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During its first departmental budget briefing of the season, City Council heard from two of the City’s top executives about the $239 million budget proposed to maintain and expand local infrastructure next year, and the debt plan that makes the City’s AAA bond rating possible.
The $2.8 billion fiscal year 2019 budget – as proposed by City Manager Sheryl Sculley based on community and Council feedback – calls for increased spending for a host of City services, including street infrastructure to the tune of $110 million.
Click here to download a copy of the City’s proposed 2019 budget.
Under the proposal presented by Transportation and Capital Improvements Director Mike Frisbie, the sidewalk program – enhanced by a new system that would fill sidewalk gaps in high priority areas – would receive $19 million this year ($10 million of which would come from the 2017 bond); $3 million would be spent on pedestrian safety and traffic-calming measures through various programs; VIA Metropolitan would receive $10 million to enhance bus service; $13.8 million would be used on drainage projects. Also, TCI would carry out several projects that were approved in the $850 million 2017 bond.
This budget would add 19 positions to City staff: nine for street project development and delivery; eight for bond project delivery; and – for the first time in San Antonio – one “pedestrian mobility officer” to oversee the completion of the sidewalk master plan and help develop a citywide effort to improve non-vehicular transportation.
Click here to download Frisbie’s presentation.
“This is a big step toward addressing the community’s No. 1 budget ask – sidewalks,” Councilman Roberto Treviño (D1) stated in a news release. “This is a crucial time for San Antonio as we shift the focus on how we build our city from the prioritization of automobiles to the prioritization of people.”
The 2019 street budget will emphasize the lowest-quality streets citywide with an $11 million infusion, Frisbie said, as his department continues to use “equity” in how it prioritizes projects.
San Antonio is the only major city with a AAA bond rating from each major rating agency, Chief Financial Officer Ben Gorzell said, and therefore enjoys lower interest rates as it borrows money to complete major infrastructure projects.
Click here to download Gorzell’s presentation.
However, that top bond rating is threatened by the local firefighters union’s three proposed charter amendments aimed at the November ballot, according to statements issued by Fitch and Standard & Poor, two of the three rating agencies.
Gorzell was “personally surprised” by their statements, he said, as “they don’t typically speculate” about what could impact bond ratings.
The ballot proposals would make it easier to change ordinances and utility rates, among other things, limit the tenure and salary of future city managers, and force binding arbitration on a new contract between the city and fire union.
Representatives from the City’s two financial advisors, FTN Financial Municipal Advisors and Hilltop Securities, also testified that the proposals would damage the city’s bond rating. Click here to download their report.
But one of those consultants from Hilltop Securities, Councilman Greg Brockhouse (D6) said, went too far when he directed people to vote against the ballot measures.
“I understand coming up here and pointing out facts about potential bond downgrades, but what are the City risks and processes when presentations turn into electioneering?” said Brockhouse, who worked for the local police and fire unions as a political consultant before being elected.
“As long as the discussion and the questions stay focused on the facts and fall short of advocating ‘Vote yes’ or ‘Vote no,’ I think that’s the ground rules we need to follow,” City Attorney Andy Segovia said.
“My opinion is that those ground rules were violated today,” Brockhouse said. “There was a clear delineation to vote no.”
Segovia acknowledged that one of the city’s advisors did “slip up,” and that he “talked to him afterward.”
No matter how Council members or City staff feel about the ballot items, Brockhouse said, it’s important to follow procedure and protect the City from further legal action by remaining neutral during these budget discussions.
Councilman Manny Pelaez (D8) and Mayor Ron Nirenberg later asked Segovia during the meeting Tuesday to confirm that no electioneering had occurred.
“Did any member of the Council or any staff member violate any of the rules on electioneering today?” Nirenberg asked.
“Not in my opinion, Mayor,” Segovia said.
Earlier in the meeting, Nirenberg had asked Gorzell to explain why the average homeowner should care about a bond rating downgrade, which could result in anywhere from $17.5 million to $135.5 million in gross costs to the City.
“I can’t translate it necessarily to a tax impact to a homeowner,” Gorzell said, “but what I’ll tell is as you look at every one of these [numbers] you can go into the bond program of that size and we don’t do that project. That’s the impact.
“So whether you’re talking about a senior center, a big road project, [or] several projects – it means that we take their tax dollar and we spend more of it on interest costs and less of it on delivering a project.”
If the City wanted to maintain its current levels of service and growth compensation, he said, it could raise revenue by increasing debt service tax rates.
Those so-called “San Antonio First” ballot measures also are the subject of a lawsuit filed by political action committee Secure San Antonio’s Future that alleges the fire union used illegal means to pay an out-of-town petition consultant to collect signatures. A judge is expected to rule Wednesday on a temporary restraining order that was filed alongside the lawsuit to keep the items off the ballot for now.
City Council is slated to vote whether to place them on the ballot this Thursday, but the deadline to do so is Monday, Aug. 20.