'Memo' written by TxDOT Engineer, leaked to TollRoadsNews as Goldman Sachs analysis, is supported by TTC Commissioners Ric Williamson & Ted Houghton
Memo skeptical of NTTA's 121 bid fuels debate
State engineer writes possible toll road offer may bankrupt agency
May 16, 2007
By JAKE BATSELL
The Dallas Morning News
Copyright 2007
AUSTIN – An internal memo written by a state transportation engineer is reverberating this week from Mesquite to Plano to the state Capitol.
Last week, a toll-road industry Web site posted a story spotlighting a skeptical two-page memo analyzing a possible North Texas Tollway Authority bid for the State Highway 121 toll road in Collin and Denton counties.
The analysis, which TollRoadsNews attributed to financial firms KPMG and Goldman Sachs, warned that an overly aggressive NTTA bid for the coveted toll road could send the agency into bankruptcy.
Days later, the Texas Department of Transportation said the memo was written not by KPMG or Goldman but by one of its engineers.
Bob Brown, a 24-year Transportation Department veteran who works out of the state's district office in Mesquite, said he wrote the memo for his boss and never imagined it would wind up on a Web site.
NTTA officials say the analysis is wildly off base. And as the tollway authority readies a bid that it hopes will supplant the state's tentative Highway 121 deal with Spanish company Cintra, agency officials are asking that Mr. Brown be removed from the team that evaluates the NTTA's proposal.
"This is a very significant decision for the region," said NTTA Chairman Paul Wageman. "The people who are evaluating the proposal need to not be coming to the table with preconceived notions."
The Plano-based tollway authority publicly unveiled a Highway 121 bid last week that includes $3.3 billion in cash payments. The agency must submit a formal proposal to the Regional Transportation Council by May 25.
Despite the attention generated by his memo, Mr. Brown said he can still fairly evaluate the NTTA's proposal.
"I can certainly be impartial, because the scoring is pretty much a mathematical exercise," Mr. Brown said. "To get someone else on [the committee] would be a steep learning curve, but I'll defer to my management."
The engineer won a vote of confidence from two transportation commissioners Tuesday after a meeting in Austin. The commissioners said they've encouraged Transportation Department engineers to expand their expertise beyond road building into financial analysis.
"Unfortunately [the memo] got out, but that's what we hire these guys to do," commissioner Ted Houghton said. "I support the guy."
"The fact that it's out in the public venue someplace is unfortunate, but that's not Bob Brown's fault," said Ric Williamson, chairman of the Texas Transportation Commission. "He did nothing wrong. He was wearing the hat as an analyst of financial opportunity for the region when he did the document."
Mr. Williamson said the memo controversy is a byproduct of the topsy-turvy Highway 121 saga, during which the NTTA has entered, exited and re-entered the bidding, most recently at the request of lawmakers angry with the Cintra deal.
"Emotions have been very high the last couple of months," he said.
The NTTA said the memo's conclusions are potentially damaging and irrelevant because the analysis examines preliminary estimates released two months ago. James Bass, the Transportation Department's chief financial officer, acknowledged in a statement last week that the document is now "moot."
Transportation officials emphasized Tuesday that Mr. Brown, who was part of the team that evaluated Cintra's bid, is only one member of an elaborate review process that includes dozens of participants
Former Duncanville City Council member Grady Smithey, who remains active in regional transportation issues, said he received the memo from Bill Hale, the top engineer for the Transportation Department's Dallas district.
Mr. Smithey said he was merely seeking more information about the NTTA's ability to build and run Highway 121. He said he circulated the memo among transportation-minded colleagues, mentioning that the Transportation Department often works with KPMG and Goldman Sachs on projects.
Where the memo went from there is anyone's guess, Mr. Smithey said, adding that he wasn't the source for the TollRoadsNews story.
Peter Samuel, editor of Maryland-based TollRoadsNews, said he reported that the unlabeled document was generated by KPMG and Goldman because his source assured him that the two firms prepared the document and because it read like a financial analyst's report. He declined to reveal his source Tuesday.
"He's a very good source, and I have full trust in him," Mr. Samuel said. "But that doesn't mean he might not have been misinformed."
The NTTA's Mr. Wageman said the Transportation Department ultimately is responsible for the leaked memo.
"It was their document," he said. "They had control of it, and now it is in the public domain."
jbatsell@dallasnews.com
© 2007 The Dallas Morning News Co www.dallasnews.com
To search TTC News Archives clickHERE
State engineer writes possible toll road offer may bankrupt agency
May 16, 2007
By JAKE BATSELL
The Dallas Morning News
Copyright 2007
AUSTIN – An internal memo written by a state transportation engineer is reverberating this week from Mesquite to Plano to the state Capitol.
Last week, a toll-road industry Web site posted a story spotlighting a skeptical two-page memo analyzing a possible North Texas Tollway Authority bid for the State Highway 121 toll road in Collin and Denton counties.
The analysis, which TollRoadsNews attributed to financial firms KPMG and Goldman Sachs, warned that an overly aggressive NTTA bid for the coveted toll road could send the agency into bankruptcy.
Days later, the Texas Department of Transportation said the memo was written not by KPMG or Goldman but by one of its engineers.
Bob Brown, a 24-year Transportation Department veteran who works out of the state's district office in Mesquite, said he wrote the memo for his boss and never imagined it would wind up on a Web site.
NTTA officials say the analysis is wildly off base. And as the tollway authority readies a bid that it hopes will supplant the state's tentative Highway 121 deal with Spanish company Cintra, agency officials are asking that Mr. Brown be removed from the team that evaluates the NTTA's proposal.
"This is a very significant decision for the region," said NTTA Chairman Paul Wageman. "The people who are evaluating the proposal need to not be coming to the table with preconceived notions."
The Plano-based tollway authority publicly unveiled a Highway 121 bid last week that includes $3.3 billion in cash payments. The agency must submit a formal proposal to the Regional Transportation Council by May 25.
Despite the attention generated by his memo, Mr. Brown said he can still fairly evaluate the NTTA's proposal.
"I can certainly be impartial, because the scoring is pretty much a mathematical exercise," Mr. Brown said. "To get someone else on [the committee] would be a steep learning curve, but I'll defer to my management."
The engineer won a vote of confidence from two transportation commissioners Tuesday after a meeting in Austin. The commissioners said they've encouraged Transportation Department engineers to expand their expertise beyond road building into financial analysis.
"Unfortunately [the memo] got out, but that's what we hire these guys to do," commissioner Ted Houghton said. "I support the guy."
"The fact that it's out in the public venue someplace is unfortunate, but that's not Bob Brown's fault," said Ric Williamson, chairman of the Texas Transportation Commission. "He did nothing wrong. He was wearing the hat as an analyst of financial opportunity for the region when he did the document."
Mr. Williamson said the memo controversy is a byproduct of the topsy-turvy Highway 121 saga, during which the NTTA has entered, exited and re-entered the bidding, most recently at the request of lawmakers angry with the Cintra deal.
"Emotions have been very high the last couple of months," he said.
The NTTA said the memo's conclusions are potentially damaging and irrelevant because the analysis examines preliminary estimates released two months ago. James Bass, the Transportation Department's chief financial officer, acknowledged in a statement last week that the document is now "moot."
Transportation officials emphasized Tuesday that Mr. Brown, who was part of the team that evaluated Cintra's bid, is only one member of an elaborate review process that includes dozens of participants
Former Duncanville City Council member Grady Smithey, who remains active in regional transportation issues, said he received the memo from Bill Hale, the top engineer for the Transportation Department's Dallas district.
Mr. Smithey said he was merely seeking more information about the NTTA's ability to build and run Highway 121. He said he circulated the memo among transportation-minded colleagues, mentioning that the Transportation Department often works with KPMG and Goldman Sachs on projects.
Where the memo went from there is anyone's guess, Mr. Smithey said, adding that he wasn't the source for the TollRoadsNews story.
Peter Samuel, editor of Maryland-based TollRoadsNews, said he reported that the unlabeled document was generated by KPMG and Goldman because his source assured him that the two firms prepared the document and because it read like a financial analyst's report. He declined to reveal his source Tuesday.
"He's a very good source, and I have full trust in him," Mr. Samuel said. "But that doesn't mean he might not have been misinformed."
The NTTA's Mr. Wageman said the Transportation Department ultimately is responsible for the leaked memo.
"It was their document," he said. "They had control of it, and now it is in the public domain."
jbatsell@dallasnews.com
© 2007 The Dallas Morning News Co
To search TTC News Archives click
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