Link to article here.

Tollways may or may not be money machine
By BEN WEAR
Austin American Statesman
February 11, 2008

It was the first, and seemingly best, argument I heard for toll roads when I got this beat more than four years ago. Haven’t heard it much lately, however.

Toll roads, Texas Department of Transportation officials said, would be an “economic engine” for highway financing as gas taxes grow increasingly scarce, generating excess cash that could be spent on other roads. Like in Houston, they’d say, where the Harris County Toll Road Authority has spun off cash for other nontoll projects and still has hundreds of millions of dollars stockpiled.

But when TxDOT officials the other day gave legislators a spreadsheet with the agency’s expected cash flow through 2015, I didn’t see any toll road profits in there. I asked James Bass, the agency’s chief financial officer, about that. After all, TxDOT owns six toll roads now, including three in the Austin area. Won’t they be throwing off some cash, I asked Bass?

Not anytime soon, he said.

So I looked at the “official statement” for the Central Texas Turnpike Project, which is the overall name for the Loop 1, Texas 45 North and Texas 130 tollways. It was a thick document shared with the investment community before the agency went out and borrowed $2.2 billion on the bond market in 2002.

The numbers are startling. It looks like the only thing throwing off dollars will be TxDOT itself.

According to that statement, the three roads will make $8.7 billion in toll revenue through 2042. In that same time, there will be $7.2 billion in debt payments for that borrowed $2.2 billion, $1.1 billion in operations costs, $752 million in routine maintenance and $388 million for long-term maintenance. The net of all that? Almost $750 million in the hole over 35 years.

More like an economic jalopy.

Of course, the three roads could do better than expected. That happens. But sometimes tollways underperform instead.

Parts of the Austin toll roads have been open for 15 months now and have charged tolls since last January. Hard to draw any firm conclusions from the limited history. But at first glance, the results don’t scream, “Bonanza!”

The three roads made $27.5 million from January through November, $3.6 million in the last month, which equates to about $31 million for the first full year. That’s well under the $42.4 million first-year projection in the official statement. That statement shows revenue nearly doubling in three years, to $79.4 million, and then topping $100 million in year five.

Will that actually happen? Only 75 percent of Texas 130 is open — the rest opens in April — and another tollway completing the Austin bypass to Interstate 35 should be done in about a year. Maybe the tollways — with that loop done, with economic growth and more consumer comfort with tolls — will hit the targets. And lose three quarters of a billion dollars over the next generation.

Economic engine? We’ll see.

Link to article here.

Michael Stravato for The New York Times

Leon Little, right, and Dean Nesloney attended a meeting last week in Robstown, Tex., on the Trans-Texas Corridor project, which could cut through their land.

Proposal in Texas for a Public-Private Toll Road System Raises an Outcry
By RALPH BLUMENTHAL
New York Times
February 10, 2008
ROBSTOWN, Tex. — Leon Little’s farm here near Corpus Christi would not be seized for Texas’s proposed $184-billion-plus superhighway project for 5 or 10 years, if ever.

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The Trans-Texas Corridor

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Michael Stravato for The New York Times

Near Victoria, Tex., a sign announces the coming of Interstate 69, which is now listed as part of a major state highway project.

But Mr. Little was alarmed enough to show up Wednesday night with hundreds of his South Texas coastal neighbors to do what the Texas Department of Transportation has been urging: “Go ahead, don’t hold back.”

Don’t worry. Texans have gotten the message, swamping hearings and town meetings across the state to grill and often excoriate agency officials about a colossal traffic makeover known as the Trans-Texas Corridor, a public-private partnership unrivaled in the state’s — or probably any state’s — history, that would stretch well into the century and, if completed in full, end up costing around $200 billion.

“Is your road more important than the foodstuffs we put together for you?” asked Mr. Little, glaring at transportation officials at the town meeting.

The plan envisions a 4,000-mile network of new toll roads, with car and truck lanes, rail lines, and pipeline and utilities zones, to bypass congested cities and speed freight to and from Mexico.

Critics abound, but experts say Texas is addressing a problem certain to worsen nationally in coming decades: the price of gasoline may be rising but revenue from gasoline taxes is not, and with the rise of more fuel-efficient vehicles, less money is being raised for highway projects, even as traffic grows.

So transportation planners are increasingly looking to the private sector to put up construction money for toll roads in return for revenue from motorists.

“We’re relying on 1993 income for 2008 output,” said Robert Harrison, deputy director of the Center for Transportation Research at the University of Texas in Austin. “It’s unsustainable.”

Texas has been a victim of its own success, officials say. From July 2006 to July 2007 it added more people than any other state — nearly half a million, beating California by nearly 200,000. In the past quarter century, they say, the state’s population has grown by nearly 60 percent while road use has doubled.

“They make fun of us, but a whole bunch of people want to be Texans,” said Phillip E. Russell, assistant executive director of the Texas Transportation Department, who presided over the meeting here at the Nueces County Fairgrounds, along with the agency’s executive director, Amadeo Saenz.

Mr. Saenz said that Texas highways averaged 46 years of age and that the state was running out of money to maintain them, let alone build new roads. “The problem is our needs far outweigh the money available,” he said.

At particular issue in South Texas is a stretch of federal Highways 77 and 59 designated part of a proposed new segment of the federal highway system, I-69. But what was to have been a new interstate long sought by some businessmen and local officials is now listed as TTC-69, or part of the Trans-Texas Corridor.

“I don’t think people realize it has morphed into a toll road,” said Linda Stall, founder of a opposition group called Corridor Watch. Ms. Stall said the project was backed by “the guys who build, financiers and the suits.”

“The only person who loses is the citizen,” she said. “We’re paying everyone’s profit.” She also said investors would “cherry pick” the most lucrative toll routes, leaving other sections unfinanced.

Mr. Saenz said some routes might not require bypassing. “The no-build alternative is still an alternative,” he said.

The corridor project grew out of the 2002 governor’s race when Rick Perry, the former Republican lieutenant governor who had completed George W. Bush’s unfinished term, surprised transportation experts by taking ideas they had discussed a decade earlier, to little interest, and “supersizing them,” as one recalled.

The project grew to consist of four “priority segments:” new multimodal toll roads up to 1,200 feet wide paralleling Interstates 35 and 37 from Denison in North Texas to the Rio Grande Valley; a proposed I-69 from Texarkana to Houston and Laredo; I-45 from Dallas-Fort Worth to Houston; and I-10 from El Paso to Orange on the Louisiana border. But the exact routes are years away from being designated.

With construction, land acquisition and other expenses, the cost was estimated in 2002 at up to $183.5 billion, all of it to be put up by private investors, state officials say. No existing roads would gain tolls.

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The Trans-Texas Corridor

The first planning contract, for a segment paralleling I-35, was awarded in 2004 to a partnership of Cintra, a publicly traded transportation giant based in Madrid, and the Zachary Construction Corporation of San Antonio. But lawmakers, concerned over the public outcry, put the brakes on additional contracts until next year.

Legislators also asked transportation officials last week to explain why they were complaining of budget shortfalls while failing to use $9 billion in voter-approved bonding authority.

Now that 12 town meetings have concluded and the agency this month began the first of 46 public hearings to run through next month, Mr. Saenz said, “We have now gotten to first base.”

Once the Federal Highway Administration signed off on the plans, he said, the agency, perhaps next year, could begin a second phase of four to six years to select actual routes. But meanwhile, people here complained, they were being left hanging.

“Six to 15 years puts us in limbo forever,” said John Floyd, whose antiques shop is the only business in San Patricio, a historic crossroads dating from 1828 and on the map as a possible corridor route.

David Helpenstell, himself a soon-to-retire employee of the transportation department, also felt threatened. “Your proposed alternate passes through the middle of my house,” he said. Now even if he wanted to sell, he said, “nobody would buy it.”

At least Texas could share the road wealth, said John Coggin of Bluntzer, suggesting that displaced landowners get a percentage of toll revenues, just as they would for mineral rights.

On his nearby farm, where he was turning over the soil for sunflowers, Dean Nesloney climbed out of his tractor to show where he feared TTC-69 could go. “It’s kind of like this,” Mr. Nesloney said extending his arms diagonally across his field.

“They’d probably take it all up,” he said. “Maybe leave me some little bitty corners.”

Link to article here.

We couldn’t agree with Senator John Carona more…we don’t need a political hack like Deirdre Delisi as Transportation Commissioner! We’d all be happy to see Interim Chair Hope Andrade get the boot, too. All she wants for San Antonio is higher transportation taxes, market-based tolls among them.

Perry’s decision could shake up highway board
Many are seeking Williamson’s spot; governor also may bump chairwoman
By PEGGY FIKAC
Houston Chronicle, Austin Bureau
Feb. 8, 2008
AUSTIN — Gov. Rick Perry’s former chief of staff, a big campaign donor and people active in North Texas transportation are among contenders for a spot on the powerful commission that oversees state highways.

There’s one vacancy on the five-member Texas Transportation Commission, left by the death of chairman Ric Williamson, but a Perry spokesman left open the possibility Friday that he could cause a bigger shake-up by deciding to replace Hope Andrade, of San Antonio.

The interim chairwoman, Andrade is the only commissioner from South Texas. Her term expired last year.

Andrade said the GOP governor has neither indicated he’ll replace her nor assured her that she’ll stay. Other commissioners are Ned Holmes, of Houston, Ted Houghton Jr., of El Paso and Fred Underwood, of Lubbock.

“I will do whatever the governor asks me to do,” said Andrade, who was appointed by Perry in late 2003. “Whether it’s one month, three months or one year, I’m going to do the best job I can to bring us all together to work on finding long-term solutions to our transportation funding challenges.”

Perry spokesman Robert Black said replacing Andrade is “within the governor’s purview” but “no decision has been made yet.”

Matter of geography?

Sen. Jeff Wentworth, R-San Antonio, said, “We hope to keep Hope Andrade on the commission. … She has been a hardworking, conscientious and able advocate for the needs, transportation-wise, of our part of the state. I think she deserves more time as a member.”Perry’s office made it clear that his former chief of staff, Deirdre Delisi, of Austin, is in the running despite reported concerns by Sen. John Carona, R-Dallas, chairman of the Senate Transportation and Homeland Security Committee.

Like other officials from the Dallas-Fort Worth area, Carona is pushing for an appointee who would give that region the geographic representation it lost with the death of Williamson, who was from Weatherford.

Among those being considered is former TXU chief executive and chairman Erle Nye, of Dallas, who has donated $203,000 to Perry since 2000 and would have to give up his seat on the Texas A&M University System Board of Regents to serve on the transportation panel. Black said contributions have no effect on appointments.

Looking for a post

Other applicants include former Fort Worth City Councilman Bill Meadows, a member of the North Texas Tollway Authority; former Duncanville City Councilman Grady Smithey Jr., a Perry appointee to a panel studying private participation in toll projects and secretary of the Dallas Regional Mobility Coalition; former Denton County Commissioner Sandy Jacobs; Benny Fogleman, in insurance sales in Livingston; Alan Wade Tompkins, vice president and general counsel for Unity Hunt Inc. in Dallas; and Southlake Mayor Andrew Wambsganss.Lawmakers have said it’s important that the appointment take into account the need to smooth relations between the Legislature and the commission. The fiery Williamson tangled with lawmakers in pushing Perry’s transportation vision, including private investment in toll roads, an avenue the Legislature sought to curtail.

Carona said in a speech that he was opposed to Delisi being appointed, the Fort Worth Star-Telegram reported.

“We don’t need political hacks in that position,” Carona said, according to the newspaper report. “We need people who understand the business. We need people who understand transportation. We don’t need someone who’s unpopular with the Legislature.”

Black said, “I’m really not going to dignify that, other than to say I think Deirdre Delisi, over her tenure in state government, has proven herself to be an exceptional leader and incredibly talented individual.”

Delisi, 35, was Perry’s gubernatorial campaign manager in 2002 and worked in George W. Bush’s first presidential campaign.

Link to article here.

How refreshing to see a board that actually votes to represent the will of the people.

California commission nixes toll road near famous surf break, though backers vow to appeal
By GILLIAN FLACCUS
Associated Press
February 7, 2008

DEL MAR, Calif. – Surfers and environmentalists threw a roadblock in front of a proposed toll road through one of the world’s best surf breaks — but backers say they will fight on.

The California Coastal Commission voted 8-2 late Wednesday against the project, which critics said would wipe out about a dozen endangered or threatened coastal species, decimate an ancient Indian burial ground and block sediment that creates world-class waves at San Onofre State Beach.

The panel’s vote means that commissioners found the project doesn’t meet with the legal requirements of the federal Coastal Zone Management Act and California’s Coastal Act.

But toll road officials said they will file an appeal next week with the U.S. Secretary of Commerce to keep the $875 million project alive.

“It’s not over yet,” said Lance MacLean, chairman of the Foothill Eastern Transportation Corridor Agency. “We still believe firmly that our project as proposed provides the best traffic relief in the most environmentally sound way.”

An estimated 3,000 people — surfers, environmentalists, commuters, union activists and tribal members — showed up for the marathon commission hearing, some with surfboards in tow.

Opponents hoisted signs that read “Protect Our Parks” and “Highway from Hell.” They erupted in raucous cheering and dancing as the vote was tallied.

“When I look at this project, I can’t believe it,” Commissioner Sara Wan said before the vote. “This looks like something from the 1950s, not from now, when we know how endangered our planet is.

“I guess if you throw enough spaghetti at the wall, you hope that some of it will stick or at least prevent the majority of folks from understanding the issues.”

Supporters said the turnpike was necessary to relieve crushing rush hour traffic on Interstate 5, where 125,000 cars pass each day between Orange County and San Diego. An alternative — widening the I-5 — would destroy more than 1,200 homes and businesses.

They also argued the road would increase access to the pristine beach for low-income and minority families and provide an alternate escape route in case of a wildfire.

“The area is in gridlock most of the time,” said Tom Margro, the toll road agency’s chief executive officer. “The fact that Southern California needs an alternative to the I-5 in this area has been known for decades.”

But speakers at the hearing questioned the wisdom of intruding on the state’s fifth-most popular state park and its famous surf break for the benefit of commuters. The break, Trestles, attracted 400,000 surfers last year and contributes up to $13 million to the local economy, the commission staff said.

Link to article here.

Motorists forced to face toll roads as state plays budget shell game
By Jaime Castillo
San Antonio Express-News
02/06/2008

It’s amazing what pushes the outrage needle these days.Web hits mushroom and national debate ensues when a blowhard like Al Sharpton accuses another blowhard like Don Imus of making dumb statements.

If Britney so much as leaves her compound, the world stands still.

But here in Texas, it’s a mere annoyance that the Legislature and state transportation officials are making bigger fools out of us than we previously thought.

Gridlocked Texas drivers have known for some time that they are being held hostage, caught between a vice of gutless state budgeting and Gov. Rick Perry’s love affair with toll roads.

We’ve been asked to swallow tolled highways as the only way out of a situation in which construction costs are rising as fast or faster than a booming general population.

And we’ve been told to do this while state lawmakers poke us in the eye with one hand and use the other to continue to drain highway dollars for things that have nothing to do with building roads.

In the current two-year state budget, another $1.57 billion will be diverted from road building to allow the supposedly fiscally conservative state leadership to balance the books in other areas.

And now we come to find out, the situation is even worse.

During a Senate hearing Tuesday, it was revealed that the Texas Department of Transportation made a $1.1 billion accounting error when it erroneously tallied some bond proceeds twice.

The news came a day after a story by Peggy Fikac in the Express-News showing that more than $3 billion in dedicated fees and taxes will go unspent for their specified purposes, which include trauma care and clean-air efforts.

The reason?

State lawmakers are using the money to shore up the budget in other areas.

As one economist put it: “We’re basically borrowing from ourselves. It’s like using the rent money to pay the food bill.”

A governor’s spokesman pointed the finger at the Legislature, saying lawmakers need “to square up with Texans” and make the budgeting process more “transparent.”

Rep. Warren Chisum, the Republican chairman of the budget-writing House Appropriations Committee, dismissed the whole matter as nothing more than “a bookkeeping deal.”

In this void of accountability, the state is continuing a long tradition of watching revenue from things like the state lottery go to places other than where officials told us it was going to go.

A major subplot of this year’s state legislative elections is the future of unpopular House Speaker Tom Craddick.

If a coalition of moderates and Democrats succeed in toppling him, they should remain mindful of the fate of the current Democratic Congress.

After being handed a majority in the U.S. House by frustrated voters, the new leadership shamefully plunged ahead and continued the pork-barrel system of funding local projects through things called budget earmarks.

Today, the approval ratings of Congress are worse than those of war-torn President Bush.

We Texans now know that our state’s budgetary shell game involves highways, state parks, trauma care and clean-air efforts.

What we don’t know is if Texas lawmakers — from either political party — will ever understand why this is wrong.

Link to article here.

This is one time where I wish a prediction weren’t right. From the beginning, we’ve been concerned that toll roads will diminish home values, and as this article attests, that’s precisely what’s happening right now in north central Bexar County. Stone Oak and even the Hill Country further north is fast becoming a ghost town. In certain areas, there are nearly as many homes with “for sale” signs as there are homes without.

Traffic…Toll Roads Threat Keeps Some From Buying Beyond Loop 410
What do toll roads and real estate have in common? Nothing? Something? Plenty
By Larry Nolan Stewart
Real Estate News
February 6, 2008

As if things were not tough enough, selling your home in some areas around San Antonio can be complicated by the growing unpopularity of driving north on U. S. Highway 281 or west on IH-10. There are many who claim that over development and under planning have created a traffic mess that turns many buyers in other directions. By the time house hunters navigate to Stone Oak and points beyond, for a simple house hunt they envision their investment of many hours of time and dollars on fuel just to go to and from work in the city. Time conscious real estate professionals are not wild about the drive either. As a drive to the Texas Hill Country turns into a drive into the “paved over” Texas Hill Country the song of the hills grows weak to some buyers.

The trip to Boerne is about the same. When you get there you reach a nice small town that is being turned into little San Antonio. The traffic jams are a revenue builder for law enforcement as frustrated drivers finally get a stretch of open road and put the hammer down! The rearview mirror turns red and the blood pressure goes up when a host of DPS, county sheriffs and others lay in wait for the hapless motorists to finally see an end to stop and go traffic.

This is not to say don’t go. My comments are simply a reflection of what I see and hear. Buyers are discovering China Grove and Lavernia to the east and Wilson County down around Floresville. There is life in the other than north directions. Inside Loop 410 is looking better to many.

Buyers seeking the country life would do well to assess the situation and make certain that the trade off is one they can be happy with.

TexDot and many local politicians have been dictating toll roads as “THE” solution rather than “A” solution. Activists like Terri Hall the San Antonio Toll Party, R. G. Griffing, a.k.a. “Dr. Dan the Scandal Man” at his San Antonio Lightning on line newspaper, and our local talk radio hosts have created so much media attention to TexDot and Governor Perry’s toll road agenda, a few Texas Senators have made scathing critical comments to and about TexDot. We should remember that we did not hear much from the senators when the toll roads fight was young. Could it be that their wrath is real or is it a case of checking to see which way the wind is blowing after the above local champions for honesty did the senators jobs for them? Don’t fall into unconditional love with the lawmakers over this sudden swing against TexDot. They still need constant watching. Let them know that you expect changes.

Link to article here.
Getting an “earful” is putting it mildly…TxDOT had a public flogging. However, actions speak louder than words. Will these senators have the spine to take on this Governor in May of 2009 as the next legislative session winds down and he dishes more threats and ultimatums? Will these same legislators GUT the Texas Department of Transportation and enact REAL reforms, or was yesterday’s hearing all hot air? What will likely determine that is the grassroots revolt now underway. The Lege is either with us, or they’re with the lobbyists and the Governor. There is no in between.

TxDOT gets earful at Senate hearing
02/05/2008
By Patrick Driscoll
Express-News

AUSTIN — There was plenty of blame to go around but little trust Tuesday as Texas senators probed Texas Department of Transportation finances, promises and actions — scrutiny that could last another year.Lawmakers, trying to figure out why the department this year suddenly faces funding shortfalls, didn’t like what they heard at a joint hearing of the Senate finance and transportation committees.

Sen. Tommy Williams, R-The Woodlands, after listening to state auditors and budget officials describe the agency’s bookkeeping, jumped the gate before TxDOT even got a word out.

“It doesn’t matter what they come up and tell us, if they have poor internal controls,” he told his colleagues. “I don’t have a lot of confidence with what’s coming out of that shop over there.”

More than half a dozen senators took turns slinging similar barbs. The sharpest accusation, verbalized by a few, was that TxDOT may have created a funding crisis after the Legislature last spring put a leash on private financing of toll roads and tasked another committee to study the merits.

“There are many, many people, myself included, who believe this is a ploy to pressure us to go back to toll roads,” said Sen. Judith Zaffirini, D-Laredo.

Last July, after state lawmakers went home, the agency took another look at its finances. There were federal cutbacks, more state diversions, inflation and some expected drying up of private toll investments to deal with.

Bottom line: TxDOT was headed into the red — $3.6 billion by 2015. The agency said it would have to slice out $1.1 billion in projects this fiscal year, on top of $900 million pushed back months before because projections had been too optimistic. That left just $3.1 billion for construction, way down from $5 billion in 2006, dubbed the “go-go year.”

But what wasn’t widely known, until Tuesday, was that the $1.1 billion was an accounting error. That money was never there to begin with — some bean counters or planners had tallied some bond proceeds twice.

“Let me state right off that we should have done a better job of anticipating this state of affairs,” TxDOT Director Amadeo Saenz said in a written statement to senators.

Senators were aghast.

“You’ve got to be kidding,” said Sen. Kip Averitt, R-Waco.

Zaffirini said TxDOT officials should have pointed the finger at themselves months ago instead of blaming lawmakers for their woes. She said a Dec. 5 talking-points paper, just handed to her, never mentions the agency’s own goofs.

Saenz, pointing to a Dec. 10 talking-points paper in front of him, said it does mention the inflated projections.

They literally were on different pages.

Meanwhile, Saenz recently reorganized staff so that planners, schedulers and bill payers will all report to the finance director.

“We have a system and that system needs to be improved,” he told the senators. “We’re working on that.”

Finance Committee Chairman Steve Ogden, R-Bryan, said something definitely needs to change. While holding a TxDOT balance sheet, he said he knows how to do a cash-flow statement and what he was looking at wasn’t that.

“I mean, this is screwed up,” he said. “This is bad.”

The other big questions of the day had to do with why TxDOT won’t use $2.9 billion in available bonds, or include another $5 billion approved by voters in November in financial projections.

Transportation officials said it’s because they don’t know if legislators will pay debt service on the $2.9 billion. Otherwise, some road maintenance would have to be deferred.

And as far as the $5 billion, which would be paid back with an infusion of general funds rather that relying on existing flows of gas taxes and other driver fees, the Legislature still has to make that appropriation, which could happen next year.

“We want to make sure that we do not leave this agency in debt,” said Hope Andrade, chairwoman of the Texas Transportation Commission, which oversees TxDOT. “As long as we can work together on how we can pay the debt, we will be open to any option.”

Trust us, senators replied. But, they added, with construction inflation outstripping interest rates, it’s best to put the $2.9 billion in bonds into action.

“We expect you to issue that debt,” Transportation Committee Chairman John Carona, R-Dallas, said
_____________________________
Link to article here.

TxDOT
$1 billion error caused cash crunch
Agency officials say they double-counted bond revenue; legislators remain skeptical about legitimacy of fiscal ‘crisis’
By Ben Wear
Austin American Statesman

But lawmakers, always skeptical, were often openly hostile during a lengthy Senate committee hearing that amounted to a thorough wood-shedding of TxDOT. They let department officials know that they remain suspicious about the legitimacy of the fiscal crisis.

Texas Transportation Commission members, said state Sen. Kirk Watson, D-Austin, “have an agenda. And that’s to privatize the second-largest (highway) system in the world. And you are hell-bent-for-leather to do that.”

State Sen. Tommy Williams, R-The Woodlands, pushed for a third party to look at TxDOT’s books.

“It’s important to me that we get the state auditor’s office in there as quickly as possible,” said Williams, who carried legislation last year that substantially curtailed TxDOT’s authority to agree to long-term leases with private companies to build and run tollways.

TxDOT’s executive director, Amadeo Saenz, said he would welcome an audit.

Saenz, TxDOT Chief Financial Officer James Bass and three transportation commissioners spent three hours answering questions in an unusual, out-of-session joint meeting of the Senate Finance and the Senate Transportation and Homeland Security committees.

TxDOT officials first announced a money shortage in November, ascribing it to a number of factors: inflation, reduced federal transportation grants, increased road maintenance needs and, most tellingly to legislators, the loss of revenue from those private toll road leases. Until Tuesday, top TxDOT officials had said nothing publicly about having made a serious bureaucratic error.

According to Saenz and Bass, the $1.1 billion that was counted twice was money borrowed through selling bonds. As a consequence, top agency officials told TxDOT’s various divisions and districts that they had $4.2 billion to spend this fiscal year.

“As soon as I heard that number,” Bass said, “I knew it was an overestimate.”

Soon after, with so-called “lettings” for 2008 trimmed to $3.1 billion, TxDOT officials announced huge cuts in spending on right of way and project design, as well as a freeze on the start of many road projects that were ready to go. That sudden halt to projects got legislators’ attention — and their goat. The Legislature and voters last year gave the agency authorization to borrow an additional $8 billion — though $5 billion of that will require further legislative action in 2009 — and so legislators don’t like that crucial road projects are suddenly up on blocks.

It didn’t take long after the freeze announcement for the idea to take hold that TxDOT was manufacturing a crisis to coerce legislators into backing away from the limits on private toll road contracts.

Tuesday’s alternative explanation may have been only partially helpful to the agency.

“So, what you’re saying is, it’s not a political effort on your part,” Watson said. “It’s a lack of competence.”

Saenz said he has brought the planning function, along with project procurement, under Bass’ control to avoid the sort of left hand-right hand problem that caused the error.

How state and federal money goes into and out of TxDOT has long been a puzzle, one made only more complex by the addition of toll road financing and a growing practice of delegating road building to local agencies. Lawmakers, gazing at balance sheets gray with numbers and listening to Bass’ clarifications of them, said the opaque nature of how TxDOT presents its finances makes it hard to trust the numbers.

“This is screwed up,” said state Sen. Steve Ogden, R-Bryan, chairman of the Finance Committee, brandishing a revenue-and-expense table. “This is really bad. I heard your explanation. But based on the data, it doesn’t match.”

Link to article here.

Perry, Dewhurst at odds over TxDOT funding status
02/04/2008
By Patrick Driscoll
and Peggy Fikac
Express-News

On the eve of a legislative hearing on whether the Texas Department of Transportation is going broke or crying wolf, the state’s top two leaders squared off on opposite sides.Lt. Gov. David Dewhurst said TxDOT has some explaining to do about massive construction cutbacks, which some claim are a ruse to pressure state lawmakers into backing off last year’s restrictions on private-sector financing of toll roads.

Dewhurst called the Senate finance and transportation committees into a hearing today, set for 9 a.m. in Room E1.036 of the Capitol Extension, to find out why TxDOT says it’ll be $3.6 billion in the hole by 2015 when it can sell $9 billion in bonds.

“I am concerned the forecasting sheet used to produce that number does not show the complete financial picture,” he said in a letter Friday to Hope Andrade, chairwoman of the Texas Transportation Commission, which oversees TxDOT.

But Gov. Rick Perry, who appoints the commission and is devoted to tolling and private investments as the best way to pay for new highway lanes, believes state lawmakers have dropped the funding ball.

“The governor wants a long-term solution” and has put forth ideas, Perry spokesman Robert Black said. “It’s time for the Legislature to step up and do the same.”

Today’s hearing on TxDOT is just the latest round of the scrutiny, which intensified a year ago and continues to get hotter as toll critics burn the ears of officials.

Also Monday, Assistant District Attorney Beverly Mathews of the Travis County District Attorney’s office said the office is investigating a complaint that TxDOT illegally lobbied and promoted toll roads.

“We have opened an investigation,” Mathews said, declining to give details.

Terri Hall of Texans Uniting for Reform and Freedom, which filed a civil lawsuit on the issue last year, said it’s about time.

“A big fat yippee,” she said. “People are so fed up with TxDOT, which is so out of control.”

TxDOT officials say they did nothing wrong.

Perry and TxDOT’s widespread push to use toll roads to make up for frozen gas taxes being swallowed by inflation hit a rough patch last year. Many lawmakers who previously passed enabling toll bills had since become skittish over public outcries.

Last year’s Senate Bill 792 reined in toll and privatization plans and called for a committee to study private financing. TxDOT also is going through a sunset review.

Before the 2007 legislative session ended, the agency began warning of a looming financial crisis. Officials blamed federal cutbacks, diversions of state road funds, inflation and the Legislature’s toll restrictions.

By November, TxDOT said it will have to slash spending for engineering and land purchases and stop any new construction after Feb. 1.

The agency has delayed $135 million worth of projects in the San Antonio region, including $64 million in Bexar County. Other areas saw similar cuts, such as an estimated $276 million in four counties in and around Houston.

Dewhurst said TxDOT should have told legislators about such problems last year. He also pointed out that lawmakers passed $3 billion in highway fund bonds, got voter approval for $5 billion in general obligation bonds, and that $1.3 billion in Texas Mobility Fund bonds still may be available.

“At the committee hearing,” he wrote to Andrade, “I hope to see that TxDOT has provided a cash forecast sheet that includes all the financial tools.”

Black said the $5 billion figure is fiction because the Legislature hasn’t authorized debt service, which could happen in 2009. And TxDOT did count the $1.3 billion in its projections.

But Perry advised the agency not to issue the $3 billion.

“Because it’s a Band-Aid,” Black said. “It is yet another short-term fix that will only put us into debt further because it is building something today we’ll have to pay for tomorrow.”