Green Acres
Prop. 2 Seeks to Protect Water Quality - but at a Price
By Kevin Fullerton, Fri., April 10, 1998
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If passed, Prop. 2 would raise $65 million in utility revenue bond money, to be paid back through higher water utility rates, in order to buy an estimated 15,000-acre "water quality buffer zone" transecting the recharge and contributing zones of the aquifer's watershed. If the plan is realized, the city will ensure that rainwater draining into Barton Creek and Barton Springs passes through unspoiled thickets of trees and grassland, which scientists say filters out most of the pollutants in rainwater runoff. Creating the buffer won't improve water quality over where it is now, but it will form a shield against further degradation caused by future development.
This is not a new strategy; it's being employed by other cities across the nation as water sources become increasingly polluted and EPA regulations on drinking water tighten. Recognizing that the future costs of treating filthy water could run into the billions of dollars, states such as New York, New Jersey, and California have started buying land that drains into their water supplies. This trend follows on the heels of a 1991 study by the American Water Works Association that stated: "The most effective way to ensure the long-term protection of water supplies is through land ownership by the water supplier and its cooperative public jurisdictions."
The worthiness of the goal, then, is hard to dispute; and as Watson proudly points out, the notion was not concocted by a "loopy environmental" contingent. From the Greater Austin Chamber of Commerce to field offices at the Texas Natural Resource Conservation Commission, all are in agreement that watershed buffers are invaluable in preserving water quality. Even editors at the San Antonio Express News last month applauded Austin's initiative and urged San Antonio city officials to instigate similar action.
Questions do arise, however - as to whether the city can realistically purchase the required land, whether the city ought to weigh down an already debt-laden utility (and ergo the ratepayers) with more debt service, and whether landowners and developers in the target zone will clean up financially on Austin's clean water initiative. Critics of this environmentally friendly council accuse the city of avoiding a thorough public airing of the bond proposal, in order to keep citizens from considering the possibility of future sacrifices in city services.
The city is already shopping for land in the target buffer zone (see map), which includes about 27,000 acres that stretch diagonally from just south of the Shady Hollow subdivision near the Hays County line, up to near Bee Cave in the west. Based on negotiations up to this point, the city estimates it will buy outright about 10,000 acres and acquire "conservation easements," or developer rights, on another 5,000. Individual tracts are chosen for purchase based on a methodology that weighs each parcel's importance in minimizing pollution, buffering creeks and other tributaries, and contributing to a contiguous greenway. Most property that the city is considering, according to Assistant City Manager Toby Futrell, is "one step away from development," meaning the current land owners are not sitting on zoning permits.
"We purposely chose land that is more rural in nature," says Futrell, adding that property which has already been improved with roads or gutters, or which carries a high price tag, would fall lower on the city's priority list. She says the city must act now to secure the land, or watch it disappear into speculators' hands. At least a portion of the land purchased would become public greenspace.
City to the Rescue?
Critics question, however, whether the city is in fact subsidizing a developer rescue package, giving developers caught under the restrictions of the 1992 Save Our Springs Ordinance an easy way to cash in on their investments. James Cooley, editorial writer for the West Austin News and former aide to ex-councilmember Louise Epstein, has suggested that potential sellers and the Nature Conservancy, the nonprofit organization the city has hired to secure options on the properties, schemed to contrive a buy-out deal that would parachute developers out of an area where large-scale development is bound to be contentious. Cooley questions whether the developers who obtained permits prior to S.O.S. are being paid off.
"The city apparently wants to buy them out before they can build anything. So we can cut them a nice big check - and lose out on the tax base they would have generated for the city," Cooley wrote in a March 19 editorial. Of course, since the bulk of the buffer zone lies outside the city limits, loss of tax base would only become an issue under future annexation.
Harry Savio, who oversees government relations for the Texas Capital Area Builders' Association, confirms that some of the land in the proposed buffer zone is owned by people "who in relatively short order" plan to build on it. But Savio says that with only one year remaining on the deadline for developers to build on pre-S.O.S. permits, he doubts that the city had much to fear from high-density projects. Savio did say that the attitude among some landowners toward the City of Austin is that "if you're going to take it [development rights] away through regulation, we'd rather you come and buy it," but he says as far as he knows, the initial idea for the buffer buy-out came from the mayor, not landowners.
City officials also deny being influenced by a sales pitch from landowners; rather, they say, the city is following the lead of other cities that are acquiring property in water-sensitive areas. City Manager Jesus Garza notes that councilmembers expressed interest in buying watershed land through the water utility a year ago, and money was set aside in the current budget to facilitate that possible move. If the Nature Conservancy was pursuing land in the area at the same time, Garza says, it was the nature of the nonprofit's work and strictly a coincidence. As for the city's chances of success in purchasing the needed land, Savio says that's still uncertain. "I don't know if the majority of landowners will be interested," he says. "My gut feeling is if you're going to pay me to do what I was going to do anyway, then I'd probably take it.... But I don't know whether they'll say, `Leave me alone,' or say, `Here's free money being offered by the fools at the City of Austin.'"
Ted Siff, field director for land conservation at the Trust for Public Land (TPL), says he expects the city's offers to be well-received by property holders, who won't be in a position to hold the city over a barrel. "They're offering fair market value for the land, and what I've heard from so many is, `If you want this land, buy it'.... The seller may have an inflated value for this land because of this bond proposition," Siff says, "but that's not going to change what an independent professional appraisal would say the fair market value of that land is." The city says it will not buy any tract until it is independently appraised.
Another point of contention is whether the city's Water and Wastewater Utility - already carrying more debt per customer than any other city in Texas and charging among the highest water rates - should be burdened with another bond issuance. The utility has $294 million in unfunded capital improvement projects scheduled over the next five years, and director Randy Goss says his staff has recommended lowering debt and increasing equity as a way to shore up its bond rating and ensure that the utility has the leverage to meet future demands. Currently, the utility's rating is "AAB," which Goss says is "pretty good, not tops."
Cooley argues that it is "unprecedented" to use utility revenue bonds to purchase a non-revenue item such as public land. Calling the bond proposal a "plundering of the utility," Cooley questions whether watershed protection should take priority over ensuring the financial health of the utility, and funding future services. "The marginal impact of this plan [on water quality] is a drop in the bucket compared to taking septic systems off line, which produce effluent 40% dirtier than runoff," says Cooley. "What happens if voters say no to the next bond issue to improve wastewater treatment? This [buffer zone] can't wait?" Pointing out that Austin gets the vast majority of its water from the Colorado River, Cooley says the benefits of protecting the aquifer are "infinitesimally small compared to what we're about to spend."
But Goss says the city utility's ability to respond to septic systems won't be diminished by the bond proposal, as long as council follows through with the rate increase. "As long as the ratepayers are willing to pay, we can afford more debt," says Goss, adding that the city's fortitude in raising revenues at the same time it creates debt should keep bond investors confident. And city officials say that watershed protection ultimately translates into greater economy for the water utility, because runoff accumulates in the Colorado River. The cleaner the river, they point out, the less the cost of treating the water, perhaps allowing treatment plants such as Green, which also draws a small percentage of its water from Barton Creek, to remain in operation instead of being overhauled or replaced at a cost of hundreds of millions.
Of course, Proposition 2 has implications for other entities besides the City of Austin. The mayor has said that discouraging development over the aquifer will not hurt the city's tax base because "Smart Growth" incentives are being offered to developers and businesses to locate in the "preferred growth corridor" in the north and east quadrants of the city. And according to Futrell, land in the proposed buffer zone currently has virtually no tax value because of agricultural use exemptions. But county and school tax bases in Hays and Travis Counties could lose out on future revenues if potential new development is shifted north into Williamson County. City officials say the lion's share of new development deflected into the preferred growth corridor will land inside Travis County, but officials in Hays and Travis County say that, as is typical, city officials did not consult with them about the plan's implications.
"My initial reaction," says Hays County Judge Eddy Etheredge, "is that yes, we should have been notified and given the opportunity to know what the big picture is, [but] I don't want to be opposed to it because I didn't know about it, or because it's the City of Austin doing it." Etheredge says, however, that he hates to see Austin discourage a "high-end tax base," such as research and development complexes, in northern Hays County at a time when schools are experiencing record enrollment. "If they have already pre-supposed that they should avoid development out here because they want it to go somewhere else, I have a little problem with that," he says.
Travis County Judge Bill Aleshire, while allowing that "this notion should not be rejected out of hand," is nevertheless critical of the city's lack of communication on Prop. 2. "Do you realize how dangerous this is - that all I know about it is what I read in the Statesman, other than the mayor assuring me that the rumor that this was being used to kill SH45 was flatly false," says Aleshire, referring to the planned highway extension in southwestern Travis County. Aleshire feels the city has not produced a "balanced proposal" to show how discouraging development in one area can be compensated by urban infill. "They should be as definite about their plan to accommodate growth as they are about their plan to stop it," Aleshire says.
Opposites Attract
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Nevertheless, Prop. 2 brokers have scored a huge coup in gaining the rare joint support of both the business community and environmentalists. The measure has the endorsement of the Greater Austin Chamber of Commerce, which is beginning to show faith in managed growth as a tonic for a healthy business climate. Glenn West, the chamber's full-time president, says that reducing the "acrimonious" relationship between the city and developers with incentives for development in preferred areas will increase overall prosperity. "No one likes what we've had so far," says West, "which is a down and dirty process that held no certainty for anybody. These proposals [the "Smart Growth" package] bode well for the urban core of Austin."
S.O.S. Alliance lawyer Bill Bunch agrees. "If the city was only buying land," he says, "I would be against it, but they're matching it with the larger Smart Growth plan, saying we're going to quit building infrastructure in the areas we want to protect.... The tax revenue benefits that occur from a more coherent managed growth policy is going to mean everybody has access to some really nice Hill Country buffer lands while paying less for growth."
And TPL's Siff adds that the costs of boring water and sewer pipes through the hills south and west of the city would cost "multiples of $65 million," compared to the relatively cheap addition of customers in the north. "It's only smart business to provide incentives for customers to buy a product you want to sell, versus a product that's going to cost you money to sell," says Siff. And he's far from alone in that view. Among others who see the land purchase as a sound investment is the city fiscal watchdog group Save Our Neighborhoods and Environment (SANE).
Still, the extra $1.20 that would be billed to Austin residents each month - or "one bottle of water for our children" - to borrow the mayor's marketing phrase, portends to some a city that will grow increasingly expensive to live in. Former city planning commissioner and La Prensa publisher Cathy Vasquez-Revilla sees little in the Smart Growth proposals that addresses needed affordable housing development in East Austin, and says people with marginal incomes may eventually have no place in the mayor's dream city. "We're all going to get pushed out to Del Valle," says Vasquez-Revilla. Aleshire, too, wonders whether environmental initiatives automatically translate into a genuine improvement to the commonweal. "Having clean water and plenty of it for the future is probably the greatest asset any community could ever have," he says, "but on the other hand, if people have to be super-rich to live here and we drive the poor farther away, I'm not sure that's socially just."
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