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Leffingwell says new Council will face challenges

Friday, January 9, 2015 by Jo Clifton

Lee Leffingwell has now retired after serving for four years on the Austin City Council and nearly six years as mayor. The Austin Monitor recently asked him to talk about his favorite part of the job.

“I tell people all the time the best part of the job is representing the city of Austin,” he said. Noting that people come to City Hall from around the nation and around the world as well as from within Austin itself, Leffingwell said he enjoyed meeting all of them, including the elementary school classes that he had gotten to address on a regular basis.

Leffingwell added, “When I go to the U.S. Conference of Mayors, sometimes I feel like a rock star just because I’m the mayor of Austin. We have a reputation around the country and around the world for being a cool place to be.” In addition, he enjoyed all the ceremonies and ribbon cuttings, he said, because he likes to be around happy people.

Here is his advice to incoming Council members: “You have to have in mind that you’re going to make a lot of unpopular decisions or a lot of unpopular votes, but the only way to do it is based on the facts, the way you think is right and fairest to all parties. I tell people all the time we have to make choices very often between two bad things. That happens all the time … and we have a very activist population. … But you should not make your vote based on what you see in the chamber, because the chamber only holds 200 people and there are 850,000 in the City of Austin. So you’ve always got to have their interests primary in the back of your mind.”

Austin’s greatest challenge for the future? Transportation, he said. It’s one thing that puts a limit on what we can do and potentially puts a cloud on the city’s future. “Because you’re going to get to a point where it is so bad that people will say, ‘I would love to move my company to Austin, Texas, I would love to move my family to Austin, Texas, but you know the traffic’s just too bad. I don’t want to put up with that.

“We are now the fourth most congested city in the entire country. I know that’s hard for people to believe. We’re a little better off than San Francisco and a little worse off than New York City,” he said, with the portion of I-35 that runs through Austin the second most congested highway in the state, just after 610 West in Houston.

He added that voters’ rejection of the 2014 rail/road bonds would “come back to haunt us.” He credited a group of anti-rail people, led by Jim Skaggs, a well-known anti-rail activist, with raising and spending the money to fight the proposal.

Leffingwell said, “I think they raised almost $500,000 to put into the campaign. When you got that kind of money to campaign against a bond that results in a tax increase, you have things going in your favor. I’ve jokingly said if you give me $500,000, I can defeat any bond proposal. … It does cost a lot of money, but it doesn’t cost as much as roads if you want to be honest about it. … I think we need roads in certain places, but there are certain places where we just can’t expect to expand the roads, like in the middle of town, for example. There’s no room to put another lane in. I think it’s going to be to the detriment of downtown Austin,” he concluded.

And downtown is important, he explained, because it’s an economic engine for Central Texas. Up to 30 percent of the jobs in Central Texas are right there in that small area in downtown Austin, including UT and the Capitol complex and the downtown business area.

“So, as dense as it is, that means it produces a lot of property tax. … I don’t know what the exact number is, but most of the property tax generated in downtown Austin goes to subsidize services in the rest of the city. So that means if you live in the suburbs and you never go downtown, you still benefit by having downtown as a great success, because it still subsidizes your services. If it weren’t the great success, your services would be worse or your taxes would go up.”

Leffingwell has been a staunch proponent of economic development agreements. When asked whether he thought the city would stop making such deals, he said, “I think they basically already have.”

Leffingwell explained: “The big enchilada [for seeking Chapter 380 agreements] has always been the state enterprise fund money, not the local participation. The Texas Enterprise Fund always requires a local sponsor, because the goal is to help local economies anyway. So in our case … since our requirements are even more stringent than Travis County, the last two I’ve seen have gone to Travis County.

“Sometimes our participation is zero. A good example of that would be the Formula 1 race sponsorship, where the City of Austin had to agree to be a sponsor so as to attract funds from the state’s Major Events Trust Fund, but we didn’t put anything into it,” he said.

Leffingwell said the city had benefited very significantly from the race and other events at the Circuit of the Americas racetrack. “Of course, being the kind of people that we are, we immediately annexed them so that we can collect property taxes on a very much improved property and sales taxes, hotel taxes, car rental taxes, very significant to the tune of about $30 million a year or so.

“We don’t get most of that, the state gets most of that … as part of their arrangement with F1. And it’s important to realize that it really doesn’t cost the state any money, either. … So at the end of the 10-year contract, the state hasn’t spent any money at all, and neither has the city, but the city has benefited,” he concluded.

In the last couple of years, Council has added more requirements for companies seeking to enter into economic development agreements. Leffingwell has generally opposed adding those requirements, but he has usually been alone on the dais on that.

He explained: “All of these so-called requirements are good things, they are things we would like to see. My only objection was that we [should] retain some flexibility… But as far as gateway requirements, just to get in the door, just to start the process, in the past all we’ve had is it can’t be located in the Water Quality Protection Zone. It has to be in the city’s desired development zone.

“OK, it’s in the desired development zone. Let’s talk and see what we have, see if we can come up with a process that meets our goals. … But now we can’t even begin that discussion, because we have an entryway requirement of a living wage,” he said, which 90 percent of the time is a good thing, but not always.

Leffingwell recalled a specific case, when the company U.S. Farathane, which manufactures plastic body parts for cars, had a few different employee categories, including entry-level job that paid somewhere below $10 an hour. That would not have met the living wage requirement, even though the jobs offered “a ladder to bigger and better things.”

He continued: “Yet we had people, like people from Workforce Solutions, who came down to the meeting to agitate for that. We have people who are hard to employ, who need these jobs. We even had the NAACP — Nelson Linder came down and said, ‘Please approve this contract because we know folks who need the entry-level jobs.’ So there are cases where you would want to have the flexibility that we don’t have now.”

He also addressed Water Treatment Plant 4, which was approved by voters in 1984, and opened in November with little fanfare. Throughout Leffingwell’s career on the Council, the plant was a source of controversy and some friction between him and members of the environmental community. Many of those same people supported Leffingwell when he moved up from the environmental board to the Council.

Leffingwell explained why he believes the plant was — and will continue to be — a good idea for Austin. He also pointed out that he was the first on the Council to object to the initial proposed site for the plant, because the property first proposed for it was too environmentally sensitive. Eventually, the city found a site considerably less sensitive and moved forward.

“Why did we need it? First of all, our water projections … I know they’re down right now. We’re in a serious drought. … But the long-term curve is what you’re going to look at, and the long-term trends that we were looking at said we were going to need that in 2013.

“So that’s one thing, and the other thing, perhaps more important, was the security issue,” Leffingwell continued. “We had two plants that serve the City of Austin that happened to be located directly across Lake Austin from each other, the Davis plant on the north side and the Ullrich plant on the south side. So if there was some kind of event that contaminated water there even temporarily,” the city would be in trouble. He said there were other security issues as well.

Leffingwell also pointed out that the new plant generates 13 percent less greenhouse gases than the old plant because of its much higher elevation. The water proceeds by gravity flow all the way from the plant to the Jollyville Reservoir. That also means the water utility saves about 13 percent on its electric bill, which is quite high.

“We were about to embark on a project to install a series of lift stations to get water to those higher elevations … at a hefty price tag,” he said. “So, by using water plant 4 instead, we didn’t have to do that.”

Leffingwell also noted that at the time Council made the decision to move ahead, it was a “very tough time in our economy,” and the plant was a big job creator. It saved several engineering firms that might have otherwise gone out of business, he said.

He added, “I remember at the time the Public Works director saying when they put it out for bid, construction costs were coming in as much as 35 percent below what they had projected those costs were going to be. So we built the plant at a time that was very cheap to do so.”

 

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