Tag Archives: austin affordable

Helping Travis County Reduce the Cost of the New Courthouse

STATESMAN IN-DEPTH: TRAVIS COUNTY COURTHOUSE

As Travis County works toward courthouse price, Florida project may be a guide

Posted: 12:00 a.m. Sunday, Sept. 1, 2013
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BY FARZAD MASHHOOD – AMERICAN-STATESMAN STAFF

As Travis County commissioners embark on plans for a $340 million civil courthouse — hoping to avoid the embarrassing cost overruns, delays and lawsuits that plagued their last major downtown construction project — officials are looking toward the beaches of Florida for guidance.

Two miles from the Atlantic Ocean, officials in Broward County, Fla. are working on a new courthouse, too. The south Florida courthouse will be five stories taller and contain twice as many courtrooms as Travis County officials plan to build, but at a cost of $298 per square foot — half the price Travis County officials project.

Consumer advocate Bill Oakey has told Travis commissioners all about the Broward County courthouse, which is under construction and slated to open in the summer of 2015. Now, Travis County leaders are looking into the Florida project, and may survey other recently built courthouses around the country for cost-cutting ideas.

“I think, shame on us if we can’t find a way to build this thing the most most-effective way possible and give the judges what they feel they need,” said Commissioner Gerald Daugherty. He met with Oakey and is having an aide research the Broward project’s particulars to see how comparable Travis County’s project is and what can be scaled back here.

County Judge Sam Biscoe, chairman of the commissioners, said he will have a discussion during an upcoming meeting and will ask his colleagues to vote on whether to ask staffers to survey similar projects, including the Harris County courthouse that opened in 2005.

The county’s anxieties about cost overruns are real: The Criminal Justice Center opened in 2000, three years later than planned and at a cost of $45 million, about twice what was originally budgeted. The county sued the contractor overseeing the project, accusing it of design problems and delays, but the company said it did everything the county asked of it. Others had said the county rushed the project and demanded too many design changes.

As with that complex, commissioners plan to fund the civil courthouse through voter-approved bonds, perhaps on the November 2014 ballot. But approval is not going to be a slam dunk. Last year, Austin voters narrowly nixed $78.3 million in bonds for affordable housing; in May, two of the Austin school district’s bond packages, worth a combined $403 million, also failed.

If Travis County seeks $340 million in bonds for the civil courthouse, the cost to taxpayers would be about $61 to $69 a year. Commissioners have said shrinking the project’s tab could improve its chances for approval.

Back in Broward County, voters balked at the request for $450 million in bonds to finance most of the courthouse project, which would have cost the average landowner about $33 a year. About 61 percent of the voters rejected those bonds in 2006. That forced community leaders — lawyers, judges, mayors and commissioners — to regroup and reshape the courthouse plan into something they could afford with other pots of money.

“The type of building we had originally contemplated was not possible,” said Alphonso Jefferson, assistant to the Broward County administrator. “The task force looked at what the basic components of a new courthouse are … and that’s what you’re seeing coming out of the ground today.”

The new courthouse will have some room for expansion, but is built for Broward County’s court needs of today, Jefferson said. Originally planned as a 893,000-square-feet complex costing $510 million, the courthouse was pared down to a 714,000-square-foot tower costing $213 million. Broward officials are using cash, federal stimulus money and tax revenue to pay for it.

Shrinking the project helped, but Broward also found more affordable ways to build and finance it. How? That’s what Travis County officials hope to learn by scrutinizing the project.

Biscoe said his request for staffers to study other projects is “more than two hours of work. It’s a major investment of time.”

He also cautioned that Travis County’s $340 million estimate, originating from a consultant’s report in 2012, is likely an unreliably high figure. He said county staffers haven’t vetted the assumptions behind the estimate. The building hasn’t even been designed yet, which is when more accurate costs emerge. The actual cost, he said, will “be based on a whole lot of facts we don’t have today.”

Travis County officials plan to build a civil courthouse sized to meet its needs 2035 and last for at least 50 years. The existing Heman Sweatt Travis County Courthouse opened in 1931 and has had two major expansions, yet, the building has about half as much space as the county says it needs.

The new courthouse estimates are made on various assumptions by the consultants, such as building a “world-class building of significance/a grand public building,” according to an Ernst and Young report.

“That’s exactly what we can’t afford,” said Oakey, a retired accountant. “We definitely need a new courthouse. … But I quite frankly don’t think that if they put it on the ballot at somewhere between $300 million and $350 million, it will pass.”

The county is negotiating a contract with consultant URS Corp. to continue managing the remainder of the project, including public outreach ahead of a bond election and help with preliminary designs of the building. The firm would also help find a separate contractor to handle the final design and construction of the courthouse and help oversee the work at the downtown site, on the block south of Republic Square Park.

“The place we need to get fairly quickly is asking, ‘What are we talking about building? How big? What are the features that the judges say they need?’” Daugherty said.

The ultimate design of the building, and in turn its cost, will be determined by commissioners, working with URS.


Two courthouses

Travis County (projections)

$340 million

15 stories

510,000 square feet

500-car underground parking garage

31 courtrooms

Broward County (under construction)

$213 million

20 stories

714,000 square feet

500-car above-ground parking garage

77 courtrooms

A Decade of Flat Wages

September 4, 2013

Can the City of Austin defy gravity?

When you look around Austin, it is easy to be lulled into believing that we are invincible.  Our housing market is so hot right now that sellers are getting multiple bids that are often higher than the asking price.  Every other week a new magazine article places Austin at the top of somebody’s “Best Place To…” list.

Over the next several years, a Grand Vision Design Plan (officially known as a “charrette”) will transform Congress Avenue into something rivaling the Champs Elysees in Paris.  Any woman who leaves her white gloves at home, or any guy who forgets where he parked his Lamborghini might still be able to head over to Hut’s Hamburgers, if it survives in its present form.

All of the Grand Visions for Austin assume that the huge bubble we now find ourselves in could never burst.  They assume that we can defy gravity, in a way that no other city in the history of the world has ever been able to do.  I guess time will tell and we will all find out, one way or the other.

In the meantime, there is an inescapable economic reality that faces the United States.  It is the reality of “A Decade of Flat Wages.”  The new report by the Economic Policy Institute is subtitled, “The Key Barrier to Shared Prosperity and a Rising Middle Class.”  Here is an excerpt from that report, followed by a link to the full text:

A DECADE OF LOST WAGES (Excerpt) By LAWRENCE MISHEL AND HEIDI SHIERHOLZ

The nation’s economic discourse has finally shifted from talk of “grand bargain” budget deals to a focus on addressing the economic challenges of the middle class and those aspiring to join the middle class. Growing the economy from the “middle out” has become the new frame for discussing economic policy. This is long overdue; in our view, an economy that does not provide shared prosperity is, by definition, a poorly performing one. Further, such an economy will not provide sustainable growth without relying on consumption fueled by asset bubbles and escalating household debt. The collapse of the housing bubble and the ensuing Great Recession have laid bare the consequences of this model of unbalanced growth.

The revived discussion of strengthening the middle class, however, has so far failed to drill down to the central problem: The wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households.

The full report is available at: www.epi.org/files/2013/BP365.pdf

Time to Pause for Another Laugh

The Definition of a Figure

By Bill Oakey

September 4, 2013

In order to become proficient in the field of accounting, one must master the art of figuring out what a figure is.  Figures are everywhere.  They just don’t seem to ever go away.  Especially the ones we don’t like, the ones that don’t balance, and the ones that linger around too long and haunt us.

Just what exactly is a figure anyway, and what do accountants use them for?

That of course depends on where it came from, who came up with it, and what you are trying to prove with it at the time.  The best way to understand figures is to sort them into types first.  Here are a few:

1. Actual Figure – A figure that actually got where it is.  It may or may not belong there, but if you rub your eyes and look again and it’s still there, it’s an actual figure.

2. Pure Figure – A single figure that is pulled from a group of figures that everybody likes.  Not to be confused with true figures.

3. True Figure – A figure that appears to be correct, but in an embarrassing sort of way.  Nobody else in the office likes it.  Usually needs to be adjusted.  Not to be confused with correct figures.

4. Correct Figure – Any figure that balances to any other figure.  It is possible for either pure figures or true figures not to balance.  In that case, do not use them.  Always use correct figures, especially if they look familiar.

5. Familiar Figure – A figure that looks right because you remember seeing it somewhere else before.  Especially useful when trying to arrive at realistic figures.

6. Realistic Figure – A figure that comes out the way it is expected to.  Should always be used on official reports.

7. Accurate Figure – A figure that bothers you because you can’t find anything wrong with it.  Be extremely careful when using one, especially if it balances the first time you try.  It may or may not be a firm figure.

8. Firm Figure – A figure that you have to go with.  Either it is too late to change it, or its effect on the person sitting next to you hasn’t been discovered yet.

9. Perfect Figure – One that makes the boss happy.  Never question it.

10. Final Figure – The kind that we only see once in a lifetime.  We can all count on it.  It’s the one that’s assessed by our undertaker.  Even if it’s out of whack, we can rest assured that it will go away and never bother us again.

Dead Serious Note:  If you were considering settling into your final resting place in a City of Austin cemetery, you might want to do it before the end of September.  The friendly folks at City Hall are planning hefty fee increases for all cemetery services, effective October 1st.  Your final figure could be 30% more, or even higher, if you don’t act quickly to avoid letting their unaffordable policies follow you to your grave.  (For the complete list of cemetery fee increases, see www.austintexas.gov/edims/document.cfm?id=191684)

Time to Pause for a Laugh

Consumer Weather Bulletin

By Bill Oakey

August 28, 2013

Tax and utility rate increases from the mid teens to the upper twenties this fall, with freezing conditions expected for salaries and wages throughout Central Texas.

Ninety-eight percent chance of heavy precipitation extending from East Austin across the City, as tears begin streaming down the cheeks of low-income taxpayers.

Radar indicates a rising tide of continued cost spirals every year from an intense high pressure area developing over the Sea of Red Ink that engulfs City and County budgets.

A large hot air mass is expected to move into Central Texas next year as political election candidates attempt to cover the huge issue of fiscal responsibility with a thin layer of cloudy promises.

Austin American-Statesman Affordability Editorials

Austin American-Statesman

City, County Must Stop Its Binge On Tax Hikes

Posted: 2:40 p.m. Friday, Aug. 16, 2013

BY EDITORIAL BOARD

The Austin City Council is either unable or unwilling to stop itself from raising taxes to near or at maximum legal levels — despite larger revenues, windfalls, and growing tax bases. In doing so, city officials have shown themselves to be drunk on tax hikes, and it’s time to implement a 12-step program.

How else can their actions be explained? Year after year, without much — if any — consideration for the public’s ability to pay through-the-roof tax bills from the city, county, school districts, hospital district and Austin Community College, elected officials have continued to impose steep tax hikes. Other cities, such as Round Rock and Cedar Park, have held the line on taxes, even while giving employees a pay raise and expanding city services.

Certainly, well-financed local governments provide services to residents and take care of parks, libraries, schools, roads and people in need. But there are limits – points at which more harm is being done than good when taxes are raised beyond certain levels. As local contributor Bill Oakey notes in his commentary below, the current system is not sustainable for most city residents whose wages have not kept pace with ballooning housing costs, electric rates and tax bills. It’s disheartening that the public’s ability to pay has been an afterthought in budget decisions.

That concern continues to be trumped by other priorities, such as providing substantial yearly pay raises and benefits for city and county employees and, in some cases, pay raises elected officials have awarded themselves; tax rebates for private companies that relocate to Austin or Travis County; and tax breaks for homeowners of historical homes in upscale neighborhoods. The steep and continued increase of tax bills is curious given all the additional money generated by new construction and businesses, a rebounding economy and larger revenue from higher property values. Elected officials tout growth as a counterbalance against such steep tax increases. Yet that benefit is not showing up in our tax bills.

That situation caused Austin City Council Member Laura Morrison to pose this question, “What do we have systemically in our business model that, even with growth, we can’t keep up with expenses … and (because of higher rates) are taking more and more of a bite out of people’s incomes?”

That question deserves an immediate answer. And neither the council nor the commissioners court should approve budgets until that question is answered and budgets are adjusted to reflect the financial realities of people who are paying the bills. Taxpayers should be getting a break, given all the extra money the city and county are taking in.

But the binge continues.

American-Statesman writer Sarah Coppola reported in recent editions that Austin’s property tax rate would increase from 50.29 cents per $100 of property value to 51.14 cents. That rate is just below the highest rate the city could choose under state law — 51.34 cents — without triggering a possible election to limit the increase.

Under the proposal, the typical Austin household would pay $173 more in property taxes, utility bills and other fees next year if the budget is approved in September. Austin would add 365 jobs to its nearly 12,400-person payroll, including 23 jobs in the planning department to review, inspect and permit new construction. Local attorney Bill Aleshire has a good recommendation to address planning department expenditures, including new jobs: Make the department a self-supporting enterprise from user fees. Council Member Mike Martinez, citing 900 positions in the city that are vacant, doesn’t see the need to add hundreds more. We agree. Council Member Bill Spelman is challenging the idea that Austin needs an additional 47 police officers in jobs that can be filled by non-civil service employees, who earn considerably less than police officers.

To give taxpayers a break, the council should take the long overdue step of granting home owners tax relief through a homestead exemption, as the county already offers.

For its part, the county also is on a bender regarding its expenditures. Earlier this month, two county commissioners, Margaret Gomez and Ron Davis, voted themselves and about 40 other elected officials a 3 percent pay raise. They were joined in that arrogance by retiring County Judge Sam Biscoe. The proposed budget for the next fiscal year also includes 3 percent across the board pay raises for all employees, though employees received hefty pay raises this year and the year before.

Though county tax bills will rise nearly 3 percent for the average homeowner, the tax rate will decline by a wee bit, about 1.1 percent. Taxpayers could and should get a bigger break, given the windfall to the county budget from rising property values. Officials seem unaware that most residents don’t share their affluence or ability to pay ever-increasing tax bills.

We’re not advocating that the city, county and other taxing entities practice strict austerity. Perhaps smaller tax increases are warranted in some cases, but they should be justified. We are arguing for tax sobriety.

OTHERS SAY: AUSTIN AFFORDABILITY

Oakey: Dollar signs can be danger signs

Posted: 12:00 a.m. Friday, Aug. 16, 2013

BY BILL OAKEY – LOCAL CONTRIBUTOR

Let’s get straight to the bottom line. The Austin city budget has increased a whopping 73.7 percent in the past 10 years, from $1.9 billion to $3.3 billion. Travis County’s budget increased 93.6 percent between 2003 and 2013, which means that it nearly doubled. Right now, the Austin area is experiencing one of the biggest economic booms that the entire country has ever seen. The glow looks great in the national spotlight. But look out for the danger signs.

We surged from becoming America’s 17th largest city in 2000 to 11th place this year. But not without a hefty price. The layer upon layer of related cost increases and future spending proposals can be summed up with one word — unsustainable.

Local property taxes have increased 38 percent in the past decade, and rents have skyrocketed 49 percent. And yet, the median income in Austin, adjusted for inflation, has stayed virtually flat since 2000. The tax rates for the city and county alone have gone up 25 percent in just four years. Homeowners whose tax appraisals have increased during that period have seen even higher increases. And that does not include Austin Community College, Central Health, area schools, and water and electric rate increases.

When many people think of 21st-century Austin, they envision young high-tech whiz kids and innovative entrepreneurs who bring new companies with good-paying jobs to town. We hear about Formula One and the X Games, and an impressive schedule of music and cultural festivals that attract more tourists every year. But beneath the veil of prosperity lies an inescapable fact. The Austin population is a diverse demographic mix.

According to U.S. Census figures, one in five Austinites lives in poverty. Interestingly, poverty has spread to our suburbs at a growth rate that ranks number two nationwide. The Brookings Institution released a report that shows we have the nation’s fastest-growing population of “pre-seniors,” ages 55 to 64, and the second-fastest-growing senior population. And yet, our city and county older-than-65 homestead exemptions have never been indexed for inflation or rising home values, and are woefully inadequate.

Estimates of the number of people moving here range from 100 to 158 per day. Those who landed a good job or who sold their home in a West Coast market can live quite comfortably in Austin. But their arrival in older neighborhoods has driven up property values and priced a lot of longtime Austinites out of their homes. Many of the tens of thousands of residents who were already here before the boom started now face economic uncertainty.

Some of these problems are not unique to Austin. San Francisco, Portland, Ore., and other cities have gone through similar growing pains. But the accelerated pace of the Austin transition gives reason for local government officials to wake up to the harsh realities of affordability. If anyone thinks the past 10 years of tax increases and high housing costs were hard to swallow, just ask yourself this. How long could you sustain the same pace, if not even higher costs going forward?

Over the next 15 months, voters will need to decide on some very expensive bond propositions. ACC is considering a half-billion dollar bond election for building renovation and expansion. Next year, we may see a $275 million election for the first phase of the urban rail project. Add to that a proposed new Travis County Civil Courthouse for $300 million to $345 million. More water and electric rate increases are forecast. Worst of all, the Austin City Council continues to raise property taxes to the legal maximum year after year.

So, what can be done to bring the area’s perceived needs and the cost to fund them in line with the public’s ability to pay? I have read dozens of consultant reports and internal planning documents. But nowhere have I ever encountered the phrase “the public’s ability to pay.” Policymakers should heed the warning signals. For many Austinites, there are only two options: cut the family budget, or load up the car and watch Austin fade away in the rear view mirror.

If local officials really want to tackle this problem, they must first recognize how serious it is. Then they need to schedule some joint planning sessions and get down to the business of doing whatever it takes to make Austin more affordable.

Oakey is a retired accountant and a consumer advocate