Point Austin: The Reading Railroad

The future of Austin as a city rests to a great degree on our ability to establish an efficient, multimodal, regional transit system including roads, bikeways, buses, walkways, and commuter and light rail. The alternative is increasing automobile gridlock, suburban sprawl, and a declining central city.

The next big transit investment should be urban rail, both by default and design – with CAMPO's Transit Work­ing Group having taken leadership of the regional project and getting buy-in from what is now a six-county area. The central city has densified sufficiently to make rail efficient, and the political momentum has built for the next step. The main obstacles have been three: 1) Who will operate the line? 2) Where's the initial route? 3) What's the financing?

If the latter question can be answered, the first two will be readily resolved. The presumption is that, at some point, initial funding for the "first phase" (expected to connect UT, the Capitol, and Down­town) will come from a bond proposition to be placed before Austin voters – a step already delayed a couple of times. In his February State of the City speech, Mayor Lee Lef­fingwell declared his intention to ballot the question by 2014, with the expectation that in the meantime the city would consider the first two questions as well as seek federal matching funds.

So it hardly seems shocking that the mayor and city staff would continue to consider various funding mechanisms for rail, not only for the initial investment but with an eye toward continuing operations. But the notion predictably shocked the easily alarmed editorial writers at the States­man, who discovered last month that the city was researching the possibility of leasing the airport as a possible funding source. The editors blustered that they and the public hadn't been immediately informed, and that discussions thus far had been confined to "a select group of people."

Opening Discussion

The leasing idea – good or bad – interests me more than the Statesman's manufactured outrage over transparency (although that may help scuttle serious consideration). Although it's not common in the U.S., quite a few European airports are privately operated under lease, and the mayor considers the leasing possibility as a way to allow "transportation to fund transportation." Currently, federal law requires that direct airport income be spent on the airport; presumably, under a long-term lease with an upfront down payment, the city could generate ongoing income that could supplement a desperately undermuscled mass-transit system (which in turn could eventually feed airport efficiency).

I asked Leffingwell about the idea last week, and he described it as very much in the preliminary review stages and unlikely to bear fruit for a 2014 timeline (if at all). "The great probability is we'll still look at a bond election," he said. "But it wouldn't be responsible not to even look at the idea."

He said he had opposed an airport sale when it was discussed informally a few years ago, but he believes that a leasing arrangement offers the opportunity to build protections into a contract and generate funding otherwise unavailable. "We keep going to the well with the voters" – citing municipal bonds, school bonds, and rising property tax rates – "and if we can find other possible funding mechanisms, it only makes sense to explore them."

Leffingwell said he believes the most obvious drawbacks of privatization – potential loss of managerial control and protections for ABIA employees – can be ameliorated by contract provisions, and he notes that there are already plenty of private businesses at the airport. "We franchise out all of the vendors that work at the airport," he said. "What's the big difference?"

Speed Bump

We're a long way from actually evaluating the leasing idea, not even a proposal yet. Leffingwell said he hopes to discuss it in a May Council meeting, but that's uncertain – there's just too much other work on the schedule, along with ongoing budget discussions. He informed Mike Martinez of the basic research and stopped there, – since last year's dogmatic "open meeting" settlement, Council members must essentially communicate publicly or not at all. Yet should they choose to hang fire on still-vague ideas – they get blasted for "insufficient transparency."

The comically awkward corollary is indirect communication by media. For example, you can read a garbled version of the leasing idea in the Statesman – but don't trust their numbers or their timing, at which Leffingwell just rolled his eyes. (For a single example, the editors estimated "$600 million to $700 million a year" from the airport lease; if that were accurate, said the mayor, "We could do away with property taxes.") I'll add to the speculation by posting the city's consultant report with this column – it summarizes the advantages and disadvantages of leasing, points to examples elsewhere, and describes the steps required to move in that direction (at least a year's timeline for a process that hasn't begun).

The Statesman's premature umbrage at what is at this point a research project will make it much harder to discuss the idea with any perspective. There are plenty of reasons to be skeptical about privatization without manufacturing fake ones; second-guessers already dogging the rail project will latch onto "secrecy" like a big dust bunny.

Perhaps that won't mean major damage, just one more mass-transit speed bump. Developing a broad consensus on what should be a major public investment in the future of Austin will be made just a little more difficult. And the daily's editors can consider their diligent work on behalf of public misinformation well done.

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A March 22, 2013 report [3MB PDF]by city of Austin consultants Leigh Fisher on the potential for leasing of Austin-Bergstrom International Airport.

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