Editor's Note: This story has been updated with information gathered from Thursday's City Council meeting by Edmond Ortiz.
City staff worked long into the night to finalize the details of next fiscal year's budget that were presented by City Manager Sheryl Sculley on Thursday morning to City Council. They've been crunching numbers and balancing dozens of departmental budgets ever since they received their proverbial marching orders in June to come up with a budget proposal that incorporates Council and citizen priorities for the $2.5 billion fiscal year (FY) 2016 budget.
"We're going back to basics on what the city should be doing," Councilmember Mike Gallagher (D10) said Thursday morning after City Manager Sheryl Sculley unveiled the proposed budget.
The $2.5 billion total budget includes $1.1 billion for general fund operating costs, and $670 million in capital projects. Public safety represents 65.8% of the general fund, just short of the 66% cap that City officials insist on as contract talks with the San Antonio Police Officers Association continue.
Next year's budget represents a 4.3% increase from FY 2015's $2.4 billion budget – about $107.5 million. The capital program includes funds to continue 2012 bond projects, finishing expansion of the Henry B. Gonzalez Convention Center, Alamo Plaza development, as well as runway improvements and a consolidated rental car facility at the San Antonio International Airport.
The final budget is expected to go before Council for a vote on Sept. 10.
Topping the list of priorities was decreasing the City's property tax rate; increasing funds to streets, sidewalks, and drainage; and maintaining public safety spending and AAA bond rating.
"With this budget, we do that," said City Budget Director Maria Villagomez during an interview on Wednesday. But the latter two hinge on finalizing contracts with the police and fire unions that keep spending below 66% of the City's general fund.
The San Antonio Police Officers Association negotiating team has agreed to return to the table on Aug. 18 to continue the more than 18-month, on-again-off-again collective bargaining process for a new four or five year contract. According to the City's certified, independent actuary, one of the police union's latest proposal would put public safety spending at more than 70%, another assumes that firefighters would accept a contract with no wage increases.
"We are optimistic that we will have a contract before the budget is adopted," Villagomez said.
The City has three different proposals on the table and they're "prepared to use any of those alternatives." For the budget presentation, the March 20 proposal has been incorporated as a placeholder.
Becuase of a 10-year evergreen clause that keeps the legacy contract in place until a new agreement can be reached, the police and fire unions will continue to enjoy their premium-free health care benefits. While no raises or bonuses can be paid to uniformed employees while the legacy contract is in place, the cost of the legacy health care plan will still exceed what the City has budgeted for public safety.
"In 2017 the amount would be $7 million to pay for the legacy health care plan," Villagomez said. "Even thought we’re budgeted dollars to give wege increases, the (current) legacy health care is more expensive.”
In September 2014, Council voted to re-allocate $14.2 million from the General Fund – away from 2015 project and program funding – to pay for the resulting public safety deficit of last year's budget process.
Council members and City staff do not want to see that happen again.
Officials said the City is sound financially but cannot keep pace with rising healthcare premiums in favor of needed, delayed infrastructure improvements.
"We've heard over and over from residents, 'We need streets and drainage,'" Sculley said, briefing reporters after the budget presentation. She added the City has offered the police union competitive wages and benefits that are also fair to taxpayers and sustainable for the community.
Council member Joe Krier (D9) told Sculley that, based on his constituents' wishes, streets and drainage must not be atop a list of potential cuts in case a new collective bargaining agreement is not reached soon. He prioritized infrastructure issues while campaigning for election to a full term as the District 9 representative this spring. Gallagher echoed Krier's sentiment.
"We can't afford to defer any more street maintenance. We're having to cut that every month we don't have a new contract," he added.
Top Priority: Fixing City Streets
One of the biggest chunks of that 4.3% total budget increase, according to the proposal, should go towards infrastructure maintenance. Council and citizens have been almost entirely united as this being the top priority. While last year's budget included $41 million for streets, sidewalks, and drainage maintenance projects, FY 2016 will spend 56% more for a total of $64 million. About $8.5 million of that comes from the lump sum bonus payment police union members would have received had a contract been signed before the July 31 deadline set by Mayor Ivy Taylor. Now that the budget process has really kicked into gear, there will be no lump sum payment during FY 2015 which ends Sept. 30.
About $9 million was diverted from infrastructure projects in November 2014 when the city had to reallocate more than $14 million from the FY 2015 General Fund budget to pay for the expired police and fire union contracts. Several projects were delayed until FY 2016. Thursday's proposal will refill that gap and then some.
Sidewalks will receive $10 million more than last year for a total of $15 million and drainage improvements to reduce flooding across the city will total $12 million.
Krier, Gallagher and other Council members applauded other parts of the budget that address infrastructure needs. Krier lauded the $1 million for pedestrian safety improvements, including sidewalks and zones around schools. This is part of a long-term plan to upgrade school zones safety citywide.
Alan Warrick (D2) said he hopes the City keeps in mind that every road improvement does not directly lead to drainage improvement. He added that each drainage improvement project should be clear and comprehensive about the problem it's supposed to address.
City Property Tax Reduces
This spring, homeowners were shocked by the sudden increase in how much their homes were appraised – the average home value in Bexar County went up an average of 11% in 2015. Several council members reported receiving an increased amount of complaints from residents. Hearing this call, the City's property tax rate of $0.5656 for every $100 of a home's worth will be lowered to $0.5583. The decrease of three quarters of a cent "will save San Antonio taxpayers $6.1 million in FY 2016."
Bexar County is also considering lowering its tax rate slightly to ease the burden to homeowners, but the bulk of property taxes are still collected by school districts.
During City Council's budget workshop in June, several council members agreed that a small, symbolic reduction of the City's property may help public perception more than citizen's wallets.
Combining a cost of living adjustment of 2%, legacy pay increases of 2-4%, performance pay for professionals and managers, and the minimum wage increase, the City will increase spending on civilian employee compensation by $16 million.
Sculley announced last week that the proposed budget will include a minimum raise increase of more than $1.50 from $11.47 to $13 per hour. The City civilian employee union and advocacy groups laud the proposal, but would like to see it further increased to $15 per hour.
"The public sector should lead the way," said Esmeralda Rodriguez of Communities Organized for Public Service (COPS) and Metro Alliance, or COPS/Metro, Wednesday evening on the steps of City Hall. "Where we spend our money says a lot about our values" so in a sense the the City budget is a "moral document."
Council members Ray Lopez (D6), Shirley Gonzales (D4), Cris Medina (D7), and Alan Warrick II (D2), joined about 30 teachers, church leaders, and fire union President Christopher Steele to support phasing in a $15 per hour minimum wage within the next few years.
"This isn't just a raise, it's an investment," Medina said.
The group also called for the City budget to include its usual $2 million for Project Quest, which organizers said helped at least 500 people obtain occupational training for in-demand occupations last year.
"We're offering competitive wages and benefits so we can be an employer of choice," Sculley told reporters. "We want to attract the very best."
Saldana and Lopez said the $13 entry wage is a first step towards enhancing the City's overall pay scale for civilian workers.
"It's one thing for us to talk about the pay of uniformed employees, but we really hadn't have conversations about how civilian employees can work more efficiently," Saldana said. "This says we support them and they're being heard."
Lopez added the City must work on developing an adequate "quality of life wage" for employees.
"That way, an employee doesn't have to be looking for a second or third job," he explained. "This isn't about them having more change in their pocket, it's about having a better quality of life."
Taylor said it's a fair wage but that the City should continue supporting workforce development programs that can allow City employees, and generally residents, to "keep climbing the ladder of success."
More City, More Services, More Personnel
The City will also be adding 172 new positions across the city, including new positions for the partially annexed area formerly known as "City South" and staff to operate and maintain new projects.
City South is scheduled to be annexed in December 2016 and will receive two interim fire stations (from the capital budget), 42 firefighters, and six police officers. While their first day won't be until Jan. 1 2017, these uniformed employees will also need to be trained ahead of time.
Other line items highlighted by Villagomez include:
- $1.9 million for maintenance and security of new creekways and parks;
- $800,000 for a new spay and neuter surgery clinic at Brooks City Base;
- $560,000 for the operation of two new libraries in districts 2 and 6;
- $350,000 for marketing and one new staff member for the Tricentennial Office (funded by Hotel Occupancy Fund);
- $3 million for police body cameras;
- $280,000 for two gun shot detection pilot programs in District 2 and between Districts 1 and 5;
- $5 million for replacement of public safety equipment
- $500,000 for scoping out and estimating projects that could go into the 2017 Bond Program
The budget also reflects a new pay-as-you-throw, variable-rate program, meant to reward households that produce less trash and while those that produce more garbage will pay more. The program, rolling out gradually this October, is designed to incentivize more recycling among residents. Gonzales said some of her constituents have misunderstood the program, they think the solid waste fee will go up for everyone.
David McCary, the City's solid waste division director, said each San Antonio household will eventually get a notice reminding customers how they can choose which sized trash bin that is needed for their home. Three sizes will be available and a new reduced/increased monthly rate correlates to size. Residents will also be able to sign up on the City website for the trash cart they need. This will apply only to single-family homes.
The City projects general fund revenue increases over Fiscal Year 2015 in property taxes (9.8%), sales taxes (5%), and CPS Energy payments (3%). The increase in property tax income reflects a 13.5% rise in property values from FY2015.
Next Steps: Public/Council Input Isn't Over Yet
City Council will hear presentations from individual departments over the course of 12 meetings in August and September, two times a week. During this time, there will also be five relaxed-format open house meetings for the public to ask questions and provide staff with comments. Two public hearings are scheduled for Aug. 17 and 24 in City Council chambers that will be more like citizens-to-be-heard sessions. A schedule of meetings will soon be available here.
Each council member has their own projects that they hope to get funded and they'll be fighting hard to get them balanced into the budget. For every project added or funding increase, cuts have to be made elsewhere.
*Featured/top image: San Antonio City Hall. Photo by Scott Ball.