Kicked in the Asphalt
Ric Williamson and an entourage from TxDOT appeared before the Appropriations Committee today. Think of it as the first day of hunting season. Everyone wanted the Highway Commission chairman’s head. The two most frequent complaints were (1) that the footprint of the Corridor freeways was far too extensive and (2) that nobody knew what was in the bill (HB 3588) that they voted on in 2003. Member after member spoke of how he or she was getting beaten up back home because of the Corridor.
The state auditor’s office, which released a report raising questions about TxDOT’s accounting practices and the state’s potential liabilities last Friday, went over the main items in the report (see “Auditor’s Report Calls for Legislative Reforms of Trans-Texas Corridor” posting, February 25). Kolkhorst, a vociferous critic of TxDOT and Williamson, was concerned that the state might be on the hook for public money. The auditor’s office testified that they had found potential uses of public funds: the cost of the development plan, engineering and environmental expenses, legal services (some $28.9 million so far), and some costs for rail projects. “I thought when we started down the road of the Trans-Texas Corridor, the whole idea was that we would enter into CDAs (comprehensive development agreements) because this was all new money, not state money, and we’re using federal dollars and concessions up front,” she said, adding. “Why doesn’t the state just do this?” That last question came up again and again.
Fred Brown joined in the fun. “I feel like I’ve been kicked in the asphalt. This noncompete clause has really got me worried. [If TxDOT builds new roads in the vicinity of a Corridor, and the developer can show it is taking traffic away from the Corridor, the state will have to pay for the lost traffic.] We don’t know what our liabilities could be on this. Can we even imagine the consequences to the state for anything that comes anywhere close to where these toll roads are going to be? Do we have the authority that we could put a moratorium on this, or can we specify that the state is not going to sign a noncompete clause. It worries me, especially for 50 years.”
Harper-Brown was concerned about the audit report’s criticism that weaknesses in TxDOT’s accounting “creates risks that the public will not know what the state pays or whether these costs are appropriate.”
Then Gattis took aim at Williamson: “As we did all the dog and pony shows [that is, public hearings about the Corridor], you all had a very well done presentation. You showed the concept, but as part of that plan–maybe I was wrong–my understanding was we were going to build a Corridor, and in each of these Corridors, the entity would build the road and they would place truck lanes, traffic, rail, freight, utilities, and that the great plan of this was no tax dollars. That’s what we were creating, that they would do this deal and it would be paid for by tolls. But that’s not what I’m hearing today. What I’m hearing is that we’re selling segments of roads, and we’re selling the most profitable aspects, car lanes, and it’s not part of the deal that they put in rail or anything else. Am I right or wrong?”
Williamson’s response was a question to the panel: “Are any of you under the impression that we have signed a contract to do anything but plan?” When he was asked about numbers–for example, that Cintra-Zachary would take in over a quarter of a billion dollars in net profit over the life of the contract, he said the numbers were just plugged in and didn’t mean anything. (“It’s very difficult to answer the question the way you put it, because we do not agree with their [the auditors’] assumptions. The $286 billion [in profit] was just a number Cintra Zachary developed in order to proceed. There’s no way on God’s green earth to know what their profits are fifty years from now.” But when he was asked if the Legislature would see the numbers in the real document, he said that it contained proprietary information, and nobody signs contracts if it gives away their financial situation. It was pretty slippery, and exactly the sort of thing that caused lawmakers to lose confidence in the Corridor over the past four years. Even a shrewd lawyer like Gattis couldn’t pin Williamson down. “How do we know this is smart?” he asked. Again, Williamson obfuscated. “Let me ask every member, “Do we have the money to build TTC-35 ourselves?”
It was getting heated.
“What doesn’t make sense to me,” Gattis said, is why don’t we package these deals ourselves. I didn’t realize we were letting [bidders] pick and choose which segments to bid on, where they could get the low hanging fruit.”
“I’m not opposed to toll road–I’ll get slashed for saying that–what I’m really opposed to is moving away from the concept where they money that we generate stays in the region and with the taxpayers who are paying the tolls so that we can reinvest in our communities. We’ve moved beyond our taxpayers, we’re in a private vendors process. I have a problem with regard to a private entity owning a toll road. If I’m the Central Texas Regional Mobility Authority, I want to set those tolls as low as possible and get as many people on them as I possibly can. My goal isn’t cash flow. If I’m the toll road operator, my goal is set the tolls as high as possible, maximize my profit. There’s a definite conflict here.”
Again Williamson dodged the issue: “How much do you value the railroad, the relocation of utilities to the right-of-way to prevent the destruction of private land?” It’s this passive-aggressive defiance that drives legislators crazy. Finally, he did respond directly. “There is only so much debt capacity in a community. You have to wait and catch up or have ad valorem taxpayers pay more money. What we have done is transfer the risk to the private sector.
“No,” Gattis insisted. “You have transferred the risk to my constituents using the Corridor. According to the auditor’s numbers, you’re taking $523 billion from the toll payers and putting them in a private developer’s pocket.”
Williamson: “$523 billion is a fantasy number, a plugged number. It’s hard for us to sit here and argue when you’re asking us questions about a planning document, not a construction contract.”
Williamson has always been his own worst enemy. He has the most inventive mind the Legislature has produced in all the years I have watched it. He touted market-based tuition a decade before the universities did. He changed the way the budget was written. He conceived the Trans-Texas Corridor. But he gets very invested in his ideas, so much so that he bristles not just at criticism but at the suggestion that some of his ideas could be improved by a little tweaking, and when that happens, he can be arrogant or dissembling or both. In his appearance before the committee, he came across as though he was trying to sell the Brooklyn Bridge. And yet, he has a passion for his own proposals that is endearing. He had a memorable exchange with Kolkhorst in which she said her votes for the transportation bill in 2003 was the worst vote she had ever cast, and he said, No, it was your best vote, and he believed it. And maybe, 20 years from now, when the battles over the Corridor have long been forgotten, and Texans are zipping around the state at 80 miles an hour, or even faster on bullet trains, he will be proven right. But he is so unbending, so unwilling to do what he demanded other agencies to do when he was the star member of the Appropriations committee twenty years ago–submit to legislative oversight and control of the purse strings–that he has made himself persona non grata in the Capitol. If lawmakers could vote again, I’m convinced that they would for toll roads operated by the State of Texas. And they may yet have their chance.
Kolkhorst returned for one last round of questioning. “Ric, you’re good,” she said. “If I were sitting where you were sitting, and you were sitting where I am, you’d take my head off.” She talked about how well the Houston toll authority is doing–well enough to pay for toll lanes on the Katy Freeway–and said, “Does the State of Texas not have the ability to do this themselves? Do we need a middle man doing this for us? Can we be our own middle man? Can’t we set up a corporation and do it ourselves?”