Public Health Committee directs manager to prioritize social-service contracts amid proposed $16.8M reductions

The Austin City Council Public Health Committee voted Feb. 4 to send policy direction to the city manager to prioritize social-service contracts and pursue sustainable funding after city budget staff said the social-services portfolio faces major shortfalls.

Chair Fuentes moved the recommendation and Vice Chair Duchin seconded it; the committee approved the direction by voice with no objections. The recommendation asks the city manager to create a comprehensive rubric that uses the Austin-Travis County Community Health Assessment to guide prioritization, explore sustainable funding sources and citywide savings, and conduct regular community feedback sessions with providers and stakeholders.

City budget staff presenting the review said the city is preparing for significant shortfalls and outlined a potential $16,800,000 reduction across the social-services contracting portfolio for FY27. Daniel Coletta of the Office of Budget and Organizational Excellence said the work seeks a shared approach that aligns the portfolio with strategic priorities and reduces duplication across partners. "The City is projected to face major budget shortfalls again in FY27 and it's been announced that there will be a planned $16,800,000 reductions across the social services contracting portfolio," Coletta said.

Staff described three levers the city will use: partnership reassessment (mapping who does what across the metro area), potential funding-model adjustments, and a contract/grant evaluation framework. They proposed a three-tier filter: (1) mandatory or legally required services to be preserved, (2) efficiency and realignment to reduce duplication without reducing service reach, and (3) performance and strategic alignment to assess ROI and alignment with city priorities. Carrie Lang, Director of Budget and Organizational Excellence, said staff are still mapping partner ecosystems and department contracts and expect additional analysis and updates to the committee.

During questions, council members pressed staff for history and context on why Austin funds a high share of social services directly, how prior reserve transfers affected the current outlook, and how the framework will capture gaps in geographic coverage and service capacity. Assistant City Manager Stephanie Haydenhower and Lang noted the city's long history of social-service contracting dating to the late 1980s, pointed to past one-time federal or philanthropic funding as part of the context, and said staff will provide additional benchmarking and gap-analysis materials in follow-up updates.

The committee directed staff to return with a memo updating the framework and to present a full set of recommendations in May; staff outlined an engagement timeline through spring with proposed budget decisions in July/August and contract changes taking effect in October. Chair Fuentes said the resolution is intended to shape the manager's social-service reset and to ensure community participation in decision-making.

Next steps: staff will deliver the requested memo and data to the committee; the committee will receive the 2025 Austin-Travis County Community Health Assessment and additional briefings in coming months prior to formal budget decisions.