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Council OKs rail ballot tweak; foes protest

Friday, August 15, 2014 by Michael Kanin

Austin City Council members Thursday approved what they called a clarifying language change to what is now a November mobility bond ballot question. As they did so, they continued to hear vocal opposition from a handful of opponents to the item, which is set as a $600 million bond question and a “covenant” to construct $400 million in road improvements.

In response to Council Member Kathie Tovo — who suggested the vote was focused on $600 million for rail — Austin Mayor Lee Leffingwell attempted to underscore his take on the measure. “It also implies a covenant with the voters that this ($400 million in) debt will be incurred … for the purpose of building specific road projects,” Leffingwell said.

After the meeting, Austin Transportation Department Director Robert Spillar told the Monitor that citizens would indeed be voting on a $1 billion package. “We are informing the voters that if they approve rail, there could be up to $1 billion worth of debt acquired by the city,” he said. “$600 million is what they are approving for rail, but as part of a contract to the voters, City Council is saying ‘and we will make good on the other $400 (million), which may well be debt products.'”

When asked if the city would be able to issue general obligation bonds for the $400 million in proposed road projects, based on the November vote, Spillar said that would not be the case.

General obligation bonds are voter approved debt instruments backed by an accompanying tax. Austin Chief Financial Officer Elaine Hart told Council members that officials could consider a range of alternative options to fund the $400 million in road construction. These, she said, include state highway bonds, Certificates of Obligation and other funding sources.

Tovo expressed concern over the notion of using Certificates of Obligation — instruments issued without voter approval — to fund such a large investment.

Meanwhile, opponents including Brad Parsons, Roger Baker and District 10 Council candidate Bill Worsham continued to stress the idea that a $1 billion question would limit the city’s future bonding capacity. Hart, unprompted by Council, directly refuted that idea.

“The $1 billion will not exhaust the city’s bonding capacity,” she said.

In the end, Council approved the language change that had served as the reason for the broader discussion. With it, Leffingwell suggested that question would now be sure to limit development authority to the Highland-East Riverside Urban Rail route approved by Council.

“It specifically announces our intent to use the $600 million only for funding the original route that we discussed,” he said. “I realize that you all thought that’s what we had voted on at the last meeting. I did, but apparently …”

Leffingwell trailed off before adding: “This is lawyer work here.”


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