Travis County Commissioners Court
June 6, 2006
Item 15
15 a receive briefing and take appropriate action on state highway pass through toll program. 15 b, receive legal briefing on pass through toll avoidance funding. The indication is that this item may be taken to executive session pursuant to the consultation with attorney exception to the open meetings act, 15 a basically is for us to receive from staff and legal counsel the briefing. We also invited consultants who have worked with Williamson county and -- and hays to share with us their perspective and hopefully a real life perspective. Since they have been dealing with some projects in -- in our neighboring counties.
>> judge --
>> I have --
>> go ahead.
>> I have a panel of experts on this topic who are prepared I believe to speak. Mike weaver, I asked mike to come and he did tell me ahead of time that he had a 3:00 meeting. I知 not sure that he's --
>> I知 sheer.
>> oh, great. Okay. Mike weaver is here to represent the projects in Williamson county, bill burnet worked through [indiscernible] engineers, he can address the projects in hays county. We have a representative from the Texas turnpike authority to speak to the general policy on pass-through financing. And let me first say that it's -- I use the term in the memo pass through tolls. And that was correct months ago, they no longer call it pass through toll program, they call it pass through financing because it has very little to do with tolls. So just -- just I think very important that you use the proper terminology. Anyway, we have represented txdot here. We also have a -- lad patillo, our own financial advisor, of course glen oppel our bond attorney. I think among all of these people you will get a pretty good overview of what this is all about. If I can ask mike and bill to come up and start the ball rolling.
>> I知 going to ask john to come.
>> joe [multiple voices]
>> he chatted with me and other members of the court. So -- I promised we would give him a special invitation to come --
>> joe, let me say this before we start. I received an e-mail from sal castillo, I believe, and he actually asked me a lot about -- about the pass through financing. Of course I had no idea of course of course I知 not going to try to answer anybody that I don't have any comprehensive knowledge on. What I ended up doing was referring him to joe, his e-mail to joe gieselman's shop and of course at that time this is basically why some of this stuff is I think partly on the agenda because of the fact that there's been a lot of maybe misunderstanding or not certain as far as what is pass through financing. Even tolls -- I think it's a good opportunity to flush things out and go from there, what it is, how can it be used, all of these other kind of things. What's allowed, not allowed. So I leave it at that. Thank you.
>> I will volunteer.
>> thank you for having us here. Between the three of us here, we are working on most of the projects in the state. We will try to tell you specifically about Williamson county, hays county, others, we will try to address some of the issues that we have heard raised by you and your constituents and not unlike what we have heard in other places in the state. I think most importantly to recognize the pass-through financing is that -- that basically txdot is asking you to be the bank. Instead of them being able to cobble together a certain amount of money over a period of years, go fund a project 100%, they are asking local entities to go fund that project and do that for them. Then they will pay you back a certain amount that's a negotiated amount over a period of time. Based on the usage of that road. When it was original called pass through toll rain, when it's the payments would be based on a cost per vehicle mile based on how that all works. Williamson county we were the third or fourth, 40 of them right now I think pending in the counties and cities, a number of which have been approved and signed and others have been in various stages. As you know from your staff, highways have to be --
>> recent rule changes, txdot is assessing projects based on whether or not they are local, regional or state. The higher priority, if they are of state-wide significance, they will tend to repay more. Of all of the projects done so far in the state, none of them that I知 aware of, john, correct me if I知 wrong, have gotten 100% of their funds back. The commission's intent, the high Commissioner's intent to be some local participation in projects as they go forward. Also, in a recent rule change, which clarified --
>> there's a lot of difference between one percent and 100%.
>> that's correct.
>> is there like an average or even for the local regional and -- and state is that I would like a sort of a -- average amount or range or txdot preference that --
>> yes and no. The hays county one, which we just got approved a couple of weeks ago, there were two projects where txdot added up all of the costs and agreed to repay hays county 75% of the eligible costs. On the other project, 1626 extension which actually touches into hays -- Travis County, ties into the future s.h. 45, they deemed that a state-wide significance and agreed to fund 100% of the eligible costs. What we have been seeing around the state, Williamson county, 88% on the dollar, we were one of the first ones in, I think we have a little bit better deal, there are varying anywhere from -- from I have seen them as low as about 65% to as high as 95%.
>> they use the words eligible costs. If we -- if we put in all of the costs, what are those percentages truly -- because that's really -- we are all trying to assess what's it going to cost the county to participate in this project.
>> okay. With the recent rule change and the opinion from the attorney general's office, since john is both a lawyer and transportation consultant, I will let him address that I知 sure glen can as well, but txdot will no longer fund financing costs. So if you have a 100 million-dollar project and you go finance that, whether it's with go debt, co's, revenue bonds, the debt service is going to be a local obligation. Eligible cost is defined by the statute as anything that goes into building a project, right-of-way, environmental mitigation, design, construction, construction management, all of the things that you would normally see in one of your county c.i.p. Projects are the same things in a txdot project. When it goes forward with the program, Williamson county is an example. We sit down with them with a list of projects, we are threw -- work through how we want to approach them, worked on cost estimates in close consultation with the district. Agreed on what that number was. That included some escalation costs, not a lot. Because they want to try to do it in 2005 or $2,006. Txdot then determined what -- what was eligible and what they would repay. Now what txdot is also doing is they look at that number and say okay, we will pay you back 80%. You are going to build this project for us today instead of five or six years from now. Your money is worth x to us, right now they are using about 4 or 5% as a multiplier. While they take away a little bit, what is eligible, they give back a little bit because they know your money is worth for them to have to wait. The key thing, most of the other jurisdictions, bill and I were in hays county this morning, making a presentation there, is that it's got to be a project that you really want to do. Because at the end of the day you will have some form of finance participation in that project. Whether it's -- whether it's 10 or 20%, findings cost or how that is done. And in Williamson county the way that we are structuring the program right now, the court has instructed first southwest company to put together a financing plan that will involve utilization of some of the old 2000 bond money, which would be using to jump start the program. We have all of the engineers underway, we are using ending -- the fund balance and the -- and the budget to fund that, which we will repay out of that future bond election to keep that going. The court will be selling co's to cover the right-of-way costs which was not eligible. And then right now, the intent is to use bond anticipation notes which will provide the short-term bridge financings which will be taken out with their revenue bonds using the tech, pass-through toll payments, pass-through finance payments from txdot to make those payments. There is still a shortfall, the project, the total project cost with debt service is more than 152, the txdot will be paid back and that is probably going to have a property tax pledge on it. Or will be supported with a -- with an off balance sheet -- really not off balance sheet, but separate financing either through a co or go. Montopolis county chose to do voter authorized debt and did go's and using the pass-through payments in lieu of a normal tax pledge to make should debt service. City of weatherford sold co's, using the project -- his firm did, are using the pass-through payments to make the debt service and principal interest payments on that co. There are no two, as I was telling glen down the hall that are exactly alike. A lot of it depends on the financial ability of the counties or the local jurisdictions. I will tell you that, we have visited with Commissioners court about this, there are obviously three ways to do pass-through finance projects. One is for you all to be a local sponsor as a city or a county. And go forward with the project and manage it much the way that you do your c.i.p. Program. Our project management firm, hiring engineers, doing all of the work and I assume that you all know that this is the only program that txdot passes all of the responsibility to you. You are completely in charge. Of everything, including construction letting, managing the construction and then turning the project over when it's finished. That's the good news. The bad news is that when you take on that, you also take on the risk of completing the project on time and the financial risk. I will tell you that the agreements that have been negotiated and signed today they are pretty standard, we have provided those to joe to share with you are very fair. Txdot has agreed to a very expedited review process and so far in washington I can report that the Austin district is meeting the two-week review time, not two months, not six months, two weeks on the plan review. So we are moving the projects very quickly because they know our interest meter is running. The second alternative if you decide to pursue a pass-through project on your own is a provision in the law that was passed last session that would allow you go to out for an r.f.p. If you wanted to, to hire private sector firm to do a turnkey job for you. Basically loose language you would be assigning your pass cash through toll payments to them to go do the work for you. The third option is 100% private, there's been two of those turned into the state so far. Actually three. With private sector without going through a local government has submitted the application to the state asking to do the project for the state. When that happens, the private sector proposal has to be sent out for competing proposals. Other people, including local governments, could compete against the private sector firm if they wanted to. Those are kind of the three avenues to pursue how to go forward with -- with projects. I think to -- to let me close, and let the other folks speak, the bottom line is that -- is that there will be a cost to the county. Whether some financing costs, if your project is a state-wide [indiscernible] you will get 100% of the eligible costs paid. The source of funding is obviously those that you are limited to anyway but state law with your property tax pledge and if you could find an opportunity to use a tax indecreement districts, we are working on one, looking at a t.i.f. To help some of the local jurisdictions cover that difference because once the road is in, there will be an economic benefit or some other mechanism, the private sector person awarded to -- because there was an important interchange on the interstate and they felt it was worth putting money in, trying to make it happen. So those are basically the sources that you have to try to fund that effort. I guess the last thing that I would add is that now that there's been a lot of discussion about -- about pass-through financing as an alternative to toll road, I知 not sure that it's an alternative as much as it's a compliment to the state's overall financing program of the roads. We are working our project right now, we are -- we are working the txdot to reconstruct a major highway. We will sell both revenue bonds for the toll component and we will have pass-through toll pieces to pay for the non-toll components. As you know, I think from this material joe provided, that txdot provides both a minimum payment and maximum payment, but they also provide a cost per vehicle mile. So -- so the key to that is much like they are going to count the cars and pay you for the people that use the road if you have one, combination of the toll road, you are basically counting the cars twice. The revenue bond traffic is there to cover the revenue bond side and then txdot would make a pass through as well.
>> [indiscernible] would be I guess -- imply a pass-through financing. What type of road? You know, we have got -- we have got highways -- what type of road would qualify for this type of -- pass-through financing?
>> basically anything on the state highway system, although I would urge you to work closely with the district in helping select a project. There are some criteria that the project you know obviously has to be in the npo plan in this case, campo, needs to be something that txdot really wanted to do anyway, but they don't have the funding for. In Williamson county ours vary from the widening of u.s. 79 all the way to the county line, very dangerous road, got a lot of traffic on it. To reconstruction of the two lane f.m. Road to a five lane f.m. To tie into one of the county's major programs. So you are all a little different.
>> are they making a farm-to-market --
>> basically, that's what a lot of counties have been doing. Again, in Williamson county we have a u.s. Highway, we also have a new interchange on i-35 in georgetown, we have one on the interstate, we have one -- we have one on the u.s. Highway as well as the f.m. Projects.
>> [indiscernible]
>> farm-to-market or higher.
>> minimal is farm-to-market.
>> I guess higher leading up to an arterial.
>> state highway --
>> state arterial for --
>> right.
>> for some interchange with the interstate or something like that. But farm-to-market is going to be your minimum road that would qualify under the terms of the legislation.
>> I think that it's a philosophical question from the Commissioners court, judge. It's nice to see on this side of the dais. The projects that would be eligible are -- are -- it's a question of the will of the court is a project important enough for you to go out and do this type of financing. There's a lot of Commissioners, judges throughout the state that would -- that's a state project, it's not my issue, I知 a county Commissioner. There are other that's have the belief if they do not act, then that project will not be done in a timely manner or done at all. So it's really a philosophical question of Commissioners court or city council has to died is it a project that we want to go out and take on the risk of -- of financing this project. I would like to talk a little bit about the process, and a little point of clarification, I did not work on the hays county one, although I helped get the application turned in while I was still on the court, mike did that when I was involved with the city of san marcos and others and -- but not the hays county one. So I can't take the credit for that.
>> but the process that you start to go through, you identify which projects -- which project or projects you think are important enough for this Commissioners court to go forward and put together a preliminary application that you turn into the transportation commission. Once you get that preliminary application turned in, they will review it with the help of the district engineer and accept or decline that application and authorize you to negotiate your deal. That's where you really get into a lot of of the stuff that mike talked about is negotiating a reimbursement rate that you feel is fair to you and trying to -- to -- to use inflation factor or -- inflation rates to -- to get the costs up to help cover as much the the interest costs as you can, any other associated costs along with that. That negotiation time can take -- can take anywhere from six months to -- to -- to longer, some of those have taken quite a bit of time, that really is also a function of -- of county or city staff, how important it is to them and how responsive they are and how the Commissioner reviews it, whether it's a regional, local or state project. Once you get your -- your agreement negotiated you go back to the commission and you go for two separate commission hearings, you get your final approval. Once you get your final approval you will start the process of hiring engineering firms doing the design of the project, getting to build it. There is going to be some sort of costs, they are going to want to see a local government have some sort of buy-in and ownership of the project. But the benefit of that -- is time, if -- if a project is -- is maybe or may not be on the state system and there's no telling what time there might be able to get to it. We have all heard the discussions about the amount of funding, the lack of funding that they have, the system being older and older every day. They don't have -- they have less and less money for new projects, much less maintenance of their existing systems. So the -- the risk and costs that a local government puts forth the benefit of that is time. Once you get your agreement finally approved, you start the design on it, you start construction on it. You do it on a much faster time schedule.
>> if --
>> give me an example. You may have been here when you first -- you may not have been here present. But the criticism of -- in opposition to to tolls being being placed on existing roads. For example, 290, 183, both of those are -- are basically -- precinct 1. The precinct that I represent, there are a lot of criticism on that. So -- so are you suggesting that -- that -- that this type of financing could be -- could be used in lieu of -- of those roads being tolled? Because that's why I asked what roads would qualify --
>> part of the -- [multiple voices]
>> -- want to see a toll feasibility study. To define whether that road is toll feasible or not. They don't want any county or city trying to circumvent the toll process by doing pass-through financing. If a road has enough traffic on it to be toll eligible, it won't be eligible for a pass through financing unless you have a scenario like mike was describing where you had -- where you have the center lanes are one scenario and the -- the frontage roads are a different scenario. But the Commissioner and chairman Williamson has made that very clear. They don't want people applying for pass through applications to try to circumvent a road that would -- that would be qualified as a toll road.
>> for everybody that has e-mailed us, urging us to -- to substitute out 71 east to 71 west, 183, 290 east, all of those things that are in the so-called phase 2 toll projects for Travis County under campo, what would our response be? Is there anybody here that disagrees that those are ineligible projects?
>> can somebody speak to that.
>> being urged, can we swap out, pass through financing for roads that have already gone through an analysis have been put into the phase 2 toll -- that's the million dollar question.
>> let me take a quick shot at it. I think bill hit the nail on the head. I think one of the aspects of the pass-through application is a toll viability of the project. If it is toll viable or something that the locals or whether they agree or not, it should be a toll road. I think it's going to be very difficult to get txdot funding through the pass through program. Remember that the money that the txdot is allocating to the pass through toll program comes through category 12, which is Commissioner strategic priority. Same program that all of you working with campo, to the highway commission year after year, trying to leverage, asking them for money. It's there money and I think bill was right, we heard from chairman Williamson on some other projects, I don't think they would fund the toll eligible projects with pass through plans.
>> I might just supplement that, although what they have said is absolutely correct. They might be willing to do their toll equity through -- through a pass through program. They did that in montopolis county. There were two direct connectors to -- to 45 that they considered toll viable however they only had -- you could only pay for about 30% of the cost of construction with the tolls they said if you are willing to fund those up front, we will pay you back that other 66%. We will pay you back through pass-through tolls, but we still expect the tolls to contribute to the overall costs of the project. So they don't -- they don't alter their analysis of whether or not a project is toll viable or not. Because you are using pass-through financing as a means. At the end of the day is what it represents it's an opportunity for -- for a county or a city to pull a project forward. I mean, that's all that it amounts to. It doesn't alter the nature of -- of whether or not it's a toll viable road. It's just your opportunity to say that we think that it's important enough that we will work to finance it up front and be paid back over time --
>> follow-up on that. Is there something because folks are going to be insistent saying huh-uh and continue to click on websites and tell us, you know, swap 'em out. And so is there something that we can point to either in txdot or ttc minutes in their rules, in 3588, what more can we provide to folks about -- to say, no, this isn't the way it works and we are not going to be able to do this, because we are trying to get the information out there and there are folks that continue to think just swap 'em out. And they are not willing to take the words well it's not going to happen. Well, show us something that says we can definitively tell them that it's not going to happen.
>> there's a kind of a -- kind of a txdot has put together a pass through application handbook. That outlines and you -- you have probably all seen that. But in there it defines there are seven parameters that they are going to require, one of those is a toll feasibility study. If -- like I said, if it's toll feasible, then it's not part -- it doesn't meet the parameters of that -- of the 7 requirements.
>> and there's --
>> [indiscernible]
>> what determines toll feasible. I知 one of those strong adamant opponents of tolls on the existing roads, have been. I知 still trying to understand what is feasible, what -- what do you foresee as far as feasible because -- because -- because the 290, 183 projects which we have had a lot of complaints on, some of the suggestions did come through well why aren't those type of projects passed through financing. Why wasn't it used and of course they were basically arterials -- basically we were not limited excess highways at that time. [indiscernible]
>> like this, highway Commissioners, the highway Commissioner has said that if you want to build added capacity road, you have got to look at the toll viability and the toll viability means that you have got a road out there, you may have citizens in a don't want it tolled, but toll viability simply means that you have got a road here that is a major road, that if you want it funded by us, then you have got to look at it as a toll. Period. If you don't, then don't come to us for money. Isn't -- I mean, isn't that -- I mean, as simple as it is. So you are either faced with -- with don't go out and build a road and txdot just says fine. Don't go -- I mean, you are not looking at the toll viability of it and the toll viability is what we consider to be you ought to look at that road because we think that it's going to have enough traffic on it that it's going to generate income. And that's -- that's I mean, you know, we need to stop dancing around it. Because that is physically and literally what the highway Commissioner and nothing gets done funding-wise if you can't get it signed off on by the highway commission, the highway commission is basically the ones that give the Marching orders to txdot. To all of our district engineers. Period. That's what it -- I mean, you know, that's what it's, I mean, unless somebody can convince me otherwise, I mean, I finally get it, I mean, when you go over there twice and, you know, you are told no this is what this thing is. This is how it's done. Is it any different from what I have just --
>> no. I think, Commissioner, you hit the nail on the head. I also would respond to Commissioner Davis toll viability is not just about the traffic and financings, also the character of the road. If you have an existing two lane f.m. Road reconstructed into 120 or 140 feet of right-of-way, a drive every 50 feet, that's not toll viable because people have to get into their homes and businesses. If you have the reconstruction of a highway like u.s. 290, the one that we are working on, same exact type of thing, old four-lane highway being converted to a major eight lane highway, the four new lanes will be tolled, managed, the other four will be hopefully funded with pass through toll payments as john said another way of txdot putting in their toll equity to get it done. So the character of the road has as much to do with the traffic and what the ultimate demand is going to be on that facility.
>> in essence, at the end of the day would be a limited excess hour.
>> that's right. It will have those characteristics. But I think it's very important because obviously you don't feel the need as a county to pull a road forward unless you have got heavy traffic. So in that case everything that you consider in a pass-through toll would be a toll road if that was the only aspect. But as mike properly pointed out, there are other aspects which are the configuration of the roadway which in fact weigh into the toll viability. You may say this isn't a candidate for a toll road even though it's heavily trafficked today. It may be a perfect candidate for you to say we are willing to work to pull this project forward.
>> one other thing that could happen, the state legislature could actually vote to either index the state tax that exists right now to inflation which they wouldn't even index it to inflation, or raise the gasoline tax. Many of us in this room, I -- I count mr. Costello in there, certainly I was there and judge Biscoe as well. Bill. We have testified in favor of -- of a local option gas tax. But that is also dependent on the state legislature, they haven't raised the state gas tax since '93, mike? '91.
>> 1991, they won't index it. Which was what representative krusee tried to get last time. They refused to even allow local option elections which they wouldn't even have on their record, they approved a gasoline increase, it's just letting local citizens decide to do it and they continue to divert more and more money out of the gas tax whether it's to the good of public service, I don't know what driving my car has to do with keeping public schools open, but they continue to divert more and more money to the department of public safety. Other things that have nothing to do with gasoline and mobility projects. We don't pay for the sheriff out of -- out of some kind of special fund, it's out of the property taxes. So they are taking more and more and mother money away, no. They gut it up and do the jobs, we are stuck.
>> the crux of the bill of what we also have to look at with -- with trying to determine whether or not we can use pass through financing for some of the roads that we need, is that we still have to have the bonding capacity because we the county has to pass this. We just had a 150 million-dollar bond, the reason we don't go beyond that some people wanted us to go to was that we were getting a little out there beyond the lines that we felt comfortable with, with going to new york and saying you have got to issue this debt. Let's take 1626, we talked about dong it from hays county line over to i-35. It's a 50 million-dollar project. 0% -- you -- 20%, you know, looking at trying to get an average, when you talk about $10 million for that, that's net that you have got to have, but you are really talking about you have to come up, find a way to borrow $50 million. Every one of these roads that we have got is not -- it's congratulate to have it, you know -- financed, but, you know, maybe we need to have our auditor down here, because we need to be asking our auditor, I mean, what are you going to sign-off on? We have got our financial analyst and people here, but this is not something that just because you have a pass-through financing mechanism in the state, that that automatically means that you can go as a county and just do those things. It does -- if you have got some borrowing abilities and you are willing to kind of get out there, well, then get after it, I mean, that's what it's about. But if you are going to find out real soon that you can't do very many of these projects. I mean because it really is --, I mean, it falls back on the financial wherewithal that the county has with regards to what it is comfortable with, issuing debt. Even though we are getting paid back from the state. Because it's really on our shoulders, isn't that right?
>> no, I mean, again you are right on track. I mean I think as bill pointed out, it's genetic proper be projects -- got to be projects that you really want, projects that are a very high priority for safety and mobility or economic development that you are willing to put money up to go do. We have told the hays county court this morning, something that we have used with a lot of local governments. At the end of the day, it's not a lot different than what you have been doing the last five or six years when you cobble together a little bit of money in campo, county, city money, you went to the highway commission to say please this is what we have got, build us a road. Sometimes 10, 20, 50%, if it's a road important enough for you to do, it's just another tool for you to help defray some of the costs. But remember at the end of the day, txdot is asking you to be the bank, txdot is passing on the completion risk and the construction risk to you. In exchange for you being able to do the project much faster and quicker and get it done. And you have to just weigh those pros and cons.
>> remember when we were talking last fall where we were trying to land was approximately $120 million was getting close to that line. And this court affirmatively, because we had so many needs on open space and local roads that are 100% the responsibility of the Travis County to take care of, we went over that $120 million limit and stuffed it with 150 million. And so we took away some of our flexibility about having left over dollars there and we kept being reminded by a bunch of -- of civil district judges of -- of please don't forget about the civil courthouse project because it is a large project that is out there five however many years out there that is also waiting for debt capacity. So we have got a lot of stuff to get balanced here.
>> the only thing that I would add is that it's hard to know exactly how much of the cost of the roadway that you will ultimately have to put into until you have gone through the negotiation process with txdot. It will cost the county county something, if nothing else it's being financed up front. Texas is not willing to pay back the finance cost. They -- fixed cost, here's what it will cost us, we will pay you back based on that, if you take charge of the project you may very well be able to do it for less than that. You won't know that piece until the project is actually done. The finance piece you can sort of know on the front end, but unequivocally you know what all of you say is true. You have got to -- it's got to be important enough to you to be willing to -- to put up some of the costs associated with this for the benefit of pulling the project forward.
>> when is the -- when is the money supposed to be reimbursed?
>> txdot starts paying back when the road is substantially complete basically, open to traffic. The original agreements were done one year after the road was opened.
>> okay.
>> Williamson county we negotiated six months. Hays county agreement because they had the same issues that you are raising about interest costs are going to be quarterly. So we are going to check every three months. Which --
>> over a --
>> over a period of 10 to 20 years. Minimum -- the minimum payment is normally based on a 20 year pay back. Maximum amount txdot will pay back is -- our own cash flow standpoint is usually on a 10 year basis. Some in between is probably where most of these projects are going to fall throughout the state.
>> txdot projects available revenue in category 12 for the pay back?
>> yes, sir.
>> so once they get a commitment, pretty good certainty that they will be able to meet it?
>> right. We had in Williamson county we actually were in new york and visited with the rating agencies and the investment houses to talk about this pass through and how we could leverage or actually commit the payment from txdot to make sure that it was there to repay those bonds and actually had some senior txdot people go with us on that trip to talk about what you just said, judge, which is they are viewing these pass through contracts much as they were reviewing the debt that they have already committed to in selling the Texas mobility fund bonds or the [indiscernible] bonds or the multi-year construction contract. Which basically removes the fear about -- owe about an annual appropriation of the money not being there. They will honor that commitment.
>> what's the source of the category 12 money for the state?
>> fund 6, gas tax.
>> that's been fair to -- fairly predictable over the last decade or so some.
>> over the last -- over the last -- I don't remember the exact range, but I think over the last 10 or so years, there's been a couple hundred million a year in category 12, that the commission has used for -- for strategic priority projects.
>> fund 6 is very predictable. That's the seven plus billion dollars of gas tax revenue from the state and federal gas tax. The commission uses its own discretion to determine how much goes into category 12. And then they also have the discretion to determine how to spend that. There's no question that that source of revenue to pay back pass through toll agreements is going to come in at some point, you know. They can't as with -- with 40 projects in the pipeline, they are going to have spent all of that money.
>> okay.
>> glen, do we need to hear from you before we --
>> not unless you have any questions.
>> any questions from -- from bond council?
>> just one I guess, judge.
>> that is, is there a possibility well I知 looking at the general obligation bonds on the difference of what -- of what would be the -- responsible for [indiscernible] uses the pass through financing, is there any scenario whereby the county could be out of the type of structure or that type of responsibility by having the separate entity to deal with that actual phase of -- of that type of -- of funding as far as through -- through general obligation bonds. In other words, another entity that the county maybe can create. Is there any situation that -- that a possibility to the situation like that? Just asking.
>> okay. Commissioner, there is the possibility with respect to the dead issuance of the county creating something like a local government corporation and using the local government corporation to issue the debt. But fundamentally that corporation when it issues that debt is going to have to look back to the source of payment and that source of payment is going to come back to probably the county's tax pledge for the shortfall to -- to them or -- owe and the revenue obligation from txdot.
>> so but --
>> that would give you some separation from it. But I think ultimately the source of payment would -- would be the same.
>> fall back --
>> in the sense that I think it still leaves you with constraint, the constraints on the tax side if you are in fact backing with your tax pledge, if you have issuing the bond. It not clear to me that you could just put your tax pledge behind the shortfall. It may be to sell these at a rate even if you used a local government corporation the side that is backed by the txdot revenues may need to be back stopped by your tax pledge, also, and your example of a $50 million project, tax pledge is hanging out there on the entire 50 million, possibly. I think that's a matter of discussion with -- would be a matter of discussion with -- with the financial advisor, rating agencies, insurance companies, the way you structure it, you would be structuring the project.
>> any nor questions before -- any more questions before he leaves? He's about to clock out, I think.
>> I would like to make one point. Commissioner Davis -- guys, correct me if I知 wrong on this, you were asking about 183, 71 -- [multiple voices]
>> no. I asked about 183 and 290.
>> to the extent that you have got projects that are already in the mix and were in the mix prior to the 2005 legislative session, this wasn't an option. This is not -- this is a very recent tool that hasn't been in play over the last five years. But just since the 2005, since '03. Some of these projects have moved on past the phase where this would be a meaningful endeavor for any of the parties.
>> I know. When was the toll designation placed on those roads then? That would be the follow-up question.
>> and I don't know --
>> 2003 maybe they weren't, I don't know.
>> but again it's not a function of even the timing in that regard.
>> it's not?
>> no. Txdot still analyzes it from -- from the perspective of is it toll viable or not.
>> but even that's prior to 2003 you didn't have the tool available at all. To even start with --
>> okay.
>> thank you.
>> my question for the -- for the panel is what kind of train wreck are we setting up if hays county is -- is physicianing to do a major pass through financing project on 1626 and it end at the Travis County line. You want to tee that one up because if there's one that we have to -- if I have great interest of god we have got to figure out something and be creative and think outside of the box, it's -- it's 1626.
>> brodie lane.
>> and 45 southwest. But I知 just trying to focus -- I知 trying to focus on what's supposed to happen there at the county line of -- of --
>> we are actually crossing -- hays county, we are actually crossing a little bit into Travis County with that program is why we visited with Commissioner Daugherty because we are actually required to tie it into the [indiscernible] future 45 stuff right there.
>> all the way to 35, wet let you.
>> we could try. Talk to the Commissioner about that. But without s.h. 45 in place, then we are going to have a new five-lane road on 200 feet of right-of-way dumping into a two laner.
>> right.
>> exactly. A train wreck.
>> yeah.
>> with the expansion of 1626 south connected to -- at the overpass to i-35, traffic is only going to increase.
>> ribbon cutting is next Thursday, you all are welcome to attend at 11:00 [laughter]
>> oh, -- any other questions, joe?
>> my question is ongoing maintenance of the project. My understanding really it's a question whether or not the local governments if they are an applicant take on the responsibility for ongoing maintenance of the state highway after the project is completed. It's an option, there are -- there are some projects right now where local governments are willing to accept maintenance because they want the road so bad so it's part of ongoing negotiations. Most of the ones that have been done to date, I know both in Williamson county and in hays, the local governments will not take on any of the maintenance responsibility.
>> > that's the same with the ones that we have worked on. Is that they -- once the project is turnkey and done, that reverts over back to the city. Back to the state.
>> it's certainly not a criteria. Of getting a pass-through toll payment. So it would just be if you want to do that as some additional contribution to the project or even a contribution to the project, that's something that you could negotiate with txdot if you thought there was -- if they could get more value, it might make some sense, but it is absolutely not a requirement for them to pay a pass through toll on a given road.
>> more question with regard to the liability the txdot for all -- for all -- the risk of lawsuits particularly with regard to clearance with the nepa, I mean, are we then subject to all of the -- all of the same risks that the txdot had for their projects.
>> it depends on where it is in the process, the environmental is already done obviously you don't take off any risks, by txdot, or you can slice off individual things and say txdot we would like you to continue to do that for -- because we don't want to take on that liability. We have done that in certain projects and say you carry forward with the environmental, we don't want to do it. Others have taken it on because it makes sense, so it just sort of depends. Anything that you do obviously as I知 sure tom would tell you, you are going to assume the liability associated with -- with those tasks.
>> the agreement, the standard agreement that everybody is executing spells out very specifically all of the things that you must comply with, all of the federal rules and regulations for not only environmental, right-of-way construction, a very trans apparent bidding process, so on, so forth. You have to be able to check those boxes through the audit process that you have complied with all of the things that txdot would normally have done.
>> once it's turned over to the state, then can the state sense it was total eligible can the state make it a toll road?
>> I知 -- again, I think that it depends on the type of road it was, if you went into it knowing it was like the example that I used the f.m. Road, that had driveways every 50 feet, I don't -- it was finished and txdot took it over, I don't believe it would be able to go --
>> it was one that was open to -- to be in a toll road, I would imagine that we would be very easy for the state then to make it a toll road.
>> that has to go through your npo. That designation is pretty much set before the road is built as to whether or not it's going to be tolled or not. They will live with it at that point and again that designation is actually determined by the mpo.
>> also by this Commissioners court. I mean because say you rebuilt 1626 to a five lane road, txdot took it over, say boy look at all of these hays county tollers. Distributes a whole new process that's contrary to deciding it's going to be a toll road before it's built.
>> it requires a public vote by the way.
>> so sole viability has to be determined up front?
>> yes.
>> if a project is not toll eligible today, it is worthy of toll, pass-through financing, can it ever be convert oaferd to a toll road? I guess the question or at least my answer to that is -- is 20, 30, 40, 50 years down in the future, possibly there would be enough traffic to -- to -- to do additional capacity on that roadway or you would have to go through the npo process and change that roadway over. But if it it's -- if it's currently not eligible for toll feasible roadway, it won't be for any foreseeable future.
>> what I would add, probably just to make a statement that's pretty act cat that sums it all up, there is very little to no connection between tolling the travelling public and using pass-through toll lane, pass-through financing as a mechanism to fund your roadway. There is basically no connection. If you are going to have to do your toll viability analysis on all new capacity. Then you just look at whether or not, you know, if it becomes a toll road so be it. Those terms, you know, through the npo, if not, you know, an option is to -- to use pass-through financing only to pull a road forward. So there's -- there's very little to know connection between the -- between the two.
>> I see mr. [indiscernible] here, I am reminded mike related to some of the issues that -- that happened on 45 north and might very well be in play on 1626, that is if you have to do any kind of mitigation of lands related to endangering engineered species, caves, pick your stuff of making the -- the -- the department of interior and fish and wildlife happy, is the purchase of mitigation lands, is that an eligible reimbursement? Because that's going to be a really [ phone ringing ] big deal.
>> [indiscernible] that hays county got approved, the number seems extremely large, because normally a road like that would be between three and four million a mile to by. Our number is over 6 and a half. We did enough preliminary work to know from tceq the requirements that we are going to have for water quality, not aware of any endangered species. But we put money in for environmental mitigation, txdot allowed that as an environmental expense. Factored into their determination on the repayment.
>> because we are in Travis County. Some of these things may be in the city of Austin, e.t.j., they have very strict water quality measures that we found on our c.i.p. Projects can be very expensive. Are those kinds of things as well kind of overlays on to a development process by a local government, are those kinds of things eligible because that would also be important to know whether that stuff up front is eligible or not.
>> I知 not 100% sure on that. Other state roads that are inside the city of Austin, there has been negotiations about the level of -- of refresh my memory and water quality detention retention both with what the city required with what txdot would normally do under tceq, so I知 not sure if it would -- if all of it would be eligible or not I don't know.
>> okay. That would be something else to know there that is eligible or not.
>> of the 40 or so pending, pass through agreements, any of them in urban counties, did I read where san antonio has one?
>> we are helping bexar county do their application right now. Collin county are in the process. I don't know whether it's in hays or --
>> montopolis county would certainly be on the edge of being an urban county.
>> which city is that?
>> yes.
>> okay.
>> the woodland area basically stuck in montopolis county. There are urban areas. Most of what I have seen since I have been here. Two categories, very fast developing counties. Which tend to be the suburban counties, Williamson, hays, collin county or tend to be smaller counties that -- that have a project as john said they really want to get done, won't get done for 40 years unless they step up. They may not have a lot of other debt, they have the ability to come up and do a 40 or $50 million project to get it done. Those seem to be the two extreme that's we are seeing right now.
>> related to bexar county, we are going through some of the same kind of debates we had a couple of years ago. Are either 281 or 1604 part of those discussions for pass through because one would make the same kind of argument that 281 and 1604 are very similar. I知 just trying to for public knowledge --
>> those are not the two projects that they are considering.
>> what are they looking at?
>> the one in -- gets into comal county has been recently proved, but not in bexar county.
>> what is bexar looking at?
>> blanco road up by catch bullis is one of them, then culebra is the other one that is being considered right now.
>> they are going through the same discussion that you are about how do I fill the gap between what txdot is going to pay back.
>> we would appreciate it if you all can stick around a few minutes. Some citizens are coming down. Comments in case they have questions. Anything from the txdot representative? Did he or she leave?
>> ed is sheer.
>> I will -- I see ed now in the back row. Ed, any additional comments that we need to know?
>> [inaudible - no mic]
>> can you come up here to the mic. Say what you need to say.
>> we will leave mr. Smith one of those empty chairs. Have a site. Have a seat.
>> I知 doran smith with txdot. Basically what we have here, as everyone stated they already hit the nail on the head, pretty much told you what the pass-through financing is about. It is a program where you basically move up your projects. That's what it basically is. Presently we have approximately 20 projects. We have a lot more coming in. And those funds are going to be reimbursement to the pass through financing. It will come from priority, the strategic 12 funding. From the Commissioners court. Excuse me, from -- from the transportation commission. We do have some urban projects that are bexar county, city of forney, montopolis county. We have approximately -- montgomery county. Nine projects have been approved, we have three projects that have final agreements to. Those projects are Williamson county, weatherford, the city of weatherford and montgomery county. We are working on six other projects to get those final agreements done. Those are hays county, city of forney, comal county, san marcos, port arthur and grayson counties. So those are what we basically have to date we have approximately, based on the amount that we have -- that we have negotiated, we have approximately -- approximately $73 million a year that we are going to do reimbursements back at the present time. And that will be spread out from years 2009 to approximately 2019. So thanks -- that's what's going on. But I知 here to answer any questions that you may -- additional questions that you may have, like I said, mr. Weaver, basically told you everything about the -- about the --
>> so the $73 million represents the -- the total reimbursement capacity?
>> that's what -- that's from the negotiated -- excuse me, if those that have been approved at the present time.
>> okay.
>> it's not the capacity, it's only what we are going to reimburse at the present time from the nine applications that have been approved.
>> is the reimbursement capacity unlimited or is there a maximum?
>> it's definitely not unlimited. We don't know what the maximum is at this point in time.
>> okay.
>> that's going to be up to the commission. In each year more opportunities come forward. Sometimes or another -- because we don't know what the commission is going to use that strong funding for. It might be all for pass through fund -- not going to be all for pass through funding.
>> how much flexibility is there on that toll viability criterion?
>> I don't think there's too much at all. None at all, really. That's one of the -- one of the things that you would have to look at, you have have to look at toll viability of a project and when -- when you look at the toll viability of the project, it's going to be up to -- when you are doing negotiations whether or not the department will reimburse anything for -- for a project that has let's say 90% toll viability for it. When you have a 90% toll viability, that's a very good project. That can be tolled.
>> is there like a cutoff?
>> can you tell you what that catoff is, but there probably is, yes.
>> okay. Any questions for mr. Smith? Thanks for coming down. We don't see you enough.
>> yes, sir.
>> we apologize what we may have said about you and your co-workers in the past. We really didn't mean it [laughter]
>> thank you very much.
>> can you wait. Hold on. My name is sal [indiscernible] for people with efficient transportation. Since mr. Smith is here, how if a 90% toll viable project is pretty good, how does a 12% toll viable project?
>> well, basically I知 really not an engineer, I知 in the financing. But that would be more or less of an engineering question and they would come up with that in our design construction and transportation planning and programming. Hose are things that they discuss when they look at the project.
>> okay, thank you, I appreciate it. Um ... The -- the term toll viable actually used to mean something. -- before a couple of years ago. Toll viability is what the investors would look at a project for a new road, a new route for a toll road. They would decide whether it was toll viable and they would invest dollars into that new road. And in -- that would be based on traffic and revenue forecasts and folks would drive that road and the money they paid went to pay back the bonds for that road. Within the last couple of years, we had this new animal that's come down the pike, called freeway tolls. It's interesting that we have mr. Weaver here that works heavily in Williamson county and mr. Burnet here from hays county. Telling Travis County that -- that don't mind us, that we have gotten in line for -- for the pass through financing and we haven't gotten in line to -- to take the -- a lot of our freeways in our economies and told them -- told them -- it's interesting they are telling you that this isn't for you, Travis County, but -- but all of this -- all of these other counties that are doing it, it's okay. But it's pretty scary. You don't want to look at it toward -- deal with it. The fact is 183 and 71 on the east side, don't need to be told, they don't need pass-through financing. Basically there are many, many miles of those roads that are already 100% fully funded. Those shouldn't be told at all. Tolled at all. As a matter of fact campo has a complete web page by environmental justice. How low income should not be equally burdened. If you look at Travis County and phase two tolls, the majority of them are in east Travis County. Is there anybody here that -- that -- I know that you folks care about this, but who has taken a stand for the east side of Travis County.
>> you have got 71 west, you got 290 west, and you have got 45 southwest, and -- and I don't -- I don't hear the word east in either three of those.
>> when you look at the map, you see the majority of miles, it is east Travis County where the folks can least afford it and Travis County has been barreling forward for the past couple of months, the past couple of years with these freeway tolls. No, you don't. You might have one up near dallas, one that was in san antonio that was stopped, that's it? Travis County is in this short line by itself, moving forward -- okay. I would call them, they are not toll viable. Because many of them have an average of 12% toll viability and that's not toll viable. Basically what the state is doing they are turning the Travis County and they want Travis County to -- to toll our freeways to -- to take responsibility and pay for the maintenance of our freeways forever. While we continue to pay gas tax dollars. And -- and the rest of the state benefits. We are giving up that responsibility, willing to get in line and pay for it. And as mike weaver and mr. Burnet basically said a moment ago, their deals in their counties once, you know, whether it's seven years or 10 or 12 years that the state finished paying off their -- their portion of this pass through financing, the state takes responsibility. That's their road. But the freeway tolls we are going to be forever in debt for these freeway tolls, this is going to cost folks thousands of dollars a year, for their families to drive on roads we have already paid for, if we had the Travis County Commissioners take a stand and say look, 71 of the airport, 183 to the airport, we are going to say no. We are not going to toll these roads because they are not paid for. They are going to let them open these free roads. We are taking a stand. That is what we need, we need the elected representatives not to give us excuses of -- of well the -- the Texas commission might say no, why try or, you know, hays and Williamson county told that's we shouldn't be doing this, we shouldn't even try. We need folks to fight for us we need representatives to represent us. And say no. You will not be tolling 71 and 183. It is unacceptable. The road will open as a free road, they have been building it for years, that's all we want. We just want representatives. Pass-through financing costs less for road construction compared to a larger footprint, the expense and maintenance of tolling equipment of freeway tolls. Pass through financing will save Travis County families announce of dollars -- thousands of dollars a year in freeway toll tax. Pass through financing relies on traditional gas tax, we pay at the pump to fund our roads. Pass through financing moves traffic faster and toll booths, electronic and cash. Pass through financing should be done through Travis County Commissioners court not with the toll authority that mike weaver helped create. That is now controlled by Williamson county. The majority of the ctrma board he is from Williamson county. Why are these folks going to set the wait for Travis County roads. For toll roads. I just -- you know, I really don't understand how we could have gotten here. This is a really big mess --
>> now, in fairness to them, we invited them because they have experience with working with the state, pass through funding.
>> sure they do.
>> they didn't come on their own initiative. They can really by special invitation. Free of charge. Free of charge -- basically I知 just -- I知 just giving you information that I know that mike weaver helped create the ctrma, this is the first contractor for the ctrma --
>> I知 not sure that it's fair to blame them for coming because we invited them.
>> I知 telling you for perspective. It's funny because I知 from Travis County. And hays and Williamson county is here. Kind of like Travis County really is. But -- but, you know --
>> do you have some suggestions as to what roads you think would be good candidate toll roads, pass through projects.
>> I have a suggestion this court needs to represent the people of Travis County. [one moment please for change in captioners]
>> did you just not hear me ask the question, people are asking us, may we swap out the phase 2 toll projects and make them pass-thru tolls? The answer is they have already been deemed to be toll eligible.
>> of course they're going to tell you that. Of course they're going to tell you that.
>> do you have any other suggestions for roads to go into a pass-thru?
>> my first suggestion would be to take a stand for the people of Travis County and tell them we are not for --
>> wife heard that. -- we've heard that. Tell us specifically roads that you want us to do pass-thru tolling. Everybody understands how you feel because everybody is all over the airwaves from the things that you do. So go ahead and answer the questions. Give us specific roads that you think that we ought to do as pass-thru tolls. We heard what you say, you want us to take 183 and you want us to take 71 off.
>> right. Okay. We got that.
>> we got that. The rest of them -- no freeway tolls. And then if -- and let's take a look at those -- and I知 sorry, and I知 sure you're nice folks, but if you take a stand for us and you said no, we're not going to do these freeway tolls, but let's discuss the pass-thru financing for these other projects. Let's do that. Okay, the y already has 70 something million there that was funded for that section. Take what you can of that money and build something with it instead of this freeway tolling idea that other folks aren't doing. That's all I basically have to say.
>> let me say this to you. You talk about nobody taking a stance. I have taken a stance for a long time opposing these roads, on existing roads. That's 290 and 183 and everywhere else. So there has been a stance taken by elected officials, all elected officials see things different. But by the tone of saying that there have been no elected officials that have taken a stance for their precinct or for their tolls in the area, whatever, that's not correct.
>> I believe what I was talking about about the commission as a whole saying no. That's what I知 talking about. But thank you.
>> mr. Costello, you live southwest. Do you have an opinion as to what we should do about 1626?
>> well, I don't, actually, because they're apparently setting up a nice bottleneck there, and that's kind of how txdot likes to do things. They like to create problems and then come back for more money or whine about this. I think we just have to take a look at designing these roads in a smart fashion. There are intersections that should be considered that txdot doesn't use. Recently frontage roads, we've been doing frontage roads here in Texas for decades. Most other states don't do them. I think they create a lot of problems. I travel down to san antonio on my way back this weekend, and I hadn't dealt with that two-way frontage road deal. That is -- that is insane. There are a lot of smart solutions, but I don't have a specific one, but I see that as the same type of bottleneck problem that txdot created when 290 basically goes into oak hill where they have all these number of lanes and they bottleneck up into one lane.
>> but in this case txdot is not creating the bottleneck. The bottleneck is going to be created because hays county is moving forward with taking a two-lane project --
>> txdot is part of the deal and it's their responsibility to make sure that the counties --
>> but do you have an opinion about whether 1626 ought to be upgraded on the Travis County side of the line?
>> I think that -- I think the counties must work together at the same time to figure out what they're doing so you don't have a bottleneck. That's the key. It's simple. It's common sense.
>> is that a yes?
>> a yes to what?
>> 1626 being upgraded as a potential pass-thru toll way. I know you're against -- tell me something you're no.
>> I just told you what I知 for, no bottle necks.
>> then I think that means they're in favor of 1626. I値l take that as a yes.
>> thank you. Yes, sir?
>> thank you, judge and thank you, Commissioners. My name is dick kellerman. I try to take care of transportation issues for the sierra club, and one of these days they might fire me. I知 also on the board of directors of save our springs. It's been very interesting this pass-thru financing and I hadn't been introduced to much of it before, but I would like to put it into perspective of other means that txdot has been taking in the past five or six years to pass on risk to someone else. They set up the -- I think house bill 3588 set up the rma's that we have here, and in central Texas the ctrma, which is building roads and building money and taking on the risk of making them for themselves. The Texas department of transportation is privatizing. They're letting the spanish country buy into trans Texas corridor 35 and build it and take the risk of financing. And now there's a pass-thru financing where now the companies are in the business now of building roads and taking the risk. Let me talk about risk for a minute. I feel different today in terms of risk for roads and roads paying off. It's not 1970 anymore, it's not the 20th century. The new kid on the block is energy supply questions and energy (indiscernible) questions. In 10 or 15 years we won't need petroleum for these toll paying cars and will people be able to buy the petroleum that they need? Could it be that Texas department of transportation has -- have been listening at campo for the last 20 years to roger baker saying that energy is the problem of the future, and the energy's not going to be there to pay off tolls or even keep cars on the highway? And the Texas department of transportation has decided to pass on to private enterprise, pass on to rma's and pass on to companies their risk? The roads still get built, txdot commits to their boss, the legislature, to build roads, and every legislator wants a road in his district and txdot has to come across to build it. Txdot has to build it. In other words, the roads are getting built, txdot is meeting their obligation to the legislation and the legislature, but they're not taking on the risk of building the roads. And one thing that we passed on -- we passed on something today, and that's pay back. There's a lot of talk about pay back. The company builds the road gets paid back by the Texas department of transportation. I think there was much too lightly approached. I have heard that txdot wants the counties to build the roads, txdot will pay them back on the basis of the road miles that are traveled or the -- I don't know the term, the number of automobile miles, I guess, so many automobile miles, and they will be paid back. Now, the roads will be built on the forecast of traffic. And if that traffic doesn't come -- and if there's an agreement for pay back early on that says txdot will pay it back on the basis of forecast traffic, well, that's one thing. If the forecast traffic doesn't come along, then if the county's not going to get their money back. If the traffic is half what forecast and the -- and txdot is paying back on the basis of automobile miles, you're not going to get your money back. In other words, pay back has got to be negotiated clearly up front so that the $20 million, $100 million you pay for the road you get back over a certain number of years.
>> dick, the only thing I would add to that is there's definitely some risk associated with the traffic, but they agree to pay you back the full amount no matter what. The only thing that varies is the period of time over which you're paid back. If the traffic doesn't materialize as you anticipate, you get paid back over a longer period of time and you have additional carrying costs associated with that. If the traffic is more than what you anticipate, you get paid back more quickly, but they agree and every agreement it's their policy to pay back the full amount that you've negotiated, so the time period is all that varies, not whether or not you are being paid the full amount.
>> so there's no financial risk?
>> absolutely. And I said there was in fact financial risk being the cost of money associated with you could get paid back in 20 years when you thought you were going to be paid back in 10; however, you get the full amount of that money if you discounted it back to today's date, it would be a smaller amount obviously if it was being paid back over 20 years. So there is, but not in terms of being paid back the total amount that you've agreed to. That's the only point I was wanting to clarify.
>> but considering the request of money, which is certainly an important thing, the risk -- and it can be a huge risk. If you're getting paid back in 20 years on the basis of one level of traffic, and the traffic is half that, it's going to be paid out in 40 years. That extra 20 years and the cost of money there can be substantial. We always talk about the next generation, the generation after that having to pay off debts, national, state and local. Well, there's a county debt that may, if that traffic doesn't happen -- and believe me, traffic forecasts -- 85% of the time they're too high. You can take a look across the country when they forecast the amount of traffic that's going to happen, they're very, very optimistic. So I would caution the county you and the Commissioners, judge, look out for my money because I知 going to be in Travis County a long time. And I would like to have -- if you build a pass-thru financed road, make sure there's hard negotiations on the pay back and forecast and traffic. Thank you very much.
>> thank you.
>> he alluded to a 40-year pay back and I値l hand this out. I didn't hand them out earlier, but when you negotiate your deal with the state, you take the cost of construction. And the way they come up with the minimum and the max is 10 years or 15 or 20 years, and that's what it is. You get paid back whatever that dollar amount is within that structure, and there's a set floor and a set ceiling. And the floor is what the cost of construction is divided by 20 years. If one car drives on that, the state is going to guarantee you that floor, whatever that ends up being over 15 or 20-year period. There's a ceiling because they don't want the counties or cities making money off this, so if a project has higher -- greatly higher enhanced traffic on it, they're not going to pay you above the ceiling. So there's a floor and a ceiling built in for the county's protection as well as the state's protection. So there is a guaranteed minimum pay back. And like john said, the amount of money will be paid back, it's just a function of time, 10 years or 15 years. And mike said earlier, most of them are projected to be falling somewhere in the middle. But I値l hand this packet out to you.
>> okay. Thank you.
>> real quick, I wanted to clear up a misunderstanding that Gerald and Karen might have had. They were concerned about the county's debt capacity they had recently passed more bonds than they thought they had should have and they probably shouldn't have done that, but debt capacity is normally related to your tax base. However, when you enter into pass-thrutology contracts, your debt capacity increases with the amount of the payment that is guaranteed by the state. So if you sign 500 million dollars' worth of pass-thru tolling projects, your pass-thru capacity increases 500 million. That's a concern. I wanted to point out that u.s. 281 in comal county is very nearly the same type of road as u.s. 290 in east Travis County. They're both four-lane divided highways in basically rural areas that are rapidly urbanizing. Commissioners in comal county said they didn't want tolls, and they got pass-thru tolling on u.s. 281. Now, as to this question of what is toll viable? Who knows what is toll viable? Only one toll project in the phase 2 program has had a traffic and revenue study done. That's u.s. -- 183-a, the new name for it, in Williamson county. The next traffic and revenue study will be completed soon. It's being done on u.s. 290. As a matter of fact, txdot just put out the traffic counters every two miles on 290 just two days ago. They still don't know how many cars are on 290 where they're coming from or going or the time of day. So we don't know what's toll viable. We do know they project the cost of that road at 355 million, and that's from 183 out to state highway 1 130. That's not all the way out to 973. I think we can look at the people that live out there for the average income is half the county average and tell that there's not $350 million to pay back much of that. The maintenance cost and the financing and all the other fees that are going to be tacked on. That will be a non-viable project. It's got to be. When the report comes out at the end of the month, I think you'll find that's true. Some of those roads are already paid for with our tax dollars, at least 90% of it. Parts of it are going to open soon. Why do we need tolls on those roads if we already paid for them? It just doesn't make sense. All we need is the little part of 183 that's south of the river and a little part of 71 that goes from, what is it, riverside drive to the airport. That's what we need to consider for some form of financing, and pass-thru tolling would work well there, just as the gentleman who spoke earlier talked about having projects as small as a direct connector on an interstate project or a bridge going over i-35, that's what we need, we need a little project that's only a mile long. That's a good candidate for pass-thru tolling. If we toll all of our roads, the state is going to keep our gas taxes. If we toll highway 290 east, our gas taxes are going to fly away to some other county, some other project or end up in the trans Texas corridor. Why do we want to increase the taxes of people in Travis County by -- ctrma says $2.2 billion over the life of their project, and then it continues after that forever. I think comal county made the right decision. They made a leadership decision and they told the governor and the Texas transportation commission, we're not going to toll, forget it. What else have you got? And they have pass-thru tolling. Thank you very much.
>> let me ask you -- I知 not real sure I understood what you were talking about $500 million, but I知 more than happy to have a meeting with our county auditor and my office and with you and if I知 misunderstanding something, then so be it. I値l certainly retract everything it is that you think that I said. Would you rather 290 east not be built and just leave it like it is and go on about the business? Do you think that that's what the people in eastern Travis County and in bastrop county, do you think that they would rather not have any added capacity road on 290 east and just leave it? Because I think that that's a viable question that we can ask people, and I think it's a available question that we can ask people in this community that we can stop -- because the judge and I have talked about this in great detail about 183 and 71. We can say stop doing it because whatever you built is obviously what you paid for. And the next mile -- and by the way, the next mile as you're going east on 71, that's even before you get to the exchange of 183 and 71. And let me tell you,, that's a 100-million-dollar project. Now, maybe we just say, do you know what, we're not going to build that exchange either. Where you have got some elected officials in the crossfire of the administration, being the highway administration, is that some of us do believe some of the things that we're told. And some of the -- and the main thing that we are told is that the revenue stream on roads and building added capacity roads is going to be just as slow as it's always been. And I知 hearing from a number of people -- sir, I certainly hear from a number of people that don't like the toll plan. As I first said from the get go, I thought that the toll plan was hard to sell. And quite frankly, I think that the state has got to do a better job in explaining to people about what they're trying to do. Because I will assure you that there are 22 elected officials on the campo board or -- actually, I think there's 21 because one is from cap cap and one is -- cap metro and one is our district engineer. But I assure you that we're not trying to do things to upset people. What we're trying to do is when somebody tells us something, either you don't get the $220 million that there is in savings to go towards building other projects, that you don't get the 160 or $170 million of the Texas mobility fund. At some point I have to believe somebody that's giving me some of these statistics. Do you know what? Maybe we ought to ask people in this community do you want status quo with what you've got with mobility and transportation, but I will tell you that I don't hear people go, no, don't build more roads. And when we start talking about putting gasoline tax -- added gasoline tax, sure, we all said, well, can we have the opportunity to have a local gasoline sales tax option. What I don't believe is I don't think that we're talking about one or two cents. I mean, if you take 400,000 cars in just our Austin area, and if you use 60 gallons of gasoline a month, I mean, you're talking about $24 million or 24 million gallons a month times the 12 months and you're talking about 288 million gallons. And if you just take 10 cents of that, you're 28 million. 28 million doesn't buy us three lanes -- three miles of highway lane. The point is that I think that what we start talking about, if we had the opportunity to have gasoline option tax -- and I do think that we probably should have had the ability to -- if we had 50-cent a gallon we could generate $144 million a year in added gasoline tax. Well, let me tell you, I don't think that this community would pass 50-cents a gallon gasoline tax, not with gasoline being $2.85 a gallon. Now, maybe you think -- maybe you think they would, but not everybody has to use the toll road, but 95% of the people have to go and buy a gallon of gasoline. So I hear you every week come up and tell us what you don't like, and there are plenty of thing that I don't like about it, but until somebody can give me, until they can honestly say here is where your revenue source is -- and I知 all ears. If you can tell me where the revenue source is, otherwise you're telling me keep the system you've got in place right now and just tell the people, we'll build roads the way we've always built them and txdot has always built roads, which is a reason why we've got 290 and 71 west, why we've waited 10, 12 years. I mean, there are some environmental challenges of coming down through there, but it's not that we're not trying to look for ways to enhance our mobility and transportation, but I for one, I知 willing to go to east and say, do you not want to toll 290 east? If you don't want added capacity, then leave it the way it is or leave txdot in the mode that they build things over 12 or 15 years. But to me, if somebody can convince me otherwise, that's why I continue to look at some of these decisions that I知 trying to make.
>> let me answer some questions for you, Gerald. Of course, the people in east Travis County want highway 290 east to be upgraded. Let's talk about giles line. Do you think we need frontage roads on that section where it's mostly parkland or dump land or land that's not going to be developed with any kind of intensity? We don't need frontage roads. Frontage roads are a huge, extravagant waste that allows somebody to toll the main lanes. We don't need frontage roads. All we need is another third lane an that could be done with pennies, chump change like $20 million to go from 183 out to sh 130, 20 million to add a second lane on each side of the road. That increases the capacity 50%. We'd be happy then if you just built one bridge a year starting at springdale road, the worst intersection we have, get rid of that. When you do that you can pick up a light at tuscany. You're building a freeway that people -- that we can afford within our means. We're not asking for an extravagant program like campo has given us. But let me point out another thing about funding and sources of money. You don't need to increase the gas tax. The gas tax is being raidd for purposes it was not intended for. There was a bond of trust between the state of Texas formed when we allowed and approved the gas tax back in the 30's and also with the federal government, a bond of trust that that money we pay into the gas tax fund would never be used for any purpose other than building roads. Now, mr. Daugherty, you remember campo. Campo is spending roughly equivalent sum of money on public transportation, which is three percent of the people who live in the campo area, roughly equivalent sum of money to what it's spendogthe 96% of people who are motorists on the highways.
>> you've listened to me well on that. You and I totally agree on that.
>> you are spending $30 for each public transit user for every dollar spent on behalf of a person who pays for his own car and gas and insurance and all that. $30. The other 30% goes into trucking. The part that's non-freight. That's three percent of the people who ride the bus, get the same amount of money as the people who drive their cars and light trucks. This tolling is going to make it worse. We have a way to back out now and do something for the people, and that's pass-thru tolling. And you don't want to be the only county in the state that's tolled all of its freeways. And if you do, if you members of the court decide to toll us, I think each one of those toll roads should bear your names, like so and so memorial toll way, 290 east or 183 south.
>> mr. May, I will agree with you in terms of the raiding of the gas tax dollars, but one of the reasons that we are having frontage roads being built into so many of these projects is because of a commitment made by campo that when you have a free road that is basically the non-upgraded roadway, that you're going to maintain that free access. So the reason we have to have frontage roads on 290 east is because the road right now is free and that's to maintain the free access for the people that are on 290 east. And if mr. Hutchison, who was here this morning, told us, there are zero plans to upgrade 290 east. It is going to be 20 years from now. With it being tolled with six lanes of free frontage roads to not only keep what's there right now, but to increase it, there's your 50% increase of free roads, but that's going to get the road done by 2010. Take your pick. Do you want it done in five years or 20 years? Sign me up for five.
>> I think you have false choices there. You can build the road the way I suggested a lot quicker. Not just cheaper, but quicker. All you need to do is pave a new lane on the side of the road, increase capacity in 50-cent cent.
>> right-of-way is not there.
>> the the right-of-way is there. It's only if you build these huge frontage roads and make everything extra wide, 415, 500 feet, that's where all the cost and the waste and the delay comes from.
>> and it takes none of the signals out. The one thing -- I would appreciate it if you do want to get some more information about debt capacity, there is a debt capacity of the county, and the 120 million was tied into the amount of debt that is rolling off that we could gain on without increasing taxes. When we took a big bulge of debt on, which is sh 130, we had to increase our debt service by $10 million. It was a tax increase. So there is a limit to debt capacity. And so it is incorrect to say that there's some unlimited thing and you've got it all figured out. We would love to get you with our planning and budget officer and our cut r. Auditor and he could give you a limit that there is a limit on debt capacity and to maintain certain ratios in new york so we keep our triple a bond rating. You can roll your eyes as much as you want, but that's the case.
>> thank you.
>> you're welcome.
>> thank you very much. Thank y'all very much for coming down. Anybody else to give comments on this item, come on down now, otherwise we're closing the public comment part. Come on down now. Our final speaker.
>> I知 here to address item 15 against conversion of freeways in Travis County to toll roads, especially east Travis County.
>> 15 is pass-thru funding. 15 is pass-thru funding.
>> that's right. My first choice to road financing would be accountability for tax taxpayers gas tax revenue. Stop the waste and management at that level and use that money for what it was meant for, improving our existing freeways and roadways. I知 advocating pass-thru financing. I know that pass-thru financing would be better for taxpayers and campo and ctrma's toll plan. The big problem I see with the currently proposed toll plan is that special interest groups are lobbying you, txdot, the campo board and the other elected officials in trying to convince them that that's the only way to go. They have put pass-thru financing in Williamson county and comal county, yet you had a group of gentlemen here from those very counties telling you it wouldn't work in Travis County. I think you won't get this money. To me that doesn't sound like they knew for sure. And I feel like this is a better plan, pass-thru financing for Travis County. I think there would be a way to make this way if we wanted to. This would cost less money than putting toll roads in. The toll roads have to have extra lanes on the side. That raises cost. They have to have infrastructure, they have to have toll tax. And there are a lot of people being able to count on that going to Travis County Texas. They're counting on making money on that. That's why they're pressuring you and the people that are in the campo board. That's why they're pressuring elected officials to vote for that because they're going to make a lot of money. On the other hand, toll roads are going to cost the citizens of Travis County money that they don't have, and of all things it's going out here east, it's going out east 290, east of 183 south and 71 east. Yes, I know that they're going to have tolls or had planned to have tolls out there at the y at oak hill. The y at oak hill is also concerned about that, and they're working on an alternative plan that's going to be cheaper without tolls. It can be done. The roads can be built just like mr. May was telling you. And by the way, I知 not sal costello. I haven't been all over the airwaves, but I am trying to stand up for a lot of people that I know that call me up and tell me we're concerned because we live out here in east Travis County. They want somebody to represent them and they pressure sal to do it. So he's just speaking for thousands of people that get in touch with him and ask him to do it. I知 speaking for my family and my friends. And for the people that are low income out on the east side of town. We feel like we can do this cheaper without having the extra lanes and without having the toll infrastructure and without having the toll tags. We feel like pass-thru financing would be the way to go for this. Tolls are a tax also, whether they're up front or whether they're in a bond package. Tolls are going to cost a lot more in the long run, and I hope y'all will consider this. I hope you'll think about it for another session. And I can tell that y'all are really giving this serious thought. I really appreciate the fact that you put it on the agenda for people to discuss it. And thank you very much.
>> thank you. That does it for this item. We'll have it back on at the appropriate time in the future.
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:
Wednesday, June 7, 2006 12:54 PM