to the $18 an hour level, was that it would increase by either the across the board or what the cpi increase was showing that year, whichever is lower. And so generally unfortunately, inflation has been higher than that across the board. But this year we're actually projecting that the inflation number will be lower than the across the board. >> So help me understand who gets paid living wage versus the lowest wage multiplied by 3.5%. [10:45:14 AM] lowest wage multiplied by 3.5%. Is that just a contract in the contracts versus. >> Temps and contracts, or then new hires coming on board? >> Okay. >> That answered my question. I see Susan coming down. Susan to. >> Have a oh yeah. Yes, please. Excellent. >> Absolutely. Building on what they're saying. That's absolutely what we do. It's projected to be $22.93 from $21.64, going up by incrementally with cpi. >> Okay, okay. >> Very helpful. The. The sales tax number. You talked about the adjustments you this chart is without the adjustments on page 16 here. What is what's the real number. The real number that we experience is the number with adjustments. Right. >> In terms of what shows up in our bank account. Yeah. That's the that's the real number. We just don't think it gives us the [10:46:16 AM] just don't think it gives us the best sense of the underlying trend. >> Sure. You know, it's like when we talk about inflation core inflation versus everything because you've got your volatile food energy. But last time I checked we all ate. We all needed some form of energy. Right. So we feel the real number, not the core number. It's kind of a similar situation. So and those adjustments, they're kind of on a lag just like our our regular sales tax numbers are on a lag. Is that correct. >> Yeah we were there. We don't know what the timing of the audits was their prior period adjustments. There are future period adjustments. And yeah, we don't have a lot of insight into into the timing of those payments. >> Okay. >> That is very helpful. The pension question, you know, councilmember qadri is asking about we had this in the previous financial forecast. Y'all talked about pensions [10:47:16 AM] Y'all talked about pensions being funded. I know we have recently undergone structural changes in cause and April's, which provided more predictability. I'm trying to understand is the change in the pension cost, because there is some flexibility in the we pick up a certain amount based on the return of the investment or help me understand how 4 or 5 months ago, we didn't have the predictability that we have apparently today of this is what we're going to pay today, and this is we're going to pay next year, and this is going to pay two years from now down the road. >> Those are two things that are driving up the pension costs next year. >> One is we had a three year phase in of our increase to the core system. So that's part of why it's going up. We knew that and we captured that. The other part is of the legislative changes is that the city's contribution now, instead of just being fixed at whatever it had been and now can fluctuate [10:48:18 AM] had been and now can fluctuate within a within a range based upon the fund performance. So fiscal year, you know, we don't know at the time we're putting the budget together how their investment returns are going to end. And then when they do end and they put out their new valuations. So we just got the information from covers, I believe in January or February we got the information of based upon our actuarial calculations, the city's contributions next year are going to ratchet up 1% based upon prior year's investment performance. >> And what's that band? How much could we potentially. >> It's 5%. We have a 5% band. And then if that 5% band gets gets exceeded, then the employees contributions can go up to 2% more. >> So, you know, like councilmember harper-madison was talking about worst case scenario. Like if the stock market continues to crash, does that mean potentially in the future we're going to be on the hook for more, because the fund is not going to be performing [10:49:20 AM] is not going to be performing like we had hoped? >> Yes, and we are. We're working with a company called gov invest to implement a modeling software that will give us a better chance. It'll give us a much better tool for doing that modeling not only based upon the best data we now know, but we can also then make assumptions in the future. What happens if, instead of getting the 7% return that they're supposed to get? What if they only get a 6% return? Or what if there's a 5% -5%? We can model all those things and then. Forecast more conservatively, as opposed to just getting the numbers from the system on kind of an after the fact basis. We will be looking forward. And so that modeling process is going well. Should have it in place here in the next couple of months. >> Yeah. And I know it's not exactly what we're discussing here, but I think that type of predictability and what we're on the hook for versus not is another reason why it's so important that we get the fire pension settled and the unfunded [10:50:21 AM] pension settled and the unfunded liability in check before it just balloons. Once again, if market returns don't do what we would like. So I appreciate that very much. On page 22, you show for the salary and benefit increases as almost $40 million. But on the backup materials you have the salary line. As I want to say, it's somewhere around $5 million. Yeah. Civilian wage is 4.2 million. Is the 39.8 the global number, not the amount that it's going up or. >> That is the increase. But that's inclusive of. Civilian wage potential market increases. Insurance is lumping all of the salary and benefits together. So [10:51:22 AM] salary and benefits together. So it also includes the labor contracts with ems and police. So everything that is labor personnel and benefits is lumped into that. >> 39 if we stripped out the police and ems, that $6.3 million number that you have in the backup as between insurance contributions, wage market, cause I'm just trying to reconcile this much larger number and that and you can we can follow up. I don't if we need to. >> We'll work on getting you a breakdown okay? >> Okay. >> The slide 18. When we talked about the property tax bill impact for a senior, are we assuming any increase in their homestead exemption? >> We are not. Generally we prepare the analysis that that shows what it would take to hold [10:52:23 AM] shows what it would take to hold a senior homestead harmless and present that so council could take action before the budget process. And we plan to do that again in the coming month or two. >> And will that just be as an item from y'all so we can either approve or not? Okay. Very helpful for the FEMA money. And we talked about how that played into our. Reserves. Assuming we get the money we are planning to get when we are planning to get it, can you follow up with us about how much more we have? Outstanding. Just generally any kind of estimate of when that might come in. But just so we can get a sense of what might still be out there. >> Yeah. >> I have a sense we'll be getting in the next two, 1 or 2 years. The remaining dollars, we [10:53:24 AM] years. The remaining dollars, we don't include them because we are still really trying to understand what the possibilities are. But we'll give you give you a breakdown of. >> That, okay. >> The council, council member, mayor pro tem Fuentes, was asking about the CEOs versus. Geo bond debt. And I wanted to ask kind of a different version of the same question. We have our voter approved debt that we know 1.3 whatever is going to be issued over the next however many years. We also have CEOs that we've approved as a body in audit finance. We received a here's all our debt grouped together, how that's going to affect a property tax bill over the next five years. Primarily your voter approved debt and your CEOs. Can you provide a breakout of. We have 1.3 issued [10:54:24 AM] breakout of. We have 1.3 issued but unauthorized for geo bond debt or pbs. What is our issued but unauthorized for CEOs just to get a relative understanding of, you know, when taxes inevitably go up because of what the voters have approved, how much of that is because of that versus the CEO? >> Yes. Okay. >> Appreciate that. And then last, I wanted to go a little bit where we started. You talked about the arpa money or the ongoing costs, the $18 million that you identified. I think it's really important of that. What's not listed, but one could make a case for it being an ongoing expenditure. We have provided over $40 million in rapid rehousing, and now those are 12 month or 24 month [10:55:24 AM] are 12 month or 24 month contracts. But the program itself, people come in, people go out. And the idea is when someone goes out, a new person comes in. And when you end that program, you no longer see any kind of declines in your homeless population. You see the exact opposite. And so. You're looking at about $20 million a year from that program alone that is set to expire and no longer continue to operate. And as well as it's not necessarily from the arpa specific projects. But last year, I remember the conversation we had and I struggled to go back, but finally found that document that we had of our pipeline and the added cost. Right. There was that whole question of, are we talking about calendar year, fiscal year, how many units we know there are going to be at least 2 to $3 million more need [10:56:24 AM] least 2 to $3 million more need from dsh services, not necessarily because of arpa specific investments, but that is a continued investment need as well. So I know we're going to have a joint meeting with public health to really dive into some of these things. I really look forward to that. But. It is raining out there, and we have the potential to provide some umbrella, but we have to be smart and I think we can be, but we need to continue to invest in people. And that's what I will continue to advocate for. So I really appreciate your work and colleagues for giving me the time to ask these questions. >> Thank you, councilmember, just for everybody's edification, if you go back and look at the message board post that I put up on April 3rd, it lays out a timeline of different budget type meetings, including audit and finance meetings, and gives a specificity about what will be discussed. But it's been [10:57:26 AM] will be discussed. But it's been mentioned a couple of times with regard to the role that homelessness and addressing people living homeless plays in this April 28th is when we have the jointly scheduled audit and finance committee and public health committee, with the mayor pro tem chairing the public health committee. That's on April 28th. So for those that are paying attention to that and or want to pay attention to that, so thanks for bringing that up again, councilmember Siegel. >> Thank you. Mayor. You sure you don't want to ask a few questions first, before I go? >> I'm going to be cool. >> All right. Well, thanks so much to the financial services team. I think we're nearing the end of our two here. So quite an endurance challenge. But really appreciate all your information. And really all my colleagues have explored a lot of the questions I had. But I did want to return one more time to this idea of the unstable financial circumstances we're in right now as a country, and how that impacts the financial forecasts for the next two years. You [10:58:27 AM] for the next two years. You know, I think my parents told me that their retirement fund has dropped 10% in the last week. You know, we're hearing all sorts of things on the news about new risks relating to an escalating trade war with China. You know, I guess oil prices are dropping, which is one bit of good news. But we heard about pension funds maybe having an increased unfunded liability. And I guess if you could share a little bit more about you intend to update us, because the fiscal year doesn't start till October 1st and a lot could change, you know, month by month or even week by week between now and then. So do y'all have a kind of a process for kind of ongoing updates to help us better evaluate what kind of decisions we need to make? >> So we work closely with the intergovernmental intergovernmental relations office as they provide federal updates on, you know, grants that are impacting and things like that. So we'll continue to work with them as they get [10:59:27 AM] work with them as they get information to look at what those changes could be and provide updates to council, either via memo or I guess mostly via memo, to let you all know those federal changes. And as we work through the proposed budget process, if anything major happens, you know, we will definitely make sure that the council is aware, either through memo or through conversations, so that you all can see the changes that we're making that that we understand could be impactful. I think it's just going to be ongoing conversations as as we kind of step away to dig into what changes we see. We'll just make sure that the council is aware and stay communicative throughout these next five, six months till we get through the proposed budget process. And if you all have any questions about things that you are seeing, my staff and I are ready to help, help you understand the impacts of the things. But if things come forward that we need to communicate, we will definitely [11:00:28 AM] communicate, we will definitely make sure you all are aware. >> Thank you. And along those lines, you know, council member Ellis brought up the 2008 drop in sales tax revenue. And I believe the largest banks in the world are saying there's a 50% chance of a global recession right now. You know, is that something that you monitor monthly, like, you know, how what's what will be the cadence of those kinds of updates so that we can kind of evaluate our spending decisions? >> So we do look at or receive the sales tax revenue on a monthly basis. We've re-implemented the. Financial the quarterly financial report that we've we started giving out. We gave out the first one in March, I believe, for the first quarter. Now that we've gotten that out, we'll be on a faster cadence to get those reports out. So the team is now that March is over, it's starting to work on the second quarter report. And so but if things happen that are drastic changes that are beyond what we said, then we will make sure we [11:01:28 AM] said, then we will make sure we communicate those changes. Otherwise we'll include them in our in our quarterly reports. >> Okay. Thank you so much. And then just last question in terms of the drop in, you know, taxable property value, you know, this 10% drop that we're seeing. You know, how rare is that. Like when's the last time that we've seen a drop like that. >> I think I have a file on that one okay. Okay. >> Not in some time. I let me get back to you. I'd have to go back a long ways and I don't have it readily available. I have to unhide some columns, put it that way. >> So I mean, does it has it dropped at all in the last ten years? Is this like the first time it's dropped at all? I mean, just any context. >> We have had years where it's gone slightly negative in, in my tenure or the last 20 years or so. So it's not completely [11:02:28 AM] so. So it's not completely unprecedented. But this magnitude, if, if that's what we end up seeing is, is out of the norm. >> Right on. Thank you very much. Back to you, mayor. >> Thank you. Councilmember Siegel members, I think that concludes this item. I'm looking to see if there's anybody has anything else. Great. Thanks. We appreciate it. And as as the council and the public knows, we're now beginning, we're actually a little past the beginning of the process on this. It will be an intense process between now and the passage of the budget. But I thank you very much for what you're providing us members that will take us to the next item, which is a discussion of the I-35 cap and stitch design options and an update. What I had indicated that I thought we would do is get the update and then go to public comment, so that those who are making comment will also have the [11:03:29 AM] comment will also have the update available to them before they make their comment. So with that, I'll go back to the. >> And as you indicated, the next item is an update on our I-35 cap and stitch design options. The I-35 cap and stitch is aimed to aid in the preparation for funding decisions. This update to point out that next month we will be coming back to discuss future proofing and other deck decking opportunities. Staff will describe multiple scenarios for financial commitment options to txdot. In may. We will come back to the city council with a comprehensive look at the city's financial fitness, including information on how this decision could affect the capacity of the 2026 bond program. Should council desire to move forward with that. And at this time, I'd like to invite and turn it over to assistant city manager Mike Rogers to make a few comments and then introduce our presenters for today. Mike. [11:04:30 AM] presenters for today. Mike. >> Thank you. Good morning. Mayor. Council members Mike Rogers, assistant city manager this presentation on cap and stitch or park decks over I-35 is an important aspect, as we just heard all the conversations about finance and capacity that we have. So what is going on with this particular project is we still do not have an answer on a grant, on a $105 million grant, but we felt it was imperative that we come before this body as soon as possible, especially when you have a magnitude of project of this nature. So we have the information that we have we've run scenarios with the grant and without the grant funding. So with that, I want to introduce our team of Kim Olivares and Richard Mendoza. >> Thank you. [11:05:31 AM] >> Thank you. >> Thank you, Sam Rogers. And good morning, mayor and council, Richard Mendoza, director of transportation and public works. We can go to the next our first slide. Oh. Got you. >> You're good. >> So today we're going to cover a brief recap of the program to include the potential cap and stitch locations. Project phasing, our decision and funding timelines, and a selection scenarios based on scoring criteria and feedback we received at the prior November 24th work session last fall. Also, cost and answer some close out questions from that prior work session and next steps. >> Yeah okay. >> Okay. So working with txdot, you know, we've identified eight distinct locations where these future cap and stitches are possible with the overall capex 35 txdot project. They extend on [11:06:33 AM] 35 txdot project. They extend on the south, which is in the right of your slide from holly street to the north at the red line crossing at airport number eight on the far left. Additionally, the university of Texas has been pursuing on their own their own caps adjacent to their campus, and this depicted by the Orange shading in the middle. We've organized our project into five separate phases. Phases one and two consist of roadway and deck elements. Those elements are required to support the overhead decks and amenities. Phases three, four, and five include increasing levels of amenities on top of the decks and illustrate what can be built on top. Generally, txdot right now is requiring a city funding commitment by may 31st. For those selected. Selected phase one roadway locations that we [11:07:35 AM] one roadway locations that we wish to future proof going forward. This is a milestone chart showing the timeline for that phasing and funding deadlines for those cap and stitch locations. If you recall, in December of or November of 23, we did pay txdot $15 million to advance cap and stitch design to 30%. Right now we are in txdot final design phase and they plan to go to construction leading by next summer, which requires us to inform them by next may which cap and stitch locations we wish to future proof to include in that letting package, as well as advance final design. We may or may not need to also commit by may. The phase two deck for the Cesar Chavez to fourth captain stitch location, depending on the [11:08:37 AM] location, depending on the outcome of a current review of our ne $105 million grant by the U.S. Dot after may, we will have until 2033 to change order in sections of the captain stitch with the txdot contract for deck and tunnel elements, but after 2033, that window closes for ten years on a construction moratorium, with the exceptions of amenities construction on top of the decks we do pursue. These are the cost estimates by cap location, and these are current and remain unchanged from what you saw back in last November work session. However, txdot has advised that these costs may change as engineering progresses, and they are good and confident through that. 2026 bid package. Leading date. After 2026, we [11:09:38 AM] Leading date. After 2026, we should expect change order cost escalations on the order of 35 to 45% of these numbers. And if we extend these payment dates all the way out to 2033, it's quite possible you could see these numbers double. To aid your decision making on selecting which caps and roadway elements to commit, we've prepared this scoring matrix, which evaluates each potential cap and stitch location based on a criteria that's listed across the top. This is similar to criteria that we use in grading our grant application for the Cesar Chavez to forth cap, you will notice that the stitches on the south, the holly stitch and the northernmost cap redlined airport have been lined out. This is based on feedback from mayor and council regarding the [11:10:39 AM] mayor and council regarding the low cost benefit for these locations. Also note that the downtown and 11th to 12th caps score the highest according to this criteria. So here we get to the various build scenarios with the corresponding cost estimates in black across the top and the current funding gap represented in red. These numbers are in millions. This is assuming, of course, that we have as secured funding, the 105 Nike grant, as well as the 41 million state infrastructure bank seb loan from txdot scenarios one, two, two a and two B include downtown and 11th 12th caps only, while scenarios three through six add mixtures of northern cap locations. Those caps that are annotated with 800ft in parentheses represent lean [11:11:40 AM] parentheses represent lean versions of that cap, and our lower cost due to the. Elimination of the requirement to provide ventilation. All of these funding gap estimates again account for the grant and the seb loan. Acm Rogers also mentioned that we've prepared some scenarios from our last briefing. In the event we do not or the grant is clawed back and for that purpose, staff has prepared these bills and funding scenarios. And this only accounts for the 41 million seb loan. Across the top. Is the current commitment needed? If we look to go elect to go forward with the cap and stitch locations, with the funding gap in red for phase one roadway elements only, we may commit now for inclusion in the txdot [11:12:43 AM] for inclusion in the txdot lending package next week. Next year. Phase two future deck elements, which could be included in a changeover at a later time. But the numbers across the top represent the current commitment needed that txdot is looking from the city by the end of next month. Some of you recall we had a number of questions. We committed to follow up with the mayor and council on the prior work session. This is a slide capturing our responses to those questions. I'll run through them quickly, top to bottom. Our city structural engineer has reviewed and validated the txdot. These txdot cost estimates that they are within the acceptable margin of error for a 30% design. Our structural engineer on staff also vetted these cost estimates with those provided by the university of Texas, and while [11:13:44 AM] university of Texas, and while they do vary from location, we did verify that they were conducted using similar engineering and cost estimate methodologies in terms of a possible rail station on the red line crossing of a northern cap cap. Metro is currently conducting a feasibility study for potential location of a location in that area, either on the cap or adjacent either side of the cap. Staff recommends that we retain the fifth street crossing for downtown circulation, with the caveat that it could be easily closed or managed for festivals or special events. The east avenue trail, the shared use path. Betterment. We are actively working with txdot now on cost estimates for that improvement, and we expect to bring forward to council an advanced funding [11:14:44 AM] to council an advanced funding agreement afar sometime later this summer. This betterment is separate and apart from the cap and stitch improvements. Although the cap and stitch improvements do make for an easier build of that shared use path. And then finally, yesterday I issued a memo to mayor and council outlining our investigations on air quality. On top of the caps. That was a more recent question, though, from the cultural arts. I'm going to turn it over to director Olivares to talk over the financial considerations. Now. >> Good morning. You'll notice that this slide is actually relatively thin because we do not have the answer about the any grant. We also have not completed the debt capacity [11:15:45 AM] completed the debt capacity analysis. There isn't a ton to be able to update to on you. Wow. Update you on regarding our finances now. We will be back in may. Like city manager Broadnax noted, we will be back in may with the analysis on our debt capacity that looks at our overall current and future debt requirements. Also, that estimated impact to our tax rates and our bond ratings, that the debt requirements also includes our pension obligations. And since there obviously was good conversation about that during forecast, it will be a fresh on everyone's minds. We want to look at our debt capacity holistically when we come back to you in may for a decision on what we pursue or not, for this project. It also is essentially committing to what we will or will not include in a 2026 bond relative to this program. So we want to make sure that you're able to see our our [11:16:45 AM] that you're able to see our our debt capacity in its entirety, as you're not just making a decision on cap and stitch, you're making a decision that has an impact on on future bond programs as well. We also want to make sure we're monitoring federal and state activity very closely at the federal level. There is ongoing conversation about the elimination of tax exempt debt. So which would result in increased costs. There's been some really great studies actually coming out this there was one that came out in a partnership between university of Texas and university of Chicago, doing in-depth analysis of that impact. We're also on the state level, looking at various bills that would impact our ability to issue non voter approved debt. But also there's a bill that is looking at putting caps on how much of the tax rate could be related to debt service. So those are all components that are very much in flux. Hopefully we have some more clarity on that. When we come back to you in may. But I just wanted to provide you just [11:17:46 AM] just wanted to provide you just not ignore the financial aspects of it all, but make sure that you're aware of what we're working on in preparation for may. >> Thank you. Kim. A couple more slides to close out. Next steps include potential in may. Well, sounds like we're going to have a work session in may to clear up the financial information and the debt capacity evaluation. Also, I expect we'll have an updated staff recommendation for captain stitch locations based on feedback we received between now and then and then the 90 day review. The initial review of our Na grant is going to be complete April 20th. Hopefully we'll have a determination on that grant by this may 6th date and help inform our decision better. The may 22nd date is the last council meeting before the txdot may 31st deadline to commit, so we'll be bringing forward rca's potentially for [11:18:47 AM] forward rca's potentially for fund 100% design costs, which roadway elements the city chooses to pursue, as well as Cesar Chavez deck pending the grant and any other decks that we want to integrate into the txdot package. And then ongoing is we're going to continually seek partnerships, philanthropy to fund operations and maintenance to develop that o&m strategy long term for those deck amenities. So just three quick slides with illustrations to place into perspective the improvements that we're talking about today. This is a depiction of the cap or land bridge, if you will, looking north from fourth street to seventh street. This is looking southeast 11th to 12th, capping opportunity a little further north than the downtown. And then looking north, Cesar Chavez to fourth [11:19:48 AM] north, Cesar Chavez to fourth capping opportunity, which is the subject of our pending grant application. So that concludes our presentation. Thank you. >> Thank you members. What I was going to do is now go to the public comment. And then I think the this thing is working again. So if you want to speak, put your name on here. I want to say. The way she laid out, there's a whole lot being discussed at the capitol right now with regard to how debt gets done and what cities might be able to do in the future. And so I appreciate that you you continue to remind us that that that is changing land, but potentially changing landscape as we go forward on this. So with that, I'll turn to the clerk's office and ask if you will begin the process of calling on people so that we'll [11:20:49 AM] calling on people so that we'll have the opportunity to hear from them. Councilmember harper- madison. >> Miss Olivares, I was just going to give you a heads up. I think I'll reach out. As you were talking about tax exempt debt, one of my constituents said, I don't even know what the hell that is. So I think I'm going to reach out to you for some pointers on key words and expressions that I should be bringing people along in along the way. Thank you. >> In a nutshell, one of the things that's happening is in the reconciliation process in congress right now, one of the ways that the federal government is looking at least at paying for federal tax breaks is basically taxing us at the local level by taking away the municipal, the, the muni bond tax exemption. And that, at least from a reconciliation standpoint, that looks like revenue. If you're going if you're going to give a tax break, you take away that tax exemption. It looks like revenue to fill that gap. I think it was I don't remember exactly where I [11:21:51 AM] I don't remember exactly where I got this information, but I think it was our cfo that gave me this information that said, for every $100 million of debt we issue, if we do away with that tax, that muni tax exemption, it adds $22 million to the cost. So what that would essentially do is 100 million becomes 122 million. That impacts things like this. It also impacts what we're doing at the airport, things of that nature. But that's kind of in a nutshell, what that issue is. I say screw that up in any way. Good. All right. We'll go to the clerk's office. >> Thank you, mayor, for speakers Andrew clements on b2. Mr. Clements, are you there? Okay. Next speaker is Adam sparks. >> Hi. Thanks so much. I was listening to the finance [11:22:52 AM] listening to the finance presentation as well, and I understand how tough it must be to consider these kinds of financial implications. But the most important thing I want to stress to council is that building caps is a 60 year project. The decision that we're making now will affect generations of austinites. You go back 60 years. Austin's population was 185,000. I looked at what the population will be in 60 years, the estimate the Austin metro area to be 20 million people. Just building roadway elements is not committing ourselves to all of the financing for the caps. It's just future proofing so that in 20 years from now, you can do the financially prudent thing for future city councils. The one thing I'll mention, too, about the matrix is that there are no areas in the downtown area where there are giant parking lots next to the development of the caps. The northern caps have the ability through the new decisions that are being made regarding Hancock center and the fiesta shopping center for newer, higher density areas that could bring revenue into the city. So we can't assume that just trying to tighten the belt is going to [11:23:53 AM] tighten the belt is going to solve all of our long term growth issues. Austin can be a internationally ranked alpha city, and we need caps in order to do that. Last thing I'll say when anybody asks me who I was voting for, I said Kirk Watson because he has the ability to get this I-35 project done, and I think this can be Kirk Watson's legacy for the city. If we fund all the caps and add 25 acres of new public land into the city, that is a winning proposition that we have to fund for the next 60 years of Austin. Thank you all for considering it, and I look forward to hearing more as things progress. >> I'm not used to all these people talking nice. I mean, somebody needs to. Yeah. >> Next speaker is Ian Wilson. >> Sorry. Can y'all hear me? >> Yes. >> Hi. I share I'm really I would love cats everywhere just that. But I'm somewhat concerned [11:24:53 AM] that. But I'm somewhat concerned for a wide number of reasons that have been acknowledged today and otherwise about these to get delivered. And I also am really sympathetic to the need to balance the city's budget. So I certainly recognize that saying build all caps is not necessarily a practical solution. So again, thanks to city staff for their thorough work here. My input is a slightly different one here. I am really concerned about the txdot is building an overpass over what would have been the holly street holly street stitch, which is in immediate proximity to the adjoining elementary school. It's the only bit of elevated I-35 between the lake and I guess 183 and anything that you all can do to work with txdot to minimize noise pollution and other impacts from that overpass on the school that is literally [11:25:54 AM] the school that is literally across the street from I-35 there. Sanchez I think is something that is really strongly worth prioritizing. And finally, I think that the north south corridor that the east avenue parkway would provide is something that should be prioritized. And all of what you're considering to fund. And so I would certainly trade a bit of cap space for a functional north south bike or pedestrian or whatever connector. And I would certainly prioritize that. Sorry if that wasn't particularly clear, but thanks so much. >> Next speaker is Andrew clements. Mr. Clements, are you there? Okay. We're going to transition to in-person speakers. First speaker is Hayden black walker, followed by Travis Schneider and Richard [11:26:55 AM] Travis Schneider and Richard Heyman. If your name has been called, please make your way to the podium. >> Good morning mayor, council members. My name is Hayden black walker with reconnect Austin. Since 2012, reconnect Austin has advocated for an improved I-35 corridor, one that reconnects our city and adds value to our built environment. I hope that you will consider voting to fund the roadway elements, which will allow caps over I-35 in the future. The current proposals are not the reconnect Austin vision, and I don't know anyone who's super excited about a 20 Laine highway through central Austin, but it would be a failure to lock the city of Austin out of the opportunity to mitigate some of the damage, the opportunity cost. If we do not fund the roadway elements for future highway caps are huge. This is the down payment on our future, a return on investment over the next 50 to 75 years. Last December, the UT board of regents faced the same choice. They unanimously approved 106 million to fund two significant [11:27:56 AM] million to fund two significant caps and reconnect. Campus. The southern cap is from 15th street to mlk, where they plan to extend the medical campus, building mid-rise and high rise buildings on the cap. The northern cap is in front of in front of the moody center, where they're planning mid-rise buildings and park open spaces to connect their sports and entertainment district. In presenting the items to the board of regents, chair eltife specifically noted the opportunity to monetize and capture future revenue. The majority of land near these caps is publicly owned. The opportunity to increase values. The public good. In addition to UT, Travis county, capmetro and central health, the city of Austin owns significant amounts of real estate at river street, second street, fourth street, fifth street, seventh, eighth, ninth, and 12th streets. All of that property fronts onto the I-35 frontage road, as demonstrated by projects across [11:28:58 AM] demonstrated by projects across the country and around the world. Caps add value, reduce harm, and generate return on investment. >> Thank you, thank you. >> Good morning mayor. Council members, we've already seen many nice renderings of what the caps might look like if they're built, including this one looking north from fourth street. But it's just as important for us to know what the city will look like if the caps aren't built. Next slide. Voting against funding the roadway elements would mean this is what our city will be stuck with for at least the next two generations. Decades upon decades. Yes, this is txdot design, 20 lanes wide, without the caps covering it. Next slide. This concrete canyon will be so wide that an entire football field could fit lengthwise. End zone to end [11:29:58 AM] lengthwise. End zone to end zone. This will be an intimidating obstacle to cross for sure. Next slide. Also, demand for adjacent development would likely be minimal since most people won't want to live, work, or play anywhere near this thing. So voting this future into existence will mean a major missed opportunity for our city's revenue. Thanks for your time. >> Thank you. >> Next set of speakers is Charles d'harcourt, Tom Wald, and Camille cook. >> Good morning. Thank you for working on this. This is obviously important. Everything you do is important. But this two. First I there's a lot of talk about the connection that this will allow the fact that this is a once in a generation thing. But I just want to talk about the place because a couple weeks ago we had something called a design assistance team [11:30:59 AM] called a design assistance team exercise, where architects and designers, urban designers from around the country came and gave us a vision of what could happen at one of these caps, which is at Hancock. And it it was mind blowing. I've been in Austin for over 20 years, but before that I lived in two other cities where freeways were either brought down and replaced by other uses, or or mitigated with other uses. And in in both of those cities, it totally transformed the city. This is an opportunity we have here. This is an opportunity to create place and we have nice places in Austin. Too many to mention. I want to mention two one because this is a few feet away right now. It's a beautiful day. There are thousands of people who are going to be using the butler trail, and that's because a generation before us thought to develop that and the other place, because it's more relevant to this, is Miller. This used to be a place with a small P, which was an airport, [11:32:00 AM] small P, which was an airport, which is useful, but it's not a place you go to. It's a place you try to get out of. But now it is a place you want to go to because it has amenities, because it's a place where humans can hang out with other humans and feel good about about it. The caps have that potential, and that's what the design assistance team provided, by the way, thank you for the council members who participated in that exercise. Now it's a place as in people will go there, but it's also a place. It's not just sorry, it's at the end of the time. >> That is your your time is up. >> Okay. >> Well, we appreciate you being here and appreciate your testimony. >> Thank you for your time. Thank you for your work. >> Thank you. >> Sir. >> Can you please what the name of that initiative was where they ran the exercise. What's what's the name of the initiative that ran the exercise for the Hancock. >> Design assistance team? >> I'm sorry. >> It's design assistance team. [11:33:00 AM] >> It's design assistance team. Action council voted for to get the grant for that. >> Oh. >> About a year ago. And it came in a couple weeks ago. >> I appreciate it. >> Thank you. >> Thank you, thank you. >> Sir, can you please state your name for the record? >> I'm sorry, my name is Charles darcourt. >> Thank you so much. The next two speakers is Melissa berry and Lindsey Nicole. >> Hi. Good morning y'all. Tom Wald with the red line parkway initiative. And I really appreciate that. >> Your name is Mr. Woldman name been called? I'm sorry. I'm sorry to interrupt you. >> Yeah. Yeah. Okay. Yeah. Tom Wald, I guess I wanted to just, you know, give some background. I appreciate Hayden giving a longer background that this is a project that's really a long time in coming with the red line parkway initiative, our corridor for creating a trail along the capital metro red line spans 32 to 36 miles, but it also intersects with the I-35 project in two locations, fore street and also a Hancock center. And it was really important to us that, you know, we were creating this trail that will serve [11:34:02 AM] this trail that will serve thousands of people well, more than thousands of people per day. But you're going to have, on any given section, thousands of people using it. You want to make sure that they're not they're not encountering traffic lights. So as part of the project, and we thank txdot, we thank the city for this, for creating car free crossings for the red line parkway at both crossings. But as part of that too, is what are people going to see? What are are they going to be, you know, walking, biking a quarter of a mile over I-35 to get across this canyon? Or are they going to be encountered by other people, other faces? And so seeing the future of I-35 project was super important and making sure we got that right. And so early on, I found it important to work with Hayden walker and her father, Sinclair black, to make sure that we got the best outcome on the surface as possible. And I appreciate, you know, txdot staff. I appreciate Kirk Watson all this time trying to get these parties together to get the best outcome. And this is just where we got into over the last 15 years. This is these caps are our option. They're not the [11:35:03 AM] our option. They're not the price tag we wanted. You know I think from the city's point of view very clearly, you know, you don't want to pay for it for something like this. But this is in large part mitigation for the project. It's also creating something a betterment. And so I think don't forget that we're spending this money here at I-35, because that's where the project is. Right. That's where the mitigation needs to happen. And then plus we'll also get parks on top of it. So I appreciate you all and I encourage you to vote for all the caps and stitches. Thank you. Thanks. >> Good morning mayor council. My name is Camille cook. I live in district three and I work with public citizen here in Austin. I'm also here to talk about cap and stitch, specifically about just being cognizant of how balanced our budget is, especially in this moment. So looking at the cost of the program, it's going to cost $284 million just for the supporting structures that would be built to hold up future caps. And that is between a half and a third of the total bonding capacity for this bond cycle. That would severely limit the [11:36:05 AM] That would severely limit the other things that need to be funded in the cycle, like climate bond. And many have been many in Austin are excited about this climate bond that's in the works, and many people want to see it funded. I saw that some of y'all in the dais support funding all caps south of the red line. While that would bring the overall cost down, it's still a massive investment for the for a budget that is increasingly being squeezed due to forces within and outside of y'all's control, those five caps still add up to almost $1 billion to fund, and their annual maintenance costs cost more than the annual maintenance to maintain all the parks in Austin. As we just saw, the base revenue forecast for fy 2026, expect a 10% decline in taxable property value. This could lead to a general fund deficit of almost $80 million by fiscal year 2030. The police budget already takes up over a third of the budget, and according to state law, we can't touch that. I ask that y'all don't get caught up in huge city beautifying projects that could force austerity upon other aspects of the city. I'm not saying that we don't invest in the city. Quite the opposite. I'm just saying that our bond projects should be prioritized around climate schools, parks [11:37:05 AM] around climate schools, parks and affordable housing. All these investments are very popular with austinites. And I'll end by saying this, like everyone else has been saying, given the financial turmoil that the country is going through, I think we should put a hold to this mega project until there is more clarity about what is going on. Costs for this project have already ballooned over $1 billion since it was proposed, and inflation is still high. Cap and stitch is nice, but I don't think it's the kind of investment that will best serve Austin in this moment that we're in, especially as it will affect our bond capacity so significantly. I think y'all should think carefully about how our money is spent right now. I know y'all are more thoughtful than other leaders around. Thank you all for letting me. >> Thank you. >> Good afternoon, council members. My name is Melissa berry. I'm the chief program officer with the downtown Austin alliance. Downtown Austin alliance has been working on this project since 2019, when we convened the urban land institute to come in and help us talk with the community and [11:38:06 AM] talk with the community and understand how to make this vision for cassie over I-35 happen. And, you know, you've heard everyone today say we're at a critical juncture, and we certainly are. Lots of work has gone into this over the years. I appreciate the amount of work that the city staff and txdot and all of you have put in to get us to this point in the process. Back in February of this year, we hosted a luncheon, an educational luncheon. We brought the folks from Dallas who were working on klyde Warren park in to talk with us, as well as the southern gateway team. And one of the things I want to share, it's really important for us to think about not only the cost of the project, but what the return on investment looks like as we make these big investments in our in our city's infrastructure. So. It was $112 million project for a five acre [11:39:06 AM] million project for a five acre park that was built in 2012. They had a 2.7 year payback on that investment. They also have identified that since that investment, they've had a $6.5 billion economic impact that they can they can actually calculate and attribute to the investment they made in klyde Warren. And it's also 180 million annual incremental tax revenue. So as we are thinking about this and I understand this is a very critical and we have to be very prudent with with the finances that we have in front of us. I just wanted to offer those data points from from Dallas. They're very important to the decision making process. >> Thank you, thank you. >> Hi y'all. I'm going to talk Boston fast for you to get this all in. My name is Lindsey Nicole. I'm a resident of the cherrywood neighborhood. And I'm here to ask for your [11:40:06 AM] here to ask for your consideration in funding the roadway elements that are critical for building caps. This is a personal issue for me. I grew up in Massachusetts, about 20 minutes south of Boston, and I lived through the famous big dig. I saw the impact of what thoughtful urban design can bring. And was it a pain in the to live through? Yeah, it really was. But it was also incredibly worth it. The irony is not lost on me that this is the worst possible time to ask for government or money from our government, and the current landscape feels like a beatdown of losses that's equal parts terrifying and exhausting. And yet, right now, we have a small window of time to make a decision that will future proof an opportunity to benefit millions of people. Txdot is already going to spend billions to rebuild I-35. It's imperative, imperative that we leverage this construction window to build the infra now, rather than retrofit later at a much higher cost. The caps over our highway unlock profound potential from monetary lens. This endeavor opens public and private development [11:41:06 AM] private development opportunities to potentially generate millions in long term tax revenue. It boosts local business, unlocks real estate and some of the most desirable areas in town. It also allows us to give back to the community as we build affordable housing, which can be critical as more and more folks are displaced. As generations of people have to leave from an urban design lens, we have the opportunity to heal that massive gash that I-35, to make our city more walkable, bikeable, and interconnected. Not to mention the possible integration with the new transit infra. And this is not something that we'll be able to build overnight. We're talking about 50, 70 years down the road. I'm not going to pretend like I have the solutions for how we're going to pay for everything, but I do know that if we don't fund those roadway elements today, we won't even have the chance to figure it out. You know, I've lived in eight different cities throughout my life, and there's a reason that Austin, Texas has a place in my heart. A place where for the past ten years, I have lived in a place to raise my children. Thank you very much for your time and consideration. >> Thank you. Mayor. We're going to go back to the remote speaker [11:42:07 AM] to go back to the remote speaker Andrew clements. >> Thank you very much for taking my testimony. Sorry for the technical glitches. Mayor and council members. There's a tremendous opportunity to improve and even future proof the I-35 corridor through central Austin for decades and even centuries into the future. I understand the amount being asked by txdot, even just for the roadway elements is daunting, and I understand the pressure mounting on you, mayor and council members as the need for public financing of capital improvement projects pile up, including those in your individual districts. But the commitment to the roadway elements needs to be made, obviously, by may, because of the txdot imposed deadline and all the other capital improvements can wait because they aren't facing the same deadline. The caps can be a destination improvement for all of Austin, not just neighborhoods adjacent to I-35, [11:43:07 AM] neighborhoods adjacent to I-35, and the caps can be thought of as found public land and possibly great amenities for all of Austin long into the future. The northern caps have north of 38th and a half street, have the greatest redevelopment payback potential, and with the tax increment financing district, they could pay back their cost and more. So please don't cut the roadway improvement cost out of the northern caps kind of shortsightedly the cost for all the caps, not just the roadway elements, is a tiny portion of the publicly funded $8 billion cost for all of the central I-35 expansion fund. All of the caps elements by the deadline in may. And as a resident of Mueller, I know that the neighborhood is pointed out, is the way we want Austin to redevelop in the future, and this is an opportunity to bring Mueller [11:44:07 AM] opportunity to bring Mueller type redevelopment to the northern I-35 caps. We have the foresight to fund the roadway elements for all of the caps and not cut out the northern ones. I really encourage scenario six. >> Thank thank you sir. >> Mayor, that concludes all the speakers. >> Thank you very much, members. We'll now go to a discussion from council members. I'll recognize first council member Siegel, followed by council member alter and then council member Ellis. >> Thank you mayor. I have some financial questions to start. I guess the first question I have is more cut and dry is what are the repayment terms for the state infrastructure loan as a 40, $41 million, I believe so. >> Kimmel Olivares, director of financial services we are required to take down that loan in in amounts equal to one third over the. As we as we begin the project, the interest rate I [11:45:09 AM] project, the interest rate I need I'm going to I know my treasurer is watching right now, so I'm going to ask her to send me the interest rate like while I'm sitting here. And. Kind of a variety of different terms with the once we have an advanced funding agreement with txdot on this project is when we would nail down all the exact terms. But it's, it's not onerous by any means. We're able to work out structure in a way that it's not going to create a huge impact or an unnecessary impact up front. That being said, it will be paid back from the debt service portion of the tax rate. It's a 20 year term. And then she's also going to send me the tax rate. So you can ask your next question and I'll answer the interest rate question. >> Fair enough. Great. And kind of building on the conversation on the previous agenda item, you know, current market instability and how that might impact the cost projections. My understanding is that this [11:46:09 AM] understanding is that this presentation is based on a financial analysis done in November 2024. Is that correct? >> Correct. >> And I mean, do we have I mean, just assuming we decided to fund all the caps currently projected at 1.4 billion in capital dollars needed, not including operations and maintenance? Is there a high end of how much that could grow over the course of the project? Could it be 2 billion? 3 billion? Have you all studied that? >> So there are we're at that 30% design phase. So there are pretty significant contingency reserves built into the current cost estimates. That being said, there definitely can be increases. One of the other factors that was not in play when we did that initial analysis in November was the just the current market conditions relative to tariffs and the sort. Our my procurement team is keeping a very close eye on how tariffs are impacting various construction contracts and services contracts that we [11:47:11 AM] and services contracts that we bring to you all for approval. We require significant backup and justification for price changes relative to our cost by the tariffs. So that's something we're going to continue to monitor and report back to you all. If we're seeing huge jumps, the now as the I'm going to actually turn to Richard to speak more to the how the cost estimates will adjust over time. And then also to go back to your the other question on the cib loan, again, it's a 20 year term and interest rate will be 3.54%, which is excellent and in alignment. What what what we're seeing with our tax exempt debt. >> Thank you. >> Thank you. Kimberly. Yes. Council member. The cost estimates have been refined by txdot based on the 30% design. They've also included in these cost estimates contingency amounts that will make them at a high confidence level through [11:48:12 AM] high confidence level through the letting date of summer of 2026. So the portions that we can capture now commit, we feel pretty confident and firm on on these costs. Now post that they have made available to us the option of funding at a later time. While the this construction contract is still in effect via change order, however, their experience with change orders is pretty much they are at the at the mercy of the contractor, and they have experienced on other projects escalations on the order of that 35 to 45% per change orders. It gets you time, but then again it comes at a higher cost. And then our last bite of the apple for the immediate future would be 2033. If the city were to move forward on a separate contract from the txdot that will be [11:49:12 AM] from the txdot that will be concluding much of their work by that time. And it's not inconceivable that you could see these cost double if we win a separate contract in 2033. >> Thank you. Thank you director. And I think earlier we heard a little allusion to the fact that whatever the city spends on cap and stitch will impact the availability of capital funds for other unmet needs. And I guess, miss Olivares, could you expand on that a little bit? >> When we look at our overall debt capacity as a city, we need to look at our existing debt service requirements, the upcoming debt service requirements for authorized budget issued, which were discussed briefly during the forecast, and then looking forward to what we might want to bring to the voters for consideration in a bond program. In addition to the debt requirements, the credit rating [11:50:13 AM] requirements, the credit rating agencies also look at our pension obligations in their totality. It's basically looking at just our overall liabilities. So as we dig into those liabilities, we're we're going to be looking at kind of what is our our tipping point of, if you like, if you pass, if you go, if you pass go, you're going to like it would result in a possible credit rating downgrade. There are a variety of metrics that the credit rating agencies utilize to make those assessments. And then they have a scoring card. So we're working with our financial advisor to help us with those those calculations and, and help us understand what would be that tipping point. So when we come back to you in may, we're able to talk about this is how much we potentially have on the table in general. And then it was it would be a discussion amongst this body to determine how it might want to allocate those [11:51:14 AM] might want to allocate those dollars or not. >> Thank you. And yeah, that's a big concern for me. You know, I'm very sympathetic to the testimony, for example, from the cherrywood resident. How beautiful and impactful this kind of investment could be for many of our neighborhoods, potentially for economic growth. But it's really those trade offs that I'm concerned about. And my understanding is right now, the city has multiple processes to evaluate our capital needs. I mean, I've heard anecdotally we might have 8 billion or more in unmet capital needs as a city across all departments and utilities. And we have our capital delivery services department that's bringing all the departments together to discuss that. In preparation for a 2026 bond cycle. And I don't know if someone from cds is here, because my next question is essentially to that process. But we also have a citizens advisory committee, the bond election advisory task force, this meeting to decide on what, you know, capital projects we should put forward in the 2026, you know, bond issuance potentially. And my concern is that we're being asked to make a decision in may 2025 when at the same time, we have these other [11:52:16 AM] same time, we have these other processes that are geared towards funding essential unmet needs in November 2026. And, you know, I like this idea of a once in a generation investment opportunity for cap and stitch. But there might be other once in a generation opportunities, whether it's housing, whether it's fixing leaky pipes or other, you know, necessary capital projects. And so is anyone here that could provide a high level summary. And I don't know if there's someone you could designate of other capital needs like that. We could summarize by department. Can the watershed department tell us, you know, how many 100 million we need in drainage, like, or is anyone here that can kind of share some sort of information that would put in context? If we spend money on cap and stitch, we won't have money for something else. >> I think we're hunting somebody down. Oh, and never mind. >> Thank you, councilman, for that question. I what we are doing the capital delivery services team is putting all of [11:53:16 AM] services team is putting all of that information together. We are scheduled for the next committee meeting for mobility with that information. So I just wanted it's still being gathered at this point as the team is working with each and every single department. But we are scheduled as we've worked with the chair of mobility, to have that as a scheduled item for the next meeting. >> Wonderful. Thank you. Acm Rogers and I, I guess my next question might be for you or might be for director Mendoza or others. And it relates to something I know you're familiar with coming from Dallas, and there's been a lot of talk about the Warren park in Dallas, and I just had someone message me, hey, you should come visit the Warren park. It's a beautiful place to bring your kids. But my understanding is that project was not funded primarily from the city. In fact, my staff did research that showed that the city only put in about $20 million. My colleagues have referenced a project in Seattle that was a multi-billion dollar cap, where the city put in less than $30 million. Even the big [11:54:18 AM] than $30 million. Even the big dig I was in in Boston going to school during the big dig, which I would say it's a tunnel. It wasn't a cap, you know, but but even that the city didn't have to pay for it. And so is there any evidence of any highway cap project in the country where the city had to make a contribution along the lines of what we're being asked to do? >> Council member you are absolutely correct with the situation. The first part is, is what you said about the city of Dallas. They came the private sector philanthropy came with over 70% of that particular fund. And of all the projects that I'm aware of throughout the country, there has been a significant philanthropy component to each and every one of those projects. I am not aware of any project that was 100% funded through cities. >> Thank you, Jason Rogers. And then my last question and I'll yield it back to mayor pro tem is about txdot. And this might be better for director Mendoza, [11:55:20 AM] be better for director Mendoza, but thank you, sir. My understanding is that the contracting and roadway elements would be handled through txdot and their contractors. And my concern here is related to labor standards. Is it true that txdot would not be required to follow our labor standards? >> Txdot is not required to follow city standards, procurement or otherwise they would manage the any grant. If that's successful and they would be subject to the requirements of that grant for procurement and labor standards. >> However the federal standards. Yes. Okay. >> Federal money it's federalized. >> But for example, how we, you know, require big developers to follow better builder standards. Or maybe on our bond projects, we require a project, labor agreements. Nothing like that would apply here. Is that correct? >> Not not to my knowledge. Council member. >> Thank you, director. Back to you, mayor pro tem. >> Thank you. Councilmember. Next, we'll have councilmember alter, followed by councilmember Ellis. >> Thank you very much. I'm curious if we still have it. If [11:56:21 AM] curious if we still have it. If not, that's fine. But the one of the speakers had the slides with the option versus the highway. And I think it's just incumbent upon us. We're not deciding today if we're going to fund all the caps. We I think as one speaker mentioned, and I could just guess if we did a straw poll, no one here would say we've got $1 billion to spend today on all the caps. We are asking ourselves if we want to preserve the option for the future for ten years, 20 years, 30 years, 50 years down the road for us to figure out how the city isn't the only one funding all of this for philanthropy or other partners to come in and help us fund that element. But if we don't put the roadway supports in place, that conversation will never happen. That opportunity will never happen. We close the door [11:57:23 AM] happen. We close the door permanently, and that is something that is unusual for us. Normally we make a decision and there's always, well, we can come back later and change our mind or do something different. You know, if we don't buy this today, we can buy it tomorrow. It might be more expensive, but there's an opportunity. There is no future opportunity. It is. We do it. There is no private opportunity. If there's no roadway element, there's no future cap. Period. End of discussion. And so the reason why I wanted to look at those pictures again is because there are a lot of different elements of this conversation. Are are we investing in a space that is as green as another park? No, this is not by itself a park. It is a public space, a public amenity. It has environmental elements. You know, the study that was shared by director Mendoza just yesterday showed that from a heat island effect perspective, you're talking 5 to 30 degree difference air quality improvements. But is it the same [11:58:23 AM] improvements. But is it the same as developing Trevino park, which we need to do is different. Those are different types of deal. We need to, you know, fully invest in the Waterloo greenway. That's a linear park right there next to it. And that can feed into this public space. But it is certainly greener than just a highway. And that is irrefutable. It is also, you know, this is one of those weird decisions where. I am not thinking about my children being able to use these caps. They certainly won't be able to, but their kids might. And we don't often make decisions that are so. Long down the road to see the reward. Right? None of us will be cutting these ribbons unless someone decides to be a 50 year council member, which I don't recommend for anybody but. I just think this is an [11:59:30 AM] I just think this is an opportunity we can't squander. And the group of us that put the message forward, we're not saying do all the caps, we're saying prevent or preserve the opportunity, create that opportunity, and we'll decide in the future. I think the northern caps have some really cool opportunity with Hancock and fiesta. If we get some developer to come up with a fluid plan that unites the fiesta and the Hancock shopping centers with public amenity space, you know, greener space in the middle where they finance that. We don't we don't have to do that. That could be part of some master development where someone way smarter than me comes up with a very cool type of project there. And so I just want to kind of lay that as the foundation. I also, you know, we've talked a lot about bonds, bonds, bonds. And that's the discussion here. But I want to just daylight and hopefully we will have more concrete things to share. But our sub quorum is [12:00:30 PM] to share. But our sub quorum is looking at other options, something that would not impact our ability to fund our 2026 bond projects that we need. So I do think there is a way to, at a minimum, lessen that blow and have a another alternative to do some of what we're talking about. And we're going to work with staff to figure out if some of these options are are doable. I do have a technical question for miss Zaldivar about the debt capacity. We know we talk about that term and it means different things. You know, so I want to start from the highest level, kind of the unfiltered number of what we should do versus not as it relates to the credit ratings, but are our debt limit policy. Is that 2% number where it's I guess it could could you [12:01:33 PM] it's I guess it could could you talk about that, the 2% debt versus assessed value policy. >> Amongst our financial policies? There is one that says that our our, our outstanding debt would not exceed 2% of the assessed valuation of the of the city of Austin in its entirety. So that that is a measure it is not the only measure. So that's where the assistance from our financial advisor comes into play, where they're able to pull in the metrics that the credit rating agencies, agencies specifically utilize in making their assessment. >> Absolutely. And that's why I said that's kind of the unfiltered number, right? That's there's a lot of factors on to that of like the credit rating agencies. Is this a good idea because of X, Y or Z. But but within that specific parameter that we have set for ourselves. You know, I went back last year, our assessed value was just over $300 billion. So if we're [12:02:35 PM] $300 billion. So if we're assuming the 10% reduction, you know, that's $270 billion. That 2% number on that would put our debt capacity at somewhere around 5.7 billion. We're at between 1 and 2 depending on our issuances for our programs. But as you very correctly talked about, you know, we've got the credit rating agencies and other things. We can't necessarily just go right up to that number and say, well, we're fine. I just I also as, as you present our capacity, I would ask that you give us that, that layer, show us kind of your homework, as it were. Right. Like here's what we think is a, you know, what would we be within the policy but not a good idea because of this, this and this. And that's why we arrived at this number, which we think is a good idea, because, you know, as I have looked at the credit [12:03:37 PM] I have looked at the credit ratings for a number of questions, I've had, you talked about the pensions, it seems like that is the driving concern is, is pension costs, whether it's cause fire police, they they don't want us to have runaway pension costs. That kind of a fair assessment. >> Yeah. They're the comments that we've received in our most recent ratings. Definitely focused on anticipated debt because we are even though we're we're having them do an assessment based on our sale in that particular year. They also ask us to provide what is our anticipated, our what our anticipated numbers are for sales in the future. So they comment on that as well as our pension obligations. They have been happy to see the reforms that we've made with cause and April's, and they are very much looking forward to seeing what might be accomplished with the fire pension reforms. [12:04:40 PM] fire pension reforms. >> Great. >> I appreciate it very much. And I will turn it over to I know a long list. >> Thank you. Councilmember. Next I have councilmember Ellis, followed by councilmember qadri, then councilmember Laine, councilmember duchen, and councilmember harper-madison. >> Everybody raise your hand. I have a technical question about the caps themselves. Do they last forever, or is this the type of project that we're seeing that I-35 was originally built in the way that it is that we see today, about 60 years ago? Is there kind of this cadence of about every 60 or or so years that things need to be readjusted and realigned? Or can you talk to me about just we put concrete on a cap and we put beautiful amenities on top. What's our timeline look like as far as longevity for the structures? >> Thank you, council member. And that's an excellent question. In speaking with txdot, they view any cap structure over there freeway as essentially a bridge structure. And so all [12:05:41 PM] bridge structure. And so all bridges have a life cycle. Those life cycles are typically designed and built for about 75 to 90 year lifespan. Sometimes they that can be extended longer given. Routine maintenance and ensure the inspections and the maintenance is upkept on the structure. But but no, they they don't last forever. >> Okay that's helpful and I'm glad you mentioned bridges. The cadence of bridge structure inspections. Is that something that would be handled through regular txdot contracts, or would the city be on the hook for inspecting the caps and txdot would do their bridges? Has that been discussed in this level of detail yet? >> I've not discussed that in detail. My expectation, though, in working with them on other bridges throughout the city, is that the structures would be added to our bridge inventory and they would fall within the two year and biannual bridge inspection, cadence and program [12:06:44 PM] inspection, cadence and program that txdot performs now. >> So they they would do the inspections. >> Yes, ma'am. >> Okay. That's helpful. I hadn't thought to ask that question until you had said that word. I just wanted to clarify also. So what we're saying right now, as far as cadence for council decisions, is that in may, we need to decide on the phase one vertical elements. And then also in may we can decide on the horizontal decks. Or we could delay that decision for another year. It just would cost more. Is that kind of we have the option of deciding decks in may. >> That's correct. >> Okay. That's helpful. I wanted to make sure I understood that, and I appreciate some of my questions have already been asked by some of the other folks, so I won't repeat them. But I was also curious about repayment terms. But you've already answered that question. I think the point about the moratorium is interesting, because it's a fairly recent concept for me, but I think it's important for folks to know [12:07:47 PM] important for folks to know that, you know what, we plan into these, whether we decide in may 2025 or decide in 2026 to do certain cap elements at whatever cost, we decide to go with once the project is finished, that that there is a moratorium, there will be a moratorium on anything starting again for decks. So if we miss a boat for something we do want, we've got to wait all the way until 2043 to build a new deck. However, a. >> That's correct understanding. >> Okay, that's that's helpful because I think that, you know, gap and being able to add decks is an important part of the conversation, regardless of which direction that we decide to go with. And the last thing I'll just say is, you know, getting a financial forecast presentation before this was was really eye opening for us. I think we all had a lot of great questions about the economic uncertainty. How is sales tax going? We've had conversations [12:08:47 PM] going? We've had conversations about property taxes and, you know, growing housing markets and things like that and trying to understand, you know, year over many dollars do we really have to work with and how do we balance our priorities as a city council? And when council member Siegel, I think you mentioned first the hundreds of millions of dollars is the number I had also thought of is that we're being asked to consider these investments. But what did occur to me is that there could be hundreds of millions of dollars for highway caps. There could be hundreds of millions of dollars for environmental bond programs. And every budget cycle, like we're going to be going through between here and August. Again, this the community typically comes with comes with $100 million worth of asks of different investments that they want to see in the community. So I'm really kind of struggling with the price tag of some of these and trying to balance the needs that we have, because there are some projects like the recent federal grant for [12:09:48 PM] recent federal grant for flooding mitigation, that's not going to be coming. Now. That's a big concern. And I hope to see in our environmental bond program that we have money for flood mitigation, because a lot of us are affected by that. So I will leave it there. I'm still trying to balance, you know, the idea of being able to build the vertical elements and get the support structures in place for future community members and future councils to be able to decide what they want to see in in that program. I definitely right now want to see the Cesar Chavez to fourth street and 11th to 12th street, and I'm still weighing the cost and benefits of the other elements there. But I do understand and appreciate the need to make sure that we're not preempting, that. Other people may want to see different benefits and pay for those benefits in the future, because I wouldn't want to do that to future councils. But I also don't want to put them on the hook for paying for things, as we see the cost going up for almost everything that we handle [12:10:49 PM] almost everything that we handle as a city. And so that's where I'm sitting right now, and I will continue to crunch my numbers, and I think we'll all have more questions for transportation staff and financial staff along the way to help us sort out how we're how we're going to get through this and make this choice. >> Thank you. Council member. I do need to bring your attention to a typo on the table that presents the scenarios. Assuming no Na grant on scenario three, there was a one digit added to the total cost for phase one, and that number should be 109 million, not 209 million. And scenario three. >> Slide nine. >> Slide nine. Yes, ma'am. >> Phase one. Scenario three. >> Yeah, all the way to the right. >> And what was that correction again. >> It should read 100 million. 109 right. Not 209. >> That's that's a big adjustment. >> And then the funding gap right below that gap is 68 million, not 168. [12:11:49 PM] million, not 168. >> Okay. >> Just just found you 100 million bucks. >> You know, you say hundreds of millions enough times. Maybe y'all can find a little bit more for us. Thank you. That's. That's all I have for now. Thanks, mayor pro tem. >> Thank you. Next, we'll have councilmember qadri, followed by councilmember Laine. >> Thank you, mayor pro tem, I want to start off by just thanking all the speakers that are here today, especially ones from cherrywood, Hancock and the Miller neighborhood. I really appreciate being able to work with them on a weekly basis, but also their, you know, them coming out and talking about, you know, something that's extremely important. And going off of councilmember Ryan alter or just alter, I guess, now. You know, it's you know, I think it's really important that we're able to get as many caps, you know, you know, that are that are feasible out there and built out because this is a generational project. It's a project. And I'm going to use a lot of the great lines that kind of Ryan was using. But, you [12:12:50 PM] of Ryan was using. But, you know, it'll go way past behind anyone here on the dais unless someone has found the cure to death. I think all of us will be gone and it'll go past maybe even our kids lifetimes. But, you know, I think we really have an opportunity as a council to do something that looks at quality of life, looks at walkability issues, looks at environmental issues. And we could either be the council that doesn't make councils of the future have headaches and stresses, or we could be the council that just, you know, continues this this cycle of pain and frustration for so many folks. And I'd rather be the council that's, that's, that's very much, you know, focused on, on the mission of making people's lives better. And, you know, I'm excited about some of the oh, sorry. My phone started to talk, you know, and I'm excited and I'm eager also, you know, to hear, you know, from cherrywood and Hancock planning study to look at the opportunities when it comes to things like the northern cap, which I think when we look at, you know, combining, connecting [12:13:50 PM] you know, combining, connecting the red line. The northern cap is just so extremely important to the work that we're going to do to boost this, you know, the transit oriented development and connecting, you know, folks in their homes to destinations. And I think we lose out on so much if we don't have these caps. There was and I don't know if we could pull it up. I know Ryan alluded to it. It was very daunting and almost scary to see what it looks like when you know the cost of doing no caps. You know, I think of district nine, which obviously I represent. So I do have a bias. But you know, it's a, it's a, it's a. Bit whether you work there. I think that's why all of us are here. You might live there, you might drive through there. You know, your kids might go to school there. But it is it is a destination district. It serves everyone in the city. It serves everyone in the region. And, you know, I can't imagine what you know, what it would look like having no caps, right? Like, how does that affect the quality of [12:14:51 PM] does that affect the quality of life, of having this really loud at times? Stinky hot 22 Laine highway that's walking distance between destinations and homes, right? So how does how does that affect quality of life? How does it affect the walkability of connecting folks? You know, from the east, you know, east and west in some in some areas that are most walkable parts of the city. I don't know if you guys have any answers to that. What what it would look like for walkability and quality of life without these caps. But then I also think of, you know, how does it affect, you know, sales tax revenue and developmental possibilities by not doing those caps? Right? So those are the things that I think are keeping myself and my team. And a lot of the folks who spoke up at night, I don't know if you guys have any comments, questions, thoughts on any of those. I'd just like life without caps. >> The baseline txdot the baseline txdot design without caps in its current form, with those crossings only includes what they call enhanced [12:15:54 PM] what they call enhanced crossings. 30 foot back of curb council member, and they are adding some treatments. Of course not to the extent that a new cap structure would provide for the community. Also, we're excited about the downtown location next to palm park. There's by moving the boulevard over to the west side, we're able to create a land bridge, if you will, whereby you can access downtown from east side without crossing any vehicle roadway. So that would be an immense benefit for that particular location. >> Yeah, which is really important. I think it was just the other day that there was a pedestrian who was killed on, you know, walking across across 35. I do have one question, and it's kind of been alluded to by a lot of my colleagues, but have we factored in opportunities for public private partnerships along the cap to help build [12:16:54 PM] along the cap to help build decks and amenities? Myself and former mayor pro tem pool, as well as staff members from the mayor's office and councilmember Bella's office, had an opportunity to go to Boston just a few months back, and we saw examples of developers building decks and areas that were very that had very constrained land options. So I have we kind of explored similar things. >> Thank you for that question. Yes. This is going to be an important aspect of what we do. As a matter of fact, we've met with opportunity Austin, and we're going to be building a, I guess, a sales pitch along with them to look at whether it's philanthropy, whether it's private sector, all other options that that may be available. So that is that process is going to be happening before the actual vote for this particular project. >> Thank you. That's my time. >> Thank you. Councilmember qadri, you asked about imagining this project moving forward [12:17:55 PM] this project moving forward without caps. And do you want to also point out that I-35 is expanding in south have large segments of I-35 expansions that don't have caps off. That can give you a really good indication of what that might look like, and how many of our residents experienced the I-35 expansion. Next, we'll have councilmember Laine. >> Thank you. The potential and the vision are amazing, but I do want to return to the consideration of how these types of projects are typically funded, and most cap and stitch projects are funded through a rich mix of federal, state, and local dollars, along with private and philanthropic contributions. Councilmember Siegel has already noted a couple I will highlight, in particular, the big dig in Boston, which was quite transformative, and the city of Boston and also had a lot of cost overruns. And the city of [12:18:57 PM] cost overruns. And the city of Boston did not contribute any money to that. We also see the Dallas example, but others as well. Atlanta stitch project, Washington, DC's capital crossing. And when we look at not just the percentage of money that goes into these projects by cities, but also the dollar amount, we're talking about dollar amounts that range from $0 to 20 million, not the large scale amounts that that we are seeing in these projections. So I really want to be part of a solution and a move forward. But I'm hopeful that when we return in may that we could see Austin's proposed financial obligations juxtaposed with some of these similar projects in other cities. The dollar contribution, the percentage of project funded by the city, how diversified the revenue sources are. Even just for this future proofing piece, I. I'm concerned that we'll see that we're far out of line of what's typical. And as soon as we move very far [12:19:58 PM] And as soon as we move very far from how projects are typically how cities typically contribute to cities like this. That becomes a sign that it's not actually financially feasible, that the trade offs be are too great, and that we will be foreclosing our ability to spend on other critical needs all across our city at a time when our residents will need Austin to be able to have funds available for these emergent needs, specifically because of private, because of economic factors going on, like the recession, but also other levels of government not stepping in. Like we have to preserve the flexibility for our local community. I also would hope that if anyone is watching, there are so many people watching this who are excited about the potential and the vision of these projects. We can't wait another day to hear from anyone who might be able to help mobilize some of these [12:21:00 PM] help mobilize some of these other funding sources, whether that is a large, large private donors, anything that can be mobilized. Because when we come back in may, we're going to have what we have to make a decision. And for me, I, I cannot look at our city looking at committing money in ways that are so far outside of the norm of how it's been accomplished in other cities. And the implications go so far into the future. Thank you. >> Thank you. Councilmember. Next, we'll have councilmember duchen, followed by councilmember harper-madison. >> Thank you, mayor pro tem. I had a couple of requests to try and get some additional data in may if that's possible. One of the things I was hoping to get your help with is to try and run a calculation similar to what you all do for the taxpayer impact statement, and see if it's possible to get kind of a typical residential ratepayer calculation for both the capital costs as well as the zo for this [12:22:00 PM] costs as well as the zo for this project. I don't know whether that's that. If possible, at the maximum scenario, but maybe also at the different scenarios and the way that you've laid out in the different tables you've shared with us today. I'm also curious, if any, if we've looked at the opportunity cost just against parkland acquisition from an environmental perspective. And I think that's also an environmental cost perspective. We got some data back from pard indicating that a cost per acre was something like, depending on whether it was urban or suburban, between 200,000 and $800,000 per acre, and maintenance was about $27 per acre, unless they had to mow, in which case the maximum was about $1,600 per acre. And when I compare that on a per acre basis from the data we got from y'all in those tables just [12:23:02 PM] from y'all in those tables just by structural costs, and then Maggio, I'm getting something like it's 65,000 times more expensive per acre for the structural costs, and something like 1100 times more expensive for no costs if we consider the mowing. So what I'd be curious to know is if there's a way for y'all to calculate some of the cost per acres to make sure I've got those numbers right for both the parks and zo for the different scenarios, as well as, if possible, against the pa data. And then I'm also curious, we had a speaker mentioned things like paybacks, incremental tax revenue. Have we been able to collect any of that data? Also that we can use to compare against the potential benefits? I know that that's not in the tables we were shared with you provided today, but is that an analysis the city has done, or that we should look to [12:24:03 PM] done, or that we should look to third party sources to try and collect? >> We've done analysis on potential tax tax increment reinvestment Zones on in the northern cap areas. The tirz potential in the downtown areas is incredibly limited. One because the waller creek tirz that already exist and then two, so many of the properties in the surrounding area have already turned and redeveloped that it the likelihood of them changing again within the lifetime of a tirz is incredibly unlikely. So for a full scale economic impact of all the components related to sales tax and so on and so forth, that's a larger undertaking that we have not done that, but we can discuss what's possible. >> Okay, that'd be great. I'd be grateful if we can do that afterwards. And then I think the last thing that I'm curious about is the matrix you all shared. And I'm curious how you [12:25:03 PM] shared. And I'm curious how you came up with the criteria for that matrix, because it looks like there's transit equity. And in terms of the conversations that I've heard about, there's things that may not be listed here, but I'm sure you all have looked into in terms of climate noise issues, air quality, parkland acquisition. So I'm curious how you guys came up with the matrix or categories. >> Yeah, I can help answer that. Michelle Marx, transportation officer with tpw. Those categories are criteria that we have seen to date included in federal benefit cost analysis requirements. So elevating these criteria that you're seeing on here was really kind of the staff's analysis of what would make for potentially competitive. Locations for [12:26:06 PM] competitive. Locations for outside money. >> Is there a way to expand on the matrix that you've got to include some of those other factors that I mentioned a moment ago? Would there be value in it? And I guess another question is, which you're also scoring this matrix. Which I'm not sure how that's calculated, but I'm wondering if there's just a way to do a relative score, right, to say by category, not cumulative. That way you're not trying to impose kind of an artificial value on the rating of different categories and their importance. Does that make sense? >> Right. Yes. And this was just an exercise looking at each of the caps relative to each other rather than just kind of from a quantitatively kind of stringent perspective. But we can absolutely kind of take a step back in the next month and look at some other factors that might be important to you. >> Okay. Because the main question I'm trying to figure out is using your matrix, in a lot of cases to try and figure [12:27:08 PM] lot of cases to try and figure out what is the what are the key or primary problems we're really trying to address with this project. Is it the equity issues? Is it the transit issues? Is it the air quality and climate issues? Is it the parkland? I'm not. That's not clear to me at this point. I imagine prior council has discussed that and probably has a vision in their minds about what that is, but it'd be valuable for me if there was a way to look at the side by side priorities. And if you all could help evaluate that, that'd be valuable going into may. >> Sure. >> Thank you. >> Thank you. Councilmember. Next, we'll have councilmember harper-madison, followed by councilmember vela. >> Thank you very much. I appreciate it. Mayor pro tem, this is a big one for me, and it's multi-tiered in a I'll say, spoiler alert, I'm writing an op Ed about something that's taking place in our city coming up, and one of the things that it addresses is deep rooted inequities in the city of Austin. And so I really want to talk about but then ask about cap and stitch. And these are [12:28:08 PM] cap and stitch. And these are real questions, but I'm asking it's not like I'm being facetious. I swear I'm not. I want to know if we've taken the opportunity to calculate the very real cost of reconciliation from city sanctioned segregation. If we've calculated the very real cost of inaction, when what we're looking at comparatively is the outcomes that traditionally happen when major metros separate their city by a big, fat highway. And so I'd like very much to talk about, especially because I'm so keen on us being mindful about our budget, given the constraints. And I really appreciate councilmember alter, when you were like, we were already in trouble. You know, that's one of the things I try not to mention. So when they told us that we had a surplus before, I was like, I got here when the caps were initiated in 19, I can tell you I haven't had. >> Any. >> Busses because I was anticipating what it was going to look like on the back end. And here we are. All that to say, I come back to the [12:29:09 PM] say, I come back to the conversation about cap and stitch from the perspective of a person who really wants us to. Reparations. The word makes people want to crawl inside a hole and never talk to anybody ever again. Right? So I don't say it. I don't even think about it like that. I think the long term greatest good for people's overall quality of life is access and opportunity. So I don't talk about reparations. I do talk about reconciliation because there are real costs to having somebody start the race 100 years late and then ask them to keep up with you. I'll leave that right there. I'm going to say I'm going to attempt to be concise, but I feel strongly about this. I 35 it just really has such a long physical and socioeconomic representation as a barrier between east and west Austin. I won't belabor it, but I have to say it. The proposed cap and stitch initiative aims to reconnect these communities [12:30:10 PM] to reconnect these communities by creating decks called caps and enhanced crossing, called stitches, over a lowered I-35, fostering economic growth. In the city of Austin. There's a multitude of financial implications. I don't have to go into those. They've all been laid out. I, I think I really want to spend the little bit of time I have speaking directly to it, talking about social and environmental implications. I can't help but think about what is. I really appreciate that. One of our speakers spoke to it earlier. The cost of trying to retrofit a major metropolitan city. I want us to think about that. That has a cost to us. But the sustained community division, the physical barrier that I-35 continues to be to segregate our communities, to limit access to resources and opportunities for residents of east Austin. That's what I-35 does today. Health and environmental concerns. I won't even go into missed opportunities for sustainable urban development. I won't even go into inhibited multi-modal [12:31:11 PM] go into inhibited multi-modal connectivity. It really is important to recognize that without improved crossings, pedestrian and cyclist mobility across I-35 remains limited and discouraged and not sustainable. But I think, in conclusion, I'd just like to say that falling into a situation where we don't make the front end investment in hard times leads me to just sort of go back to the conclusion is poor people lose if we win by doing it. I am very clearly in support of caps for the economic development that the east side will have the opportunity to finally realize and experience, but poor people lose if we if we get caps, because property values will raise, pedestrian traffic will raise everything, will be better economically, but without addressing some of the other things that make it so that poor people will just move further east will still going to be in this position. So even if [12:32:12 PM] be in this position. So even if we get caps, which is what we want, I have to make certain that there's other caveats that are included, because all things that address cyclical and generational poverty come last. In terms of our considerations, I promise you every time. And then as an extension of that point in consideration, poor people lose if we don't do it because they're still stuck on that side of I-35 with no access to the economic opportunities that present themselves. If we do do it. So guess what? At the end of the day, it doesn't matter who wins or loses because poor people always lose. And that makes me sad. In which case, as we continue this conversation, I'll continue to support caps and stitches. I have five pages in case anybody's ever interested in me not talking too long from here to where I will show you in my opinion, personal perspective. Personal perspective. In six years worth of anecdotal experience from this dais and in that community across the street east of I-35, we need the caps. Even if we only do 11th and [12:33:15 PM] Even if we only do 11th and 12th. And I certainly am not minimizing the importance of council member Velasquez's district or folks north of me. I'm speaking specifically as it pertains to my deep observations for district one. We need to cap the highway, period. There's really no question. Ultimately, when it comes to economic impact, people impact people's ability to stay. As we have these other conversations adjacent to this conversation, like I think one of the things Kerry said earlier, I can't remember it was it was a presentation about dollars. There was a dollar presentation where they said record numbers of people are contesting their property taxes. I don't care if you put a new fluorescent light bulb on that front porch, they'll tell you you did $1,000 worth of improvements. You have to you don't have any choice. That said, though, if that also has financial implications, then there was something else we discussed earlier which also has financial implications. I read a thing earlier that talked about animal services. I think on my way out, this will be when I finally get to have a real talk, real talk with my constituents [12:34:16 PM] real talk with my constituents about how I feel about our commitments to being a no kill city and being a city with the kind of financial obligation that the city has towards animal services. So when we're talking about philanthropy, robust philanthropy, building caps over highways, transit infrastructure, I think those same philanthropic dollars should take care of our furry friends, and we should take those dollars back for people. And I will be talking about that moving forward. So if you want to fight, let's spend the next year and a half doing it. Hopefully we can be friends afterwards because I'm not picking the fight to fight. I'm picking the fight to save our dollars are an actual, tangible representation of our commitments to people. So if my neighbor's dog can get a $14,000 surgery to keep digging up my yard, but my neighbor can't get a $14,000 surgery, we might be doing something wrong. If we have a city that's been so deeply disinvested in on one part of the city, there are [12:35:17 PM] part of the city, there are people in 2025 who do not have running water east of I-35. Y'all know that. It's the time of the month. Surprisingly, by the eighth there are people who just got their stamps on the first and are all ready broke. Real poverty. And I'm not talking about race. That's another thing I want to fight about. In the last year and a half. Folks who say every time I say segregation, white supremacy, racism, people who think I want to be a race baiter and have a nice fat fight with your ignorant today, I promise you, I don't. I'm bringing it up because it matters. Because everything we do, there's some implication that ties back to city sanctioned segregation that split the city in half. And I think folks want to lean on that being about blackness. It's not. [12:36:19 PM] being about blackness. It's not. It's about poverty. They don't care if you white, if you broke supremacy. And the kind of elitist culture that leans on whiteness and richness for you to be the elite, they don't care if you white and broke you over here with me at the barbecue. You're welcome. All that to say, every decision we do or don't make financially, despite the difficulties that we have to consider adjacent to them. I want us to do this pair that with. How are we making right what we spent hundreds of years making wrong so that although her grandparents look like her, I still have to teach my biracial children in this country that if they have one drop, they are black, period. Because that means something. Every decision we make has [12:37:21 PM] Every decision we make has implications, financial and otherwise. When do we make it right? One of the things we can do to make it right is transit infrastructure decisions that won't continue to affect people who live on that side of the highway. Thank you. >> Thank you. Councilmember. Next, we'll have councilmember Bella. >> Thank you very much. Mayor pro tem, you know, one of the speakers mentioned then, town lake today, lady bird lake. And you know, lady bird lake was essentially a cooling pond for Austin energy's electric plants. I mean, it was built as a cooling pond for Austin energy's cooling plants, and it was really kind of an industrial kind of trash area for years and years and years. And people in, in lady bird gets a lot of [12:38:24 PM] in lady bird gets a lot of credit. It wasn't just her, but a group of austinites in the 50s, 60s came together and said, this could be so much more today. It is one of the most beautiful, most compelling, most attractive places in the city. I mean, you go out there on a you go out there this Sunday and there might be 100,000 people walking that trail enjoying it. Families that took vision to go from, you know, waste land, waterfront where people dump things. And, you know, Austin energy had lay down yards and all that kind of stuff to one of the most attractive parts of. >> All. >> Austin took a vision. It took a lot of money, but we got there today. Most now it's kind of the cherry on the sundae will be the wishbone bridge that's being built there next to the longhorn dam. It's just another beautiful [12:39:25 PM] dam. It's just another beautiful enhancement to an area that no one would go to with nothing but but, you know, trash and trouble down by the river. That's not the case anymore. I see the I-35 project in very much the same vein. I-35 has been just a divide in the city, a scar in the city. Look at the land next to I-35, a bunch of underdeveloped properties, a bunch of just kind of places that just linger. That it just be. Why is that? Why when just blocks away, there's beautiful structures and beautiful projects? It's because of the environment around the highway. It's because of the noise and the light pollution and the car pollution and all of those kinds of things. And so we have that opportunity today to create really a linear park, very much [12:40:28 PM] really a linear park, very much in line with the rose Kennedy greenway, starting at Cesar Chavez and ultimately terminating up at the red line, where it crosses the highway around 40th street. And that's just such a tremendous opportunity. And I want to be clear, too. We're talking about the, you know, which caps to build and which foundation elements to fund. I don't want to build the northern caps right now. I just want to be clear about that. Central health is remodeling the old sears right now, and they're about to move into it. H-E-B is remodeling their store there in Hancock. Fiesta is doing just fine there in dellwood. Those projects, those those areas, someday they will be ready to turn over. That's not today. That's not going to be in ten years. In 30 years, in 50 years, they may be ready to redevelop. And the our population needs our our, our the growth of our city. You [12:41:29 PM] the growth of our city. You know, we could see just a tremendous redevelopment potentially of those two. The foundational elements for that, there will be council members sitting on this dais just cursing our names for having missed out on the opportunity to cap those in the future and to really transform our, our, our city. So I just see this as just I mean, it's not a hard question, honestly, in the memo on air quality that was just sent out. And thank you very much. That was an excellent memo on air quality. You mentioned the Denver caps, the I mean, again, look around the country. We have, you know, Boston, Seattle Dallas Houston is talking about a cap right there next to their downtown where txdot is going to bury. I can't remember what highway it is that runs through there, but Seattle, Phoenix, just Saint Louis did a cap right around where the arch is and created this beautiful park that has been just a tremendous asset for the city. If we do not build the caps, and [12:42:31 PM] If we do not build the caps, and if we do not prepare to build caps in the future, we will be at a competitive disadvantage to every city in the country that is building caps. I just want folks to understand that, you know, I grew up in in Laredo, and there's a I'll start with this. I think this story is true. But hb Zachary, back in the 19 tens, 1920s, came to Laredo and wanted to build this thing called a riverwalk, where he wanted to make it a place for tourists and for people to enjoy and this kind of stuff. And Laredo said, no, that's pie in the sky stuff. And we don't want to spend that money. We've got so many other critical needs, you know, he went up the street to San Antonio and San Antonio said, we do want to build the riverwalk again. Those are the kind of generational decisions I think that we face, and we're not going to face many of them. [12:43:33 PM] not going to face many of them. This is one of them, like I said, I mean, water shed we can fund in 28, we can fund, you know, there's a lot of different. Again, I don't mean to pick on watershed in particular, but I'm just saying there's a lot of investments that we need that we can continue to make in 2028 or in 2030 or in 2032 or in whatever date down the future. But this is really a pivotal moment where if we do not invest in the foundational elements for the caps, we cannot invest in the caps in the future, and we cannot mitigate the damage that a highway does running through our city. So I think that's a real critical difference from all of this discussion to virtually every other discussion that that we've had about the caps. Really appreciate the discussion. It's been an excellent conversation. Really appreciate the speakers and the points that they made. I do have a handful of questions, though. With regard to council member duchin's comment about the [12:44:35 PM] duchin's comment about the costs, the caps, at least the downtown caps would generate about 15 acres of capped land, which we would use for parks. How much would it cost us to buy 15 acres of downtown land? >> That's a question I would have to get back to you on. >> And there's. >> A lot of different factors. >> And I remember when we used that parkland dedication money to buy that tiny little piece of land next to shoal creek. This was a while back. I'm going about three, maybe four years back. And that was in the multi-million for, I think, a 0.5 acre or something like that. Again, just comparing apples to apples, how much would it cost for us to add 15 acres of parks? I think that's a very important number. I mean, separately, as a northern, that's about ten acres that we're going to put on the northern cap. But I would really like to focus on the on on the downtown caps to answer those questions. You know, also, has [12:45:37 PM] questions. You know, also, has UT released any public plans about its caps? >> Council member beyond the board of regents meeting at the end of last year? No, not to my knowledge. >> You know, we've talked to them individually, we've met with them and discussed it. And I know they're working through this. And honestly, their plans for the caps are much more ambitious. From what I understand that our plans for the caps and please correct me if I'm wrong, but they want to build, I believe, like tall buildings essentially extend their campus onto the caps. Is that correct? As far as you know. >> That is my understanding. And that's that's exactly kind of what I've taken away in conversations with them too, that they're looking at it as an opportunity to expand that medical campus. And kind of leverage some of the partnerships and activity that's already put, developed, put together for that work and [12:46:37 PM] together for that work and expand it over to the cap area. >> Yeah. >> And I appreciate that. Y'all have always included the UT caps as kind of part of the slide in the presentation, because it really is part of the linear park that we're ultimately trying to build. I mean, that that is absolutely part of the overall concept of what we're trying to do. And I also just wanted to say that I see that y'all are working on that betterment agreement to expand that ten foot pedestrian and bicycle trail. And ultimately, I just want to say I 100% support that. If we do build a series of deck parks along I-35, we will have a bicycle and pedestrian trail essentially connecting all of those caps. And that's a critical component of what we're trying to do. Again, looking at lady bird lake and what we've been able to do there, I just I just wanted to give y'all props for that. I think that's [12:47:38 PM] for that. I think that's extremely important and helpful. Step up. The. Is there any additional information on I really appreciate the downtown Austin alliance. I wish I had made that event where we pulled down the executive director of the klyde Warren park and, and I believe the president of the board who we met with when the mayor pro tem and council member Velazquez and I went to Dallas to go visit the klyde Warren park, but we didn't really get into the economic development details of. And again, in that slideshow, they were talking about $180 million in additional revenue generated by the caps. And we're talking about caps built in 2012, expanded, I think in 2018 or 2019. Do we have any detailed information about the economic development impacts that the klyde Warren caps had in in Dallas? [12:48:41 PM] in in Dallas? >> Not beyond what the da shared with us today, but that is something we could reach out to them and dig into a little bit more and get some more data. >> I really appreciate it because, you know, again, in council member Laine mentioned that that other cities who are not in Texas have different funding opportunities and cooperative state governments. And Dallas does not. Dallas, they did get a little bit of money from txdot for that first cap, but the my understanding is that the rest of the caps, they're going it on their own. And I just think that's very revealing that Dallas built and opened their first highway cap in 2012 and immediately wanted to expand it and then build the southern gateway cap again to council member harper-madison point, talking about racial reconciliation. That's what the southern gateway cap is. Dallas recognizing that it's not just [12:49:43 PM] recognizing that it's not just about downtown, that the highway has negative effects throughout the city and trying to mitigate a lot of those negative effects. So I think by by building, by starting to build some caps, we then open the door to future caps to future connectivity, not just in downtown, but really throughout the I-35 corridor through Austin. The. And then let me just finish on a couple of more kind of technical questions. The so txdot wants us to both identify the foundational elements that we that we are going to build, and then also identify any caps that we want to include as part of their initial bid package, their rfp, that's, that's that's going [12:50:43 PM] rfp, that's, that's that's going out. Is that correct? >> That's correct. Council member. >> And my understanding from conversations with staff and really just conversations with others is that the, the cheapest, most efficient way to build the, the foundational elements and the caps would be to include them as part of the txdot package. Since everybody's already there, they're doing the work. This is you know, it's incrementally it costs more. Is that is that our understanding as well? >> That's right. Typically you're going to get the most competitive bids from contractors at that letting process. So that's why waiting until change orders will we should anticipate added cost for anything not part of that package letting package. >> So ideally again just thinking about the decision that we have before us, we should be prepared to both identify the foundational elements that we [12:51:44 PM] foundational elements that we want to build and the caps that we want to include as part of the txdot bid package is that. >> That would be the way you would pay least overall for the bundled improvements. Correct? >> Okay. Got it. Well, great. I just again, appreciate the information. You know, I think staff has done a great job getting information about the costs, which obviously is very important. But what I feel like we still don't really have is information about the benefits. We have not done the economic development analysis work that would say, hey, this is a future revenue we're going to get, whether it's captured by the waller creek tirz or the, you know, future northern cap tirz or not. That's that's kind of not really the point. It's still money that goes to the city to build good works. That's really if again, if there's I know [12:52:46 PM] if again, if there's I know we're running short on time, but if there's anything to be done over these next six weeks or so is to really try to better understand the economic development impacts. And where I would look would be cities that have done these types of projects and see how they have experienced these types of projects and what has happened to them. You know, again, if you're bullish on on Austin's future, you support the caps. If you think that Austin is has kind of peaked and the future is uncertain and that we may be kind of flatlining out, then it may not be worth it to build the caps. But if you think that the last 25 years in in Austin, that the next 25 years are going to look like the, the last 25 years, and I do, I'm very bullish on Austin. We've got to take this opportunity to get the foundational elements in place and then build as much as we can, particularly in the downtown area where where they will have, I think, a very large economic development impact. And, [12:53:47 PM] economic development impact. And, you know, and when I think about where we have made mistakes as a city, we're tearing down our convention center because we built it too small. And 25 years later, here we are tearing down the convention center. We're really doubling the size of our airport because we built it too small. At our airport to handle all the capacity issues. I think about the 2000 light rail vote, and I think about how different Austin would be if we had passed light rail in 2000. In other words, our mistakes have not been that we've overbuilt and we're sitting on a bunch of white elephants that that no one is using. Our problems have been that we have under built, and we're trying to catch up to the growth and to the infrastructure needs that we've had. So, you know, again, I think this is one of the most important decisions that this council can make. And I am 100% supportive of all the foundational elements. And honestly, building as much cap as we can afford. But I just want to say for the Dyess, I do want to take the northern caps [12:54:49 PM] want to take the northern caps off the table in terms of I don't think that we can realistically fund the construction of those right now. We do need to put the foundational elements in place so that a future council can take those actions. >> Thank you, councilor vela, and I'll pick up on that last comment. I just want to clarify with staff on page five, we have the funding and phasing milestones I have here that as part of us making a decision on which roadway elements to support, we also have a commitment to fund capex for may 2025. So can am I correct in thinking we're going to say we want all of these roadway elements or some of these roadway elements, and then we're also deciding on which cap decks to fund at that point as well. >> You have an option to include or not include a commitment to fund certain cap decks in the decision in may. So what's been stated thus far regarding the [12:55:50 PM] stated thus far regarding the roadway elements is 100% true. Anything that you choose to fund and include preserves the opportunity for future cap decks. In regards to the horizontal elements themselves, you can go above and beyond the roadway elements and say, we also would like to fund and include this deck or this deck in the letting package right now, or you can reserve that and, you know, buy a little bit more time to put funding stacks together and partnerships together and look toward future change orders or future contracts. >> Okay. >> Very good. Thank you. Colleagues, I really appreciate everyone's commentary around the roadway elements and support for funding the caps. I certainly am with you all and wanting to fund the caps in the downtown area. I think it makes a lot of sense, and especially addressing the historical inequities that we've experienced as a city. But I look at the times that we're in and the budget forecasts that we just received, I struggle with whether or not we should commit [12:56:53 PM] whether or not we should commit dollars to fund the roadway elements for the northern caps with those two northern caps, can you walk us through why the northern caps are almost double the amount for the downtown caps? I mean, the one of them is less an acreage, yet it is 60 million compared to what was it, 20 million for downtown. >> A big factor there, council member, is that if the city does decide to move forward on caps in that northern area, the incremental cost of asking txdot to further sink the roadway in that section would be part of our betterment. So that's really a big portion of what you're seeing there. >> Okay. >> And that the Cesar Chavez to fourth street is 40 million to fund the roadway elements on that. Yeah. And just to get a little bit more into the deeper on the northern caps, they also [12:57:55 PM] on the northern caps, they also scored the lowest on equity. Can you also talk us through that scoring criteria. >> Yeah. That was just a kind of formula. Look at the demographics of surrounding census tracks. Looking at where we have kind of low income nonwhite populations in our city. >> Thank you. And so when I think about this, and especially as it's framed as a generational opportunity for us to make this type of investment, I look at it through the lens of equity, understanding that we do have this opportunity to fully invest in our downtown core, especially providing that reconnection, how important that is for our community. And I certainly want to be responsive to our community's needs and really leverage the moment we're in. But when I think about the greater needs of our community overall, to me, I question, does it make sense to build park decks in the central core versus building more parks and open spaces all throughout our city? What kind of investment does [12:58:56 PM] What kind of investment does does it? What kind of investment? And what are we saying with our investment decisions if we continue to only invest in the central core and there are trade offs associated with it? I mentioned a flood mitigation grant that we've lost in southeast. I know that I have projects in southeast that are more than $40 million just on drainage alone. What type of generational investment that would mean to future south austinites, if we were to take those dollars and instead invest them in drainage improvement, or in parks maintenance or or in acquiring more park land? So I don't when I look at the decision that's before us, I don't want to look at it in silo. I'm grateful that the university of Texas is going to add 17 acres of open space and park space, and additional enhanced community benefits that all of austinites will enjoy. Question is, does it make sense for the city of Austin to continue to invest in these types of park decks? Or should we focus in and do some of them [12:59:56 PM] we focus in and do some of them downtown, where we can really fully build them out and then invest in the rest of our city, that those are the questions that are before us as a dais. And also, we got to think through the other downtown enhancements that we have. We reference Waterloo greenway around Waterloo, waller creek, that is a linear park. It's going to be a world class national state. That needs funding. It just lost another federal grant a couple weeks ago, and that would be an incredible opportunity for our city to step in and to ensure that that linear park gets built out. Also, you know, there are we have a lot of pending questions before staff. So I know I spoke with acm John fortune and or deputy manager John fortune. Acm Mike Rogers on setting up a q&a page for our questions so that we can formally submit them and have them in writing, so that as we make these decisions as. A [1:00:57 PM] make these decisions as. A community, we can be transparent and have those responses fully documented. Because it is I agree, I think this is one of the top ten decisions that will make as a council, and it will change the future of our city. Lastly, my question is on the environmental impact. Staff sent a memo last night. If can staff quickly just touch on what the information that was included in that memo and just provide a brief summary? >> Sure. The memo was in response to some of the questions at a recent climate, water, environment and parks committee really wanting to understand a little bit more about what the human environment might be like on top of these caps, in terms of what kind of air quality users might experience at a public space on top of a highway, what kind of noise levels to anticipate? So the memo circulated last night, [1:01:59 PM] the memo circulated last night, summarizes the staff research to date on this topic. In short, we worked with the txdot environmental team to summarize some of the air quality findings in the Eis for the baseline capital express project, in which they set forth that the highway project itself would not be is not anticipating exceeding federal air quality standards after construction. However, the Eis for that capital express project did not look at the potential of caps being included in the project, and that wasn't included in their analysis. So in the last 12 months or so, staff has been putting doing a little peer city research to look at what air quality studies have yielded at other some of the other cap locations and other cities that have been [1:03:01 PM] other cities that have been mentioned to date. The one we found was some air quality data related to the I-70 cap in Denver, where the local kind of university there had done some air quality sampling in the middle of the cap, at the edges of the cap, in the neighborhoods adjacent to the caps, to just compare what sort of particulate matter readings were, were kind of users experiencing on these caps. The takeaway was that in the middle of the cap, the air quality readings were better than in the adjacent neighborhoods. As you move out to the edges of the cap, though, those particulates increased in their samples, and they were more or less on par with what the adjacent neighborhoods were experiencing there. So based on this, staff put together a scope of work, and we're currently engaging with a consultant to model out specifically what sort [1:04:02 PM] model out specifically what sort of microclimate impacts we might anticipate in in the Austin region. The memo talks walks through some of the preliminary findings that we've put together for just the 11th and 12th cap. We started with that one cap to model out future air flows, future noise, anticipated noise impacts both with and without the cap, and also looked at potential anticipated changes to heat and how users experience heat. What we found and this study I should say, is, is funded by a federal grant that's currently on pause, which is why we've only begun to model this for the 11th and 12th cap. The idea would be to expand that modeling to the other caps in future. What we've found to date is that because txdot is sinking the freeway significantly, and we're looking at about 20 foot retaining walls on either side, [1:05:04 PM] retaining walls on either side, much of the kind of particulate pm 2.5 particulates are, are going to be kind of stay within the canyon of that highway. So the cap experience would be a little bit we're not seeing a whole projecting a whole lot of difference mid cap and large cap like we found in Denver. However, this is again a preliminary model. And we continue to move forward with this with our stakeholders. But this is going to provide us the information that we need to thoughtfully think about how we program and design what goes on top to maximize those air flows to kind of create barriers between users and any kind of, you know, concerns from the freeway below that that might emerge at the edges. We also looked at noise and what those preliminary findings are showing us is, as one might anticipate, [1:06:05 PM] us is, as one might anticipate, that the caps and the stuff we put on top of the caps do serve as a significant noise block and improve noise conditions from a baseline, no cap scenario. Same thing with heat and how we experience heat. Adding trees and vegetation to what's effectively just kind of a concrete canyon today will significantly improve how human users experience heat in this area as well. >> Thank you. >> Thank you, mayor pro tem. Yes, councilmember Siegel. >> Thank you, mayor. And I actually wasn't going to address the air quality information, but given what's been shared, I want to say that this memo that we received that cites to quote unquote, air quality studies from Colorado and the Denver area is actually just measurements taken on two days by the public radio station. So this is an NPR station, a staff member that worked with a grad student to take measurements on two days. So we shouldn't [1:07:05 PM] two days. So we shouldn't overemphasize the quality of this information. There was no study. And the Denver measurements only compared the air quality on the cap to a spot 1500 feet away, downwind from the highway. We don't actually know whether the air quality is safe in Denver, and my team has been emailing with city staff this morning, and even this microclimate study is not ready, and staff of the city are challenging the base assumptions and inputs. And I think this air quality issue is very important. We're talking about a generational opportunity to invite people downtown to play on top of the freeway. And I think we want to make sure the air quality is safe. I also want to address acm. Rogers talked about there's a presentation that's being prepared on our capital needs for the mobility committee. And after speaking with councilwoman Ellis, I've learned that that presentation is not going to occur until may 17th. And so it's not going to happen at the April meeting. It's happening at the at the may 17th meeting. And right now, council is scheduled on may 22nd to vote on this extremely [1:08:07 PM] to vote on this extremely important multi generational investment. And I think I want to talk with my colleagues. But I think it might be appropriate to have a special called meeting on may 29th where we could actually digest the information from capital delivery services, maybe get better air quality information. We want to I mean, txdot has put us under the gun with this deadline, but we want to get as much information as possible. And I've already heard from Sierra club this morning. They're questioning the air quality information that our staff is circulating. And I think we need to get to the bottom of some of these issues. What are the actual trade offs? What is the health impacts of people that were being? We're basically going to say to generations of austinites, come downtown on these freeways and let's make sure it's safe. So I'm hopeful that if that works for my colleagues, that we might consider having a special called meeting to give us an extra week to digest the real tradeoffs and some of the other information. Thank you. >> Thank you, council members, I apologize, I had to step off, but several of you know, you rsvp to an infrastructure summit and I was supposed to speak at [1:09:08 PM] and I was supposed to speak at lunch and that's why I was there. Those that rsvp you were recognized as being here talking about infrastructure. So. So your name, your names were called out. And I appreciate everybody allowing me to step away to do that. I think that concludes unless you all want to say something else. You leaned forward. Kim, I saw you. Yeah, I think that I think that concludes the business to come before the city council at this work session. So without objection, we are adjourned at 1:09 P.M.