Regular Called Meeting of the Economic Prosperity Commission Wednesday, April 17, 2024, 6:30pm City Hall, Boards & Commissions Room 1101 301 W. 2nd Street Austin, Texas Some members of the Economic Prosperity Commission may be participating by videoconference. Audio is recorded. Public comment will be allowed in-person or remotely via telephone. Speakers may only register to speak on an item once either in-person or remotely and will be allowed up to three minutes to provide their comments. Registration no later than noon the day before the meeting is required for remote participation by telephone. To register to speak remotely, call or email Cesar Garza and Stephanie Calderon at the Economic Development Department: cesar.garza@austintexas.gov and stephanie.calderon@austintexas.gov or 512-974-8055 (Cesar Garza). CURRENT BOARD MEMBERS/COMMISSIONERS: Laura Dixon, Mayor (Watson) Christiana Ponder, District 1 (Harper- Madison) Benjamin Salazar, District 2 (Fuentes) Raquel Valdez Sanchez, District 3 (Velasquez) Michael Nahas, Vice Chair, District 4 (Vela) Rodrigo Cantu, District 5 (R. Alter) Vacant, District 6 (Kelly) Amy Noel, District 7 (Pool) Luis Osta Lugo, District 8 (Ellis) Vacant, District 9 (Qadri) Kelsey Hitchingham, Chair, District 10 (A. Alter) AGENDA CALL TO ORDER PUBLIC COMMUNICATION: GENERAL The first 10 speakers signed up prior to the meeting being called to order will each be allowed a three-minute allotment to address their concerns regarding items not posted on the agenda. APPROVAL OF MINUTES 1. Approve the minutes of the Economic Prosperity Commission Regular Meeting on March 20, 2024. DISCUSSION AND ACTION ITEMS Discuss and approve the commission’s potential recommendations to City Council for the City’s FY 2024-2025 budget. Drafts of these recommendations were introduced at the commission’s March 20, 2024 meeting; however, due to a loss of quorum during the meeting, the commission did not take action on any recommendation. Conduct officer elections for Chair and Vice Chair for one-year terms of office from May 1, 2024 to April 30, 2025. DISCUSSION ITEMS 4. Presentation by Michael Ward Jr. on Austin Urban Technology Movement’s tech ecosystem that eliminates poverty through expanding technology skills, apprenticeships, digital equity, workforce development, and job placement assistance in our society. WORKING GROUP/COMMITTEE UPDATES 5. Updates from the Jobs, Procurement, and Infrastructure working groups on the established focus and current findings of each group. FUTURE AGENDA ITEMS ADJOURNMENT The City of Austin is committed to compliance with the American with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request. Meeting …
ECONOMIC PROSPERITY COMMISSION REGULAR CALLED MEETING MINUTES Wednesday, March 20, 2024 The Economic Prosperity Commission convened in a REGULAR CALLED meeting on Wednesday, March 20, 2024, at 301 W. 2nd Street, Room 1101, Austin, Texas. Vice Chair Michael Nahas called the Economic Prosperity Commission Meeting to order at 6:37 p.m. Board Members/Commissioners in Attendance in Person: Raquel Valdez Sanchez (3), Michael Nahas (4), Luis Osta Lugo (8), Board Members/Commissioners in Attendance Remotely: Benjamin Salazar (2), Kelsey Hitchingham (10), Laura Dixon (Mayor) Absent: Tina Cannon (9), Christiana Ponder (1), Amy Noel (7) Vacancy: District 5, District 6 PUBLIC COMMUNICATION: GENERAL None present. APPROVAL OF MINUTES 1. Approve the minutes of the Economic Prosperity Commission Regular Meeting on February 21, 2024. The minutes from the meeting of February 21, 2024, were approved on Commissioner Osta Lugo’s motion, Commissioner Valdez Sanchez’s second on a 6-0 vote. Commissioners Cannon, Ponder, and Noel were absent. WORKING GROUP/COMMITTEE UPDATES 2. Updates from the Jobs, Procurement, and Infrastructure working groups. At the commission’s February 21, 2024 meeting, the working groups were asked to contribute to the commission’s budget recommendation to City Council (Agenda Item 3). The Procurement and Infrastructure working groups were not able to meet since the February 21, 2024 meeting; they have no updates. Update from the Jobs working group (Commissioners Nahas, Valdez Sanchez, Salazar): they met yesterday to discuss potential budget recommendations, talked mostly about City Council’s proposed resolution for an Austin 1 Infrastructure Academy, whose goal is to train people in construction and infrastructure jobs. They also discussed the Austin Urban Technology Movement, which offers training in the technology industry and is a potential speaker at a future commission meeting. DISCUSSION AND ACTION ITEMS 3. Discuss and approve the commission’s recommendation to City Council for the City’s FY 2024-2025 budget. Vice Chair Nahas shared with the commission potential budget recommendations related to renters, retirement programs, and sales-tax income. During this agenda item Commissioner Dixon moved off the virtual dais, creating a loss of quorum, so the commission did not take action on any potential recommendation and moved on to the remaining discussion-only items. DISCUSSION ITEMS 4. Discuss entrepreneur-in-residence programs at universities and how these programs can foster and retain talent locally. Commissioner Osta Lugo led discussion on the limited availability of these types of programs, the potential for them to be used in Austin for international students to …
ECONOMIC PROSPERITY COMMISSION RECOMMENDATION 20240417-002A Luis Osta Lugo (8) Date: April 17, 2024 Subject: City’s FY 2024 – 2025 Budget (Renters) Motioned By: Michael Nahas (4) Seconded By: Recommendation The Budget of the City of Austin should respect renters as the equal of homeowners. Description of Recommendation to Council Require that the City of Austin 2024-25 Budget respect renters as "Typical" residents of Austin. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" add a line for the average tax per rental unit, which includes the property tax and all other taxes and annual fees on rental properties. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" rename the line "TOTAL YEARLY IMPACT" to "TOTAL YEARLY IMPACT (homeowner)" and add a line for "TOTAL YEARLY IMPACT (renter)", which includes the average taxes and fees paid per rental unit. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" include a calculation of "TOTAL YEARLY IMPACT (renter)" for the previous budget, Fiscal Year 2023- 24, and compute a percentage increase from Fiscal Year 2023-24 to Fiscal Year 2024-25. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" use the bottom half of the page to hold a table of "TOTAL YEARLY IMPACT" for Austin residents at all income levels. Rows should be by household income for every 10th percentile, from bottom 10% to top 10%. City Staff should estimate what proportion of each income bracket are homeowners and renters and assign an average (mathematical mean) property tax weighted by that proportion, based on properties that income bracket would rent or own. Unless City staffCity staff may have have more detailed knowledge;, they should investigate ifcan assume that residents in the bottom 10th percentile of income uses the average (mathematical mean) of the bottom 10th percentile of residential Austin Energy usage, residential Austin Water usage, etc. Rationale: The City of Austin 2023-24 Budget's “Taxpayer Impact Statement” refers to a “Typical” Resident Ratepayer” who pays property tax with a homestead exemption and, therefore, 1 of 2 must be a homeowner. The 2023-24 budget claims that this “Typical” Austin resident owns a house worth $499,524. In fact, the City of Austin actually has a majority of renters. The U.S. Census Bureau for the time period 2017-2021 reports that only 44.7% of the housing units in Austin are owner-occupied. A household owning a property worth $499,524 is likely …
ECONOMIC PROSPERITY COMMISSION RECOMMENDATION 20240417-002B Date: April 17, 2024 Subject: City’s FY 2024 – 2025 Budget (Retirement Programs) Motioned By: Seconded By: Recommendation Reduce risk by moving retirement programs from pensions to defined contribution. Description of Recommendation to Council Remove risk by changing our retirement programs from pensions to defined-contribution programs. Remove risk by paying other parties to accept Austin’s existing pension liabilities. Payment could be either a series of future annual payments or an immediate payment, using funds raised by General Obligations bonds. Rationale: The City of Austin currently promises pensions to its employees. That is, we specify benefits after they retire for as long as they live. This sounds nice, but the hard truth is that we do not know the financial future. We do not know the price today of those promises. Those promises have already created a gigantic problem. The 2023-24 Budget says our unfunded actuarial accrued liabilities in 2020 were “nearly $2.4 billion”. That is more than one-and-a-half years of the annual General Fund. Every resident, adults and children, lost more than $100 benefits in Fiscal Year 2023-24 because the City of Austin spent that money fixing just 1/30th of our pension liability. Pensions are dangerous. They crippled America’s car industry. They almost ended America’s steel industry. And multiple cities have declared bankruptcy due to the burdens of pension: Detroit MI, Stockton CA, San Bernardino CA, and more. Pension programs can harm more than the City of Austin; they might harm our employees in the future who would be relying on the City of Austin for those pensions in their retirement. To ensure the City of Austin’s economic prosperity, it should not make unpredictable promises about the future. It should “pay as we go” with its employees. That means a defined contribution plan, which puts a fixed-multiple of the employee’s salary into a retirement program this fiscal year, without any promises about the future. 1 of 2 The risk from existing liabilities caused by past pension programs should be removed from the City of Austin budget. That can be done by paying a financial firm to accept the risk, in exchange for fixed future payments or a lump sum, raised with General Obligation bonds. The risk could also be removed by offering fixed or lump sum payments to holders of the pensions. Vote For: Against: Abstain: Absent: Attest: [Staff or board member can sign] 2 …
ECONOMIC PROSPERITY COMMISSION RECOMMENDATION 20240417-002C Date: April 17, 2024 Subject: City’s FY 2024 – 2025 Budget (Sales-Tax Income) Motioned By: Seconded By: Recommendation Investigate hedging sales-tax income to reduce uncertainty and increase the budget. Description of Recommendation to Council Ask the City Manager to investigate hedging as a way to reduce the uncertainty in sales-tax income. Specifically, the City Manager should ask financial institutions how much they might bid in exchange for 80% of next fiscal-year’s sales tax revenue. If City Council accepted such an offer, the City of Austin would have a more stable and predictable income, allowing us to plan better and increase the budget. Rationale: The City of Austin’s income from sales tax is large and unpredictable. The 2023-24 Budget states that sales tax was 7% of income. But it also shows that, over the last decade, its income is unpredictable: growing 25% some years and 0% in others. But most of the City of Austin’s expenses are predictable and fixed. According to staff, “70 to 80%” of the expenses are wages, which are steady expenses. With a variable income and fixed expenses, it is easy for the City of Austin to overspend and run out of money. The result would be drastically slashing programs during the middle of a fiscal year, which would be harmful to the economic prosperity of all Austinites. The City’s staff knows about this danger and warns about it in the 2023-24 Budget: “City financial staff have long advocated thoughtfulness and restraint in projecting sales tax revenues, in the knowledge that periodic economic disruptions and resulting contractions of sales tax revenue—such as the one witnessed during the COVID-19 pandemic—are inevitable.” And “… actual sales tax receipts falling short of budgeted levels can have severe repercussions with respect to maintaining a balanced General Fund budget, there are no corollary consequences should this revenue exceed projections.” The City of Austin could plan better and have a larger budget if we exchange the variable income from sales tax for a steady predictable income. That is, find a financial institution that is willing to trade: it will pay Austin a stead income in return for 1 of 2 accepting the unsteady income from sales tax. In the financial lingo, this is called “selling risk” or “hedging”. It is very common in the business world. For example, Southwest Airlines could lose a lot of money if fuel …
& A U T M H Q P R O G R A M S Austin Urban Technology Movement (AUTMHQ) is increasing diversity in tech through its workforce development tech ecosystem . Us Digital Equity Workforce Development Job Placement OUR Christian B. Darrell K. Yasenia E. During my three-month tenure at AUTMHQ, I evolved from a blind volunteer into a tech-savvy AI enthusiast. My collaboration with the supportive AUTMHQ team made my experience memorable, introducing me to the tech world and instilling a lifelong fascination with AI. I was an Austinite facing housing challenges, but I found a lifeline in AUTMHQ's digital literacy class at Operation Liberty Hill. The program gave me a laptop, hotspot, and skills to help me online so I could apply for more opportunities with the Affordable Connectivity Program, too! As a busy mom of five living near Operation Liberty Hill, I found a way to change my life in AUTMHQ's digital literacy class. The program gave me a device to support my kids’ education and gave me a passion for learning. Now, I’m excited to master Excel to manage my money and imporove my conversational English. The Problem There's a significant gap between the number of tech jobs available and the qualified individuals to fill them. The tech industry highlights: sectors. 1. Millions of unfilled tech roles across 2. Barriers for underrepresented groups to entre the tech industry, thus not meeting industry talent demand. The takeaway: There's a clear disconnect. Tech jobs are being created exponentially, but the number of talented individuals from underrepresented groups are not entering the tech field at the rate needed to meet 1. The Diversity Index Score uses the Simpson’s Diversity Index methodology, a calculation of tech occupation diversity across the 7 top level race and ethnicity groups as reported by the U.S. Bureau of Labor Statistics. demand. 2. Job postings are a measure of employer demand for tech talent during 2022. The total figure represents job postings across the 17 tech occupations used within Cyberstates. The emerging tech job posting figure uses a basket of 15 emerging job roles and skills, such as machine learning, artificial intelligence, robotics, digital business transformation, and more. Source: Lightcast Labor Market Trends www.autmhq.org Demographics Trends Across the U.S. Zippia. "25 Trending Tech Industry Statistics [2023]: Tech Industry Demographics, Worth And More" Zippia.com. Jun. 29, 2023, https://www.zippia.com/advice/tech-industry-statistics/ The Solution: Awareness-to-Employment Pipeline Digital Equity Workforce …
ECONOMIC PROSPERITY COMMISSION RECOMMENDATION 20240417-002 Luis Osta Lugo (8) Date: April 17, 2024 Subject: City’s FY 2024 – 2025 Budget (Renters) Motioned By: Michael Nahas (4) Seconded By: Recommendation The Budget of the City of Austin should respect renters as the equal of homeowners. Description of Recommendation to Council Require that the City of Austin 2024-25 Budget respect renters as "Typical" residents of Austin. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" add a line for the average tax per rental unit, which includes the property tax and all other taxes and annual fees on rental properties. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" rename the line "TOTAL YEARLY IMPACT" to "TOTAL YEARLY IMPACT (homeowner)" and add a line for "TOTAL YEARLY IMPACT (renter)", which includes the average taxes and fees paid per rental unit. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" include a calculation of "TOTAL YEARLY IMPACT (renter)" for the previous budget, Fiscal Year 2023- 24, and compute a percentage increase from Fiscal Year 2023-24 to Fiscal Year 2024-25. Require that the City of Austin 2024-25 Budget's "Taxpayer Impact Statement" use the bottom half of the page to hold a table of "TOTAL YEARLY IMPACT" for Austin residents at all income levels. Rows should be by household income for every 10th percentile, from bottom 10% to top 10%. City Staff should estimate what proportion of each income bracket are homeowners and renters and assign an average (mathematical mean) property tax weighted by that proportion, based on properties that income bracket would rent or own. City staff may have more detailed knowledge; they should investigate if residents in the bottom 10th percentile of income uses the average (mathematical mean) of the bottom 10th percentile of residential Austin Energy usage, residential Austin Water usage, etc. Rationale: The City of Austin 2023-24 Budget's “Taxpayer Impact Statement” refers to a “Typical” Resident Ratepayer” who pays property tax with a homestead exemption and, therefore, 1 of 2 must be a homeowner. The 2023-24 budget claims that this “Typical” Austin resident owns a house worth $499,524. In fact, the City of Austin actually has a majority of renters. The U.S. Census Bureau for the time period 2017-2021 reports that only 44.7% of the housing units in Austin are owner-occupied. A household owning a property worth $499,524 is likely in the top 25th percentile …
