Updated Decision Tree + Q&A

[Colleen Pate]

Council—

In anticipation of the upcoming Audit & Finance Committee meeting, I wanted to make a couple of things available to the Council.

I’ve attached an updated proposal for the Decision Tree. This has contributions from our professional finance staff. The changes are based primarily on comments received at the last Audit & Finance Committee meeting. The new version of the proposal also has some color coding to better show what items are current policy and practices and what is new.

http://assets.austintexas.gov/austincou ... 153151.pdf

Also attached is a document that answers some questions about the proposal. The finance staff has also made sure the answers to the questions are accurate.

http://assets.austintexas.gov/austincou ... 153106.pdf

For clarity, let me state my primary purpose with this proposal. Austin is a growing, successful city. To continue and enhance that success, we need investment that, among other things, improves our quality of life, benefits our economy, and reduces maintenance costs on aging infrastructure. Such investment typically comes from a bond election.

The framework for making these public investments is also important to Austin’s success. If Austin considers borrowing money, plans to collect taxes to pay debt, and promises voters it will timely complete important projects, we should use transparent, understandable, and disciplined thinking about whether we need a bond election, why we need it, and what should be in it.

I think the voters expect us to do this. We need to demonstrate that we are transparent and make understandable, disciplined decisions. After the TRE election, I believe it’s even more important that Austinites have confidence in our processes.

Thanks for your consideration.

Kirk

On Behalf of Mayor Watson

[Jose Chito Vela]

Mayor,

Thank you for the proposed decision tree. I'm largely in agreement with the purpose, goals and language. I do have a few suggestions. A version with my suggested edits is posted below.

https://drive.google.com/file/d/13WflZ5 ... RVKeX/view

I'm concerned with looking at only whether there are two years or less of remaining bond funds for the city as a whole. I feel that this is better evaluated on a department by department and need by need basis. We may have plenty of transportation funds, but no parks funds or watershed funds. Or we may have plenty of transportation funds but not any we can use for sidewalks and urban trails. I'd prefer to look at capital funds on a category by category basis.

I'm glad we have a AAA credit rating and want to do everything possible to keep that, but our bond policy should not just mention our current AAA rating. Recently our bond rating was AA+. Pension reforms undertaken by the city were well received and we are now AAA again. But our policy should take account various scenarios. I suggest broader language where a bond issuance should be sized as to avoid any downgrade in our credit rating.

I also suggest a few additional considerations for our affordability prioritizations. One is to prioritize projects that help multiple departments. One example is combining flood control and parks projects. These often share similar needs and goals and pair very well together. Another priority are projects that lower operating costs, such as HVAC upgrades, maintenance facilities, refueling centers, and similar improvements. These types of facilities can often lower our electric, water and fuel costs.

Finally, we need a catch all category for exigent circumstances. While it will be rare to pass a bond this way, we should consider the possibility for circumstances that necessitate quick action. A handful of smaller changes are also contained in this version.

I look forward to discussing this at tomorrow's audit and finance meeting.

Chito