Friday, December 15, 2006

'Stipends' for losing bidders: Another piece of TxDOT's corporate welfare program

The Highwaymen (in Texas)

Even the losers win as Texas rushes to privatize its roads

December 15 2006

by Eileen Welsome
The Texas Observer
Copyright 2006

Ric Williamson, a former state legislator and longtime pal of Gov. Rick Perry, runs the monthly meetings of the Texas Transportation Commission like a traffic cop.
Staff members give brisk status reports before Williamson dismisses them so the next bureaucrat can take the podium. If members of the public embark on a diatribe, Williamson will let them prattle on with an air of friendly indulgence. Then, rounding his shoulders and leaningforward—using body language no doubt perfected when he and Perry were freshmen state representatives harrying their elders—he’ll pleasantly announce that their time is up.

As commission chairman, Williamson sits atop the organizational chart of the Texas Department of Transportation, a huge branch of state government that receives about $6 billion in tax revenue each year, and parcels out road construction jobs worth many billions more.

Appointed by Perry in 2001 and elevated to chairman in 2004, Williamson is now the governor’s man on one of the most ambitious and expensive public works programs in the world: building a network of privately financed and operated toll roads and super-corridors that will literally and figuratively change the state of Texas for generations to come.

Yet even the chairman is perplexed by some details of the new public-private partnerships being forged to build thousands of miles of roads quickly. During a break in a recent commission meeting, Williamson shook his head in befuddlement when asked why the state has begun paying millions of dollars in "stipends" to companies because they weren’t picked to build some of the toll roads.

The notion of paying the losers, Williamson agreed, is “nutty as a fruitcake.” But the department is bound by law to do it, he said, a law Williamson suggested might be a holdover from the era of big government.

Actually, million-dollar parting gifts for the losers is a more recent Texas custom, courtesy of the huge 2003 transportation bill sponsored by Mike Krusee, a Republican state representative from Round Rock and chairman of the House Transportation Committee.

Already, TXDOT has paid roughly $4.3 million to companies whose proposals to spearhead two different road projects were rejected, according to documents obtained by The Texas Observer under the state’s Public Records Act. As much as $10 million more will be doled out in the coming months.

The payments, sometimes called “work-product stipends,” or “consolation stipends,” are needed to encourage competition and innovation, TXDOT officials say. But agency records give no indication that the stipends are actually encouraging more companies to compete for the jobs.

Instead, records show the same small pool of companies, sometimes in different configurations and under different partnership names, vying for the contracts. Sometimes they’re winners. Sometimes they’re losers. Either way, they walk away with a hefty bundle of cash.

The millions in stipend payments are small change compared with the billions that will be spent on toll roads, multimodal corridors, rail lines, bridges, and port expansions in the coming years. Perry’s signature project, the Trans-Texas Corridor —really a series of superhighways crisscrossing the state—could cost more than $36 billion, by one company’s estimate. That’s greater than the entire annual budgets of some countries.

“Texas is on the leading edge in the use of tolling and public-private partnerships to improve the highway system,” says Bob Poole, director of transportation studies for the Los Angeles-based Reason Institute, a public policy think tank with a free- market philosophy.

It’s all part of a global effort by investment banking firms and multinational companies to convert public infrastructure—roads, bridges, tunnels, airports—into private, moneymaking ventures. “Hundreds of billions of dollars are moving around world markets looking for long-term investments,” D.J. Gribbin, a division director of Macquarie Holdings, recently told congressmen on Capitol Hill. Gribbin, whose company is part of the Australian-based Macquarie Bank, likened infrastructure in the United States to the “dead capital” created by Third World squatters who build homes on property they don’t own. Without clear title, the squatters can’t borrow against their homes or sell them. Thus the investment is “dead capital,” he explained. “Highway infrastructure here in the United States is analogous. Inadequate markets and legal systems in this country have locked up billions of taxpayer dollars in our transportation infrastructure,” said Gribbin, a former chief counsel of the Federal Highway Administration and former national field director for the Christian Coalition.

The effort to privatize infrastructure dovetails nicely with the agenda of public officials who want to build new roads and repair old ones without increasing taxes. “What we’re seeing,” says Pat Choate, an economist, author, and Ross Perot’s vice presidential running mate in 1996, “is an era in which governments will be selling off their infrastructure to keep their no-tax pledges.”

Multinationals from Spain, Sweden, Japan, the Netherlands, and Australia have rushed to Texas to help liberate the state’s dead capital. The problem is that once freed, much of that capital won’t be staying in Texas. For the next 50, 75, or 100 years, it’ll be flowing overseas to its liberators.

Last spring Rep. Krusee, author of the transportation bill that is making Texas’s massive road-building binge possible, spoke at a gathering of transportation officials in Santa Monica, California. Krusee had been taking a beating from bloggers and anti-toll advocates in Texas for his role in creating the private-public partnerships that will cannibalize the state’s roads and gobble up millions of acres of farmland. After receiving a warm round of applause, Krusee launched into a lengthy discussion of how it all began: “Everyone’s wake-up call is different.
For Texas, it was Dell computer locating their expansion in Nashville, Tennessee,
because Austin’s roads were inadequate. On that one day we lost 10,000 jobs.
We did not have the enormous funds it took to fix it, and the timetable stretched
for decades. We knew that in time, we would lose more business, more jobs, throughout
our state. So we discovered the magic, and the necessity, of private sector financing and tolls.”

Dell Inc.’s rather mild criticism sent local and state officials rushing about like Henny Penny. Roads, roads, roads, they concluded, would keep good corporate citizens like Dell from leaving. But they needed more money, and that would mean raising the gasoline tax. (Currently, the gas tax is 38.4 cents a gallon, with 18.4 cents going to the feds and 20 cents to the state. A fourth of the state’s share, in turn, goes for education.)

“A political calculation was made that large-scale increases in gas taxes would be politically impossible. So the choice in Texas was taxes versus tolls, and the choice was made to go with tolls,” said transportation guru Poole, who has advised four U.S. administrations on transportation and privatization issues, and currently acts as a consultant to a number of states, including Texas.

That “choice” was made by a powerful clique of state officials and business leaders, not the public. Taxpayers may well have been receptive to a big, messy debate about future transportation needs and the gasoline tax, but they were never asked.

For Republicans, though, the prospect of raising taxes was akin to heresy. So state officials snuck innocuous-sounding constitutional amendments onto the ballot in 2001. Proposition 2 allowed the state to issue bonds for road projects in border colonias. Proposition 15 created the Texas Mobility Fund, a bank of sorts that is funded by a stream of tax revenue and can make grants and loans, and issue bonds to finance the construction, reconstruction, acquisition, operation, and expansion of state highways, turnpikes, toll roads, toll bridges, and other mobility projects.

Voters approved both amendments in a low-turnout election. Effectively, just 2 percent of the state’s population voted for the ballot measures, hardly a mandate. The Trans-Texas Corridor was never mentioned in either proposition, and the word “toll” appeared only in passing. Still, Perry and others now point to them as proof that voters have approved his administration’s behemoth road-building program.

A few months after voters approved the constitutional amendments, Perry rolled out his Trans-Texas Corridor plan. The text of his press release made it clear that extensive discussion had been going on behind the scenes with investment-banking types interested in resuscitating the state’s “dead capital.”

Perry tossed around terms like “toll equity” and “exclusive development agreements,” and introduced a new political animal called a “regional mobility authority.” (Regional mobility authorities are quasi-governmental bodies that act as local toll road authorities. Made up of representatives from one or more counties, they have many of the same powers as TXDOT. They can issue bonds, borrow money, and enter into contracts with private developers. The new layer of bureaucracy, as one lobbyist put it, allows TXDOT to control the purse strings while making it appear as if the locals are in charge.)

Perry’s announcement set the stage for construction of the massive toll projects. But it was Krusee’s 2003 transportation bill, House Bill 3588, that allowed TXDOT to slough off many of the stuffy old rules governing how highway contracts were awarded, and to get down to business with its multinational friends from Spain, Australia, and Sweden.

Krusee’s bill essentially serves as a “charter” for the public-private road-building partnerships and new financing mechanisms now being used, said consultant Poole.

Perry was only too happy to sign the bill into law. Within months, though, several grassroots groups sprang up to fight the toll roads. Unusual alliances formed: urban dwellers and rural farmers; Republicans and Democrats; rich people and working people.

“There needs to be a revolution,” one farmer remarked darkly at a recent meeting of activists. “I was once a staunch Republican, but I’m not anymore.”

Dollie Cole, a wealthy landowner who lives on a ranch near Lockhart and whose late husband was president of General Motors Corp., has refused to let highway officials on her land. She’s vowed to fight the construction of the Trans-Texas Corridor and urged her neighbors to be wary of TXDOT’s promises. “Don’t be fooled,” she said. “You are paying for a road twice and will continue to pay throughout your life and throughout your childrens’ driving life.”

Judging from Krusee’s near-defeat in this year’s House District 52 race, support for toll roads is, well, taking its toll. Democratic challenger Karen Felthauser, a substitute teacher who had no political experience and only a fraction of Krusee’s financial backing, came within approximately 2,000 votes of capturing the district.

Despite the growing opposition, transportation officials haven’t detoured from their plans. “The Transportation Commission is using scare tactics and old-fashioned, mobster-type arm-twisting to further their gains,” says State Rep. Joe Pickett, an El Paso Democrat. Other state legislators and businessmen are also concerned about the toll projects, Pickett said, but they’re afraid to speak up because of the department’s enormous clout. “There isn’t anyone who will talk about it. If they’re in the business sector, they’ll get blacklisted. If it’s a state rep or senator like myself, they’ll get their projects cut.”

Although Pickett’s not against all toll roads, he believes the massive projects, which will be financed in part by bonds, loans, and toll income that has yet to be collected, will leave the state in a perilous financial condition, with a fractured, unequal transportation system.

“TXDOT is looking at the here and now. They’re not looking at the future. They’re just trying to sell everybody a bill of goods. Some people are going to get rich, become millionaires or billionaires, and 10 years from now the state will be messed up pretty bad.”

TXDOT officials have a rosier view, saying the privately financed and operated toll projects will allow roads to be built more quickly and ultimately lead to less congestion, less air pollution, and fewer accidents. They also point out that the concession fees and the revenue they’ll get from private toll operators can be used as seed money to build other badly needed infrastructure. (In reality, though, it seems this revenue will more likely be used for the construction of feeder roads, bridges, and overpasses that will funnel motorists into the for-pay lanes and super-corridors.)

House Bill 3588, like subsequent legislation, has clauses buried within it that should aise enormous public concern. An anticompetitive clause, for example, puts a two-year moratorium on TXDOT’s ability to build or improve roads that would compete with a toll road. TXDOT officials say Interstate 35 is exempt from that clause, as well as some other roads identified in its 20-year plan, but that clause ensures that customers on additional toll roads won’t be siphoned ff to a free highway during the critical period in which the toll facility is ramping up.

Another section of the legislation requires TXDOT to construct connections to and from the Trans-Texas Corridor. By doing so, TXDOT will help prop up a private developer’s operation, and quite possibly divert funds from free roads elsewhere that need improvement.

A third provision provides a limited waiver of sovereign immunity, giving greater financial protection to developers by making it easier for them to sue the state and force TXDOT or the commission to comply with its obligations. And a fourth allows the state to enter into contracts on other than a low-bid basis.

Also buried in Krusee’s bill was the legal language that explains why TXDOT is now paying million in stipends to losing bidders. It went unnoticed by the public. But the road-builders cleared their desks, sharpened their pencils, and got to work drafting proposals. They had a win-win situation–even if they lost

One of the first projects for which stipends were awarded was State Highway 130, a 49-mile toll road that will extend from I-35 north of Georgetown to U.S. 183 southeast of Austin. Although TXDOT officials are still being cagey about thealignment of the Trans-Texas Corridor superhighway that will parallel Interstate 35 and run from the Mexican border to Oklahoma, it’s highly likely that SH 130 will become the first leg of that corridor.

Three firms made the short list to build the project. They included:

*Lone Star Infrastructure, a consortium led by Fluor Corp., a multinational company and longtime government contractor.

*Four Rivers Developers, a joint venture whose largest partner was Granite Construction Inc., a publicly traded company headquartered in Watsonville, California that makes gravel and concrete, and oversees huge construction jobs.

*Texas Corridor Constructors, another joint venture whose primary partner was Zachry Construction, a well-established and privately owned firm in San Antonio that frequently partners with local, national, and multinational companies on large projects.

TXDOT’s experts ultimately decided to go with Lone Star Infrastructure, whose team includes nearly 30 members, including Edelman, the world’s largest privately owned public relations firm. (Former Ronald Reagan advisor Mike Deaver is listed as one of its leaders.) In the old days, the two losers would have gone home empty-handed. Instead, the Granite team and the Zachry-led team each received stipend payments of $1,379,219, according to records obtained from TXDOT.

The next project in which stipends were awarded was the development plan for the TTC-35 project, the mega-corridor that will parallel Interstate 35. The winner in that competition was Cintra-Zachry, a partnership consisting of Zachry Construction and Spain’s Cintra Concesiones de Infraestructuras de Transporte. The two rejected companies each received $750,000. One was Fluor (which was on the winning end of the SH 130 project). The other was an entity called the Trans Texas Express, whose members included Skanska BOT AB, a global firm based in Sweden that builds hospitals, schools, and transport facilities; Telvent, a Spanish information and technology company; and a number of U.S. firms, including several based in Texas.

Millions of dollars in additional stipends will be paid on other toll projects being developed under so-called “comprehensive development agreements.” Those projects include TTC-69, another super-corridor that will start at the Mexican border, skirt Corpus Christi and Houston, and jog northeast toward Arkansas, as well as several smaller toll road projects in San Antonio and around Dallas-Fort Worth.

Transportation officials said the stipends defray only a portion of the costs that go into preparing the proposals. “We need to be able to reward these firms for submitting,” says Hope Andrade, a San Antonio businesswoman appointed by Perry to the Transportation Commission in December 2003. “These proposals are very expensive. A million is nothing for what they submitted. If they don’t get reimbursed, then we discourage innovation, and we’re trying to encourage innovation.”

But records obtained from the state Comptroller’s Office under the Public Records Act show that some stipend payments are going to companies that are already are doing a landslide business with the state. Since 2002, for example, San Antonio’s Zachry Construction has been paid roughly $1.1 billion by TXDOT for various projects. California-based Granite Construction received payments totaling $335 million. (Roughly $52.5 million of that went to both Granite and its local partner, J.D. Abrams, an Austin-based company that also does hundreds of millions of dollars of business with TXDOT.) And Lone Star Infrastructure has received approximately $825 million.

Andrade and other TXDOT officials emphasize that the department gets to keep the intellectual ideas contained in the losing proposals and use them on other projects. But when pressed, they could cite no new ideas that sprung from the losing SH 130 proposals.

Commissioner John W. Johnson, appointed to the commission in 1999 by then-Gov. George W. Bush, says TXDOT did glean some innovative ideas from the toll lane project on Interstate 635 in Dallas. Originally a tunnel was envisioned, he says, but shifting some of the lanes below ground level will save money.

This summer, as rallies and demonstrations against the Trans-Texas Corridor erupted around the state, Secretary of State Roger Williams, Texas Transportation Commissioner Ted Houghton (another Perry appointee), and numerous TXDOT employees went to Wall Street to pitch their “Texas style” public-private partnerships, or PPPs as they’re known in the alphabet-soup world of road-building.

Phillip Russell, engineer, lawyer, and director of the Texas Turnpike Authority Division, sounded more like a hotdog vendor than a public official involved in overseeing multimillion and even billion-dollar deals as he spoke frequently of revenue opportunities available to private-sector developers. In a forum held for potential developers in New York City, he described a tolled interstate project in Dallas as “a package you all can sink your teeth into.” Of State Highway 121, another Dallas project, he said, “This is your opportunity to sharpen your pencils.” Addressing the TTC-69 corridor, he remarked, “If you haven’t dug into this one, you’ve got 52 hours to submit.”

TXDOT’s pitch for private partners is drawing interest from around the globe. One of the most active firms is Cintra Concesiones de Infraestructuras de Transporte. Its parent is Grupo Ferrovial. Both are publicly traded companies based in Madrid, Spain. Cintra has investments in 17 toll roads in six countries. In a proposal for a Virginia project, Cintra boasted that it had become “a strategic partner of the State of Texas, obtaining a 50-year contract worth up to $36.7 billion to develop the Trans-Texas Corridor.”

Cintra, along with home-grown Zachry Construction, has been given the green light to develop the master plan for the TTC-35. The partnership also has been awarded—without any competitive process—the go-ahead to develop the remaining 40 miles of SH 130, which will run from Austin to Seguin. The partnership is also competing for toll road projects in San Antonio and Dallas, and wants to build a 600-mile freight line that will run from Dallas-Fort Worth to the Mexican border. On the TTC-69 project, Cintra and Zachry have divided into two separate teams and are competing against each other.

Another big player in the global transportation market is Australia’s Macquarie Infrastructure Group, which is part of Macquarie Bank, an investment bank named after a former governor who helped transform Australia from a penal colony to a viable, dynamic country. Macquarie, which manages more than 30 toll roads in nine countries, has made proposals on several projects here in Texas, including one in San Antonio and three in Dallas.

Several years ago, Cintra and Macquarie made headlines when they formed a partnership and paid $3.85 billion for a 75-year lease to operate the 157-mile Indiana Toll Road, and roughly $1.83 billion for a 99-year lease on the Chicago Skyway, an eight-mile stretch of elevated highway on Chicago’s south side.

Bob Poole, the privatization guru, said U.S. infrastructure is more attractive to investors than the infrastructure in other countries because the political climate is more stable, another way of saying that contracts are more likely to be enforced and there’s no risk a project will be nationalized. “It’s like they’re buying a piece of ownership in a 50-year business,” Poole said.

Other global players are lining up for a piece of the action, including Skanska, a Swedish-based company that has projects throughout the world; AECOM, another multinational with 28,000 employees working in five continents; and Spain’s Dragados, which is active in more than 60 countries and bills itself as a world leader in “infrastructure and transport concessions.”

Choate, Ross Perot’s old running mate, points to another factor driving the construction of the super-corridors. The West Coast’s ports, roads, and rail lines have reached gridlock proportions, he contends, and corridors such as the TTC-35 could serve as alternate trade routes for moving foreign goods into U.S. markets. Using deepwater ports in Mexico, for example, container ships could offload goods, which could then be shipped by rail or truck through Mexico, into Texas, and up to other parts of the United States and Canada. “These routes will be cash cows,” said Choate.

Certain aspects of the super-corridors support Choate’s contention. At a recent meeting, for example, a TXDOT official confirmed there will be no frontage roads on the super-corridors other than an occasional access road allowing landowners to reach their severed property. “Because what we really want in building our parallels is we want Interstate 35 to remain the local and regional boulevard of choice for the taxpayers of the state, while the corridor becomes the regional and national transportation corridor of choice,” Transportation Commission Chairman Williamson said.

Some toll roads, as well as the super-corridors, will overlay portions of existing highways or rural farm-to-market roads. Since they’ve already been paid for through the taxes at the pump, critics maintain that Texans are paying twice for the roads, a concern that was echoed by legislative analysts. “Toll roads represent double taxation,” they wrote. “Motorists already pay for highways at the gasoline pump, vehicle registration counter, and at auto supply retailers. They should not have to pay for highways again when they exercise their right to travel on them.”

Far less attention has been paid to other ways the public is underwriting the privately operated toll roads: the large, multinational companies and global investment firms are often using taxpayer-supported bonds, loans, and grants from sources such as Texas’ State Infrastructure Bank, the Federal Highway Administration, and the Federal Department of Transportation. These private firms will be able to deduct millions from their income taxes for interest payments on the huge debts and won’t be paying property taxes because the state will still own the roads. (With large swaths of property removed from the tax rolls, property owners may find themselves making up the difference.) The state will also be helping to subsidize the profits these firms earn by performing a lot of the advance environmental work and providing emergency services and law enforcement personnel once the roads are up and running.

Among the greatest ironies is that the super-highways won’t really do much to reduce congestion, a fact that Chairman Williamson confirmed during a recent commission meeting while trying to allay the fears of businessmen and communities who worry they’ll become ghost towns once the new roads go through. In a question-and-answer session with Amadeo Saenz, TXDOT’s assistant director of engineering operations, he asked, “Is it also my understanding that we have a congestion relief study ongoing to determine what percentage of traffic moves off of Interstate 35 and onto the parallel?”

“Yes sir,” responded Saenz.

“Is it safe to say that no less than 2.5 percent and no more than 10 percent of the traffic is going to fall somewhere in that range?” asked Williamson

“Yes, sir.”

“So for those who live in, for example, Hillsboro who believe that Interstate 35 is their economic lifeblood and the parallel might have the same impact on their city as Route 66 had on some cities in Oklahoma, we can represent to them that it appears, least-case your traffic shrinks 2.5 percent, worst case it shrinks 10 percent, and in no circumstance should that be enough to markedly impact your local economy?”

“That’s correct,” Saenz responded.

Miles of new toll roads have already opened in North Austin, including the Loop 1 extension, State Highway 45 North, and a portion of SH 130. Not surprisingly, portions of these roads, collectively called the Central Texas Turnpike Project, were built by Zachry, often in partnership with other Texas firms. With their smooth pavement, sturdy overpasses, and large, easy-to-read signs, they lookno different their untolled counterparts.

For now, motorists can cruise these roads free. Come Jan. 5, though, the toll booths will be manned, the electronic surveillance will be up and running, and cameras will be recording the license plates of scofflaws still intent on getting a free ride.

For a department that loves numbers and PowerPoint presentations, TXDOT’s being unusually fuzzy when it comes to saying how much, exactly, the tolls will be. “The tolls will be set at whatever price the market can bear,” says Gabriela Garcia, a TXDOT public information officer.

The tolls roads in North Austin were, for the most part, financed and built the old-fashioned way. There were no stipends. No noncompete clauses. No 50-year leases. No legal waivers. No guy from Sweden or Spain breathing down the highway department’s neck, telling the State of Texas where it can and can’t build a competing road. The tab to taxpayers will be hefty, though, roughly $3.6 billion. The good news is, unlike many of toll projects now on the drawing boards, the state will get to keep the revenue the roads will be generating.

Fast-food restaurants, big-box stores, and discount shoe outlets already are appearing along the access roads, part of the “induced development” planners say invariably follows the construction of new roads. More development means more cars. More cars mean more roads. And so the cycle goes.

Near the intersection of Loop 1 and State Highway 45, there are still a few large pieces of wide-open land. Birds dive in and out of the brown fields. A ribbon of reddish cloud is unraveling in the sky, and small crescent moon has appeared. Scattered through the fields are small signs announcing that the property’s available for development. Soon the fields will be gone.

Karol Griffiths, a business and tax consultant, contributed to the research on this story.

© 2006 The Texas Observer:

For more TxDOT's corporate welfare [CLICK HERE]


"If you’re successful in getting the Trans Texas Corridor to come in, then there will be no property left for these people.”

Commissioners face angry crowd over Outer Loop

December 15, 2006

By Brandi Hart
Mckinney Courier-Gazette
Copyright 2006

Anger. Confusion. Concern.

These were just some feelings that the majority of people in the packed Collin County Central Jury Room expressed in the three-hour-long public hearing held Tuesday night about the technically preferred alignment of the Outer Loop.

About 16 people officially spoke during the public comment period of the meeting, where the court voted 4-1 to approve the technically preferred alignment. Commissioner Joe Jaynes made the motion to approve the alignment, Commissioner Phyllis Cole seconded the motion, and Commissioners Jack Hatchell and Jerry Hoagland voted to approve the alignment. County Judge Ron Harris voted against the motion. He said after the meeting he voted against it because most of the comments he heard and saw were not in favor of the alignment.

The alignment includes 500 feet of right of way, the highway will be two lanes and the construction on the eastern, southeastern and western sections of the highway is not expected to begin until 10 to 20 years from now. Jaynes said the alignment might one day be the future Trans Texas Corridor but he wasn’t sure.

The county has not secured funding for the highway or most of the right of way for the highway, and the alignment is not “set in stone,” Jaynes said.

The commissioners approved the Outer Loop alignment from U.S. Highway 75 to Texas Highway 121 two months ago. Some landowners who live near the U.S. 75 to Texas 121 alignment asked the commissioners why they were invited to be there when the commissioners had already approved that alignment. Rebecca Bona was one of those and asked the court how it plans to get the right of way for the loop. Jaynes said 90 percent of the right of way for the Dallas North Tollway in Collin County was donated, which caused many people to laugh.

John Gunnell, who has owned land northeast of Farmersville for 36 years that used to belong to his grandfather, spoke against the alignment.

“I’ve been working all this time so I have a place to retire. If you’re successful in getting the Trans Texas Corridor to come in, then there will be no property left for these people,” Gunnell said.

“This is my house and I built it two-and-a-half years ago and Collin County never mentioned I was in a proposed right of way when I got my building permit,” Gunnell said.

“I have a cemetery on my property that goes back to the 1700s and you’re going to take that, too. I know it doesn’t look like I’m anybody but I’m a third generation farmer and my daughter wants to farm on this land. If I had known my property was in the right of way, I would have stayed in Fort Worth,” Gunnell said.

Mike Ingersoll said the proposed alignment would take most of his land away.

“You take the whole damn thing except for 20 feet. Why should I pay taxes on it and it may well be worthless. We have lives we’re wanting to plan and why aren’t people being informed of the closings by Realtors? There should be something required that tells potential property owners that this freeway is coming through,” Ingersoll said.

Leona Richardson said the commissioners would have helped their position if they had better informed people about the proposed alignment.

“We have been the stepchild in Collin County for the last 20 to 30 years. This was the last place you could go,” Richardson said referring to the north, northeast and southeast section of the county. Numerous people clapped and cheered after Richardson’s comments.

John Albers owns 650 acres east of U.S. 75 and northeast of Farmersville and said the technically preferred alignment cuts his property in half, and would take out his home and farm buildings.

One man who said he owns a $700,000, 5,800-square-foot home spoke against the proposed alignment as it will directly affect his home and might make his property value plummet at least — of what is it worth.

“There’s a lot more input from people wanted in this room. I’ve been working on hiring a team of professionals to work with the commissioners, neighbors and people about this,” Albers said.

Cole said that like most people at the meeting, she is also part of the Baby Boomer generation and that most of the people would most likely be dead in 20 years when the Outer Loop is completed. Some people in the crowd said they plan to live another 30 years and asked what about their kids. One man yelled out, “What about the air” to Cole and the commissioners.

Cole added that she is, “not out looking for road projects.”

“We have road projects that we can’t fund. I personally do not want the Trans Texas Corridor in Collin County. I want my grandchildren to be able to breathe. The technical alignment will not move through your house and we are trying to plan for the future and mobility in Collin County for our children,” Cole said.

Jaynes told the crowd that he and Ruben Delgado, the director of engineering for Collin County, have spoken about the Outer Loop and the proposed routes at city council meetings in various cities in north and southeastern Collin County.

“Last year, we added 102 vehicles per day. Collin County is one of the fastest-growing counties in the nation and the fastest-growing county in the state. It’s easier to have an alignment before another 100,000 people move into the northwestern quadrant of the county or into Anna or Melissa,” Jaynes said.

He said now the cities that will be affected by the Outer Loop can put the alignment on their maps and tell developers where the proposed alignment will be.

One man threatened to get all of the commissioners voted out of office while Cole was speaking after everyone had spoken in the public hearing. Numerous people laughed, clapped and cheered at comments made by people who spoke in opposition about the alignment during the meeting. Almost everyone who spoke during the public hearing said the recent notice each received via certified mail from the county about the public hearing was the first notice they have received about the Outer Loop.

Alfred Scott was at the meeting because he is opposed to the alignment as he owns 30 acres of land northeast of Blue Ridge. He said his notice about the public hearing that he received from the county did not state that the commissioners might take action on the alignment Tuesday.

“If they said they might vote on it, then more people might be here,” Scott said in the packed Central Jury Room.

The county will accept written comments about the technically preferred alignment from now until Dec. 27.

Contact staff writer Brandi Hart at

© 2006 Star Community Newspapers :


Thursday, December 14, 2006

Ric Williamson: Texas Transportation Institute uses "bad math"

State knocks report touting gas tax hikes

Report from Governor's Business Council says indexing gas tax could eliminate need for most toll roads

December 14, 2006

By Ben Wear
Austin American Statesman
Copyright 2006

A private group tied to Gov. Rick Perry has released a study saying that state transportation officials have overstated by tens of billions how much additional money the Texas Department of Transportation needs for highways in the next quarter-century.

The report by the Governor's Business Council, released Nov. 28, also says the need for most new toll roads could be eliminated by allowing the state's 20-cents-a-gallon gasoline tax to increase with inflation and borrowing money based on the added revenue. A similar proposal died in the 2005 Legislature.

State transportation officials rebutted that analysis Wednesday, arguing that it understates future needs and overstates what the tax would raise.

"The individuals contracted to do that report were contracted to produce an intended result," Texas Transportation Commission Chairman Ric Williamson said. "But this is a great thing to put on the table and say, 'Let's talk about this.' "

The study contends that an $86 billion gap in transportation funding over the next generation, a bracingly huge figure that Williamson and others have brandished repeatedly in recent months, should more properly be about $56 billion.

Toll supporters have cited that gap, along with a resulting $1.40-a-gallon increase in the state gas tax that officials say it would take to close it, as justification for the state Transportation Department's wholesale commitment to toll roads.

The authors, who include Texas Transportation Institute researchers Tim Lomax and David Ellis and well-known transportation consultant Alan Pisarski, trimmed $22 billion from the state's $86 billion estimate by saying those costs were for city and county roads and are not the state Transportation Department's responsibility.

The authors said the state may have overstated future costs by an additional $8 billion or so.

Williamson and state Transportation Department staff members said eliminating that $22 billion local obligation is bad math and they are looking for a way to address all of the state's unmet needs.

That number, they point out, specifically grew from a request to localities to list projects they had the money to pay for and projects that at this point were beyond their fiscal reach.

It's unclear whether the Texas Legislature will want to talk about an increase in the gasoline tax, last raised in 1991.

Perry opposes any increase, and a bill in 2005 to raise the gas tax annually based on inflation (yielding a half-cent a gallon increase in year one) never made it out of committee despite an endorsement by House Speaker Tom Craddick.

Michael Stevens, a Houston real estate investor who chairs the Governor's Business Council, which commissioned the study, said most of the numbers in the report originated with the state Transportation Department.

Stevens said that the calculations showing how much an annual inflation adjustment to the gas tax could accomplish shocked even him and that he hopes the report will expand what up to now has been a toll-centric discussion about how to pay for the state's transportation needs.

"I hope the debate will be a public and healthy one," Stevens said, "and generate some improvements in our policy."

The study said $56 billion in road improvements between now and 2030 could be paid for simply by allowing the state's 20 cents-a-gallon gas tax to rise based on an inflation index tied to highway construction costs, then borrowing against that future revenue to build roads quickly.

The study assumes 3.4 percent annual inflation in construction costs (well below recent double-digit annual increases), pushing the state gas tax to 59 cents by 2030.

That would be in addition to the 18.4 cent-a-gallon federal gas tax.

Transportation officials also said that the report has significantly overestimated how much revenue a gas tax increase would generate by assuming that the average fuel efficiency of cars and trucks would rise to only 23 miles per gallon by 2030.

The officials say that hybrid cars and other technology will cause gas tax revenue to nosedive in coming years.

Even if gas tax revenue stagnates or falls, Stevens said, emerging satellite technology would allow the state to tax motorists based on actual miles travelled.

The study has reverberated through transportation and legislative circles because that volunteer council is peopled by Perry supporters, including Stevens. Stevens said he met with Perry before the study came out.

Given that the report would seem to undercut Perry's opposition to a gas tax increase and support of toll roads, was the governor unhappy with the council's handiwork?

"My view is that the governor is interested in good policy," Stevens said. "That Ric Williamson is unhappy with me doesn't necessarily mean that the governor is unhappy with me."

Perry "believes that we do have a sound transportation policy in place and moving forward," spokesman Robert Black said. "But his general reaction has been, 'Put the ideas on the table, and let's let the Legislature have a debate on them.' "; 445-3698

© 2006 Austin American-Statesman: www.


“This has nothing to do with Trans-Texas Corridor.”

TxDOT discusses I-35 expansion

December 14, 2006

Gainesville Daily Register
Copyright 2006

The key word is “preliminary,” transportation officials said Wednesday.

Those whom the Texas Department of Transportation (TxDOT) considered “stakeholders” in a plan to expand Interstate 35 through Cooke County to additional lanes were invited to one of two meetings on Wednesday.

At 10 a.m. in the Gainesville Civic Center, TxDOT and consulting firm Carter-Burgess of Fort Worth hosted Gainesville officials including City Manager Mike Land and police Chief Carl Dunlap.

At 2 p.m. at the Valley View City Hall, Mayor Carl Kemplin and Valley View ISD Superintendent Kathy Garrison discussed concerns with TxDOT officials regarding alternative, draft proposals to expand I-35 from the current four lanes.

The meetings precede a public hearing on the widening proposals, which is scheduled from 5:30 to 8 p.m. Jan. 16 at the Gainesville Civic Center, 311 S. Weaver St.

Between now and then, TxDOT engineer Wayne Bell said officials will begin a “feasibility study” and will prepare a rough estimate of property acquisition, construction and other associated costs. Bell said he plans to present the study, with a list of pros and cons to several alternatives, at the public hearing Jan. 16.

Guests at each meeting noted potential incompatibilities with the proposed unofficial plans as TxDOT engineer Danny Brown made notes in red ink on the long, printed satellite view maps of I-35 from the Cooke County line to the Red River.

Carter-Burgess project manger Rodger Clements reviewed TxDOT’s plans to expand the highway, and hosted the meeting.

Plans include not only adding new lanes but straightening the curves and flattening some of the hills — most notably finding ways to cut down on the angle of curvature at the Cooke-Denton county line, near the Elm Fork-Trinity River bridge, and near the Red River.

Clements said the proposals are not yet viewable by the public via a Web site but will be prior to the public hearing.

Two of the proposal maps presented do away with the original I-35 route through southern Cooke County entirely and proposes a six-lane beltline from southern Cooke County — one to the Red River, to run half-a-mile west of Gainesville and Valley View and another to bypass only the southern portion of the county closer to Valley View.

“Doesn’t this cut into Trans-Texas Corridor territory?” Kemplin asked.

“This has nothing to do with Trans-Texas Corridor,” Brown said.

Garrison opposed the western route as it comes close to Valley View ISD’s land and existing football field, and bypasses businesses on the existing I-35.

Other proposals include following the existing route with three lane road with median barrier and 10-feet-wide shoulders, a three-lane road with 12-feet-wide shoulders with median barrier and room for an additional fourth lane on each side.

The two plans which cut through Gainesville and Valley View call for making the service roads on each side of the interstate highway one-way and removing overpasses at Southland Drive in Gainesville and FM 1307 in Valley View.

The Gainesville plan is in conjunction with a removal of the current half-clover interchange at U.S. Highway 82 and I-35 and replacement of a standard on and off ramp system. Work on the interchange is scheduled to begin in 2007.

Bell said the expansion plans have noting to do with Trans-Texas Corridor 35 or plans to run the TTC-35 route up the I-35 corridor.

He said the expansion is necessary. Denton County will see an expansion of I-35 to four lanes each way soon, and the population of Cooke County is expected to grow along with Denton.

“In the meantime we will, of course, continue to maintain I-35,” Bell said.

Reporter Andy Hogue may be contacted at

© 2006 CNHI:


"Some dirt could be flying relatively soon."

Outer Loop route gets a green light

Collin County: Concerns voiced, but commissioners stress that highway project in early stages

December 14, 2006

The Dallas Morning News
Copyright 2006

McKINNEY – After years of discussion, Collin County commissioners decided this week where the Outer Loop highway project will be built.

Commissioners voted 4-1 to approve the county's preferred route for the 45-mile project at a special public hearing Tuesday night. About 300 people attended the hearing, which lasted about 90 minutes.

Some residents at the hearing were concerned about the project's effect on the county's rural atmosphere, while others worried about the highway taking their property.

But the county needs to do something with 102 people moving into Collin County each day and 102 vehicles being registered each day, Commissioner Joe Jaynes said.

"We need to be planning ahead for the growth," he said, adding that the number of vehicles in the county will double in 20 years. "We have had four years of meetings on this, and people need to know where we are going with it."

As planned, the loop will start just south of Nevada at the Rockwall County line. It will run north to an area east of Blue Ridge. It will then veer to the west and run east-west across much of the northern part of the county, including Anna, Melissa, Weston and Celina. It eventually will connect to a Denton County road that will reach I-35E.

Regulating development

Although the highway won't be built for many years, choosing a route now allows the county and cities to regulate development along the path of the highway. It also helps them preserve the 500-foot-wide swath of land needed for the ultimate six-lane highway and six lanes of frontage roads. The swath also includes 100 feet for a future rail line.

The path still can – and probably will – have some minor changes.

After hearing from about 20 speakers concerned about the highway going right through their homes, commissioners encouraged county staffers to consider slightly shifting the route around some areas. Some speakers also warned that the project would lessen the rural feel of northern and eastern Collin County.

"I grew up in the suburbs of Los Angeles. This is not suburban LA, and I don't want it to be that way," Blue Ridge-area resident David Canfield told commissioners.

Commissioners tried to reassure concerned residents that the project is still a decade or two away from the first major phases of construction. It could take even longer before it becomes a major highway, they said.

"A lot of people think we are going to build another LBJ Freeway as soon as possible," Mr. Jaynes said. "That's not the case."

Able to negotiate

Commissioners likened the Outer Loop to the Bush Turnpike, which sat on the drawing board for decades before it was built. With the decision, the county is able to start negotiating with landowners.

Some dirt could be flying relatively soon. The first possible project – a two-lane road between U.S. Highway 75 and State Highway 121 – could be built in about five years, Mr. Jaynes said.

In addition, the state could speed up the project if it makes the Outer Loop part of the Trans-Texas Corridor, a toll road that will stretch from the Red River south to San Antonio.

That project calls for up to a 1,200-foot-wide swath to provide room for truck lanes, utility lines and rail lines.

"This may become a part of the Trans-Texas Corridor, but it is not going to have 1,200 feet of right of way," Commissioner Jack Hatchell said.

The decision shows that the commissioners continue to ignore the northeast section of Collin County, said Blue Ridge resident Leona Richardson. The third-generation Collin County resident said she's upset that she may eventually have to move.

"I hate that I have to give up my part of the county so that others can profit," she said.

Others at the meeting said they were happy with the decision because it will make their property more valuable. Seven years ago, Bill and Yvonne Stewart bought 15 acres on the east side of Highway 75 in Anna as an investment.

"It's going to make our land more valuable than it ever would have been with farming," Mr. Stewart said.


© 2006 The Dallas Morning News Co


TxDOT is 'open for business' on proposed "North Tarrant Express" toll road

Moncrief urges I-35W pressure

December 14, 2006

We've been able to focus our efforts on our priorities, and because of that, we've got a lot of stuff going on

Fort Worth Star-Telegram
Copyright 2006

FORT WORTH -- Mayor Mike Moncrief on Wednesday asked business owners to keep pressuring the state to expand Interstate 35W, which he called the city's front entrance.

Speaking to the Interstate 35W Coalition, a group of Alliance-area businesses that officially formed a year ago, Moncrief also said that future economic growth in Fort Worth depends on better highways and regional freight and passenger rail systems.

'We know it's a part of how people will perceive our city, our region, as they enter our front door,' Moncrief said during a meeting at the Coca-Cola plant on Fossil Creek Boulevard.

Moncrief and other elected officials praised business leaders for pushing the issue of I-35W at the state level. For decades, the freeway, which has only two lanes in each direction north of 28th Street, was left off the state's lists of funded highway projects.

Then about two years ago, the 35W Coalition began taking shape, and government and business officials began lobbying for the state to do something about I-35W.

Last week, the Texas Department of Transportation announced that it was ready to take bids from contractors to build toll lanes on I-35W, Loop 820 and Texas 121/183. Existing lanes would remain free. Construction could begin in 2009, said the agency's Fort Worth engineer, Maribel Chavez.

Moncrief wants work to begin in 2008.

State officials also said that the 36 miles of toll lanes would be considered a single project, under the name North Tarrant Express.

'I appreciate that name,' Tarrant County Judge-elect Glen Whitley said at the coalition meeting.

Whitley also credited the formation of the Tarrant Regional Transportation Coalition three years ago to represent the western Metroplex's transportation needs within the North Texas region.

'We've been able to focus our efforts on our priorities, and because of that, we've got a lot of stuff going on,' he said.


Roadway priorities

Tarrant County's 2007 transportation priorities:

Ensure that the state follows through on North Tarrant Express toll lanes.

Start the environmental study for the local portion of the Trans-Texas Corridor.

Push for help easing rail traffic at Tower 55 in Fort Worth.

Push for state funding of a regional rail system.

Make sure the planned expansion of the Grapevine funnel stays on course.

Keep as many projects as possible on the region's Transportation Improvement Program, a list of projects scheduled to receive funding over the next two to three years. (Projects that languish on the list are likely to fall off.)

Go to Austin in January with a legislative agenda that promotes Metroplex unity.

SOURCE: County Judge-elect Glen Whitley

Copyright © 2006 Fort Worth Star-Telegram, All Rights Reserved.

© 2006 Fort Worth Star-Telegram:


Wednesday, December 13, 2006

"Money can be raised through existing gas taxes, without having to make the roads pay as you go."

Study Criticizes Toll Road Plans

Dec 12, 2006

Copyright 2006

A new study claims the Texas toll road project is inefficient and will not support the future population of the Lone Star State.

When garnering support for the new toll roads, politicians argued it was the only feasible way to fund new roads.

With the amount needed for construction, it would increase gas prices to $3 a gallon if they were to fund the roads instead with a gas tax.

The Texas Transportation Institute out of Texas A&M reports TxDOT overestimated the cost of the toll roads by $30 billion.

The study also says even with the Trans-Texas Corridor, it will take an additional $44 billion in more road construction to support future populations of Texas.

The institute claims the money can be raised through existing gas taxes, without having to make the roads pay as you go.

We brought this study to TxDOT to find out if its true.

"I think what this report shows is that there is no easy solution to how we're going to solve the transportation needs here in Texas. Not only today's needs, but the future needs," Randall Dillard with TxDOT said.

TxDOT says they will study this report and possibly use it to make future recommendations on road work.

© 2006 WorldNow and KXAN:


Tuesday, December 12, 2006

"Threats to private property due to eminent domain proceedings."

TFB Members Call For Added Protection On Eminent Domain


Livestock Weekly
Copyright 2006

ARLINGTON — Delegates to the Texas Farm Bureau Convention here last weekend called for additional protections in Farm Bureau policy to deal with threats to private property due to eminent domain proceedings.

Driven by concerns over the potential loss of land due to the Trans-Texas Corridor and other state and local initiatives, some 968 voting delegates at the 73rd annual meeting unanimously adopted state policy and recommended national policy that strengthens landowners’ options when confronted with eminent domain proceedings. State policies adopted during the annual meeting serve as a roadmap to guide the state’s largest farm organization as it addresses issues and challenges in 2007.

Regarding eminent domain, delegates supported legislation requiring those exercising eminent domain to make a good faith offer. They suggested the condemning authority should pay attorney fees, appraisal fees and related costs whenever the offer is challenged and the amount awarded exceeds the initial offer. Delegates said adequate time should be given to those affected by eminent domain to relocate.

Delegates also recommended a governmental review to determine the number and kind of entities that have the right to exercise eminent domain.

“We encourage the legislature to consider limiting the number of entities with these powers,” delegates said.

In other action, delegates reelected Kenneth Dierschke of San Angelo to his fifth one-year term as president of the state’s largest farm organization.

“Farm Bureau is our life,” Dierschke said of the election contested by former TFB Vice President Lloyd Arthur of Ralls. “I will continue to represent you in Washington, Austin, and anywhere in the world we go.”

Concerning other policy, delegates sought to protect the property tax cuts afforded by the legislature during the recent school finance debate. They favored lowering the current property appraisal cap to six percent, and indicated that all increases above the cap be approved by countywide election. They supported elimination of the current unelected position of county chief appraisal officer and supported shifting those duties to the county tax assessor/collector, which is an elected position.

Delegates favored reappraising property every three years instead of annually, and suggested the appraisal district post the average increase in a county’s property values — to show a real increase in taxes — in the local newspaper.

With the current drouth focusing both urban and rural attention to the state’s water situation, delegates sought to clarify agriculture’s position in the state water debate by urging classification of water for agricultural purposes as an essential use of water. Opposing legislation that would give municipalities water that is required to sustain crops and livestock, delegates urged the development of brackish and seawater desalination projects to meet growing urban demands. They also supported legislation that encourages and supports voluntary water and land stewardship by “providing assistance and incentives to landowners for activities which benefit both urban and rural Texas.”

Following the convention, the Texas Farm Bureau board of directors met to elect officers. Chosen as vice president was Bobby Nedbalek, a cotton and grain farmer from Sinton. Don Smith, a dairyman from Sulphur Springs, is TFB’s new secretary-treasurer.

State directors elected included Dewey Hukill, a cotton, corn and wheat farmer from Olton; Charles Ray Huddleston, a wheat, corn and sorghum producer from Celina; Gary McGehee, a sheep and cow-calf producer from Mertzon; Richard Cortese, a grain and livestock producer from Little River; Raymond Meyer, a cow-calf producer from Pleasanton; and Arthur Bluntzer of Goliad.

© 2006 Livestock Weekly:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE