Riverside Drive and Town Lake Park

The Undoing of a Remarkable Compromise

or

How 7 Seconds of Commute Time Is Worth More Than a Great Park And The Lives of People Who Go There

by Larry Akers

Friends of the Parks of Austin Stakeholder Representative

Town Lake Park Community Project

Introduction

Since the lands now known as Auditorium Shores and Butler Park were first conceived as parkland, the presence of Riverside Drive as a commuter roadway separating the two tracts has confounded any attempt to create a unified central park as the centerpiece of the Lady Bird Lake Corridor. The central design decision of the Town Lake Park Master Plan and the associated Community Events Center Venue Project was and remains the fate of the section of Riverside Drive between Butler Park and Auditorium Shores. That the road remains open and remains an issue 13 years after the Town Lake Park Master Plan called for its elimination is a case study of the political machinery of the City, both its public processes and its shadowy inner workings. The history of this indecision involves difficult, conscientiously negotiated compromises upset by after-the-fact double dealing, insubordinate resistance of City staff to directives from both City Council and a City Manager, and a municipal paralysis resulting from dueling perspectives on quality of life. That lives are likely at stake is a point that gets too frequently neglected.

This essay covers the history of the Riverside Drive question, the motivation for closure, and the processes engaged to resolve the issue from the mid-1980′s to the present. The executive summary contains links to sections detailing the summary’s major points, and the individual sections contain links to original source material. This background should help inform the process we engage again at the beginning of 2012 to again face the question of how to deal with the roadway that splits our centerpiece central park on Lady Bird Lake.

Executive Summary

Removal of Riverside Drive in the middle of Town Lake Park
has been City policy since the late 1980′s, motivated by a concern for pedestrian safety within the park and the need to reclaim its right of way to form the contiguous green space necessary for a viable great park. When the Town Lake Park Community Events Center Venue Project was launched with a public vote in 1998, elimination of roads within the park was a primary goal of the project’s stakeholders. The fundamental negotiated agreement in the 1999 Master Plan process was to close Riverside Drive through the park in exchange for creating an opulent service yard for the Long Center and the Palmer Events Center (PEC), which forced the PEC into the heart of what had been long been envisioned as the park’s green space. The decision to close the road was carefully vetted by stakeholders, who ordered a professional preliminary traffic study, parking study, and full traffic impact analysis (TIA) of the site, its facilities, and the commuting grid. The finding of the TIA was that closure of the road would induce only a 6-7 second delay on the average peak time commuter passing through the area and across the river. The stakeholders all agreed this was an acceptable price to pay for the unification of the venue’s parklands and the safety of the park’s visitors. Signed by numerous community leaders including all the stakeholders, this agreement culminated in a Master Plan, adopted by City Council, that featured removal of Riverside Drive between the PEC and the railroad tracks.

No sooner was the compromise adopted than the City, in concert with development interests, began maneuvering to double-deal the agreement, attempting to keep the Riverside Drive intact as a commuting throughway. The Real Estate Council of Austin and other development interests pressured Council to hold off closing the road until the original traffic analyses could be trumped by a broader study, the Downtown Access and Mobility Plan (DAMP) Study, with more visionary traffic projections. The Great Streets Plan projects were analyzed in the study with measures to mitigate their impact on traffic flow. Not so with the Riverside closure, which was tacked onto the study at a late date and without the modelling mitigation measures which were suggested for the study. Even so, the DAMP study concluded commuter traffic would flow more easily if the eastbound flow of Riverside alongside Auditorium Shores were eliminated. City Council, wishing to close the roadway completely and upset that the mitigating measures were not considered, ordered the road to be narrowed to two lanes and instructed staff to perform subsequent studies identifying means of mitigating total closure of the roadway. Staff’s initial recommendation that mitigation should offset 100% of Riverside’s traffic load was seen as another aspect of a double standard for new development that placed higher requirements on the park for infrastructure burden than would be applied to any private development project.

Transportation staff never complied with Council and subsequent City Manager direction to perform mitigation studies, knowing that without the technical support Council requested, Council would be too uncomfortable with closure to order it. Absent any further analysis, when imminent development of Phase II of the park forced the issue, the Traffic Department negotiated with stakeholders for an interim reconfiguration of the road, narrowing it to its current two-lane, two-way setup with a roundabout. The design was such that park construction could proceed, and the remaining segment of the road could be inexpensively eliminated later when reasonable study was finally performed.

City Manager Futrell imposed a three-year delay on the project, but even during that time, the Traffic Department continued its insubordinate refusal to conduct the mandated studies. Concerned about pedestrian safety, stakeholders and the City negotiated a set of pedestrian safety measures for the road to be added to the interim design, and the current configuration was constructed in Fall, 2005, just before construction of Butler Park. Unfortunately, the safety measures have performed questionably, and the most important one, automated scheduled road closure gates, were clandestinely value-engineered out of the construction contract, undoing the important decision to close the road during heavier park use hours.

In 2009, a process to update the park Master Plan was aborted by Assistant City Manager Rudy Garza when the scope was determined by the community to remain similar to that of the original master plan, both with respect to construction cost and to the removal of Riverside. However, the process to that point had yielded a proposal to convert the Riverside right-of-way to a pedestrian cultural events plaza that would also preserve an emergency vehicle passageway.

As we approach construction of Phase III of the park on Auditorium Shores under Council mandate to finish revisiting the Master Plan, and despite another six years of stakeholder requests, the Traffic Department has yet to perform the mitigation studies mandated by City Council. They have produced only traffic counts, but these traffic counts show a steadily decreasing westbound use of the road. Current westbound peak traffic flows are only 55% of what they were when the original TIA projected complete closure of the road would induce only a 7 second delay in commuting, and only 44% of what was projected in the DAMP study, which noted that eastbound closure would decrease commuting times. Yet the Traffic Department insists, without study, that preserving this commuter roadway through the middle of our central park is necessary for traffic flow.

Confounded by intransigent insubordination by staff and the willful double-dealing of some community groups on the original site plan compromise, the community must now somehow resolve the Riverside issue, so that the Master Plan can be completed and construction on the next phase of the park can begin.

Why Close Riverside Drive?

The traffic speed studies (1, 2, 3) conducted by the Transportation Department establish that excessive speeding is very common along this unsignalized stretch of road. The presence of parking areas along the right of way creates particular dangers, as lines of sight for both motorists and pedestrians are blocked by parked cars.

The ultimate tragedy would be for the City’s resistance to closing the commuter roadway through its central park to result in the death or serious injury of pedestrian park visitors. We have been lucky so far, but as time passes and park use increases, the tragedy becomes ever more likely.

Some of these points and others have been stated clearly since the planning phases of the project, exemplified by this essay that was circulated during the early days describing the case being made for closure during the master planning and immediately subsequent phases of the project.

Closing the roadway, aside from relieving the negative aspects of the road, would open up new opportunities and fiscal bonuses. The west end parking lot could be gracefully doubled by reflecting it over onto the abandoned roadbed, provided needed parking for the northwest quadrant. The significant cost of constructing a new pedestrian bridge over West Bouldin Creek could be avoided, as the existing street bridge over the creek would be plenty wide enough to accommodate vehicle access to the parking lot, the Hike and Bike Trail, and a commuter bike path. There would be no need for an anticipated new westbound commuter bike path, as the existing hardscape could be used. And there would be no need to invest in automated closure devices to shut the street for pedestrian-only hours.

Most significantly, the abandoned roadbed could be used as the hardscape for the center of an events plaza that could accommodate festivals like Art City Austin, the wine and food festival, and others, while also being integrated into an all-hours public plaza that would come to be identified as Austin’s front porch. The plaza could have a distinctive identity and attraction and be fringed with other elements of interest, such as an art park or sculpture garden. The retention of a hardscape stretch could also support the passage of emergency vehicles through the area as necessary.

What is now a detriment and liability for the park stands ready to be turned into a great asset.

The History of Riverside Drive in Town Lake Park

We turn now to the history of the debate over Riverside Drive and its impact on the park, leading up to our current situation with the updating of the park’s Master Plan.

The 1980′s

That creating a great central park on the shores of Lady Bird Lake between South First and South Lamar required the removal of that portion of Riverside Drive was recognized as soon as the district was being considered as parkland rather than as a site for a convention center. In the mid-1980′s, a volunteer group, the Town Lake Park Alliance, pursued and achieved the parkland dedication of the 54 acres of public lands south of Riverside Drive adjacent to Auditorium Shores, and while they were at it, the parkland dedication of over 300 acres of other public lands along the riverfront. Slides from a historical presentation about the group summarizes the history and impact of the Town Lake Park Allliance.

After the parkland dedications were finally achieved in 1987, an enormously participatory public process culminated with in the completion of the Town Lake Comprehensive Plan, which covered all the parklands from Tom Miller Dam to Longhorn Dam and beyond to what is now Guerrero Colorado River Park. Over 4000 individuals were contacted for participation, with the consultant group led by Larry Speck conducting 114 personal interviews and holding over 200 meetings with interested civic groups.

The central feature of the plan was the creation of a great new central park in the district that is now the Town Lake Park Community Events Center Venue Project. A cornerstone of that treatment was the removal of this stretch of Riverside Drive, as indicated in this schematic of the central portion of the plan.

After a full round of review by City of Austin boards and commissions, the Town Lake Comprehensive Plan was adopted unanimously by City Council in 1988 and subsequently codified in the Town Lake Comprehensive Plan Ordinance, the only comprehensive plan ever so codified by the City of Austin.

Adding to the weight of public input, the comprehensive was incorporated intact into AustinPlan, the City’s master plan developed during the late 1980′s, and the R/UDAT plan (*cite) for downtown. A major economic development report commissioned from the SRI International Public Policy Center by the Greater Austin Chamber of Commerce, “Creating an Opportunity Economy” recommended the City “Develop Town Lake as a “Great Park”, comparable to Golden Gate Park in San Francisco or Central Park in New York.

Yet after clearly expressing its desires and plans, for the next ten years the community awaited the impetus that would untangle the interlocking uses on the Town Lake Park site and enable the park to be realized.

The Creation of the Town Lake Park Venue Project

The impetus came from the University of Texas, which served an imminent eviction notice to the major local performing arts groups who had been performing at UT’s Bass Concert Hall. Thus began the search for a new homw and the push to convert the old Palmer Auditorium to a new performing arts center. A stakeholder group consisting of representatives of ARTS Center Stage (representing the Austin Symphony, Austin Lyric Opera, and Ballet Austin), the Junior League of Austin (representing civic events center users), the South Austin Coalition of Neighborhoods, and the Friends of the Parks of Austin (representing park interests), coalesced to push for the creation of the Town Lake Park Community Events Center Venue Project, which would meld a new performing arts center, a new civic events facility, and a great new Central Park on the parkland composed of Auditorium Shores and the “54 acres” south of Riverside Drive. The venue’s funding mechanism would be a new tax on cars rented locally. After shepharding the creation of the venue through a successful public election in 1998, the stakeholders and the City of Austin formulated a set of goals for the project in a Memorandum of Understanding and pledged mutual support of each other’s goals in planning and implementation of the new cultural park. Every stakeholder signed the memorandum.

The goals for the parkland development in the memorandum, were:

• Maximize the contiguous open space with emphasis on
  massing rather than fragmenting this space
• Create a continuous and significant swath of open space west
  of Palmer as the centerpiece of the cultural park, opening the
  site Barton Springs Road to Town Lake
• Minimize vehicular traffic and parking within the open space
• Give the park external appeal and maintain attractive sight lines
  within the park
• Observe the parkland dedication and use the Town Lake Comprehensive
  Plan as the planning foundation for the park development

Every stakeholder understood, from the language of the memorandum, from emails and written material distributed at meetings, and from many discussions within the group, that satisfying each one of these goals required eliminating the streets within the district.

The 1999 Town Lake Park Master Plan

Planning the multi-faceted project was an extraordinarily complex process involving many competing interests. But amidst all the work of developing programming, operational, capacity, access, fiscal, cultural, recreational, safety, aesthetic, legal, and transitional requirements, two fundamental issues rose above all others in the group’s deliberations — the fate of Riverside Drive and the placement of the new facilities: the civic events center, an on-site parking garage, and the service yard area that would be used by both the new civic events facility and the Long Center. Resolving these two issues would set the parameters for much of what would follow and allow the other pieces to fall into place.

The impact of closing Riverside on both the commuter traffic grid and the access to venue facilities was a primary concern and required both initial assessment and subsequent thorough analysis. To this end the professional traffic analysis firm WHM and Associates was contracted to perform a preliminary traffic impact analysis. Since 1998 traffic counts showed that Riverside Drive carried only 20% as much traffic as Barton Springs Road, closure of the road seemed intuitively reasonable to stakeholders. WHM agreed. In its preliminary traffic study, WHM concluded, “it may be feasible to remove the section of Riverside Drive between South 1st Street and Lamar Boulevard”.

With this reassurance, the stakeholder group proceeded to conceive what the project might look like with Riverside Drive closed to through traffic. But all stakeholders remained concerned about the impact that closing Riverside Drive would have on both commuter travel times and access to events at both the events center and the Long Center. No one wanted to go down a path that would be a detriment to either the events or the community’s quality of life. So WHM was hired to follow their initial assessment with a complete traffic impact analysis (TIA) on the street and access scenarios.

The WHM Town Lake Park Traffic Impact Analysis

The complete WHM Traffic Impact Analysis was an extensive piece of professional work modeling traffic flows around the larger area both north and south of the river with state of the art CORSIM modeling technology. It used both current traffic counts and a quantified assessment of future traffic growth through year 2005, including a factor for background demand growth and assuming the completion of eleven major emerging development projects north of the river. A thorough parking demand analysis was also part of the study. WHM calibrated the impacts on levels of service at over 25 area intersections and the composite commuting delays induced by the project, modeling four configurations of Riverside Drive: as-is, as-is with area grid enhancements, westbound-only, and complete closure.

The TIA modelled the performance of area interesections, with results expressed in standard terms of levels of service (LOS). These levels ran from A (best) to F (worst). Their findings for the controlled intersections along the major thoroughfares bordering the project were as follows, with each intersection represented by a LOS grade.

Intersection Performance

AM peak

• Lamar — existing: DCB — Riverside closed: DBB (slightly improved)
• Barton Springs — existing: DBDBC — Riverside closed: DAECB (net same)
• South First — existing: DDC — Riverside closed: ECD (slightly worse)

PM peak

• Lamar — existing: DDCA — Riverside closed: CCDA (improved)
• Barton Springs — existing: DBCCC — Riverside closed: CADBB (improved)
• South First — existing: CDB — Riverside closed: DCB (net same)

In general, the impact of Riverside closure was marginally longer queues on Drake Bridge and reduced queues and delay on the Lamar bridge. The only intersection pushed from acceptable (levels A-D) to unacceptable (E-F) level of service was Barton Springs Road at South First. Unacceptability at level E was defined as an average stopped delay of 40-60 seconds, an interesting range considering the cycle times at many complex intersections, including most along expressway access roads, commonly approximate two minutes.

The report’s verbiage regarding average vehicle trip delay was oddly couched in percentage rather than absolute time increases, and the oral presentation of the results by WHM’s Mike McInturff was even more oblique, focusing on the cumulative number of hours spent in traffic delay for all vehicles collectively during a peak period. These means of explanation tended to magnify the perception of the impact of the closure, while obscuring the impact on the average commuter trip. Commute-time impact from complete closure relative to the As-Is with enhancements configuration was stated as an 8.1% (a.m.) and 7.5% (p.m.) additional delay.

Though the textual explanation of delay times, repeated in executive summary, and the oral presentation seemed designed to obscure the truth of the matter, the hard numbers in the report summary described what this meant in absolute terms and made the facts of the analysis very clear in this table of delay times per vehicle trip through the district and across the river:

Commute Time Delay

AM peak

• 1999 conditions: 2 min 40 sec
• 2005 traffic load, 4-lane configuration with mitigation: 2 min 32 sec
• 2005 traffic load, Riverside westbound only: 2 min 38 sec
• 2005 traffic load, Riverside closed: 2 min 38 sec

PM peak

• 1999 conditions: 2 min 2 sec
• 2005 traffic load, 4-lane configuration with mitigation:2 min 9 sec
• 2005 traffic load, Riverside westbound only:2 min 12 sec
• 2005 traffic load, Riverside closed:2 min 16 sec

The core truth of the TIA was that closing Riverside completely, versus keeping all four lanes as was, would lengthen a cross-river, peak hour commuting trip through the area by six seconds in the morning and seven seconds in the evening. Percentage increases were disingenuous: 8 percent of a small number is still a small number. In light of this analysis, the policy decision involved weighing 6.5 seconds of induced delay against the enormous public benefits to both park visitor safety and park scope, design, and amenity made possible by the closure.

Bouyed by the findings from the TIA, the Junior League, parks, ARTS Center Stage, neighborhood stakeholders, and City participants entered the heart of the master planning process secure in the knowledge that removing the roadway would have insignificant impact on commuters, and that the Town Lake Comprehensive Plan vision of removing the roadway between South First Street and the railroad to unify the parkland tracts and protect pedestrians was entirely feasible.

Master Planning — Building Site Issues

The core questions of the master planning process then became the placements of the various new facilities. Neighborhood and parks stakeholders adopted a position that all the major facility development on the site, i.e., the civic events facility, Long Center, and their common parking garage and service yard, could be constructed in a development zone east of a north-south boundary defined by Civic Drive (which separated the Palmer site from Riverside Center) and extending south to preserve a stand of legacy trees in an island of the Palmer parking lot that were dedicated to the fallen soldiers of World War II, and continuing to the east side of the intersection of Barton Springs Road and Bouldin. The master planning firm EDAW initially agreed that there was sufficient land area within that zone to accomplish this.

However ARTS Center Stage and the Palmer Auditorium staff pushed back extremely hard against this notion, insisting that they required an expansive service yard. Accommodating this requirement in the L-shaped geometry of the available site meant that the entire civic events building would need to be pushed to the west entirely beyond the proposed development boundary. The consumption of such a vast amount of parkland right in the heart of what was to have been the park’s green space placed enormous stress on the viability of constructing a great central park on the remaining parkland west of the events centers. The Junior League, being representative of the needs of the events center, tilted toward the ARTS/Palmer position on the question. This conflict was the central point of debate leading up to and including the master planning charettes of Spring, 1999.

Master Planning — Major Issues Resolved at Public Charette

During the charette, under great pressure from the City Convention Center’s leadership and Palmer Auditorium operator and from ARTS Center Stage to create a “Cadillac” service area, the master planners from EDAW pushed the Palmer Events Center footprint deep into the green space conceived as the heart of Town Lake Park. The planners recognized that after sacrificing this significant chunk of core parkland, the only way to retain the contiguous green space required for a great park was to remove the central portion of Riverside Drive. Wishing for the events center to be successful and abiding by the Memorandum of Understanding to support Palmer’s goals, the other stakeholders under great duress accepted the Palmer location, but only contingent on the absolute assurance that Riverside Drive would be removed from the heart of the park. This was the central agreement of the entire master plan, the lynchin on which the entire development plan turned. All stakeholders, including ARTS Center Stage (the Long Center and their constituent performing arts groups), signed on to the agreement in writing. It was a hard-won compromise, a deal, a brokered agreement which all stakeholder parties and a broad cross-section of community leaders in attendance signed in endorsement.

Master Planning — Subversion on the Road to Adoption

But trouble was afoot. With the Long Center and Convention Center Departments having gotten essentially everything they wanted out of the site plan, with the building and service yard locations firmly in place, and with EDAW completing its work on the Master Plan consistent with the guidance it had been given in the public workshops and by stakeholders, the double dealing began immediately, and the monied powers went to work. Just before the Master Plan was submitted to City Council, an ad hoc business coalition including the Real Estate Council of Austin (RECA), the Austin Hotel/Motel Association, the Downtown Austin Alliance, the Greater Austin Chamber of Commerce and other real estate interests, adopted a resolution, originally drafted on RECA stationery, calling for Riverside Drive to be retained as a commuter roadway.

In the face of this challenge, EDAW maintained unequivocally that road should be closed. Late attempts may have been made to misrepresent their position, because as the plan was moving to City Council, EDAW felt obliged to issue an extraordinary communique, saying, “To clarify our position we offer the following: EDAW does recommend the closing of Riverside Drive between First Street and the RR (railroad) right-of-way, within Town Lake Park. It is our recommendation as the park master planners, charged with creating a great urban park, that the closing of this segment of the street provides the best opportunity for creating a significant and contiguous open space in the heart of the city. We hope that this statement helps clarify and resolve this particular issue.”

Stakeholder groups were shocked, then, after approving the EDAW Master Plan, to see that a new page 5, was inserted at the 11th hour in the package of the plan sent to City Council. The insertion proposed an alternative that retained a scaled-back Riverside Drive through the heart of the previously unified green space. The source of the insertion was not revealed. Stakeholder objections to the unreviewed insertion were ignored, and the Master Plan went to City Council for adoption with the alternative remaining and a recommendation for more study, presumably to try for a third time to find a technical justification for retaining the roadway. Current data could not justify the closure, so new data had to be created.

The DAMP Study

Though these problems became apparent weeks before the study went to City Council, and there was plenty of time to incorporate mitigation measures into the Riverside assessment, staff did not allow this to happen. Austan Librach was quoted in the American Statesman as saying to do so would be expensive, and any expense over $5000 could not be tolerated.

Even so, the DAMP Study concluded that traffic flow would be significantly smoother with Riverside’s eastbound through traffic eliminated than if it were retained, even in the existing four-lane configuration. The study also observed that within the middle of the park district, one lane was sufficient to handle the westbound flow without inducing any delay whatsoever, provided the intersections at South Lamar and South First remained in a multi-lane configuration.

The Riverside component of the DAMP study was attacked strenuously for its methodology. English ex-pat and professionally trained traffic analyst Paul Mullen issued a report faulting the absence of any source-destination analysis, for presupposing without evidence the distribution of redirected Riverside traffic load, and for not accounting for driver discretion in adjusting their commuting patterns that would correct the imbalances derived in the DAMP modeling. For example, though the study’s hypothesized traffic redistribution created greater stress on Drake Bridge than on the Lamar bridge, it did not attempt to adjust its parameters, as drivers would, to choose Lamar as a less congested route. Moreover, Mullen made observations similar to the park advocates, that if the redirection of traffic created pinch points in the grid, for each of these there were solutions that would mitigate the induced complications.

Park stakeholders, meanwhile, accumulated the list of traffic grid adjustments, the locations of several of which were identified in the CORSIM modeling, and presented them to the City with requests that they be incorporated into follow-up CORSIM modeling. Several of these suggestions required little capital investment, and some of those that did were emerging as likely projects for the City to implement. City Traffic Engineer Gordon Derr developed a similar, largely overlapping list of mitigation measures suitable for investigation.

DAA and RECA, meanwhile, were divided on the DAMP Study recommendations. For RECA, no induced delays or lane restrictions of any kind were acceptable. DAA took the more moderate position that the delays induced by the Great Streets proposals, up to 93 seconds for some single elements and cumulatively much more across all their endorsed projects, were worth the advantages of performing the conversions. But even knowing that the delays induced by Riverside closure could have been easily and substantially reduced, neither group was willing to balance the benefits of not having an unimpeded four-lane commuter raceway through the middle of a space-constricted central park against any delays imposed on commuters. RECA’s hard line stance left no room for accommodating broader civic goals in the street grid. DAA was happy to trade pain for gain in the CBD, but not for a central park.

The City Transportation Department presented the DAMP Study results at a series of public and board and commission meetings. Stakeholders tracking the meetings had to repeatedly point out that the Riverside component of the study had not been balanced with mitigation strategies as had the other projects modelled in the study. After a series of these corrected presentations, the Department finally settled into admitting that the mitigation measures had not been studied as directed.

The City’s Environmental Board, then led by Lee Leffingwell, reviewed the staff’s recommendations on near-term road projects in light of the DAMP Study, and resolved that contrary to the staff recommendation, Riverside Drive should be eliminated from the roadway plan and permanently closed to motor vehicle traffic, citing pedestrian safety and the development goals of the park.

Council Resolves to Reconfigure Riverside

By the time the DAMP Study went to City Council, the problems with the study expressed in the Mullen report and the protests of park advocates that the study had been rigged to not allow for Riverside mitigation were understood by the Councilmembers. Council heard the staff presentation of the DAMP concept plan and enacted various resolutions in response. With respect to Riverside, there were two staff recommendations to Council. Commensurately, there were two parts to the Council Resolution 021205-66C. The first was to immediately reduce Riverside to one lane in each direction. This recommendation was peculiar in that it reflected Charles Betts’ so-called “acceptable compromise” while neglecting the DAMP study’s findings regarding eastbound traffic. The second instructed the Transportation Department to “Continue to develop alternatives that would make viable the removal of Riverside Drive as an at-grade roadway through Town Lake Park. (Riverside Drive shall not be permanently closed through the Park until such time as alternatives are implemented to mitigate Riverside Drive’s lost traffic capacity.)” Significantly, Council voted to amend their draft resolution, which had used the word “replace” rather than “mitigate”, establishing that the viability of removing the road did not depend on mitigating measures capable of absorbing 100% of the impact of Riverside’s closure. Developing the alternatives meant devising mitigating measures that would help absorb the load and modeling those measures with the City’s new analytical tools.

The Transportation Department never acted on the second part of the resolution. Despite frequent reminders from project stakeholders, and despite the very specific agenda for study, the work was simply never done. The City now owned the CORSIM tools and had learned to use them in-house, but the Transportation Department would not perform the work directed by Council. Planning Department Director Librach informed the stakeholders that the City engineers who could perform the modeling
“had other things on their plate”.

The Transportation Department, with vocal support from RECA, did offer to conduct temporary closures of the road to study the impact on traffic flow. These would obviously be biased toward failure. Their temporary and random nature would lead to driver route surprise and confusion, a prime contributor to traffic flow delay and an inhibitor of adaptive response over time. Being designed for failure, they would be used to justify retaining the road in its full configuration. Stakeholders sternly rejected this approach.

The Persistent Double Standard

Phase II Park Development Approaches

Out of this negotiation came the interim design that is currently in place on the ground. Riverside would be reconfigured to two lanes, one in each direction, with a roundabout north of the PEC and the western portion of the old eastbound roadway reused for parking. This was to be an interim configuration, allowing yet more time for the Traffic Department to perform its mitigation studies. The layout was such that the road could be easily closed for events and on weekends. Moreover, when an ultimate decision to close the road completely was reached, the roundabout could serve as the east end terminus, the new west end parking lot could be reflected to the north to double its capacity, and the portion of the road between the parking lot and the roundabout could be easily and inexpensively removed. This configuration would allow the Phase II work to be done without sacrificing more precious parkland to a new west end parking lot. The ultimate removal of the central link could be performed for the next phase of park development, north of the Riverside right of way, and this could be done without touching the newly developed Phase II area that came to be known as Butler Park.

Phase II, Attempt II

Toby Futrell’s delay of Phase II park construction re-set the time line for a 2005 endeavor. As the new construction date approached, stakeholders continued to push for the Riverside closure mitigation studies to be performed, and the Transportation Department, defying the City Council resolution, continued to stonewall. The Council resolution to narrow the road to one lane in each direction, however, forced the question of fine-tuning the previously negotiated design for pedestrian safety.

Pedestrian Safety Measures Negotiated

Stop signs at crosswalks and active speed controls like speed humps or heavily textured pavement were rejected by the Traffic Department. The Department again offered to conduct and monitor temporary closures, and the idea was rejected for the same reasons previously stated.

Nevertheless, in the mediated meetings stakeholders and the City agreed to a package of measures to improve pedestrian safety. These included pedestrian activated crosswalk controls in the form of embedded crosswalk lights at multiple sites to stop oncoming traffic, reducing the speed limit to 30 mph, ensuring the roadway transition area configuration calmed traffic to speeds below 30 mph, safe islands in the medians near the parking lot and where Riverside narrowed from four lanes to two, automatic closure of the road on weekends, holidays, and on weeknights when events were being held in the park, signage, and a number of other measures. Stakeholders were greatly skeptical that these measures would be adequate, particularly the embedded lights, which would be scarcely visible to westbound traffic with the sun low in the sky at that time of peak park activity in the evening.

Adopting the Riverside Realignment Construction Contract

No progress on the roadway could come without a struggle.

A last ditch effort to upset the interim realignment plan was mounted by the Long Center, which objected that the realignment would upset its ability to accommodate bus drop-offs for large performances for children. Project Manager Robert Holland (see a summary of his report) easily dispensed with this objection, pointing out how the roundabout accommodated a bus drop-off plan and measuring the configuration to illustrate that there was far more than adequate on-site space for bus parking. Typically, performing arts centers utilize off-site parking and a shuttle plan for such events, but the on site accommodations were so generous that Long Center would not need to do this. Furthermore, the roundabout was a solution to the problems anticipated with automobile queues backing up into South First Street as attendees arrived at the parking garage to attend major performances. The roundabout offered an ample queuing configuration.

When City Council considered the realignment construction contract, Councilmember Jennifer Kim offered some last resistance, parroting RECA’s familiar objections to giving up any lane of the grid anywhere, but the argument had no technical support. An opponent of any modification of the four-lane, divided Riverside, she secured a resolution directing a Council presentation on the impact of narrowing Riverside to two lanes, “with particular attention to increased traffic density downtown”. The briefing apparently gave Council no reason to hesitate in resolving to reduce the street.

With backup material briefly summarizing the negotiated pedestrian safety measures, City Council considered and adopted a contract to perform the realignment construction with the pedestrian mitigation measures that had been negotiated. Again, there was an explicit understanding that the modified configuration was to be an interim measure, sufficient to not interfere with Phase II park construction, but needing to be revisited before Phase III was designed.

Pedestrian Safety Measures: Betrayal and Failure

Worse, without the knowledge of the Public Works Director who oversaw the mediated negotiations, the automatic road closure mechanisms were “value-engineered” out of the Riverside realignment construction contract and never revived. The Transportation Department attempted to reinvent the negotiated road closure agreement, claiming the closures were to be “experimental and only occasional”. For this gambit, Transportation had to be overruled by the other departments. Performance of the agreed upon closures was then pushed on the Parks Department, which had to bear the cost of closure permits and the placing, manning, and removal of unsightly, temporarary barricades every weekend. There was no way their stressed operations budget could accommodate all this, and after four weeks, the weekend closures became a thing of the past.

So while the re-routing of the street has achieve some traffic calming, the failure of the other measures continues to endanger pedestrians. Drivers regularly and sometimes aggressively exceed the speed limit through the heart of the park. Traffic speed studies (East of roundabout, Oct 19-22, 2011, West of roundabout, Oct 19-22, 2011, West of roundabout, Oct 1, 2011) have repeatedly observed speeds as high as 68 MPH on this stretch of the street, and drivers regularly pass through at speeds from 45-55 MPH.

Only by sheer luck has the tragedy of pedestrian injury or death in the park been avoided to date.

To the Present

Over four years have passed since the opening of Butler Park. Financial improprieties by the Convention Center Department and defensive maneuvers by the Law Department and City Manager have induced delays in the project and consumed the time and energy of project stakeholders. Yet exposure of the financial irregularities has led to a revival of the park development effort. City Council resolved to complete the master plan update initiated in 2009 and ordered the City Manager to prepare a finance plan for finishing the park.

Despite the passage of time, the Transportation Department has continued its refusal to conduct studies modeling the closure of Riverside Drive with the mitigation measures to help absorb its redirected traffic. When pressed, they will occasionally turn over some traffic counts, as if those provide sufficient evidence to put the question to rest.

Yet in the mean time, two of the mitigation measures that were proposed as likely means for absorbing Riverside’s traffic have come to pass. The first was the conversion of Cesar Chavez to two-way traffic, enabling a left turn from Drake Bridge onto westbound Cesar Chavez. Studies have clearly established that the demand on Riverside is driven not by commuters trying to reach or depart from downtown, but rather by commuters from the southeast trying to reach or return from northbound Mopac or Lamar. The direct left turn onto Cesar Chavez relieved the previously significant delay induced by having to loop through a chicane of one-way streets downtown to accomplish the same turn.

The recent completion of the Pfluger Bridge extension across Cesar Chavez, though not necessarily obvious, should be a contributor to relief for Riverside Traffic. CORSIM modeling during the DAMP study showed that the high frequency of pedestrian crossings of Cesar Chavez near Lamar required lengthy pedestrian crossing time at the signals at Sandra Muraida and B. R. Reynolds. The bridge gives pedestrians a safe, elevated option. This should allow the crossing signal times to be reduced, or in the case of Sandra Muraida, eliminated, significantly increasing the capacity of Cesar Chaves and helping induce traffic to cross Drake Bridge before proceeding west.

The other mitigation measures proposed by the City were not so capital intensive. As park advocates have stated for nine years now, these should be modeled to determine how much load from Riverside could be mitigated, and to see whether the remaining delay would fall within bounds judged to be an acceptable tradeoff for protecting pedestrians in our great central park on the lake and for creating the contiguous green space that will finally allow the park to become great.

An Adaptive Reuse of Riverside

During the 2009 master planning sessions, the idea took shape of converting the Riverside right-of-way between the roundabout and the Observation Hill parking lot into a community festival plaza.

The plaza would become home for events like the Art City Austin Festival and the Austin Wine and Cheese Festival, among others, that have recently been held on downtown City streets. The street closures have resulted in a variety of problems related to downtown mobility and access to churches and businesses, and the closures also impose a heavy direct cost on the events. These events have a city-wide identity strongly linked to downtown, and their continued success depends in part on maintaining that identity. Providing a home for these and other cultural events within the cultural Town Lake Park would allow them to retain that identity, albeit in an even more attractive setting, solve the street closure problems downtown, greatly simplify event logistics and reduce costs, and help establish the park as the cultural center of the city.

Moreover, even when not in use for major events, the plaza could become the front porch for the city, a place for gatherings both formal and informal, a place to enjoy a lunch outdoors, people watch, meet friends, and do all the other things a strongly identified public plaza supports. The plaza would be conceived as a cultural site, its design being evocatively artistic in its own right, while also serving as a venue for display of artworks and an axis around which cultural features like art gardens could be placed.

Some hardscape would need to remain, both to support the ingress and egress of vehicles and equipment necessary to mount a festival, and also to provide a path through which emergency vehicles could pass, providing them essentially the same access they currently have with the street. A strip of the existing pavement structure could serve this purpose, minimizing the cost of maintaining that access.

But the area would remain one for pedestrians, safe from the cut-through commuter traffic that currently cuts the park in two with an unpleasant no-mans land and threatens the safety of pedestrians crossing from one half to the other. Furthermore, the truncated portion to the west could be repurposed for the additional parking that will be needed, and which would need to otherwise consume the precious remaining parkland. And absent through traffic, the existing street bridge over West Bouldin Creek would likely be sufficient to serve segregated driveway access, bike path, and hike and bike trail use, eliminating the need for an expensive new pedestrian bridge for the trail.

2011: The Latest Word from the Transportation Department

To date, the mitigation measures have still not been studied, nor has the Transportation Department indicated any willingness to do so. The department’s intention is clear: Riverside will remain a commuter roadway bisecting the park and injecting commuter traffic into the park at peak park usage hours in the evening.

A July 6 memo from Director Rob Spillar states, “My perspective is that the capacity provided by Riverside is vitally important to the overall network both north and south of the river.” This plain statement, made without the benefit of any of the analysis that has been demanded for over nine years, would taint any subsequent analysis that might be performed in less than a completely transparent manner, open to and vetted by the public. The only evidence that the Transportation Department provides to support this predisposition are a compilation of traffic counts. Without analysis, traffic counts are just numbers. Without consideration of how those numbers might change if other network adjustments were made, they tell an incomplete story of achievable conditions.

To Rob Spillar’s credit, he is willing to consider joint configuration of the street as a commuter road and events plaza. However, commuter road use would negate many of the benefits of the pedestrian-only plaza configuration and would continue to induce the danger and disruption of through traffic, particularly in those after-work hours when park use is likely to be heaviest.

But Should We Believe Their Conclusions?

Prior to the venue development, traffic counts from the year 2000 for westbound Riverside Drive through the park during evening peak hour were as follows. (All counts indicate vehicles/hour.)

• 733 from westbound Riverside east of S. First and proceeded west into the park
• 124 from northbound S. First and turning left onto Riverside
• 93 from southbound S. First and turning right onto Riverside.
• 950 vehicles per hour total

This traffic volume would be consistent with the measurements used by WHM in their Traffic Impact Analysis for the Town Lake Park Master Plan, which illustrated that the impact of closing the road completely would be negligible under the unimproved conditions existing at that time and without taking into account other mitigation possibilities.

The DAMP Study projection, which included additional demand from planned projects, the equivalent of which and more are now developed, was that 1200 vehicles per hour would use westbound Riverside during evening peak. The lack of any consideration for mitigating design allowed the projection to be used to justify retaining westbound (only) traffic on Riverside. (The greater delays that would be induced by other components of the Great Streets Plan, even if mitigated, were judged to be acceptable.)

Yet the current traffic counts show a radical reduction in the use of Riverside from those previously observed and projected levels. The DAMP study established that maintaining any eastbound through traffic induced delays to the grid by complicating signals at the South First and Lamar intersections. Moreover, according to the City’s traffic counts, westbound use of the road has declined in recent years.

• 2005 — 8713 vehicles per day
• 2007 — 7494
• 2009 — 5955
• 2011 — 5850

More significant are the counts for westbound flow during the evening peak period:

• 442 — 4:00-5:00 pm
• 526 — 5:00-6:00 pm
• 412 — 6:00-7:00 pm

Morning peak is even less, reaching only 411 at the 7:00-8:00 am peak.

This bears repeating:

• 950 vehicles per hour at p.m. peak, 2000
• 1200 projected for 2005 in 2002
• 526 now

So WHM’s preliminary study indicated that even with nearly twice the current level of traffic, “it may be feasible to remove the section of Riverside Drive between South 1st Street and Lamar Boulevard”. In their subsequent and much more thorough CORSIM modeling, redirecting 177% of current peak traffic flow would induce only 7 seconds of additional delay to a cross-river commuter.

We remind those who wish to give credence to the DAMP Study’s closure recommendation that the estimated traffic flow on which that recommendation was based is well OVER TWICE the flow now occurring.

So while reviewing the recent traffic data, we should keep in mind that the problem we are trying to solve now is much smaller than the problem we faced during the original master plan and the problem anticipated in the DAMP Study. Recent traffic counts are barely half of what they once were and are much less than half of what they were projected to be in an unmitigated scenario. The mitigating measures that were submitted for study should much more easily relieve the traffic to be diverted from Riverside than when originally proposed.

An interesting study reported in the New York Times recently pointed out a phenomenon in actual traffic behavior that is likely not revealed in current CORSIM modelling, but has a sound basis in probability, statistics, and queuing theory and in the observation of actual traffic flows. In at least half of all cases, adding a new street in a congested traffic grid probably results in longer travel times. Conversely, removing a street can result in simpler, more streamlined traffic flow with shorter travel times in the area.

Who Is Doing the Deciding?

Clearly, the City Council, which has the sole authority to decide whether Riverside should be closed, is not being given the information allowing them to do so, in spite of their demands that it be provided.

The project’s public stakeholders are not doing the deciding. Their wishes regarding Riverside have been thwarted for over 12 years despite any evidence to justify the thwarting. Real estate interests which participated fully in the public process but did not like its negotiated outcomes have been able to keep the parts of the compromises they like (e.g., the Long Center service yard) and arrange to have the parts they disliked (the Riverside closure) subverted by City staff and Council.

Is the Transportation Department doing the deciding, or are they just following orders? Their insubordination to both Council and City Manager directives does not seem the kind of thing that would come naturally and voluntarily to engineers, nor the kind of thing that would be tolerated by higher management.

One must wonder why when WHM presented the findings of their TIA, they went to such lengths to disguise the result of the delay times their modelling showed. One must wonder whose agenda Austan Librach was referring to, when he said studying Riverside was not on it. One must wonder about the names, particularly RECA’s, that were all over a proposal that bypassed the extensive master planning process to become, at the last minute, part of the Master Plan sent to City Council. One must wonder why the “acceptable compromise” proposed by the executive director of the Downtown Austin Alliance for two-lane, bidirectional traffic on Riverside through the park somehow became the fact on the ground, even after the City’s DAMP Study analysis showed it not to be the most efficient way to move traffic. One must wonder why Rob Spiller entered the current process intent on preserving this “vitally important” roadway, when his own evidence shows the street’s use has declined by almost half from a level at which it was quantitatively shown to be unnecessary. What kind of transparency allows these decisions to be made completely outside the extensive public process the City has sponsored for this park?

Who is making these decisions?

What Kind Of City Are We?

When the City of Portland, Oregon realized that their Willamette River waterfront was an asset that could be the jewel of its central city, they demolished an entire waterfront freeway so they could make it so. Now millions of locals and tourists enjoy the waterfront park, and you will hear none of them lamenting the loss of their expressway.

When the City of Austin proposed to eliminate the left turn from southbound Lamar onto eastbound Riverside, people howled like their lives would be turned upside down and their evenings wrecked. Funny thing: the change was made, and no one found real cause to complain.

When the Town Lake Park Master Plan proposed to eliminate the lightly used segement of Riverside Drive that would reduce, disrupt, and fragment its new centerpiece park and endanger its visitors, the real estate interests howled like we were out of our wits. “Many great parks have roads through them!” they argued, citing New York’s Central Park and ignoring that Central Park has eight completely roadless spaces within it that are larger than the entire Butler Park/Auditorium Shores district. Central Park, of course, would be more aptly compared to the entire Lady Bird Lake Corridor, which contains the busiest section of interstate highway in the nation, the Mopac Expressway bridge, major thoroughfare crossings at Lamar, South First, Congress, and Pleasant Valley Road, and whose parkland is further chopped by Barton Springs Road and Cesar Chavez. Those making this argument seem to think Austinites have never seen a great park, nor can we recognize that we do not have one.

We can, though, and we have the desire and the means to create one. We are the kind of community that can blend arts and recreation, civic events and civic beauty, business and fun, all day and evening and night. We can give musical and cultural opportunities to dripping wet kids. We can put both fine art and zany art in a free, public space, right in the middle of the most brilliant part of the city. We can provide a park where we can do all these things without fear of being run over by a weary or anxious commuter, ever.

This park is how we will say that.

Friends of the Parks of Austin Stakeholder, Town Lake Park Community Project

One of the issues we will be facing in the planning process is guidance on the planning and design of the Alliance Children’s Garden. The garden has long been planned for the area immediately south of the Liz Carpenter Fountain and was to have been built out as a component of the Butler Park project. The reason the garden remains underdeveloped above its ground plane is the action of the artist group originally chosen by the City’s Art in Public Places (AIPP) program to participate in the garden’s design.

Here I will go into some of the history of the AIPP Program in Town Lake Park and its impact on the park’s development. I will also offer some thoughts on direction for the garden’s design, the goal being to realize a park component that culturally, intellectually, and physically enriches our children and the whole community.

Incidentally, the Alliance Children’s Garden was so named by City Council to recognize the enormous contribution of the Town Lake Park Alliance’s work in the 1980′s. A capsule account of their work has been placed on the master plan’s history web page. The very existence of this park is owed exclusively to that group’s volunteer work.

AIPP was granted a 2% slice of the construction budget for the Palmer Events Center (PEC) and first two phases of Town Lake Park construction. Aside from the artworks it funded for the PEC building, including art features embedded in the building, its efforts were concentrated on the park development. This resulted in three primary work products:

1. an arts master plan for the park featuring programmatic requirements for artwork placements and a vision for the Dougherty Arts Center (DAC),
2. design by New York artist Robert Lipski for a centerpiece fountain in the park
3. after landscape architecture firm TBG Partners solicited AIPP to participate, design of a Children’s Garden to be constructed northeast of the DAC and designs for artworks therein.

These elements were all presented in the park master plan for arts. Let us review each aspect.

A previous post suggested a change to the art master plan for the park regarding art acquisitions, so I will not repeat that here, except to recall that it was a policy adopted by the artist group without review by outside parties, and it has already served to limit options for the development of the park and will continue to do so until the policy is repaired.

Friends of the Parks of Austin Stakeholder, Town Lake Park Community Project

Although most of master planning effort of the stakeholder group for Town Lake Park focuses on physical layout and design, there is one policy aspect of the original Master Plan that I think we should discuss for revision.

The park’s art master plan guidelines, among other things, established that “all artwork for the park be commissioned to assure site-specificity”, so that the installation must be new and original. This would rule out any placement of pre-existing pieces such as might appear in a sculpture garden or otherwise be a centerpiece element of the park. Works by sculptors such as Charles Umlauf would be forbidden, as would acquisitions or donations of any existing artworks, regardless of their merit or appropriateness to the site. Estate collections, a foundation of most art venues, would be forbidden. Effectively, this would turn the park into a market for new pieces developed only by artists familiar with the park. Fostering local art production is not a bad goal in itself, but because of its exclusivity the policy limits the park from a world of possibilities. While this serves the goal “to encourage involvement by local and regional artists/artisans”, the primary emphasis is on the creation of new artwork rather than the quality of the park experience.

Furthermore, “The acceptance of gifts of art and the purchase of existing artwork for the .. acres that comprise Phases I-IV of Town Lake Park will be strongly discouraged.” It certainly is. The policy process for gifts of art and commemorative art states “proposals for actual artwork will not be considered”, and that while a commemorative individual or event may be suggested, “The specific form that the commemoration takes will be determined by the AIPP Panel when funding is available.” A donor may suggest an artist to execute a piece, but this recommendation will only be “considered” by the AIPP Panel. Not only do these terms greatly discourage philanthropic contribution, which almost always comes with a requirement for the advise, consent, and direction of the donor, but it places all artistic direction for a donation in the hands of a committee required and dedicated to supporting local artists. In effect, both the availability of the cultural park as an art venue and the potential for donor funding are turned to the goal of local artist employment and only secondarily to the park experience. The policy for art acquisition is more about committee control than the park’s quality; the park’s art program effectively creates an enforced cartel for local artist employment.

Town Lake Park’s cultural elements should definitely be a reflection of our community. But that reflection needs to be broader than a snapshot of current art production as favored by the AIPP committee. It should be allowed to incorporate our community’s legacy of art production and art collection, our broader tastes as well as our current productivity. So I hope as part of our work we can revisit this policy, which was formulated by artists primarily in the interest of artists, and generalize its approach to one that is formulated with input from the broader community primarily in the interest of our community’s cultural park.

The reversal of the transfers means that $520,764 of venue funds that had been or would be illegally transferred will be returned to the venue, where they should be available for park construction.

For the current 2010-2011 fiscal year, this transfer is $130,000. (See the FY 2010-2011 City Budget page 225 (p. 236 in the PDF file).

For fiscal year 2009-2010, the transfer was $125,382. (See the FY 2009-2010 City Budget page 434 (p. 552 in the PDF).

For fiscal year 2008-2009, the transfer was also $125,382. (See the FY 2009-2010 City Budget page 488 (p. 610 in the PDF).

The prior three fiscal years also saw a $125,382 transfer into the fund, but the source was the General Fund, not the venue project Revenue Fund. The General Fund is a legitimate source of funds.

The first year of the illegal transfer (2008-2009) was also the first year the budget was under Marc Ott’s tenure. In the previous three years, the budget was developed by Toby Futrell.

Section 334 of the Local Government Code governs venue projects, including the Town Lake Park Community Events Center Venue Project. Section 334.042 clearly delineates all the eligible sources of revenue and all the eligible uses for that revenue permitted under law. In particular, Section 334.042(d) speaks to the uses:

Sec. 334.042. VENUE PROJECT FUND.
..
(d) The municipality or county may use money in the venue project fund to:
(1) reimburse or pay the costs of planning, acquiring, establishing,
developing, constructing, or renovating one or more approved
venue projects in the municipality or county;
(2) pay the principal of, interest on, and other costs relating to
bonds or other obligations issued by the municipality or county
or to refund bonds, notes, or other obligations; or
(3) pay the costs of operating or maintaining one or more approved
venue projects.

(The full text of Chapter 334 may be found on-line at Chapter 334 of the Local Government Code.)

Skimming a portion of venue revenues into the City’s Tourism and Promotion Fund is not among these uses allowed under state law and is therefore illegal and would not withstand legal challenge.

Council must immediately direct the City Manager to halt or reverse the $130,000 transfer of funds from the venue Revenue Fund for the current fiscal year. It must also reverse the previous two years’ transfers, restoring the $250,764 to the venue fund, plus accrued interest if such is the policy for interdepartmental loans.

If such a transfer is contemplated for the 2011-2012 budget, it must be withdrawn immediately.

Both the City Manager and the Law Department should be sanctioned for initiating and authorizing this illegal fiscal activity. Regarding the Law Department, the matter has already been referred to the State Bar of Texas.

On June 5, Council and the City Manager were notified of this violation in the 2010-2011 budget. Lack of response is unacceptable and constitutes another chapter in the financial abuse of the venue project, the pattern of which exposes the project and the City to uncertain risk.

Summary

This complaint against the City Attorney of the City of Austin concerns malfeasance in the Law Department’s work related to the Town Lake Park Community Events Center Venue Project. The City Attorney has on multiple occasions issued opinions to the Austin City Council and City of Austin staff that are without basis or are complete misrepresentations of State of Texas law regarding venue projects. In doing so, it has asserted positions that, if true (which they are not), would establish that the City of Austin has conducted the venue project and related work illegally under state law for many years, exposing the City to challenges and sanctions that could endanger the project and its funding stream.

Specifically,

1) The Law Department has asserted, without any foundation in Council policy action and in direct conflict with years of City of Austin public presentations, boundaries for the venue project that false constrict the scope of the project. This in spite of the fact that well in excess of $1 million of venue revenues have been spent over a period of twelve years on both planning efforts and on actual construction outside their fabricated boundaries of the project (but within the area generally and historically understood to be the intended venue district). Had these expenses occurred outside the venue, a clear violation of Chapter 334 of the Local Government Code would have occurred.

2) The Law Department has plainly misrepresented Chapter 334 of the Local Government Code, asserting that ad valorem tax revenue may not be expended within a venue project district when that district is composed of dedicated City parkland, and that recent expenditures must be refunded from the venue to the City’s General Fund. This, in spite of the fact that significant ad valorem tax revenues have been spent within the same district for ten years.

By virtue of these two unfounded opinions in 2011, the Law Department sets conditions that would establish the City of Austin has acted illegally and exposed the City to legal action. The City Attorney, while knowing, or being easily able to ascertain, these actions had occurred, did not inform the City Council of these historical violations. In fact, as both opinions are unfounded, these violations never occurred.

Furthermore, the City of Austin Law Department, which is responsible for ensuring the propriety of the City’s budget, overlooked what appears to be a clear violation of Chapter 334 in the current City budget. Specifically, $130,000 of venue revenues are being transferred to the City’s Tourism and Promotion Fund, a use that has no relationship whatsoever to the goals or the physical reality of the venue project. I do not know whether this kind of transfer has been done in prior years, but no language of Chapter 334, which prescribes the eligible uses of venue revenue funds, would support such a transfer.

These recent opinions form a pattern by which the Law Department is attempting to conduct fiscal policy by seemingly ad hoc legal fiat, attempting to overrule policy formally established by public vote and by the prior actions of the City Council. The City Attorney, by virtue of the Law Department’s position of legal expertise and authority, is constraining City departmental staff from legitimate courses of action, thereby placing the City Council in the uncomfortable position of needing to heed their attorney’s advice even though it is at best questionable in the context of past City actions and an objective reading of state law, and at worst completely bogus.

The backdrop for all these maneuverings has been to defend the City of Austin Convention Center Department’s maximized use of the car rental tax authorized to support the venue project. Though the ballot proposition only specified that the car rental tax would fund venue project (including parkland) development and construction, the covenants governing the bond sale to finance a portion of the construction of the Palmer Events Center part of the project gave facility maintenance and operation (which was not specified as a valid use of the tax) priority over park construction (which was specified).

The City Attorney has strenuously defended the legal grounds for these terms of the bond covenants, using reasoning that completely avoids the fundamental question of whether the funding priority conforms to the ballot proposition passed by public vote and is therefore legitimate. Their reasoning is based solely on adherence to process involving the State of Texas Attorney General, a process wherein the City’s claim of this legitimacy were never to be questioned. By failing to address the apparent inconsistency between the ballot proposition and the fiscal direction embedded in the bond covenents, the Law Department has left the City Council uninformed, exposed to legal action that could invalidate the core financial instruments of the project, and with a false sense of security that the City’s contracts are legitimate when the question is far from settled.

The Opinion Regard Boundaries

Since the Town Lake Park venue project was enacted in November, 1998, the City of Austin has represented that it includes all the City of Austin parkland west of South First Street, north of Barton Springs Road, and south of Lady Bird Lake (then called Town Lake), including the area known as Auditorium Shores. The western boundary of the area has been portrayed at various times as including the parkland known as the Butler Pitch & Putt Golf Course west of the Union Pacific Railroad right-of-way and east of Lee Barton Drive, as well as the western portion of Auditorium Shores between the railroad and South Lamar Boulevard. Other promotional graphics indicate the district extends only to the railroad. But in every City publication, the Auditorium Shores tract between Riverside Drive and Lady Bird Lake has been considered part of the project.

No boundaries for the venue district have ever been formally established by City Council.

On April 7, 2011, the City Attorney represented to City Council and staff that the boundaries of the Town Lake Park venue project do not extend north of Riverside Drive, and therefore the City may not expend car rental tax revenues, which are devoted exclusively to the venue, in that area.

This assertion has no foundation whatsoever and represents an attempt to de-scope the project now, after the fact, and redirect its car rental tax revenue stream for other purposes.

The Law Department’s assertion that the Town Lake Park Venue Project extended only from Barton Springs Road to Riverside Drive prompted me to do exhaustive research into its physical definition.

Four Council actions comprise the definition of the venue. These are:

Resolution 19980902-017, adopted September 2, 1998, which adopts a City Manager recommendation “to finance the construction of the Town Lake Park Community Events Center with related parkland development and parking facilities through the use of additional revenues created on the imposition of a five percent tax on short term motor vehicle rentals.”

Ordinance 19980903-J, adopted September 3, 1998, which specifies Proposition 11 (the venue project definition, creation of car rental tax, bond authorization for construction) and Proposition 12 (Long Center lease authorization) and their ballot language.

Resolution 990729-30, from July 29, 1999, approves the Master Plan for the venue project developed by the EDAW partnership and directs the City Manager to initiate amendments to the City Code to accommodate the plan, which is incorporated as an Exhibit.

Ordinance 19991028-088, adopted October 28, 1999, which authorizes issuance of the project bonds, incorporating the bond covenants. (As this ordinance runs to 50 pages, it is included by reference with a web link below. Attached, though, are the critical pages specifying the funding priority I mention.)

None of these actions identifies the boundaries of the venue. Nor do any of them define the physical size of the venue. Neither do either of the bond packages (1999 and 2005), though as secondary documents those would not be define the venue or its geographical boundaries in any case.

A notion had crept into the folklore of the project in 1999 that the venue was sized at 54 acres. A departmental memo from Planning Director Austan Librach in May, 1999 (attached) had mentioned the 54 acre size, also passing along the Law Department’s feeling that the venue lands could extend north of Riverside Drive. But there is no foundation anywhere in City policy action for the 54 acre limitation.

The closest the City has come to actually specifying the boundaries is the scope of the Master Plan for the project, which included Auditorium Shores, the current Riverside ROW, and the parkland south of Riverside exclusive of the Long Center lease site. The plan prescribes park development for all these tracts, though the current use of the Butler Pitch & Putt was deemed appropriate. Prescribed improvements on Auditorium Shores extend west of West Bouldin Creek as far as the an extension to Lady Bird Lake of the alignment of Lee Barton Drive. This suggests appropriate boundaries for the venue would be the Lady Bird Lake south lakeshore, South First Street, Barton Springs Road, and the western edge of parkland bounding the line defined in part by Lee Barton Drive.

An exhaustive search of City documents establishes that the meets and bounds of the venue project have never been set and that the size of the venue has never been formally specified in a policy action.

Significant venue funds were expended in the development of the Master Plan, including the Auditorium Shores area north of Riverside Drive. Furthermore, in 2006-2007, the City spent $935,000 on project construction between Riverside Drive and Lady Bird Lake, building a lake water intake and distribution system integral to the park. Both the planning expenses and the construction expense would be an illegal use of venue revenues if Auditorium Shores were not part of the project. The Law Department by its opinion exposed the City to sanction for these supposedly illegal expenditures.

The City actions cited above may be found in their entireity on-line at:

Resolution 980802-17 Authorizing Rental Tax

Ordinance 980903-J Setting Proposition 11 Ballot

Resolution 990729-30 Accepting Town Lake Park Master Plan

Ordinance 991028-88 1999 Bond Package

The Use of Ad Valorem Tax Revenues on Venue Parklands

According to a Parks and Recreation Department staff briefing of a Parks Board committee on May 9, 2011, the Law Department maintained that ad valorem tax revenues may not be used to support parkland development or maintenance within the Town Lake Park venue project. Furthermore, the Law Department asserted and that the venue project must therefore reimburse the City’s General Fund for maintenance expenses it incurred on the Liz Carpenter Fountain that were triggered by changes in state guidelines for public water features and financed by a bond issue to respond to those changes. The reimbursements would come out of the pool of venue funds belatedly proposed for the next phase of Town Lake Park development.

Accordingly, even though the venue has never funded any maintenance expense for Butler Park, the Law Department is implying that the park’s maintenance cannot be supported from the City’s General Fund. Additionally, the suggestion is that even if all or part of Auditorium Shores were included in the venue (over the Law Department’s newly proffered objection that the venue does not include that tract), Auditorium Shores development and maintenance could not receive any funding support from ad valorem taxes, i.e., the General Fund.

The Law Department’s justification is supposely from Chapter 334 of the State of Texas Local Government Code, which governs venue projects.

Their assertion is completely false, as a straightforward reading of Chapter 334 clearly shows.

They apparently hang their hat on Section 334.041, “General Powers”, section (f):

§ 334.041. GENERAL POWERS.
…
(f) A municipality or county may not use revenue derived
from ad valorem taxes to construct, operate, maintain, or renovate
a venue that is part of an approved venue project. This provision
does not apply to:
(1) a venue authorized under Section 334.001(4)(D) or
(F); or
(2) a county or municipality for which the use of
revenue derived from ad valorem taxes to finance a venue project is
approved at an election held under Section 334.0241.

Here is what Section 334.001(4)(D) says:

§ 334.001. DEFINITIONS. In this chapter:
…
(4) “Venue” means:
…
(D) a municipal parks and recreation system, or
improvements or additions to a parks and recreation system, or an
area or facility that is part of a municipal parks and recreation
system;

The venue project is entirely on City of Austin dedicated parkland. Section 334.041(f)(1) specifically states that the ad valorem tax restriction does not apply due to the Section 334.001(4)(D) exemption.

Again, the Law Department was subverting the park component of the venue project on completely false grounds, illegitimately restricting the funds that had and could be applied to the park’s development and maintenance. Furthermore, the City Attorney again placed its client at risk by putting the City in the awkward position of already having since 2001 violated state law as they interpret it. This incorrect interpretation, if recognized, invites the City to be legally challenged regarding its actions, even if such a challenge would melt away under any reading of Chapter 334.

Chapter 334 of the Local Government Code may be found on line at http://law.onecle.com/texas/local-government/chapter334.html

The Tourism and Promotion Fund Transfer

In the City of Austin 2010-11 Approved Budget, Page 225 (attached) describes the Tourism and Promotion Fund, and states, “Additional revenue sources for the Tourism and Promotion Fund include interest earnings and a Palmer Events Center (PEC) Revenue Fund transfer of $.13 million.’

The Palmer Events Center is a core facility within the Town Lake Park Community Events Center Venue Project. The PEC Revenue Fund is a venue revenue fund, supported primarily by the car rental tax and revenues from the PEC and its parking garage. Eligible venue revenue expenditures are enumerated in Chapter 334 of the Local Government Code. No expenditure such as this one is described. The City of Austin 2010-11 budget may be found on-line at FY 2010-2011 Budget. The referenced Page 225 is on page 236 of this PDF file.

The Bond Covenants

The Law Department has offered a process-oriented justification (attached) for the propriety of using rental car tax revenues for the ongoing operations and maintenance of the Palmer Events Center.

Chapter 334 clearly allows operations and maintenance to be designated by ballot as an eligible expense of venue revenues. In this case, though, O&M expenditures were not authorized by ballot, which specified instead that the car rental tax would fund the planning, development, and construction of the venue. In no public discussion prior to the election or throughout the subsequent master planning process that culminated in July, 1999 was there any mention that car rental tax revenues could be used for this purpose. The historical precedent in the City was that bed tax revenues underwrote the operations and maintenance deficity of the public events facility, and the understanding was that this would continue to be the case.

That the bond covenants were adopted with the O&M funding taking priority over park construction is a sleight of hand that may be outside the purview of this grievance process. However, the Law Department’s steadfast opinion that operations and maintenance somehow fall under the definition of planning, development, and construction defies any understanding of the English language. Either their interpretation of the language is such, or they maintain that material inconsistency between a ballot authorization and its implementation is legal and acceptable. In this the Law Department would also be wrong.

Their defense seems to hinge on the State of Texas Attorney General’s blessing of the bond package. However, the Attorney General (AG) is not asked to rule on the consistency of the bond covenants with the ballot authorization. This falls under the AG’s explicit acknowledgement that the AG’s office took the City’s word on matters of fact (of which this was one) and made no attempt to independently verify such. The Law Department, by generalizing the AG’s certification as a blessing of all claims made, overreaches dangerously. A court might take a dim view of the attempt to include ongoing O&M as an element of construction. Yet the Law Department has exposed its client, the City, to an invitation to a court to force such consideration, which would place the entire financial underpinnings of the venue project at risk.

During the master planning meetings in Spring, 1999, leading up to that summer’s Town Lake Park Master Plan charettes, a thorough parking demand analysis was performed by WHM Transportation Engineering Consultants Inc. The demand analysis took into account parking demand associated with the Long Center, Palmer Events Center, Daugherty Arts Center, and the park, operating at full capacity in all their planned venues. As events at Palmer typically experience highest demand during the daytime and Long Center events at night, the demand curves for the two facilities were generally complementary. Parking for the park and Daugherty is generally satisfied by available surface parking that was not included in the garage analysis, but that demand was nevertheless factored into the analysis.

WHM followed industry standard guidelines in assessing the appropriate level of parking availability. The industry standard is to supply of total peak demand. Serving beyond this 85% threshold would lead to the additional spaces being used too rarely to justify the construction expense. Rather, when events are projected to exceed that threshold, off-site supplementary parking plans, perhaps including shuttles, are normally required, as is often done for major events at various Austin venues. The City Hall/CSC/AMLI complex was viewed as a sensible and adequate resource for supplementing public parking directly available to the venue.

The peak demand period identified was on Saturday afternoons, when 2420 spaces would be required, 2100 of those resulting from capacity events at the PEC. Applying the 85% metric results in a requirement to supply 2057 spaces directly available to the venue. It should be noted that the demand figures included demand of 120 spaces for park users, but that this demand would be satisfied primarily by surface parking on the park site. Nevertheless, the demand was factored into the garage analysis.

Financial projections for the car rental tax supported only enough revenue for the venue to construct 1000 on-site garage spaces, but the 85% threshold required much more. Directly adjacent to the venue, though, the One Texas Center garage, which is little used during peak event hours, could provide 700 spaces, and the AustinEnergy garage at 721 Barton Springs Road could provide another 250. Both garages were offered for weekend and evening public use. Furthermore, AustinEnergy offered to fund an additional 200 parking spaces in the on-site garage. The resulting 2150 spaces easily satisfied the recommended 85% of measured demand, achieving 88% of peak demand. The only other periods exceeding this availablity were Sunday afternoons (peak 2228, driven by PEC events) and a a ten minute period on Friday evening when full capacity at Long and a tailoff in park activity produced demand of 2170 spaces, the park component of which would be satisfied by park surface parking as previously noted. Evening activities at the Long Center, even with all three of its planned venues at capacity, never would create enough demand to reach the level parking directly available to the venue.

The problem, then, seem to have been safely solved. Supplementary procedures such as valet parking, shuttle vehicles to the One Texas Center and 721 garages, could be put in place for patrons for whom the short walk from a garage was troublesome. If a major PEC event exceeded availability, garages just north of the river could provide overflow parking, and shuttle service could make attendance from those locations would make them amendable.

Simultaneous full capacity events at both facilities would not be remotely feasible under any achievable circumstance, so a decision was made that some management coordination would be required to avoid such circumstances. Major PEC events like the Christmas Affair could not be co-scheduled with major Long Center events such as an afternoon opera performance. (Though this decision was made clear at the time, it was thoroughly ignored shortly after the Long Center’s opening, when a major Long Center even ran simultaneously with a major event at the PEC and the Reggae Fest at Auditorium Shores. This experience served as a stern reminder that management coordination was necessary and that ignoring the previous understanding had very negative consequences. Since that rocky beginning, all facilities have cooperated effectively on scheduling.)

To be absolutely clear, the reason the on-site garage was sized at 1200 spaces was precisely that the City believed, based on venue revenue projections, that it could not finance a larger facility. No one would have balked if more money were available, but it was not.

With this data in hand, the master planners were instructed to develop a 1200 space garage on-site. It was footprinted at the 1999 Master Plan charette, designed by Evan Tanaguchi of the Barnes-Tanaguchi Partnership, and developed along with the Palmer Events Center. The neighborhood had input into the garage design process and sought a design that would not create a concrete canyon effect on Barton Springs Road. Tanaguchi was sensitive to this input and designed the elongated, curved garage with significant setback from the street and height that would dominate neither the PEC nor the Long Center buildings.

Extraordinarily late in the design process, the Long Center became concerned about on-site parking availability and petitioned the City to accept a loan that would fortify the construction of the garage so that it could support construction of additional levels at a later date. To be clear, there was no offer by the Long Center to fund the eventual garage expansion; that would be at the expense of the City. Since the financial burden of providing the garage expansion would fall on the venue as surely as if the garage were upsized immediately, the same constraint applied: there were insufficient anticipated revenues to pay for it. Doing so would radically affect the availability of funds for planned park construction. Additionally, the neighborhood objected that the proposal to eventually upsize the garage with additional levels would violate the design principles that had led to Tanaguchi’s design. Incorporation of these design principles was one a many complex factors in the nest of compromises formulated in the master plan. Yet Long Center loudly pilloried the neighborhood for its objections, blaming the neighbors for thwarting their parking desires and convincing the American-Statesman editorial board to echo this criticism of the neighborhood. But the predominate and definitive reason the loan was rejected was fiscal. The project could not bear the financial burden of accepting the loan and financing the eventual expansion. Moreover, the professional parking demand study, which was based on Long Center data, and the resulting parking component of the master plan established that needs were to be met within all standard planning guidelines by the existing parking plan.

Trouble surfaced after September 11, 2001, when AustinEnergy withdrew its spaces at 721 Barton Springs Road from availability to the venue, citing fears of terrorism. This appears to have been a ruse, as the building houses no operationally critical procedures or equipment. Project stakeholders, including the neighborhood, have petitioned over the years for the AustinEnergy spaces to once again be made available for non-business hour use. Councilmember Riley’s late addition to the June 9, 2011 City Council resolution regarding the venue project speaks directly to a desire for AustinEnergy to abide by its original agreement to make these spaces available.

It is remarkable that vitriolic stories have resurfaced blaming the neighborhood for thwarting the success of the Long Center by opposing the garage expansion. Neighborhood opposition, while it existed, was not the deciding factor in the City’s refusal to accept the Long Center proposal. The real reason was fiscal.

Furthermore, the existing shortage is due to AustinEnergy’s withdrawal of its commitment to offer its garage during evening and weekend hours.

Whatever Happened To Town Lake Park?

(Hint: It’s About the Money)

by Larry Akers

Friends of the Parks of Austin Stakeholder Representative

Town Lake Park Community Project

Visitors might enjoy a visit to Auditorium Shores or Butler Park (collectively Town Lake Park) and not appreciate how far short the park falls from what was envisioned in its creation. They might not guess how the funding authorized by the voters of Austin to construct the park had been hijacked. Without referring to the Master Plan and the accompanying finance plan adopted by City Council in July 1999, they might not recognize that the park is only half funded and half built.

So what went wrong? Why, 12 years later, have only 24 acres of the available 76 acre park been developed? Within even those 24 acres, why is the centerpiece Alliance Children’s Garden adjacent to the Daugherty Arts Center undeveloped? Why have many other features of the redeveloped area been omitted, so that only one corner of the site is attractive for use? And why have pedestrian safety measures adopted by the City been ignored in implementation? Where is the world class park the voters taxed themselves to pay for and meticulously planned?

The short answer is that unbeknownst to the public and even the City Council, the Convention Center Department absconded with the funding the voters authorized for construction of the park. Using it to underwrite the operations and maintenance of the Palmer Events Center, a purpose not authorized by the voters, the Department made itself so flush with cash that it has filled the pockets of its managers and employees with nearly $5 million of unearned take-home pay.

This report delves into the background of this failure to deliver by the City. The executive summary has links to sections of the report presenting a full explanation of its points. The sections have links to many supporting City documents, which are also indexed at the end of the report.

Executive Summary

In October, 1998, City of Austin voters authorized creation of a tax on local car rentals to fund construction of the Town Lake Community Park Project. The project consisted of a new Palmer Events Center (PEC) and a park redevelopment on adjacent parkland, with a parking garage to serve both as well as the new Long Center for the Performing Arts. In Spring 1999, project stakeholders and nationally recognized professionals guided creation of a master plan for the project. In May-July, 1999, stakeholders and City Council accepted the master plan, along with a financing plan developed by Assistant City Manager Jim Smith, that would fund complete build-out of the finished project by 2007. The finance plan allowed construction funding for the PEC to exceed the City’s bonding authority, and for park development to be completed in four phases on a schedule accelerated thanks to an inter-department borrowing line of credit of up to $6 million. It was a brilliant start.

But in October 1999, City staff presented to Council the bond covenants, the contract governing the bond sale, that redefined the project and the financing authorized by voters and by Council, undermining the recently adopted Jim Smith finance plan. The covenants specified a car rental tax funds dispersal “waterfall” such that any operations and maintenance (O&M) shortfall for the PEC would take complete priority over any park construction funding. A City Councilmember reported that staff presentation of the covenants made no mention of rental tax dollars being redirected to O&M, and the covenants were adopted on consent without discussion. Jim Smith’s August 2000 financial update to Council, either in ignorance or unlikely deception, insisted that the park financing was on track and might even be accelerated, even though its underpinnings had been destroyed. Council appeared to remain uninformed of the waterfall until Spring 2002. The stakeholders who had brought the project successfully to the City and had been given a formal oversight role were not informed at all until mid-2003. Though the ballot language had only specified that the rental tax would fund construction, Staff had redefined the word “construction” to include operations and maintenance in perpetuity, and had reduced even the designation of park construction to “any other legal purpose” under state law.

The financial impact of the waterfall scheme on the park project was devastating. Phase II was delayed twice, for nearly three and a half years, resulting in a $4.43 million cost in lost park features and donations. Phases III and IV were removed from the financial plan altogether, with staff citing insufficient funding.

The Convention Center Department enriched its employees personally with the windfall from the car rental tax redirection. The waterfall allowed the Convention Center Deparment, which had historically funded events center operations shortfalls from the hotel/motel bed tax, to free the bed tax revenue for other purposes. With much of their windfall, they created a “Gainsharing Bonus Program” for their employees, which from 2001-2010 sent nearly $5 million home as bonus pay, those benefitting most being the director and officers who put the waterfall in place and directed its cash flows. The bonuses were essentially unearned, having been justified in part by the bogus performance reviews that Department Director Bob Hodge created and for which he was fired and nearly indicted. No other City department had ever had such a bonus pay program.

Project stakeholders pushed for correction of the structural financial problem caused by the waterfall. When the Gainsharing Bonus program was exposed by project stakeholders privately to City Council along with complaints about the waterfall scheme, the City quickly offered $7 million to “finish” the park. Though welcome, this offering failed to correct the structural issues with venue finance, and it was insufficient to realize the park as designed in the Master Plan.

Stakeholders also pressed the issue with City management. In Fall 2007, Assistant City Manager Rudy Garza pledged to stakeholders to formulate a plan to wean the Convention Center Department from the car rental tax. Garza also initiated a revisitation of the master plan in public workshops, with his apparent intent being to establishing that $7 million would be sufficient to meet the public’s vision for the park. When those workshops started to produce a refined vision, essentially consistent with the original master plan, that carried an estimated price tag of $22 million, the revisitation process was abruptly halted.

Garza’s promise had come to nothing, so stakeholders escalated their complaints. City Manager Marc Ott, confronted with the issues and with Garza’s failure to deliver, responded not with a plan of action, but rather with a legal defense of the City’s use of the rental tax money for PEC O&M. He failed to respond to any of the points raised about transparent governance, faithful execution of voter will, or failure to implement Council direction of the Jim Smith financial agreement and park development plan.

In February, 2011, the City declared that the $7 million allocated by the City’s Chief Financial Officer for Phase III construction no longer existed, having been quietly spent almost entirely by the Convention Center Department. City Management began proposing that the remainder of park construction could be funded via the planned 2012 bond election, without considering that the public, having already taxed themselves to fully pay for the park, might resist taxing themselves to pay for it again after the City redirected the original construction funds to an unauthorized purpose.

There is plenty of time and car rental tax revenue within the venue project’s life, though the cost of delay has been steep. Adjusted for standard construction inflation measures and taking into account items removed from Butler Park on account of the cost of delay, the delayed and undelivered funding for the park as of 2011, the City remains over $19.2 million short of meeting its funding commitments under the Jim Smith plan. $4.43 million in additional construction purchasing power was lost due to the 2002-2006 delay. The City also recently declined a $1 million donation that would have enhanced the park’s water feature on the north side of the PEC. Still, the car rental tax revenue stream could easily allow recovery from all these shortfalls. From its inception in 1999, the car rental tax has generated nearly $37 million more than necessary to cover bond debt service, enough to have fully funded the complete park and the PEC overrun with millions to spare.

Putting park construction back on its originally authorized path to completion will require the City to honor its original ballot authorization that states the car rental tax was authorized exclusively for “construction” of the PEC and the park. The Convention Center Department will need to fund its operations from revenues and other sources. The precedent for this other source is the hotel/motel bed tax, which has been redirected to other purposes including padding paychecks through the Gainsharing Bonus Program. Ultimately the fiscal direction of the Town Lake Park Community Project can be restored and the park project fully realized as envisioned in its master plan and subsequent refinement.

A Good Start

In the summer of 1999, there was every reason for excitement about the City’s construction of a long-awaited great Central Park on the south shore of Town Lake. The land use logjam that had kept the parkland between Town Lake, South First Street, Barton Springs Road, and Lee Barton Drive locked in unsightly surface parking and semi-decrepit uses had finally been broken. Voters had supported two 1998 ballot propositions put together by a formalized stakeholder group to allow Palmer Auditorium to be renovated into the Long Center for the Performing Arts, a new Palmer Public Events Center and a shared parking garage to be built adjacently. The surrounding parkland tract would be redeveloped into a great cultural and recreational green space park with stunning views of downtown and Lady Bird Lake (then named Town Lake). An open public process, guided by public stakeholders and the City, would direct the project. A world class park was in the making.

The propositions provided a financing mechanism, a 5% tax on car rentals in the City, to fund the construction of the PEC, park, and garage. An extraordinarily inclusive public master planning process had produced a site plan sketch and ultimately a Master Plan that cemented many tough compromises and represented consensus among all the stakeholders in the development and the community. The Master Plan was formally adopted by City Council in July, 1999, along with a financing plan that would allow a first rate events center and garage to be built promptly. The financing plan included phased funding for park construction that would completely develop the park in accordance with the visionary $21.9 million Master Plan by 2007. The City would finally have the fine centerpiece of its green necklace of parkland along Town Lake, realizing the vision of the 1980′s initiative mounted by the Town Lake Park Alliance and an army of supporters in what may have been the city’s defining polical struggle of the 1980′s.

Project Fundamentals

As conceived when the enabling Proposition 11 was brought to ballot in November, 1998, the new Palmer Events Center and parking garage would be constructed at a cost of $40 million and be financed with 30-year revenue bonds backed by a car rental tax authorized by the voters and dedicated solely to the construction of the Town Lake Park Community Project venue. The venue project would include the events center sited within a 76 acre parkland green space, uniting with adjacent parkland to create a central city oasis. A parking garage to serve the PEC, the Long Center for the Performing Arts, and the park. The Proposition 11 ballot language and the supporting text published by the City comprised the entire formal description of the project provided to the voters by the City, establishing the agreement by which the voters agreed to tax themselves. By state law governing such venue projects, the rental tax could be used for no other purpose and could not fund any project or program outside the boundaries of the venue.

The Stakeholder Group, Master Plan, and Financial Plan

Chaos had reigned during the months leading up to the 1998 charter election, as proposals from the Mayor’s office, City staff, and downtown interests for accommodating the arts groups’ request for Palmer seemed almost designed to pit interested parties against each other. As the deadline for formulating a ballot authorization approached, core stakeholders together stepped outside the City-guided process and came to a basic agreement on how a coordinated project would be conceived and financed. The agreement was formalized under a Memorandum of Understanding. City Council accepted the stakeholder guidance, and all parties carried the ballot propositions to electoral success. City Council had been so impressed by the stakeholder effort that in the wake of the election, the City formalized the stakeholder group and charged it with directing the venue’s master planning process, selecting contractors, and overseeing the project development. The resulting Master Plan created a site plan and facility and park designs sufficient to establish construction budgets of $46.9 million (subsequently increased to $48.3 million) for the Palmer Events Center (PEC) and parking garage, and $21.9 million for the park development. This $21.9 million was expressed in terms of phased expenditures as the site was redeveloped.

The Jim Smith Financial Plan

In May, 1999, Assistant City Manager Jim Smith created a proposal to the stakeholders that could resolve these timing issues. The project would allow $6.9 million of additional immediate funding for PEC construction, funded from redirected car rental tax revenues that would have otherwise funded early park construction. This would allow the facilities to be built on time and as desired, including exhibit space that was substantially larger than originally envisioned. Then, to compensate the park development for this initially unavailable revenue, the City would institute an inter-fund borrowing capability for the venue, essentially establishing a line of credit of up to $6 million against funds held by other City departments. This would initially support the “park” landscape construction immediately around the PEC and garage and the design of the second phase of the park, between the PEC and railroad tracks and south of Riverside Drive. The interfund borrowing would be repaid by incoming rental tax revenues, and the line of credit would remain available, so that the rest of the park could be constructed in phases. The plan had the City committing to park construction funding of $18.5 million in phases, all by 2007. The remainder of the proposed construction budget would be funded by donations, which from the very beginning were envisioned to underwrite part of the park’s development. The entire park development, a full realization of the Master Plan, would be completed in 2007, though the pace of donations might dictate when certain finishing items would be put in place. Explicit in this financial proposal was that “streetscape improvements of $6M called for the master plan are not included” in this financial plan, the assumption being that the street improvements, being separate from the venue, would require funding from standard public works sources. The City’s $18.5 million would be devoted entirely to parkland enhancements.

All parties agreed to this financial plan. Though 2007 was still a greater deferment than any would have liked, the reality of limited bonding authority and prudent borrowing limited the project’s financial capability beyond that point. Furthermore, actually executing the site preparation, engineering, design, and redevelopment of the entire park site would likely take nearly as long, even if complete funding were immediately available. 2007 was a reasonable expectation for completion, and all major forseeable issues had been apparently resolved. Smith described the plan in a memorandum to City Council in July, 1999, and City Council subsequently adopted the agreement. (Page 2 of this posting) (Page 3)

The Heart of the Problem: The Bond Covenants and Funding “Waterfall”

What no one in the public knew, including City Council, stakeholders, and relevant City board and commission members, is that this financial plan was quietly demolished less than three months later. Convention Center Department and Finance Department staff met with bond counsel to formulate, the bond covenants, the contract for financing the PEC construction. The covenants established several Special funds and specified a prioritized list of disbursement targets for the car rental tax revenue which have come to be known as the funding “waterfall”:

1. pay the debt service on the $40 million bonds
2. fund a debt service reserve, essentially a surety bond, or a kind of
   insurance policy that could be called on to cover the debt service
   payments in case normal revenues could not do so
3. fund a $1 million Repair and Replacement account to cover repairs to
   the facility, for example replacing worn out seating
4. fund an Operating Account and operating reserve to cover the operations
   and maintenance of the PEC
5. “any lawful purpose under the Act and as authorized by the election
   held November 3, 1998″.

The bombshell in this scheme is item #4, the commitment to underwrite the operating loss of the PEC and garage with car rental tax revenues.

The PEC was expected to operate at a loss. Most public events centers, including the old Palmer Auditorium, operate at a loss, as their charters favor serving the public by hosting affordable events over making a profit. Historically, the Palmer Auditorium operating loss was covered by the City’s bed tax revenues, which from the early 1980′s through the mid-1990′s amounted to a subsidy for Palmer of approximately $1 million annually (in CPI-adjusted current-value dollars), according to City Convention Center Department financial documents from 1982-1995.

In none of the extensive communication from City staff to the public, the stakeholders, and City Council had there been any suggestion this would not continue to be the case. The May 1999 financial scheme formulated by Assistant City Manager Jim Smith assumed that all rental tax revenues in excess of the debt service would be devoted to construction. In the Proposition 11 ballot and supporting language, “construction” was specified as the sole target the voters were authorizing for car rental tax revenue expenditure. In defiance of common language use, the bond covenants assumed a definition of “construction” that includes the operation and maintenance of the facility in perpetuity.

To fully appreciate the clandestine nature of this action requires several observations.

• The community stakeholder group that had been charged with overseeing the venue development had to that time been intimately involved with virtually every aspect of the project, including outreach and community input, scoping, budget, program analysis, traffic analysis, selection of contractors, design (both in the large and in architectural and landscape detail), phasing, and conflict resolution. No aspect of the project had proceeded without stakeholder input and review. Yet the stakeholders were not consulted at all regarding the funding waterfall or the redirection of funds to operations, and shockingly, were not even informed of the waterfall scheme or the fact that rental tax revenues were underwriting Palmer O&M until almost four years later, in June 2003. The occasion for finally conveying that information was subsequent to the Convention Center financial officer’s announcement that Phases III and IV of the park development were being completely withdrawn from the venue’s financial plan.
• City Council operated under the same assumption as the stakeholders that the car rental tax revenues, as stated in the City’s ballot and supporting language, would fund park and facility construction, not operations and maintenance. The staff briefing for City Council regarding the bond covenants and accompanying ordinance did not readch the level of detail of describing the funding waterfall. Staff did not mention that the rental tax would be funding operations and maintenance. Any reasonable reading of the ballot and the bond covenants would have concluded that the covenants represented a signficant policy change from the ballot direction, a change that under state law would require at least a public hearing. The Councilmembers, being familiar with the project, knew that no discussion of funding O&M from the rental tax had ever been conducted or publicly vetted.
• The bond ordinance was adopted on consent by City Council on October 28, 1999 without any discussion on the dias whatsoever, there being no apparent cause for material debate.

There was no reason for anyone involved with the project, including the City Council, to suspect that such a revision of the voter’s authorization would or could be made. Yet when the funding waterfall was slipped into the covenants, the entire financial structure underlying the commitment to fund park construction was subverted. O&M funding was given complete priority over park construction. Park construction was not even mentioned by name, only alluded to as “any lawful purpose”.

As it turned out, there would be no need to consider what other expenditures might be considered “lawful purposes” and take precedence, for the O&M costs consumed virtually all the available revenues. As the interfund borrowing funds were sufficient to cover the Phase I “park” construction of landscaping around the PEC and garage and the design contract for the Phase II development, nothing seemed amiss for almost four years. The Convention Center Department Financial Officers, having been given fiscal control of the venue project, apparently did not consider themselves accountable to either the Parks Department or the stakeholders overseeing the venue project, for they did not share the financial reports that would have shown the revenue disbursals and the emerging reality of revenue starvation for the park.

Nothing of the funding waterfall came to public light until May, 2003, when the Convention Center Department financial officer announced to stakeholders that Phases III and IV of the park development had been removed from the financial plan for the venue project. Venue revenues could only foreseeably support the completion of Phase II, the area west of the PEC now labelled Butler Park. This announcement was met with anger and disbelief. How could the revenue stream that would so easily support the May, 1999 financial agreement have been so wrong? The numbers made no sense. Only then was the funding waterfall revealed. The revenue was more or less as projected, though depressed a bit by the temporary post-9/11 business lull, but it had been surrepticiously diverted from park construction to the Convention Center Department’s operations and maintenance funding of the Palmer Events Center.

The determination to abort Phases III and IV had been made by a new acting Assistant City Manager over the project, John Stephens, and relayed to City Council in a memorandum. Stephens was moving into this job after serving as the City’s Director of Financial Services. Stephens boldly (and incorrectly) asserted that with completion of Phase II, “the City will have more than fullfilled its commitment to stakeholders in this project, because it will have spent $2.2 million for the construction of phase two that was intended to have come from donations.” How this $2.2 million in Phase II would somehow cover the City’s $11.1 million commitment to Phases III and IV of the project is a deduction Stephens chose not to explain.

Further evidence that City Council was unaware of the waterfall appears in a John Stephens memo to Council in March, 2002, in which he notes an inquiry from Council earlier that month about the priorities for distribution of the rental car tax. The clear indication is that two and a half years after the bond covenants were adopted, City Council still had not been informed of the flow of funds.

Even Assistant City Manager Jim Smith may have been unaware of the waterfall, even after it was enacted. Smith’s venue project update memorandum in August, 2000 gives every indication that the financing plan for park construction was intact and on pace and might even be “accelerated somewhat” through further donations or rental tax revenue increases. Yet the waterfall had already thoroughly undercut the feasibility of Smith’s financial plan. The diversion of funds would have made Smith’s claims unsupportable.

If City staff had been comfortable with the propriety of their bond covenant scheme, why was it withheld from virtually everyone outside the Convention Center Department and the Financial Services Department with any interest in the project?

Fiscal Impact of the Funding Waterfall

Over time, the cumulative effect of this diversion was disastrous for the park project. A snapshot of the venue project financials shows that from the beginning of the project through fiscal year 2007-2008, the car rental tax generated $49.882 million in revenue. Debt service on the Palmer bonds consumed $26.055 million of this, and the repair and replacement reserve (a dubious beneficiary of rental tax funds, since it was more an operating reserve rather than a capital reserve) consumed another $1 million. The PEC’s expenses through 2007-2008 were $26.999 million, and its event-related revenue totalled $14.664 million, giving the PEC an operating deficit of $12.335 million. By the Jim Smith 1999 agreement and by what the voters approvated, $22.827 million should have been available for construction, more than enough to complete the City’s pledge of construction funding for the park on its original schedule. But only $10.8 million had been spent (belatedly, the delay itself resulting millions in lost purchasing power). The rest had been diverted to PEC operations.

This trend continues to the present. A more recent financial statement shows that the PEC’s operating deficit for 2008-09 through 2010-11 was $5.515 million, while the car rental tax collections less bond debt service payments was over $10.242 million. Debt payments have been reduced substantially from 2009 forward, since some of the refinanced bonds were paid off completely that year. Overall, since the rental tax was instituted, it has generated $36.898 million more than needed to meet bond payments, twice what the City’s commitment to park construction funding, yet barely half the park construction funds have been provided.

The City’s hotel bed tax had underwritten the operations and maintenance of the City’s former public events facility, Palmer Auditorium, for many years. Throughout the 1980′s and early 1990′s, the bed tax fully supported Palmer Auditorium’s operating loss at an average of approximately $1 million per year (adjusted by the CPI to current dollar value). (Supporting City financial documents for this period are collected here.) After 1995, City balance sheets and revenue summaries lumped Palmer’s operations with the Convention Center, making it impossible to determine Palmer’s operating loss or underwriting revenue stream.

Bed tax revenues allotted to the Convention Center Department continued to rise through the 2000 decade to a level of $12-14 million annually, not counting a distinct venue allocation of approximately $6 million, demonstrating an enhanced capability for underwriting events center operations. Had the bed tax underwritten the PEC’s operations as it had for Palmer Auditorium, the PEC’s remaining operating deficit would have been negligible, and the car rental tax could have fully funded the park construction as designed in the venue Master Plan and to the level and schedule specified in the 1999 Jim Smith financial plan agreement with the stakeholders, voters, and City Council, with many millions of dollars to spare.

But behind closed doors, hidden from project stakeholders and the public and without forthcoming disclosure to City Council, the Convention Center Department had redirected virtually all the car rental tax funds above debt service away from what was required by ballot (construction of the events center, garage, and park), using it instead to fund operations and maintenance of the PEC.

By 2003, more than half the park development had been completely struck from the venue’s financial plan, and the only part of the “park” that had been completed was the landscaping and driveways immediately adjacent to the events center. The Austin American-Statesman was running full page spreads and banner editorials announcing that the leadership of the Downtown Austin Alliance was endorsing abandonment of the notion of a central park and instead leasing the land out for commercial development. This was an even more radical proposal than architect Sinclair Black’s 1983 proposal for a public/private convention center/hotel/office/condo/retail project on the site. (Black’s idea had so enraged the public that an uprising led by an ad hoc group, Town Lake Park Alliance, resulted in a proposition defeat of the convention center proposal at the polls by a 2-1 majority, a subsequent replacement of a majority of sitting Councilmembers by new ones supporting park dedication and development, and a broad-based planning initiative that determined that all the City waterfront lands should be developed as a unified park, with adjoining private lands subjected to development ordinances to protect the integrity of the green belt. All these ideas were enacted as ordinances and eventually provided a framework for the venue project.)

The Convention Center Gainsharing Bonus Program

A remarkable discovery of municipal corruption relating to the venue project was uncovered in April, 2007.

Having offloaded the bed tax’s burden of financing events center operations onto the rental car tax, the Convention Center Department was now flush with the full benefit of the bed tax revenues. Immediately, they began an unprecedented “bonus” program in which they paid themselves substantial salary bonuses every year. Called “gainsharing” bonuses, these were paid out supposedly as performance bonuses in recognition of the department’s ability to exceed its revenue-generating goals. In fact, they were taking an approximately $400,000 slice off their car rental tax windfall every year and stuffing it in their pockets as take-home pay. Convention Center Director Bob Hodge had been fired and nearly indicted for creating scandalously bogus performance reviews to make the department look good. Those reviews helped justify taking home personal gifts funded by the redirection of funds that the voters had dedicated specifically to park construction.

From the Gainsharing program’s inception in 1999 (the year in which the car rental tax was initiated) through 2008, the Convention Center Department directed by one accounting $3,772,691.91 and by another accounting $3,657,335,49 of tax revenues into employee bonuses. Convention Center Department Director Bob Hodge took home $70,503.13 in addition to his salary. Larry Anderson, the Convention Department’s Financial Officer in charge of the Town Lake Park Community Project, received $46,979.92. No one benefitted more than the senior department managers who put the bond convenants and Gainsharing program in place and have managed the department’s cash flow.

No other City department has ever had a bonus program like this, which raises questions of pay equity with respect to all other City departments. But then, it is likely that no City department has ever been able to redirect another department’s voter-authorized construction revenues to its own purposes. It was a simple shell game, using only one shell to shift the budget obligations of operating an events center from one historically granted revenue stream, the bed tax, to another, the car rental tax, freeing the money to disappear into department workers’ personal pockets. What enabled the sleight of hand was the secretly instituted funding waterfall scheme.

Incredibly, after the program was revealed, it accelerated, even through the financially stressed years of 2009 and 2010 ($556,283.96 and $665,414.56 in bonuses respectively). In the current economic downturn, as in previous ones, City jobs are being eliminated in virtually every other department, while the Convention Center continues padding its paychecks at a record pace.

Toby Futrell’s 3-Year Delay of Phase II

In 2002, City Manager Toby Futrell had, over the strenuous objections of stakeholders and after excellent Phase II park construction bids had been received, postponed Phase II construction from 2002 until 2005. The Phase II bids, including virtually all the proposed add items, had come in $500,000 under budget, thanks to the post-9/11 lull in the construction industry. But Futrell rejected the bids without consulting either stakeholders or City Council, claiming that if the park were built, there would be insufficient funding in the parks budget to maintain the park until 2005. At the time, stakeholders were still ignorant that the Convention Center Department was using venue revenue to fund O&M for other parts of the project. But they objected that deferring Phase II construction for three years would cost far more in additional construction expense than would be saved on interim maintenance.

This fear turned out to be true. Three years later, bids for park construction came in $3.59 million higher than in 2002, despite the removal of over $1 million in work from the package. This explains why only one corner of the Phase II tract was sufficiently developed to attract visitors. Furthermore, by deferring construction, the City walked away from a $480,000 donation that had been pledged by the Junior League of Austin to fund complete installation of artwork and interactive features in the Children’s Garden area south of the Liz Carpenter Fountain. Less than a half million in maintenance money was saved over the three years, and that amount could have been reduced by placing the park on an austere use and maintenance schedule. Futrell’s decision cost the project over $4 million and deprived the public of three years of enjoyment of its new park.

By the time the funding “waterfall” was finally revealed to the public in Summer 2003, the stakeholders were becoming sensitive to the possibility that the park development could be shelved entirely. The City was still promising to fund Phase II construction in 2005. Stakeholders, though protesting the delays, decided not to press the issue of the redirection of the car rental tax jus yet, for fear that if they backed the Convention Center Department into a corner, it would use its considerable influence to rally the business community against ever building Town Lake Park. The stakeholders decided to wait until the first significant piece of the park was on the ground, so that the public could begin to appreciate the potential value of its new central park on the lake.

The excess revenues that were being swept into the Convention Center’s Gainsharing Bonus Program and gifted to employees would have been more than adequate to fund the maintenance program for the Phase II park development that Ms. Futrell insisted the City could not possibly afford. Her judgement apparently was that it was worth $3.6 million of lost opportunity cost, nearly a half million in donated funding, and three years of public enjoyment of our park to maintain the payments of bonuses to Convention Center employees.

The Leslie Browder Offering

After completion of the Phase II effort now called Butler Park, stakeholders began pushing City Council to fix the structural financial problem caused for the venue by the waterfall scheme. At least 23 meetings have been held with various Councilmembers since 2005. (Five from 2007 are noted in this summary letter. During one of these meetings with Councilmember Betty Dunkerley in October 2007, the explanation of the impact of the waterfall scheme and an expose of the Gainsharing Bonus Program prompted the Councilmember to summon the City’s Chief Financial Officer Leslie Browder immediately into the meeting.

Some three weeks later, Ms. Browder issued a memorandum announcing the City would make $7 million immediately available for the next phase of park construction. (This memorandum was subsequently updated to partially correct its misstatement regarding the lack of donations to the project. Although the City of Austin has maintained no consolidated accounting of park donations, cash and in-kind donations as of April, 2011 total well over $1 million, $1.45 million has been explicitly declined by the City, and another $1 million prospect was essentially chased off when certain park elements were named without consideration to a pending donor.)

While stakeholders were cheered that some of the money previously stripped from park construction had reappeared, the sudden timing of the offering was an unmistakable signal that at least some in the City management structure were embarassed by the funding revelations. The Browder memo indicated that these funds would be used to “finish” the park development, though that level of funding could never realize anything resembling the Master Plan or approach the City’s commitment in the Jim Smith financial plan. The structural problem with venue financing, rooted in the waterfall scheme, still existed and had not been addressed.

The Appeal to City Management for Resolution

Hopes for some resolution rose when Toby Futrell was succeeded as City Manager by Marc Ott, who came to the city with transparent governance as one of his philosophical banners. When it became apparent by 2007 that City Council would not act on its own, stakeholders began talking directly to the City Manager’s Office, culminating in a meeting in November 2007 with Assistant City Manager Rudy Garza and Convention Center Department Director Mark Tester. The waterfall and the Gainsharing Bonus program were discussed in detail, and stakeholders made clear their rationale for thinking the waterfall was illegal. Garza pledged to develop a plan to wean the Convention Center Department and PEC from the car rental tax O&M revenue.

Garza, aware of the new $7 million infusion, was keen to leverage that work into an update of the park Master Plan via a series of public meetings. The City and TBG Partners, the landscape architecture firm that had designed Phases I and II and which had been contracted to design this new phase, were instructed to conduct a series of public workshops to update the plan. Garza’s clear desire was that the public would come to understand the park project could be satisfactorily completed with the $7 million (of which only about two thirds would be devoted to actual construction, the rest to design, City overhead, and contingency), despite the offering being far short of the City’s original commitment to the park.

During the winter and spring of 2007-2008, the City and TBG Partners conducted three workshops in which finish-out goals, design concepts, and site plan options were discussed. By the third such meeting, it was clear that the public’s vision for completion of the park was still in tune with the original Master Plan. Time and changing circumstances allowed refinement of the plan for the area between Phase II and the Lady Bird Lake. It was clear that the public could see no way to satisfactorily finish the park on the proposed $7 million. An estimated price tag for the new working concept design was around $22 million, roughly what remained to be spent on the Phases III and IV of the original financial/development plan, given adjustments for inflation, plus remaining expected donations. Essentially a refined, updated version of the original design concept was emerging from these workshops, and the required budget was remarkably consistent with the 1999 Master Plan-driven financial plan.

Without explanation from Rudy Garza’s office, the revisitation of the Master Plan was terminated as it neared completion.

The Marc Ott Position

A year passed without any action from the City Manager’s office to reform the project’s financial structure. Stakeholders, frustrated by Rudy Garza’s failure to deliver on his promise, escalated their case directly to Marc Ott. Ott’s response was studiously narrow and on strictly legal grounds. He pointed out that state law allows venue funds to be used for O&M, that outside legal counsel found the ballot language to be compliant with state law, and that the funding waterfall was consistent with the bond covenant ordinance.

The stakeholders are in complete agreement with all three points, but those three points glaringly evade the principal questions. Though state law allows venue funds to be used for O&M, the opinions establishing that point were rulings on ballot language that specifically included O&M in the public authorization. The Proposition 11 ballot authorizing the venue project specifically did not include any such expenditure, but rather “construction” only. The definition of “construction” does not include “operations and maintenance” in any reasonable interpretation of the English language. The ballot language no more authorized the use of the car rental tax for O&M than it authorized construction of a sports arena, amusement park, race track, or any of a number of other notions that would be legal under the governing state law. Had the intent of the ballot been to add O&M funding to the financial authorization, it would have appeared there. Had the operating assumption been that the venue revenue stream would absorb the burden previously carried by the bed tax, the Jim Smith financial plan would have been inconceivable. By no stretch could the projected cash flows have supported it.

Ott did not answer the question that stakeholders clearly asked: Can venue funds be expended on something outside the scope of the ballot authorization? As for the funding waterfall being consistent with Ordinance No. 991028-88, the City’s bond covenant ordinance, of course it is. That very ordinance defined the funding waterfall. The City Manager’s circular reasoning does not address whether the bond covenant ordinance was consistent with Proposition 11. Financially, the ballot authorized one project; the bond covenants defined another, quite different one. But in his circumscribed response, Ott chose not to address this disparity. Nor did he offer any response to the questions around the Gainsharing Bonus program. Yet the City Manager had decided that the status quo was the legal, right, and proper course for the City to pursue.

The question of whether the City can redefine the target for a cash stream authorized by public ballot is one that bears on all City bond proposals. Given the City Manager’s explicit approval of such action in this case, a thorough exploration of the extent to which the City has re-targeted voter-authorized bonds over the years would be appropriate, and such a finding should provide guidance to voters in future bond elections.

Browder Offering Revisited — The Money Vanishes

Progress toward the next phase of park construction came in fits and starts. The public process to scope the effort was aborted by the City when public input reasserted the goals and scope of the original master plan, but with elaboration on the area around and north of Riverside Drive. Concept development was started, stopped, re-started, stopped again, and restarted under new project management at PARD. A public input process was repeatedly delayed.

In late February, 2011, word began to emerge that the $7 million that Chief Financial Officer Leslie Browder had committed to the project in December 2007 was gone. The money had been spent elsewhere. The City has failed to timely respond to an Open Records request for an accounting of the funds, though Convention Center Department officers have privately stated that they spent the money within their department. Since the revenue stream funding the commitment was the venue’s car rental tax, and since this revenue is managed by the Convention Center Department, a clear accounting of the revenues and expenditures should readily appear on the department’s balance sheet.

Current Funding vs. Funding Promised in the 1999 Financial Plan

A preliminary and incomplete computation of the difference between the park construction funding pledged by the City in the 1999 Jim Smith agreement and the funding actually delivered to date shows the City has failed its commitment to date by nearly $19.25 million in 2011-valued dollars. The costs and losses the City incurred by arbitrarily delaying the project and the City’s refusal of donations and have contributed significantly to the shortfall.

To understand this $19.25 million shortfall, start with the 1999 Jim Smith financial plan as a baseline. The plan was for the City to devote $18.5M to construction in four phases, the last to have been completed in 2007. The plan was severely impacted when Phase II was delayed for three years, the cost impact resulting in many of its elements being removed before going to contract. There are somewhat accurate cost estimates as of 2005 for those elements. Phases III and IV were never implemented, except that a water intake station considered a part of Phase III was built as part of Phase II.

The methodology here is to consider the finish-out costs of Phases II, III, and IV (Phase II as of 2005, for which we have cost data, and Phases III and IV as of their original implementation dates, 2005 for Phase III and 2007 for Phase IV) and adjust those cost estimates as per PCUBCON to 2011 dollars. (PCUBCON, the United States Department of Labor standard measure of inflation/deflation on inputs to construction projects, the measure most appropriate to civil construction projects like Town Lake Park.)

A number of items originally bid in the original Phase II solicitation in 2002 were withdrawn to contain costs in later bids. These include:

30k labyrinth downscaled
40k masonry
150k planting
250k reduction in interactive fountain features
200k signage
200k reduction in pond featues (circulation rather than fountain aeration]
20k furnishings
100k lighting
450k Riverside area landscaping
1.2M Alliance Children’s Garden ground plane
480k Alliance Children’s Garden features
3.12M Total

Additionally, at least two other items did not make it from the Master Plan to any Phase II solicitation, which has resulted in a programmatic hole in the park;

pedestrian interface between park and PEC west entrance
landscaping along the Barton Springs Road ROW — replacing the pecan trees essentially destroyed by AustinEnergy’s pruning

This would indicate a total shortfall for Phase II of $3.52 million,
effective 2005.

The Jim Smith plan included $8.1M for Phase III. This would have included the water intake structure and system, for which $935,000 was spent during the Phase II contract. That leaves $7.165M, to have been spent in 2005.

The Jim Smith plan included $3M for Phase IV, to have been spent in 2007.

The Jim Smith plan anticipated donations of $3.4 million to carry the rest of the anticipated cost of build-out. This amount has been exceeded, but the City has turned away $2.48 million of offers. The Alliance Children’s Garden features to have been donated were accounted for above, but two separate $1 million donations (Bloch Foundation and Live Strong Foundation) for projects that were each conformant with the Master Plan program were refused. If the City refuses such donations, it must bear the responsibility for substitute financing.

$4,854,080 Phase II adjusted per PCUBCON 2005-1011
$8,734,135 Phase III adjusted per PCUBCON 2005-1011
$3,657,000 Phase IV adjusted per PCUBCON 2005-1011
$2,000,000 in lieu of donation support
$19,245,215 Total remaining obligation under 1999 Financial Plan

Yet another way to look at it is that the Toby Futrell delay induced a $3.59M differential in Phase II bids, plus a $480,000 loss of Junior League funding, plus $290,000 is fees related to the repackaging and re-bids, plus $70,000 in Public Works management fees, for a total wastage of $4.43M. Furthermore, $400,000 of park funds were spent on Riverside improvements in the Lamar/Lee Barton Drive area, which would serve commuter traffic flow, but not the park. This brings the total almost exactly to the Phase II shortfall computed above from features left out of the actual development, almost perfectly validating that mismanagement decisions by the City were solely to blame for the failure to meet the Master Plan goals for Phase II.

Another broad brush approach to estimating the City’s remaining obligation isto consider that the original Master Plan called for a construction cost of $21.9 in 1999 dollars. Adjusting this amount as per PCUBCON gives $33,083,273. Given that the City has spent $12.1 million on park construction, that leaves a remaining estimated cost of $20,983,274.

The deficit figure should likely also be bumped by an additional $1,000,000 to compensate for a donation by the Bloch Foundation which the City refused to accept.

Remarkably, the operating deficit of the PEC through 2008, $12.335M, an amount that was covered by the car rental tax, almost exactly matches the shortfall of funds delivered to the park. Had those park construction funds been delivered on time (and inflation costs therefore not incurred), there would have been approximately enough additional money available to supplement the City bed tax underwriting to fully cover the PEC operating deficit. Had the full rental tax cash flow (after bond payments) been made available to the park project as originally intended, by 2008, $22.827M would have been available for park construction, enough to complete a very well appointed version of the park.

The Way Back

Fortunately, the venue revenue funding by the car rental tax will continue to flow at least until the PEC bonds are retired in 2029. If the revenues are channelled as originally designed, this leaves ample time to fund complete build-out of the park in a delayed, but reasonable timeframe. The City is bound by covenant and common sense to support the operations and maintenance of the PEC, to protect its own investment and that of the bondholders, but the funding to do so must come from other sources. The historical precedent of funding Palmer Auditorium’s operating deficit from bed tax revenues is time-tested, and reverting to this scheme should be sufficient to absorb the deficit. Any further shortfall could likely be covered by managing the facility with an eye to greater revenue.

The car rental tax should be completely devoted to construction of the venue, as directed in Proposition 11. This means using it exclusively to make bond payments and maintaining its debt reserve, and then funding park construction. The revenue stream will amply support full build-out. Construction can be accelerated ahead of the arrival of revenues by use of the inter-fund borrowing capability already in place. In light of the Gainsharing Bonus Program abuses, the current balance of the interfund borrowing line of credit should be reduced to zero so that a new injection of construction funds may occur. The car rental tax revenue stream should be re-examined to determine whether the inter-fund borrowing limit can be raised, which would enable the City to further accelerate construction.

City management and City Council under guidance from the voters and stakeholders had it right with the adoption of Proposition 11 and the subsequent financial plan formulated by Jim Smith in May-July, 1999. There is no reason that a return to this foundation will not enable the complete realization of the dream of a great city park at the heart of the Lady Bird Lake Corridor.

Summary

In summary, the financial plan formulated by Assistant City Manager Jim Smith and approved by stakeholders in May 1999 and by City Council in July of that year was fiscally sound and embodied the wishes of all project stakeholders and elected public officials. Had the agreement been honored, the park would have been funded sufficiently to implement its full development on the agreed upon schedule, with completion of the final phase in 2007. However, the surreptitious formulation and stealth passage of the bond covenants undermined this financial plan. The “funding waterfall” instituted in the PEC bond covenants, which was hidden when presented in summary to City Council, has left the park construction budget with a current shortfall of approximately $19.25 million relative to the City’s funding commitment. Several million dollars more have been wasted by bad timing (over the objections of stakeholders) and the refusal to accept donations. The diversion of car rental tax revenues into Convention Center Department operations and maintenance left that department so flush with cash that it sent nearly $5 million home in its employees’ pockets, with the senior managers responsible for overseeing the venue project finances benefitting most.

As a result, we have a partially built park, its features not integrated and only partially implemented even in its developed areas. Plans to finish and knit the park together having several times been suddenly aborted. The taxes which the citizens of Austin levied on themselves to construct the park have been diverted to fund the Convention Center Department operations and to individually enrich its employees with unearned bonuses. City Management has refused to correct the financial direction of the project, only defending its actions on narrowest and incomplete legal grounds and ignoring questions of propriety and public trust. By its actions, the same City Management has expressed its intention not to deliver the “great central park” on the lake that was envisioned in the 1980′s by the Town Lake Park Alliance, recommended in the SRI economic development plan for the City, developed in concept in the Town Lake Comprehensive Plan and the Waterfront Overlay District, and developed in detail in the 1999 Town Lake Park Community Project Master Plan.

But by returning to the root concepts and original financial plan for the project, the City can recover from a decade of fiscal misdirection. The park and its cultural facilities can become the world-class centerpiece of the Lady Bird Lake Corridor that the City envisioned and the voters elected to pay for.

Index of Referenced Documents

Proposition 11 Ballot Language and Supporting Text Published by the City

Local Government Code, Chapter 334, State Law
Governing Venue Projects

Stakeholder Group Memorandum of Understanding

Site Plan Sketch from Master Plan Design Charettes

Complete Town Lake Park Master Plan

Jim Smith May 1999 Financing Plan Memo

Jim Smith May 1999 Financing Plan Phased Park Construction Spreadsheet

Jim Smith Memorandum to City Council, July, 1999

Staff Recommendation for City Council Action on Resolution 19990729-30, page 1

Staff Recommendation for City Council Action on Resolution 19990729-30, page 2

Staff Recommendation for City Council Action on Resolution 19990729-30, page 3

City Council Resolution 19990729-30, formally adopting Master Plan and Jim Smith Financing Proposal

Town Lake Community Park Project Venue Bond Covenants: Special Funds and Waterfall

Town Lake Community Park Project Venue Bond Covenants: Prioritized List of Disbursement Targets (the “waterfall”)

Jim Smith’s August 2000 Venue Project Update Memorandum to City Council

Town Lake Park Phases III and IV Area Sketch

John Stephens January 2003 Memorandum to City Council, Announcing Cancellation of Park Phases III and IV

John Stephens March 2002 Memorandum to City Council Explaining Funding Waterfall

Spreadsheet Snapshot of Venue Project Financials to April 2007

Spreadsheet Snapshot of Venue Project Financials to March 2011

Summary of Palmer Auditorium Operating Losses and Bed Tax Underwriting 1982-1995

City of Austin — Palmer Auditorium and Bed Tax Financials

Sinclair Black’s 1983 Proposal to Lease the Subject Tract to Private Development

Convention Center Department Gainsharing Bonus Program Summary

Convention Center Department Gainsharing Bonus Program Complete Accounting by Year and by Employee 1999-2008

Convention Center Department Gainsharing Bonus Program Complete Accounting by Year and by Employee 2009-2010

Stakeholder Summary Note to Council on Financing, December 2007

Leslie Browder December 2007 Memorandum to Council on Authorization of $7 Million of Phase III

Leslie Browder Supplement to 2007 Memrandum Recognizing Some Project Donations

Marc Ott’s Response to Stakeholder Questions on Venue Financing

Fulbright and Jaworski Legal Opinion on Venue Financing

PCUBCON Construction Inflation Index Data, 2008

As if the Law Department had not already disgraced itself by
fabricating false boundaries for the Town Lake Park Venue Project (and
thereby implying that the City has for 13 years spent venue revenues
money illegally outside the venue), they are now fabricating
restrictions on financing parkland development and maintenance within
the venue that state law specifically states do not apply.

The Law Department is now maintaining that ad valorem tax revenues may
not be used to supplement any parkland improvements within the Town
Lake Park Venue Project, and that the venue project must therefore
repay the City’s General Fund for maintenance expenses on the Liz
Carpenter Fountain.  The payments would come out of the (inadequate)
pool of venue funds belatedly proposed for the next phase of Town Lake
Park development.

Accordingly, even though the venue has never funded any maintenance
expense for Butler Park, the Law Department is implying that the park’s
maintenance cannot be supported from the General Fund.  Additionally,
the suggestion is that even if all or part of Auditorium Shores were
included in the venue (over their own noisy but bogus objection that
the venue does not include that tract), Auditorium Shores development
and maintenance could not receive any funding support from ad valorem
taxes, i.e., the General Fund.

Their justification is supposely from Chapter 334 of the State of
Texas Local Government Code, which governs venue projects.

Their assertion is completely false, as a straightforward reading of
Chapter 334 clearly shows.

They apparently hang their hat on Section 334.041, “General Powers”,
section (f):

§ 334.041. GENERAL POWERS.
…
 (f)  A municipality or county may not use revenue derived
from ad valorem taxes to construct, operate, maintain, or renovate
a venue that is part of an approved venue project.  This provision
does not apply to:
  (1)  a venue authorized under Section 334.001(4)(D) or
(F);  or            
  (2)  a county or municipality for which the use of
revenue derived from ad valorem taxes to finance a venue project is
approved at an election held under Section 334.0241.

Here is what Section 334.001(4)(D) and (F) says:

§ 334.001. DEFINITIONS.  In this chapter:                                  
…
  (4)  “Venue” means:                                                          
…
   (D)  a municipal parks and recreation system, or
improvements or additions to a parks and recreation system, or an
area or facility that is part of a municipal parks and recreation
system;
…
   (F)  a watershed protection and preservation
project;  a recharge, recharge area, or recharge feature protection
project;  a conservation easement;  or an open-space preservation
program intended to protect water.

The venue project is entirely on City of Austin dedicated parkland.
Section 334.041(f)(1) specifically states that the ad valorem tax
restriction does not apply due to the Section 334.001(4)(D) exemption.

Again, the Law Department is subverting the park component of the
venue project on completely false grounds.  Do they think that no
one else can comprehend such a simply stated law?  That they alone
can interpret it and to whatever ends they wish (defunding the park)?
The City Attorney is being transparently dishonest and again
misrepresenting the interests of the project by illegitimately
narrowing its scope.  Furthermore, the City Attorney is again
placing its client at risk by putting the City in the
awkward position of already having for years violated their newly
fabricated version of the law.

The Law Departments is literally unbelievable.  They cannot be
believed when it comes to Town Lake Park.

Larry Akers
Friends of the Parks Stakeholder Representative
Town Lake Park Venue Project

Aside from the fact that the eventual goal for private contributions was $3.4 million, not $7 million, the figure of $500,000 is completely wrong and is known to be so.

In fact, actual contributions accepted by the City to date total $1,730,000. Here is an inventory:

Ranger Excavation: $700,000 for digging the wet pond and building the
  Observation Hill, the amount bid for the same work in response to a
  City RFQ and for which the City was willing to pay
Long Center for the Performing Arts: $640,000, relocating trees from their
  lease site elsewhere within the venue
TBG in-kind services: $220,000
  Re-design of Liz Carpenter Fountain: 110k
  Redesign of Children’s Garden in wake of artists revolt: 50k
  Design of Bloch Foundation Cancer Survivors Memorial: 30k
  Design of Live Strong feature for Lance Armstrong Armstrong: 15k
  Town Lake Park donation booklet: 15k
  Total: 220k
Riverside Center tree relocation: $75,000 from multiple sources in
  cash and in-kind services
36 commemorative benches: $72,000
Susan Toomey Frost: $20,000 for Toomey Pecan Grove (via Friends of the Parks)
Outdoor clock (donated for TLP but later placed at PARD HQ): $3,000 purchase
  price
Total: $1,730,000
 
Yet even this amount is less than the donations the City has actually turned away.  When Toby Futrell unilaterally delayed the Butler Park construction by over three years, she declined a generous donation of $480,000 from the Junior League of Austin intended to fund features in the Alliance Children’s Garden.  (The Garden has yet to be built, thanks to the City’s having passed up the opportunity to build Butler when construction prices were low and builders needed jobs.)  The City also declined the A. F. Bloch Foundation’s $1 million donation to revitalize the neglected pond area north of the Palmer Events Center.  The Bloch Cancer Survivor plaza which would have been another cornerstone attraction in the park.  The Lance Armstrong Foundation offered yet another $1 million for a Live Strong feature in the park that would have been another architecturally and artistically distinct attraction. But the City’s unfortunate commemorative naming of various park features introduced a thematic clash with the endeavor, and the offer was withdrawn.

Rejected donations:
Junior League: $480,000 (declined without thanks when Phase II was postponed)
R. A. Bloch Foundation: $1,000,000 (Cancer Survivors Park declined)
Lance Armstrong Foundation: $1,000,000 (project died with naming of Doug Sahm Observation Hill)
Total: $2,460,000
 
Finally, a handful of donations are being held by the Friends of the Parks of Austin, waiting for the day when the City finally gets around to the next phase of the park.

Pending donations, held by Friends of the Parks of Austin:
Town Lake Park Alliance: $9000 for Town Lake Ant Alliance in Children’s Garden
Akers/Wynns families: $500 Robert M. and Lena Mae Wynns Akers memorial tree
Total: $9500

Total:
$1,730,000 donations accepted
$2,480,000 donations refused
$    9,500 donations pending
———-
$4,201,500 total philanthropy

The source of the $500,000 quote, Assistant City Manager Rudy Garza, was supposedly was passing along information from a 2007 memo from Chief Financial Officer Leslie Browder.  Garza should have been aware that Ms. Browder issued a correction to the memo, Cc-ed to the Assistant City Manager’s Office, just days after the original, incorporating many additional donations and boosting her total substantially.  Both memos are linked from http://austinfriendsoftheparks.wordpress.com/whatever-happened-to-town-lake-park/.

No mere miscounting could be so grossly incorrect as to represent the total sum of donations to be $500,000.  Given the other defenses, obfuscations, misrepresentations, and outright fabrications the City Manager and Law Department have issued regarding the park, one must wonder whether this is yet another attempt to undermine the park development and justify the de-funding of park construction in favor of subsidizing Convention Center Department operations.  Is it to make a case that since the public does not care for the park, then the City need not honor its commitment to fund its construction?  Since the public is not holding up its end of the deal (a “deal” in which the City merely expressed its hopes, not its requirements), neither should the City be required to uphold its end?

The bare fact is that generous philanthropists in the City, despite a nearly complete absence of City outreach, have already surpassed the full donation goal for park construction costs, while the City has met less than half its own funding commitment.  Rather than demeaning these philanthropic efforts by grossly understating them, the City ought to celebrate the unsolicited outpouring of private donations.

A great big Thank You from the City to its philanthropists would be more appropriate.

Larry Akers
Friends of the Parks of Austin Stakeholder Representative
Town Lake Park Venue Project