BG Reads 6.26.2024

🗞️ Bingham Group Reads - June 26, 2024

June 26, 2024

Bingham Group Reads

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June 26, 2024

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Today's BG Reads include:

🟣 Broadnax considers service adjustments as ‘tough’ budget awaits (Austin Monitor)

🟣 May 2024 busiest month on record at Austin-Bergstrom International Airport (City of Austin)

🟣 Jim Schlossnagle leaves Texas A&M for Texas baseball job (ESPN)

🟣 Fearing losses, banks are quietly dumping commercial real estate loans (New York Times)

Read On!

[BINGHAM GROUP]

Highlights include:

🟣 Austin Police Chief candidates listed (6.18.2024) -> www.binghamgp.com/blog/ausitnpolicechiefcandidates

🟣 City Manager TC Broadnax's comments on the search (6.24.2024) -> www.austinmonitor.com/stories/2024/0…-police-chief/

If there’s a matter of particular interest and/or concern, we’re happy to discuss. Email me at: [email protected]

[CITY OF AUSTIN]

[AUSTIN METRO NEWS]

Broadnax considers service adjustments as ‘tough’ budget awaits (Austin Monitor)

The Austin Monitor recently sat down with new Austin City Manager T.C. Broadnax to discuss some of the more prominent issues facing city staff and City Council as he gets situated in his job.

For the budget process as you’re going through it, are there any big differences that you’ve noticed procedurally in how Austin has assembled its budget compared to what you came from in Dallas?

Not at all. If there’s anything that will be different, it’s an approach that looks at it over a two-year window now, which is something that I’m working with the team and hopefully working with the Council to move forward so that they have a better snapshot of not just what they’ll be approving in the next three months, but what that might look like, the levels of service and any other types of programmatic efforts the following year so that they can get a little bit more long-term view of programs, whether pilot or not, to give some calm to where our budgets are from year to year.

That would probably be the only nuance, but that won’t be new to me. It’ll be new to this city, certainly. But I think budgeting – as I’ve been doing it for many, many years for local government – is pretty consistent in how they approach it, just depending on the laws that the state may have. Getting to learn and understand the departments coming in a month new already, and jumping straight into budget, I’m relying heavily on the institutional knowledge of our team when it comes to what those needs are and what the other types of issues and challenges are... (LINK TO FULL STORY)

See also:

Resource Management Commission sets sights on natural gas utilities in bid to expand oversight (Austin Monitor)

As the city prepares to renegotiate its contract with Texas Gas Service, Austin’s Resource Management Commission is vying for a seat at the table, with a proposal to expand its purview to include the utility’s oversight on its way to City Council.

The proposal, spearheaded by Commissioner Paul Robbins, would amend the commission’s bylaws to include advisory duties on issues of rate design, environmental goals and low-income assistance measures. Commissioners passed the proposal in a 6-1 vote, with Commissioner Genell Gary voting against.

Unlike the city’s municipally owned electric and water utilities, Texas Gas Service is a publicly traded company serving large swaths of Central Texas, the Rio Grande Valley and the Gulf Coast. The utility serves roughly 230,000 Austin residents via a franchise agreement with the city, which grants distribution rights in exchange for 5 percent of annual revenues... (LINK TO FULL STORY)

May 2024 Passenger, Cargo Traffic at Austin-Bergstrom (City of Austin)

 Austin-Bergstrom International Airport (AUS) passenger traffic growth for May 2024 was up 4.37% compared to May 2023 with 2,068,404 passengers flying during the month, making it the busiest month on record at AUS. 

This surpasses the previous record set in July 2023 by an additional 27,423 total passengers… (LINK TO FULL STORY)

Jim Schlossnagle leaves Texas A&M for Texas baseball job (ESPN)

Jim Schlossnagle, who just led Texas A&M to its first Men's College World Series championship series, is leaving to become the next baseball coach at rival Texas.

Schlossnagle agreed to a deal with the Longhorns just one day after a 6-5 loss to Tennessee in Game 3 ended the Aggies' season just one win shy of their first national championship. The loss will be compounded by Schlossnagle's defection to the Aggies' bitter rival as they reunite as conference foes this year in the SEC.

"What a home run hire," Texas president Jay Hartzell said in announcing the hire Tuesday night. "Coach Schlossnagle is the best in the business, his long list of accomplishments is incredible, and his track record of building great programs is well documented. We are the premier baseball program in the country with legendary coaches, our six national championships and record 38 College World Series appearances, so it's certainly fitting that we hired a coach of his caliber to lead us."

Schlossnagle went 135-62 in his three seasons with Texas A&M, including two MCWS visits and a 53-15 record this season, which tied for the second-most wins in program history.

"After our baseball team arrived back in College Station earlier today, Jim informed me of his desire to leave Texas A&M," Aggies athletic director Trev Alberts said in a statement. "While we are certainly disappointed, we are grateful for his contributions in helping our baseball program reach unprecedented heights. Baseball success is important to everyone associated with Texas A&M, we will not stop in our pursuit of excellence and our commitment to baseball will not waiver."… (LINK TO FULL STORY)

[TEXAS NEWS]

Streets, homeless encampment cleanups are highest resident priorities in San Antonio budget survey (Texas Public Radio)

The Community Satisfaction and Budget Priority survey found that the top five investment priority areas for San Antonio residents were streets, homeless encampment cleanups, services to assist the homeless, sidewalks, and police services.

City Manager Erik Walsh said the surveys will be part of what guides the city council’s decision on the Fiscal Year 2025 budget, which will be passed this fall and begin in October.

The top five investment priority areas last year were homeless encampment clearings and services as one item, followed by streets, affordable housing, Animal Care Services, and police… (LINK TO FULL STORY)

[US and World News]

Business fumes as Democrats blast GOP for blocking corporate tax credits (The Hill)

Senate Democrats say Senate Republicans are blocking an expansion of the child tax credit and a package of corporate tax credits, even though business groups are clamoring for its passage, because they want to deny President Biden a legislative victory five months before Election Day. It’s the second time this year presidential politics have created a rift between Senate Republicans and the U.S. Chamber of Commerce and the Business Roundtable, two of the biggest business trade groups in Washington.

Earlier this year, Senate Republicans voted overwhelmingly to block a bipartisan border security deal that the U.S. Chamber of Commerce endorsed and by the Business Roundtable applauded — along with the National Border Patrol Council and The Wall Street Journal’s editorial page — after former President Trump told allies on Capitol Hill he didn’t want to give Biden a win on border security. Democrats say Republicans again are blocking a major bipartisan initiative to help Trump.

“The business community still really wants that, we really want it. It’s all presidential politics, they don’t want to give Biden a win. That’s 100 percent what it is,” said a senior Senate Democrat of the Senate Republican opposition to the House-passed Tax Relief for American Families and Workers Act of 2024. The senator said Senate Democrats are stepping up their efforts to break through the Senate GOP blockade.

“We are trying very hard. There’s no real reason they’re objecting,” the source said. The package would restore research and development expensing for businesses, which lapsed in 2022. The U.S. Chamber of Commerce has urged the Senate to approve the package, which the House passed at the end of January, and it warned that if research and development expensing were not restored retroactively, it would “result in irreversible harm to U.S. innovation and competitiveness.”

The Business Roundtable has also urged the Senate “to approve this essential legislation and send it to the president’s desk.” Joshua Bolten, the CEO of the Business Roundtable, said it would “boost business investment at home, create American jobs and strengthen U.S. competitiveness.”… (LINK TO FULL STORY)

Fearing losses, banks are quietly dumping real estate loans (New York Times)

Some Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses.

It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic. Late last year, an affiliate of Deutsche Bank and another German lender sold the delinquent mortgage on the Argonaut, a 115-year-old office complex in Midtown Manhattan, to the family office of the billionaire investor George Soros, according to court filings. Around the same time, Goldman Sachs sold loans it held on a portfolio of troubled office buildings in New York, San Francisco and Boston. And in May, the Canadian lender CIBC completed a sale of $300 million of mortgages on a collection of office buildings around the country.

“What you are seeing right now are one-offs,” said Nathan Stovall, director of financial institutions research for S&P Global Market Intelligence. Mr. Stovall said sales were picking up as “banks are looking to shrink exposures.”

In terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly $2.5 trillion in commercial real estate loans held by all banks in the United States, according to S&P Global Market Intelligence. But these steps indicate a grudging acceptance by some lenders that the banking industry’s strategy of “extend and pretend” is running out of steam, and that many property owners — especially owners of office buildings — are going to default on mortgages.

That means big losses for lenders are inevitable and bank earnings will suffer. Banks regularly “extend” the time that struggling property owners have to find rent-paying tenants for their half-empty office buildings, and “pretend” that the extensions will allow landlords to get their finances in order. Lenders also have avoided pushing property owners to renegotiate expiring loans, given today’s much higher interest rates… (LINK TO FULL STORY)

[2024 Austin City Council Race Watch]

This fall will see elections for the following Council Districts 2, 4, 6, 7, 10, and Mayor.

Declared candidates so far are:

Mayor

District 2

District 4

District 6

District 7 (Open seat)

District 10 (Open seat)

_________________________

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