Item 58 - Council Agenda 5/22/25

[Colleen Pate]

I understand that there's a question about whether the policy and process for TREs that has been proposed by the Audit & Finance Committee would preclude a Council Member from bringing an IFC proposing a TRE and/or keep the Council from acting on a TRE. The policy and process is not intended to prevent such action and I don't believe that it can.

Committees recommend. The Council acts. The Council can only act as a body. As such, committees may review, analyze, propose, recommend or certify certain things, but the Council must always act to put authority behind committee work. In fact, the Council can make a different determination than a committee and essentially overrule a recommendation. So, pursuant to this proposed policy, the Audit & Finance Committee may recommend or certify that certain policy requirements have been followed, but those are not final actions of the Council. All Council decisions must be made by the full body and no committee action can circumvent or preclude Council action.

The language of the Decision Tree is limited as a practical matter. Some may mistake the abbreviated language of the Decision Tree to suggest the end of the process after a review or recommendation of the Audit & Finance Committee where it says, “NO TRE” and “YES TRE”. However, there is obviously an assumption that there will be subsequent Council action if desired since state law requires a record vote of the Council in order to call a TRE. So, regardless of the findings of the Committee that might result in a “Yes TRE”, there can’t be a TRE without full Council action. And, as noted, the Council can decide to go forward with a TRE even if the Committee were to make a different recommendation or find that a TRE proposal was outside the fiscal policy.

For clarity purposes, I'm recommending we add language to the Decision Tree to expressly state that the final boxes are “Subject to Council action”. The boxes would say, “Subject to Council action, YES TRE” and “Subject to Council action, NO TRE”.

All of us recognize the significance and importance of calling a tax ratification election or, for that matter, deciding not to hold one. The Audit & Finance Committee's recommendation confirms a belief that an item of such significance and importance deserves having a financial policy and a process that provides opportunity for thorough review. As a Council, and through our practices, I think we've determined and proven that committee review and committee recommendations bring value to our processes. The goal of the Audit & Finance Committee's proposed policy and process is to assure that a deliberative committee will review a proposal for a TRE, adding some focus and rigor to help the full body deliberate.

In this case, the recommendation is also intended to assure the public that we've followed a detailed, disciplined process that included a deep dive by a Council committee. Although not a requirement of the proposed policy framework, the proposed process would be that an IFC would go through the Audit & Finance Committee in order to create greater transparency and enhance credibility of the proposal whether an election is ultimately called or not. If we're going to ask people to vote to raise their taxes, we'll want to be able to say we followed a prudent fiscal policy and we followed a prudent process. If we’re going to vote to not go forward with a TRE when we have so many needs, we’ll likewise want to be able to make such a statement.

I should note that the Decision Tree and the Committee recommendation includes fiscal policy proposals from our professional finance/budget staff.

I hope this is helpful. As always, I appreciate how seriously people are taking these issues. We are doing well working as a team on behalf of Austinites at a time of budget stress. Thanks for that.

http://assets.austintexas.gov/austincou ... 101913.pdf

Kirk

On behalf of Mayor Watson

[Jose Chito Vela]

Thank you for the post, Mayor. If we are going to go to the voters and ask for a tax increase, we need to show them we have been thoughtful and deliberate about the need for additional revenues. A committee recommendation that follows a set process with established guidelines will help us show just that.

Before the 3.5% property tax revenue caps - when the city had the option of going up to 8.5% above the prior year's property tax revenue - we did not have a defined process. It was just ad hoc based on departmental needs, community demands and political sentiments. The TRE process discussed and recommended at Audit and Finance is an improvement over past practice and should help us when explaining the need for additional revenues to Austin residents.

Chito