City Hall Hustle: Water, Water Everywhere ... and Nowhere
Council splits on WTP4 audit, possible shutdown
By a 5-2 vote last week, the new City Council decided to suspend issuance of "Notices to Proceed" for any new construction at Water Treatment Plant No. 4 until City Council is presented with an estimate of the cost of shuttering the controversial waterworks for either five or 10 years. (Ongoing work that's been approved – the bulk of the contract – continues, for now.)
Mayor Lee Leffingwell took the lead in opposing the measure, spending a generous amount of time with bond adviser Bill Newman in spinning painful delay scenarios for Austin. One scenario anticipated that a downgrade of water and wastewater bonds could mean an extra $25 million for every $100 million that the city borrows.
And while an estimate of stoppage costs – "to at least the nearest $5 million," according to the resolution – will be forthcoming on or around Aug. 18, Leffingwell wrangled a ballpark figure from WTP4 contractor CDM, whose Steve Link said it would cost "far over $100 million" to shutter the plant. Moreover, to do so properly could take up to two years, with a similar lag expected on a restart; with a five-year delay, Link said, you'd be turning around and reopening it almost immediately.
Not that Leffingwell believed plant opponents had any real interest in reopening the plant. He told the Hustle, "Anybody that really believes plant opponents want to delay the plant, not shut it down – well, I've got some oceanfront property in Arizona." Gesturing toward a screen in the City Hall atrium showing Save Our Springs' Bill Bunch addressing council, he said "You really think these folks are gonna come back in five years and say, 'Go ahead'?"
Mayor Pro Tem Sheryl Cole – who has been a steadfast supporter of WTP4 – attempted to split the difference. As council's arguably most fiscally conservative member, she sided early in the meeting with Leffingwell in ascribing importance to the city's bond rating, raising the prospect of how a downgrade could drastically impact the city's proposed 2012 bond election. In order to assuage those concerns, she offered a revised version of the original resolution that set a firm date – Sept. 2 – when notices to proceed on construction could be offered again.
WTP4 opponents Laura Morrison, Chris Riley, and newcomer Kathie Tovo remained largely silent, with Bill Spelman doing most of the talking – and finding himself repeatedly crosswise with the mayor. Spelman argued that shuttering the plant could, in fact, support the city's bond ratings by showing investors the city would be "keeping our rates competitive and ensuring that our revenues and costs are in balance" without the additional debt of WTP4.
One prominent subplot involved Austin Water's recent execution of a contract to build WTP4's Jollyville water main. Arguably, the suspension of notices to proceed will have little immediate impact, since $427.4 million of the $508 million construction total has been committed, but until last week, plant opponents were hopeful the Jollyville water main – designed to transport treated water from WTP4 to a reservoir – hadn't yet been green-lit. Spelman quizzed Assistant City Manager Rudy Garza on when the Jollyville notice was signed, with the council member voicing the concern of opponents in the audience that Austin Water and its management were ramming through contracts in an attempt to preempt this newest council action. (Garza said the notice had been issued the previous Tuesday; the WTP4 item wasn't publicly posted until Friday afternoon.) This brought a sharp rebuke from the mayor. "I want to caution you about making accusations or threats," Leffingwell said. Spelman then asked Garza whether the Jollyville contractor could delay big equipment purchases "if it will not put them off schedule too much." Again, Leffingwell snapped that he didn't think that was an appropriate request.
Nearing the vote, Leffingwell said: "I'm not gonna support this anyway. ... This is an exercise that has no purpose to me." Spelman said, "I say this very rarely, but I could not disagree with you more."
"It's not that rare," Leffingwell shot back.
Spelman and Tovo both spoke briefly in support before Mike Martinez, a core vote in favor of WTP4, responded. "Intuitively, I know it's gonna cost too much money," he said, adding, "In a few weeks, we'll get [the estimates] back, and no one's gonna agree." He called the item "political theatre" crafted to further the project opponents' cause. "You ask questions so you can find a way to give your answers," he said. Lastly, he aimed at Spelman over his questioning of Garza, saying, "I've never seen a staff member berated for working their tail off."
The final vote was 5-2, Leffingwell and Martinez the nays, with WTP4 supporter Cole attempting to offer a "third way" in the debate. Cole, a consistent vote in favor of the plant, appears now to be entertaining alternatives while still trying to mitigate investor concerns. In a situation this fraught with political tension, who knows whether half-measures will get her much of anywhere.
Follow the Hustle's water-dripping tweets @CityHallHustle.