Austin city memo details $5.28M in social service contract cuts

Donald Earl, who said he has been homeless for eight years, stands with his belongings outside a voting location at the Terrazas Branch Library on Tuesday, Nov. 4, 2025. Austin voters are deciding on Proposition Q, a property tax rate increase that would, in part, fund $20.4 million for up to 350 new rapid rehousing units and expanded emergency shelter beds and services for people experiencing homelessness.

Jay Janner/Austin American-Statesman

A city memo obtained by the American-Statesman offers the first detailed look at how Austin plans to cut its social services budget following the failure of Proposition Q and the passage of an austerity budget last month.

In the Wednesday memo to mayor and City Council, City Manager T.C. Broadnax outlined $5.28 million in cuts to city-funded social services. The reductions will be generated by a 10% across-the-board reduction to contracts held by the economic development and public health departments, and municipal and community courts, and a reallocation of Homeless Strategy Office funds by 4%, the memo stated.

A woman sleeps on the sidewalk outside Caritas of Austin on East Seventh Street in Austin on Monday, Dec. 1, 2025. The nonprofit works to support people experiencing homelessness.

Jay Janner/Austin American-Statesman

Some social service providers say they were not notified of the reductions before the memo was sent to elected officials, and that the reductions outlined were larger than they were led to believe.

“This has come as a complete surprise and shock to the nonprofit community,” said Walter Moreau, executive director of Foundation Communities, which is facing about $500,000 in cuts. “There was never any indication this was an across-the-board 10% chop.”

Moreau said Austin Public Health invited him and other nonprofit leaders to a meeting Thursday to inform them of the cuts. But he said given the holidays, leaders of many of the affected organizations are on vacation and do not know about the changes.

“This is wrong,” he said. “The community needs to know what the city's doing.”

Christina Collazo, executive director of Todos Juntos, also learned of cuts to her nonprofit at the Thursday meeting. Her organization is facing about $80,000 in cuts to two different city contracts. She said Austin Public Health gave the organization four weeks to implement the cuts.

“That short notice, when all of us are wrapping up the calendar year and trying to get things squared away, as you can imagine, it's very difficult to make work,” she said.

Although the City Council approved a revised budget a week before Thanksgiving that called for cuts to social service contracts, how exactly those reductions would be made remained unclear until Broadnax’s Wednesday memo.

But the memo still hasn’t been released to the public. As of 1 p.m. Friday, the memo did not appear on the city’s official distribution webpage, which states the city makes “every reasonable effort to post memos the next business day.”

“Staff have begun the process of notifying impacted partner agencies and organizations regarding the changes to their City contracts via phone calls, virtual meetings, and written notification,” Broadnax said in a statement to the Statesman Friday. “Given the number of impacted organizations, staff wanted to meet with our partner agencies before they heard about any changes through other sources.”

He added that as part of next year’s budget process, the city plans to inventory all contracts across departments that provide social or community services to identify duplication of services, merge similar agreements and ensure “that our investments are fiscally sustainable.”

Collazo said the fate of one of her nonprofit’s other city contracts remains unclear. When the nonprofit reached out to Austin Economic Development about possible reductions, she said the department told her group they would reach out next week about joining a call alongside Austin Public Health to nonprofit leaders.

Broadnax’s Wednesday memo states that the city anticipates an additional $16.8 million reduction to the social services contract budget next year, and includes a list of every social services contract and whether or how they will be cut.

City Council Member Ryan Alter said he was also somewhat surprised by how cuts were made.

“I had hoped that we might do slightly more refinement,” he said. “I think given the time that they had, they felt the most appropriate way was basically to do an across-the-board cut.”

Alter said the cuts are a direct result of Prop Q’s failure and “the result of limited resources.”

Collazo said her organization is considering staff-wide pay cuts, changes to its staff health insurance policy and reductions in spots available in their free childcare service.

Moreau, of Foundation Communities, said his organization would “carry on the best we can.”