Voters will decide this fall whether to set a new requirement for third-party audits of Austin's government, on the heels of City Council's approval of a separate recurring "efficiency assessment" program.
The big picture
Voters' rejection of Proposition Q, a proposed tax rate increase, prompted the passage of a reduced city budget last year and led council members to consider other reforms related to city finances and their spending.
The concept of wide-ranging external auditing was supported by officials including Mayor Kirk Watson soon after election results were released in November. Council ended up adopting a citywide audit program as proposed by Watson earlier this year. However, calls for additional reviews continued from outside City Hall.
The political group Save Austin Now, a top donor against Proposition Q, also pushed for third-party city auditing since last year. It circulated a petition for an "Independent Affordability and Efficiency Initiative" for city government, which it submitted for certification on June 2.
Resident-backed petitions in Austin must be signed by at least 20,000 registered city voters to earn a place on a ballot. Save Austin Now submitted more than 21,100 signatures, and on June 22 City Clerk Erika Brady verified that enough were valid to pass the local benchmark. Officials must now call a November election for the proposition.
“The more than 20,000 Austin residents who signed our petition only want transparency, accountability and efficient spending for the high taxes that we pay,” Save Austin Now co-chair Matt Mackowiak said in a statement. "The campaign phase begins now. If Austinites want to see their tax dollars spent wisely and efficiently, then we must pass this outside audit charter amendment.”
The context
Austin voters will consider the auditing ballot measure less than a decade after a similar proposal for an efficiency study of government finances was rejected with nearly 58% of voters against.
The proposition will also represent the latest of several ballot items promoted by Mackowiak and Save Austin Now intended to adjust city policy. In 2021, the group led a successful campaign to reinstate a public camping ban which it followed with a losing attempt to set minimum police department staffing levels. It's been involved in other city elections since then, including Proposition Q last year.
The framework
City Council's and Save Austin Now's versions of a government audit share some similarities and each center around external assessments of city finances. They also differ in several ways, from how they were laid out to what they'd accomplish.
Elected officials adopted their version of an auditing requirement in February through a city ordinance, which can be changed if a supermajority of Austin council members agree to make edits through a public process. On the other hand, the Save Austin Now petition would enshrine auditing requirements in Austin's charter, which lays out the local form of government and foundational city rules. The charter can only be edited every two years through an election, which residents would have to successfully petition for.
Both proposals call for assessments by a contracted third party, with internal support from the city auditor's office. The council-approved version is based on repeating reviews of all city departments over multiple years, which must begin by early 2027. The Save Austin Now petition outlines a one-year assessment to be repeated at least every five years going forward. It'd also ban Austin from calling a tax rate election like Proposition Q unless an audit was completed within the previous year.
Both versions also include accountability provisions related to Austin's extensive outside contracts. The recently adopted ordinance calls for a review of city contractors' performance and deliverables, and recommended improvements. The Save Austin Now petition language states auditors should set new performance metrics for contractors to ensure accountability.
The council-approved program will be funded through the auditor's office budget, with a cost still to be determined. Save Austin Now's measure would instead require the project to be paid for entirely with savings from the city budget identified through the assessment process.
The other side
After promoting a citywide audit program that was approved months ago, Watson said he believes Save Austin Now forwarded an inferior and redundant version that could create problems for the city. Given the political group's chosen method of a charter amendment, he also noted that fixing any potential issues would be more difficult if the proposition is enacted.
"The bottom line is, we don’t need it," he said in an interview.
Watson called the Save Austin Now proposal problematic for its shorter one-year timeframe, which he labeled as impractical given the scope of local government, and setting new performance metrics for various city contractors rather than leaving those measures to individual reviews. He also criticized the proposition's tying of project funding to city cost savings, which he said "steals the auditor’s independence" in judgment and financial recommendations.
"Such a requirement creates a financial conflict of interest and violates fundamental professional audit standards," he said.
While the audit program approved by council this year is not yet fully underway, Watson said a project solicitation has been released and that officials will soon be choosing a firm to handle that work. He also said he's not aware of any other cities to have adopted similar ordinances for recurring, citywide financial reviews. For now, Austin continues to produce individual audit reports on various topics of interest and investigations into allegations of fraud and waste.
Quote of note
“The city of Austin has an ordinance that creates an independent audit and it’s doing it in exactly the same way that this charter provision does. But it does it where it’s practical, it’ll get you longer-term results, it doesn’t require it to be done in a shotgun, one-year fashion. And it doesn’t create potentially false incentives because it says you’ve got to find stuff to cover your salary," Watson said. "That’s not the way to do a real audit. ... You want independence? You don’t get independence if your payment is tied to finding something wrong.”
What else?
Austinites are likely to consider other charter amendments this fall in addition to the auditing proposal.
Officials had forwarded a slate of potential amendments in 2024, but that vote was canceled due to errors made by city staff when calling the election. Those items could return to the ballot in November alongside other new proposals.
Council members will decide on any additional charter measures this summer.
