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Toll opponents sue to stop RMA bonds

Wednesday, March 2, 2005 by

Suit seeks to remove "illegal" board of CTRMA

Toll road opponent Sal Costello filed a lawsuit yesterday asking for a temporary injunction to stop the delivery of $250 million in bonds for the US 183-A project today.

The Central Texas Regional Mobility Authority (CTRMA) sold those bonds on Feb. 16. Documents on those bonds require the CTRMA to verify both when the bonds were sold, and when they are delivered, that there are no significant material claims or lawsuits pending against the CTRMA. In other words, outside legal counsel, in this case Vinson & Elkins, must give the CTRMA a “clean bill of health.” The suit could put that in jeopardy.

Costello, as founder of the People for Efficient Transportation (PET), is requesting a temporary restraining order against the CTRMA to stop the delivery of the bonds. Attorney General Greg Abbott and Comptroller Carole Strayhorn also were named parties to the litigation in their capacities as the agencies that must “sign off” on the CTRMA’s bond deal.

According to the lawsuit, PET claims the Central Texas Regional Mobility Authority is an illegal board, with members who have exceeded their terms under the provision of the Texas Constitution. House Bill 3588 designates six-year terms for RMA board members, but Costello said the constitution states no one on a regional entity can serve more than two years. PET is asking the court to stop the delivery of the bonds.

"The illegal, unconstitutional CTRMA board should not be allowed to move forward with the bond sale, nor on the double tax toll plan,” Costello said. “An illegitimate board should not be permitted to control the tolling of 50 percent of our metro highway lane miles, especially without an independent economic impact study showing the need for the plan. This is nothing more than a special-interest political power-play and is a recipe for disaster.”

The TRO hearing is scheduled for 10am this morning in District Judge Jeanne Meurer’s court. The US 183-A bonds are scheduled for delivery to investors at 2pm. RMA attorney Brian Cassidy expressed confidence the injunction would fail. If not, the TRO could have serious implications for the cost of the US 183-A project.

“We think we’ll prevail on the merits of the case. This was obviously calculated to stop a project which had no other real opposition,” Cassidy said. “It would be very costly to Central Texans if the transaction is enjoined.”

The US 183-A bonds were issued at highly favorable rates. Cassidy confirmed that a temporary restraining order would mean the CTRMA would have to take the bonds out to market again. If that were to happen, the deal would unlikely not be as good, since interest rates have been on the rise since the sale was approved on Feb. 16.

If the restraining order fails, Costello intends to petition Abbott and Strayhorn to refuse the bonds. Costello believes that stopping the bonds is essential to undoing the RMA. “That bond sale is really the first step toward cementing themselves into existence,” Costello said. “After the bonds are sold, if Travis County wants to get out of the CTRMA and start its own RMA…in a sense, the two counties are married for the next 40 years."

Bar owners sue to stop smoking referendum

Several bar and restaurant owners, concerned about the possible effect of an outright ban on smoking in their establishments, filed suit in federal court late Monday to stop the City of Austin from putting a referendum on the May 7 ballot to tighten up smoking regulations. City Clerk Shirley Brown plans to ask the Council tomorrow to place the Onward Austin referendum on the ballot.

Austin Free PAC; Paul Silver, owner of 219 Wes t; Bob Cole, owner of Hill’s Café; and a number of other clubs are seeking a preliminary injunction and a declaration that the proposed ordinance is unconstitutional and violates the city charter and state law. Marc Levin of Potts and Reilly represents the bar owners. He told In Fact Daily on Tuesday that federal Judge Sam Sparks had scheduled a hearing on the preliminary injunction for March 17. Levin said he did not know whether the judge might consider issuing a temporary restraining order before that.

Rodney Ahart, the sparkplug behind Onward Austin’s successful drive to gather more than 36,000 signatures of registered voters, had not heard about the lawsuit when contacted Tuesday. However, he said, “That’s unfortunate. Anything like this will be seen as anti-democratic. Tens of thousands of people signed to put this on the ballot. Now you have people trying to thwart the democratic process.”

According to the bar owners’ complaint, there are 2,000 smoke-free restaurants in Austin, as well as 400 bars where smoking is not allowed. One of the principal objections to the proposal is that it would create a criminal offense without culpability on the part of a bar owner, who might not even be present when the offense—smoking–takes place. The offense would be a Class C Misdemeanor violation of the current law, which is punishable by fine only.

Levin said his clients feel very strongly that the ordinance would cost the city money and hence, they argue, the Onward Austin initiative “constitutes an appropriations measure” because it creates a tobacco education program, eliminates the current permit system and would negatively impact the city’s sales tax revenue. The plaintiffs say that the city currently receives more than $63,000 annually from bars that obtain smoking permits. That revenue would be lost, they say, and sales tax revenues would decline as alcoholic beverage sales diminished in the city. They cite an example from Dallas, which they say suffered “an $11.4 million decline in alcoholic beverage sales” while surrounding cities, such as Richardson and Plano, experienced increases when Dallas enacted its smoking ban.

The federal government already has a comprehensive scheme to regulate tobacco advertising, Levin said. He will argue that the initiative would violate the First Amendment by “expressly banning certain forms of tobacco advertising and implicitly banning all such advertising in public places.” If the referendum became law, it would prohibit the display of ashtrays and other smoking accessories in bars and restaurants. At least one of the plaintiffs keeps ashtrays in his bar which advertise a cigarette brand, Levin said. The plaintiffs are also injured because presumably they would be prohibited from continuing to sell tobacco products even though they are licensed to do so, they argue.

In an email to City Council members, Silver asked that they delay a decision on whether to place the referendum on the May 7 ballot. However, March 7 is the deadline for placing items on the ballot under state law. It seems unlikely that the Council would delay action based on the possible outcome of the bar owners’ lawsuit.

Notes from the campaign trail

The Austin regional group of the Sierra Club announced Tuesday that it was endorsing Lee Leffingwell for Place 1 and Margot Clarke for Place 3. In announcing Leffingwell’s endorsement, political committee chair Karin Ascot, said, “He has consistently demonstrated a thorough understanding of quality of Austin’s unique natural places. We are confident in his ability to make the right decisions for the public good as Austin faces the challenges that our continued growth will bring in the future.” Leffingwell and Ascot served on the Environmental Board together for several years. He has won the endorsement of every group that has announced its choices so far.

In addition to Leffingwell, the Sierra Club also endorsed Margot Clarke. “We have chosen the best candidate to protect the fragility and uniqueness of Austin’s environment,” said Ascot, ”Margot Clarke knows how urgent it is to protect the precious natural resources on which we depend for our health and the high quality of life for which Austin is renowned.” Clarke is well known for her work on environmental issues, including a stint as outreach coordinator for the Lone Star chapter of the Sierra Club, which she quit in order to run for office.

The Sierra Club did not endorse a candidate in Place 4. The seat is held by Betty Dunkerley, who is seeking re-election. Dunkerley’s only announced opponent is perennial candidate Jennifer Gale. Leffingwell’s opponents include Scott Williams, Steven Adams, Andrew Bucknall, James Paine and Casey Walker. So far, only Leffingwell, Walker and Williams have filed for the seat. Other Place 3 candidates include Jennifer Kim, Gregg Knaupe, Mandy Dealey and Wes Benedict. Benedict, who ran against Council Member Danny Thomas in 2003, filed his designation of campaign treasurer last Friday but has not yet tendered his filing fee or signatures needed to place his name on the ballot. Next Monday is the last day to file for these races.

Mayor Pro Tem Jackie Goodman said Tuesday that she is putting together a notebook of issues and current statistics “for whoever gets Place 3.” Goodman, who will retire in mid-June, has served on the Council for 12 years. She is the current longest serving Council Member and has said she will become a consultant when she returns to the private sector.

The Oak Hill Association of Neighborhoods will host a City Council candidate forum at the Regent’s School, 3230 Travis Country Circle, from 7-9pm tonight.

©2005 In Fact News, Inc. All rights reserved

Experienced adversaries . . . Rodney Ahart, leader of Onward Austin, and Marc Levin, who has sued the city to keep Onward Austin’s referendum off the ballot, both ran for the same Austin Community College seat eventually won by Veronica Rivera . . . Today’s meetings . . . The Environmental Board will meet at 6pm at the Council Chambers and the Water and Wastewater Commission is scheduled to meet at 6pm in Waller Creek Center. The Art in Public Places Commission will meet in Room 2.016 of City Hall at 6pm . . . Musical moms at the Symphony . . . Two of Austin's talented moms will be on the same stage March 26th to perform with the Austin Symphony Orchestra. Kelly Willis and Sara Hickman bring their popular songs for kids to the stage with the Symphony at the Bass Concert Hall when the ASO presents its Spring Family Concert, " Musical Moms." For more information, visit or call 476-6064.

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