Travis County Commissioners Court
July 17, 2007
Item 23
23. Discuss and take appropriate action on alternative funding for howard lane east. There's a little history to this. >> yes. This is the section of howard lane, we call it howard lane 2 to distinguish it from howard lane 1. Both were included in our last bond election of 2005. Howard lane 2 is a section between cameron road and state highway 130. As you may recall, it was a public/private partnership and the county appropriated a little over $6 million to -- to join with the private property owners in the construction of the roadway. The Texas department of transportation and the toll road authority built an interchange on state highway 130 in its phase 1 construction. They bid that at the request of Travis County and the property owners because we anticipated that if we delayed to phase 2 it may be decades before that connection were made. Txdot agreed. Moved the interchange to the howard lane, even though there was no intersecting treat street there at the time. We forecasted that both Travis County and the private property owners would come to agreement, and ultimately build howard lane to connect with 130. The tier 1 projects, the public private partnerships had a deadline of December 31st of 2005. 2006 excuse me. To reach agreement on -- on the public private partnerships. That did not happen. On this project. As a result the moneys that were allocated to the howard lane project were reprogramed to the tier 2 project, so those funds are no longer available. Txdot approached members of the court to look for alternative funding sources for you to build howard lane. One funding source in particular, our simplest bond fund no longer needed for state highway 45 north. We appropriated $23 million in bond over -- I think that was in the 2001 bond to acquire right-of-way for 45 north. That process is being completed. Txdot estimates there's now about 10 million-dollar left over and txdot is suggesting perhaps the county could use that source of money to build howard lane. In talking with our bond counsel, it's not quite that easy. You just can't use surplus bond money from one proposition on anything that you want to use it on. >> can I just -- let me just adhere when txdot academic others came to Commissioner Davis and me, it was after txdot had identified -- identified what txdot saw as surplus funds from 45. It was kind of like county put this money up for the 45 prong, we don't need this money after all, howard lane would be a good purpose to to use it for. When we heard it presented that way we thought well it makes all of the sense in the world. Then we learned that we are not really free to use that money as we -- >> that's right. Those funds came from a proposition that included two projects, 45 north and farm-to-market road 1826. According to our bond counsel, both projects have to be deemed complete before you can defease any surplus bonds and create new debt to substitute for use on another project. In talking with the bond counsel, he said it might be possible for the county to enter into an agreement with txdot to pay txdot a given amount of money for right-of-way on -- on the yet to be completed project 1826. For txdot to come back and say okay for the purpose of 1826 you are finished. The money that you have paid us represents full payment, we won't come back to you for any more and we can -- the court could then say okay we are now complete with project 1826 with regard to the bond covenants. If that were done then perhaps you could go and defease any surplus bonds out of that proposition 2 and then free up debt. You will still end up having to go issue new debt, either certificates of obligation or road bonds for howard lane. So -- so the short answer is that you can do it, but there's some gymnastics that you will have to go through in order to use the $10 million for some of the project. At that point also you understand that you are creating new debt for a new project and you could use that same debt for any other purpose. I mean, you could do it on any project or no project. So -- so it is like having a brand new bond project at that point. >> let me ask you a quick question about just the gymnastics portion of it. We would be obligating one million or more toward the application of 1826 and then issuing 8 million in certificates of obligation so are we issuing 8 million in certificates -- under the possible option, are we issuing the $8 million in certificates of obligation because -- what -- I guess the question is why aren't we issuing nine million in certificates of obligation. >> because our estimate is only 8 million. >> I see, okay. >> it's really, I mean, there's two actions here. One is to defease the surplus bonds. That's done, then you have to create new debt to pay for howard lane. Our estimate right now it's in the $8 million range. Yeah, you could at that point if you wanted to issue another ten million, use two million for yet another project you could probably do that without radically altering the debt model. Now -- >> there's another -- >> joe, at any rate, I think that it's best for us to -- to at some pointing ahead and defease that -- that -- those bonds and really just -- just clean the table. Just take all of this off the table. Because I think that's probably the thing that we really do need to do anyway. I think that txdot would -- would probably say okay whoever that right-of-way is, whatever those things are that you need for do down as far as 1826 is concerned, we will sell that. Then that way -- until that's done, until it's done we -- we cannot really defease those bonds and get them all outstanding. Regardless and whether it's new debt or any type of situations, that should be done outside of any of this stuff in my opinion. We just have an opportunity to do that. I think that's what we still need to do. Make sure that that's real clear on this issue. >> we also have another alternative funding source that the court chooses to pursue it, campo will be issuing a call for prongs in about another month. For stpmm surface transportation metropolitan funds. They are going to have about 30 some old million dollars -- some odd million dollars available in the next call. We are thinking perhaps the county and city of Austin would go in a joint application because remember howard lane 2 goes through the city of Austin corporate area between cameron road and -- to the eastern boundary, harris branch subdivision. Then goes into the unincorporated area from there on over to state highway 130. So we would envision a joint application for federal funding. That would require a 20% match from a local source. T.n.r. Is also recommending that in the spirit of a public/private partnership agreement which howard lane was in a bond election, that the 20% match be split 50/50 between the private property owners in Travis County. That keeps us whole with regard to the property owners and all of the others that were involved in the -- in the public/private partnership projects. That would also substantially reduce the amount of money of both Travis County and the property owners would have to put into to get it completed. Those funds I believe would be available in fy twine '09. So there's still time to get the property owner's agreement to it. Steve actually e-mailed the property owners, one property owner is not dispossessed at this -- disposed at this point in time to take any action. Just came out of the hospital, is not physically prepared to deal with this issue. So they didn't say no, but they just asked we give them a little more time to think about it. So we could go ahead and proceed to apply for the federal funds when campo does their call for project, we would be in competition with all of the other local governments in the metropolitan area for that pool of money. I think with txdot behind us and the city of Austin and Travis County I think our chances would be more competitive than if we were just going alone. >> so if the court decides to let's say look at what this option here that you are looking at right now, especially with the -- with the city and the county being partners, as far as looking at the stpmm money, that would come before campo with that -- with that $38 million that's set aside for the particular allocated, proposed allocated projects, you mentioned a couple of things and I want to make sure that -- that everyone understands exactly what's happening here. You mentioned a couple of things as far as the continuation with the private partner publicship [sic] agreement that we have kind of looked at. My question is if we have to be responsible for 20%, each government entity, county on one end, city on one end with their 20% participation as far as that match of the 80% coming from the federal government if this actually does take place before campo, within the public/private partnership agreement itself within Travis County, that means that the partners of the private sector would have to come up with 10% of the 20% to make this thing consistent with the way that we have done -- dealt with as far as private partner publicship [sic] >> is that correct. >> that is correct. Just -- >> that's right. >> looking at the numbers, I want to make sure that the $13.5 million that -- that we were referring to as far as the total cost of -- of this particular phase two connection to s.h. 130 to the interchange, the city is responsible -- the 20% I guess is a part of that 13 -- part of the 13 -- I will include -- is that correct? >> [inaudible - no mic] >> the estimates for both the city and the county section were prepared by me and -- t.n.r., 7.5 of the $13.5 million total is meant to represent the county's portion. The cost of the county's portion, 20% of that would be $1.5 million, the 1.5 will be the max, will have to come from the local entity. The $6 million that I estimated has not been confirmed by the city yet. They still feed to do that. We are communicating with them to make sure that they are comfortable with that number. One other thing on the county's portion, keeping in -- in line with what was originally proposed as the partnership, the 20% that the private parties would be expected to -- to -- private parties be expected to be on the -- to put on the table would not include the amount for the bridge. That's why the 1.75 million is so big. Kept in the spirit of that original concept, the cost of the bridge, the county talked about picking up that entire cost. If we hold to that concept, then what they would be paying 20% for, their half of the 20% would be just for the roadway portion of that segment. >> excluding the cost of -- >> the private sector to donate all of the right-of-way and easements required for the facility. These are just the construction costs. Right-of-way should come to the county without cost to the county. >> I guess what I'm concerned about at this point is that we are on the same time line with the city, especially if we need to go before the campo, if the court decides to -- to look at this particular option as far as looking at the funding which in my -- there seem to be a lot more to the point and cheaper. Than the others that -- that we looked at we discussed earlier, especially if -- >> our out-of-pocket expenses would be -- [multiple voices] >> right. The city of Austin, if the court decides to go in the direction, when will the city actually probably be able to take up the issue to -- to make sure that we are in a -- in concert with the movement that needs to get to the campo board, in other words all of these little different things that we have to have succinct and in order to proceed. So I want to make -- that's what I'm trying to get to as far as the timing of all of this. >> my understanding of the timing Commissioner as the judge said, the call for projects comes out in mid August. I've heard, I can't really verify this, but I've heard that the process would be; projects in mid August, turn this in in November, decision on which projects get funded early next year, van into spring, somewhere in there. At that point you need to start -- if we are successful, we need to start talking about getting our money together, probably in the fy '09 -- >> it is on the city's radar screen to look at what we are looking at here -- [multiple voices] >> pardon me. >> I have communicated that to city staff, yes, I have. >> we will continue to follow up. We really need for them to -- to agree to participate with us. I think it would be a more successful application, I don't know why they would not want to participate, it would save them a lot of money as well. >> exactly. >> thank you. >> campo's strategy would be for us to ask for how much? >> right now I'm saying 13.5 million. Of which 20% would be our local match. But we ask for the full and they say put up 20%. I still need to verify what the city is costing. I estimated at 6. I really need for them to weigh in, because that's their piece of it. It's at least $6 million for this. >> okay. >> okay. >> that's one of -- let's save that until next week and decide, how is that? Decide one of these options next week. >> that's fine. >> there was one other option, judge, that was to wait until the next bond referendum. Several years down the road. >> okay. >> obviously the thing to do is to give this thing a shot at txdot, I mean, why wouldn't we try that? I mean that --, I mean, that maybe money that just knew found money, at least get told that -- I think they want to bring it back next week. Sounds to me like next week. >> [indiscernible] >> may as well have some people. >> make sure that they are on board. I'm recalling a conversation that they had -- you need to say hey that won't work, here are the reasons why. But if you have another strategy, we will see what they say. >> okay. >> yeah. >> could be much easier with their support by campo. The other thing is that it -- shouldn't we find out from the city of Austin how they are leaning, we can do that in one weekend. >> when will they meet again? >> 2008 [laughter] >> they are relying on city staff's recommendation, aren't they? >> yeah. >> [inaudible - no mic] allocated bond money for this project, they sill still have that bond money available. I don't know why they wouldn't apply, use their bond money, save them money. >> don't apply any pressure, just ask them. [laughter] every time we apply pressure it back fires, joe. >> a brotherly request for information. We will have it back on next week. >> it will take a fraction of the time it's taken today, Commissioner.
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Last Modified:
Wednesday, July 18, 2007, 18:30 AM