Audit and Finance Committee (AFC) Special Called meeting Transcript – 7/22/2025 Title: ATXN-1 Channel: 1 - ATXN-1 Recorded On: 7/22/2025 6:00:00 AM Original Air Date: 7/22/2025 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. [2:59:51 PM] This is atxn the City of Austin's Government Access Channel I. >> Yes, yes. Good afternoon everybody. It's 3:00 on July 22nd, 2025 and I will call to order the audit and finance committee of the Austin city council. We are meeting in the city council chambers, which are located at city hall, 301 west second street in Austin, Texas. And we have a majority. We have all of the members of the committee and some additional council members that have joined us as well. So that's very good. We have five people that have signed up to speak, and so I'm [3:00:51 PM] signed up to speak, and so I'm going to call your names when I call your names, if you'll just come forward and take one of the chairs. And then we'll go in order and, and hear from you today. So Paula Soltani, Paula Soltani, Ryan Saunders, Bob nicks, Kathy Mitchell and Savannah Lee, if your name has been called, please come forward and grab a chair. And miss Soltani, I'll call on you first. >> Good afternoon. Thank you so much for having me. My name is Paula Soltani. I'm one of the co-directors of a grassroots organization called vocal Texas, based here in Austin. We organize to end homelessness, the drug war, mass incarceration and AIDS. And I'm here to urge you to support the full eight cent tax rate election. I know that's not a small, small ask, but we're not facing small [3:01:52 PM] but we're not facing small challenges. We're in the midst of a historic housing and homelessness crisis that I'm sure you're all aware of. And we also have federal budget cuts looming. It's only going to get worse. The proposed tax rate at the maximum level is the only option that meets the scale of the moment. When I thought about what I wanted to share with you today, I thought of both the progress made and the pain that people are still feeling. The good news is, is that Austin has made real strides. We've strengthened the homeless strategy office, we've expanded shelter beds, we've improved shelter quality. We've fixed broken programs. Some of our very own vocal Texas leaders who experienced homelessness for years are now housed. One now works for vocal Texas as an organizer, and that's really powerful. But I won't sugarcoat it. The situation is still so bad for so many people out there. Most of our members remain unhoused. Every single day, our organizers meet people standing in line for hours [3:02:53 PM] standing in line for hours outside of Trinity center sunrise, the Texas harm reduction alliance, waiting to access basic services. The wait lists are long for case management, housing services, vouchers. People are waiting and waiting and waiting. Right now, the chances of finding truly affordable housing, supportive housing or rental voucher in Austin are extremely slim, even though we've heard social services will not be cut in this year's budget, the city has been relying on one time arpa funds that are about to run out hundreds of people in rapid rehousing and on emergency housing vouchers are on the verge of becoming homeless again and without future funding. We have no plan to replenish those funds or expand those programs. So let's be clear the investments in the TRE scenarios are not luxuries or extras. These are lifelines for poor people in our city. They fund shelter beds, case managers, new permanent supportive housing units, rapid rehousing, [3:03:54 PM] units, rapid rehousing, community based shelter initiatives. These are the programs that will help stabilize people, survive, help them survive and heal. And without them, the entire city feels the consequences. It's not just a moral path. This is a rational one. If austinites care about public safety and quality of life, we must ask them to help the city invest in in both of those for everyone, especially those most in need. Lastly, I would like to add that we would like to see both prevention and diversion added to the scenarios for the tree, and we're supporting an eight cent increase instead of 6 or 7. >> Thank you ma'am. >> Because we need reserves. >> Thank you very much. Appreciate you being here. Ryan Saunders followed by Bob nix, then Kathy Mitchell and Savannah Lee. If y'all want to go ahead and take a seat, you're welcome to do that. >> Hello. Thank you for allowing me to be here. I'm here to discuss a few topics related to [3:04:54 PM] discuss a few topics related to inefficiencies that impact budget. >> Your name is Ryan Saunders. >> Yes, sir. Yes, sir. Ryan Saunders in district three. I'm here to discuss a few topics related to inefficiencies that impact budget waste, police resources, as well as create frustrating circumstances for residents. It seems city legal and municipal court have more power and influence on citizens lives than many realize. Yet there does not appear to be clear oversight or ability to check their actions. I have had issues with city legal making determinations on city ordinances that impact quality of life, inefficiencies, dealing with municipal court. In regard to getting parking tickets, I have an annual Erp permit where you send multiple emails with supporting info about the permit only getting an automated response, and that you're in a queue and then receiving a letter that your ticket is delinquent to drive to municipal court to be told that they did receive your communications, that letter was auto triggered and you're just backlogged. And last but not least, nuisances such as animal noise is now only able to be regulated through citizen complaints at municipal court. I'm here to talk about [3:05:55 PM] court. I'm here to talk about the issues at a high level, so I won't go into too much detail, but I feel like I was basically blackmailed into mediation. Direct quote from a city legal employee. If you want to go to court and refuse mediation, we will refuse any additional future charges related to this issue. And I was denied when I asked for a meeting to sit down and review the ten plus citizen complaints I had filed. Because responses to these complaints by the court are sporadic, and it's very hard to get any clarity as to what is going on with them, unless you're extremely persistent. In regards to the budget, I want to mention the impact on public safety by occupying police manpower through the confusion and inefficiency of ordinances such as noise and sound ordinance issues. Police officers are often even reluctant to ticket for certain ordinances because of past resistance from municipal court to enforce the charges. One example when it comes to nightlife and noise issues is the confusion and inefficiency of different criteria for different uses. Food trucks, speakers are responsible. APD residential or residential is APD short term [3:06:57 PM] residential is APD short term rentals is code enforcement. Outdoor music venue permits is code enforcement, but if they only if they have a permit, if they don't have a permit but they're violating the rules, then they would be APD. I have a short term rental on one side of my property, a bar across the street, a food truck park on the other side, and a single family on the other side. And if all four were called to noise disturbances, each would have different decibels. For noise ordinance, each one is regulated by a different department of jurisdiction. So if a code enforcement officer attended one and the other was violating, they couldn't write a ticket and a second police officer would had to respond. The city Austin requires commercial establishments that use sound equipment outdoors in any space not fully enclosed by four solid walls and a roof to obtain outdoor music venue permit. It states that it must have four permanent walls, yet a bar that has a glass garage door that can open and close was determined by the legal department to not be an outdoor music venue, and they are allowed with a garage door open to still have live music [3:07:57 PM] open to still have live music and djs. I would ask that judicial committee be brought back. Thank you. >> Thank you sir Bob nix. Mr. Nix isn't here. Kathy Mitchell, followed by Savannah Lee. >> Hey y'all, I'm Kathy Mitchell with equity action and we are very happy to see the list of services that is proposed for the trees, particularly, I would say starting at $0.05 and higher before that. It's just grave sadness that we are not able to pay for the services that are listed. Some of this is, of course, directly attributable to a federal administration that is clawing back our idea of what it means to be American, and how that would be paid for. But some of it is choices that this body [3:09:00 PM] of it is choices that this body made last year when the police contract that we could not afford passed. And I'm not trying to have an I told you so. I'm just being real. And in terms of the community support for the tree, I think you will find a resounding yes to all the services that are there. And I think you will find some skepticism around additional money for the police department that is in this budget proposal. So to me, a good first step in straightening out what it is that we think is important in this city in light of the moment that we're now in, would be to the greatest extent possible, minimize what we are adding to the police budget. And so these two things are connected. I know I'm here to speak to the tree, which I'm going to speak in support of, and also a commitment, a commitment from council, that we have invested a massive amount in our police [3:10:01 PM] massive amount in our police department. And it's time to start looking at all the other things. And there are lots of ways to do that, and this list is part of that process. There is also a lot of conversations that we need to have about civilian izing various functions at APD, some of which you just heard about from the previous witness. So I want to say yes, but I know that I'm already hearing back from members of the community that I work with that they want to know where you all are on this conundrum of the ability to just at any point, put new programmatic work at APD where it does not belong. So we want some kind of commitment. I don't know what that looks like. Maybe it's just some comment from the dais. Thank you. >> Thank you, miss Lee. >> Hey, y'all. Thank you, mayor [3:11:01 PM] >> Hey, y'all. Thank you, mayor Watson and council members for having us. My name is Savannah Lee and I'm here with equity action. While we understand that this is a big decision, we feel that a big decision is necessary for us to meet a very big moment. As mentioned by council member Siegel in the budget review last week, this cannot be the moment that we shrink from the progress that Austin has made. As arpa funding closes out and the trump administration claws back funding already promised for services that form the backbone of community care in Austin, we must fill that gap. The tax rate election could provide the funding we need, not just to triage the many recent crises we're facing, but allow Austin to demonstrate what a great city and a functioning democracy can look like, even as democracy falters around us. Studies show a long term cost savings of $4 for every dollar spent on homelessness prevention programs. Others show cost savings of $97 per dollar spent on harm reduction, like syringe exchange exchange programs. The more we're able to invest in our community now, the less we will have to spend later. Preventative spending isn't just a compassionate and moral [3:12:02 PM] a compassionate and moral choice, it's the smart and efficient one. Meanwhile, the projected 2026 2027 budget promises millions in cuts to social service programs. These cuts could have catastrophic effects on austinites who are already hanging on by a thread. If a tree is what must be done to ensure that those cuts are not made, it must be something that we can take to the voters. We want to make clear, though, that funding from any potential tax rate increase cannot go to add even more irreversible and unnecessary dollars to APD's budget. This budget projects that by next year, we will have added nearly $100 million to APD. While everything else gets cut. The cr I spoke about earlier the kind of care that is compassionate, evidence based and will provide long term cost savings is preventative, not punitive. We want to ensure that any tree, anything that a tree thinks about, thinks about public safety holistically. A safe community is one with robust health services. Fully equipped mental health response teams, well- maintained parks, job programs that actually place formerly incarcerated people in much needed jobs, a strong [3:13:03 PM] much needed jobs, a strong library system and accessible childcare. A tax rate increase, should the voters approve, should only be spent in these areas. Austin voters want to help people succeed. That's the choice in front of you and in front of our community. While the current administration attempts to save a failing agenda of mass arrest and incarceration with Texas redistricting, redistricting, we can and must be the beacon for a whole different set of choices. And the demonstration project to show that the Austin way works. Thank you. >> Thank you, thank you both. So that concludes all the people that have signed up to speak for our public communication. So for purposes of where we're going to go, let me kind of try to outline. First of all, we don't anticipate that at this early point in the process that we're the committee is in a position to make any sort of final recommendation tree, no tree, that sort of thing. And I want to walk through the process so that the public will know kind of what's going on. There's a real desire on the on the part [3:14:03 PM] real desire on the on the part of the council to put rigor behind the decisions that we're making. And, and particularly if we're putting something to the voters. So part of what we're attempting to do is have a lot of transparency. And that includes, by the way, quite a few meetings related to this. It also includes getting data out there, such as the data that the manager's office provided Friday night, which are the different alternatives, getting getting those kinds of things out there so that people will be able to see them and see what we're talking about, and the impact that this would have on households and different approaches to the taxes. And it also includes a first time ever policy that was passed by the Austin city council at the recommendation of the audit and finance committee, regarding how to walk through a decision tree for a tax rate election. With that, let me talk about the [3:15:05 PM] that, let me talk about the calendar for a second. So tomorrow at 9 A.M, there will be a budget work session that's related to the general fund. People can come and speak about anything they want to speak about, but it's related to the general fund. On Thursday, we're having what I guess we would call a regular council meeting, but it's not related to the budget. But I just mentioned, because we're going to meet pretty much every day this week. But tomorrow is a budget work session beginning at 9 A.M. Next Tuesday, July 29th. There will be another budget work session that begins at 9 A.M, and that will be related to the enterprise and cip budget. We're currently not scheduled, but because the work of the audit and finance committee wants to be complete, and we believe that by July 30th, we ought to have final property valuations, probably later in the day, which [3:16:08 PM] probably later in the day, which will allow us to look at those and be and get the data out there to the public. We'll have a special called meeting of the audit and finance committee on July 30th at 330, July 30th at 330. That'll be posted very soon. Then on Thursday, July 31st, the council will have a meeting to. And a key part of that is to set the maximum tax rate, just briefly. The maximum tax rate is a requirement of the state, so-called truth and taxation law that requires that the governing body, by vote, declare the maximum tax rate it will consider when it passes a budget. That's a key. As we're discussing potential tax rate election, because what that the maximum tax rate needs to be set [3:17:09 PM] maximum tax rate needs to be set in such a way that it doesn't preclude a tax rate election that would go up to a certain amount. Because what will happen is the passage of a budget that triggers such a thing. We want to set that tax rate where you can do you can not preclude something like that, and you can actually do it. That's not to say, and I want to be very clear, and I'll say this every chance I get what that the maximum tax rate that gets passed, that is not to say that will be the tax rate that gets passed, it is just setting it the maximum we'll consider as we as we go through the budget process, that will be July 31st. And we'll do that at 9:00. The work session will begin, and at 3:00 there will be a budget hearing. And that will also be when the audit and finance committee, any anything we say on the 30th will be brought forward to the full council on the 31st. With regard to [3:18:10 PM] the 31st. With regard to potential for a tree, I will also mention one other thing, and I posted it on the message board for the public that's interested in this. That's one agenda on the 31st. That's one agenda. We have some time certain one of those times certains is the 3:00 budget hearing. When you sign up to speak for that agenda, if time is going to get cut off the way we normally cut off. So you're not going to be able to sign up to speak for a 3:00 hearing up until 245. It's like when we have our regular meetings of the council, and we have a time certain at 2:00. It's just part of the agenda. So you're going to have to sign up in advance. It's all laid out on the message board. Just for other information, Monday, August 4th is the requested deadline for filing budget amendments by the council and ifc's Tuesday, August 5th is a potential budget [3:19:13 PM] August 5th is a potential budget work session. Thursday, August 7th is a budget work session. And then we August 13th through the 15th. If we need all three days, will be for budget adoption. So the other thing I want to say before we get into the next part of this, is for those that are paying attention to this, no decision has been made yet. So those who say there's already a decision for a tree and how much it is, you're not right. There's been no decision made yet. For those that say there's a decision, not a tree or it's too low, no decision has been made yet. Don't jump to conclusions on that again, because if we're going to make a decision on all that, as we make a decision, we want to make sure that there's rigor members. What I was going to do next was I was going to put us in a situation where we could ask questions of our [3:20:13 PM] could ask questions of our professional staff with regard to tax ratification elections. Again, to put some rigor behind this, get information out to the public the way I would like to do this, unless there's objection is have a an executive session related to some of the questions related to tree and then come back in and start with that by asking questions of staff and talking about what what it means to have a tree, how you go about ballot language, those sorts of things. So unless there's objection, the audit and finance committee will now go into a closed session to take up one item. And pursuant to section 551071 of the Texas government code, the committee will discuss legal issues related to item number one, which is the recommendation of a tax rate election and certifying conditions for the election. Is there any objection? Without objection, we will go into [3:21:16 PM] objection, we will go into executive session at 3:21 P.M. Folks. When we finish, we'll come right back out and we'll start the meeting again. So thank you all very much. Good afternoon everybody. It's [4:07:56 PM] Good afternoon everybody. It's 4:07 P.M. On July 22nd, 2025, and I will call back to order the audit and finance committee of the city of Austin, the Austin city council. We are out of closed session and in closed session. We discussed legal issues that were related to item number one. But I've called us to order when nobody is here that I need it. Nope. No, I was wrong about that. Mr. Howell. If I could get you to. So members of the public, what we what I indicated before we went into executive session is we know there are a lot of questions about tax rate elections or trees, and some of them are very basic. Some of them are more complicated. But what we have asked Mr. Howe to do, who is with the law department? What we've asked him to do is for him to walk through. TRE 101, if you [4:08:58 PM] to walk through. TRE 101, if you will, to kind of answer some of the basic questions about what happens when you have a tax rate election and how you go about a tax rate election instead of us throwing questions at him, he's just going to make a brief presentation. I'll open it up for any questions that anybody has. But but this will be a good way for us to get into the bloodstream. How this kind of what the what this thing looks like if we end up doing it. Mr. Howe, you have the floor. >> Is Ian Howe, assistant city attorney. So as we look at going forward to adopting a budget and a tax rate, I'm going to go over some of the basic things that the public may have questions about. And council may have questions about. And I'm going to talk about the briefly, the budget adoption requirements and [4:10:00 PM] budget adoption requirements and the tax rate adoption requirements and how that relates to tax, possible tax rate election. If council were to decide that they wanted to go that way. All right. The principal point is that when council adopts a tax rate and a budget, they adopt one budget and they adopt one tax rate. If the tax rate is above the voter approval rate, then council under state law must call a tax rate election. And then that proposition. Then you're clear about what that tax rate election is, is on. And I'll I'll show that lately. But you're talking about what the tax rate you're going to be clear about what the tax rate is and further information required by law. So when we talk about the voter approval rate. I think that's something that's commonly talked about. You hear the 3.5% thrown around a lot. And what [4:11:00 PM] thrown around a lot. And what we're talking about in a base level is 3.5% more than the city spent on maintenance and operations last year. Now, it's much more complicated that if anyone wants to look at it, it's in the tax code. Chapter 26. But there are series of calculations that go into that. So it's more complicated than just that. It's 3.5% more than the city raised last year. But primarily you're looking at maintenance and operations, and you're not looking so much at debt. All right. As you go forward with that. Council is going to approve the budget by an approve the budget, they're going to approve the tax rate. And then they'll have to do an ordinance calling the election. And the state law has specific language that it requires in that proposition. So this isn't one of those situations where the [4:12:00 PM] of those situations where the city can take multiple tax rates to the voters and let the voters choose. The state law is very specific that you're taking the one tax rate, and the voters are voting up or down to approve it or not approve it. And if the voters don't approve it, then what happens is the city's tax rate automatically gets knocked back down to the voter approval rate. And then the city. So there isn't an alternative at that point. That is the tax rate for the next year. There is there's not an option after that for the city in regards to the tax rate. And I'll just read the specific language just so people know what the language is, just says approving the ad valorem ad valorem tax rate of some amount of cents per $100 valuation. And you and for the current year and you got to give the rate I'm actually I'm not sorry I'm not going to read it exactly. But you give your your tax rate and you say how much higher it is than it was last year. And then [4:13:00 PM] than it was last year. And then you also say what the purpose is for why you're doing that increase. And when you're when council is adopting the budget keeps in mind that's, that's the budget for the upcoming year. That's the tax rate for the, the upcoming year. And so the public's aware. And then the next year the council will adopt the budget for that year and then the tax rate for that year. So the tax rate for the upcoming year is not automatically the same for the next year. That will come back to council in the following year. And that that's the summary. >> I want to ask if anybody's got any general questions. One thing I want to just make sure, for clarity purposes, the budget that was proposed by the city manager, what's been referred to as the manager's proposed base budget, that budget goes up to the voter approved approval rate so that any increase in in the [4:14:00 PM] so that any increase in in the rate above that would, would trigger an election. >> That is correct. >> Okay. Anybody else got questions? Okay. Thank you very much. And we really appreciate it. Members. What I thought I would what we would do before we then next go into the alternatives that have been presented, put together by our staff is just call attention. I'm not going to read through it. But again call attention for the public to look at the tree decision tree that the council passed on the recommendation of the audit and finance committee. And what I'll promise to do is put post this on the message board again today. We will post the policy that we passed, the decision tree that we passed on [4:15:02 PM] decision tree that we passed on the message board today so that anybody that wants to will see what it is that we will as a as an audit and finance committee, that we will walk through, make a recommendation to the council, and then the council will will vote based upon that that adopted policy. So we'll do that today. Now with that. I see two people ready to go. So Mr. Benigno okay, why don't y'all kick it off, tell us how you want to proceed and then walk us through in a general fashion, these alternatives so we can talk about where we are. >> Hello, mayor. Council members Eric Nelson from the office of budget and organizational excellence. We do have a presentation that I'll try to get through swiftly, so we can leave more time for your questions. Starting out, why are we here? Well, consistently [4:16:04 PM] we here? Well, consistently since the passage of sb two, we've shown a version of this chart. And generally speaking, our expenditure growth is a little bit higher than our revenue growth. And during the pandemic, we had some unexpected federal assistance, and we had an explosion in sales tax. That kind of masked that fundamental dynamic for a little while. But now that sales tax collections have dropped, it's back. So we have not just extremely limited opportunities to fund significant new investments, but we have real struggles to balance against our expenditures for our base level of general fund services. We're starting to see some of the consequences of that appear, even in our fy 26 proposed budget, which relies on a $14.1 million transfer from our reserves in order to provide transitional funding for social service contracts. In other [4:17:04 PM] service contracts. In other words, to give these providers a window to prepare for steeper, more permanent cuts that would take place in the next fiscal year, our reserves are projected to end the year at 15.8%, which is $18.2 million below the 17% financial policy level. Looking ahead to fy 27, we have produced a balanced budget plan, but we did have to make some significant adjustments. As I mentioned, there would be deeper and permanent cuts to social service contracts. We would hold civilian wages flat, and we would also eliminate the transfers to the housing trust fund and capital rehabilitation funds. And so these measures would save the general fund almost $50 million, which gives you a sense of the scale of the reductions necessary to balance against our expected revenue collections next year. For a [4:18:06 PM] collections next year. For a little context, prior to sb two, the inflation factor in what was then known as the rollback rate was 8%, as opposed to today's 3.5%. If we'd adopted a rate at that 8% level every year since it took effect, the general fund would now have 190 million more projected property tax dollars in this fy 2026 proposed budget, and that's the equivalent of adding over eight and three quarter pennies to our projected tax rate. Of course, we didn't always go to 8%, but we went back and we looked at the ten year average prior to sb two, and we were at about a 6.54% level above the as an effective increase. And if we apply that across the years since sb two took effect, we would have 123 million more property tax dollars this year or this coming year, which is equivalent to [4:19:06 PM] year, which is equivalent to about 5.7 Denise of tax rate. On the other hand, we don't want to just look at the city's revenue needs and challenges. We also need to consider the taxpayers that provide that revenue. So this table displays a ten year history of the combined property tax bill experienced by Austin's typical homeowner that we that we've defined as the non-senior owner of a median value home that qualifies for a homestead exemption. As you can see at the bottom, the combined bill has risen by a little over 5% for the past ten years, a period in which incomes grew by about 5.7%. But I should also point out, in large part due to trees by aid and Travis county, the typical homeowner's tax bill grew by almost $1,000 in fy 25, or over 13%. Looking ahead to fy 26, we don't have firm data from [4:20:11 PM] 26, we don't have firm data from all of the other entities, but we do know what the city's plan is just dialing into the property tax impact on this slide in our base budget, at that maximum voter approval rate, we'd be projecting property tax increase of 7.9%. For our typical homeowner, that is a projection, and it can and will change when we get the final certified rolls from the appraisal districts. But as I mentioned at the presentation last week, we have an ongoing dynamic where we have more and more debt service as a result of bond initiatives that were approved by voters over the past several years, that we were issuing more and more debt for. And, you know, looking forward to fy 27, that trend will continue, and we're projecting a 7.5% increase in that year, again, for our base budget at that maximum tax rate. Moving to the tree itself, I don't want to [4:21:11 PM] the tree itself, I don't want to echo too much what Ian said, so we can skip the first part. But in designing these tree scenarios, we were guided by the financial policy that was recently adopted by the council, which tasked us with performing a comprehensive analysis of general fund programs and services to plan it so that we do not conduct a tree more than once every four years. We want to work to clearly identify the level of programing or services we're funding with that additional revenue, and account for the service impact. If the election should fail, and we want to make sure that these investments are sustainable over the medium term, over that that four year tree window. Late Friday night. And well, to be honest, we might have slipped into Saturday. >> We I was going I was going to point out that your numbers may be off just a little on that. [4:22:12 PM] be off just a little on that. >> Sorry about that. We distribute we distributed several tree scenarios at various levels of increase, organized around the number of additional pennies. They would require. City management developed these scenarios starting from over $300 million of spending proposals drawn from council feedback on their priorities, board and commission recommendations, the community's request, and looking at departments proposed service enhancements that we solicited and evaluated throughout the budget development process. We then filtered these through a holistic financial analysis of the general fund impacts. And again, our our main focus was sustainability. We wanted to make sure that both the base budget and these new investments would be sustainable through fy 29. We wanted to try to ensure the health of general fund reserves and restore or maintain compliance with other financial policies. This table summarizes the scenarios. It gives you a [4:23:13 PM] the scenarios. It gives you a sense of the magnitude and timing of the expenditures that can be sustainably supported at these different level of increases, and importantly, each one ensures a balanced general fund through fy 29. And except for maybe the first one, all of them get very close to or maintain compliance with our 17% general fund reserve policy. I translating those scenarios into more concrete, but still projected tax and revenue impacts. You can see that each penny equates to about a 2.5% additional effective increase. So, you know, one penny takes you from that three and a half to a six. And you can follow the chart all the way down and also compare those scenarios with the revenue that each one would generate relative to our base budget. Property tax revenue. [4:24:15 PM] budget. Property tax revenue. And finally, we want to translate as well how this these additional pennies would impact our typical homeowner. The chunk in the middle will compare the incremental impact of a tree at the various levels to that base level, and the chunk on the right will show you what our projected total increase, inclusive of any tree, would be for our typical homeowner in fy 26. And with that, we're happy to take any questions. >> Members. Questions. Yes. Councilmember alter. >> I wanted to take a moment just to understand, and this will probably be cleared up at our now July 30th meeting when we get the final rolls. But in the budget document itself, it mentions that our taxable value is 227.1 billion, which seems would suggest that $0.01 would [4:25:16 PM] would suggest that $0.01 would be 22.7, not 21.6. I'm just curious that discrepancy. >> Right. Well, so that's true in terms of the levy as the amount that will we will bill the community. I guess you'd put it. Generally speaking, we budget 98.5% collection rate because we know that we won't get perfect compliance. That knocks you down to, I believe, about 22.3 or so. And then the city also has several tax reinvestment financing Zones. And we are committed to making payments to those Zones that are determined by the value captured within those Zones and the tax rate. And when we account for that, the net that would end up in the general fund available for ongoing maintenance and operations expenses is that 21.6 million? >> That makes a lot of sense. That really is my only question at this moment. I might have [4:26:18 PM] at this moment. I might have others, but thank you. >> So for purposes that are look, let me ask anybody else have questions. Okay. So for purposes of someone looking at this slide deck, I want to compare. Slide eight and 13 I think it is. Yeah. Just so that people can see what we're dealing with. As you've laid it out here in the fy 26 proposed rate, you've got you you walk through for the typical rate and taxpayer and the number you come up with is for 76, 31 as a total that includes the property tax bill and all rates and fees. Right. >> Yes, sir. >> And if you multiply that times 12, that gets you an [4:27:18 PM] times 12, that gets you an annual. What the what that typical rate and taxpayer will be will the increase that that that person will see. >> That that would be the total. You'd multiply the $22.35 by 12. >> I'm sorry of course to get. Yeah, yeah of course. And then you take that number and go to 13. If somebody's trying to figure out what, what happens to their to their bill, one penny would add another $40 and 26 to that. Correct? That's correct. And you just walk yourself through this. I'm just trying to get clarity and rigor on what what this does to an individual household. >> Yep. >> That's correct okay. Thank you. Other questions. Okay. Members is there anything else you want to bring up at this meeting other than me [4:28:19 PM] meeting other than me reiterating that we will meet on the 30th at 330, that meeting will be posted. And at that meeting we will have hopefully the final rolls be able to give some direction with regard to what gets brought. Bless you, whoever that is. We'll bring back to, they'll bring back to council for us to vote on the maximum tax rate the next, which is on the 31st, as we as we move forward in trying to get through this budget process. Is there anything else? Anybody. Yes. Mayor pro tem. >> Yes. Thank you mayor. And as for anyone watching, you could tell right now we're being very thoughtful and deliberate and really understanding the process and the context of what it would take to consider a tax rate election for process clarification. Tomorrow we will meet to hear from staff and receive briefings on the general fund. At that time. I'm just curious. I mean, certainly knowing the amount of effort that was done to bring a [4:29:21 PM] that was done to bring a balanced budget as we receive the briefings from staff tomorrow, I the questions I have prepared around the general fund do take into consideration and bring out some of the budget scenarios that have been presented to us. So for deliberations for tomorrow, how should we handle that? Because I might be pulling from. >> Well, I think every all council members have the various scenarios. So I actually think that's good that you're going to be able to make those kinds of comparisons if you want to. And I think we just just do it. Dive right in. Just do it. I mean, that's that's the purpose. The purpose of the meeting tomorrow is for general general fund discussion. So no need to hold back on those because they're that we ask for them for a reason. So I think that's great. >> And have the alternatives been posted online to where they're publicly? >> I don't know that the answer to that question have those. >> I don't believe they have, but we can certainly take care [4:30:21 PM] but we can certainly take care of that. >> Let's let's get that done. That's great. Good. That's really good. Thank you. Other. Yes, councilmember vela. >> Just a quick comment, really. We're kind of charting going through uncharted waters to a large extent. I think ultimately I think the tax rate election will have to become a multi political, you know, feature of Texas in the future. But I appreciate both law and the budget just kind of laying out the path forward for us. This is going to be our first time really kind of working through the process. And I do just appreciate the finance committee and the council and staff in general, just trying to make this as thoughtful and deliberate of a of a process. I wish we had more time. Honestly, this is a big budget process. It's always a big budget, but this is an even bigger budget process. And I wish we had even [4:31:22 PM] process. And I wish we had even more time and I wish we were able to, but it is what it is. I mean, this is state law and this is what is before us, but I just wanted to make those comments and again, just thank staff for I know it's always a busy time of year. There's extra busy time of year every four years. We're looking at it. But again thank you all and appreciate everything. >> Good. Thank you. Council member. Yes. Council member duchen. >> Thanks. I've got one question and one clarification I'm looking for. And the question is if this is to et or Eric, if as you visited with your counterparts and other Texas cities that are under the same constraints that we are, are they looking at the problem in pretty much the same way we are, which is entertaining? This idea of a tax reduction, potentially every X amount of years, to try and address what might be systemic shortfalls, or are they looking at this differently? >> It's a great question. I [4:32:25 PM] >> It's a great question. I don't have an answer for you right now. I mean, I do talk to with cfos in other large cities and in the area, and I've not had the discussion with them specifically about how are they managing their taxes and tax rate elections over time. And I don't even have immediate knowledge in regards to whether or not these other cities will be pursuing that this year, but happy to look into that for you. Happy to make those calls. >> Do you know if any of them have proceeded in prior years? >> No. Obviously Travis county and the school district both did tax rate elections last year, and I'm aware of, I think, 3 or 4 other small Texas cities that have done tax rate elections. And of course, Austin did one for project connect in 2020. Okay. But as Eric mentioned, it's the consequences of sb two have been slow to arrive because of the huge federal stimulus spending and the and the upward tick that's caused in sales tax revenue has allowed a lot of cities to manage through the [4:33:26 PM] cities to manage through the 3.5% revenue cap. But with the federal stimulus drying up and sales taxes flattening out, you are seeing our story is not unique. You're seeing Houston and San Antonio and Dallas. They are dealing with budget deficits. I can say that for sure, but I don't have the information. I will get that in regards to whether or not they're considering. >> Okay, I would like to at some point, if I can follow up with you on that. And the second question is we've got we were presented with, I think, eight scenarios that correspond to the eight pennies that are on slide 11. I'm just wondering if there's any value in stepping through very briefly how, because some of them are ongoing, like the first scenario is one time, some of them are ongoing. If it makes any sense for not just us, but the public, to get a brief window into what those scenarios mean for the city and why you chose, in some case, to present some as one [4:34:27 PM] case, to present some as one time, in some cases, some as ongoing. >> We can do that now, or we can do that tomorrow when we go through the general fund budget. >> I just want to make sure it gets. >> I would suggest we do that when we go through the general fund budget. Okay. So we can when they do that the whole council will will be here. >> Perfect. Let's do that. >> Thank you. Sure. Other thoughts or questions? Yes. Councilmember Ellis. >> I have one question that's more about formatting. I appreciate the scenarios that have been presented to us. I found the left hand columns to be a bit confusing, which ones were actually lined up with which department? And so if that's going to be out there for the public to digest, I just may suggest, you know, either drawing some lines or color coding or, or some sort of way to kind of understand which buckets of funding scenarios are applying to which departments so we can have that conversation together. >> Good. Thank you. >> Yeah, we appreciate that. We'll clean that up. And we're also I just wanted to say because we've had a few inquiries working on getting an [4:35:28 PM] inquiries working on getting an actual excel version distributed to council offices as well. >> Great. >> That'd be great. Thank you. >> All right. For members of the public that are paying attention, tomorrow at 9 A.M, we will have a budget. The city council will have a budget work session. As you can tell from the discussion just now, it will be related to the general fund. July 24th, there's a council meeting. Then July 29th, there will be a budget work session beginning at 9 A.M. Related to the enterprise funds and cip budget. On July 30th at 330, there will be a special called audit and finance committee meeting on Thursday, July 31st. There will be a council meeting to set the maximum tax rate. We will begin with a 9:00 work session and at 3:00 there will be a budget hearing. That's all. One agenda, one meeting. Monday, August 4th. We will have. That's the requested deadline for the filing of budget amendments and ifc's August 5th. We have [4:36:29 PM] ifc's August 5th. We have scheduled a potential budget work session. August 7th, there will be a budget work session, and then we are scheduled August 13th through 15th for budget adoption members. Anything else? With there being no further business to come before the audit and finance committee of the Austin city council at this special called meeting on July 22nd. Without objection, we are adjourned at 4:36 P.M. Thank you everybody. See you tomorrow.