Austin Letter

Trusted Insights and Perspectives Since 1979

September 19, 2014

Neal Spelce Austin Letter Masthead

Volume 36, Number 26

Heres a question you should ask the Mayor, the Austin City Council and all the candidates for those offices:  If the voters turn down the $600 million Urban Rail/Roadway bond package November 4th, will they go ahead and spend $400 million of the amount on roadways? 

They can legally do that.  Because, unlike the rail proposal, voter approval is not needed to issue state highway road bonds.  Remember the roadway portion of the package was added to the Urban Rail proposal  as a sop to those who indicated they wouldn’t support a rail-only initiative.  “Add money for roads, and well climb on board,” they said in effect.

The Austin City Council made some major concessions to the road backers hoping that would be enough to insure passage.  As a result, the roadway projects were added, even though back when the Urban Rail discussion began, there was no mention of roads.

Yet, the Council plans to spend a full $600 million to cover construction costs for the first line of Urban Rail.  How do they plan to do that and still spend $400 million on the road projects?  The Council made a commitment to secure federal matching funds though there is no guarantee the federal money is there before proceeding with Urban Rail.

Well then, what are the prospects for passage of local Proposition One?  There are still six weeks to go and a lot can happen during that time but right now, it doesnt look good for passage.  And this is one of the reasons we raised the question at the top of the page.

Of course, it could still pass and a lot of money will be spent in the coming weeks to persuade residents to vote for local PropOne.  But if it failed, would officials vote for roads anyway, or would they say the voters have spoken and not take action?  Now is the time to pin them down – before the election.

The roadway improvements on the ballot are significant, even though some are for initial studies only.  The objective is to move traffic more efficiently and try to reduce congestion (though thats a big task as the area population and cars increase daily).  The projects:  IH35, US183, SH71, RM620, RM1826, RM2222, Parmer Lane, Lamar Blvd and Loop360.



Playing catchup is an expensive proposition.  Especially if you are talking about sidewalks in Austin.  If you live in a neighborhood without sidewalks, what does it take to get the City to install sidewalks and what is the cost citywide?

Don’t know if this is an accurate number, but one city staffer recently told a neighborhood seeking sidewalks that “it is currently estimated that there is over $800,000,000 in new sidewalk construction needed citywide.”  That’s a hunk of change.

And that same city staffer said currently there are “limited resources” to install sidewalks.  As a result, the City of Austin has “developed a prioritization matrix to decide who gets first dibs on what sidewalk money exists.  (It apparently doesn’t matter much if you have been begging for sidewalks for a long time).  Here are some of the factors the city uses to make sidewalk installation decisions:

  • How far is it to schools, major employers, transit stops, government offices, public accommodations and public housing?
  • How many people live in the area?
  • Are there already existing sidewalks in the area?
  • Is the request made by the Americans for Disability Act task force or part of an Adopted Neighborhood Plan?
  • How busy is the street?
  • Have there been reported pedestrian safety concerns?

You get the picture.  These “priorities” were adopted in the 2008 Sidewalk Master Plan.  Sidewalks are funded through Capital Improvement bonds.  And here’s the kicker:  “unfortunately the bond funding for new sidewalk projects has already been allocated,” said the city staff person.

So what are the prospects?  According to this same city staffer:  “If new bond funding becomes available in the future, it will first be committed to projects with Very Highand High priority rankings and there area a large number of these throughout the City.”  (The other rankings are Medium, Low, and Very Low.)



More regulation.  Dont forget the Distracted Driving Ordinance goes into effect in January. 

Unless using a hands-free system, you will be prohibited, while moving in a vehicle or riding a bike, from using the following:  portable devices such as a hand-held mobile phonepersonal digital assistantMP3 or other hand-held music player … electronic reading devicelaptop computerpagerbroadband personal communication deviceGPS or navigation system … electronic gaming device or portable computing device.  Be warned.



Speaking of electronic devices and cars, some thieves are dispensing with smashandgrabtechniques and using high tech means to break into your car.

Without a trace or a sound, thieves can open a locked car using a handheld electronic device, grab what is inside, and be gone in seconds.

The device appears to have some type of key fob like the one you use to open and lock your car.  The thieves walk up to random cars, push a button and see which car doors respond.  We’re told the device can reportedly be purchased online for as little as $5.

It seems like every time something better is invented to prevent criminal activity, the criminals are out there doing the same thing on how to defeat it.  Best advice:  dont leave valuables inside your car.



The Austin areas homebuying frenzy cannot last forever.  With that in mind, one Texas real estate financial expert has four steps the US government can take to enhance the process.

The Chief Economist for the well-regarded Real Estate Center at TexasA&M Mark Dotzour has analyzed changes that can be adopted by your federal government that he feels will enhance the home buying experience.  Here’s how he puts it:

First, the regulatory body writing the Dodd-Frank rules can hurry up and complete their task.  They are way overdue.  The uncertainty this creates causes lenders to be risk averse, especially toward mortgage borrowers.”

Another step is for Fannie Mae and Freddie Mac to make home loans to buyers with less available cash.  That will open up the housing market to many people who do not have a 20% down payment.

“Third, the Office of the Comptroller of the Currency can relax its tough guidelines that discourage banks from making loans for new subdivision developments.  The lack of new building sites makes lots and new homes more expensive.  In several good markets (such as Austin), the lot shortage is acute.”

Finally, there’s a serious labor shortage in many parts of the home construction industry.  The government can help by enhancing the guest worker program to provide muchneeded craftsmen, such as carpenters.

As we have repeatedly reported, residential real estate in the Austin area is smoking hot.  But he feels his suggestions would helpespecially if a cooling-off period becomes the norm.



How about thisA small state agency a really vital one, at that did not use all the money authorized by the Texas LegislatureSo, it is returning $43.2 million to the state.

You may have heard stories over the years about heads of state agencies looking up near the end of their fiscal year and finding out there is money unspent in their budget.  So the word goes out, “lets spend those funds so we can get an increase next time.  I mean, after all, we can’t be seen as not being relevant” – or something to that effect.

Well, along comes the TexasA&M Forest Service (TFS).  These are the guys who work on suppressing wildfires in the state.  A vital need, if there ever was one.  A total of $161 million was authorized by legislators to pay for wildfire suppression efforts in 2011 and 2012.  You may recall those two years were among the worst in state history for the largest and most destructive wildfires.

So, what happened?  TFS Director and State Forester Tom Boggus said TFS employees worked daily with state and federal agencies to obtain allowable reimbursements.  As he put it:  “Thanks in part to their diligence, we have paid the bills in full and currently have funds to return to the state.”

This may not be the end of the story.  TFS officials say another $6.7 million in Federal reimbursement funds is being processed and could be returned to the state as well.



Speaking of budgets, if you travel, youll need to increase your travel budget next year.  Just about all travel expenditures are going up.

Our friends at Kiplinger report you should budget about 5% more, on average, for hotel costs next year (and watch out for fees; some hotels are charging for maid service!).  Car rental rates are expected to rise 3% and restaurant meals, 2.5%.



Dr. Louis Overholster says childhood is like being drunk, everyone remembers what you did, except you.


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