Council approves toll study

Consultants tell city they need at least 90 days

Although the Austin City Council would prefer to have the results of an outside review of the Central Texas toll road plan in hand sooner rather than later, Council members agreed on Thursday to extend the deadline from 60 days to between 90 and 120 days on the advice of city staff.

"We have gotten some feedback that 90 days would be sufficient as a minimum, but the 60 days was where we were struggling," said City Manager Toby Futrell. "We were really having trouble finding someone who thought they could turn this around in 60 days." Since the Council voted last week to proceed with the study, Chief Financial Officer John Stephens and other staff members have been in discussions with some nationally-known transportation consultants about the possibility of taking on the project.

The Council had originally pushed for a 60-day turnaround on the project in order to make sure Council members were fully informed before the next vote on the Capital Area Metropolitan Planning Organization’s (CAMPO) 2030 Transportation Plan, which will occur in either April or May. Several members of the Council also serve on the CAMPO board, which signed off on the toll road plan last summer and has since made several modifications. But rather than push for an incomplete study in 60 days to beat the CAMPO deadline, the Council decided to allow the consultants sufficient time to complete their work. "I certainly want to make sure we add the needed time on there," said Council Member Raul Alvarez, who moved approval of the item.

"We need to have the time to do this right," said Council Member Brewster McCracken, who has emerged as one of the most vocal critics of the toll road plan after originally voting to support the plan last summer. "When we get the report back, we could vote to amend the CAMPO 2030 Plan at a subsequent meeting. The most important thing is to not repeat the mistake that was made with the toll road plan in the first place, which was to act with insufficient information in a rushed manner. Let's get some good information and take the time and do it right and get a better result."

Mayor Pro Tem Jackie Goodman wanted some assurances that delaying the report past the CAMPO vote on the 2030 Plan would not have any unintended consequences. McCracken assured her that any vote taken by the group this spring could later be amended provided there were enough votes on the board. "The other roads in Travis County are not scheduled to open as toll roads for a couple of years," he said. "We do have some concern that they may try to rush up toll gantries on these roads beforehand. I think in light of the alarming spending practices we saw in the Comptroller's report—like hosting parties at the Four Seasons and first class plane tickets and paying the Chair's administrative expenses at his company—I think that raises questions, and we will have to take caution on this. We'll keep an eye on it." (See In Fact Dail y, March 10, 2005.)

In addition to speaking with transportation consultants in the past week, the city staff has also approached the Central Texas Regional Mobility Authority (CTRMA) about participating in the cost of the study. "They didn't give us a definite 'no'," said Stephens. "They said the RMA's board meeting would not be until the end of March and it would have to be something that would be approved by the board. They certainly committed to provide staff resources and time to assist with the study."

The Council's resolution, approved on a vote of 7-0, will also direct the staff to ask Travis County Commissioners to help fund the study, which could cost up to $100,000. "It makes sense to me that Travis County in particular would participate in this," said Council Member Daryl Slusher. "Both Travis County and Austin have representation on the CAMPO Board that approved the plan. I think it's something that really affects the county and the city a lot. It makes a lot of sense for them to share in it, especially since we share 80 percent of the same taxpayers, so I would like to make a formal appeal to them as well."

More bonds no problem, says Austin CFO

City has good bond rating as a result of fiscal policies, says Stephens

As the City of Austin pays off bonds issued in 1998 and 2000, its bond rating is strong and the city is in solid financial shape to issue more bonds in 2006. Chief Financial Officer John Stephens outlined the factors affecting the city's bond capacity Thursday, telling the Council they could issue up to $279 million in bonds for capital projects in 2007 without affecting the city's tax rate for bonded indebtedness.

Mayor Will Wynn recently called for a bond election in 2006, in part to purchase open space in accordance with the priorities outlined by Envision Central Texas and in part to fund drainage improvement projects (see In Fact Daily, January 26, 2005). Council members are still selecting their representatives on a Citizens Bond Advisory Committee, which will make recommendations about the size of the bond package and specific projects.

Since the list of needs identified by various departments over the next few weeks could exceed the $279 million available to the city without raising the tax rate, Stephens prepared a chart for the Council outlining four different alternatives. The first, keeping the tax rate for bonded indebtedness at its current level, could yield the city about $46.5 million per year for a total of six years. Raising the tax rate by one cent per $100 of property value in the first year after a bond election would increase that annual yield to $80 million per year, for a total of $360 million dollars of bonding capacity. Additional increases in the two following years would raise the amount available to $499 million and then to $600 million.

The city's bond rating, Stephens advised, was solid at AA+. The city's adherence to its financial policies is one factor rating agencies use to grade the city's bonds, and Stephens said the City Manager and Council had stuck by those policies, even during difficult financial times. That includes a strict timetable for borrowing money by issuing bonds. "We should not propose to the voters more than we can reasonably issue in a six-year period," he said. "This policy arose to avoid problems we had in the past where voters approved bonds for projects we did not issue for a number of years, and then by the time we did get to the projects the cost estimates for those were outdated. For the 1998 election, the policy has helped us keep track of bond issuance and related spending."

In addition to the impact on the tax rate, the city staff also tracks how bonds will affect several other aspects of the city's financial operations. The city tracks the ratio of debt service to total city expenditures and the bonded indebtedness as compared to the total assessed property value in the city. According to Stephens, the city could issue bonds in 2007 and stay well within the guidelines for those ratios set out by the city's financial policies. "Although we cannot predict with certainty how much our population or our assessed value will have grown by 2016, we think our projections are conservative," he said.

The bond capacity data could play a major role in discussion about the proposed 2006 bond package as groups line up over the next year to lobby for their favorite projects to be included in the package. Council Member Betty Dunkerley provided what could be a preview of the debate last week at the Oak Hill Association of Neighborhoods candidates’ forum. When asked about her stance on taxes, she reminded the crowd about her efforts to keep the city's tax rate low during the recent economic downturn and her pledge to carefully monitor spending during the recovery. Commenting on the city's bonding capacity, she did say she would be willing to consider a one cent increase in the tax rate for bonded indebtedness, depending upon the needs identified by city departments and the Citizens Bond Advisory Committee.

©2005 In Fact News, Inc. All rights reserved

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