Rebates for CPS Energy customers, a property tax rate cut, and pay bumps for city employees are all part of the proposed $3.4 billion city budget the San Antonio City Council will discuss Thursday morning.
City Manager Erik Walsh and other top city staff will present the council with their recommendations, which will serve as the rough draft of the budget council is expected to pass in mid-September. Their budget proposal also includes investments in capital projects at the airport, convention center, Alamodome, and numerous voter-approved bond projects.
Up approximately $279 million over the $3.1 billion FY 2022 adopted budget, according to rounded figures provided to media ahead of the council presentation, the proposal is broken out into three parts:
$1.5B – GENERAL FUND – Increase of roughly $140 million$641M – CAPITAL BUDGET – Increase of roughly $49 million$1.2B – RESTRICTED FUNDS – Increase of roughly $90 million
The FY 2023 budget proposal includes $156.4 million in American Rescue Plan Act, and city staff are expecting increased revenue from property tax, sales tax, CPS Energy, and other sources than was in the adopted FY 2022 budget.
CPS ENERGY REBATES
A current windfall from CPS Energy is likely to take center stage Thursday. As temperatures and energy bills soar, the utility is expected to bring in $75 million more than expected for the current fiscal year, which ends Sep. 30.
City staff are recommending about $25 million of that surplus be divvied up between the city’s aquifer protection program, closing gaps in the sidewalk system, and buying or building a warehouse to store emergency supplies.
But the lion’s share – $50 million – would go back to customers.
City officials are recommending putting $5 million of the surplus toward the utility’s assistance program for low-income customers, and $45 million to be divided between all CPS Energy customers.
The $45 million would be distributed in the form of a credit in customers’ October bills and be based on their energy usage in July. The city estimates the average residential customer would get a $31 credit.
“This is not going to wipe away anybody’s outstanding balances. It’s not going to pay anybody’s complete utility bill. It is the city, as the owner of CPS, recognizing the extraordinary position that everybody finds themselves in, and doing our part,” said Walsh.
Council members would have to vote on that proposal before September, ahead of the rest of the budget, in order for the money to make it into October bills.
At least one council member has already suggested an alternate plan. District 1 Councilman Mario Bravo sent a memo to Walsh and his colleagues requesting the $50 million currently earmarked for customers be used for converting buildings into community resiliency centers, upgrading homes’ weatherization and energy efficiency, and reducing the urban heat island effect in the city.
“We should responsibly invest this revenue in ways that prepare our community for extreme weather and protect residents from future high energy bills,” writes Bravo.
EMPLOYEE PAY BUMPS
The city currently has a 9.6% vacancy rate in its positions compared to 7.6 or 7.7% before the pandemic. At the height of the pandemic, when the city had a hiring freeze, it got up to 15%.
Officials said they conducted a market analysis of all civilian jobs in the city and a survey of city employees. As a result, staff is proposing a 5% wage bump across the board, plus an additional 2 to 7% market rate increase, depending on the job.
Out of the city’s approximately 7,000 civilian employees, Walsh said 244 would get more than a 7% market adjustment because the city’s pay was so far off for positions like plumbers, electricians, nurses, and public health outreach workers.
The minimum city wage for all employees, part-time, full-time, and seasonal would also be raised to $17.50 an hour.
“I have a son that works for the largest grocery store in town, picking up carts and bagging groceries. And he’s making more over there than a lot of employees who work in the city at that level,” Walsh said. “So we need the right size it because we’re in competition with everybody.”
PROPERTY TAX CUT
Despite the additional costs, property owners will still get tax relief.
To stay below a state-imposed revenue cap, the city also plans to lower the property tax rate by 1.67 cents per $100 of value. The tax rate cut is on top of the increased homestead exemption and other tax breaks for homeowners the city council passed in June.
It’s the eighth property tax rate reduction in 30 years, according to city staff.
The proposed budget includes $160 million worth of spending out of the city’s record $1.2 billion bond, which voters approved in May.
The combined public safety budgets of fire and police would be 60.7% of the general fund, well below the city’s typical guideline of 66%.
Although Walsh said the San Antonio Police Department budget – the largest of all city departments – is growing, the general fund at large is growing at a faster pace.
Police officer and firefighter wages are determined by their union contracts and are not part of the city’s plans to increase pay for civilian employees.
The budget proposal includes 78 new police officer positions, 50 of which are contingent upon federal grant funding and would be used to address high crime areas. Another 28 positions are for supervisory roles at the North St. Mary’s Street substation, scheduled to open in early 2024.
The fire department would have 21 new uniform positions, split between a new ladder truck at Fire Station 45 on the far West Side and a new medical first responder unit at Fire Station 24 on Austin Highway.
$116M for streets, $21M for sidewalks, and $1M for bike facilities$19.6M in new parks and recreation improvements$136M for affordable housing to create 2,500 new housing units$160M of spending out of the city’s record $1.2 billion bond$35.3M for improvements at the Henry B. Gonzalez Convention Center and the Alamodome.$3.2M for renovations and improvements at eight libraries30 new positions in the airport and support departments ahead of the Terminal Redevelopment Program$1.2M for ACS Emergency Overflow and transport kennels$1.3M in new funding for homeless outreach and hotline$1.2M in new funding for six months of the lease and operations of the homeless hotelNo fee increase for solid waste service, though one is expected in FY 2024
City council will meet at 9 a.m. Thursday, Aug. 11 for the initial budget presentation.
The city is planning a series of special council work sessions between Aug. 16 and Sep. 14. It will also be soliciting community input.
A final vote on the budget is expected Sept. 15.
The city’s full budget calendar can be found HERE.