Item 55 - Bond Decision Tree

[Mike Siegel]

Dear colleagues,

I’d like to express my appreciation to the Audit & Finance Committee members for bringing this policy forward, and for your work to encapsulate the multifaceted considerations regarding a potential bond program into a one-page framework like this.

I generally believe these are important considerations before Council goes to voters for bond approval.

That said, I have two concerns about the proposal as drafted and would like to ask your support for amendments.

First, I want to flag that similar to the conversation we had about a TRE decision-tree, the proposed decision tree would privilege the members of the Audit & Finance Committee in making capital budget decisions, which would tend to weaken the influence of the other Council members who are not on the committee. Given that impact, it may create the impetus for all of Council to serve on Audit & Finance.

Adopting a capital budget and capital program is one of the most important decisions our City Council can make, and I don’t think my constituents would want me to water down their influence over this type of decision. To that end, I wanted to ask if the sponsors of this item would accept an amendment to change the certification element of this decision tree by replacing “Audit and Finance Committee” with “City Council.”

My second concern is that this decision tree assumes a comprehensive bond program every six years. I see two major challenges with this assumption.

First, the City has not been on that type of calendar. For example, the last time voters considered a parks bond was 2018. And from what I understand that money is spent. We didn’t have a bond program in 2024. So now as far as parks are concerned, we are at least 8 years out, and possibly more if there’s no parks bond this year.

Under the proposed policy, there is a safety valve, and Council could find that parks represent a “significant community need” and then move onto the next step of the decision tree. Which is fine, but there’s of course the risk that we use that language, which is designed to be a rare exception, and instead start invoking it frequently because some capital program areas are dry on dollars, while others have money in reserve.

The second challenge is whether a comprehensive bond program every six years is appropriate for Austin at this stage of our development. City staff are telling us we have over $10B in unmet capital needs, and they’ve prioritized $3.8B in projects. They are also telling us we should limit any bond program in 2026 to $700M or so.

Given the desire to not ask for too large a bond package in any year, it might be a better approach to split up our capital program propositions into alternating cycles, such that we don’t go back more than once every six years for any program area, but that we might alternate program areas in different election cycles.

We don’t have to decide that now, but I also don’t feel comfortable committing to a rigid six-year policy that we overrule on a regular basis.

Which brings me to my second proposed amendment, which would amend the second stop on the decision tree, to add the words “in the relevant program area” before the question mark. Would y’all support this change? Please respond here or contact my office with any feedback.

Thank you for your consideration, with respect,

Mike

[Colleen Pate]

Colleagues,

Thank you, Council Member Siegel, for your thoughts and input. We’re embarking on a very important step in how we make disciplined decisions, so it’s good to have this input.

I believe it’s fine to change the language so that it’s explicit the entire Council will be making the recommendation. As I’ve said previously, that’s always the case. A committee can make recommendations, but only the Council can act.

I anticipate that, like we do with other committee work, the Audit & Finance Committee will still likely review these issues, work through the Decision Tree, and even make recommendations. However, as indicated, making the Decision Tree explicit creates clarity.
I propose the following:

“Does the proposed Bond Election meet the following urgency conditions as reviewed by the Audit and Finance Committee and certified by the City Council?

I also understand the desire for us to look at our financial policies. To be clear, the item we are voting on is a decision framework and not a change in specific policies. We have not used this as a vehicle to delve into the policies and whether they should be changed. For example, at the Audit & Finance Committee meeting, Council Member Alter spoke about the “2-year” policy and the way the Decision Tree (at that time) addressed it. I offered an amendment that is now part of the Decision Tree so that it refers to whatever policy there is at the time. This allows us to create a decision framework and preserve the ability for the Council to now look at the “2-year” policy in greater detail.

I believe Council Member Siegel’s proposed addition amends the policy before there’s been an actual focus and full analysis on that policy. Again, we’re voting on a decision framework and need to consider the actual policy separately. To achieve the goal of CM Siegel (and me, and likely most of the Council) to have a full discussion on this item, we can amend the decision framework similar to how we addressed the “2-year” policy. I suggest we amend the Decision Tree, under the “Project Delivery” section, to say:

“Proposed bond propositions have been sized such that projects can be delivered on a timeline consistent with financial policies.”

This allows us, again, to create a disciplined framework and preserve the discussion regarding the specific financial policy.

In fact, as I mentioned at the City Council meeting, I’ve been working with our professional financial staff regarding the agenda for the upcoming Audit and Finance Committee meeting on March 4th at 9:30 AM to include a briefing and discussion around our current financial policies.

Chief Financial Officer Ed Van Eenoo will make a presentation, including offering thoughts from the professional staff about potential updates to policies. We can also do this at a work session, and I recommend doing that.

As for the Audit & Finance Committee, the entire Council is invited.

I hope these thoughts are helpful.

http://assets.austintexas.gov/austincou ... 122103.pdf

Thanks,

Kirk
On Behalf of Mayor Watson

[Mike Siegel]

Thank you, Mayor, for sharing these thoughts and for incorporating my suggestions. I support this item as amended and look forward to the continued discussion. Mike

[Julie Montgomery]

On behalf of CM Ellis, please see the following motion sheet for the Bond Decision Framework resolution and Exhibit A, with accompanying rationale:
https://assets.austintexas.gov/austinco ... 083005.pdf

[Colleen Pate]

Please see the attached revised resolution and decision tree that reflects the feedback from CM Siegel and Ellis

Resolution: http://assets.austintexas.gov/austincou ... 112825.pdf
Decision Tree: http://assets.austintexas.gov/austincou ... 112917.pdf

On behalf of Mayor Watson