Rail plan demonstrates growing clout of North Texas agency

Posted Sunday, Sep. 30, 2012

By Gordon Dickson

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ARLINGTON -- Many people thought the TEX Rail/Cotton Belt project -- a proposed commuter rail line stretching 62 miles from Fort Worth to Plano -- would never get on track.

But the North Central Texas Council of Governments, along with its sister organization, the 43-member Regional Transportation Council, is flexing its muscles like a full-fledged regional government by dreaming up an unusual funding plan that includes state and federal tax revenue, borrowed funds and private investment.

If the council of governments succeeds, the TEX Rail/Cotton Belt project could not only connect distant parts of the Metroplex through public transit up to 30 years ahead of schedule but also bring in a major employer -- a rail car and streetcar manufacturer -- that could add hundreds of jobs to the region.

This new way of doing business illustrates that the council has evolved into far more than a planning and advisory board for roughly 230 local governments in the 16-county region.

The agency and its staff are no longer just facilitators or moderators in negotiations for big-dollar transportation projects: They are at the head of the table.

"It's the single most influential government entity in the Metroplex," said Jeff Ritter, a Richland Hills resident who serves on the Fort Worth Transportation Authority board. "What entity other than the federal or state authorities has as much influence over all aspects of local government? There is none."

Ritter said he was a bit taken aback to learn that the council's plan for the commuter rail corridor essentially overlapped much of the work that his agency, also known as the T, was doing on a proposed TEX Rail project connecting southwest Fort Worth to Grapevine and Dallas/Fort Worth Airport.

The T has been criticized for moving too slowly on the TEX Rail project, which is years behind schedule.

TEX Rail represents the part of the commuter rail line in Tarrant County. The council of governments' Cotton Belt initiative includes the TEX Rail plan, plus an extension northeast into cities such as Addison, Carrollton and Plano.

Ritter is unsure what the T's role will be in the project if a private developer is used, although he supports building the rail line as quickly as possible.

"The council of governments is obviously in a position of great influence in the region and in all aspects of local government, whether it's municipal, public transportation or transit-oriented development," he said.

This new role for the council of governments has also led to notable changes in the routine of its leaders.

In November, the Regional Transportation Council held its first-ever executive session to brief members on the TEX Rail/Cotton Belt finance plan. Then, this month, after the still-unidentified developer submitted its initial confidential proposal to build the TEX Rail/Cotton Belt project, RTC members were told that they would have to sign nondisclosure agreements to get a glimpse of the details.

Most of the people in the room gladly signed on the dotted line.

Cobbling funding

In the past decade, as Texas and other states have struggled to find alternative sources of funding for transportation projects because of an ever-shrinking pot of gas tax revenue, metropolitan planning organizations, with the ability to leverage federal and state funds, have taken on the role of a de facto regional government.

"Their involvement is very appropriate because they can facilitate with all these local governments," said Bill Meadows of Fort Worth, a Texas Transportation Commission member.

Of TEX Rail, he added, "It's been perceived as a Fort Worth project ... but it's a project that matters to a number of different transportation partners, all of which are playing an important role in advancing it."

On paper, the council of governments is the region's congressionally recognized planning body -- a group that maps out plans to deal with issues such as population and job growth, highway construction and air pollution for 20 years and beyond.

The council of governments helps local governments see the big picture, and it's an enormous responsibility. During the next year, it will oversee an estimated budget of $172 million, including $78.6 million in transportation expenditures.

During the past five years, the council of governments and the RTC have developed expertise in funding road work previously thought out of reach. The idea is to gather whatever federal and state dollars are available and to leverage those funds with a cornucopia of other financial resources, including loans, bond debt and private investment.

For example:

Sam Rayburn Tollway in Collin and Denton counties today is owned by the North Texas Tollway Authority. The original plan was for the Texas Department of Transportation to lease the road in the Texas 121 corridor to a Spanish-owned company for 52 years. But opposition to that plan emerged. The council of governments moderated a yearlong negotiation that in 2007 resulted in the tollway authority agreeing to provide a $3.2 billion upfront payment to the region. That money included $2.5 billion for the council of governments and the state Transportation Department to spend on other projects in the region.

The President George Bush Turnpike western extension in Irving and Grand Prairie was also a candidate for private development in 2008, but the council of governments again moderated and arranged for the tollway authority to take the project. With the help of state and federal transportation officials, a revenue package was put together that included $674.3 million in revenue bonds, a $418.4 million federal transportation infrastructure loan, a $9.1 million federal discretionary grant and a $72.5 million equity contribution.

Chisholm Trail Parkway, which is scheduled to open in 2014, was on the planning books for a whopping 50 years before construction finally began on the 28-mile road from southwest Fort Worth to Cleburne. The council of governments, tollway authority and state Transportation Department worked out a deal guaranteeing that money would be available to build Chisholm Trail Parkway. It was financially linked to the President George Bush Turnpike western extension, so that leftover funds from one project could be used on the other.

The conductor

The leading figure at the council of governments is Michael Morris, the agency's longtime transportation director.

He said the development of the TEX Rail/Cotton Belt project is a landmark moment comparable to the creation of Dallas Area Rapid Transit in the early 1980s.

Today, DART has one of the most comprehensive light-rail systems in the western United States. But in its startup days, it was considered a waste of time and money by large swaths of the population in North Texas. Mass-transit supporters endured years of criticism in the Dallas area before their vision began to show results in the late 1990s.

Now that DART is up and running, Morris said, it is time to link the rest of North Texas by rail.

"Today, almost 30 years later, in my opinion this is as big a passenger rail moment as in 1984 when the voters approved rail," he said.

It was during a monthly meeting in September that Morris told RTC members that he needed to know whether they opposed privatizing the TEX Rail/Cotton Belt project.

Most of the details are veiled in confidentiality. But Morris and others in the know have said the project includes allowing the developer to recapture its investment through development around the stations ranging from Summer Creek in southwest Fort Worth to TCU, the Medical District, downtown Fort Worth, the Stockyards, Grapevine, DFW Airport, Carrollton, Addison, Plano and perhaps beyond.

Initial estimates pegged the cost of the TEX Rail/Cotton Belt project at $1.6 billion, although that amount could increase as more details become known.

Morris said the RTC has already committed $90 million to the project and could be asked to chip in an additional $50 million to help develop what's known as "positive train control," a federal mandate that technology be installed allowing remote control of trains. That way, if the train operator is incapacitated or not paying attention, someone from outside could seize control and prevent a collision.

Positive train control will be required on most passenger and freight rail lines beginning Dec. 31, 2015, according to the federal Rail Safety Improvement Act of 2008.

State officials were also looking at additional funding sources to sweeten the pot, Morris said.

The Texas Department of Transportation is eager to show the federal government that it can build passenger rail as successfully as it can build freeways and toll roads, and it might have additional dollars available for TEX Rail in the voter-approved Texas Mobility Fund, he said.

Morris also explained that the prospect of bringing in a rail car manufacturer -- a major employer that would build modern commuter rail cars and streetcars and sell them to transit systems throughout the United States -- had grabbed the attention of the governor's office.

The state's executive branch has at its disposal resources such as the Texas Enterprise Fund to help bring economic development and job growth to the state.

Since 2004, the fund has disbursed $377.5 million statewide to several hundred job-growth projects, including $1.3 million awarded last year to GE Transportation for a locomotive plant in far north Fort Worth.

"If I talk to TxDOT, they need to read in the newspaper that it's for real," Morris said. "We're going to be partnering with the governor's office, and I need to know you're serious about moving ahead."

RTC members offered glowing words of support for Morris, whom many consider a pioneer in transportation funding.

"Michael, I suggest you stop talking," said Bernice Washington, a DFW Airport board member. "It sounds too good to be true. You need to stop talking before you convince me it's too good to be true."

Fort Worth Councilman Jungus Jordan credited Morris and the council of governments with being the innovator behind an estimated $16 billion in road projects financed with alternative methods and either completed or under construction the past five years.

Now, Jordan said, it's time to turn that financial wizardry toward passenger rail.

"What Michael has put up here is, 'How do we fund our vision?' I fully endorse this," Jordan said. "I think it's visionary."

Link to blog here.

Texas Tribune Festival 2012 talks Transportation & Trade

We're liveblogging this weekend from The Texas Tribune Festival's Trade & Transportation track, which includes panels on light rail in Texas, the future of trade and the upcoming legislative session.

Featured speakers include Phil Wilson, the executive director of the Texas Department of Transportation; Gordon Bethune, the former CEO of Continental Airlines; Texas Secretary of State Hope Andrade; and Deirdre Delisi, the former chairwoman of the Texas Transportation Commission.

State comptroller raises the red flag on debt

By Joe Holley | Wednesday, September 26, 2012 | Updated: Thursday, September 27, 2012 10:28am
Houston Chronicle

AUSTIN — Local governments are loading down Texas taxpayers with debt without providing them enough information about the amount already owed for roads, schools and other public projects, State Comptroller Susan Combs contends in a report released Wednesday.

Titled "Your Money and Your Debt," the report notes that the current level of government debt approved by Texas cities and counties soared from 2001 through 2011, with tax-supported debt of cities increasing 126 percent to $27 billion. Tax-supported county debt, the report said, grew by 131 percent to $10.3 billion.

"As taxpayers step into a voting booth to approve new debt, government should tell them how much debt they are already responsible for repaying and how much debt service is included," Combs said in a statement. "Elected officials are responsible for telling the taxpayers they serve about the price tag associated with new and existing debt."

Critics of Combs' report were quick to assert that local governments have been forced to take on essential projects the state has refused to fund.

The tab in Texas includes $40.5 billion of outstanding state debt and $192.7 billion of outstanding local debt, including $63.6 billion held by the state's 1,024 school districts. Sixty-one percent of local debt is tax-supported, while 39 percent - about $75.8 billion - is backed by revenues generated by fees, tolls and other sources. According to the report, Texas has the least state debt among the 10 most populous states, but the second-highest local debt burden.

'There must be balance'

Houston, for example, has total outstanding debt of $13.1 billion. With a population of nearly 2.1 million, debt per capita is $6,264. Most city debt, the comptroller's report points out, is backed by fees and other revenue sources.

"We could do a better job on being smarter about borrowing," Combs said. "Are we really being careful before we build another building?"

Voters will be considering $2.7 billion in bond issues on the ballot this November from the city, Houston Community College and Houston Independent School District.

Janice Evans, speaking for Mayor Annise Parker, said the mayor has a record of limiting debt, from ending the practice of issuing bonds to pay pensions to supporting the pay-as-you-go drainage fee dubbed Rebuild Houston. The latter, Evans said, allows the city's bond proposals this fall to be the smallest in 30 years and to require no tax increase.

"Much like the purchase of a car or a home, long-term debt allows the city to finance very expensive and necessary public improvements. However, there must be balance," Evans said. "The numbers in the state comptroller's report clearly show that Houston is maintaining that balance with a per capita debt that is in line with that of other major Texas cities."

Combs' report puts Houston third in per-capita debt, behind San Antonio and Austin. Debt service makes up 18 percent, or $804 million, of the city's $4.2 billion budget this fiscal year, Evans said.

Although Harris County has no bond proposals on the ballot this fall, County Judge Ed Emmett criticized the report's use of population growth and inflation as a benchmark to compare spending and debt. The state built the University of Texas and Texas A&M University with proceeds from oil discoveries, Emmett said, and could not have done so if it had been constrained by that alone. "The Ship Channel, the highway system, all those things were built in anticipation of future growth, not waiting until you get the growth and then saying, 'OK, now you can spend the money,' " he said.

Emmett stressed the difference between debt backed by property taxes and that backed by revenues, such as tolls paid to the Harris County Toll Road Authority.

Combs acknowledged that "there is plenty of good debt" that voters approve to help finance highway and water-related projects, for example. Still, she charged that too many governmental bodies are piling up debt without regard to its impact on future generations of Texans. "Have they done all their due diligence? Have they tried as hard as they know how to be strategic, to be careful?"

Combs suggested several ways to make debt obligations more transparent. As new debt is presented to voters for approval, her report recommended including on the ballot the amount of outstanding debt, debt service, per capita obligation, the amount of new debt, estimated debt service and the estimated per capita burden for proposed bonds.

With 85 MPH Speed Limit, Trucks May Avoid New Toll Road

• by Aman Batheja
• September 27, 2012
• Texas Tribune

In a matter of weeks, a 41-mile stretch of toll road with the fastest speed limit in the country will open in Central Texas.

But truck drivers may steer clear of the new high-speed road, said John Esparza, president of the Texas Motor Transportation Association, which represents the trucking industry in Texas.

“It’s going to be a deterrent, yes,” Esparza said of the road’s 85 mph speed limit.

The Texas Department of Transportation has said it pursued a higher speed limit for the new portion of State Highway 130 from Austin to Seguin in part to entice drivers away from more congested highways. Agency officials have said engineering tests demonstrated that an 85-mph speed limit is safe for the new toll road.

Judge grants foreign company eminent domain powers for pipeline construction

A Beaumont judge on Monday granted a foreign company’s petition to condemn land for the construction of a crude oil pipeline.

Last June, TransCanada Keystone Pipeline filed the petition for condemnation against Texas Rice Land Partners, James and David Holland and Mike and Walter Latta.

TransCanada filed the petition seeking to build a pipeline to carry crude from Alberta to the Gulf Coast.

On Sept. 24 Judge Tom Rugg, Jefferson County Court at Law No. 1, ruled that the company has the right to sieze land in Jefferson County for the pipeline.

Lockhart hopes boom follows 85 mph tollway

By Ben Wear

Austin American Statesman, September 23, 2012

LOCKHART — Barbecue can only take a town so far.

This city's signature culinary product, of course, was featured prominently when about 250 local business and political leaders gathered recently for an "economic development summit." But the real subject of what organizers dubbed the "Race to Lockhart" was speed.

Speed in the form of an 85 mph Texas 130 tollway extension opening as soon as next month. And the potential speed of development, fed mainly by the tollway, in a quiet county of 38,000 up to now mostly bypassed by the Central Texas population boom.

Community leaders believe the four lanes of Texas 130 will spur growth — despite what is expected to be a charge of about 15 cents a mile to drive on it. The tollway, which will link Lockhart to Austin to the north and will provide a much faster route to San Antonio to the south, has drawn the attention of a handful of developers, but no dirt has turned yet.

Court Rules Motorists Can Be Detained For Paying By Cash at Toll Booths

Using cash increasingly seen as suspicious activity

Paul Joseph Watson
Infowars.com
September 24, 2012

The Eleventh Circuit US Court of Appeals has ruled that private contractors operating toll roads on behalf of the state have the power to detain and store records on motorists who pay by cash at toll booths – another example of how using cash is increasingly being treated as a suspicious activity.

Having been held hostage by the Florida Department of Transportation (FDOT) and the private contractor in charge of the state’s toll road, Faneuil, Inc. at a toll booth last year for paying cash and refusing to have a report filled out on them and their vehicle, Joel, Deborah and Robert Chandler filed suit.

“Under FDOT policies in place at the time, motorists who paid with $50 bills, and occasionally even $5 bills, were not given permission to proceed until the toll collector filled out a “Bill Detection Report” with data about the motorist’s vehicle and details from his driver’s license. Many of those who chose to pay cash did so to avoid the privacy implications of installing a SunPass transponder that recorded their driving habits,” reports TheNewspaper.

“They were likewise unwilling to provide personal information to the toll collector, but they had no alternative because the toll barrier would not be raised without compliance. FDOT policy does not allow passengers to exit their vehicle, and backing up is illegal and usually impossible while other cars wait behind.”

The three-judge panel dismissed the suit, ruling that detaining motorists in order to record details about people who paid by cash was not a constitutional violation and that the state and the contractor could subject motorists to such treatment because, “In Florida, a person’s right and liberty to use a highway is not absolute.”

This is merely the latest example in a growing trend of authorities treating people who use cash to pay for goods, bills or services as suspicious. Given that the use of cash cannot be used to track purchases or movements of individuals, extra layers of bureaucracy and intimidation are becoming institutionalized in order to dissuade people from using hard currency as part of the move towards a cashless society.

Earlier this year we reported on how the FBI was telling businesses to treat people who use cash to pay for a cup of coffee as potential terrorists.

The flyer, issued under the FBI’s Communities Against Terrorism (CAT) program, lists examples of “suspicious activity” and then encourages businesses to gather information about individuals and report them to the authorities.

The flyer aimed at Internet Cafe owners characterizes customers who “always pay cash” as potential terrorists. Given that some retail outlets don’t even accept card payments for amounts lower than $10 dollars, this would put millions of innocent people under the spotlight.

We also recently highlighted the case of Texas resident Julia Garcia, who was falsely imprisoned and harassed by Wal-Mart employees for attempting to buy goods with a $100 dollar bill the Wal-Mart cashiers erroneously claimed was fake.

The Wal-Mart cashier ripped the $100 dollar bill in half before taking another in Garcia’s possession and doing the same. Despite a counterfeit detection test proving the bills were genuine, the Wal-Mart employees tried to hide the fact and told Garcia they were keeping the money. Only after police were called was the Wal-Mart store ordered to replace the stolen bills.

Wal-Mart is part of the Department of Homeland Security’s See Something Say Something campaign, which encourages shoppers and Wal-Mart employees to report suspicious activity. In a PSA for its snitch program, the DHS characterizes using cash as a suspicious activity and a potential indication of terrorism.

Earlier this year a Tennessee man was charged and jailed by police after using an old $50 bill to pay for goods at a Quik Mart store. Two banks analyzed the bill and confirmed it was genuine. Police apologized to Lorenzo Gaspar and he was subsequently released from prison.

Link to article here.

Keepin’ it Kleen: Public-private partnerships, or just crony capitalism?

By Michael Kleen
Rock River Times
September 19, 2012

Michael Kleen

By Michael Kleen

“Public-private partnership” has become the latest buzzword among the political class and its supporters.

Often used in combination with “economic development” (another favorite campaign slogan), public-private partnership conjures the rosy image of government and the private sector walking hand-in-hand toward a more prosperous future. More careful observers, however, see nothing more than a mask for cronyism and corruption. In truth, these partnerships may enrich a few, but they hardly ever yield the promised benefits for the public.

The “public-private” concept works in several ways: either government partners with private business to build and maintain public projects, or government invests in private business to foster the growth of certain industries, supposedly for the public good.

Rather than stay out of the marketplace, government officials use their influence and authority to grant special favors to their friends and colleagues in the business world.

When government officials and business leaders maintain a close relationship for their own financial benefit, as is often the case with public-private partnerships, it is sometimes called “crony capitalism.”

Crony capitalism is marked by favoritism when it comes to handing out legal permits, government grants, business contracts and special tax breaks.

Self-serving friendships or familial ties between businessmen and government officials mean anyone not on the “inside” of these relationships is excluded from the process.

On a certain level, some cronyism is inevitable. If a local government needs to hire a company for a construction project, for instance, the officials in charge of hiring will have a natural inclination to reach out to people they know. After all, they reason, what is the harm in using their position to help a friend or relative? Many people go into government because of this potential for making influential friends, finding jobs and building new business relationships.

Because those relationships result in decision-making based on political and social considerations, however, they often go wrong. Public resources that could be used for infrastructure, education or public safety are diverted into business deals that either go belly up, resulting in the loss of millions of dollars, or into seemingly endless projects that only serve to line the pockets of special interests.

In San Diego, the local government partnered with a private company to build a 10.2-mile toll road. It cost $847 million to complete, $140 million of which came from a federal loan. Less than three years later, the company went bankrupt and left taxpayers to pick up the tab. If this had been a purely private venture, only the initial investors would have lost out. Instead, the federal government lost $78 million on its loan, and the San Diego Association of Governments had to shell out $341.5 million to buy the failed company to keep the road operating.

The most famous recent example of a failed public-private partnership was the collapse of the solar energy company Solyndra. Despite skepticism from the U.S. Energy Department over the viability of the company, the Barack Obama administration fast-tracked them for a $527 million loan because it wanted to be seen as promoting green energy. California gave Solyndra another $25.1 million in tax breaks. Two years later, the company filed for bankruptcy while its executives took home nearly $1 million in bonuses.

While gambling with public funds on risky business ventures is bad enough, these arrangements also promote a sense of distrust, alienation and jealousy. It does not take an especially inquisitive mind to wonder why certain businesses or individuals are at the receiving end of these relationships and others are not.

Why, for instance, did Illinois Gov. Pat Quinn (D) raise income taxes on thousands of Illinois businesses, but then give tax breaks to a handful of corporations? It was almost as if those companies had some kind of special access to the governor that every other Illinois business did not.

One need not go as far as Springfield to find similar examples. When the Rockford Park District needed to construct a “green roof” at Nicholas Conservatory and Gardens, for example, it awarded the $108,277 contract to none other than Christiansen Roofing, a construction company owned by Winnebago County Board Chairman Scott Christiansen (R). Even if the Park District did not hire that particular business as a result of Christiansen’s political connections, the dozens of other building contractors in the area who were left out of the deal could be forgiven for reaching that conclusion.

While some politicians and business leaders may trumpet the virtues of “public-private partnerships,” voters and taxpayers are justified in greeting them with skepticism. They may just turn out to be crony capitalism in disguise.

Michael Kleen is a local author, historian, and owner of Black Oak Media. He holds a master’s degree in history and master’s degree in education. Read his previous columns online at makleen.com.

Texas Facilities Commission will part curtain on public-private partnerships

Austin American Statesman
September 19, 2012
By Laylan Copelin

The Texas Facilities Commission on Wednesday unanimously voted to implement a faster, more transparent process for considering unsolicited proposals from the private sector to develop state lands.

The change comes a year after the commission approved its guidelines for public-private partnerships — but only weeks after one of the first projects in Austin stirred public opposition to the process as much as the developer's proposal.

Private-public partnerships — or P3s, as they're called — are being touted as a way for governments to finance improvements, pay for services or raise money.

Austin American Statesman

Published: 7:25 p.m. Sunday, Sept. 9, 2012

Turns out the saga of the Texas 130 tollway extension has even more to it than I managed to cover in this space last week.

For one thing, I was not alone in raising questions about the Texas Transportation Commission's decision to set what seems like an artificially low 55 mph speed limit on the new two-lane frontage roads alongside the as-yet unopened toll road south of Mustang Ridge. Those frontage roads will officially be U.S. 183 because this is the route U.S. 183 followed before the tollway started construction in 2009.

Plaintiffs hoping to stop the privatization of correctional facilities in Ohio are also challenging the constitutionality of Gov. John Kasich’s proposal to lease the Ohio Turnpike to private investors. 

Balfour Beatty Construction Announces New Leadership Additions in Houston

Dallas, TX (PRWEB) September 11, 2012

Balfour Beatty Construction made two key leadership additions in the Houston office, appointing Juan Rodriguez Vice President of Public/Private Projects, and Dawn Landry as Director of Business Development.

In their new roles, Rodriguez and Landry will focus on continuing development in the company’s core markets of interiors and special projects in Houston and the surrounding area, while expanding into public/private ground-up and education projects. In addition, they will be working to maintain momentum in creating value-based solutions for integrated project delivery, public-private partnerships, design-build and other innovative client applications.

Austin American Statesman

Published: 7:40 p.m. Monday, Sept. 3, 2012

Based on assumed savings from a five-year pilot project that began this summer, the Texas Department of Transportation is considering outsourcing all routine maintenance on long stretches of Texas interstate highways, including much of Interstate 35. The agency has touted the potential savings as high as $120 million over five years.

TxDOT has presented the pilot as a fresh concept and a success even in its infancy, but the agency has experimented as early as 1999 with having private companies take over all maintenance of parts of I-35 and Interstate 20. And the results of that program were "extremely disappointing," according to legislative testimony by TxDOT's former executive director.

So our ol' friend Dan Shelley makes the news once again for his cozy ties to Perry and this time, he's in legal trouble for committing fraud against Texas taxpayers. Read about his escapades with his revolving door between Perry's office and toll giant, Cintra when it won the rights to the Trans Texas Corridor here.

Thursday, September 13, 2012

Texas Medicaid Fraud: Who Built THAT?

Link to article here.

DFW wake-up! Your future is so laden with toll roads, your freedom to travel will become non-existent! Throw the bums out!

As officials mull HOV lane changes, North Texas’ toll-filled future comes into focus

By Tom Benning
Dallas Morning News
September 13, 2012

As long as they’ve existed in the Dallas-Fort Worth area, HOV lanes – on I-35E, I-30 and North Central Expressway, to name a few – have been free to any vehicle with two or more occupants.

But that’s changing in the near future, the latest sign that tolls, fares and fees are fast becoming the new norm in North Texas’ driving landscape.