Drained from emergency debris collections, Austin Resource Recovery prepares for a squeeze this budget cycle

Photo by city of Austin

Tuesday, April 4, 2023 by Kali Bramble

As it continues to pick up the pieces of Winter Storm Mara, Austin Resource Recovery is preparing to weather financial challenges thanks to the $20 million relief effort.

Four months out from budget season, Director Ken Snipes and Finance Division Manager Victoria Rieger stopped by the Zero Waste Advisory Commission last week to begin charting the course ahead after the costly cleanup job. While FEMA is likely to reimburse as much as 75 percent of expenses, the process can take up to two years.

“To date we’ve collected about 1.33 million cubic yards of material. For context, that material would be about 110,000 dump trucks,” said Snipes. “Collecting this type of debris is something you would normally see associated with a hurricane.”

Initially, staff hoped the expense could be recouped in part through gradual increases to service fees, which it had already planned to propose rolling out next year. The incremental changes to base rates, clean community fees and cart fees had been proposed as part of a broader effort to scale up services and increase its emergency reserve fund balance.

Now, under direction from new city management, Rieger says they will have to either scale back or reconsider.

The timing of the decision is challenging for the department, who had been planning for several years to increase its reserve balance from 30 to a more “responsible” 60 to 90 days cash on hand, all while dealing with increasing costs for labor and equipment. While rate increases are still inevitable in the long term, Rieger says they are now uncertain about a timeline.

“The impact that $20 million expenditure is gonna have on our bottom line is pretty astounding. We expect our fund balance at the end of the fiscal year to be fully depleted and in the negative,” said Rieger. “Once we pull back on those (rate increases), that ending balance is gonna look more negative.”

Despite the decision from above, the Zero Waste Advisory Commission formally stood behind its initial position, unanimously voting to recommend budget increases to support competitive wages, fleet growth and financial stability.

“Negative dollars are not good dollars … we have too many examples of various departments who have taken this route and are now having to pay the piper,” said Chair Gerry Acuna. “This is not the way to ask you all to run a business – it’s not fair to the employees, the city or the ratepayers.”

Staff will be reworking their financial forecast ahead of the deadline for budget proposals in May. In the meantime, ARR is hoping that Austin’s streak of bad weather luck eases up in time for a rebound.

“In the three and a half years that I’ve been here, we’ve had three ice storms and a pandemic,” said Snipes. “The thing that worries me is that coming here I heard people talk about these big floods, and we haven’t had one of those. So guess what I’m worried about having?”

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This article First appeared in austinmonitor

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