Sale of infrastructure to foreign investors imperils American prosperity

Posted on August 19, 2008 by Terri Hall

Link to article here.

The story here is this (Note: the term “equity” is code for effective ownership of U.S. assets, like public highways):

“The U.S. trade deficit exceeded $712 billion last year, or 5.1% of GDP. That’s nothing more than America’s borrowing money from abroad to support a lifestyle that is unsustainable. But whether foreigners are now buying hotels, pharmaceutical companies or utilities, the numbers tell us that the rest of the world is no longer willing to foot the bill to feed America’s consumption habit. ‘It’s not just that American assets are cheaper. The untold story here is that foreign investors are no longer willing to finance American debt,’ says Stiglitz. ‘They now want equity.’

“If you were to look at America Inc. as a company, it’s like owning a company and you own a smaller and smaller fraction of it. So the fraction of America Inc. owned by Americans is diminishing,” says Stiglitz.

The Great American Yard Sale
By Jeff Israely/Paris, William Boston/Berlin
Time Magazine
Thursday, Aug. 14, 2008

When Belgian-based, Brazilian-controlled InBev launched a hostile offer for American beer king Anheuser-Busch last month, xenophobia quickly foamed to the top. Beer drinkers in St. Louis, Mo.–A-B’s home–vowed to swear off Bud if those foreigners bought “our” beer.

They’ll get over it. A-B’s shareholders sure did, considering the $52 billion price tag, which at $70 a share was a 27% premium for a stock that had gone flat. The ruling Busch family ultimately faced up to the fact that the U.S. is for sale, and foreigners are buying. It’s everything from the St.-Tropez crowd buying up condos in Palm Beach, Fla., to Asian and Middle Eastern governments sinking billions into U.S. banks to Europeans taking over U.S. pharmaceutical and infrastructure companies. Even tourists are busy using their euros and pounds to snap up iPhones, jeans, shoes and everything else they can stuff into the empty suitcases they carry along for just that purpose, damn them.

The weak dollar and our weakening economy are underwriting the great American yard sale. Investors from Dubai are behind the June purchase of the General Motors Building in New York City for $2.8 billion. The Abu Dhabi Investment Council’s sovereign wealth fund bought a 90% stake in the landmark Chrysler Building. General Electric’s plastics division is gone, and its famed appliance unit could soon be in the hands of China’s Haier or South Korea’s LG. Chrysler is hoping to hook up with India’s Tata Motors or Italy’s Fiat. Switzerland’s Roche Holding is offering about $44 billion to acquire the 44% of the biotechnology outfit Genentech that it doesn’t own.

The surge of foreign buying spans the economy. Since 2003, foreign-led mergers and acquisitions have increased more than sixfold. Last year there were over 2,000 foreign-led acquisitions of U.S. companies in deals worth some $405.4 billion, twice the value of deals in 2006 and up from $60.8 billion in 2003, according to Thomson Reuters, the financial-information company. Unlike the 1980s panic about the Japanese buying up American landmarks like Rockefeller Center, the response of the financial establishment has been to welcome the latest rush of foreign investment. “The U.S. needs these flows, particularly now,” says Bank of America chief market strategist Joseph Quinlan. “It helps create income and jobs for Americans.”

That would include Anne Marie Moriarty, a vice president at Corcoran Real Estate Group, who shuttles between New York City and European capitals, tempting foreign buyers with choice American properties. Moriarty is brokering the $16 million sale of an apartment in Manhattan’s Chelsea neighborhood to an Italian buyer, just one of the latest in her run of foreign deals. She says that since March 2007 her residential sales to foreigners have doubled, which is part of the reason that New York’s real estate prices have held up in an other wise tanking market. “It’s bucking the trend,” says Moriarty. Foreigners “see it as a long-term investment. Part of [real estate] for them is owning a piece of New York.”

Foreign companies were also the buyers in four of the top U.S. commercial real estate deals in 2007, according to Real Estate Alert newsletter. Rome-based investor Valter Mainetti has been building his Michelangelo Fund around trophy properties, ones that have historical or architectural value beyond their location and square footage. In 2006 he acquired a minority share in New York City’s Flatiron Building, a property that today is valued at $180 million. In June he raised his holdings to a 53% share of the famous building. “The Flatiron is expensive, but with the [cheap] dollar, it made sense to increase our share,” says Mainetti. “The stability of the New York real estate market is unique. This current crisis will pass, and the dollar will re-establish itself. We are confident.”

Foreigners spent $52.2 billion on U.S. commercial real estate in 2007, double the previous year’s total, according to Real Capital Analytics, a research group based in New York City that tracks property investment. Dan Fasulo, head of research at Real Capital Analytics, says foreign investment in U.S. property is a relatively recent phenomenon. He compared the current trend to the globalization of stock-market portfolios in the 1980s. “This isn’t just about the dollar. The strongest driver is that investors are looking for geographical diversification. The same situation played out on Wall Street about 10 to 15 years ago,” he says.

Buy American (Companies)

Over the past five years, foreign takeovers of U.S. companies have steadily risen. Among the more notable: Swiss pharmaceutical maker Novartis’ $39 billion staggered buyout of Alcon, the world leader in eye care; British energy distributor National Grid’s takeover of utility KeySpan Corp. for $11.8 billion; Saudi Arabian petrochemical company SABIC’s acquisition of GE’s plastics division for $11.6 billion; and Italian aerospace company Finmeccanica’s pending takeover of the U.S. military contractor DRS Technologies in a $5.2 billion deal. Some 55% of foreign direct investment in the U.S. came from the Old Country last year, with extra impetus now coming from its currency advantage. Says Scévole de Cazotte, senior policy director for Europe at the U.S. Chamber of Commerce: “European companies are very much conscious of the potential windfall. You buy cheap now with the belief that in 10 years the currency will have rebounded.”

Infrastructure is a prime example. Barcelona-based Abertis has been buying up airport-operation contracts from Atlanta and Burbank, Calif., among others, and a variety of service contracts in tele communications and parking garages. Now it is seeking a $12.8 billion deal to operate the Pennsylvania Turnpike, but the state legislature has balked. The road to growth leads to the U.S., says Abertis spokesman Toni Brunet, who notes that states and municipalities have lagged behind European public entities in privatization. “In terms of infrastructure, the U.S. is an emerging market,” says Brunet.

Indeed, European infrastructure firms calculate that the U.S. needs a massive infusion of capital to modernize its roads, bridges and power lines, highlighted by a recent spate of blackouts and the tragic collapse of a Minneapolis highway bridge last year. Steve Lucas, cfo of British power utility National Grid, says estimates are that the U.S. will spend $2 trillion in the next two decades upgrading electricity and gas infrastructure. “That’s bigger than China,” he notes.

The U.K.-based utility has been on a shopping spree that–while hardly anyone was looking–has transformed the company into a force in power and gas in the U.S., serving 4.4 million electricity customers and 3.4 million gas customers. In 2000 it bought New England Electric System and the Eastern Utilities Association. Two years later it grabbed Niagara Mohawk. Then in 2006 it scooped up Rhode Island Gas, and last year it completed its acquisition of KeySpan. That deal put National Grid among the top five distributors of electricity and natural gas in the U.S.

Shopping for Innovation

It’s not just about accumulating buildings or businesses. The U.S. is also a technology supermarket. Talk to Peer Michael Schatz, CEO of Qiagen, a German biotech firm that is a leader in technologies to isolate and prepare DNA and RNA for medical testing. Last year Qiagen merged with Digene, a U.S. biotech group that has developed groundbreaking diagnostic technology for the early detection of cervical cancer. Schatz says constant shopping for innovation in the U.S. is a key to his business plan, scouring technology-auction sites of American universities, searching for the right technology in the early phases of development. “The difference between the U.S. and Europe is that the U.S. has stellar science and a rapid rate of innovation and transferring that technology to the market for commercial purposes,” he says. “No other country comes close.”

There’s even an upside to the relative cheapness of the U.S. dollar. Volkswagen CEO Martin Winterkorn wants to boost the number of VWs the company sells in the U.S. to 800,000 over the next decade. But he has to cut costs to get the price down, which means building the cars on American soil with more U.S.-made components. So in July, Volkswagen announced plans to build two new sedan models in a $1 billion plant in Tennessee. VW hopes to export cars to Europe. “They could save $8,000 a car by building in the U.S.,” says Sean McAlinden, chief economist with the research group Center for Automotive Research, based in Ann Arbor, Mich. “The market has changed. It will be a much bigger market for the kind of small car with advanced technology that the Europeans are so good at making.”

And it’s not just Volkswagen. GM’s European-manufactured Opel Astra is expected to be built in the U.S. in the future. Volvo, writhing under the burden of the weak dollar, has reportedly asked Ford to find facilities for it to produce Volvos in the U.S. instead of Sweden.

Viewed from ground level, rising investment in the U.S. looks like a great thing. Without the inflow of foreign capital, the dollar would probably be even weaker and interest rates and inflation could be higher. But Joseph Stiglitz, a Nobel Prize winner and former chief economist of the World Bank, says there may not be a happy ending. For years, Stiglitz has warned that Americans are living beyond their means. The U.S. trade deficit exceeded $712 billion last year, or 5.1% of GDP. That’s nothing more than America’s borrowing money from abroad to support a lifestyle that is unsustainable. But whether foreigners are now buying hotels, pharmaceutical companies or utilities, the numbers tell us that the rest of the world is no longer willing to foot the bill to feed America’s consumption habit. “It’s not just that American assets are cheaper. The untold story here is that foreign investors are no longer willing to finance American debt,” says Stiglitz. “They now want equity.”

We used to measure the economy in terms of GNP, which is the amount of income produced by U.S. citizens. But now we measure it by GDP, the income that is actually produced in America. The distinction becomes important, says Stiglitz, when an increasing proportion of the country is owned abroad. “If you were to look at America Inc. as a company, it’s like owning a company and you own a smaller and smaller fraction of it. So the fraction of America Inc. owned by Americans is diminishing,” says Stiglitz.

That means that when the economy recovers, there will be less wealth left in the country to reinvest in it. But then returning to the original question–Why is the American yard sale not setting off alarms?–Stiglitz explains that the alternative is even worse. “There isn’t an outcry,” he says, “because the focus right now is the weakness of the American economy, and anything to keep our economy going is welcome.” That’s why no one really objected to Citibank’s becoming a Middle Eastern–financed bank, because it’s better than Citi’s becoming a dead bank. “But clearly we’re worse off as a country,” he says.

When the dust settles on the current downturn, the U.S. economy will probably regain its dealmaking swagger. But unlike the Japanese experience in the 1980s, the current trend of foreign buyouts won’t be unwound. Yet the only way for the U.S. to avoid becoming a second-rate economy is to make the investments necessary to stay ahead in knowledge and innovation. Will we do it? There are a whole bunch of rich foreigners who have just bet their future on it.

Find this article at:
http://www.time.com/time/magazine/article/0,9171,1832861,00.html

TURF testimony at 3 public hearings at Transportation Summit in Irving

Posted on August 19, 2008 by Terri Hall

The road building and transportation lobby’s biggest event of the year is arguably the Texas Transportation Summit, hosted annually by Dean International in Irving, TX. Not usually an invited guest among those whom ordinary citizens have ardently opposed, TURF was invited to attend by the Summit’s Founder, David Dean. An olive branch and honest effort to incorporate differing views? We hope so. Time will tell. Below is the TURF testimony at three public hearings that were held concurrently with the Summit: one addressing MPOs, another public private partnership toll roads, and another addressing the diversions from the gas tax to non-transportation uses.

Testimony by TURF Founder, Terri Hall, before the Senate Transportation and Homeland Security Committee Addressing MPOs, August 12, 2008

Chairman Carona, Senators, thank you for having public testimony on this vital issue effecting transportation decision-making in the state, MPOs. The citizens have found by and large that MPOs are rife with many of the same problems we’ve experienced with TxDOT. MPOs are tone-deaf to the public and do not represent the will of the taxpayers anymore than TxDOT does, regardless of the elected officials that sit on those boards.

The process by which this shift to toll financing for nearly every road project is flawed to begin with. The public has been shut out from DAY ONE and has never been given ANY meaningful input as to whether Texans even want to be charged both gas taxes and tolls to get to work or have any chance at mobility.

We don’t want or need any more organizations that give political cover to TxDOT (and frankly to the Governor and Legislature) that allows TxDOT to check the public involvement box and ignore the overwhelming opposition to tolling existing right of way and proceed as planned anyway. I’ve personally witnessed it in the NEPA public hearing process and there is no meaningful public input to date.

There is no provision that allows the public to veto a project or influence how its financed. There are already 2 lawsuits pending against the MPOs in this state due their flawed decision-making processes. MPOs are not a reflection of the will of the people. When hundreds of citizens have turned out to ask MPO Boards to nix toll plans (by a 2 to 1 or even 3 to 1 margin against), they consistently vote to toll anyway. What is the point of “public involvement” if the public’s input is consistently ignored? The only redress is to unseat at least half the MPO Board in the next election only to again have it stacked with pro-corridor, pro-toll, pro-privatization appointees. The citizens never know who will be appointed to the MPO, and therefore have no way to truly impact the MPO even at the ballot box. If a board member votes with the people, they promptly get removed from the Board and replaced with one who will vote pro-toll. Ask former Chairwoman Andrade, she facilitated that retribution in Bexar County.

THE FAIR AND EQUITABLE SOLUTION
Ordinary citizens and taxpayers have been alienated from the process of transportation decision-making at EVERY level. The citizens have a right to self-determination in a Republic and we deserve the right to bring this to a public vote or have some other means of having citizen input heeded perhaps through the NEPA process, rather than continue the TxDOT & MPO charade of “citizen involvement.”

Let’s remind ourselves what TxDOT thinks of as citizen involvement…it’s them breaking the law to hire a lobbyist to lobby elected officials and hire marketing firms and political consultants to write and coordinate their speeches, public appearances and press statements in order to spout the glowing benefits of the tolling to taxpayers in Town Hall meetings to convince an angry public that they really do want toll roads.

Texans are smart enough to know if we truly need this new infrastructure, how they want it financed, and what the preferred route and solution ought to be. It’s not just the top-down approach that’s upsetting people, it’s the lack of any meaningful input into the decisions being made at EVERY level of the process. It’s abundantly obvious that the decision has already been made for us. That’s what people are objecting to.

I do hope our message is clearly communicated and HEEDED in your recommendations to the Legislature.

Testimony by TURF Founder, Terri Hall, before the Legislative Study Committee on Private Participation in Toll Roads, August 12, 2008

The invited testimony before this CDA Study Committee has been noticeably stacked in favor of CDAs or PPPs, despite the overwhelming public opposition to privatizing our public infrastructure. Rather than heed the public’s concern, you have instead chosen to try and tweak PPPs in order to make them more palatable to an angry public rather than truly study what you were charged with studying: the EFFECTS of PPPs on the traveling public. This committee operated form the assumption that PPPs would continue from day one, rather than deliberate whether we should be engaging in any more of these types of contracts and whether this type of contract is in the public’ best interest.

We feel strongly that you should take a few steps back and study whether or not the government should even be in the business of making a profit and whether or not massive leveraged debt in this lending is the right approach. This committee also ought to study whether we should continue such a heavy reliance on tolling considering the sustained volatility of the price of gas. Considering both Houston and Dallas toll roads have experienced a decline in toll road usage and that there has been an overall decline in driving due to high gas prices, will 87+ toll projects be toll viable in 5 or 10 years given these conditions. Will the taxpayers be stuck with even higher toll prices because of lower ridership or worse be stuck bailing out a toll road in default?

Increasing the cost of transportation, particularly with a market-based toll rate and/or a PPP which is the most expensive transportation tax, is not only unwise, it’s a recipe for economic disaster.

Gas prices have caused a dip in toll road usage (per articles in Express-News and Landline Magazine) and caused marked drops in driving in general. The bond debt for these toll projects is very likely to default under these conditions, which most leading energy analysts agree will continue for the foreseeable future.

Where is the consideration of the taxpayer in all of this? Short of some brief comments by Senator Tommy Williams and Rep. Wayne Smith, the taxpayers pocketbooks and their ability to pay these new taxes hasn’t even been on the radar. Where was the invited testimony from leading experts about high gas prices and the dwindling availability of oil and its effect on driving and the subsequent increase in usage of other modes of transportation? These issues have an enormous impact on the sustainability of 87+ leveraged toll projects. The Transportation Summit put on by Dean International had a speaker on this subject, and this area is being investigated by Congress, yet the Committee didn’t see fit include such an elephant in the room in its decision of whether or not to recommend the most expensive transportation funding option….PPP toll roads?

Several witnessed testified that most toll roads aren’t self-sustaining. Why are we building toll projects that can’t sustain themselves and need massive taxpayer subsidies? Raiding other public funds to piece these projects together does the exact same thing the gas tax does, takes from some to give to others. How is this process better or more efficient for the taxpayer? It’s not, it just allows an unaccountable government revenue stream.

Testimony in answer to Senator Robert Nichols’ question concluded not a single PPP currently on the books anywhere in the U.S. could be used as an ideal model or exemplary PPP deal. The taxpayers can’t afford any more untested experiments when the risks and costs to the pubic are so high. We’re not guinea pigs for the financial markets and road builders to “try out” their “innovative financing” schemes. We’ve studied these deals for many years now and we’ve been reaching to find one that served the public well. So far, one doesn’t exist. To continue such risky schemes and to ignore the obvious warning signs to the tune of billions of dollars is totally unacceptable.

Dennis Enright testified that CDAs cost 50% more, that there is no risk transfer, and these projects should always stay in the public sector. None of these areas make PPPs palatable to the taxpaying public. We keep hearing PPPs and tolling are just a tool in the “toolbox” and that “one size doesn’t fit all,” but due to TxDOT’s Minute Order passed December 18, 2003 mandating all new capacity be studied for tolling, it’s become the only tool in the toolbox unless you remove it.

The GAO recently cautioned that public protection must be put in place when using PPPs and indicated PPPs aren’t right for every project. SB 792 took the first step toward primacy, but the fundamental assumption that everything that can be tolled will be tolled (including subsidizing projects that aren’t 100% self-sustaining) must be removed. Senator Nichols’ Primacy Determination model needs to take a few steps back to change the assumption that everything will be a toll project of one kind or another, to one where the priority is to improve freeways and keep them freeways, resorting to tolling dead last.

To ignore the economic warning signs and bury our heads in the sand and continue down the path of models that require sustained increases in driving and affordable gas, is to foolishly invite economic disaster and would be a complete failure of the Legislature’s fiduciary duty to the public it swears an oath to protect and serve.

Testimony by TURF Founder, Terri Hall, before the House Appropriations Transportation Subcommittee on Transportation Financing Options, August 13, 2008

Thank you for studying the vital issue of transportation. There are many considerations before this committee that will impact the taxpayers’ everyday lives. The shift to privatizing and even maximizing profit (even on public toll roads) should cause every public servant to pause.

While some are trying to “fix” PPPs to make them more palatable to an angry public already suffering under high gas prices, we need to take a step back and look at whether this shift to reliance on tolling to fund new road construction is prudent, protects the public interest, and is sound fiscal policy that best serves the public interest. We submit that tolling satisfies none of those areas.

While we’re not opposed to all tolling, the tolling of existing right of way, market-based tolls, and privatization smack of runaway taxation and both government and private profiteering exploiting what amounts to government-sanctioned monopolies, our public highways. The toll-first Minute Order #109519 passed by the Transportation Commission on December 18, 2003 demonstrates tolling isn’t just a “tool in the toolbox,” it’s the only tool they’ll continue to use in order to fill their coffers. Through the prolific use of tolling, TxDOT has become a defacto taxing entity with no accountability to the traveling public who depends on these highways for their daily living.

We’d like to bring some things to your attention that we feel are vital to setting transportation on the right course.

TOLL ROAD USAGE, DRIVING DOWN
First, we cannot bury our heads in the sand and ignore the warning signs around us. In a San Antonio Express-News article July 29 and a Landline Magazine article from August 1, it states that toll road usage is down in both Dallas and Houston, largely due to high gas prices. The FHWA also reports that driving is going down causing gas tax revenues to also drop.

One can see there is an inverse relationship between a drop in driving and the escalating price of gasoline. So any transportation policy that substantially increases the cost of transportation will not only wreak havoc on the economy and leave less money for taxpayers to cover other necessities, it’ll actually reduce tax revenues, particularly toll road usage, necessitating increases in toll rates or causing the massive leveraged debt used to build these facilities to go into default leaving the taxpayers to bailout a HUGE mess not unlike the mortgage and banking crisis we’re seeing now.

INDIRECT EFFECTS OF TOLL ROADS
We must also consider indirect effects and the unintended consequences of toll proliferation like traffic diversion to surface streets which will increase wear on county and city roads, not meant to handle such traffic loads. In a study called the Empirical Evidence of Toll Road Traffic Diversion by Peter Swan of Penn State and Michael Belzer of Wayne State, released January 14, 2008, Swan and Belzer noted that efforts to “monetize” existing toll roads is a recipe for the level of higher toll rates that increase truck diversion.

A summary of the findings published in the Newspaper.com (January 14, 2008) states:

The researchers analyzed decades of data from the Ohio Turnpike and nearby alternate routes in Ohio, comparing both to national data to determine the effects the toll rates had on nearby free roads. Ohio raised toll rates in the 1990s and subsequently lowered them, allowing an easier calculation of the effect of different rate levels. The study showed that as the Turnpike toll increased, truck traffic increased on alternate, free routes as truckers balanced the monetary savings with the cost of the extra time needed to take an indirect route.

Swan and Belzer’s economic modeling showed that the Turnpike could maximize its revenue by setting a truck toll rate of 46 cents per mile and collecting $111 from each truck driving the length of the Turnpike. At this high rate, however, the number of trucks avoiding the toll road would quadruple and place 608 million vehicle miles of added traffic and wear on secondary roads.

The study did not directly examine accident rates but the results suggested that imposing tolls on divided highways would increase the number of road fatalities by pushing truck traffic onto roads not designed to handle heavy truck traffic.

“Because we know that secondary roads pose greater safety hazards, the safety cost of diversion will be substantial,” the study explained. “We know enough about the frequency and severity of crashes based on highway type to suggest that a substantial increase in crashes, crash severity, and fatalities in the state of Ohio probably would occur as a result of this diversion.”

Interestingly, 46 cents a mile is the exact truck toll rate set by the Alamo RMA in the 281 toll project. In a TURF lawsuit to stop that toll project due to an insufficient environmental study of the impacts of that toll road on existing residents and businesses, no economic impact was conducted nor any study of the indirect effects of the toll road on surface streets and neighborhoods due to diversion.

DELIBERATE SUPPRESSION OF POTENTIAL NEGATIVE IMPACTS HIDDEN
Also found through litigation to stop the 281 toll road, TURF attorneys discovered a key study by a geologist TxDOT hired was deliberately hidden from the FHWA during the environmental review process. The report speaks of potentially “severe” impacts from the toll road on the Edwards Aquifer. Obviously this information could have changed the outcome of the FHWA’s environmental clearance (“Finding of No Significant Impact” or FONSI) for the 281 toll project had it been submitted with the environmental assessment. TURF’s attorneys also uncovered correspondence that shows management at TxDOT tried to pre-determine a FONSI on both 281 and 1604.

Such deliberate deception by a state agency cannot be tolerated, not to mention it violates the National Environmental Policy Act (NEPA). The public trust can only be restored by direct punishment (employee terminations) for such violations and through strong legislative oversight.

PUBLIC PROTECTIONS PARAMOUNT
The GAO recently released a report to Congress in February 2008 citing concerns about needing more rigorous up front analysis of PPPs to ensure pubic protections are put in place. Senator Robert Nichols released a draft of a decision tree of sorts called a “Primacy Determination” that suggests a process by which any decision to toll would go through to determine if a PPP was the right type of method for a given project. We think this sort of process must be in place to ensure the public interest is protected. However, it assumes most if not all projects will be toll projects.

We submit that this decision-making draft ought to take one step back, and that is, to have a process by which TxDOT and the MPOs must go through to keep our freeways toll-free FIRST. Tolling should be the last option considered (PPPs, if not completely eliminated, the last on the tolling option list), especially considering high gas prices and tighter, more expensive lending conditions.

HIGH COST OF BORROWING
Even if a public toll authority does the project, a Bloomberg article, Not Even 2% Fed Funds Help Munis Amid Record Rates, from just days ago, August 7, 2008, shows that even municipal bonds and other government financial instruments are experiencing higher lending rates.

Two experts didn’t parse words:

“The world is falling apart” for borrowers, said Robert Doty, the president of American Governmental Financial Services, an advisory firm in Sacramento.

“The unwinding of the credit bubble has had dramatic implications,” George Friedlander, a municipal strategist at Citigroup Inc. in New York who has covered the market for more than 30 years, said in an Aug. 1 report.

Government and certainly the Appropriations Committee cannot ignore its fiduciary duty to the public by looking the other way and ignoring the warning signs.

OVERSIGHT AUTHORITY MUST HAVE TEETH
Another area the Legislature needs to consider addressing in statute is giving the State Auditor the authority to force a tolling entity (whether public or private) to redo their traffic and revenue studies if the methodology or study is insufficient in any area. For instance, the State Auditor asked the Alamo RMA to redo its traffic and revenue study to take into account high gas prices, which is an obvious factor tolling authorities must consider in whether a toll road will be viable long-term. These agencies are doing inadequate studies to ram their agendas through. An article in the Express-News about this recommendation from the Auditor, emphasizes that the Auditor cannot force the RMA to re-do anything, that SB 792 only has the Auditor review their methodology. The Auditor should have the ability to force a tolling entity or TxDOT to redo an inadequate study that could potentially put these public roads in default at the taxpayers’ expense.

MPO TONE DEAF TO PUBLIC
Also, MPOs can be just as tone-deaf to the public as TxDOT. Certainly RMAs and unelected toll authorities fit into this category as well. The public by and large has been left out of transportation decision-making at EVERY level. There is no provision that allows the public to veto a project or influence how its financed. There are already 2 lawsuits pending against the MPOs in this state due their flawed decision-making processes. MPOs are not a reflection of the will of the people.

When hundreds of citizens have turned out to ask MPO Boards to nix toll plans (by a 2 to 1 or even 10 to 1 margin against), they consistently vote to toll anyway. What is the point of “public involvement” if the public’s input is consistently ignored? The only redress is to unseat at least half the MPO Board in the next election only to, again, have it stacked with pro-corridor, pro-toll, pro-privatization appointees. The citizens never know who will be appointed to the MPO, and therefore have no way to truly impact the MPO even at the ballot box. If a board member votes with the people, they promptly get removed from the Board and replaced with one who will vote pro-toll. Ask former Chairwoman Andrade, she facilitated that retribution in Bexar County.

THE FAIR AND EQUITABLE SOLUTION
The taxpayers have a right to self-determination in a Republic and we deserve the right to bring this to a public vote or have some other means of having citizen input heeded, perhaps through the NEPA process, rather than continue the TxDOT & MPO charade of “citizen involvement.” We need some public involvement REQUIREMENTS that FORCE TxDOT to implement the alternative chosen by the public, not the one that makes the State the most tax revenue.

LOBBYING FOR TOLLS/PPPs
Let’s remind ourselves what TxDOT thinks of as citizen involvement…it’s them breaking the law to hire a lobbyist to lobby elected officials and hire marketing firms and political consultants to write and coordinate their speeches, public appearances and press statements in order to spout the glowing benefits of the tolling to taxpayers in Town Hall meetings to convince an angry public that they really do want toll roads.

We provided the Sunset Commission as well as the Chairwoman Harper-Brown’s office with in-depth documentation of TxDOT’s illegal lobbying activities. The Texas Government Code Chapter 556 states that TxDOT is subject to a reduction in appropriations per 556.005

(c) A state agency that violates Subsection (a) is subject
to a reduction of amounts appropriated for administration by the
General Appropriations Act for the biennium following the biennium
in which the violation occurs in an amount not to exceed $100,000
for each violation.

DETERMINE TRUE NEEDS, COMPARE FREEWAY FIX TO TOLLWAYS
We need to end the toll road wish lists (MPO TMMP plans that even the Governor admitted were based on an if-money-were-no-object principle) and get a true side-by-side, apples to apples comparison of the cost of fixing our roads and keeping them freeways versus the cost of turning them into tollways. If it’s anything like the US 281 project in Bexar County, TxDOT/ARMA has turned a $100 million gas tax funded FREEway plan into a $1.3 billion toll project. This side-by-side comparison will help Legislators and the public discern our true “unfunded needs,” since we cannot rely on TxDOT’s “funding gap” figures to be accurate. Then and only then can we accurately assess funding our roads in the least invasive, most affordable, and most transparent fashion.

Thank you for allowing us testify to the citizens’ concerns and we trust their voices will be heard and heeded as we seek to restore trust in the transportation decision-making process across the state and to put the citizens back in the driver’s seat.

Local planning boards, MPOs, want bonding power!

Posted on August 19, 2008 by Terri Hall

As if the Metropolitan Planning Organizations (MPOs) aren’t in enough hot water with two pending lawsuits against them by citizen groups, now one of the state’s most powerful MPOs, the Regional Transportation Council (RTC) in Dallas-Ft. Worth, is asking for the power to finance roads by selling its own bonds like a Regional Mobility Authority (or RMA)! It’s bad enough the RMAs are un-elected boards tone-deaf to the public interest and to the citizens’ objections, but MPOs which are just as bad if not worse, are seeking the same bonding authority. The MPOs role set-up by the feds is as a “planning” not “taxing” entity.

MPOs have no business and certainly no legal authority to finance or build roads, and the RTC knows it, so they’re trying to change the law to grant themselves MORE POWER, the power to put the taxpayers’ further into debt! They also seek to gobble up neighboring suburbs into their jurisdictions, diluting smaller communities’ power over their own transportation destinies.

Senators talk transportation at annual summit
by Mark Lavergne
Lone Star Report
August 19, 2008

IRVING – Federal, state and local elected officials, transportation leaders, companies and other interests convened this week for the 11th Annual Transportation Summit, hosted by the City of Irving, to mull challenges and innovations on how to get from place to place.

The meeting of minds provided a ripe occasion for state lawmakers to discuss future policy, including those on the Senate Transportation and Homeland Security Committee, who met Aug. 12 to discuss a sizeable plate of issues. Another committee dealt with toll road issues (see Around Texas). Another Fund 6 (see article).

Among the transportation committee’s concerns:

Metropolitan Planning Organizations. The message from members of Metropolitan Planning Organizations (MPOs) was not surprising: Please give MPOs more “flexibility,” i.e. more decision-making ability about where the money goes.

MPO members are often appointed by county commissioners and city council members, and are usually made up of elected officials and transportation experts who make decisions about which transportation projects to work on.

Michael Morris, director of transportation for the North Central Texas Council of Governments Regional Transportation Council — no doubt one of the state’s longer job titles — suggested creating “metropolitan mobility authorities.” An MMA would be a statutory hybrid between a regional mobility authority (RMA) and a metropolitan planning organization (MPO). RMAs have more funding power than MPOs do.

Terri Hall with the transportation policy watchdog group Texans Uniting for Reform and Freedom (TURF) had issues with the idea. “What’s really troublesome about that,” she said, “is that the makeup of these boards is, I think, flawed to begin with,” since state legislators often sit on the MPO boards, which allocate federal funds, creating a separation of powers issue.

“There’s also the issue,” she said, “of having the boards diluted,” with appointees that the people have no role in choosing. “Now they’re going to try to give them actual bonding authority.”

Morris also said that it is important for MPOs not to be too numerous, saying that it would be “ludicrous” for DFW to have three different MPOs. Lewisville and McKinney each have separate MPOs from the DFW MPO — as required by law, Morris said. The DFW MPO is going after some 12 counties right now so they don’t have a bunch of MPOs planning in the same metropolitan region, Miller said.

The committee members seemed receptive to Morris’ ideas.

Said Sen. Florence Shapiro (R-Plano): “What we’re missing in our MPO is the ability to do the same thing that an RMA might do, and that’s the funding mechanism.” But Shapiro emphasized that the authority should be given to an already existing entity, the MPO, rather than creating another layer of government on top of it.

Indeed MPOs, plus the spending power of RMAs, would essentially equal a Metropolitan Mobility Authority.

Morris suggested giving MMAs the use of toll revenue. Right now those revenues go to Fund 6, but “the region is scared to death that someone will sweep it during session,” Miller told the committee. Miller has been looking for innovative ways to ensure that the money stays in the region.

Hall, of TURF, told the committee that citizens have found that MPOs are “tone-deaf to the public, and don’t represent the will of the taxpayers any more than TxDOT has been.”

“We don’t want or need any more organizations that give political cover to TxDOT,” Hall said, “and then allows TxDOT to check the public involvement box and ignore the overwhelming opposition to tolling existing right-of-way and proceed as planned anyway.”

Hall told the committee that there are already two lawsuits pending against MPOs in the state due to flawed decision-making processes. “MPOs are not a reflection of the will of the people when hundreds of citizens have turned out to speak at these MPO boards and its toll plans two-to-one, three-to-one, in some cases ten-to-one margins, and consistently vote to toll anyway. What’s the point of public involvement if the public’s input is consistently ignored?”

“Texans are smart enough to know if we truly need this new infrastructure, how they want it financed, and what the preferred approach ought to be,” she continued. “It is abundantly obvious that the decision has already been made for us, and that’s what we’re objecting to.”

One of the lawsuits challenges the very existence of MPOs in Texas, Hall told LSR, on the grounds that no Texas law makes MPOs legal in the state. Federal law makes MPOs possible for the states, but the states must have enabling legislation, which Texas is without, Hall said.

Bus accidents another black mark on TxDOT? Recent bus accidents in Texas, notably the recent fatal one near Sherman, could provide more reason to remove vehicle regulation from TxDOT, Sen. Kim Brimer (R-Fort Worth) told the transportation and homeland security committee.

Sunset staff found TxDOT’s regulation of motor vehicles did not “conform to commonly applied licensing practices.” While staff did not recommend taking the licensing function away from TxDOT altogether, Sunset Advisory Commission members, including Rep. Ruth Jones McClendon (D-San Antonio), suggested creating a whole new agency to deal with licensing (currently done at the Texas Department of Public Safety) and vehicle regulation (currently at TxDOT).

Shapiro asked Major Mark Rogers of the Public Safety Commission to look into compiling and including on the DPS website a list of private bus companies that have been taken out of service for safety concerns.

Rogers said that was “something that we could easily do.” She also asked that DPS look further into requiring seatbelts on all buses, a measure the last legislature mandated for school buses. “I know it’s an expense,” she said, “but when you’re seeing this happening over and over again throughout the state, at expense to whom and why? Its certainly not too expensive to ask to save lives.”

Employees at TxDOT. Committee Chairman John Carona (R-Dallas) pressed TxDOT executive director Amadeo Saenz on the number of employees at TxDOT, saying fewer would provide greater efficiency.

But Saenz said that the agency already has 800 to 900 full-time-equivalents fewer than appropriators authorized. Right now he wants to keep the workers he does have in place to determine which functions the department can regionalize.

Carona pointedly asked: “So, is it fair to say that you would be prepared to release those 800 to 900 positions back to the finance committee?”

“Yes and no,” Saenz replied. He said core groups and work groups are looking at improvements that could be made to TxDOT’s technology. The goal is to be become more effective, efficient, and transparent, he said.

Billboard regulation. Margaret Lloyd, policy director for Scenic Texas, urged the members to reverse the existing law and limit outdoor advertising. Lloyd said she would like at least to see “some local control,” requesting that the Legislature consider granting “very narrow authority” to counties.

But Lee Vela of the Outdoor Advertising Association of Texas said that limiting outdoor advertisement would “suppress business.” He acknowledged that some Texas roads could be designated as “scenic” but indicated there should be standards for determining which.

Lloyd also suggested the creation of an advertising tax, saying that if billboard companies are considered a business for condemnation purposes, then they should also be treated as such for tax purposes. But Vela said such a tax, though considered in the past, never got traction because it reduces advertising spending.

Sen. Tommy Williams (R-The Woodlands) exhorted Vela and Lloyd to come up with a compromise on the issue, saying he was “sick of this issue,” and surmising that his colleagues were as well. “If we [the Legislature] have to solve it, everybody loses,” Williams said.

Several witnesses spoke in favor of the billboards, including representatives of several non-profit organizations who had had billboard space donated to them, saying that increased regulation would cut off a crucial advertising medium.

Gas tax diversions get legislators' attention, so does bogus TxDOT study

Posted on August 19, 2008 by Terri Hall

TxDOT’s trumped-up study by yet more consultants, at a company called Cambridge, is based on totally bogus assumptions. They assumed vehicle miles traveled by Texans would go up 70% by 2030 and that our population would be more prosperous and thus own more vehicles (and do more driving). What planet are they on? The Federal Highway Administration’s statistics have shown Texas driving as flat or going down since gas prices began to escalate in 2005. The Texas State Data Center’s (basically the Texas’ census data center, SDC) own population projections show the complete opposite of what these consultants divined from the blue sky. Texas’ projected population growth will be poorer, less educated and older. In a UT Austin study from 2005, outlining the potential pitfalls of the Trans Texas Corridor (TTC), it cites this data as problematic to the TTC, and, we conclude, to TxDOT and the road builders’ larger agenda that requires more cars, more driving, and lots more money from taxpayers to get around.

Since retirees aren’t the ones clogging our roads during commute time, and the less educated struggle just to make ends meet much less take on the exploding cost of owning and using a personal vehicle, TxDOT’s numbers are all wet. Their assumptions also fail to take into account the high price of gas (as the State Auditor recently admonished a tolling authority to do) and the reality of dramatic reductions in driving and toll road usage as a result. Our Legislature must do its duty to exercise oversight over such a blatantly trumped-up figure that is not even remotely based on reality.

Harper-Brown: Highway fund getting short-changed
by Mark Lavergne
Lone Star Report
August 19, 2008

IRVING – The Transportation Summit abounded with big transportation ideas to meet the state’s big future transportation needs. Meanwhile, the state itself is coming up short on funds to meet transportation needs of the present.

The House Appropriations Subcommittee on Transportation met Aug. 13 to examine problems in funding for the state’s highways old and new, and possible solutions.

In the spotlight was Fund 6, the state fund that, in theory, is designated for building and maintaining the state’s highways. The problem, said committee chairman Linda Harper-Brown (R-Irving), is not merely funds that go to Fund 6 that are then diverted to things other than roads, but also funds that ought to go to Fund 6 but never make it there in the first place.

Harper-Brown said she anticipates that in 2009 “we will have an opportunity to make it a transportation session,” as TxDOT is under Sunset and because of gas prices and new funding needs. “This is the time if there ever was one,” she said.

What Fund 6 pays for

Thomas Galvan, of the Legislative Budget Board (LBB), told the subcommittee what percentage of the Fund 6 money goes where: 86.2 percent to the Texas Department of Transportation (TxDOT); 7.1 percent (about $1 billion) to the Texas Department of Public Safety (DPS); 5.1 percent to benefits for employees at Texas Department of Transportation, the Attorney General’s Office, and a few other agencies; a few hundred million to other small agencies, salary increases for the various agencies, etc.

That’s just the beginning. Some funding for SB 10, the healthcare bill from last session, is coming from Fund 6 this biennium ¡V about $107 million for medical transportation. DPS’s $1 billion a year pays for employees benefits including insurance and retirement. The Texas Education Agency receives $100 million each biennium for public school transportation. (The recent school finance summit hosted by Commissioner Robert Scott featured a veritable choir of superintendents saying they will need more.)

The Health and Human Services Commission gets $20 million each biennium for ambulance services. Also $66.9 million goes for (mostly TxDOT but a few others) employee salary increases (for salaries altogether it’s about $623 million). The Texas Transportation Institute gets $12.8 million each biennium, and the Office of the Attorney General $11.5 million. The latter went towards transportation-related cases such as right of way acquisition.

The Texas Historical Commission also is receiving funding from TxDOT’s portion of Fund 6, about $500,000 a year. Another $6.3 million each biennium goes to the State Office of Administrative Hearings (SOAH), for DPS’ license verification program. The Public Integrity Unit at the Travis County District Attorney’s Office receives about $1.9 million a biennium to prosecute motor vehicle tax fraud cases. The unit has received money from Fund 6 as far back as LBB’s records show, which is 1990, Galvan said. Most other diversions started after 2000.

Jim Smith, a financial analyst for the Comptroller’s Office, told the subcommittee that currently 10 state agencies receive appropriations from Fund 6. As of July 31, Fund 6’s cash balance was $4.3 billion. But Harper-Brown questioned how much of that was going to local communities for local transportation needs.

What Fund 6 should be getting paid, but isn’t

Harper-Brown asked for a consolidated list of revenue that should be going to Fund 6 but isn’t. “One of the things that concerns me is that we’re always talking about diversions out of Fund 6 that need to be paid for from that fund,” Harper-Brown said. “But there are a lot of funds that don’t go into Fund 6 and not only are there funds that go into GR that are transportation-related and never made it to our transportation funding, but then some of those ¡K fees are going into the general revenue side, but the expenditures are coming out of the Fund 6 side.”

TxDOT’s chief financial officer, James Bass, told the subcommittee that a lot of revenue generated by operations managed and paid for by TxDOT, which thus should go to Fund 6, is going instead into the state’s general revenue (GR) fund.

Among these are the Automobile Burglary and Theft Prevention Authority, which assesses a $1 fee for each auto insurance policy in the state. That fee is deposited into GR, and paid for by Fund 6. Likewise, historically there has been a $20 permit required to drive oversized and overweight vehicles. From each of those $20 fees, Fund 6 only got 30 cents. Recently the fee was upped to $40, and now the fund receives $20.30, Bass told the subcommittee.

Bass said that if those funds were directed back into the state’s highway fund, it could save the state each year about $15 million for the auto theft prevention program, and $7.5 million for overweight permits, or $45 million in Fund 6 per biennium.

TxDOT executive director Amadeo Saenz said lack of funding for Fund 6, along with diversions from there, were preventing TxDOT from “building and maintaining highway systems.”

Rep. Dan Gattis (R-Georgetown) told Saenz, “We need transparency to know what certain agency’s budgets are being spent on and making sure that they are being spent on the appropriate things.”

Another TxDOT-produced study

Members of the subcommittee balked when Saenz told them that TxDOT had hired two analysts to produce yet another detailed study forecasting the state’s future transportation funding needs. The study’s magic number: $15.9 billion more per year. Members were skeptical of the report’s findings, saying its assumptions and methodology were unclear.

Gattis told study co-author Allan Rutter of Cambridge Systematics that “$15.9 billion doesn’t mean squat to me if you don’t tell me what it’s based on.”

Harper-Brown said TxDOT’s credibility was in question because of how the agency had crunched numbers.

Rep. Terri Hall of Texans United for Reform and Freedom, the transportation watchdog group that has opposed TxDOT’s recent toll road policies, told LSR that the premise of VMTs varying directly with population increase is “totally bogus,” citing a 2005 study from the University of Texas-Austin showing that although the state’s population is indeed growing, much of the new population is older and making less money, and thus not driving their own vehicles. Harper-Brown also observed that the baby-boom generation was getting ready to retire.

She also criticized the report for not taking high-speed rail, which she believes will play a big role in the state’s future infrastructure, into account for determining the state’s future funding needs. “Shouldn’t we look at a total big picture?”

“Maybe high-speed rail’s time has come,” she said. “We just can’t continue to build these roads. We can’t get them done quick enough.”

TxDOT’s rigged environmental study on 281 failed to include aquifer authority

Posted on August 15, 2008 by Terri Hall

Link to article here.
Did aquifer authority weigh in on toll-road study?
By Pat Driscoll
Express-News
August 14, 2008

One bone of contention with the U.S. 281 tollway’s environmental study has to do with whether officials “involved” and worked in “consultation” with an aquifer authority, as required by regulations.

Illustration of U.S. 281 tollway from Alamo Regional Mobility Authority slide show.

Critics filed a federal lawsuit in February to challenge the thoroughness of the study, which says doubling U.S. 281’s width for eight miles would not cause significant impacts.

The study’s conclusion is ridiculous, they say, especially since the highway traverses Edwards Aquifer recharge and contributory zones.

Toll advocates say the lawsuit is frivolous and will just delay a long-needed project.

Here’s some stuff plaintiff attorneys dug up:

These pages from the study say the Texas Department of Transportation sent letters to stakeholder agencies, including the Edwards Aquifer Authority, in February 2006 to solicit input:

• Download file

The Edwards Aquifer Authority, responding to an open records request, said two months ago it has no record of the TxDOT letter or any other written request since December 2005 concerning U.S. 281 and Loop 1604 widening projects:

• Download file

But there’s this record of a 25-minute telephone conversation between a TxDOT consultant and the authority:

• Download file

“It’s ridiculous, in our opinion, to say that that’s agency coordination,” plaintiff attorney Andrew Hawkins said in an e-mail. “It’s not a meeting, it’s not a request for EAA to participate and give input on the project — it’s a consultant yanking info out of EAA staff to plug into the consultant’s report.”

TxDOT's rigged environmental study on 281 failed to include aquifer authority

Posted on August 15, 2008 by Terri Hall

Link to article here.
Did aquifer authority weigh in on toll-road study?
By Pat Driscoll
Express-News
August 14, 2008

Illustration of U.S. 281 tollway from Alamo Regional Mobility Authority slide show.

Critics filed a federal lawsuit in February to challenge the thoroughness of the study, which says doubling U.S. 281’s width for eight miles would not cause significant impacts.

The study’s conclusion is ridiculous, they say, especially since the highway traverses Edwards Aquifer recharge and contributory zones.

Toll advocates say the lawsuit is frivolous and will just delay a long-needed project.

Here’s some stuff plaintiff attorneys dug up:

These pages from the study say the Texas Department of Transportation sent letters to stakeholder agencies, including the Edwards Aquifer Authority, in February 2006 to solicit input:

• Download file

But there’s this record of a 25-minute telephone conversation between a TxDOT consultant and the authority:

• Download file

Texas drivers hit hard by gas prices, spend over $2,000/yr on gas

Posted on August 11, 2008 by Terri Hall

Link to article here. Perhaps what’s most frightening about this reality is that this report doesn’t take account the 87+ toll road projects yet to be built, and how that could add a minimum of 20 cents PER MILE to drive in Texas costing the average family $2,000 or more per year (the equivalent of doubling the cost of gasoline!).

Report: Texas Drivers Spend 6 Percent of Income on Gasoline
Austin Business Journal
Published in Texas Insider: 08-11-08

Drivers in Texas spend nearly 6 percent of their income on gasoline, twice as much as what drivers in some states spend, according to a report released today by the Natural Resources Defense Council.The report highlights two areas: state-by-state vulnerability to high oil prices and implementation by states of alternatives and solutions.

Texas is the 16th most vulnerable state when it comes to gas prices. The average Texas motorist spent $2,174 on gasoline in 2007, or about 5.85 percent of income, the report shows.

Motorists in Mississippi, which ranks at the top of the list, spend an average of more than 8 percent of their income on gasoline, while drivers in Connecticut, the least vulnerable state, spend 3.17 percent of income on fuel.

The states in which drivers are most at risk to high gas price increases are Mississippi, South Carolina, Georgia, Louisiana, Kentucky, New Mexico, Indiana, Arkansas, Oklahoma and Iowa.
States doing the most to promote energy-saving policies to reduce oil dependency and protect residents from oil price spikes include California, New York, Connecticut, Washington, Pennsylvania, New Jersey, Rhode Island, New Mexico, Colorado and Maryland.

Despite a growing focus on alternative energy, Texas, where the petroleum industry remains a large part of the economy, has a long way to go to wean itself from oil dependency. The report ranks the Lone Star State 36th on the solutions list.

Guerra: TxDOT didn't coordinate with Aquifer Authority on 281 toll road

Posted on August 10, 2008 by Terri Hall

Link to article here. What’s so damaging about this revelation is that the feds gave a “Finding of No Significant Impact” on this project over the Edwards Aquifer (extremely environmentally sensitive area and the sole source of drinking water for nearly 2 million people)when TxDOT didn’t even solicit comment from or coordinate this massive project with the Edwards Aquifer Authority!

The email correspondence showing that the management of TxDOT pre-determined the outcome of “no significant impact” along with the fact that they didn’t bother to coordinate with the AQUIFER AUTHORITY on potential impacts to the aquifer (when they state in their study that they had) proves a fraudulent study was submitted to the feds. TxDOT just can’t seem to play by the rules. They have to deceive and rig the results in order to railroad their agenda. Well, the light of day is now shining on these ill-conceived toll plans, and the citizens are seeking justice.

NOTE: AGUA and People for Efficient Transportation (PET, Inc.) filed the lawsuit in 2005. TURF and AGUA filed the current lawsuit in February this year.

TxDOT documents not reassuring about toll-road concerns
By Carlos Guerra
Express-News Columnist
August 9, 2008

Long faulted for its arrogance, the Texas Department of Transportation also is under fire for embracing toll roads.

They are forced to because gas taxes can’t meet growing highway needs, TxDOT officials say. So they will finance a lot of new highway lanes by tolling new and existing roads, and by handing some publicly owned right-of-way to private toll-road builders and operators in exchange for letting them collect tolls for decades.

TxDOT and the Alamo Regional Mobility Authority plan to pay for a huge expansion project by tolling 70 miles of U.S. 281, Loop 1604 and other area highways.

“It’s a massive, multibillion-dollar project over the most sensitive parts of the (Edwards Aquifer) recharge zone,” says Bill Bunch, an attorney who, along with Andrew Hawkins, represents Aquifer Guardians in Urban Areas and Texans Uniting for Reform and Freedom.

Construction on the 281-1604 project — which will be 19 lanes wide in parts — started in late 2005, and within weeks, a contractor ruptured a sewer main, spilling raw sewage for three weeks before it was fixed.

The two groups sued TxDOT and the regional mobility authority over their environmental assessment — required by the National Environmental Policy Act to get federal funds — which the groups say is flawed and grossly insufficient.

And they sued the Federal Highway Administration (FHWA) for approving TxDOT’s environmental assessment and demanded a more extensive environmental impact statement (EIS) before irreparable harm is done to the aquifer.

The massive highways will traverse numerous recharge features and a lot of the Edwards’ contributing zone. That notwithstanding, TxDOT’s environmental assessment included a “finding of no significant impact,” which in bureaucratize is written: “FONSI.”

Bunch and Hawkins pressed their case, and just before it went to court, TxDOT and the RMA raised the white flag and the federal agency “disapproved” TxDOT’s environmental assessment, forcing the state agency and the RMA to conduct the much more extensive EIS.

In the conduct of legal discovery, the attorneys recently uncovered some apparently damning documents.

In TxDOT’s environmental assessment, the agency asserts that it “coordinated with” and “solicited comments and input regarding the proposed action and potential issues that should be considered during the development of the environmental assessment” from a number of agencies, one of which was the Edward Aquifer Authority.

“Hogwash,” says Hawkins. “We scoured everything in (TxDOT’s) administrative record and found no letter asking for comment or coordination.”

In fact, all they found was a “Record of Conversation” of a 25-minute phone call made by a TxDOT contractor to an aquifer authority staffer asking for technical info. That isn’t exactly “comment and coordination.”

But to be on the safe side, the attorneys checked with the aquifer authority for any correspondence whatsoever from TxDOT from December 2005 to the present concerning the planned toll roads on U.S. 281 and Loop 1604. “And they wrote us back saying we have nothing, no e-mail, no correspondence. Nothing,” Bunch says.

The lawyers did find two e-mails from a TxDOT geologist and a biologist that raise questions about the impartiality of their science.

In one to the U.S. Fish and Wildlife Service, the biologist wrote: “At the moment we are trying to get a FONSI from the FHWA by September.”

And the geologist wrote a colleague at TxDOT saying that he was “unclear on … the extent to which we need to study (the) 1604 corridor,” before adding, “plus I know mgmt want to get (the) FONSI on 1604 right after 281 so we really need to get working on both.”

Guerra: TxDOT didn’t coordinate with Aquifer Authority on 281 toll road