Travis County Commissioners Court
January 17, 2012 (Agenda)
Item 20
Item number 20, consider and take appropriate action on the following requests: a, a pass-through toll finance agreement with txdot for m f-16 26 between west of bready lane and fm 2304, aka manchaca road in precinct 3.
b, a pass-through toll finance agreement with txdot for fm 969 between fm 3177,aka decker lane and hunters bend road in precinct 1.
and c, resolutions supporting Travis County's pass-through toll finance agreement with txdot for portions of fm 973 and fm 969 in precinct 1 and a portion of fm 1626 in precinct 3.
and we indicate that the matter may be taken into executive session under consultation with attorney.
on Friday I received an email from the auditor's office.
>> correct.
>> indicating that we had not really gotten financing in place?
>> correct.
and in the handout I just gave you was the language they had suggested we could use.
I think it needs some tweaking, but that generally covers what their concern was.
and if this is the only item that's holding up the court's approval of the pass-through finance agreement today, I would ask the court allow us to work with the judge, the county attorney's office and the auditor's office to get it right and make it a part of the agreement with txdot as well.
>> okay, what's the problem with getting if funding in place?
>> I'm not real sure what their -- their real concern is, but I think it's that we have an agreement and we don't have all the money right now.
and they also know txdot doesn't have their share of the funds either.
for clarificationings, the first few years of both projects is going to be funded totally with county funds.
the actual grant I guess you call it for txdot occurs during the construction fades pe which they will be responsible for completing and so within that scenario the auditor's office felt like we had so have some money in here, just alert folks there's a chance txdot might not have their money on time, we might not have our money, this covers it.
I think that's what they are trying to get at.
>> we would issue cos.
>> they would be more like what we issue today for permanent improvement bonds.
they look much more like 20-year long-term bonds.
we've met with bond counsel a the authority is under 1479.002 so we have the authority from the state to issue bonds for this purpose.
we just have not -- the court has not taken any action to go forward with that issuance and p.b.o.
is working actually currently to bring to you what your issuance will look like for cos, voter approved bonds.
>> is this us boring money on behalf of txdot so we can front the cost of this project, one being to the tune of 67% county and the other 47% county?
>> that's true.
>> so we are financing txdot's portion as well for which they will pay us back during construction.
>> they will pay us back part of the total cost.
we do not get reimbursed for any of the design costs, right-of-way position and we also contribute to more construction to make us more competitive at this round.
>> I did note that that, you know, basically they said we're not paying enough of their portion.
>> [laughter] to be competitive, right?
>> we believe this language would be sufficient?
>> I think it might need some tweaking, judge.
there's reference to a grant in there, it's not really a grant, but I would like to work with the auditor's office, county attorneys and txdot to make it right and hopefully if the court is okay with it, maybe incorporate it into a final draft and bring it to the -- either the judge for signature or back to the court next week.
>> we've looked at these projects already and approved them months ago.
I hadn't anticipated that little problem though.
>> if there are no on or about issues, I would like the court to approve both agreements subject to us coming up with the language that satifies theni auditor's office, txdot and the county attorney's office.
that we will then change in the agreement, bring those back to the judge for signature.
for the judge's signature.
>> anything else from county staff?
>> txdot staff is here --
>> [one moment, please, for change in captioners] those -- those funds were acquired from stomach husband money years later.
the campo board didn't know where that money was going to come from.
of course, now we're entering into language arts, changing this agreement.
I think before the judge signs off on -- on this language arts, that they are coming up with or double speak or semantics, whatever you want to call it, parsing words as elected officials do.
I think that you should come back.
after the -- the wording is what the judge is going to sign, share that with the public.
because this it's just like -- first this is just appalling, the financing in the first place, second of all, it's -- it's just not good government.
thank you.
>> mr. Reeferseed.
>> yes, sir, I would like to briefly echo mr. Priest.
the kind of floppy seemingly relative nature of this.
I'm confused.
I'm not as knowledgeable as mr. Priest.
it appeared to me that toll road is in that, somewhere in that language.
maybe I'm just not reading it correctly.
but with all of the money that we're talking about coming from various sources, there's opening for more money coming in later, you have -- having another -- having another toll road on a road that's already been built and paid for, I would assume, is not good government.
so -- so I might be speaking out of ignorance here, I'm sorry, but -- but again I echo what mr. Priest was saying, it just seems not -- not up to snuff with you guys, you know.
a little bit on the sloppy side.
>> these would not be toll roads.
these would be free roads and the county would advance the money to pay for construction.
and the state would reimburse us a percentage of that over time.
>> that's right.
>> what happened is that we looked at these projects, months ago, and submitted a request to txdot for a pass-through agreement.
and we really have been waiting on the document itself and this document.
it seems to me that if the language that -- that we land on is similar to what's before us today the county judge would sign it.
if the language is dramatically different, we really would bring it back to the court and have the judge consider it in open court.
>> that's fine, I will get consensus of the other parties.
if there's any concern about it at all that requires a major change, we will bring it back next week.
>> so to be clear this language is about risk shifting.
to be sure that the county is not at risk should these funds become available.
is that essentially what this language is about?
these funds that we're borrowing on property tax for the benefit of the txdot road, which normally would be paid for with gas tax.
>> there are really two issues.
that is whenever you approve a contract, it is not a valid contract until the auditor certifies the funds.
meaning that you have appropriated those funds.
so it's just a check and balance.
so we're always looking at that.
this is not quite so clear because it's a little more complex.
so the language that cap -- submitted it -- is trying to make that all right.
change the language with this very different kind of contract.
so that -- that's what this is.
the other thing is that on -- on January 6th, I'm sorry, I've got crud here.
January 6th, jessica sent the Commissioners court a memo, which we fully agree with, and there are concerns that p.b.o.
has and I think that it's just a matter of you understanding those.
one of the problems with -- with not -- this agreement alone but when in fact the county takes on a debt and we do not get an asset, on our books the fund balance shrinks.
when we finance 130 and 45, when gasb 34 came in, it made the county look like it was insolvent because we forwarded the money and we didn't get the land.
so any time that we do that, there is an impact on the county's books.
it doesn't mean that you shouldn't do it, but just so you understand that that's what that is.
there are some timing issues that jessica, I think very rightly pointed out that we have to notify txdot on certain things, it's pretty fast.
so y'all just need to be real comfortable I think with the concerns that p.b.o.
raised that you understand those and are willing to take that risk.
we just agree with that.
>> one of the timing issues is that the county would only have 30 days for additional funding.
we have discussed that what that would mean for the Commissioners court is if the cash flow indicates 3 million in this fiscal year, that might be an appropriate amount over that that we would issue to cover that risk.
there are also some other bullets that we've indicated here that if you have any questions, I'm happy to answer it to the best of my ability.
I also included in this memo, this is obviously a topic of -- that we've talked about for over a year now, so you've seen some -- we've had discussions on it, we did provide the cash flow that we've seen from the department, we also provided for you just an estimated with the reimbursement and an estimated 5%, 20 year financing, what our county responsibility would be at the end of the day, that's on a table at the end of the second page.
I think the total principle is about 30.5 million.
however we are estimating that the county's responsibility once we receive a reimbursement from txdot and pay interest on those funds will be about 35 million.
so that's laid out there as well as some other concerns that we raised in bullet points at the end of the memo there.
>> have those transaction costs be included, steve, in your estimate of the county's percentage participation in these two road projects?
>> as far as funding goes, no.
>> so actually our percentage participation is probably higher than the -- than the --
>> 30 million.
>> yeah, higher than the 66% on f.m.
1626 and the 47% on f.m.
969.
>> that's right.
>> unfortunately, I think the risks are worth it.
because of actions to the Texas legislature.
>> as far as the 30 daytime framings, if -- time frame goes, if we need additional funds where that really could become an issue is during construction with change orders, we deal with that all of the time.
it comes down to managing our contingency budget.
if we use a large portion of that early on in the contract then we would have to come back to court before the balance of whatever is remaining gets burned up and replenish that.
it really goes to doing a very good design so we don't have significant change orders.
>> when I spoke with steve last week, one thing that I wasn't aware of, that the total reimbursement amount will not exceed 110% of the allowable construction costs.
so we do understand, excuse me, that we have an out if after design is complete the project is 110% over budget.
>> that's true.
there is a -- there is an out clause, if you will.
once we get through design, we have a more accurate figure of what it's going to cost to construct this thing and acquire the right-of-way, if it does exceed 110%, we have asked txdot, pat is our contract person here, if we could bail out if we had to.
it's a huge number and then -- then you might want to reconsider this.
I really don't expect that.
but one of them on 626, you are done -- 1626, a sensitive part of the world there, we could run into any number of things, karst features, whatever, or f.m.
969 bad soil conditions out there.
if it turns out we have to put a huge amount of investment into the payment that could blow our budget significantly as well.
>> this also creates a little bit of a check on txdot, my understanding from the p.b.o.
memo.
I believe that txdot there's no limitation on txdot's change order -- abilities within this contract.
>> they will be managing the construction, they will be approving change orders.
but I --
>> but if -- we can bail if it gets too expensive because of -- I mean, t.n.r.
has a very good track record for estimating the cost of a project with an appropriate contingency.
I don't know whether or not, I don't -- I don't pretend to assume, what txdot's track record is with regard to change orders and -- and estimation of project costs.
>> well, that's true.
the bailout, though, occurs before you go to construction.
once we start construction, we're in it.
>> okay.
>> are you with txdot.
could we have your name, we will be happy to get your context.
>> I'm pat
>> [indiscernible] director of design for the Austin district of txdot.
>> welcome.
>> you are just here in case we have specific questions.
>> it's a great project.
>>
>> [indiscernible] today and there had to be a level of confidence because I like to thank txdot for participating.
this has been projects that need to have attention for a number of years.
1626 and also f.m.
969.
of course, we are -- I'm looking forward to moving there as the judge stated earlier, you know, we've been studying this and looking at this for a while.
I mean, we have -- we have really gone back in the time where we tried to get other sources of funding to try to look at this, but we are competing with everybody in the state of Texas.
of course we didn't -- we couldn't achieve that and we didn't achieve it.
but this is the -- another way of finding innovative ways to do something different than what you could do before.
of course, I'm -- I'm really appreciative of the level of -- of what txdot is doing here.
and -- and the type of -- of relationship that we have with txdot.
those folks in -- in the traffic situation in both of these areas for this -- and Commissioner Huber can speak for herself, but in 1626, also f.m.
969, deplorable type of situations.
they are.
and we come here to take care of business, hopefully to go ahead and move forward and take care of some long outstanding considerations for
>> [indiscernible] to hunters bend road as far as 969 is concerned and of course along that with f.m.
973 at that intersection.
but it's in very deplorable, tough, safety concerns and issues that we've had to address and look at for many years.
we've heard this.
and I'm ready to move forward so we can get started.
we need some relief.
safety concerns and other things like that.
it's very important.
that we get that attention and get this relief and hopefully move forward with this particular project.
I appreciate txdot being on board in this particular incident along with Travis County and others that are involved in this.
so it's really something that I think we need to do.
we will look for an alternative way of dealing with it.
>> Commissioner Huber?
>> well,.
>> I just have to say I was really disappointed with the lack of flexibility on txdot with some of the points that we raised.
while these are both very needed projects and I tip to support their need.
I -- I continue to support their need.
txdot repeatedly in these different items cited state law that they couldn't deviate because of state law.
so ...
I did find the lack of flexibility in those time frames very disappointing.
I just ask do you think that given where we are today and what we're looking at with this amendment that we can work with this contract?
>> I do, Commissioner.
I mean we've had several good partnerships with txdot recently.
we did, by the way, ask txdot if this was the same sort of agreement that they were -- that they were asking of other entities that got approved for pass-through financing this last round and yes it is.
they are all being asked the same as us to -- to accept this.
but I think that we can work with them.
>> I have to think that -- that in looking at this, that these state laws are written more for their arrangements with private contractors and their need to get things turned around rather than public sector.
but I guess it is what it is.
so if we can work with it --
>> Commissioner Gomez?
>> I think I have -- somebody raised a question a moment ago about Travis County's record in completing projects on time and on budget.
what is txdot's experience with that or history?
>> I don't know, Commissioner.
>> now that she's here --
>> I don't know the numbers, but I think that we have a pretty good record of on time and under budget, I'm sure they are the exception to the rules.
for some projects, larger projects, think on the whole we have a very good track record.
I think we -- to work with the county in this I think is -- I have to -- I have to just echo what steve mentioned, we have a good partnership with the county on other projects and I think we can do the same thing with this one, change orders, which I think is -- I think a big concern of -- of court, which change orders I think are just the nature of the beast with construction.
it all depends on how good the maps are to start -- plans are to start with when we go forward.
there are always things that change during the course of construction.
any change order, unless it's a substantially change in the type of work that's being done is going to create a problem with funding.
I think the change orders that would be out there would be very minimal.
we would have comment from the county, some sort of discussion as in why we're really doing what we're doing.
so it's not going to be txdot being out there on its own just doing because they think they have a checkbook from the county.
that's not the way that we do business or at least not the way that the Austin district does business.
we are there, we are going to get comments from you all on whatever it is that we are proposing to do and it's going to be something that the county wants.
it won't be just what txdot wants or feels like they have -- excuse me, just a -- blank check.
that's just not the way we do business.
>> so you think if any change orders come across it will be from the county side, not from txdot?
>> I think it will just be a change in what is happening during construction, that -- that typically asphalt changes, I mean, various bobby kick in any time --
>> working in the office, our office oversees f.m.
969, what would be -- txdot would be overseeing the construction of the project, county developing the ps and e in cooperation with us and coordination with our office.
I'm speaking more for the 969, but the other roadway would be in the same format.
change orders would occur, but when they come up we would be in touch with the -- with the county to let them know and if it's anything of a major change order, it wouldn't be done blindly without knowledge and coordination with the county.
there's -- there's minor ones come up and just depends on the situation.
but a lot of it goes back to -- to the -- to the plans and the development of the -- development of them and how well that's done as to if there would be any major change orders which would have -- talking about major, you are talking about larger dollar amount.
but change orders occur in every contract.
we've -- there's never a contract we've gone through construction without a change order.
but typically they are minor.
but if -- we would work closely with the county like we would on any advanced funding type of agreements, contract, we have to coordinate with you all as well on change orders.
that's not unfamiliar.
>> so steven the county is pretty sure that all of the planning has been done adequately?
so that -- so that change orders as necessary will take place.
>> that's what we will be looking for Commissioner.
we haven't started the design yet.
with this approval today that will start us through the process of hiring a consultant who knows txdot standards, and doing the necessary research and investigation into the field to make sure we don't have large surprises.
so that's certainly something, plus with txdot's eyes on it, their experience, I think between the two of us we can minimize any potential large change orders in the construction phase.
>> well, that's good to know.
I think my concern has been the same from the very beginning and I think it has to do with the fact that -- that county would have to put out the money and then we won't get enough in return for -- for our investment.
and so -- so I will continue to -- to vote no.
>> what's the status of the -- of the 1626 project in hays county?
>> I can't speak to 1626.
>> I don't know that I know the status either.
>> I think the last I heard, judge, is they got approval of their environmental document, that cuts them loose to go start finishing up design and acquiring right-of-way.
Commissioner Huber probably knows a little bit more about it, though.
okay?
>> I'm sorry, I didn't catch your answer.
>> the hays county section of 1626, hays county as you know is widening up our way from -- from deep within their county and the judge had asked what the status of that project is.
>> the last I heard it was held up on some environmental issues but that may not be correct at this point, it's been a good while.
we have before us two agreements and two resolutions.
>> correct.
I want to make note in the agenda item and the court there was mention of f.m.
973 in part c of that agenda request, 973 is not part of this.
it's just 969 and 1626, the resolutions are correct in your backup.
>> I saw that.
I questioned that but I was thinking it was just in the intersection phase as 969 and 3177 all the way to hunters bend.
they have to cross.
as they crossed I thought about that was the possibility of them -- of them the intersecting portion of that.
>> just an error on my part.
it does cross.
>> that's what I assumed was that.
>>
>> [indiscernible] January 9th memo, you addressed the -- some cash flow assumptions.
for our consideration.
as well as some concerns.
I noticed that you copied 10 people dealing with road projects, county financing, auditor's office, are we ready to take action today in your view?
after consideration of the points that you raised?
>> yeah, I just wanted to make sure that the Commissioners court was very well aware of the contract that they were entering into.
something that's been discussed for a long time and I know the Commissioners are very dedicated to these projects.
the one thing that I would like to make sure that I'm able to revisit with t.n.r.
is the cash flow in light of that 30 days to make sure that 2.89 million that's noted here from t.n.r.
from fy '12 that that is the correct amount.
it might be that they would like to revisit that.
the other thing that I would like to make sure that I understand is the design.
since we're doing the design in-house, I'm assuming that that's been taken into account in your work plan and that -- that as you know, you know, these resources wouldn't be used, I don't believe, for any personnel costs.
so -- so just making sure that -- that -- that all of the t's have been crossed in that areas and the design is -- able to move forward.
>> we are hiring consultants to design both projects.
so we're good.
any more questions, comments?
>>
>> [multiple voices] I'm sorry, go ahead.
>> Commissioner Eckhardt then we will recognize you for a motion, Commissioner Davis.
>> I would just ask that staff do the calculations of the transaction costs on top of the overall project costs so we have a clear picture moving forward into the legislative session of how much of the burden of state roadways is being moved on to property tax.
because I think that it will be important for us to be able to document that.
>> okay, we will work with p.b.o.
on that.
because of the failure to identify funding sources at the state level.
>> so if we give tentative approval today, ms. Rio, do you need to get with the auditor and t.n.r.
and -- and lad and glen?
>> I think that would be appropriate?
and if there are issues that we need to address, just bring it back to court.
we have to look at this language anyway, right.
>> yes.
>> I would like to move approval of item no.
20, if there's any variation in the language that we have in the before us the risk factors, this particular project, that be disclosed to the court and also allow county judge to sign the -- the document that we perceive as far as this contract is concerned.
I second the motion.
that motion covers a, b and c.
discussion on the motion?
all in favor?
show Commissioners Huber, Eckhardt, Davis and yours truly voting in favor, Commissioner Gomez voting no.
>> sorry.
>> hot off the press.
apparently the environmental issues are -- are part of the holdup on 1626?
hays county.
that's why I didn't second that motion.
>> thank you.
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