LegalZoom or LegalDoom?

by: Julio Gonzalez Altamirano

Sun Feb 14, 2010 at 07:12 PM CST

Here are the deal details.  The City pays out $20,000 for ten years for a nominal total of $200,000.  The state's recruitment- and talent poaching-focused Texas Enterprise Fund would provide an additional $1,000,000.  Austin's population is only about 3% of the state's population, though it's likely that we produce more revenue per capita to state coffers than the average community, so let's say 7% of the state's money comes from Austinites.  That's a total of $270,000 nominal going to the folks at LegalZoom.

In exchange for Austin's $270k, LegalZoom agrees to provide jobs, make real estate improvements to its space, and use minority and women sub-contractors in the improvements.  At the onset, LegalZoom agrees to bring in 50 jobs, augmenting the number to a total of 600 jobs by 2016.  To put these numbers in context, Austin's proposed budget for FY 2010 is $2.75 billion.  Austin has about half a million working age adults (over 18 under 65).  So, either way, this deal is neither a substantial public expense nor a significant contributor to employment.  The City's analysts estimate a net benefit to the City's revenues of $563,000, and LegalZoom indicates that about 540 of the 600 jobs will be local new hires.

Is this a good deal?

In the chart below, I calculate the expected nominal dollar benefits to City revenues under different flight probabilities by LegalZoom if no incentive package is offered.  While the media coverage seems to convey a sense of 100% flight probability if the incentives are nixed, that is unlikely to be the case.

The return on revenues for the City are decent in the event that LegalZoom is likely to skip Austin without incentives, but if that is not the case than this investment looks less compelling as a revenue generator.  This is especially the case if there is a good chance of LegalZoom relocating regardless of incentives, and particularly so because Austin has many ways of generating revenue through enforcement of fines, efficiency initiatives, or just plain old increases of fees and taxes.  From this analysis it does not appear that the revenue generation is a compelling factor in this deal.

The job creation however, does seem much more compelling.  While LegalZoom indicated their net total job creation in the public hearing process, I could not find an estimate of the expected duration of those jobs in years.  This is needed to calculate the subsidy cost per job year.  Let's assume that each job will last an average of 5 years.  Thus, even if there is only a 5% chance of flight, the expected jobs created by the deal would be 27 for a total of 135 job years.  Even under that conservative scenario, Austin public monies would be buying  a job year for $2,000.  Simply put, even if LegalZoom was very likely to show up without the incentives, buying the certainty of the jobs is pretty cheap and the most compelling piece of the deal.

As a one shot deal the LegalZoom job creation commitment makes the incentives pretty compelling for an Austin taxpayer, but as a long-term strategy, there are some potentially troubling issues that should be addressed.

For starters, it's unclear why exactly LegalZoom is seeking these incentives or why the Austin policymakers think this might be a sector worth subsidizing.  As Wells Dunbar implies, LegalZoom's proposal might be opportunistic wrangling, as opposed to a make-or-break incentive mix.  With the Hanger Orthopedic incentives, it was clearly an investment in creating a cluster around one of our desired growth areas (medical) where Austin is not yet a dominant leader.  Dunbar goes on to hypothesize that we are probably offering incentives because some other town is also in the mix, invoking a collective-action dilemma.  Further, the focus on funding relocation probably seems random and unfair to existing Austin companies that might believe they could transform local subsidies into additional job years more efficiently than relocating firms.

To remedy these issues the Council could look into creating an even more structured incentives process that focuses exclusively on key strategic areas like medical technology and life sciences and that uses a market-based bidding mechanism to reward efficient job year creation regardless of the geographic origins of the company.

Originally posted at Keep Austin Wonky.

Energy Generation Plan Presented to Austin City Council

by: citizen.sarah

Thu Feb 04, 2010 at 06:12 PM CST

The energy plan that Duncan (who will be retiring soon and we wish him the very best) presented  sets Austin on a path to reduce our carbon emissions 20% below 2005 levels by 2020 and get a total of 35% of our energy from renewable resources. It will meet council's renewable energy goals, move Austin Energy towards becoming the leading utility in the nation in terms of clean energy and global warming solutions, and re-affirm the city's commitment to the Climate Protection Plan, which has the laudable goal to establish a cap and reduction plan for the utility's carbon dioxide emissions.  It is a flexible, living document that will allow council to evolve and adapt as conditions change. AND it will reduce the capacity factor of our Fayette Coal Plant by 60% and gets the ball rolling on figuring out the best way to shut it down(which you know makes me happy). Sounds like a pretty sweet deal, doesn't it?

As we've come to expect over the years from our award winning utility, Austin Energy is taking an especially responsible and forward-thinking role with this new plan.  I've formed this opinion for a few reasons:

1. They're adopting aggressive renewable energy and efficiency goals as part of a larger, smart business plan.  Austin doesn't need a new generation plan because we're going to be strapped for energy by 2020; Austin Energy could rest on their laurels and do nothing for the next ten years and we'd be fine buying up excess energy on the open market as its power purchase agreements expire and gas plants age.  But if they did that, by the time 2020 rolled around Austin would be way behind the technological curve and very likely be stuck with higher rates as a result.  Austin Energy has picked up on the national trend that the traditional fuels we rely upon, such as coal, are quickly becoming financial liabilities even as solar and wind are becoming more and more cost effective.  This plan will allow the utility to reposition itself  for 2020 going forward so that in ten years we will have made the preparations necessary to take full advantage of the coming clean tech boom rather than be left scrambling and dependent on outdated energy sources.
2. Austin Energy and the task force that helped formulate this plan were very careful to balance considerations of reliability, affordability, and clean (in terms of the environment and human health).  The city has the responsibility to make sure that everyone who lives here can afford their utility bills.  It doesn't do any good to make the switch to a new clean economy if we do so on the backs of those that can least afford it.  But that couldn't be farther from the case with this plan; this isn't green for some, this is green for all.  Compared to other options, this plan will minimize the impact for those least able to pay their electricity bill, supports in-house economic development and the hiring of local contractors, and ensures that everyone will have a chance to play a role in moving our city and economy forward.  There's been a lot of focus and attention on the utility's estimate that the plan will raise rates in 2020 by approximately 22% or $21 a month, but what's missing from that discussion is that even if Austin Energy doesn't do anything between now and 2020 rates will go up by 15% or about $14 a month.  So do the math -- for an extra $7 a month in ten years, we can build up a clean local economy that minimizes impacts on low-income consumers and creates avenues to new employment opportunities, improves public health, AND puts Austin in a prime position to start lowering rates by taking advantage of cheap renewable energy. OR we can save families $7 a month compared to today on their utility bills but lose out on new jobs and leave every citizen in the city of Austin at the mercy of high fossil fuel costs and coming federal regulations on greenhouse gas emissions.  Austin Energy is not only looking at what is most affordable now, but what is most affordable in the long term. Coal may be cheap and reliable energy now, but depending on it in the long term will get us into trouble in terms of cheap and affordable in 2020.
3. Austin Energy is not only reaching for the low fruit of emissions reductions and energy efficiency, they're building high-tech ladders to get at the really juicy stuff at the top of the tree. Let me explain. There are a number of ways Austin Energy could go about reducing emissions.  The easiest of these would be to buy renewable energy credits, or RECs. RECs and offsets are in essence a mechanism for utilities, businesses, and governmental bodies to pay someone else to clean up and still get the credit for it.  They're a good and have a positive influence on society at large because they do encourage clean energy investment and development, but not necessarily in a nearby community (in fact almost certainly not).  It might be easier in the short run to pay someone else to be clean up, but then we miss out on all the delicious creamy gravy that comes along with renewable energy development.  If you buy RECs you don't get new jobs and businesses in your community.  If you buy RECs your own people are still breathing the same amount of pollution.  But Austin Energy is taking the initiative to really get at the heart of the problem by cutting the amount of pollution coming out of the smokestacks we own.  For that, they should be applauded.

Original post can be found at Texas Vox.

Austin Solar Panel Financing up for First Vote (Updated)

by: Michael Hurta

Thu Oct 22, 2009 at 08:59 AM CDT

In other words, the the council can take the first step towards a plan that would allow solar panels added to homeowners' houses through property tax based loans.  Council Members Randi Shade and Mike Martinez also co-sponsor the legislation, and hopefully the rest of the council will join in support.  If passed, though, the council will still need to vote on the final implementation, which would probably occur in January.  Regardless, the mayor sounds excited about the idea:

"If successful, it will help make solar energy accessible to many more local residents, help them save money on their home energy bills almost immediately, and continue to build on Austin's growing reputation as a national leader on renewable energy initiatives," Leffingwell said.

Leffingwell said the program could potentially allow the installation of solar panels and energy efficiency upgrades with no up-front cost. The loan would also be tied to the home and would convey when it is sold, the statement said.

Of course, the plan still has its kinks, too.  I imagine the City Manager, the Mayor, and their staffs will be able to work them out.

Austin Energy General Manager Roger Duncan is an advocate of solar power but worries that if too many people install solar panels too quickly, the city could have trouble maintaining its grid unless it comes up with a new business model for the utility.

The city government has been promoting solar mainly by offering to pay part of homeowners' installation costs. That subsidy money comes from fees collected from all electric-utility customers.

But the subsidy, or rebate, has proven so popular that the city has had trouble keeping up with demand - $3.3 million of the $4 million the city budgeted for this fiscal year was already committed by Oct. 1, the start of the fiscal year.

Thankfully, a loan program like this, more useful to consumers than simple subsides, will can also save the city some money.  Unlike those subsidies, the long-term budgeting implications would barely be effective under a solar panel loan program.  Worst case scenario: I'd imagine the city could place a cap on the amount of loans it gives out per year.  We might need such a restriction, because Austinites are certainly the type to jump on an opportunity like this.

At the current pace, Austin can set itself up to be the first Texas city with such a plan, which may serve as the impetus other cities need to follow through.  Rep. Villarreal follows the issue on his blog, and he informs us, "The City of San Antonio and other stakeholders around town have been working to figure out how to implement the program in our community."

Perhaps Austin will show the way.

Update: The Austin City Council passed the resolution on a 7-0 vote.

Tonight: Inauguration Celebration at Threadgills

by: Ian

Mon Jun 22, 2009 at 01:52 PM CDT

Tonight, you're invited to our inauguration celebration at Threadgills. We'll have local live music featuring W.C. Clark, so don't miss this exciting event!

Inauguration Celebration
Tonight, June 22
7:30 - 9:30 p.m.
Threadgills World Headquarters
301 West Riverside Drive
Austin, TX 78704
RSVP on Facebook

Hosted by:
* Mayor Lee Leffingwell
* Council Member Chris Riley, Place 1
* Council Member Mike Martinez, Place 2
* Council Member Bill Spelman, Place 5
* Council Member Sheryl Cole, Place 6

Unplugged at the Grove Shut Down Due to Noise Complaint

by: Phillip Martin

Fri Jun 12, 2009 at 10:39 AM CDT

The first full day I was back in Austin a couple weeks ago, I went to Unplugged at the Grove. For those who don't live in Austin, Unplugged at the Grove is a concert series hosted at Shady Grove, a cool Austin restaurant on Barton Springs road in South Austin. They have local artists play for ninety minutes to two hours in a small setting; you can eat food, drink beer, and see free live music from some of Austin's best artists.

That is, until Captain No Fun calls the cops on you, which apparently happened yesterday.

Apparently, the opening act went beyond the 75 decibel limit (remember -- the 75 decibel limit is somewhat similar to chamber music being played in a small auditorium). Neighbor No-Fun threatened to do the same the following week.

From Austin 360:

Thursday’s opening act Sahara Smith was in the middle of her set when Austin Police showed up with a decibel meter and ordered the show stopped. Headliner Jimmy LaFave never played in front of a crowd estimated at 600. “Unplugged” booker Marsha Milam said the complaint came from a neighbor who told Shady Grove management that he’d call the cops next week, too.

“We’re gonna be back with live music next Thursday and the Thursday after that,” vowed Young. “I’ll pay the bands even if they only play five minutes. We’re not gonna give up the fight.”

I think you all know where I stand on this -- the music ends before 9:30pm, its on a loud, loud street in Austin anyway, and considering that my best friend lives a block off of Burnt Road in Central Austin where they have been bulldozing and building new apartments for several months, the idea that Unplugged at the Grove is too noisy is laughable.

Here are competing sides from the comments at Austin 360.

By stex5150

June 11, 2009 9:19 PM | Link to this

It is carpetbaggers like this that need to just pack up and go back to wherever they came from. They have no idea what Austin is all about or what made the company the carpetbagger works for want to locate in Austin. If you are stupid enough to buy a house or condo without researching the area for noise, traffic or crime then you really are not the genius you think you are. The Austin music scene was here long before 75% or more of these carpetbaggers got here but they all want to complain about the noise in their overpriced condos that were built right in the middle of the “Live music capital of Texas”. Think before you buy or go back to wherever you came from, preferrably sooner than later.

By YeahIsaidIt

June 11, 2009 9:23 PM | Link to this

They shoulda arrested the whole lot of them! Don’t want to hear no stank’n music in this overpriced town. Used to have a good neighborhood till all the weird crowd showed up and brought their drugs and tree huggers with them. And not to mention the bike losers. We don’t need know Stevie Ray statue…we need a statue of W…he saved America. Hail the New World Order and down with dull and awful live music. Anyone know the guy that called the cops? He needs a medal! Yeah I said it!

The noise ordinance thing -- pushed by neighborhood associations and Austin City Councilwoman Laura Morrison -- is complete nonsense. When I go camping at state parks (which I also did when I was back in Texas), then quiet hours don't start until 10pm. Before then (and normally after), you'll have lots of families running around, pick-up trucks playing country music -- and in the middle of nowhere.

And everyone is fine with it. And everyone has a good time.

But in the middle of a city, where there have been restaurants for decades, noise exceeding chamber music levels at a small auditorium is considered unruly at 8pm? Are you serious? Did someone confuse Barton Springs road with Georgetown's Sun City or something?

Whoever wants to run against Laura Morrison next election cycle, I'll support you.

Mayor Leffingwell -- let's see what we can do about this.

Update:

Just got an interesting e-mail: the homes across the street from Barton Springs have been around a long time, and those neighbors are (A) used to noise, and (B) the traffic on Barton Springs is loud, too.

The only new living areas there are those condominiums they put up where the trailer parks used to be -- those parks where, ironically, Jimmy LaFave -- who was headlining last night -- used to live for a while. Which means, more than likely, the complaint came from someone that just moved into the neighborhood willingly. 

Either that, or Laura Morrison is just traveling the city, telling kids to get off of her lawn.

Election Night Party!

by: Bill Spelman

Wed May 06, 2009 at 11:01 AM CDT

Now it's time to celebrate! You're invited to our election night party at Joe's Bar & Grill. We'll have local live music featuring Brent Adair, so I hope you can celebrate with us this Saturday evening.

Election Night Party
Free Appetizers
Live Music Featuring Brent Adair
Saturday, May 9th
7:00 - 9:00 p.m.
Joe's Bar & Grill
506 West Avenue
Austin, TX 78703
(next door to Frank & Angie's Pizza)
RSVP on Facebook

Join Us Tomorrow for our Town Hall on Affordability

by: Bill Spelman

Fri May 01, 2009 at 10:25 AM CDT

Friends,

Please join us tomorrow morning for a community town hall meeting to discuss affordability, the social safety net and how that affects the long-term sustainability of our community.

Austin faces some tough challenges ahead, but by working together, we can leverage our city resources to get the most bang for our taxpayer buck. If you can't make the event, then please share your ideas online.

Thanks for your support. I look forward to seeing you tomorrow morning.

Best regards,

Projecting Austin 2009 City Turnout: 50,000 About Right

by: Karl-Thomas Musselman

Wed Apr 29, 2009 at 02:04 AM CDT

First off, a note that overall, turnout is higher in raw numbers and slightly higher in percentage turnout than past years. Then again, this is a Mayoral election year and most recent years' turnout has been low even in the face of contested council elections. The following chart is from the Travis County Elections Division which reports the daily turnout countywide on the 1st day only for all elections, inclusive of those in Austin and smaller jurisdictions.

Yes, even with Monday's rain, we were able to shock the electorate by .04 percentage points higher raw participation! **ahem, cough**

So, as in past elections, I'm running my own models based upon the 2006 (Mayoral) and 2008 (Council) elections for Austin. Each day of data refines the data and rainy days like Monday can suppress the total estimated turnout. These models adjust for average excess of votes included in the daily tallies from the county that don't end up being City of Austin voters (which is measurable and reasonably predictable in past years).

Expected Total Early Vote for City of Austin by Latest Model Run (Tuesday)

Now, this is just the Early Vote estimate, but the share of the EV to Election Day vote has been trending predictably as well.

The easy math is to just go with a 50/50 split but I'll be conservative and use the 48/52 early to e-day split, and produce the following projected TOTAL votes by model as of Tuesday's data.

I expect these numbers to lift some more in coming days.

The 5 Things I Hate About Austin City Council Races

by: Phillip Martin

Mon Apr 20, 2009 at 04:45 PM CDT

Here's something to argue about -- five things I hate about Austin City Council races. The only caveat to this list I'll make is that I hate all of these things even if they are "important" and they are "what has to be done" or whatever. That doesn't mean it doesn't suck.

Anyways, here's my list. Feel free to add to the list in the comments:

1. The Austin Political Machine
   
   I'm thoroughly convinced that you can win an Austin City Council race by convincing the right 50 people that you are better than your opponent. The political machine equals key endorsements from certain groups, the support of whichever Travis County Democratic Party activist is most awesome at the time, a few key people w/ labor, and those two or three business-types that give you some credibility.
   
   Sure -- you'd have to go to rallies and talk to more than that, and you'd need the mail and you'd need the door hangers and you need (maybe) the TV time. But all of that pales in comparison to the simple fact that if you can convince the right 50 people that you are better than your opponent (and it may even be less than that -- I'm just using a random number) then you're set.
   
   If there was this kind of political machine in Democratic politics across the country, then Hillary Clinton would be President. There's no movement/ability for an outside candidate that isn't beloved by the bikeway (as opposed to the beltway) to make any real shot, unless he or she just buys up the airwaves.
   
   Unless my best friend or I am a candidate, I will never work for an Austin City Council campaign.
   
   
2. The Focus on Central & 78704 Austin
   
   I lived in Central Austin while going to UT, and my first two years in employment were in the 78704 zip code. While each of those general locations do embody the spirit of Austin, they're not the only part of our city.
   
   For one, there's East Austin. There's also the area west of the Balcones Escarpment, along Mesa Boulevard, the Far West neighborhoods, Great Hills, etc. We've got thousands of people that don't travel south of 183 unless there's a UT-football game or something special going on at Zilker Park. But are we helping build rail for any of these people?
   
   No. Of course not. Because (1) everyone focuses on bikes and bike lanes b/c the City Council re-elect constituency lives in Central Austin, where rail isn't needed that much, and (2) the opportunity to convince people beyond Central Austin of the importance of light rail grows more and more difficult with each passing year as Austinites adapt (and nest) into living patterns where not driving a car is unimaginable.
   
   
3. The Lack of Imagination in City Council Campaigns
   
   States are considered laboratories of democracy for new public policy. And beyond that, cities are often the first to enact advanced and challenging policies that trickle up to the state and, sometimes, national levels.
   
   But the opposite occurs with campaigns. The innovations all come from the top, because very few at the local level are willing to think outside the box. In Austin, that means everyone buys into #1 and #2 on this list, and that's the campaign. Get the group endorsements, knock on the Central Austin doors, win the election.
   
   Bo-ring and bad for our city's democracy. And I don't buy the whole, "if the people will lead, the leaders will follow" argument on this particular complaint. I agree that its up to us to step up to President Obama or Governor Perry or other large-scale elected officials. But locally, you should be able to reach out to your constiuency -- especially during a campaign -- in new and creative ways that broaden the scope of democracy and citizen engagement.
   
   That I've seen the exact same City Council campaign five times over is ridiculously. And I'm only 24. I don't know how any of you that are older than me live with it on a yearly basis. Pretty soon we're going to be able to write a computer program that makes all the decisions for a City Council race.
   
   
4. The Gatekeepers
   
   This is an off-shoot of #1, but here I'm talking about how if you win one or two endorsements, you get 45 million door hangers (slight exaggeration) and that's it. And yet what credibility should those people have to make decisions and have that sort of magnitude? Can I have access to that group's thinking if I don't have time to show up to the meetings -- or do I have to have free time to come out on a regular basis? For example, I love UDems, but I never went to meetings while I was in school at UT because (1) I had a job that often ran pretty late, and (2) when I didn't have a job I had my Church choir practice (I played guitar). How do I have access to their decision-making?
   
   On the flip side of that, someone that should have more credibility but doesn't is someone like the Austin American-Statesman. Their year-round general suckiness of local coverage (more in the print editions than online) disempowers one of the best voices we could have for editorial decision-making. But because they opt-out of any sort of sane coverage of local politics (see their nonsense on Leffingwell the past few months), then even legitimately valid endorsements can be easily dismissed by the Austin Political Machine.
   
   
5. Do the Elections Really Have Consequences?
   
   We're still talking about keeping Austin weird, protecting local business, keeping jobs local, helping grow our new idea economy, improving transportation, saving our springs, etc. Are we really making as much progress as we should?
   
   Because Austin (at least electorally) is more or less a one-party town, I think progress actually moves slower than it should. When you have competitive, opposing ideologies, then the incoming candidate/party needs to make clear, sharp policy differences in order to win re-election. But since we're always asking for the same thing, then the measuring stick for what constitutes an improvement is tiny.
   
   The pendulum has a much smaller arc, which creates a negative feedback loop for activism, new coalitions forming, and improved creation of public policies. And yet -- everyone is kind of OK with this as long as they "win" their election.

I'll take state politics over city politics any day of the week -- and if KT, myself, and others have to use BOR to poke people with a stick in order to try and make progress happen, then we will.

After all, sometimes it works.

Austin American-Statesman Releases Endorsements

by: David Mauro

Sat Apr 18, 2009 at 10:36 PM CDT

The Austin American-Statesman has published its endorsements for next month's municipal elections.

Mayor: Brewster McCracken

The Statesman's endorsement of McCracken praises him as a leader who has learned from his mistakes and is ready to lead Austin into the future by investing in clean energy, biotech and digital businesses.

McCracken has a broad view of what Austin needs and how City Hall should manage in a budget crunch. He can build alliances and should be a visible, active mayor. We have not always agreed with McCracken, and he has made his share of mistakes on the council, but he seems to learn from them.

The endorsement, although expected, gives a definite boost to McCracken's campaign, although it could be off set by what seems to be a likely upcoming endorsement by the Austin Chronicle of Lee Leffingwell. 

Place 1: Chris Riley

Nearly everyone, including the Statesman, seems to think that both Chris Riley and Perla Cavazos are able candidates who would do a great job for Austin on the City Council.

While little separates Cavazos and Riley in their campaigns, Riley has more experience and we believe is ready for the City Council. Cavazos has a good career ahead of her and with a bit more seasoning will be an even better candidate.

No matter the result in Place 1, the consensus is that Austin will have elected a well-qualified and prepared council member.

Read all of the Austin American-Statesman's endorsements here.