Category: Public Private PartnershipsLink to article here.
Taxpayer funded lobbying at its finest. The Travis County Commissioners paid for a panel to come up with a way to bypass voters and build a new courthouse using an anti-taxpayer, anti-property rights sweetheart deal known as a public private partnership (P3). P3s involve eminent domain for private gain and public money (in this case $205 million in public subsidies) for private profits in long-term concession deals that amount to government-sanctioned monopolies.
Committee recommends private partnership to build new courthouse downtown
Austin American Statesman
Updated: 11:09 p.m. Monday, Aug. 6, 2012
Published: 9:54 p.m. Monday, Aug. 6, 2012
Travis County should consider bypassing voters if it wants to smooth the way for a public-private partnership to build a $343 million courthouse in downtown Austin, a panel appointed by county commissioners says.
Early estimates show that the county's portion of the project would be about $205 million, and the 14-member Civil and Family Courthouse Recommendation Committee joins a state district judge in recommending that the county issue bonds that don't require voter approval, a move they say will speed the project up by avoiding an election.
The committee's chairwoman said having one private entity, rather than the county, head the project, "would be significantly advantageous for the county," despite that model costing about $4 million more. A public-private partnership to build and run the courthouse would be faster, would be less likely to lead to construction or maintenance hiccups and would be less risky for the county, Chairwoman Betty Dunkerley said.
Commissioners will ultimately decide how to proceed and pay for the project, but that's unlikely to happen today when they hear the committee's recommendations.
The new building is meant to replace the 82-year-old Heman Marion Sweatt courthouse on 10th and Guadalupe streets, which officials said is crowded and potentially unsafe.
"This courthouse needs to be built as fast as it can," Dunkerley said. "A (voter-approved) bond probably would not be on the ballot for a year and a quarter. That's too much risk to the county."
Dunkerley, a former Austin City Council member and budget director, estimated that $200 million in bonds would add about $70 a year to the average taxpayer's bill.
Last year, state District Judge John Dietz — an advocate among judges for a new courthouse — urged county leaders not to take bonds to an election, saying that getting voter approval might be difficult.
The committee is recommending the county pick up about 60 percent of the total project cost. The business partner would pay for 40 percent of the project, and design, build, maintain and operate the building for 30 years.
It's been more than a decade since the county's last major construction project downtown, the botched construction of the Blackwell-Thurman Criminal Justice Center. The county-run project cost $45 million, more than twice the original estimate, opened three years late and sparked multiple lawsuits.
Having a private entity head the project would reduce the county's risk because the firm, not the county, would bear responsibility for the project, Dunkerley said.
That's worth the estimated $4 million it would add to the project's cost, she said. "The more risk you off-load, the better off you are, even if it costs you a little bit extra. ... It would take only one really bad thing to happen to that building and us being stuck with the bill to close that gap," Dunkerley said.
Putting the project's leadership in the hands of a single contractor would also move it along faster and allow for smoother operation among subcontractors, Dunkerley said.
And though the upfront costs of a partnership are higher, the county estimates it could save about $12 million over 30 years because annual maintenance costs under the partnership are $7.6 million, $400,000 less than if done by the county.
Travis County didn't seek voter approval when it paid $21.75 million to buy a one-block parking lot for the proposed courthouse in December 2010, and some don't want to see the county fund the entire project that way.
"I am concerned that this is a decision being made without allowing the citizens of the county to weigh in on whether or not it's how they want to have tax dollars be spent, especially in such a large amount," said Craig Bennett, a state administrative law judge in Austin and an adjunct professor at the University of Texas School of Law. Bennett is among those generally opposed to building the courthouse in the crowded and expensive downtown.
The courthouse is slated for the block south of Republic Square Park, abutting a growing entertainment, retail, dining and condo district. The proposed arrangement could bring office space or other uses to the block, keeping part of the property on the tax rolls and generating revenue for the county and other taxing entities. The committee recommends that half the block be dedicated to private use.
Commissioners are expected to vote in the coming weeks on whether to pursue a public-private partnership, but it's unknown when they will decide how to pay for it.
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