CAMPO Mobility Financing Task Force report

THANK YOU MARK!

CAMPO Mobility Financing Task Force report from Monday, Jan 29th, 2007 by Mark Kilgard:

In the course of trying to arrange a meeting with Senator Watson, his aide Steve Scheibal let me know about today's "CAMPO Mobility Financing Task Force" that Kirk Watson has initiated. The meeting was today at noon at the Capitol (room E1.016). It went for three hours (wow, I didn't know it was going to go that long).

The task force members are:

1. Senator Kirk Watson, chair
2. Mayor (of Buda) John Trube, vice chair
3. Commissioner Gerald Daugherty, Travis
4. Commissioner Sarah Eckhardt, Travis
5. Commissioner Cynthia Long, Williamson
6. Judge Liz Sumter, Hays
7. Mayor Pro Tem Betty Dunkerley, Austin
8. Dr. David Ellis, Texas Transportation Institute, Texas A&M
9. Michael Replogle, Transportation Director, Environmental Defense
10. Greg Marshall, The Marshall Group (consultant), Business, Economic Development Capital City African American Chamber of Commerce
11. Frank Fernandez, Executive Director, Community Partnership for the Homeless

The meeting started (and ended) with Kirk Watson expressing his sense of purpose for the task force. He used the words "shelving the Phase 2 toll plan" to describe his actions at the last CAMPO meeting.

Watson provided three long paragraphs to describe the mission of the task force. In short, the claim is the task force is going to construct a "policy framework" for evaluating transportation proposals for Central Texas.

As near as I can tell, the group intends to invite experts to future meetings. Future meetings were proposed for Feb 9, 23, March 2, 12, and 26 with the March dates all tentative. The public is invited to all of them presumably.

It's rather unclear what the group actually provides back to CAMPO except that 7 of the task force members are actually CAMPO Transportation Policy Board members.

The "middle" of the meeting was spent hearing presentations from Bob Daigh (TxDOT District Engineer) and then Michael Aulick (CAMPO Executive Director). This was mostly a background briefing.

Bob spent his talk identifying funding sources for transportation projects. There was a bit of "funding crisis" to his talk when he described the "current balance" for the federal highway construction funding possibly going to zero in 2008. Talking about the "current balance" of something with as much cash flow as the federal construction fund is really beside the point. The slides give you the sense "we are almost out of money" when having a fund's "current balance" going to zero when the fund has inflows of billions of dollars a year is rather different than running out of money. No one on the task force pointed this out.

(Bob also seems to misunderstand the term "Private Equity". Equity implies some sort of ownership stake, but Bob used the term in his slides and discussion to describe any non-governmental financing. Basically he means "private capital" for financing.)

Michael went through his standard slide deck about what CAMPO is and discussed regional forecasts and the CAMPO 2030 plan.

At the meeting, there was a CD prepared by CAMPO with a large number of documents that were collected in hardcopy form in binders for the task force members.

The CD contains two PDFs: "Mobility Financing Task Force Binder.pdf" (492 pages) and "January 29 Final Presentation.pdf" (Michael's 57 slides).

The big document collected a bunch of CAMPO documents, studies, maps, etc.

It had two interesting documents I had not seen before.

Page 234 has a table of toll revenues CAMPO expects the Phase 1 and Phase 2 toll plans to generate. It's not clear when the table was prepared. The data claims to be 2003 dollar data so I assumed that's when the table was prepared. What's interesting is that the introductory paragraph suggests that CAMPO was/is expecting 50% of the construction cost of Phase 2 toll roads to be financed by toll-backed bonds.

They call this 50% "cost recovery". What's interesting is that the actual average capacity of the Phase 2 toll roads (according to the MAFS study) is 29% of the total construction cost, far below the 50% CAMPO hoped (in 2003?) to actually be able to recover.

Page 235 also confirms my working assumption that every 1 cent in gas tax brings in roughly $10 million per year. In 2005, fuel (gas and diesel) within the CAMPO region were 0.93 billion gallons total, forecast to rise to 1.8 billion in 2030.

After the meeting, Michael Aulick pointed me to the gentleman working at TxDOT responsible for the 17 cents/gallon estimate of what a local gas tax option would have to be to replace the Phase 2 toll roads. This estimate was prepared in response to a question posed by Rep. Mark Strama during a past CAMPO meeting.

What I learned for the discussion was that Mark's question was interpreted in an extremely broad way. Their 17 cents/gallon estimate was based on not simply paying for the total construction cost of the Phase 2 toll projects but also replacing ALL the projected revenue (not net income but revenue!) that such projects would provide in the future. This is a really bogus way of interpreting the Mark's question (the TxDOT claimed they asked Mark to make sure this was what he wanted but I have a hard time thinking Mark could have actually wanted his question understood the way TxDOT choose to understand it).

The TxDOT understanding of the question is bogus because there's no need to replace revenue that would go to operating a toll road if there was no actual toll road. This is what lead to a wholly excessive estimate, one repeated in the Statesman to help justify toll conversions. The TxDOT understanding also wanted to provide the FULL construction cost when in a toll financing scheme, toll-backed financing would only cover 29% of the construction cost according to the MAFS study (and 31% according to the 2004 project studies). So TxDOT apparently interpreting Mark's question to pay for 100% of the cost when actual toll conversion only paid for less than one third of the toll conversion construction cost.

I recall Mark asking the question at the CAMPO meeting and I really don't think TxDOT was answering Mark's question in anything approaching a reasonable way.

The gentleman went on to hand me a color TxDOT flier titled "The Texas Transportation Challenge" and point out the flier says a $1.40 per gallon gas tax "is necessary to expand our transportation system as needed over the next 25 years". It was a little odd for me to express my frustration about a gas tax estimate prepared by TxDOT being so out-of-whack and then be told about another estimate that was almost an order-of-magnitude larger than what I had just expressed frustration about.

Most of the task force members seem reasonable. Dr. David Ellis seems particularly appropriate member, very knowledgeable. One member I'm not so sure about is Michael Replogle ( http://www.environmentaldefense.org/page.cfm?tagID=961) who doesn't appear to have any connection to Central Texas (he's from D.C.) and spoke repeatedly and, at times, verbosely about land use planning issues from an anti-sprawl perspective rather than really transportation funding issues.

Hope this gives you a little more sense of the continuing saga...

- Mark Kilgard