CITY OF AUSTIN GOVERNMENT STRUCTURE: A COMPARATIVE ANALYSIS

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CITY OF AUSTIN GOVERNMENT STRUCTURE: A COMPARATIVE ANALYSIS Terrell Blodgett Mike Hogg Professor Emeritus in Urban Management LBJ School of Public Affairs The University of Texas at Austin

Forms of U.S. Local Government Mayor-Council form The oldest form of local govt Mayor is the political AND Executive/Administrative head Can be “strong” or “weak” mayor based on charter powers given Commission form Elected individuals serve as heads of various functional areas of city Portland, Oregon is only major city with this form Council-Manager Designed to provide more effective governance while retaining Democratic control. Features elected board of directors (City Council) led by lay chairperson (Mayor) and appointment of professional CEO (City Manager) Similar to models used by schools and large nonprofit orgs There are 3 generally recognized forms of local government in the United States. The oldest, the mayor-council form, generally means that the mayor is the political AND executive/administrative head of the city. Cities are sometimes classified as strong–mayor or weak-mayor although charters of these cities vary widely in the power given to the mayor. The classification of “strong “ or “weak” mayor refers to the authority given that individual in making appointments of department heads and advisory boards, in vetoing ordinances, in making purchases, and in the budget function. The next slide illustrates these variations in Houston and Denver.   The second oldest form is the commission form where elected individuals serve as the heads of various functional areas of the city. Portland, Oregon is the only major city with this form of local governance. In this form, commissioners are actually elected as Commissioner of Public Works or Public Safety, etc. and actively give overall direction to various functional areas of the city. The third form, the council-manager plan, celebrated its 100th anniversary last year. This form grew out of what “reformers” saw as weaknesses in both of the first two forms. The plan was designed to make government more “businesslike” while maintaining final authority in all matters with an elected governing body. Advocates feel the plan combines the best of elected independent directors, a chairperson who is not the CEO, a strong commitment to the oversight role of the board, transparency of action, and a strong commitment to ethics. This model is not unlike the model utilized by schools (both K-12 and higher education) and large nonprofit organizations.

Key Dates: History of Austin City Government 1839 City Incorporated 1840 Election for city officials held ; Mayor aldermanic form; Mayor and eight aldermen elected for one year; later number reduced to six; numbers Increased to as many as 20. 1908 Voters adopted commission form of Government; Mayor and four Commissioners elected; functions of government divided among 5 elected officials. 1924 Voters adopt Council-Manager form; five Council Members at large; those five then electing a Mayor at their first meeting. 1953 Council members elected by place and select the Mayor from within their ranks. 1969 Council increased to 7 members. 1972 Roy Butler became first directly elected Mayor; 6 Council Members still elected by place. 2012 Voters approve election of 10 Council Members by district and a Mayor at large.

Changes in Forms of Government Largest Cities in U.S. Rank City Form 1 New York Mayor-Council 2 Los Angeles 3 Chicago 4 Houston 5 Philadelphia 6 Phoenix Council-Manager 7 San Antonio 8 San Diego 9 Dallas 10 San Jose, CA 11 Austin 12 Indianapolis 13 Jacksonville, FL 14 San Francisco 15 Columbus, OH 16 Charlotte 17 Fort Worth 18 Detroit 19 El Paso 20 Memphis In all cities over 100,000 pop: 176 are council-manager, 97 are mayor-council and one employs commission form. IN RECENT YEARS, In cities over 100,000: 8 cities have switched from council-manager to mayor-council. 3 cities have switched from mayor-council to council-manager. 9 cities rejected changing from council-manager to mayor-council November 4: Sacramento this year became 9th major city to reject change to mayor-council. Vote was 57% to 43%. The five largest cities in the country all employ the mayor-council form of local government. Beginning at Number 6 (Phoenix), three of of the next five utilize the council-manager form (San Antonio at No. 8 and Dallas at No. 9).   Six of the next 10 are mayor-council cities and four are council-manager cities. In all cities over 100,000, 176 are council-manager cities, 97 are mayor-council, and one employs the commission form. Several cities have changed their form of local government in recent years. In cities over 100,000: 8 cities switched from council-manager to mayor-council(Fresno and San Diego, CA; Hartford, CT.; Miami and St. Petersburg, FL; Toledo, OH; Richmond, VA; and Spokane, WA.) 3 cities switched from mayor-council or commission to council-manager(Cedar Rapids, IA; El Paso, TX; Topeka, KS). 9 cities rejected a change from council-manager to mayor-council: (Little Rock, AR; Des Moines, IA; Grand Rapids, MI; Kansas City, MO; Cincinnati, OH; Corpus Christi, TX; Dallas, TX(twice); Worchester, MA). On November 4 of this year, Sacramento, CA(capital city of CA; city of approximately 500,000) became the 9th major city in recent years to reject a change from council-manager to mayor-council government. The vote was roughly 57% to 43%. (2)

Form of Local Government Texas’ Top Ten Cities City Rank 2013 Est. Pop. Form of Government Year adopted Comments Houston 1 2,195,914 Mayor-Council 1946 FN 1 San Antonio 2 1,409,019 Council-Manager 1951 Dallas 3 1,257,676 1930 FN 2 Austin 4 885,400 1924 Ft. Worth 5 792,727 El Paso 6 674,433 2004 FN 3 Arlington 7 379,577 1949 Corpus Christi 8 316,381 1945 Plano 9 274,409 1961 Laredo 10 248,142 1981

Form of Local Government Texas’ Top Ten Cities - Comments FN 1 In earlier years, Houston operated under both the Mayor-Council and the Commission form of government. Due to a variety of circumstances, the city adopted Council-Manager government in 1942. The plan was voted out in 1947 and today, the city remains a Mayor-Council city. FN 2 Since 2000, Dallas voters, in two separate elections, have rejected a change to Mayor-Council government. FN 3 In 2004, El Paso became the largest city in the country to change from Mayor-Council to Council-Manager government.

City Council Configuration Texas’ Top Ten Cities Rank 2013 Est. Pop. Council Configuration Year adopted Comments Houston 1 2,195,914 11-5-1 1979 San Antonio 2 1,409,019 10-1 1977 Dallas 3 1,257,676 14-1 2005 Austin 4 885,400 2013 Ft. Worth 5 792,727 8-1 1975 El Paso 6 674,433 2004 Arlington 7 379,577 5-3-1 1 949 Corpus Christi 8 316,381 1945 Plano 9 274,409 7-1 1961 All are at large, but 4 must reside in district Laredo 10 248,142 1981

Duties, Powers and Responsibilities Mayor-Council vs. Council-Manager Subject Council-Manager Austin, San Antonio, Dallas, etc. Strong Mayor Houston Stronger Mayor Denver Apptmt. of Chief Administrator City Council Mayor Apptmt. of Dept. Heads City Manager Mayor, conf. by Council Mayor, conf. by Council.; Mayor can remove w/o Council Work of Depts No role for Council Apptmt. Of Adv. Bds. Mayor, no conf. by Council Prepare Budget Approve Budget Council; Mayor has veto Passage of Ordinances Purchasing Restrictions on City Manager Mayor approves contracts up to $499,999 w/o Council

During Disability of Mayor City Austin Houston Denver Member of Council Presides Yes No How is Mayor Pro Tem Chosen Council elects one of its own Mayor chooses, subject to CC approval Mayor Chooses a Member of his/her Cabinet In Denver, by charter the Mayor’s Cabinet is composed of managers of the following departments: Public Works, Finance, Parks and Recreation, Environmental Health, Safety, General Services, Human Services, Aviation, Community Planning and Development, and the City Attorney. The Mayor designates one member of the cabinet to serve as Deputy Mayor, who serves at the pleasure of the Mayor. The Deputy Mayor serves as the Active Mayor in the case that the Mayor cannot. This continues until an election can be held for Mayor

IBM Study: Smarter, Faster, Cheaper: An Operations Efficiency Benchmarking Study of 100 American Cities (2011) Study demonstrates that throughout U.S. spending commitments are outpacing expected revenue growth for cities. Local govts must find new revenue and budget reductions to close budget gaps. Report argues cities must operate smarter if they are to do more with less. Can be done through benchmarking – comparing operational profile of similar situated organizations to find opportunities to improve. Used public data to benchmark the 100 largest cities. (Austin does this) Found that the most important factor in determining efficiency of a city is management. Also found that Council-Manager cities are nearly 10% more efficient than Strong Mayor. IBM STUDY OF OPERATIONS EFFICIENCY IN 100 AMERICAN CITIES   In 2011, IBM Corporation published a report entitled “Smarter, Faster, Cheaper, An Operations Efficiency Benchmarking Study of 100 American Cities.”(1) This study presents evidence that throughout the country, spending commitments are outpacing revenue growth that cities may expect to achieve . It states that each year, local governments must find a combination of new revenues and budget reductions to close the gap in their budgets. The report argues that cities must find ways of operating smarter if they are to do more with less. One effective means for an organization to identify inefficiencies is through benchmarking (a practice in which the City of Austin engages ). Benchmarking is comparing the operational profile of similar situated organizations to find opportunities for improved performance. For this report, IBM used publicly reported data to benchmark the 100 largest cities to compare how efficiently they operate. The study found that the most important factor in determining the relative efficiency of a city is management. The report further states that cities with the council-manager form of local government are nearly 10% more efficient than those cities with the strong mayor form of operation.

Why Bond Ratings Matter City Moody’s Rating Houston AA2 San Antonio AAA Dallas AA1 Austin Fort Worth El Paso Arlington Corpus Christi Plano Laredo Bond ratings (by Moody’s Investors Service) of the ten major cities in Texas are shown here. The chart shows that the citizens of Houston (the only Mayor-Council city in the top ten) pay more to issue their bonds than do several Council-Manager cities.   Houston’s bonds are rated the same as El Paso, Corpus Christi, and Laredo, two levels below those of Austin, San Antonio, and Plano. Standard and Poor’s and Fitch ratings are substantively the same as Moody’s. SCALE – TOP TO BOTTOM: AAA, AA1, AA2, Aa3, A1, A2, A3, BAA1, BAA2, BAA3, BA and below

Role of Various Players on the Team Mayor Charter duties: preside, vote, no veto, no administrative duties. Unwritten duties: leads goal process, leads policy priority process, leads Council to an effective governance team. Council Works with Mayor to give CM clear goals, objectives and overall policy direction; gives orders to CM as a body, not as individuals. City Manager Directs implementation of Council policies and budget; appoints and supervises all city employees (except specified charter exceptions).

Summary This is the system which has worked nationwide in large and small cities for over 100 years. In Texas, this system is successful in diverse cities. Examples: Dallas (business oriented), San Antonio (diverse in race, income, city area). In Austin this system has worked for 90 years. It is to the CMs advantage to make the Council look good. It is to the Council’s advantage to give the CM the professional latitude to advise the best way forward, including working out the details of accomplishing everyone’s overall objectives for a great City of Austin.