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Travis County may ask voters to OK funding for new courthouse

Wednesday, August 8, 2012 by Michael Kanin

Despite a positive recommendation from an advisory committee, Travis County Commissioners remain concerned about whether to fund a new downtown Civil and Family Courthouse using a public-private mechanism.

 

If commissioners elect to proceed with a public-private partnership, Travis County’s portion of the construction bill is expected to be roughly $205 million. If county officials decide to go with a traditional approach, construction could cost as much as $343 million.

 

All of these numbers are preliminary. Such items as cost and scope will become more clear as commissioners begin to narrow their focus into a decision. However, one thing seems clear: Commissioners would, at least at this early point, rather go before voters for any construction costs associated with the new courthouse.

 

“I’m going to probably be prepared to say that we need to … put this on a ballot,” said Commissioner Margaret Gomez.

 

Most of Gomez’ colleagues agreed with her, though Commissioner Sarah Eckhardt hedged a bit. “If it didn’t pass, our next gambit would be to … go to (certificates of obligation bonds), despite the fact it hadn’t passed,” Eckhardt suggested. “That’s doable, correct?”

 

After commenting that Eckhardt should phrase her question “real carefully,” Assistant County Attorney John Hille, told Commissioners that he would prefer to discuss that option further in Executive Session. They obliged him.

 

The county could use general revenue bonds or certificates of obligation bonds to fund its cost for the new courthouse; general revenue bonds would require voter approval, while certificates of obligation would require only a majority vote of the commissioners.

 

The county’s civil and family operations are housed in the aging Heman Marion Sweatt courthouse. In December, 2010, Commissioners bought an empty downtown block at 3rd and Guadalupe Streets for $21.75 million with the idea of turning the parking lot into its new courthouse. (See In Fact Daily, December 15, 2010.)

 

The purchase of the land opened the question of how best to develop it. Struggling to come to a consensus, the Commissioners in early May empowered a citizens’ committee to deliver a recommendation on how to fund the project.

 

On Tuesday, Commissioners heard from key members of the group: Chair and former Austin Council Member Betty Dunkerley, attorney Martha Dickey, and real estate expert Charles Heimsath.

 

The committee recommended that county officials move forward with a public-private partnership, citing seven key reasons. These include that “the speed inherent in the (public-private-partnership) delivery method” could aid the court in acting quickly on the project, that a public-private partnership would offer the county “a single point of contact and accountability,” and that the transfer of risk offered by a public-private partnership was a key factor.

 

“Probably the biggest benefit that we thought the county would get … was the transfer of risk,” said Dunkerley. “We felt that, with a (public-private partnership), you could transfer more of your risk – your construction risk, your maintenance risk, everything – that would relieve you of some of that responsibility.”

 

The concept of a public-private partnership has been used most extensively in portions of the British commonwealth. With it, the county could hire a private firm to manage any number of functions of the new courthouse, from its design and build all the way up to maintenance and operations. How much control the county turns over to a private firm would be up to Commissioners.

 

The Austin Water Utility employed a version of the public-private partnership concept when it contracted for the construction of Water Treatment Plant 4. That effort, under what is called the Construction Manager at Risk approach, has led to some questions about the risk portion of the agreement – especially after utility director Greg Meszaros told Council members that the project could come in slightly over budget. (See In Fact Daily, May 24, 2012.)

 

New York Governor Andrew Cuomo considered using a public-private partnership to fund the $5 billion-plus construction of a new Tappan Zee Bridge, but decided against the idea in May. The state will issue bonds for its portion of the project.

 

Dunkerley also told commissioners that her committee recommended three items it was not instructed to cover: first, that the court should develop the entire block it purchased – half, initially, for private use and half for the courthouse;  second, that it should include space for retail in the project; and, lastly, that the court should use certificates of obligation bonds, as opposed to general revenue bonds, to fund construction.


In the end, the Commissioners acted only to approve and receive the report of the committee.

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