 "Photo: Bryant Haertlein")
Austin City Manager Marc Ott proposed a $2.8 billion fiscal year budget on Wednesday to the city council that evades a previously projected $25.3 million budget deficit.
If the budget passes as is, Austinites could expect an average monthly increase of $4.25 on water utility rates, but would not see any changes to electric rates.
To avoid a budget shortfall, Ott proposed freezing open job positions in city departments as well as limiting public library hours and cutting back on road maintenance.
Ott also proposed a property tax rate decrease from the current 40.34 cents per $100 assessed value of a home to 40.28 cents. Property tax revenue is the biggest source of funding for the general fund, which provides for services such as public safety, health and human services, parks and recreation and library services.
"He and his entire team did an exceptional job," said Mayor Pro Tem Brewster McCracken.
McCracken said the city is seeing recession, such as budget cutbacks, despite rises in sales tax revenue - revenue that usually decreases in a recession. He said this is an indication of a structural problem in the budget, referring to an imbalance of funds.
The biggest city expenditure is on public safety union contracts, which is increasing faster than incoming revenue and disproportionately to the budgets of other departments, McCracken said. He said the city is in negotiations with fire and police unions, which are asking for large salary increases.
"We're already having to cut basic services in the current situation," McCracken said.
The $241.1 million police department budget, a $13 million increase from last year, accounts for the largest percentage of the city's general expenditures fund. A portion of the money will be used to hire 24 new officers, required as a result of population growth, and to pay the upcoming year's salaries of 39 officers hired last year, according to the budget.
Ott emphasized the need for discussion among city management, city council and Austin residents with respect to challenges such as higher energy and labor costs as well as aging infrastructure that is outspending incoming revenue.
"We are confident that working together with our citizens, we can make this one of the most livable and best-managed cities in the country," Ott said.
City council appointed Ott as city manager in January upon the departure of Toby Futrell, who held the post for six years.
The council is expected to approve the budget by Sept. 1, which would take effect Oct. 1.
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