Travis County Commissioners Court
February 27, 2007
Item 25
>> okay. 25. Consider and take appropriate action on a roadway improvement agreement with keith crawford for mckenzie road, in precinct four. And my question was this -- we have a letter of credit for $57,570 to be called down when repairs and improvements need to be made. Normally the letter of credit is like insurance. So the wording is kind of opportunity knee. Here we put on the letter of credit when we need to make the improvements or when the improvements should be made by the developer -- but the developer does not make them.
>> no. This one is basically, they are making a contribution, there's a substantial amount of county money that has to go into the project to reconstruct the roadway. And so when we budget for that probable cause, we will draw down this and supplement county funds.
>> normally the letter of credit has conditions, it has to be met before you can call it down. The only condition in this letter of credit is simply that it need to be done.
>> we are ready to start the project, right. When we are ready we can draw down on their letter of credit and mix it with our money and go ahead and do the work. That's just a piece of the total budget for the project.
>> it's that simple. And the --
>> [indiscernible]
>> I can't speak for tom. Maybe we should wait until he gets down here?
>> is tom here now. Find out if he does. It's --
>> sure.
>> it's unique. Not that it's wrong, but what struck me was typically we -- a -- letter of credits really have a sort of condition and it's insurance for us in case of developer doesn't do something. In this case the draw down takes place when it's time to do the work.
>> that's right.
>> tom nuchols, thumbs up, it's fine with me.
>> okay.
>> yes.
>> it's a little bit different than the normal ones.
>> let me find out if tom is okay with this.
>> it may be better, but it is a little better.
>> okay.
>> tom usually have those bankers hours, joe, but even he ought to arrive real soon.
>> I think what he has is a baby.
>> [laughter]
>> now, as soon as you find that out, joe, let's do it, okay? Thank you on the -- you are on the clock today, aren't you? We will get you out of here as soon as we can.
>> appreciate that.
Item revisited:
A similar question was raised as to number 25. Consider and take appropriate action on a roadway improvement agreement with keith crawford for mckenzie road, in precinct four
>> this is a -- a concrete batch plant and it will be -- they will be putting in some fairly heavy trucks and what we arranged for them to do, we basically measured the loading that they were going to put on the mckenzie road based on the axles, the number of trucks, where they were going. This is basically an assessment of about $57,000 that will go toward improving mckenzie road. That -- that in and of itself is not sufficient. We will still need to -- to do the improvements that we had planned to do anyway. But it's basically we think that it's their fair share of upgrading of a roadway. There is one last minute provision, the contract calls for a five year period, that we basically have to prove that they have damaged the road within five years of the execution of this agreement. We have since gotten their approval to say five years from the beginning of their operations. Which they expect to start in September, but we want the five year, you know, starting and knowing that they -- even started their operations yet. So we are fairly confident that once they do start operations with these large trucks, it will be just a matter of months before the road deteriorates because they are such heavy trucks. We are prepared to basically put the improvement in place when they start promoting it.
>> so the condition here is basically when it's time to do the work.
>> the condition is actually -- the road is damaged. T.n.r. Staff think that's inevitable. But the actual trigger, the conditional drawing on the letter of credit is the -- is that Travis County has determined that their trucks negatively impacted the road.
>> do we have --
>> it's functioning like a traditional letter of credit, fiscal security in that respect.
>> it's a valid, enforceable letter of credit.
>> as much as any of our other letters of credit.
>> okay.
>> is five years the only length of time that we can -- that we can do this letter of credit for them? What I'm getting at is do we imagine that this concrete business will only be in business and there by affecting the road for five years. Do we have the ability to extend it after the period runs, what are our options?
>> it's a one-time payment. Once it's triggered, that's it. They are finished with their obligation. And we have five years to actually pull the trigger. Now, if we can't prove damage within five years, there's no provision in here to extend it another five.
>> so if we pull the trigger on the, you know, the second to last day, the fourth year, we are pulling the trigger for the actual damages over that five year period? Or the damages and future damages that -- how does that work?
>> it's basically all this is, is -- the minute -- the damage itself is nothing more than the trigger. The $57,000 was our estimate of their rough, roughly proportional contribution to the loading to the road that would require it to be reconstructed. It still will require t.n.r. To basically put in a substantial amount of money to reconstruct the roadway. Which we believe is at least contributing to part of the general traffic that will be using the road as well. As we are doing is taking the 57,000, adding it to the road and bridge fund, reconstructing the roadway, which we expect to do probably just as soon as they start operations because it won't take many of those trucks to prove damage. I'm not sure if that answered your question, but it's -- that's kind of the mechanism. It's a -- an estimated share that gets triggered when we prove there's been damage. We expect it to happen within that five year period.
>> say they are in operation, the concrete pumping trucks are going down this road for 15 year time period. What do we do in 10 years --
>> there's nothing beyond that. In other words, there's -- that's on the public fund -- any subsequent improvement to the road will be done by the general taxpayer.
>> we don't have any ability to extend -- extend our -- our hook as it were into this property owner.
>> I wish we did, but we don't. The state and the city have ways of levying ongoing charges for overweight trucks, the county governments do not.
>> okay. That answers it.
>> move approval.
>> second.
>> discussion? All in favor? That passes by unanimous vote. Thank you very much, frank was here, frank smith this morning. I guess we'll let him know.
>> yes.
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Last Modified:
Thursday, March 1, 2007 1:56 PM