Monthly Archives: November 2015

Leslie Pool Takes The Lead In Battling Fee Waivers

By Bill Oakey – November 23, 2015

City Council Member Leslie Pool sponsored a resolution last week that will help protect taxpayers from the burden of subsidizing special event fee waivers next year. Ms. Pool took the time to call me in response to my previous blog posting regarding public safety spending for 2016 special events. The key point as she explained it is that she has tracked down another funding source that will not come from taxpayers. There is a Business Retention and Enhancement Fund that is being considered for this purpose. This fund contains the $2.4 million returned to the City from White Lodging, as a result of their lack of adherence to their incentive agreement.

I will take this opportunity to apologize to Council Member Pool for not contacting her before I published the blog posting on the resolution that she sponsored. She has made it clear that she supports a long-term solution that will reduce or eliminate taxpayer subsidies for fee waivers. This has been a long and treacherous affordability battle, and it’s great to know that Leslie Pool is in our corner and taking the lead on this issue. The resolution that she sponsored and got passed is an important first step in the right direction. Now it is up to the City Manager to follow through with a plan for alternate funding sources for special events and the permanent elimination of fee waivers – finally!

The Fee Waiver Controversy Gets A Brand New Twist – And It’s A Humdinger!

By Bill Oakey – November 11, 2015

We all remember the big brouhaha over special event fee waivers that has raged in the press and at City Council meetings over the past couple of years. It’s a twisted tale of a City Council resolution seeking “alternate funding sources” for the multimillion fee waivers for SXSW and other large event promoters. Of course the money to pay for these waivers comes from you and me, the taxpayers.

So, here’s a quick recap. In May of 2014, Mayor Pro Tem Kathie Tovo got a resolution passed unanimously to direct the City Manager to develop a plan to remove the local taxpayers from the fee waivers and pay for them with alternate funding sources. Her suggestions included surcharges on ticket sales and possibly a portion of the Hotel Occupancy Tax. The first resolution deadline of August 2014 came and went with no action. Then a November 2014 memo surfaced, promising a new deadline of August 2015. When that deadline slipped away, I asked for help from a City management contact person.

Mr. William “Bill” Manno in an office called “Management Services” sent me an email this past July 10th, stating that a draft report responding to the Council resolution would be delivered to the City Council by “October, if not sooner.” On Tuesday of this week I emailed Mr. Manno and asked him to please send me a copy of the report.

City politics is a lot like participating in a real life novel of mystery and intrigue. The level of gamesmanship that goes on behind the scenes is stunning. One of my best inside sources at City Hall alerted me today of a fascinating twist in this saga. First, let me mention one quick thing. The City Council accepted my appeals not to include any funding for special event fee waivers in this year’s budget. All along I’ve been hoping that my compromise proposal for alternate funding sources might have a chance.

Well, take a look at these two items coming up on the Council’s Nov. 19th agenda:

67. Approve an ordinance amending the 2015-2016 Fiscal Year Budget to provide funding for public safety during South by Southwest.

( Notes:   SPONSOR – Council Member Leslie Pool )

68. Approve a resolution directing the City Manager to create a long-term plan to address overall public safety during the spring festival season.

( Notes:   SPONSOR – Council Member Leslie Pool )

You will notice one piece of terminology that is conspicuously missing from these items. You guessed it, the phrase “fee waiver” do not appear in the agenda verbiage! Someone with Karl Rove’s knack for political maneuvering decided that “public safety funding” sounds a whole lot prettier and nicer than the dirty old ugly term “fee waiver.” But the end result to the taxpayers is still the same. Instead of requiring event promoters to pay their own fees for City services, or using ticket surcharges or Hotel Occupancy Tax funds, the problem can be solved by simply passing a budget amendment. Let the taxpayers subsidize the additional public safety services.

Since Leslie Pool was not on the Council during the loud public controversy over fee waivers, perhaps she was seen as an easy target by the special interests who have worked behind the scenes to protect the status quo on fee waivers. But the cat is now out of the bag and we still have time to push for adoption of the alternate funding sources originally conceived in the 2014 Tovo resolution.

Here Is My Proposal for Special Event Funding

Compromise Funding Proposal for Special Events By Large For-Profit Companies

By Bill Oakey – November 11, 2015

  1. Do not approve any designated “public safety funding” for special events until a policy is adopted pursuant to Mayor Pro Tem Tovo’s Resolution # 20140501-036. This was the resolution calling for the City Manager to develop an alternate funding plan for special event fee waivers. Please note that Mr. William “Bill Manno” in the Management Services Office made a commitment this past July 10th that a report would be delivered to the City Council by “October of this year, if not sooner.” Providing public safety funding for special events equates to the same thing as granting fee waivers, regardless of whether the “fee waiver” label is used.
  1. Do not approve any multi-year agreements with special event organizers until a non-taxpayer supported funding policy has been formulated.
  1. Ask City staff and the appropriate task force / committee members to develop and recommend a compromise funding strategy with the following three elements:a. A portion to come from the Hotel Occupancy Tax funds. (This would require amending City Code Chapter 11-2, Section (B) (3) that allocates 15% of Hotel Occupancy Tax receipts to the cultural arts).b. Surcharges added to ticket prices for those events. A study could be done to estimate the amount that could be generated from the surcharges at various levels, such as 25 cents, 50 cents, one dollar, etc.

    c. Require the special event companies to pay a portion of their own fees. As a part of this component, the outside companies that piggy-back on SXSW should be required to pay a reasonable fee (or an increase in their current fees, if there are any) when they apply for their permits. SXSW itself may not be entirely to blame for the entire funding gap that has been attributed to them.

Please note that the City’s total service costs for special events exceeds the cost of the current fee waivers. The funding gap was $4.2 million in 2013, per the City Transportation Dept. Report. That’s because the City does not set the fees high enough to cover the actual cost of all services provided. Therefore, the new funding policy that replaces the fee waivers should be formulated sufficiently to completely eliminate any funding gaps. That would result in a zero-cost impact on the local taxpayers. That is what we need. The bottom line is that local taxpayers can no longer afford the cost of the fee waivers. The current fee waiver system is one of the most unpopular programs in all of City government.

Courthouse Dilemma Calls for Creative Solutions

By Bill Oakey – November 9, 2015

New Courts for Families - "We need a safe environment for women and children."

New Courts for Families – “Yikes, the rats! We need a safe environment for women and children.”

Many Travis County taxpayers breathed a momentary sigh of relief after the votes were counted, showing that the $287 million courthouse bonds were defeated. But in the halls of the Travis County Commissioners and in lawyers’ offices downtown, the mood was very close to panic mode. They are all still reeling. A recent law passed by the Texas Legislature places the County in a veritable straitjacket. They are prohibited from issuing any debt for projects in a failed bond proposition for three years.

It is too late now for County officials to ponder what went “wrong.” What needs to happen quickly is a major shift in thinking about the new courthouse.  The voters have spoken. They chose not to spend that amount of money on the type of facility that was proposed. Here are some of my thoughts on how to move forward with new plans for the courthouse:

1. Downsize the Design Ambitions for the New Courthouse

Travis County has probably spent in excess of $10 million on consultants and staff time for the courthouse planning to date. The most basic starting point for any such plan is determining how big of a courthouse that we need. The County staff worked up a report that estimates we would need space for 35 judges and 33 courtrooms between now and 2035. But how seriously did anyone question those estimates? Today we have 19 civil and family courts. It does not appear to me that we have added new courts in recent years at such a rapid pace that a target number of 33 is justified. Do we really need a courthouse as tall as the Frost Bank Tower?

The new courthouse was envisioned to be a state of the art facility with every modern innovation in place. One point in particular caught my attention. The hallways were planned to be several times wider than what exists in the current courthouse. It’s one thing to build something that is less cramped and more safe for those visit the courthouse. But floor after floor of the new building should not require enormously vast hallway space. From an affordability perspective, the taxpayers would probably prefer the building to be much better than the old courthouse, but something less than a Cadillac standard of perfection.

2. Take a Fresh Look at the Security Needs for the New Facility

It is true that family violence, child custody and divorce cases can pose a serious security risk. Abuse victims should not have to ride in the same elevator or sit next to their perpetrators in the hallway. Children especially should have a safe and secure place to stay while in the courthouse. But there are large numbers of civil cases that do not come with the same high level of risk. Think about issues like insurance disputes, eminent domain cases and various other civil matters. Even adoption cases are fairly low-level in terms of security needs. Why couldn’t the building be divided into high security and lesser security sections? It is my understanding that the vast amounts of thick and heavy glass in the construction design contribute the most to the high cost. In a hybrid design scenarios, the internal and external construction materials for the lesser security sections would be much less expensive. Such a configuration could require some judges to move between sections to try different types of cases. If that should become necessary, then so be it. All reasonable measures to bring down the courthouse costs should be considered.

3. Work with the Legislature to Try to Amend the Debt Restriction Law

Three years seems like an unreasonable time to have to wait for another bond election. Perhaps our County officials could work with the Legislature to come up with an amendment to the law for constitutionally mandated functions like building and maintaining adequate court facilities. The sooner the law could be changed is in January 2017. That’s a little over a year away. We could potentially have another election in May or November of 2017. At least that’s better than a three-year wait.

4. Take the Time to Tally Up the Land Sale Revenues and Other Offsets to Reduce the Bond Price

Travis County Commissioners were wise to consider the sale of several County-owned properties to generate revenue to offset the cost of the bonds. However, those sale transactions could not be completed in time for this year’s bond election. Now, however, there will be sufficient time for the properties to be sold before the next bond elections, thus allowing the size of the ballot initiative to be reduced. In addition, County officials should factor in estimates for the potential parking revenues and the lease receipts from private usage of excess space in the building. Another significant revenue stream will come from the sale or lease of the second half of the property that the County intends to put out for bids to private developers. Once all of these revenue sources have been nailed down and summarized, the voters can be presented with a much clearer estimate of the tax impact of a new courthouse.

Is There Any Possible Way to Build a New Courthouse Without Waiting Three More Years?

On the surface, the answer would seem to be no. The financing options appear to be limited to a choice between bonds or certificates of obligation, or else cash appropriated straight out of the annual budget. However, there is one other option that has been used in other places. In Long Beach, California a new courthouse opened in 2013 that was built with upfront funding from a private consortium. The $340 million cost plus interest will be repaid by the State of California over the next 35 years. Of course, Texas does not pay for county courthouses. And I’m not sure if it would be legal for Travis County to bypass the voters and enter into an agreement with private developers to build a large courthouse. It would still be a debt-based transaction and could run afoul of the newly passed law requiring the three-year waiting period.

An Offer of Desperately Needed Help for the Judges and Lawyers

During the recent bond campaign, residents were treated to large glossy postcards featuring pictures of monster-sized rats. These hideous creatures reminded me of the B grade 1959  horror film, “The Killer Shrews” (See the YouTube trailer here, or the entire movie here)While I cannot speak for all of the taxpayers, the County certainly has my personal permission to invest in a few packages of rat poison, if not a friendly call to a pest control service to alleviate the problem. The same goes for fixing the leaky roof. However, I would hesitate to suggest hiring a consultant to develop plans for those endeavors.

Travis County’s HUGE Wake-Up Call – So, Where Do We Go From Here?

By Bill Oakey – November 4, 2015

It is hard to overstate the historic significance of the failure of Travis County’s bond proposition for a new civil and family courthouse. In the 44 years that I have lived in Austin, I can’t think of another time when a major Travis County bond proposition failed. The voters here have consistently approved bonds for new infrastructure, whether it be for roads, buildings on land acquisition. But this time was different…Why?

That is the question that the Travis County Commissioners and their staff should be asking right now. Rather than pounding their fists and insisting that the voters did the wrong thing, they really need to take a few deep breaths and think about why the bond proposition failed. In the minds of the pro-bond fundraising groups there was only one side to the argument – We need a new courthouse, the old one is dilapidated. End of discussion.

The reality is that most Travis County residents do not disagree that we need a new courthouse and that the old one has long since outlived its useful life cycle. But that reality just happens to bump up against another one – affordability. This year’s round of sky-high tax appraisals hit everybody like a punch in the gut. When people are seriously scared about whether they will be able to afford to stay in their homes, their willingness to vote for tax increases becomes severely strained.

So, Where Does Travis County Go From Here?

There is no question that heads are rolling downtown at the County offices. As much as the County Commissioners would like to find a quick solution for the badly needed courthouse, there is a new State law that will probably slow them down. Apparently, a bill that was passed in last year’s Legislative session mandated that counties must wait 3 years after a  bond election to issue any new debt for a project that fails. County officials are working as we speak to determine exactly what their options are for pursuing any construction of a new courthouse.

The Big Missed Opportunity That Helped Lead to the Current Mess

The date was September 10, 2013. The Travis County Commissioners held a regular meeting on that date. Agenda Item # 18 addressed several items related to the proposed new courthouse. The 4th bullet speaks to my recommendation that the courthouse should be conceived as a “national model of cost effectiveness and efficiency.”

From the Commissioners Court Minutes for September 10, 2013

18. Consider and take appropriate action regarding the costs and engineering and architectural features of certain recently constructed civil and/or family courthouses.

Members of the Court heard from:
Belinda Powell, Capital Planning Coordinator, PBO
Roger El Khoury, Director, Facilities Management Department (FMD) Bill Oakey, Travis County resident

Clerk’s Note: Judge Biscoe circulated a memo requesting staff to ascertain certain information regarding recently built courthouses in other jurisdictions.

MOTION: Approve the information listed in Judge Biscoe’s backup memo plus five additional points:

o Delivery method;
o Soft costs and hard costs;
o Any cost reduction measures;
o Strive to achieve a national model of cost effectiveness and efficiency

and;
o Whether Furniture, Fixtures and Equipment (FF&E) are included in the
total cost.

The Motion Passed Unanimously. But What Happened Next?

The answer is simple and most unfortunate – Nothing!

In 2014 I was appointed to the Community Focus Committee for the proposed new courthouse. I was under the impression that this committee would function in an advisory capacity. However, we never performed any advisory role and we never interacted with the County Commissioners. Instead, we attended meetings where we were briefed by the staff and two sets of consultants on the progress and status of the courthouse planning efforts.

I brought up the fact that the County  Commissioners adopted my stipulation that the courthouse should become a “national model of cost effectiveness and efficiency” on at least two occasions. But no one ever brought forth any cost containment strategies. No discussion of alternative cost scenarios was ever presented to us. In fact, our committee was never even briefed on the estimated cost of the courthouse until the same week that it was scheduled to be presented to the Commissioners Court.

Shortly after the high cost of the proposed courthouse was announced, I submitted my resignation from the Focus Committee. It’s too late now, but if the taxpayers’ concerns about affordability had been taken seriously, perhaps the courthouse bond proponents would be celebrating a victory this week instead of wringing their hands in defeat.