Government Accountability: Voter approval should be required for Austin debt

Robbins: Voter approval should be required for Austin debt


A July 20 American-Statesman editorial took issue with the Austin City Council for planning to issue bonds for buyouts of the homes of Onion Creek flood victims, since these bonds will be sold without voter approval. Upon reading the editorial, I wondered why the Statesman set its threshold for protest at such a low level. The Austin City Charter specifically states that all revenue bonds, including those that finance Austin’s electric and water utilities, be approved by the voters. Yet this Charter provision has been ignored for 16 years.

Article 7, Section 11 of the Austin City Charter clearly reads: “All revenue bonds issued by the city shall first be authorized by a majority of the qualified electors voting at an election held for such purpose.”

The tradition of utility bond approval by Austin voters goes back as far as 1890. However, this practice of voter approval began to be attacked for various reasons beginning in the 1980s.

In 1984, the City Council approved bonds without voter approval to finance the skyrocketing cost of the South Texas Nuclear Project. The council did this because the city was legally required to pay for cost overruns, and believed voters were so outraged by these overruns that they would not vote to keep up payments. The decision was taken to court, which ruled that the city had the right, but not the obligation, to sell bonds without voter approval. The public was so outraged by the episode that the City Council continued to seek voter approval for all other revenue bonds.

In the mid-1980s, several city purchases of buildings were financed with certificates of obligations, which are similar, though not identical, to revenue bonds. While technically complying with the charter, these transactions also raised hackles in the electorate.

Beginning in 2000, the city began purchasing large long-term supplies of renewable energy. These contracts were, in essence, virtual debt. However, they were not revenue bonds, so again, they were not precluded by the charter. Most of these transactions made good business sense and were good for the environment, but the expensive purchase of electricity from a biomass plant in East Texas is still controversial, and the complete terms of this contract have never been made public.

The last revenue bond election in Austin was held in 1998. There was no official reason given for their cessation after this. There were several contributing factors though.

1. A lot of bond money already had been authorized.

2. There was an economic recession in 2001, so growth-related expenditures were limited for a time.

3. The electric utility was over-collecting revenue to buy down debt so it did not need to borrow a lot of money.

4. Some public officials found it convenient to “forget” what was in the charter.

I began protesting their forgetfulness in 2006. The City Council-appointed Charter Revision Committee recommended in 2011 that this section be updated to mandate voter approval of projects costing more than $50 million. However, the City Council never placed the issue of voter approval on the 2012 Charter election ballot for voters to approve.

So here we are today, with a new water treatment plant exceeding a half-billion dollars in cost that will not be needed for a generation, a $2.3 billion biomass contract that continues to raise electric rates, and an acute affordability problem for the majority of Austinites. While voter approval of debt is not a panacea, it is part of a checks-and-balances system that needs to be resuscitated.

The new 10-1 City Council to be elected this fall could be a turning point to enlist more citizen participation in city government. I urge voters in the upcoming November election to ask candidates if we will be allowed to participate in our Charter-prescribed right to economic self-determination. Or will we continue to be ignored by a government that thinks it always knows best?

Water in the News: Austin needs to take measure to control water rates

Robbins: Austin needs to take measure to control water rates

BY PAUL ROBBINS – SPECIAL TO THE AMERICAN-STATESMAN, Posted: 12:00 a.m. Saturday, April 12, 2014

Austin’s cost of living is soaring, and one reason is its water costs. Water rates are falling into a dangerous pattern. It’s called a “death spiral.” Costs go up, inducing market pressure to drive consumption down, eliminating revenue needed to pay fixed costs. So rates go up again, causing consumers to cut back further, and the spiral gets steeper.

At the same time, the Central Texas region is afflicted with record drought, so consumption is heavily discouraged. Water rates will go higher to make up for even more lost revenue.

Austin’s water utility boasts that its conservation efforts have lowered consumption 17 percent per person between 2006 and 2013. This seems impressive until you consider water rates went up 70 percent in the same time period. In fact, between 2000 and 2014, water rates went up 123 percent and wastewater rates went up 130 percent. Inflation only rose 36 percent.

And brace yourselves. It has been announced that by 2019, water rates will need to be increased another 31 percent and wastewater rates another 15 percent. This is despite cutbacks planned for next year’s budget and recent hook-up fee increases for new buildings of almost 200 percent.

The planned increases may not stop here. Due to the drought, the utility is shopping for new water supplies. To give you an idea of the relative cost, groundwater sold by one potential supplier to an Austin suburb is 30 times the price Austinites pay for Colorado River water.

Why are costs so high?

  • The biggest reason is capital investment and debt, much of it coming from growth. About 52 percent of your water/wastewater bill is related to capital improvements. An example of this is the half-billion-dollar Water Treatment Plant No. 4, which began construction in 2010. Judging from the utility’s recent forecast, Austin will not need its capacity for 17 years. Because it is a wasted asset, it will literally cost more to turn on the plant than to leave off.
  • There were poor decisions regarding asset management. The “profit” from the land sale of the former Green Water Treatment Plant site was put back into enhancements for the site’s redevelopment instead of lowering water costs. Other property, such as the retired Govalle plant on Lady Bird Lake, sits almost unused.
  • The water utility is one of the largest energy users in Austin, consuming enough electricity to power 17,000 homes. Yet it has no energy conservation plan and is buying wind power at 39 percent more than it cost the electric utility to purchase.
  • The utility’s profit, the transfer to the General Fund, has more than doubled since 2000, while water consumption is roughly the same.

Until the debt works its way out of water rates over time, Austin may not be able to do much to lower them. But through fiscal discipline and real conservation efforts, it can mitigate future increases.

There are a host of small cost-saving measures that can add up. These include: reducing General Fund transfers; postponing the operation of the new treatment plant until it is needed; buying and conserving electricity at an affordable cost; selling unneeded assets and using the profits to buy down debt; using leak-resistant polyethylene pipe; using “smart” utility meters to reduce labor costs and water loss.

There are several strategies that need to be implemented instead of purchasing new supplies. One of the most basic is to fully implement the water conservation plan approved by the City Council in 2007. This would be greatly enhanced if the conservation program was moved out of the debt-strapped utility, which has a conflict of interest saving water.

In addition, Austin has a reclaimed water system that is barely used, as well as access to Barton Springs flows into the Colorado River that might be routed to a treatment plant.

Austin would be foolish to ignore the affordability of its water any longer. Wall Street has a word for cities that have reached the height of fiscal hubris: Detroit.

Robbins is an environmental activist, consumer advocate, and author of “Hard to Swallow,” a report on Austin’s high water costs.

Water in the News: Robbins: Dry lakes demand conservation

Robbins: Dry lakes demand conservation

Austin Statesman, September 17, 2013

 The question on a lot of people’s minds right now is, “How low can they go?”

Lakes Travis and Buchanan, which supply much of our region’s water, are not natural lakes. They are reservoirs completed in the 1930s and ’40s. At full capacity, they hold 2 million acre-feet. (An acre-foot is enoughwater for annual needs of about three average Austin homes.)

Today, barring a major rainstorm, they are about to fall to their lowest levels since they were created. In September 1952, the lakes reached 621,000 acre-feet. On Sept. 10, they were at 659,000 acre-feet and dropping by about 1,400 acre-feet per day. Those worried about the water supply are in the perverse position of “praying for hurricanes.”

People living near the lakes, as well as cities facing water shortfalls, have become resentful of the rice farmers in the Colorado River’s lower basin area. It must be remembered that these farms have been cut off from their water supply for the past two years, the first time this has happened in the history of the lakes. It should also be remembered that federal funding for the lakes partially relied on the congressional support of the agrarian region downstream.

And while there is considerably more wealth per gallon generated by cities and industries compared to farms, this wealth will not be especially meaningful without food. In 2011, farmers paid about $28 per acre-foot for raw water to grow enough rice to feed about 1.2 million people annually on a calorie basis. Meanwhile, Austinites were willing to pay $1,600 per acre-foot for treated water to grow their “crop” of grass.

Believe it or not, it can get worse. If you total current use from Austin and other cities, future water contracts to provide for Austin’s growth, industrial use, evaporation from the lakes, and agricultural use, and apply it to current lake levels and drought conditions, the Highland Lakes would be below zero.

It is time to start planning in earnest for the future. There are no longer enough resources to provide for insatiable thirst of all who come here. We will either face huge increases in cost or need to create a water-efficient economy. Conservation of both water and money are key.

Five of the most promising strategies need center attention.

• Full implementation of 2007 conservation plan: In 2007, Austin created an aggressive conservation plan with 19 strategies to save water. Today, many of these ideas are still not implemented or have their effectiveness compromised. Some, such as mandatory plumbing fixtures retrofits, have stalled because they are controversial. Others, such as mandatory irrigation audits, have no method to measure effectiveness.

•Reclaimed water: The use of highly-treated wastewater for non-potable purposes such as irrigation and cooling towers has been employed to great effect in other cities. Austin has invested more than $50 million in its own “purple pipe” system. This has the potential to defray as much as 50 million gallons per day of peak capacity, the same as will be provided by the controversial Water Treatment Plant No. 4. However, Austin’s overly strict hook-up policies, lack of marketing staff, and lack of customer-side financing are constricting the use of this new system.

•Polyethylene utility pipe: Austin is using polyvinyl chloride water pipe as its material of choice. This is extremely toxic to manufacture and is more prone to leaks than polyethylene pipe, which is almost leak-proof and sometimes cheaper to install. Austin needs to replace more than 700 miles of old cast iron pipe that is at the end of its life, and it should be using the best materials.

•No new water projects: When Water Treatment Plant No. 4 comes online, this half-billion-dollar facility will raise Austin’s peak capacity to 335 million gallons per day. This past August, the city barely used half of this amount. This unneeded expenditure, and others like it, directly compete with water conservation funding.

•Relocate water conservation programs: Austin’s water conservation programs are administered by a utility whose main mission is to sell water. This is a blatant conflict of interest. The water conservation programs should be moved to a separate agency unshackled to the water utility.

Conservation is the best option we have right now, and the least expensive. It is past time to make the hard decisions necessary to make it work to its full potential.

Praying for hurricanes is not a drought-management policy.

Robbins is the editor of the Austin Environmental Directory. The new edition is online at environmentaldirectory.info.

Environmental Directory: Best of Austin 2013

BEST OF AUSTIN › 2013 › CRITICS PICKS › MEDIA

Environmental Directory

Everyone who’s serious about protecting our environment should own a (free) downloadable or print copy of The Austin Environmental Directory. Call us biased, but the 2013 edition is one of the best directories that activist Paul Robbins has published since starting this exhaustive endeavor in 1995. Appropriately, water is the theme of this year’s guide, which also includes updated info on clean energy programs, energy-efficient lighting, recycling, an expanded list of local enviro groups, and so much more. Think you know everything already? You’re guaranteed to learn something new.

Austin Environmental Directory
512/447-8712
www.environmentaldirectory.info

Water in the News: The Irony of Conservation

Then There’s This: The Irony of Conservation

Austin’s water-saving habits will delay need for WTP4

By Amy Smith, Austin Chronicle, Fri., Dec. 21, 2012

This is how Lake Travis looked on Nov. 9. It looks the same today.

This is how Lake Travis looked on Nov. 9. It looks the same today.
Photo courtesy of The LCRA

“I just need to point out environmentalists were right and you were wrong,” said Spelman, referring to the emotionally charged series of debates leading up to the 2009 Council vote on the plant. “Because,” he continued after pausing a beat, “you have done such a wonderful job with conservation … and if you want to say you’re happy you’re wrong … this would be a lovely time to say so.”

The back-and-forth over WTP4 sidetracked what was supposed to be one of the high points of the Council briefing: Mes­zaros was joined at the podium by Resource Manage­ment Commission Chair Leo Diel­mann, who was on hand to endorse the conservation program’s progress and report on improved relations between utility staff and the Council-appointed RMC. A year ago, the two sides had all but stopped speaking to one another due to their disagreements over how well, or how poorly, the program was working. RMC members complained to Council about what they believed was a lackluster conservation effort and the utility’s apparent reluctance to share information. In response, Council members prodded the utility to start working more collaboratively with the commission. “We came to y’all 18 months ago very critical of the water conservation program and of the water utility,” Diel­mann told the Council. “What we didn’t realize 18 months ago is that the water utility has made very good progress toward these goals.”

But all of this cheerfulness was enough to make water watchdog Paul Robbins gag. He said he felt like a “caged rottweiler” during the briefing, which he said was set up on the agenda in a way that did not allow for public comments. The utility, he says, is still underachieving in many areas – water-saving landscape incentives, irrigation audits, and rebates for rainwater harvesting equipment and water-efficient toilets. He said he outlined these and other shortcomings in an update to his 2011 report, “Read It and Leak,” which he provided to the RMC in November.

Energy in the News: Austin’s Biomass Plant Commissioned

Renewable energy advocates have a responsibility to the public to see that their money is well spent.   At the time the contract for a power purchase agreement was approved by City Council in 2008, most environmentalists that spoke were either critical of the plant, or said they did not have enough information to support it.

We gained credibility with the public because of this.

Unfortunately, our opinion did not prevail, and we will be paying for this millstone until 2032 barring some change in the contract.

At a small ceremony amid the tall pines of East Texas, a handful of Austin officials watched one of the most unpopular investments in Austin Energy’s history rumble to life Wednesday.

A power plant fueled by wood waste held its official opening after briefly coming online a few weeks ago. The privately owned plant will sell $2 billion worth of electricity to Austin Energy for the next 20 years at a price well above the going rate for competing power sources.

“As a green-power advocate, I think we would have been better off investing in other things,” environmental activist Paul Robbins said.

Energy in the News: Austin becomes an all-green municipal operation

This article announced that the City of Austin’s annual municipal electricity purchases would all be from GreenChoice renewable energy.  This was about 328 million kilowatt hours a year in 2017.  Though the electricity coming through the lines was a mix of all power sources, this mechanism allowed Austin to dedicate its electric budget to wind power, allowing more demand  to be sold on the system.

Costs premiums of about $8.5 million detailed in this story have since come down markedly, in part due to my intervention.

=====

Today, Austin becomes an all-green municipal operation

Today Austin will become the nation’s first major green-energy-only municipal operation, a milestone it will reach by relying on renewable energy the city has been unable to sell to its 400,000 other electric customers.

…every penny the city would normally spend on nonrenewable sources will instead go to a West Texas wind farm. This will reduce the carbon footprint of one of Central Texas’ biggest carbon-producing enterprises.

“Austin calls itself a green city. A lot of that is hype,” said environmental activist Paul Robbins, who has been pushing the city to switch to renewable energy for more than a decade. Now that it has, he said, “This is the first time in a long time Austin is truly a leader.”

 

Water in the News: Top Water Users 2011

A handful of prominent Austinites are again among the city’s thirstiest residential water users, including some who previously blamed broken pipes and other aberrations for using far more water than the typical Austin Water Utility customer.

With Central Texas more than a year into one of the worst droughts in recorded history, the households of health care magnate Robert Girling, auto dealer Doug Maund, lobbyist Neal “Buddy” Jones, U.S. Rep. Michael McCaul and champion cyclist Lance Armstrong used between 13 and 20 times what the average Austin home used over the past year, according to Austin Water Utility records.

The list, obtained through an open records request by environmental activist Paul Robbins and verified by the American-Statesman with the water utility, shows water consumption from Oct. 1, 2010, to Sept. 30, 2011. That time frame roughly corresponds to the current drought, which has left Lake Travis, Austin’s primary source of water, about 37 percent full and dropping.

 

Water in the News: Throwing Toilets Out of Airplanes

Toilet program, once flush with cash, asking for more funding

Rebates for high-efficiency toilets have resulted in 1.3 million gallons of water saved per day.

Marty Toohey, Austin StatesmanAug 31, 2012

For years, the City of Austin has offered to pay most or all of the cost of buying and installing new, high-efficiency toilets to help the city conserve a limited resource.

They have asked for an additional $3 million for the program…

Paul Robbins, a longtime environmental activist and frequent critic of the water utility, contends…

“It’s cheaper to do a shared savings program,” Robbins said. “Instead, they’re throwing toilets out of airplanes. They seem to have forgotten that money is a nonrenewable resource.”

Water in the News: No Drought Here

Then There’s This: No Drought Here

So what if the lakes are half full – it rained, didn’t it?

By Amy Smith, Fri., Austin Chronicle, July 27, 2012 

A little over two months ago, during a City Council work session on Austin Water Utility’s budget outlook, Mayor Lee Leffingwell raised the issue of relaxing the city’s Stage 2 drought restrictions that limit outdoor watering to once a week…

It’s possible the city wouldn’t be in a position to free up more water for St. Augustine grass had the LCRA not cut off water to rice farmers in downstream counties due to drought conditions in cities. Rice farmers are enormous water hogs, but they reportedly contribute nearly $400 million to the Texas economy and provide 5% of the nation’s rice. City officials and others often speak ill of rice farmers for using so much water without much thought to conservation.

Environmental activist Paul Robbins takes a different view. “I personally look at this situation and think, ‘Do they want us to eat grass?’ The rice farmers’ loss from this year’s crop would literally feed a million people on a calorie basis,” he said. “It seems OK to AWU that we waste water on grass, but not on rice.”