Watering the F1 MBE/WBEs

Last night the Water and Wastewater Commission voted 5-1 to reimburse construction of pipes for the Austin F1 track. What does the city get? A water main and drain in an unincorporated area, and the opportunity to ensure minority- and women-owned business involvement: Something that the developers were working on anyway.

The commissioners gave their backing to two items relating to the F1 track: First, that the city negotiate a developer agreement to reimburse the project for an oversize 24" and 36" water pipe worth $5,373,734; Second, a similar agreement for an oversize 30" wastewater pipe, maximum reimbursement $8,126,619. The commission vote came with the addendum that, if the city attorney decides that it activates the city's third party rules, then the developers must follow the city's rules on small, minority-owned and women-owned business enterprise involvement (commonly known as MBE/WBE.) Their backing now goes to council for final approval.

However, just before the meeting the project announced that it was already hiring a MBE/WBE consultant, Haynes-Eaglin-Waters, run by Cloteal Davis Haynes and Kirk L. Waters. An ex-board member of the Austin Black Contractors Association, Haynes is a former city planning commissioner and is a member of Mayor Lee Leffingwell's community cabinet. Haynes was also on the development team for the city's Scattered Cooperative Infill Project, which was intended to bring affordable housing to Austin (sort of the residential version of the commercially-oriented Austin Revitalization Authority.)

The MBE/WBE part of this process is not unexpected (Haynes' name has been in the mix during closed-door discussions for the last few weeks.) Two weeks ago, project attorney Richard Suttle said, "The water and waste water component will be bid under the city’s guidelines and goals for MBE/WBE, so that will strictly comply." However, that doesn't mean Haynes et al will only be looking at one contract. Suttle has been meeting with city staff for several months on designing more MBE/WBE opportunities and said, "For the track, since it’s privately funded, it doesn’t have to [comply with the city's MBE/WBE clauses], but we have a desire to ensure that there’s fair participation."

One group that has been eying the MBE/WBE potential for the project closely is the U.S. Hispanic Contractors Association. In a statement, their representative Paul Saldana wrote, "The commitment and actions taken by Formula One to retain an outreach consultant is a step in the right direction and we remain optimistic. It is the hope of the USHCA that meaningful contracting opportunities and participation for local small and minority-owned businesses will come to fruition."

So how does this all tie in with last night's vote? What the commission backed is called a service extension request. They're fairly common, and here's how they work. A developer wants to build somewhere where there's no water. However, the council can agree to reimburse the developers if they feel like the city has something to gain. In the case of the F1 track, not only is the planned facility in the city's extra-territorial jurisdiction, but it's also in the desirable development zone. The important part of this is that the project becomes a city project by proxy, meaning that it has to be bid out like a city project, meaning MBE/WBE bidding.

This SER is a new application, but there was an existing agreement back from when the track was going to be the Wandering Creek housing development. That earlier application lead to some confusion at council back in August when everyone but Bill Spelman knew that an earlier revised request was for the F1 track.