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City and company continue to work out details of agreement

Friday, July 19, 2002 by

The City Council approved on second reading the settlement agreement with Stratus Properties early this morning after hearing from a quieter and more respectful crowd than during the lengthy hearings of June 27 and July 11. More than 200 signed up to speak at the hearing, with 58 in favor and 144 opposed. Opponents strenuously objected to the Council’s decision to limit their input to one hour. Council Member Raul Alvarez voted no, as expected, with the remainder of the Council voting in favor of the proposal. The Council also approved the associated zoning cases for the 1,273 acres Stratus owns at Circle C. A couple of protesters wore kerchiefs over their mouths to symbolize the fact that they could not speak. At one point, Mayor Pro Tem Jackie Goodman lost control of the meeting, prompting a chant of, “Let the people speak.”

Yesterday’s hearing was technically called to discuss two Stratus zoning cases which could not be considered last week because of posting errors. One tract is earmarked for the Ladybird Johnson Wildflower Center and the other will be zoned for retail sales. Neighbors in favor of the deal said they hope the tract will be the site of a grocery store and Steve Drenner, Stratus’ attorney, said his client is negotiating with HEB concerning the tract.

Robert Breunig, director of the Wildflower Center, was the lead speaker in favor of the agreement, which would give Tract 113—contiguous to the city’s Proposition 2 land—to the center. The additional land would allow the city and the center to work in cooperation “in creating a contiguous block of protected land over the sensitive part of the aquifer,” he said. Breunig indicated that the land would be incorporated into the center’s landscape restoration program. The goal of that program is “to learn how to bring ecological health back to landscapes,” he said. Breunig said part of the 38-acre tract might also be used to build a new entrance to the Wildflower Center so that it would no longer conflict with users of the busy LaCrosse intersection. Breunig drew applause from the audience when he said, “It would be nice if all of these tracts could be open space.”

Breunig continued, “Tonight our community is at a crossroads. We have an aquifer and a springs that is in poor ecological health. We know that. And we have a landowner who has property rights, grandfathered property rights. We know that. And we have the collision of these two principles, these two realities . . . Our approach has been to advocate coming together with a compromise, an imperfect compromise, perhaps, but a compromise . . . to preserve as much land as possible and to increase the environmental quality of the overall project. We have worked hard to that end, and I think we have an agreement fashioned now that sets a new standard for development over that part of Austin. I know that a lot of my friends disagree with me on this, but given the alternatives that we have, it’s the best possible alternative—given the alternatives we have before us.”

Breunig was obviously distressed later in the evening when Lauren Ross, an environmental engineer hired by the Wildflower Center to assess the environmental implications of the deal, asked the Council not to approve it. However, Ross did not say what representatives of the Save Our Springs Alliance have said repeatedly—that strict compliance with the SOS Ordinance would produce a superior result.

Ross asks for broader stakeholder process

Ross, who participated in the stakeholder process, brought opponents to their feet applauding when she tearfully asked the Council to table the proposal. She said “We asked the city to trade dollars for a reduction in the square feet of office space and the number of homes on the Stratus lands . . . We made that request based on our experience at the Texas Legislature and the historical success of Stratus there and the opinions of good legal experts . . . that the city would likely lose a Chapter 245 challenge, the downturn in city tax revenues and the inexorable market forces that would pave the entire Barton Springs zone.

“You can only support this deal if you are willing to live within the box of the agreement that this is the real world. Unfortunately Barton Springs and the salamander and all of us live in a different real world. Rather than a world of law, politics and money, we live in a world of rocks and water—a world of sediment contaminated with toxic and carcinogenic chemicals, byproducts of traffic, wastewater lines and pipelines . . . If we are to protect what we love best, we cannot allow corporations to create our world of law of politics.” Ross said she wanted the city to attempt to engage all stakeholders—including those in Hays and Blanco Counties—to preserve the aquifer.

Following her testimony, Ross told In Fact Daily that the opinion she gave the Wildflower Center says, “If you assume zoning and Chapter 245, this is not worse than, and in some ways is better than” a strict application of the SOS ordinance.

Tim Jones, a member of the city’s Environmental Board, told the Council, “I think this agreement is the mask of a beautiful woman on the face of a gorilla.” He then asked them to adopt a moratorium on new development or zoning in the Barton Springs watershed instead of going forward with the agreement.


Stratus Properties CEO Beau Armstrong, who had not previously spoken, allowing Drenner to represent the company, defended the amount of public input the company and the city had solicited. “This has been a very emotional and difficult process for all of us to be involved in. We have spent the better part of two years and thousands of hours worth of not only our time but staff time as well as neighborhood time to fashion this proposal,” he said. “It is by no means perfect. There are many things that I’m not one hundred percent happy with, but I believe that’s just the nature of any type of compromise.”

Jon Beall, president of the Save Barton Creek Association, echoed Armstrong’s assessment of the process He outlined the discussions that had taken place over the past two years. “I dream about this in color,” he said. “I am neutral on the deal because I have not seen the final settlement, but I urge you to make it the best possible settlement it can be in favor of Barton Springs and the aquifer.”

George Cofer told Council members that he too was cautiously optimistic about the proposed agreement. “I support the concept of the settlement agreement, and I’m getting closer and closer to actually saying I support that stack of paper that documents the settlement agreement,” he said. “I’m more and more convinced that this is not only the best alternative, but is in fact far, far better than the lesser of two evils. There are so many good things that will accrue to the community if you vote to settle with Stratus.”

A laugh for the Democrats

Bill Bunch, executive director of the SOS Alliance, complained that the hearing was unfair because city staff, whose job it is to present the zoning changes and other elements of the proposal, got a half hour in addition to the hour speaking time those favoring the agreement had. Bunch called Stratus a “rather puny and anonymous corporation,” and asked the Council, “Who told you you were powerless and when did you start believing it? The fundamental premise of this deal is that the only alternative is something far worse.” He added, “You have embraced a vision that means we cannot save the springs . . . you have taken on the complete worldview of failure . . . We have a man in the White House who is totally incompetent, but he got there because he believed he can get there. If George Bush can be in the White House, you can save the springs.” The audience responded with a round of applause and Mayor Gus Garcia, a staunch Democrat, laughed.

Council Member Daryl Slusher asked Nancy McClintock of the Watershed Protection and Development Review Department about a letter signed by 53 University of Texas scientists questioning the deal. She said staff would be meeting with members of the group to find out “what they think should be appropriate.”

David Johns, a hydrogeologist who negotiated setbacks from critical environmental features, including sinkholes—where water enters the aquifer most quickly—told the Council that Stratus had agreed to setbacks of up to 300 feet. Those setbacks are a part of Austin’s regulations, he said, but are not covered by the SOS Ordinance. In response to questions from Slusher, Johns said he believes the setbacks he negotiated will protect the features as intended.

Goodman offered an amendment concerning assessment of property to pay for the perpetual maintenance of structural controls to limit runoff and reduce pollutants entering the aquifer. City staff and representatives of Stratus are still working out details on the provisions dealing with what happens in the event the city decides to downzone any of the land within the agreement. On Thursday afternoon, Ken Jones, general counsel for Stratus, indicated that the company had made another concession in that area, reducing the amount of land that would have to be returned to Stratus should the city decide to downzone the property. However, City Manager Toby Futrell told the Council that the matter is still in negotiation.

As the Council adjourned, a few stalwarts for the opposition began to chant “Recall.” While the vote could damage the political aspirations of some Council members, the two that might be most concerned about a lack of enthusiasm from environmentalists—Slusher and Goodman—have three more years. Alvarez, Danny Thomas, Will Wynn and Garcia have not indicated whether they wish to run for re-election when their terms end next spring.

The Council does not meet again until Aug. 1, when the matter is planned for third and final reading.

City could face expensive problems as a result of deregulation

Austin Energy ( AE) officials plan to bring a resolution to the City Council to help determine how much money should be kept in the utility’s Debt Management Fund.

The fund was created in 1996 by Council resolution, but another Council action in 1999 allowed the fund to be used for items other than paying down existing debt. “We at the utility have come to view this fund, in addition to improving our competitive position, as a contingency fund for unexpected emergencies and to address revenue shortfalls or emergency power purchasing needs,” said Roger Duncan, AE Vice-President for Governmental Relations, Energy and Environmental Policy.

The Debt Management Fund currently contains approximately $181 million dollars. Since its creation, the amount in the fund has ranged from $103 million to $221 million. Austin Energy officials will ask the Council for a policy on how much should be maintained in the fund.

Having additional cash on hand could help the utility deal with the pressures of the competitive market place should problems develop at one of the city’s power-generation facilities. Duncan told Council members that Seattle’s public utility, Seattle City Light, had used up its entire cash reserve when it was forced to pay higher than expected prices for power in 2000 and 2001.

“They have to go on the wholesale market to purchase power for about 10 percent of their needs,” Duncan said. “When they got caught in the power prices that surged in the western states, they had a $590 million dollar budget impact.” Seattle increased rates for electric customers and the electric utility wound up borrowing money from the city’s cash pool to keep from raising rates further. “Instead of money being transferred from the utility to the city, the city had to transfer money to the utility,” Duncan said. (Further details of the problems faced by Seattle City Light can be found in the archives of the Seattle Post-Intelligencer at

One important difference between Austin and Seattle is that Austin Energy has enough generating capacity to meet 100 percent of the city’s needs, which is a long-established policy. While there are no plans to change that policy, there is still the possibility that the utility could be forced to buy power on the open market in an emergency. If one of the utility’s power plants were off-line for an extended period during the summer, the cost of securing power on the wholesale market could easily range between $55 million and $100 million.


City Council appointees . . . On Thursday, the Council granted the wishes of at least three Planning Commissioners by appointing their replacements. The new commissioners are Niyanta Spelman and Michael Casias, formerly of the Zoning and Platting Commission, and Matt Harris, who previously served on the Robert Mueller plan advisory commission. Diana Castañeda was reappointed to the ZAP and Lee Leffingwell was reappointed to the Environmental Board. The reappointment of Leffingwell, the chair of the Environmental Board, was held up by political considerations, since his name appeared in an ad supporting the election of Kirk Mitchell over Daryl Slusher. Leffingwell told In Fact Daily, “In a private conversation with Kirk Mitchell I told him I would support him on environmental issues, but not other issues, and I subsequently changed my mind.” He said that his name was not used after he voiced an objection. As a consensus appointee, Leffingwell needed the support of the entire Council . . . Postponed . . . Given the lengthy discussion on the Stratus items Thursday night, the Council decided to delay several other potentially controversial items. The appeal of a decision by the Zoning and Platting Commission to deny an amendment to the Harris Branch PUD was rescheduled for August 22nd and a public hearing on the Upper Boggy Creek Neighborhood Plan was pushed back until August 1st. The Council did pass a measure allowing for subdistricts with neighborhood planning areas (see In Fact Daily, June 17, 2002) and approved a resolution on the timetable for shutting down two of the units at the Holly Power Plant. Several neighbors of the plant spoke during the public hearing, urging the Council to shut down the entire plant. The Council also postponed indefinitely consideration of the Downtown Austin Mobility Plan, which had generated considerable opposition among certain segments of the downtown community.

© 2002 In Fact News, Inc. All rights reserved.


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