Travis County Commissioners Court
July 12, 2005
Item 32
We indicated earlier that we would try to call up the legislative item at around 11:00. And that is number 32. And I just saw bob in the courtroom. 32 is to consider and take appropriate action on issues under consideration during the special session of the 79th Texas legislature. We did get a list of bills that we may need to discuss, but we may not. I thought it would be important to get an update on what's happening. We have gotten a couple of e-mails lately from conference of urban counties, Texas association of counties, et cetera. Good morning.
>> good morning. We would just -- good morning, judge and Commissioners. We would just start with a very short statement to say that as all of you may have been following in the newspapers, it now appears significantly more likely that the legislature will pass h.b. 2, the school reform bill, and h.b. 3, the property tax relief bill, during this special session. It's certainly far from a done deal, but I think the odds have improved pretty dramatically in the last few days. Primarily because the senate passed a version of property tax relief which is much, much closer to what the house passed than what the two bodies had previously been talking about. So what that means is we're certainly at least going to be here through next Tuesday, which is the last day of the special, as the anticipated conference committees try to resolve h.b. 2 and 3. And what that means is that the other bills that c.u.c. And the staff for the court and bob and myself have been working on, several of them actually have a chance to pass. The thought had been that if h.b. 2 and h.b. 3 weren't going anywhere, probably no other bills would go anywhere. But under the current expectation, I think there are three or four issues that the legislature will take up and consider. Tuition revenue bonds, for example, judicial pay raise, which was killed right at the end of the last session. Eminent domain legislation. I think has got some momentum. And there are a couple of other issues as well that very possibly could land on the governor's desk this session. So with that, I think we do have a couple of specific bills that the court would like a briefing on unless there are any questions.
>> [inaudible].
>> I believe it's next Tuesday. Wednesday, I知 sorry.
>> judge, [inaudible] caps?
>> there is -- senator janiksa filed a bill dealing with appraisal caps and it is senate bill 25, I believe, yeah, senate bill 25. And that is going to be heard -- that is being heard right now in senate finance. And it would -- the way that it would work right now, as you know, appraisals cannot rise more than 10% per year. This would give the Commissioners court or another governing body the authority to drop that appraisal rate down to as low as 3% if you so chose to do that. The governor has not opened the call to appraisal caps at this point. I think he could easily do it if he wanted to. The best we can tell, there is not that much attention being put on this bill right now. They are focusing on house bill 2 and house bill 3. I know that the conference of urban counties I think is going to wait and watch on this bill. So there doesn't seem to be a lot of interest around appraisal caps right now.
>> bob, let me just ask a question for the court's education on this issue. Would that bill not require the constitutional amendment that was the hurdle that the house couldn't, you know, couldn't get 100 votes for?
>> yeah, and the constitutional amendment was not set for hearing so it's just the bill that's been set.
>> and the governor had a bill, after the bill had been passed by one of the houses?
>> yes, sir.
>> but no certain order.
>> don't you wish you could do that? [laughter]
>> I think we have either one or two staff members that do have bills that they wanted to mention, and then chris had mentioned the issue of eminent domain, which the governor has opened the call to that issue. And I think tom nuckols is prepared to make some comments on that bill. That bill, the h.j.a.r. Is up in the house on eminent domain and that's in response to a u.s. Supreme court case.
>> I don't know how broad or how narrow it is.
>> very, very broad. It's broader than I think is necessary to address what happened in the new london case that the supreme court just decided. Because in my opinion that case was basically where the city looked at the land uses in an area and they were residential main and said it's really in the community's interest if we change that from residential to sort of office research complex, retail. And I mean they didn't do that by changing the zoning. They did it by going in and, you know, telling this residents there your land use in this area is not the land use that benefits this community the most, so we're going to condemn you and replace you with another land use by a different private party. The way this resolution is worded, it basically says you can't use condemnation if the primary purpose of the taking is for economic development or for a particular class of individuals. I think that would invalidate a lot more than what happened in the new london case. I just came up with a couple of examples off the top of my head. One, for example, if a new chip manufacturing plant was considering locate in the Austin area and as part of the incentive package, the city or the county agreed to build roads and condemnation was needed for those roads, I would say the people who wanted to fight that condemnation could invalidate it. They could certainly argue that it violated this provision of the constitution that would be added by this resolution because clearly in that case they could argue that the condemnation of the road necessary for the microchip plant benefited the microchip plant. One thing this resolution prohibits is condemnations to prohibit a particular class of identifiable individuals. And going back to the public-private partnerships we were just discussing, the case I was talking about where maybe there might be one little segment of road that's needed for a vitally important arterial that's being built pursuant to one of these public private partnerships, well, whoever the landowner was on that one tiny piece could say since this is a public-private partnership it not only benefits the public but it benefits a identifiable class of individuals, being all of the owner landowners the contract has contracted it. It could have an impact on things that you all are interested in doing that are a lot different than what happened in the new london case that the supreme court just decided.
>> a resolution has the same force and effect as a law?
>> well, it's a resolution that proposes an amendment to the constitution. So it would go to the voters. There -- I知 sorry. Judge, there is a bill filed -- tom is absolutely right about the incredibly broad language of the constitutional amendment. There is a bill filed, it's s.b. 62, it's the one that's been moving through the process, that attempts to put some parameters on the broad language that's in the constitutional amendment. And it does specifically address transportation projects including railroads, ports, public roads and highways and utilities services. However, I think tom will probably agree with me that that's a pretty short list. There's -- there are potentially many other things that simply have not in the context of a short special session even necessarily had the opportunity to kind of rise to the surface and be thought about and be considered. So I think there is some concern about the difficulty of getting enabling legislation in place in the next week that really does justice to narrowing this constitutional amendment to address the specific problem that was identified in the new london case.
>> [inaudible] condemning the players restaurant so they could put in their own private hotel and their own economic development, in this case I知 all for it.
>> the answer to that is no, but the university of Texas representatives have been actively participating in the hearings partly because of that specific issue. But the -- it does raise some questions, for example, with the development of new universities around the state. For example, in san antonio a proposed Texas a&m campus is under consideration, and this -- this language in this legislation are going to create some potential bills to climb in order to get that done.
>> really the most famous case in Texas where a government entity used eminent domain nor economic development purposes was when the city of article ton condemned land to build a ballpark at arlington. I would say under this constitutional provision they wouldn't have been able to do that.
>> now, the public use in that particular case, tom, was the intangible value of having a sports franchise, and what that does for the community's good will and emotional well-being. So a use -- a definition of public benefit that maybe is a little bit less than the bright line test that, you know, the legislature might want to put in place in an actual bill.
>> it would be a lot different if it were a football stadium.
>> yes, sir. [laughter]
>> and that's actually a real situation in the arlington area right now, and they are concerned about this. All of that having been said, judge, my perspective is that there is a lot of momentum to pass this constitutional amendment and probably to pass this enabling legislation. And my guess is that if that happens, there will then be an effort next session to refine it. But this issue is definitely going to be on the table for the next -- the foreseeable future.
>> okay. Thank you. Anything else? Any other bills?
>> good morning, I知 harvey Davis, assistant investment manager, and I知 substituting for mary mays, your investment manager. There is an amendment to the public funds investment act that we're asking the court to take a position on to oppose. This was -- I think anne denkler briefed you last week on this change. The change is being sponsored by tex pool, which is the overnight funds that Travis County puts most of its money in. And they -- they want to be regulated, they want to change the way that they can invest their funds to be under the rules of -- it's called rural 287, which is the rule that most money market mutual funds are under. Right now tex pool, their investments are governor holden by the public funds investment act. The reason that we are recommending that the court oppose this is because this increases the risk, in our opinion, of tex pools' investment. And we feel that tex pool being -- tex pool and other government pools being under the public funds investment act has worked just fine. For example, the -- if they change and come under the -- under rule 287, then they could invest in corporate bonds and unregulated securities. Government treasures organization of Texas, which Travis County is a member of, mary mays is treasurer of that organization, most of the larger governmentment entities are members, they are oppose ing this change. So that's briefly the reasons that we feel like that -- that the change is not warranted. It increases tex pool's rick. According to their analysis, they felt that they could earn two basis points more than they are currently earning. So they are trying to -- they are trying to increase their yield by somewhat increasing their risk.
>> what options do we have if this were to go forward and happen if we chose not to take on that risk? What other options would we have for our overnight investments if tex pool is one that we decide the risk was not worth it for stphus.
>> if tex pool chose to make that change, then we would look at other pools because other pools may say, well, we could come under rule 2-a 7, but we prefer to limit our investments to the public funds investment act. So there may be a shift into other government pools that did not make that change.
>> thank you. But there are other government pools out there?
>> yes. It's -- actually there are probably about four or five pools that -- Texas is very competitive.
>> are we able to describe in I guess persuasive language why the risks in this case are much greater than the gain in earnings?
>> I think so, yes.
>> saying the risk is accessible and the additional money we may earn outweigh the risk.
>> right. That's what they are saying.
>> we're saying just the opposite, but are we able to put together a written later that explains?
>> yes, and mary has prepared a couple of memos that has made that point.
>> are those memos in her top desk drawer or has the court signed those already or signed it, one of them?
>> no. They've been distributed as backup for this item.
>> judge, the language that harvey is referring to is contained in senate bill 5, which was heard last week in the senate. And then it went and I think mary testified on that bill and expressed her comments to the committee. Then the full senate took it up Friday and voted it out 28-0. This is just a small part of a larger bill. The bill got to the house yesterday, so if you'll did want to try to impact that language, we would be working in the house to do that over the next 10 days or week.
>> seems to be moving fast.
>> right, because the senate bill 5 is a bill dealing with financing state government. So this is just a small part of it.
>> what's the court's preference?
>> I知 certainly happy to fly with what harvey and mary are saying. Makes sense to me.
>> do we think a letter to the senate may help?
>> the senate voted it out 28 zip so it's over in the house. So really your attention probably wants to be placed in the house right now.
>> which committee is it [inaudible]?
>> it will go to I guess ways and means.
>> I think it boils down to whether we can put a letter together that's convincing and I get raises enough possible horrors to make people oppose it. If you are sitting there looking at what's being earned today by the substantial tex pool investment and the administrators are saying we believe it's fairly safe and we can earn this much more money, my guess is the legislators are just [inaudible]. I guess you can say you've got the understand the risks are not much higher than we recommend and here's the reasons why. If we can do that kind of letter --
>> as I understood it, their analysis, tex pool said they could earn $10 million more for the state with this change.
>> [inaudible].
>> just on the state's investment.
>> see, there's the problem. They are looking at money and they are not looking at the risks that can be passed on to us. No offense I think to say we're not interested in being in this kind of riskier investment and we would pull our money and put it someplace if this change goes into effect. I think that's where you get their attention is. You're not going to make as much money if you have large investors saying thank you, but no thank you for the additional risk.
>> what are the other 1bgs pool pate counties saying?
>> I know of no position by other counties. One way or the other. I only know that ctot as an organization is opposing it.
>> probably the last letter --was not persuasive to the senate.
>> not if they are going to get 10 million more dollars.
>> if that's what we're up against. I would survey the other counties and see what they are saying. I mean we have an alternative if this passes and that is to go to some of the other public funds investment act funds if we think that's where we ought to be.
>> yeah. And if they choose to remain under the public funds investment act.
>> right.
>> action on this is going to happen very quickly like literally today or tomorrow in terms of that bill probably coming out of the house committee, I believe that the house companion or the bill that is -- what would happen is house bill 23 would get substituted, the house version of house bill 23 would get substituted for senate 5 in the ways and means committee. I might be wrong about that and it may be house bill 5 that is the senate companion piece, but I think this language is in house bill 23; is that right harvey?
>> I知 not sure.
>> I think that's where it is. In either event, it's either going to be jim keffer with house bill 23 who is the chairman of ways and means or jim pitts. If it's house bill 5, it's going to have to come out of committee let rally in the -- literally in the next 48 hours or so in order to move forward. So whatever we do, we need to act pretty quickly.
>> I guess our request would be if the court would allow us to -- mary mays or myself to speak opposing this.
>> I move [inaudible] and that be communicated to our local delegation and anyone elsewhere appropriate in terms of the county's opposition in addition to our investment officer's opposition.
>> take a strong shield and a lot of self-esteem when you go over there, mr. Davis.
>> > okay.
>> any more discussion? Do you need a letter from the court? Let's beef up that letter and send it from the Commissioners court anyway. All in favor? That passes by unanimous vote. We're behind you all when you get over there, let them know that.
>> thank you.
>> [inaudible].
>> anything further under item 32? Thank you all very much. Good to see you all again bob and chris.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, July 12, 2005 3:46 PM