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Council OKs sale of Roy's taxi franchise

Monday, May 1, 2006 by

Yellow Cab to buy Roy’s under agreement that would set aside permits for new company

Early Friday morning, the City Council approved the sale of Roy’s Taxis permits to Yellow Cab on first reading, with a couple of conditions by Council Member Betty Dunkerley intended to put the system in balance over the next four years. The vote was 6-1 with Mayor Pro Tem Danny Thomas dissenting.

Under the Dunkerley proposal, hammered out after discussions with Roy’s Taxi and Yellow Cab, Roy’s 155 permits would be transferred to Yellow Cab. That would give the Velasquez family some ability to recoup its investment, Dunkerley said. Cabs would be painted and outfitted for Yellow Cab at no cost to the drivers.

Dunkerley also asked the city to set aside 55 new permits for a new taxicab franchise, giving the city three cab companies. An additional 20 new permits would go to Austin Cab, in order to give them the ability to hire some of the cab drivers that would prefer to work for Austin Cab when the transfer is completed.

Actually, the only motion on the table — after a lengthy discussion with cab drivers late Thursday night and early Friday– was the transfer of the Roy’s permits. The move to create a new franchise would require a separate motion from Council. The question would have to go through the Urban Transportation Commission before making it back to Council, possibly in the September or October time frame, Council members were told.

The transfer of Roy’s permits would give Yellow Cab 455 permits in the market, overpowering any competition. That disturbed Mayor Pro Tem Danny Thomas, who saw a need to make a stronger statement on the franchise monopoly.

"I think what we need to do is… I think we should deal with this a little bit more," Thomas said. "I don’t see how we can justify it. I can’t justify it, and I hope anybody sitting up here can’t justify it because these (drivers) have been asking (for a new franchise), and 55 permits is not going to help a new cab company get off the ground. I just don’t see how we can do it."

Council Member Raul Alvarez thanked the drivers and told them he had struggled with the decision on his vote. Roy’s had a right, after 75 years, to sell its business. And if Council denied the transfer, those permits would still be on the street for sale. Alvarez said he would support first reading on the Dunkerley proposal, if only to see if further negotiations could be continued.

At the end of the night – and after three hours of discussion — Thomas was the lone vote against Dunkerley’s proposal. Dunkerley’s estimate is that the changes would not go through until 60 days after the third reading of the ordinance, which would mean roughly three months from last week.

Mayor Will Wynn told Council members they were limited in the actions they could take on the Roy’s-Yellow transfer. Unless the city had just cause under the franchise agreement, it had no right to take back permits from Roy’s. Council Member Jennifer Kim acknowledged that many cities used the medallion system – as opposed to a franchise contract – but that the cost of such an arrangement typically averaged $359,000 per medallion. Such a cost would likely be prohibitive to Austin drivers, Kim noted in an exchange with Wynn.

The creation of new permits, as proposed by Dunkerley, did not win a lot of support from cab drivers who would have preferred to see the Roy’s permits transferred to a new franchisee. Dunkerley said that Yellow Cab had agreed to give 4 of its existing permits back to the city – a comment that drew laughter from the cab drivers in the audience – and an additional 11 would be created with the growth of the Austin economy this year. That would leave the city with a deficit of 60 permits, which cab drivers were keenly aware of in their comments to the Council.

Under Dunkerley’s proposal, Yellow Cab would not have access to any additional permits over the next four years, giving competitors a chance to build business. New permits would be split between Austin Cab and the new franchise. Three applicants have applied for franchises.

Capitol City, one of the three applicants, said it could make a "go" as a franchise with as few as 75 permits. Attorney Jeff Howard, who represented Capitol City, said that the owners had applied for 130 permits but were willing to go with 75, as a minimum, in an effort to move forward with a third franchise in the city.

Cab drivers gave a number of passionate speeches about the low pay and high cost of driving cabs, of Yellow Cab’s higher charges to cab drivers (which Yellow said was because of a better package of benefits) and of the potential threat that new permits could be in the market. Andrew Clements of the Urban Transportation Commission – which voted to recommend denial of the permit transfer – urged Council to take a fresh look at the franchise system in order to minimize the monopoly of the market.

Notes from the campaign trail

OHAN forum focuses on roads, development, environment

True to its name, the Oak Hill Association of Neighborhoods grilled City Council candidates last week about issues near and dear to Southwest Austin neighborhoods: transportation, development, and the environment.

Candidates for Places 2, 5, 6 and the Mayor’s office laid out their campaign platforms and answered a series of questions posed by the association in a two hour forum.

One of the most contentious questions was about the potential impact of passage of Proposition 2 on the May 13 ballot. The proposition is designed to protect the Barton Springs zone of the Edwards Aquifer, but according to some interpretations, could block the city’s ability to develop infrastructure in Oak Hill and surrounding areas.

The question produced the most sparks among the Place 5 candidates, which includes incumbent Brewster McCracken. He said Prop 2 could force Oak Hill to accept a toll road.

“The city is required to share the cost of any road built with gasoline taxes under a development agreement,” he said. “But a toll road is essentially free because the state pays for all of it. Proposition 2 would prevent the city from sharing in the cost of building improvements to Highway 290 and 71. Prop 2 will make Oak Hill residents second-class citizens.”

But McCracken’s opponents accused him of using scare tactics.

“I disagree with his interpretation of Proposition 2,” said Kedron Touvell. “There will be ways for the city to work with the amendment without allowing additional major development in the area.”

“It’s not a case of toll roads or no roads at all,” said Mark Hopkins. “We can find a way to deal with the process of funding the roads that need expansion.”

Candidates were also asked if they thought Oak Hill would get its fair share from the November Bond election.

“Oak Hill does not have a Council member from this area,” said Touvell. “Most of the money in the bonds will go for buying open spaces in this area. Not as much will be for better parks and other services.

But McCracken raised the specter of Proposition 2 again.

“The issue of flooding and drainage comes to mind,” he said. “If Prop 2 passes, the city will not be able to spend an equal amount of money in the Oak Hill area for infrastructure repairs. But I don’t see anything in the language to allow residents out here to pay lower taxes.”

Candidates for Mayor were asked if Oak Hill was a good candidate for a Transit Oriented Development zone.

Mayor Will Wynn said that with Austin facing explosive growth, a TOD makes sense for the area.

“We have to find a place for a million more people in the Austin area over the next couple of decades,” he said. “To do that, we are going to have find ways to put more people in less space. TOD is the kind of land use planning that can make that possible.

Mayor Pro Tem Danny Thomas said any plan for Oak Hill needs to conform to the neighborhood’s planning process. “We’ve got to get the transportation out here first,” he said. “That’s basic to figuring out where to build” (a TOD).

The mayoral candidates also talked about improving transportation in the area.

“South Austin always seems to be behind the rest of the city on these issues,” Thomas said. “We haven’t done a good job of planning for these areas. We need more stakeholder input on how to plan for this area.”

But Wynn pointed out that Oak Hill is a prime example of how Austin needs to change. “We need a jobs and housing balance, instead of people living here, working there, playing over there and being stuck in traffic in between.”

Place 2 candidates were asked about annexation, a touchy subject among many in the area.

“Many times, the city annexes an area in order to get the tax revenues,” said Mike Martinez. “But we need to look at when amenities and services can be provided. The city wants dense development in the central core, rather than sprawl. But we need to provide equal services for all the parts of the city that are annexed.”

But candidate Eliza May said the city must look at the areas and see if there is a balance. How does the cost of providing services and the revenue gained balance?” she said. “It needs to be something the community is asking for.”

In Place 6, candidates were asked if they would support overriding the SOS regulations in order to allow businesses in Oak Hill to redevelop.

“The goal of the city is to increase density,” said candidate Darrell Pierce. “With the impervious cover regulations in the SOS, businesses will need to build up, not out.”

Candidate DeWayne Lofton said it would not be easy. “It takes a super-majority of the Council to override the SOS,” he said. “It’s a complicated issue. The SOS is a solid piece of legislation and it will be difficult to circumvent. I don’t want the city to find itself in court over the issue.”

Candidate Sheryl Cole said the city needs to take a look at what is best for Oak Hill. “I know there are plans for a mini-downtown in the area,” she said. “It’s designed to help redevelop the area. But I also support SOS.“

©2006 In Fact News, Inc. All rights reserved.

Election starts now . . . Early voting begins today for four City Council races and seven ballot propositions, the most controversial of which are two amendments to the City Charter sponsored by the Save Our Springs Alliance. So far, only Mayor Will Wynn and Place 6 candidate Darrell Pierce are the only ones who have indicated that they are spending the big bucks required to put their faces on television. But the ads attracting the most attention were put up by the Clean Water Clean Government PAC, which began running an attractive TV spot urging voters to vote in favor of Propositions 1 and 2 on Friday. The grapevine says the PAC bought $100,000 worth of air time to make sure everyone who watches local news or a number of cable TV shows would have the opportunity to see the spot . . . Neutral . . . The Board of Directors of Liveable City, which released an extended report on each of the top two propositions, decided this weekend not to take a position on the Clean Government and Clean Water amendments. However, the group released a statement which said "open government and transparency are critical to the City of Austin," They urged the city to convene a citizen's task force on land development, police records, economic development incentive negotiations, and high-level city council and city staff meetings, to consider implementation of an open government ordinance . . . Ethics complaint accepted . . . Arthur DiBianca has gotten word that the Texas Ethics Commission has accepted his most recent complaint against Rodney Ahart, former treasurer of Onward Austin, the PAC which put the successful anti-smoking ordinance on last year's City Council ballot. DiBianca alleges that In 2004, the American Cancer Society (a nonprofit corporation) spent about $52,000 petitioning for the anti-smoking measure, but Onward Austin did not report those "in-kind contributions" until April 7, 2005. DiBianca says the report was due January 18, 2005. He also says that Onward Austin did not give complete information on the contributions. This is particularly inconvenient timing for Ahart, who is running for a seat on the Austin Community College Board of Trustees.

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