Mayor Adler’s State of the City (includes full text)

Thank you, President Fenves. I am grateful for your leadership at the University

of Texas and for our growing working relationship and even friendship.

And with the conversations that need to be happening between UT and the City

on issues like the development of the Innovation Zone around our new medical school,

a replacement arena for the Drum, the future of the MUNY golf course site, as well as

expanding opportunities for closer connection between Austin and the incredible

intellectual resources of your faculty, there’s a lot for you and me — and the community

— to be talking about.

And by the way, I’m grateful to you for skipping the West Virginia game tonight.

You get pretty good seats, so I know what kind of sacrifice this is.

President Fenves recounted the story of the Austin Dam. I love that story,

because as the Mayor of Austin I’m often asked what the secret sauce is that makes

us a magical city and a center for innovation and creativity. Most every other city

wishes it could replicate our success. When I attended the climate change talks in

Paris, the 100 Resilient Cities meeting in London, the Almedalen Political Rhetoric

Festival in Norway, and the traffic control center in Dublin, Ireland, and people found

out that I was the Mayor they’d get a big smile on their face and tell me how much they

love Austin.

Cities from all over our country and the rest of the world send entire delegations

here to troop through our offices in hopes of finding the magic formula written on a

white board somewhere. These leaders from other cities ask me what makes Austin

so special. I tell them about Barton Springs and how our commitment to our

environment became perhaps our most important asset. I tell them about Willie Nelson

and our live music, how by embracing diverse cultures we established an inclusive

community where creativity thrives, about a community where it is okay to fail so long

as you learn and grow. And I tell them about Michael Dell reinventing the assembly line

in his dorm room and how coming up with radical new ideas here doesn’t make you an

outcast — it can make you rich and famous.

And then I tell them about the Austin Dam, and how when the dam burst we were

set on a path that turned us into a boomtown of the Information Age. The lesson, I tell

these visitors from other cities is clear. They need to leave Austin, return to their

hometowns, and destroy all their dams and bridges, too.

But some cities just aren’t willing to do the Big Things.

You know, back when the Austin Dam burst, only 22,000 people lived here. The

flood that took down that dam may have receded, but the people kept coming. By the

end of the 20th Century more than 656,000 lived here, and still they came. So great is

the flow of people into Austin that we are, according to one headline, “the Boomingest

Big City of All.” Last summer, the population of our five-county metro area went over 2

million. And lest anyone thinks that not building infrastructure is still a viable option to

keep people from moving here, the Urban Institute predicts that by 2030 — when

today’s pre-schooler is a freshman at UT — Austin’s metro population may well top 3

million.

It’s easy to look downstream and see the outlines of a future that we could not

have contemplated even a few years ago. Forbes Magazine just put Austin in first

place on its list of “Cities of the Future” because of what it called “the nation’s

superlative economy” and the fact that so many people just want to live here. Forbes

cited a fact that they found eye-popping but to us only confirms what we see around

us: Our population grew 13.2 percent between 2010 and 2014, more than any other

city they studied.

People keep moving here because, according to Paper City Magazine, “Austin’s

just as cool as it thinks it is.”

And it’ll stay that way — for a while anyway — even by doing just little stuff. Our

community, cultural, environmental, business, and elected leaders have laid such a

strong foundation that it is entirely possible that even if we spent some significant part

of the next couple years having picnics in the sunshine on the riverbank, the state of

our city will remain the envy of the world.

The very success that comes with such an economy is also exacerbating

challenges because all too many in our community are struggling and not sharing in

this good fortune, but, by many traditional measures of success, Austin is strong.

We are working.

Austin is the 6th-best city to look for a job. In fact, our unemployment rate in

December was 3.1 percent. The last time it was that low, Bill Clinton was still President

We are prosperous.

For the second year in a row, the Urban Land Institute survey named Austin the

second-best real estate market in the country.

We are safe.

When contrasting our crime rate to other big cities in Texas, there was such a

stark difference that Texas Monthly called us “basically a fairy tale land populated by

elves and hobbits.”

We are innovative.

We have 7 percent of the state’s population but 30 percent of the new patents.

Austin ranks 8th in the country in venture capital investments. A year ago Forbes put us

on a list of five cities poised to be the next Silicon Valley Tech Hub. Whether it’s

Google’s driver-less cars, the Pecan Street Project implementing energy-use

technology out at Mueller, or our community’s seemingly limitless innovations in the

field of breakfast tacos, Austin has become a city where good ideas become real.

We are green.

The American Council for an Efficient Economy ranked Austin as the 9th-most

energy efficient city in the country. About 10 percent of all wind power in Texas is

generated for Austin Energy. And because of decisions this Council made, our utility

will soon become one of the biggest users of solar energy in Texas and in the world.

We’re also a pretty good-looking bunch.

According to no less than CNN, Austin is home to America’s 7th-most attractive

residents, a ranking that, given this audience as a representative sample, is far too low.

I mean, look at how great you look! Of course, we would have ranked higher, but CNN

marked us down – I kid you not — because so many people here dress like hipsters.

Now, I personally don’t look great in skinny jeans, and I think maybe we didn’t rank

higher because your Mayor was getting a little too plump.

So, Diane has me on a diet now.

But here’s the thing that I want to make very clear tonight: The City would

probably get along pretty well, at least for some period of time, without a City Council,

or a Mayor for that matter. This river has been flowing for a long time before we

showed up, and it’s going to keep flowing whether we show up to work tomorrow or

not. People will keep moving here for great jobs, abundant sunshine and, lest I need to

mention it again, because of how incredibly good-looking you all are.

This is the good fortune and daunting challenge of being Mayor of Austin:

Barring an infestation of killer bees, a zombie apocalypse or, God forbid, a recession

that hits Austin hard, this year when I wake up each morning, Austin will be America’s

favorite boomtown whether I go into work or not.

But I do not believe that I was elected to be a caretaker mayor. And I don’t intend

to spend my time skipping stones across the river’s surface, having fun but not much

effect on the river’s course. Our long-term challenges are too great and they require

long-term strategic thinking and action.

Do not mistake me for saying that timing the traffic lights, building sidewalks, and

setting the tax rate are not necessary. They are good and proper functions of a local

government. I’m just saying that these things would probably happen no matter who

was in my job.

And, in fact, we have already done a lot on Council, and if you want to see a list

of our accomplishments, I invite you to visit our new website at mayoradler.com for a

list of the 50 items that come first to my mind.

But by way of example, there’s one thing on this list of accomplishments that I

want to bring up, but not in the way you’d probably expect. I’m going to do something

I’m probably not supposed to. I’m going to tell you that one of our big achievements

from last year – helping to cut city property tax bills, saving the average homeowner

$14 a year – was a great thing to do, but really did not mean as much as some might

think.

Sure, it was the first time in anyone’s memory that an Austin City Council lowered

not only city property tax rates but also the average tax bill, which is great. This act

began to bend the affordability cost curve. In that respect, it had great meaning. And

it’s true that this is the only tool presently available for the City to address the equitable

balance between commercial versus residential property taxes.

But is this a fair measure of the job we are doing on affordability?

Normally, you can’t get a politician to shut up about cutting taxes, but I haven’t

been an elected official for very long, so imagine with me for a second: It’s 20 years

from now, and we’re at the unveiling of the Steve Adler Plaque to

Last-Minute Amendments and Innovative Abstractions. It’s a perfect day, the blue

sky open to all the ambition in the world. And with an approving smile, a prominent

citizen is recounting my tenure as Mayor:

“Steve Adler” – she says: “He saved me $14.”

Wow. We have to do more than that.

I believe our goal is to do big things, to do that which would not occur if we did

not do them. And if you ask Austinites, I believe they’d say the same thing.

What good does it do to create all these jobs if you can’t get to the one you have

because you’re stuck in traffic?

How does Austin’s prosperity benefit us all if our real estate prices are attractive

to out-of-town investors but increasingly unaffordable to the people who already live

here?

The ETC Institute just released a survey about how Austinites perceive the job

we’re doing at City Hall. The results should not shock you in the slightest.

People like Austin as a place to live, work, and raise their children. No surprise

there.

On the other side of the ledger, fewer than one in four Austinites thinks we’re

doing a good job of planning for growth, and frankly I don’t know why that number is so

high.

We have an affordability crisis. The Brookings Institute says we have the 2ndfastest

growing suburban poverty rate in the country. We live in the most economically

segregated metropolitan area in the country. A family making the median income can

now no longer qualify for a loan to buy a median-priced home here.

If you’re just treading water, you’re going to get washed away. This is the result

of years of not preparing for growth, and it’s unacceptable. The price of growth cannot

be that the cost of living is growing so much that people can’t afford to live in Austin.

We’ll never go back to the days when Austin could accurately be described as a

retirement community for twenty-somethings. But it should not be a radical notion to

say that Austinites should be able to afford to live in Austin. In fact, this should be our

policy.

But here is an important question. How do we get there? Should our ultimate

goal and measure for success be that we save the average homeowner $14 a year?

Or even $50? It may be a part of making our city more affordable, but does it matter so

much that it should be the ultimate measure of our success?

What if we slashed spending on fire, police, and social services enough to cut

city property taxes in half? Since the City portion of your total tax bill is only 20%,

would that make living here affordable?

We talk a lot about affordability, but we don’t know exactly and we certainly don’t

agree on what that means. That’s why tonight I announcing this year we will have an

“Affordability Audit” of city government. Your City Council has appropriated the money,

and in the next few weeks we will order the City Auditor to undertake such a

government system-wide audit. When it comes to affordability, we need to get smarter,

more deliberate, and more focused. This will be a first-ever audit of its kind in Austin.

We desperately need it, and we’re going to do it. It should tell us what your government

is doing that makes this City more affordable? What are we doing that makes it less

affordable? What’s working and what is not?

Inextricably linked to affordability is the second-biggest expense for most

families, and that’s transportation. And if time is money, then we’re spending an awful

lot of money stuck in traffic every year. The news late last year that I-35 had become

the most congested road in Texas surprised no one living here. Traffic congestion on I-

35 has gotten so bad, people in Houston feel sorry for us.

Our mobility problems are bigger than I-35, of course. We all relate to it in our

own way, whether it’s having to sit in rush hour traffic every day to get home from work,

to live in a neighborhood without sidewalks, riding a bike in traffic, to stewing in

resentment as you sit at an intersection as the light turns green. And then red. And

then green. And then, if you’re lucky, you get to the next intersection where you watch

the light turn green — but you don’t go.

That ETC survey that told us Austinites think we’re doing a bad job planning for

growth also found that fewer one in five of us — 17% — is satisfied with traffic flow on

major streets. Really, people in Austin are so fed up with traffic that almost half of us

are dissatisfied with the enforcement of traffic laws, partly because we now see how

“blocking the box” at intersections slows everyone else down, and also because Austin

had 102 traffic fatalities in 2015, well over the previous record of 81. Our city is so

congested and dangerous that we wish the police wrote more tickets. That’s how bad

traffic is.

For all the real good news about Austin, we have big problems. The river has

risen way past flood stage.

We have the problems of a great town that is suddenly becoming a great city.

So we have to learn to do big things. The scale of what faces us as a city is

forcing us to adjust the scale of how we address our problems. For a long time, we

have acted as if incremental fixes were enough. Growth brought money and jobs and

acclaim. It wasn’t too broke, so we never fixed it. Doing just OK was good enough for

government.

But is your city government doing anything on affordability? Every budget year,

the scorecard we use is the average property tax bill and utility bill. That’s easy to

understand, but it tells us so little about affordability in Austin. Yes, last year, we cut

property taxes by $14 and even lowered the average residential Austin Energy bill by

$3.33 a month. But none of that is as important as the impact on affordability caused

by the combined impact of housing, transportation, healthcare, incomes, and even

child-care costs.

The danger of using the wrong metric to measure whether your government is

helping with affordability is not that we’re just measuring the wrong thing – it’s that

measuring the wrong thing means we’re not working on what will really have an impact

on affordability. This has to change.

So now here we are, and the water is at our door. We are the city of the future,

but what future will it be? If we do not do big things now, we’ll end up with the housing

costs of San Francisco and the traffic congestion of Los Angeles. We’ll be immobilized,

crippled by growth, isolated from each other, stuck in our neighborhoods.

It doesn’t have to be this way. There is no law of cities that says as Austin grows

we will become unaffordable and immobile. Our future is still in our hands. Austin is still

at a place where we can do something about it.

But we need to do big things. If Austin is going to become a better version of

itself instead of a cautionary tale, we need to learn to scale our thinking. Our problems

are out of proportion to the old way of doing things. Learning to scale our solutions is

as much of a challenge as the intertwined crises of affordability and mobility, but this is

where the good news comes in.

Because inherent in our challenges is the promise of transformative change.

Great cities do big things not because they are great. Cities become great because

they do big things.

And in these rapids, the old paradigms of political leadership do not serve us

well. In Austin, we are often too quick to go to extremes. We need to learn that not

everything is a zero-sum game. By now you know that I do not believe our city or our

Council are well served by leadership that stakes out firm positions on ideological

grounds and seeks dominance over its opposite ideological pole, resulting in timeconsuming

and expensive conflict.

I believe that the best way forward can most often be found by taking the best of

both positions and creating consensus around a new position. This starts by showing

respect to both sides and seeing the validity in how they see themselves. Too often

this is called compromise, but finding the right answer is not the same as finding a

compromise. I don’t believe taking the best of both worlds is a compromise any more

than water is a compromise between two hydrogen atoms and one oxygen atom.

We can do big things if we as a City Council take a lesson from the startup

culture and adopt an iterative leadership style. That means we try things and we learn.

Then we try better things and we get better. It’s the culture and lesson of our tech

startup ecosystem.

I believe that to best address the new challenges of mobility and affordability, we

must become comfortable with trying new things and adjusting when we receive new

information. I want us to creatively and innovatively deal with the problems that fastgrowing

cities are facing even if other cities have never figured out the answers.

This is how we learn and get better. This is how we do big things.

It has been suggested that this is not the way government works, that

government cannot innovate. This idea that government cannot innovate would have

come to a great shock to Alan Turing, who invented computers while working for the

British military. A couple of decades later, these computers were connected in a

government program called ARPANET. We now call it the Internet.

We are only as small as we see ourselves, and the scale of our achievements is

limited only by our perspective. To paraphrase a government employee proposing a

rather innovative government program, we choose to do big things at this point in our

city’s history not because they are easy but because they are hard.

Inherent in seeking solutions that are big enough for our problems is increased

risk. Put another way, some rockets are going to blow up on the launching pad. We

cannot be afraid to fail so long as we learn quickly. In our first year, while we have

pursued big things, we have certainly learned lessons.

When we picked up the Housing Heroes challenge to find permanent housing for

our homeless veterans, first accepted by my predecessor Mayor Leffingwell, we didn’t

know how we were going to do it. We did know what had been tried wasn’t working

fast enough. So we had to resort to the only

thing that would work, and that’s what

hadn’t been done before. And yes, there were false starts, mid-stream adjustments,

and missed deadlines, to be sure.

But we learned that by bringing the Austin Apartment Association, the Real

Estate Council of Austin, the Austin Board of Realtors to the table with the Ending

Community Homelessness Coalition, or ECHO, we could, for the first time, partner the

people who had the homes with the people who were trying to find the homes. Add in

the efforts of the Greater Chamber of Commerce and the fortuitous fact that so many

people were happy to contribute to help homeless veterans, and we hit upon the

innovation – the Risk Fund – that created a solution big enough to address the

problem.

I am proud that we were able to help these community heroes find permanent

housing for homeless veterans. We erased the backlog of veterans waiting for homes,

and now ECHO is able to immediately help homeless veterans as soon as they

encounter them. A solution to scale can bring a problem into focus and then make it

small enough to manage, even one that was once thought hopeless.

And as much as the Pilot Knob PUD represents an achievement in creating

opportunities for affordable housing, it also represents an incredible teaching moment

for my administration. No one had figured out how to achieve permanent affordable

housing at this scale, and we found a way within existing city policy. The prices were in

line with other land trust deals the city had done. It created future options for the

Council, not obligations.

To be clear about Pilot Knob – every penny the developer was originally going to

pay to the City the developer continues to pay to the City. The recent work of Council

did not change by one dime the financial deal for the developer. Rather, we asked the

developer to work with the City to find a mechanism the City could use to provide

permanent affordability, and the developer worked with us to find a solution at no

benefit to himself.

It’s safe to say we could have done a better job of anticipating the reaction of

many in our community. One of the big lessons we have drawn from this is that it

doesn’t matter how good an idea is if we don’t do a good job of explaining it and

creating consensus.

Big changes can cause so much discomfort that maybe they should come with a

disclaimer of possible side effects. It is not unusual for the city to do SMART Housing

projects without ever causing a newspaper to spill ink. I suspect the confusion from our

lack of communication compounded the fear caused by the numbers being bandied

about. Big change causes discomfort. Our challenges may inspire us to do big things,

but our emotions are regular human size.

If the way we used Pilot Knob to give the City the choice, but not the obligation,

to invest more in permanent affordable housing in any given year was not the best one

to use or if it doesn’t work, then we need to adjust it. But Austin needs to build a

firebreak that will stop the gentrification or forced displacement of our neighbors in a

way that will actually achieve opportunities for permanent affordability or we will lose

people and communities all together. Pilot Knob – by creating permanent affordability –

is such a firebreak.

Over the last year I have also learned that, as a Council, we must be diligent

about guarding our time and purposeful in how we spend it. As clear as our priorities

have been, it is not always so clear how to prioritize them. Nowhere has this been

more evident than in our fight over ridesharing companies.

I am proud that a team of community volunteers, city staff, and council members

collaborated to create the first cross-platform safety badge in the sharing economy,

one demonstration project of the concept that we call “Thumb’s Up!”

I am proud that we got Uber and Lyft to show unprecedented flexibility and to

agree, for what I believe is the first time, to offer their passengers a real and physical

choice between fingerprinted drivers and non-fingerprinted drivers.

But I am not proud of the hours and hours of expended time that could have

been spent looking for innovative solutions to mobility and affordability. And now we

are going to spend more time, not to mention a lot of money, having an election that I

fear will not ultimately achieve our goal of people in Austin being able to have a

meaningful choice of a fingerprinted TNC driver regardless of the vote’s outcome.

I know that we will always have events that happen that require the Council’s

immediate attention. The recent death of David Joseph is one such event. Regardless

of what happens next, the loss of a 17-year-old boy is terrible. There should be and will

be a quick and thorough investigation of this tragedy.

But I, as Mayor, together with my colleagues on the Council, need to learn from

what we’ve experienced. We — the Council — are in this together. And I think, together,

we have done good work:

Don Zimmerman is a constant voice about the impacts of government spending

and joining with me to find options for the biomass energy plant.

Ora Houston has been a leader on the Spirit of East Austin Initiative and was

instrumental in initiating body cameras for public safety officers.

Kathie Tovo, who brings us institutional knowledge, has brought us closer to a

sobriety center and helps protect much of what we treasure about the city we love.

Sherri Gallo has shown us all what it means to reach out to our districts and

helped secure the senior homestead exemption.

Ellen Troxclair is a conservative voice on a generally liberal Council who, at her

best, is able to find the common ground to bridge differences.

Delia Garza does great work on affordable housing, health and social services,

and renewable energy.

Pio Renteria is my partner on housing initiatives including combating

gentrification in Homestead Preservation Districts and in helping to get the affordable

housing strike fund off the ground.

Greg Casar has worked to reform development rules to promote housing

integration, and identified affordable housing funding to fight back against economic

segregation and gentrification.

Leslie Pool, who traveled with me to Paris to sign the Under MOU 2 climate

treaty with local governments all over the world, led us with good-government

resolutions, including lobby reform and electronic campaign filings.

And Ann Kitchen. Only a few people will truly understand this, but there’s no one

I enjoy disagreeing with more. The work Ann is doing on the Mobility Committee will

serve this City for generations to come. Ann is an asset to this City, and I am grateful

for her partnership.

Speaking of partners, and there’s no good place in a speech to say perhaps the

most important thing, I want to thank Diane Land, my first lady, my partner in crime, my

Valentine. I am so damn proud of you. This is a hard gig for you, whether it’s putting

your career to the side, finding ways to continue to lead on community goals, or

spending a lot less time with me. Remember our trip to Dublin where we spent the day

at their traffic control center? Do I know how to show a girl a good time or what? A

blessing of this job is that more people in Austin and around the world are getting to

know the woman I love. I am well aware of the sacrifices you are making for me and for

your city, and I am determined to make this time worth your sacrifice.

And to the City Manager, Marc Ott, I apologize for all the eggs the Council and I

have broken and the hundreds more we will continue to break. We continue to tackle

monumental challenges together, whether it’s putting together a City budget of which

we are all so very proud or partnering with me on the Spirit of East Austin Initiative,

(which I’ll talk about later). And the measures of this City’s success and the supporting

foundation that I addressed at the beginning of this speech reflect your work and the

work of your team.

Ultimately, we will be evaluated and judged – you, me, and the Council – on how

we each do to achieve greater affordability and increased mobility. Those, I think, are

the significant yardsticks for each of us individually and collectively. I believe you and I

can do great things together.

I want to thank the 13,000 city employees who get up every day in the selfless

pursuit of public service. These folks are among the best and brightest in our

community, and their commitment to the general welfare is a gift to us all.

And finally, I want to thank my appointees to boards and commissions. You are

my representatives in the community. Your ability to extend the reach of our office is

invaluable to me, and I am grateful for all you do.

And I remain honored to work with this first 10-1 Council. With hiccups here and

there, the 10-1 system is working extremely well. We have not devolved into ward

politics. We support one another even when we disagree. We’re doing the right thing

with the committee system, and by that I mean we’ve tried it and are adjusting it.

This adjustment to the committee system is an opportunity for us: We must find

space to be more deliberative with each other, to think through issues as a Council and

find our center when there’s less pressure to decide. If we can create this space for

ourselves, we can finally lift Austin out of the either/or politics of the past and move

toward a more iterative leadership model that allows us to try new things, to adjust

when we learn new information, and to try find new ways forward.

It is my hope that in doing so that we can be more deliberative about how we use

our time. We spend a lot of time on three-letter emergencies — STRs, TNCs, ADUs —

that seem to catch us flat-footed. These are important issues that might be best sorted

in a calm fashion at successive work sessions. We can and we must, together, work

through these issues in a way that does not eat up so much of our time.

We can’t pretend that these are aberrations. There will always be issues

demanding time. There will be flash floods and wildfires. There will always be pockets

of super-heated interest. But the greater community needs us to spend time on doing

big things, and it’s hard to imagine the big ideas that will get us there if we spend so

much of our time on the emergency d’jour.

We only have so much time before either time or circumstance takes us out of

our chairs. This is the only time we will have to do this work to make Austin more

mobile and more affordable. And when we stand for judgment, and our jurors are

sitting in traffic and worrying about how they can afford to keep living in Austin, do you

really want them to think, “At least they saved me $14?” We must do more.

We must do big things on affordability.

Here is our challenge: We have more than 21,000 subsidized housing units

locally, and we also have more than 65,000 unsubsidized units that rent at below

market levels. We are losing those units – to redevelopment and demolition – every

day. To call these “housing units” ignores that these are homes to about 200,000 of our

fellow Austinites. And if we do not aggressively preserve our existing affordable

housing stock while building new affordable housing, then we are effectively saying

goodbye to a population the size of Amarillo.

These people are a part of who we are, and we cannot lose them without losing

something we value about this city. And if we do nothing, the river will wash them away

downstream. But if we harness growth, we can use it to power the solution.

Here’s what we’re doing:

Since taking office in January, this new Council has approved an estimated 5,342

affordable housing units for construction that are now in the pipeline.

This Council has created also the first Homeland Preservation Districts in the

entire state. Now, growth in these rapidly changing areas will fund efforts to mitigate

the symptoms of gentrification. In this way, growth will pay to keep Austin affordable for

those who already live here.

And as the recent groundbreaking for The Independent – which you probably

know as the Jenga Tower – reminded us, giant residential towers are not making

Austin more unaffordable. In fact, because of a change this Council passed, downtown

towers will pour tens of millions of dollars into the city’s affordable housing trust fund.

Over the next 10 years, it is projected that this Council will have put a combined

$68.2 million dollars into the Housing Trust Fund and $5.6 million into the Homestead

Preservation District, not including Pilot Knob. Making growth pay for the burdens it

creates is possible, it’s happening, and it’s working.

This is all good news.

But this is also nothing more than a good start.

The City of Austin has the capacity to bend the affordability cost curve, but it

doesn’t have the capacity to achieve the scale needed to disrupt it. We’re going to

need to harness the power of the private market to achieve the scale we need.

Last year I called for a strike fund to do just that, and tonight I’m pleased to let

you know that we are making great and real progress. We have assembled private,

public and nonprofit sector professionals who are in the final stages of creating a

funding mechanism to buy and preserve our affordable housing stock. We studied

models from across the country. We studied local demographic and market data. We

are now working to “Austinize” this idea.

By the end of 2016, we will officially launch the Austin Affordable Community

Trust. This strike fund will leverage private investment dollars, and we intend to also

include opportunities for Austin residents to participate through crowdfunding and

minibonds(I still want to see something like an “Austin Bond”), to secure affordability

now and into the future. This will, quite simply, give affordability a profit motive on a

scale that no other city has imagined.

The good news is that we are tackling this problem at an earlier point in time than

other large cities. Today, the median home price in Austin is about $322,500.

Meanwhile, the median home price in San Francisco is about $1 million. If this works,

we will not turn into another San Francisco. The Austin Affordable Community Trust, as

well as everything we’re doing at the city with the affordable housing trust fund and

homestead preservation districts, will help us become the Austin that we imagine by

remaining an Austin that we recognize.

But using growth to fund affordable housing is only part of the solution.

Affordability is something we all feel, albeit differently, and one thing that we as a city

can do to touch the most people to lower your property taxes in a way that makes a

real difference to you. We have begun to do this by increasing the senior and disabled

property tax exemption, saving those taxpayers a total of $1.6 million.

And we created, for the first time, a meaningful general homestead exemption for

city taxpayers of 6 percent, saving Austin homeowners a total of $3.5 million. I want to

increase the city homestead exemption this year with a goal of reaching the 20-percent

threshold in 2018.

But the City’s portion of the overall property tax bill is only a small part of your tax

bill. If we are going to do big things for you, we need to think creatively and

innovatively. And I’m pleased to tell you tonight that we’ve recently taken steps to do

this.

For too long, Austin has suffered from a broken school finance system. Because

of this, AISD last year sent $270 million to other school districts, which works out to

about $1,000 for every homeowner in Austin.

So when AISD taxes you a dollar on your tax bill, a big chunk of it leaves and

isn’t available to be spent here for services. But if the City taxed you for that same

dollar, all your money does stay here. Austin taxpayers could save money or get more

for the taxes we pay by having the city and the school district engage in a “tax swap.”

What if the city paid from some small part of the social services now being paid for by

the district? If the City were to raise its taxes only to the extent necessary to pay for

something that AISD already does but which the City takes over, AISD could lower

their taxes by even more and our community would get the same value. Last week the

Council asked the City Manager to explore this option to see if we can get it done.

This, alone, could result in a difference on your tax bill that you’d actually notice. (And

we’d make it equitable for taxpayers and students in other school districts.)

We must do big things in Austin’s Eastern Crescent .

I want us to focus on this year on the Spirit of East Austin Initiative, a strategic

partnership between communities, my office, the Council, and the City Manager. The

Spirit of East Austin seeks to combat the effects of historical and intentional inequitable

policies and practices, as well as the results of benign neglect.

Inherent in addressing inequities is the promise of transformative change. We will

never reach our full greatness if we don’t face east. Just as the sun rises in the east, so

does the future of our city.

In the last half-year, the Mayor’s office and City staff, along with community

leaders, have met with community groups to see what they want. Past Mayors and

Councils have tried top-down efforts. We want this to be a ground-up, communitydriven

initiative in which we at City Hall are not the generators of change but the

accelerators, removing barriers to success and connecting the projects people want

with the people who can make them happen.

The projects being discussed include affordable housing, anti-displacement

policies, and targeted workforce training. There are mobility projects driven by local

needs, infrastructure projects lead by area residents and businesses, and site-based

education and STEM training tied to living-wage paying jobs.

We must press forward faster, taking our best assets and leveraging them to

bring unprecedented focus, energy, investment and opportunity to East Austin.

As we Face East, we do not excuse or dismiss the parts of our past that are, at

best, ugly and unjust. Rather, we can use this history as fuel for the kind of

determination to shape a more equitable and prosperous future in our City’s East

Austin. Just because we were not the ones who originally did wrong does not absolve

us of responsibility now for doing what is right.

Affordability is not the only lens through which we need to analyze our actions at

City Hall, which is why we are creating an Office of Equity at the City of Austin. Your

Council put funding for this in the current budget, and soon the Manager has indicated

you’ll see a public process to hire the first Director of Equity at City Hall. For too long,

this city has not served everyone who lives here or taken into account the long-term

effects of what we do. Having an Office of Equity will help us change this by making

equity a part of everything we are doing.

We must think and act big on mobility.

This must be the year of mobility; it is time, Austin. We have to go to work to help

you get to work.

Your Council has now launched a three-month community conversation to set

priorities on what mobility projects we want and need to do next and then to decide

how we’re going to pay for them. We have to move past planning and talking and do

big things.

This means actually taking the corridor plans off the shelf and doing the work on

Lamar, Burnet Rd., Airport, MLK and Riverside. It means taking concrete steps to get

traffic moving on Loop 360 and RR 620. It means creating more transit lanes so that

buses can travel to and from Park N’ Rides located at the perimeter of congestion and

travel at no less than 45 mph, passing cars caught in rush-hour traffic jams. We need

to work with our mobility partners to build out a network of express lanes on 183-North,

MoPac North and South, and IH35, connecting Park & Ride facilities to Austin’s

employment centers. Even those of us that don’t want to get out of our cars want those

around us to do so; some folks will get out of their cars to get into those faster moving

buses.

The Council has wisely acted to direct the City Manager to identify mobility

projects that we could consider bringing to the voters in a bond election as early as this

fall.

Importantly, we must also turn to the highway that has divided our community for

so long but that now unites us in frustration: I-35. The road we all avoid is the one we

must now face. It’s time, Austin, to finally do something about I-35 and help fix the

most-congested road in Texas.

We are getting into position for a win. This began five years ago in 2011 when

the legislature passed Budget Rider 42, appropriating $300 million to look at relieving

congestion around Texas. Our very own mobility champion, Senator Kirk Watson, set

up a local community stakeholder group and has shepherded the process. He brought

in the Texas Transportation Institute at Texas A&M and, working with TxDOT and other

transportation experts and advocates, created a focus on the most congested roads in

the region, I-35 being the biggest offender. The City of Austin added some money and

expertise of our own to help with the process of looking at I-35.

And when it was far enough along, that work transitioned into an additional, more

specific and facilitated focus on I-35 as it runs through downtown.

From the start, it was detailed, smart work, led by experts on how to improve our

situation. And to have us ready to get to work on projects, instead of just talking about

them.

I have never seen a TxDOT community and public engagement process that was

as robust as the one they have taken over the last few years. TxDOT did a great job

focusing attention, energy and expertise on I-35 in this region and, in particular, our

downtown.

This effort has put us in a great position to do big things on I-35. It resulted in a

vision for I-35 that runs from SH 45 in the north to SH 45 to the south. And this work

should include lowering the I-35 mainlanes through downtown to alleviate street level

congestion and adding capacity with managed lanes to help alleviate I-35 congestion.

This would also allow us to put a cap on top of I-35 to help to heal a physical wound

that has too long cut our city in half.

The process has been responsive to community input. My vision for this project

includes cooperation with our regional partners, CAMPO and the CTRMA to draw

down money from the state and federal government to transform I-35.

Governor Abbott’s important focus on congestion in our State took form just days

ago in an announcement by TxDOT Commissioner Bruce Bugg and Chairman Tryon

Lewis that Austin should receive $159M to improve key intersections on I-35 when the

final vote is taken this month. This important funding goes into some of those

improvement projects identified through the process envisioned by Rider 42, and the

deliberate, good work that’s been ongoing since that time. This is cause for great

celebration, and our City is thankful for this attention and support.

Austin needs more mobility choices to encourage those that will to get out of their

cars. We need better transit, bike and pedestrian options.

And at some point in our future, that includes significant mass transit options

such as urban rail or other innovative mobility options where people move above our

streets. I cannot imagine the Austin metropolitan area, 25 or 30 years from now with 4

million people, not having such infrastructure.

Last month, Capital Metro approved a new study of transportation in our urban

core dubbed the Central Corridor Comprehensive Transit Analysis. This 30-month

analysis is the next step in improving downtown transit service, and finding solutions

for how we can connect more parts of our overall community to each other with real

transit options. To get this done, we have to do it right, and right now that means

beginning with seriousness and deliberation and not a panicked haste towards our

goals.

We must do big things to develop a world-class workforce.

We’ve got unfilled jobs. We’ve got people looking for work. They don’t match up.

We just need to get the people ready for the available jobs. Until now, that hasn’t been

done at a scale necessary to move the needle on our tragic economic segregation. But

starting now, it needs to be.

Here are the facts: Two-thirds of Central Texas high school graduates who go

onto higher education don’t complete a degree or certificate. This is partly because the

educational pipeline is not innovating along with growth industries. Employers who

want to create an inclusive workforce are facing tough sledding, forcing them to look

outside our community for job-ready applicants.

This is the flip side of the affordability challenge. There are two ways to make

things more affordable. Yes, you can try to make things cost less – but you can also

help people earn more so they have more to spend. As much as we need to bend the

cost curve on housing prices and property taxes, we need to address the jobs and

income side of the equation as well.

We need the city, county, Chambers of Commerce, Austin Community College,

Workforce Solutions and other key stakeholders to work together to develop a worldclass

workforce system that trains a world-class workforce.

Here is the first step: County Judge Sarah Eckhardt and I have just

commissioned the region’s workforce development community to come back to us with

a master plan that allow us to plan for the job training in the same way we do for capital

infrastructure – strategically, methodically, and with an intent not to put a report on a

shelf but a plan into action. This will be the first-ever coordinated strategic plan

between the City and the County on workforce development. It will need to reach

consensus on the specific workforce challenges we’ll go after, and then set specific

goals and identify the exact metrics we will target.

With this master plan, we will help build the bridge over this raging river to cross

the economic opportunity divide. Our goal is not modest. We intend to create the best,

most-effective workforce development and job-training ecosystem in the country. By

training thousands more of our neighbors to fill the good jobs being created in our City

that we read about every day, we will move the needle on income inequality.

This is another case in which our challenge itself contains within it the kernel of

opportunity to address it. The biggest gaps on job readiness are where our biggest

opportunities are found: in tech and healthcare jobs. We need to focus job training

efforts and that means not trying to be all things to all people. This may require us to

make tough choices and to say no to some good ideas and programs that don’t fit in

the master plan. But this is the right thing to do to make progress where we need it

most.

We are also working toward a new Economic Incentive policy at the city. Our

Economic Development Department is focusing on creating opportunities to train local

talent for local jobs. In the future, the best way for an interested company to seek

financial help or even incentives from the City should be to create or grow jobs in town,

jobs we want and lack, for people who live here and are looking for opportunity.

We must do big things on permitting.

Fixing our city’s broken permitting process remains a high priority of my

administration. The complexity and delays of the development and permitting process

are not just frustrating, they have a real impact on affordability. Small business owners

are telling me they will not try again to expand their operations in our city – even

though their customers would like them to, because of the burdensome process and

expense.

This past year, the Zucker Report commissioned by the City Manager described

in painstaking detail the enormity of the challenge. But if the Zucker Report of the

Planning and Development Review Department was a wake-up call, then you’re a real

deep sleeper. The problems in permitting have been with us for a while, and there are

no excuses not to fix them.

Our office has worked with the Manger and his staff, as well as stakeholders, to

articulate this question: If the permitting program were successfully fixed, how would

we know? The answers to that question are the performance metrics to which the

public will be able to hold the Manager and this Council accountable.

The “Roadmap to Success” plan put forward by the Development Services

Department should make measurable improvements in permitting, some already taking

place, from making it possible for you to make a payment or file an application or

submit a plan online, to such advancements as releasing the cell phone numbers for

building inspectors to increase accessibility.

But the key to fixing permitting is the performance metrics.

This is a two-year process. My pledge to you is to continue regularly and

periodically convening public and stakeholder meetings along the way to make sure

that progress is happening over time and that at the end of two years we have indeed

reached success. This is a problem that we can fix it, and we will.

We must do big things on Austin Energy.

If we do not reform our utility’s business model, we face the threat of the

legislature taking control of our utility away from us. That’s why we have been working

with the City Manager to bring the transparency and sound business practices that

Austin Energy needs to survive and thrive for decades to come.

One problem we have is with the murky transfers of funds from the utility to the

city’s general fund. No one seems to understand, trust, or particularly like this model.

So let’s change it. I propose learning from San Antonio and moving to a model

where the City of Austin, as the owner and shareholder of Austin Energy, gets paid a

dividend in a transparent and reliable manner. This will put our utility and our City on a

more transparent and fiscally sustainable footing.

This coming year will also have us looking at electric rates, both residential and

commercial, to make sure they are fair and equitable and we are launching a Cost of

Service Study that will be the most transparent and visible of its kind anywhere in

Texas.

Finally, both with our energy and water companies, we need to begin the work of

transitioning our current business models to ones that better take into effect the way

new technologies are changing those industries.

These will be significant focuses of my time this year: affordability, mobility, the

Spirit of East Austin, job training, permitting and Austin Energy. We will better make

Austin affordable for the people who live in Austin and set into motion real and

meaningful solutions. We will realize opportunities by righting past wrongs, and turn

congested eye sores and clogged corridors into healthy arteries and ways for you to

get to work and to get home.

It is also important to mention, though there’s not time today to address, the work

we will also begin to enable a growing music industry and better protect artists, to

better establish our resiliency as a city even in the face of acute stressors, to protect

our environment (our core value) and to implement our Climate Change Plan, to

establish a secure future with sufficient water, to implement the My Brother’s Keeper

program, and to modernize our development code.

Big things take time. Rome was not built in a day, and we will not change the

course of this river in a year. When we come together next year to once again assess

the state of our city, the measure of our success will not be whether we have

completed our work, but whether we have begun down a substantial and meaningful

path and if we are still at it. This is not where our focus as a city should be for just a

year, but for a decade or more or even a generation.

Human endeavor need not always be folly. For every Austin Dam that collapses

with the best laid plans of city fathers there is another that generates power and lifts a

region out of darkness, much like LBJ did when he got funding for the system of dams

along the Colorado River. When done correctly, a dam can change the future by

harnessing a river.

This, in the end, is our choice. We can sit by the river while the water rises,

congratulating ourselves on circumstance and basking in the glow of our magical city.

Or we can harness this growth to change the future course of the river,

transforming Austin into a more fully realized version of itself. To do what Austin needs

us to do, we have to be better versions of ourselves, more willing to fail in the pursuit of

progress, less afraid of doing what has never been done before. If we find the courage

to lead our city to where it’s asking us to go, if we can work together to do big things,

then we will be a great city.

And then we can truly say that the state of our city is strong.