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I. Double Taxation Without Accountability

Regional mobility authorites (RMAs) are not directly accountable to the people of Texas. No voter approval is required for their creation; no voter approval is required for the selection of their board members or staff; no voter approval is required for the selection and funding of their toll projects; nor is voter approval required for “conversion,” as it is called in transportation planner’s language.[6] Comptroller Strayhorn has repeatedly said, “the redesignation as toll roads of roads already constructed, under construction or funded through traditional means, such as the gasoline tax, is double taxation.”

Travis and Williamson counties created the Central Texas Regional Mobility Authority (CTRMA) in the wake of 2001 legislation allowing counties to create regional mobility authorities, or RMAs, to finance, build, operate and maintain toll roads and other transportation projects. CTRMA is a two-county political subdivision of the state, authorized to operate in its jurisdiction by the Texas Transportation Commission (TTC).[7]

The CTRMA board includes seven members, with three each appointed by the commissioners courts of Travis and Williamson counties and a seventh member appointed by the governor to serve as chairman (Exhibit 1).

EXHIBIT 1
CTRMA Board Members
Board Member Selected By
Robert “Bob” Tesch, Chairman Governor*
Lowell H. Leberman, Jr. Travis County
Henry H. Gilmore Travis County
Johanna Zmud Travis County
Robert L. Bennett, Jr. Williamson County
James “Jim” Mills Williamson County
David Singleton Williamson County
* Chairman Tesch was originally appointed to the board by Williamson County and later was selected by the governor to serve as chairman.
Source: Central Texas Regional Mobility Authority.

The terms of all CTRMA board members expired as of February 2005. Williamson County has reappointed its current members. At this writing, Travis County has not yet made its appointments, and the governor has not designated a new chair. When these appointments are complete, two of the six county-appointed members will serve two-year terms; two for four years; and a final two, along with the chair, will serve six-year terms. All subsequent member terms will be for six years, giving the board staggered six-year terms. Appendix 2 provides a timeline of significant events in CTRMA’s short tenure.

Questions have surfaced regarding the constitutionality of the six-year duration of terms for all RMA board members, as they are described in the RMA’s governing statute, Chapter 370 of the Transportation Code. The six-year terms of RMA board members may be held to violate Article XVI, Section 30(a) of the Texas Constitution, an issue raised by litigation filed on March 2, 2005 in Travis County District Court. The section says, “The duration of all offices not fixed by this Constitution shall never exceed two years.” On its face, this provision could invalidate the service of CTRMA’s board members and, in the extreme, invalidate past decisions by those members. The Legislature should consider legislation to approve retroactively CTRMA board decisions and amend the Texas Constitution to set the terms of RMA board members at four years to avoid any uncertainty that may result from an unfavorable court or attorney general ruling.

The Capital Area Metropolitan Planning Organization (CAMPO), a 23-member body consisting primarily of elected officials from Travis, Williamson and Hays counties, must approve CTRMA projects (Exhibit 2). Like all metropolitan planning organizations, CAMPO is required by federal law to approve all transportation plans in its region that receive federal funding.

EXHIBIT 2
Capital Area Metropolitan Planning Organization Members
Member Representing
Gonzalo Barrientos, Chair State Senator, District 14
Greg Boatright, Vice Chair Williamson County Commissioner
Steve Ogden State Senator, District 5
Dan Gattis State Representative, District 20
Dawnna Dukes State Representative, District 46
Terry Keel State Representative, District 47
Todd Baxter State Representative, District 48
Elliott Naishtat State Representative, District 49
Mark Strama State Representative, District 50
Eddie Rodriguez State Representative, District 51
Mike Krusee State Representative, District 52
Sam Biscoe Travis County Judge
Karen Sonleitner Travis County Commissioner
Gerald Daugherty Travis County Commissioner
Bill Burnett Hays County Commissioner
Will Wynn City of Austin Mayor
Daryl Slusher City of Austin Council Member
Brewster McCracken City of Austin Council Member
Danny Thomas City of Austin Council Member
Nyle Maxwell City of Round Rock Mayor
Dwight Thompson Alliance of Cities Mayor
John Trevino Capital Metro
Bob Daigh TxDOT (District Engineer)
Source: Capital Area Metropolitan Planning Organization.

The CAMPO board includes 21 elected officials as well as one representative from the Capital Metropolitan Transportation Authority (Capital Metro) and one from the Texas Department of Transportation (TxDOT). (Capital Metro is a transit authority established in 1985 by Austin-area voters that uses the proceeds of a one-cent local sales tax to provide public transportation within its jurisdiction.)

While Hays County is represented on CAMPO, the county has not petitioned TTC to join CTRMA or to create its own RMA, although it still could choose to do either.

CAMPO coordinates regional transportation planning with TxDOT, area cities and counties, Capital Metro, the Capital Area Rural Transportation System (which provides public transport services in Austin-area rural areas) and other transportation providers.

Since its beginning, CTRMA has worked closely with TxDOT to create its construction plan, and its operations depend heavily on TxDOT development and funding; Travis and Williamson Counties provided some early, but relatively limited financial assistance.

On April 12, 2004, CTRMA and TxDOT presented the authority’s proposed regional implementation program to CAMPO. This identified the greater Austin area’s immediate mobility needs and proposed toll-road projects for CTRMA to operate or develop (Exhibit 3).

EXHIBIT 3
CTRMA and TxDOT Initial Project List
US 183-A: San Gabriel to SH 45 North
SE 45: SE US 183 to IH 35
US 290 phase of the “Y” in Oak Hill
US 183 / SH 71: IH 35 to the Airport
Loop 1 US 290 to William Cannon
SH 45: Loop 1 to FM 1626 (4 lanes)
SH 71 phase of the “Y” in Oak Hill
LP 360: RM 2244 to south of Walsh Tarlton
US 290: US 183 to SH 130
Loop 360: Loop 1 to US 290
Note: Since this list was made public, CAMPO has deferred funding to the Loop 360 project and removed the toll-road designation from Loop 1 (US 290 to William Cannon).
Sources: Central Texas Regional Mobility Authority and Texas Department of Transportation.

Exhibit 4 illustrates CTRMA’s and TxDOT’s road plan, the Central Texas Regional Mobility System.

CTRMA’s proposed regional implementation program includes projects that were included in CAMPO’s Transportation Improvement Program (TIP), a federally required, three-year plan listing transportation projects that can be developed with available funds. CAMPO amended its TIP on July 12, 2004, expanding the list of projects to include all of the toll-road projects CTRMA and TxDOT had proposed.

As public knowledge of CTRMA’s plan spread during summer 2004, many Central Texas residents became increasingly concerned about the plan’s reliance on toll roads.

The most controversial part of the plan, judging from news accounts and mail received by the Comptroller’s office, was the proposed addition of tollbooths to the section of Loop 1 (MoPac) crossing William Cannon Drive. This segment touched off a particularly contentious debate about what should or should not be tolled; what constitutes “conversion” of a road; and just how the state should fund highway construction and maintenance.

It should be noted that, despite CTRMA’s close involvement with TxDOT in developing a toll road network for Travis and Williamson counties, at present it is directly responsible only for the construction and operation of US 183-A. TxDOT is planning and building the other roads in the region’s plan. CTRMA officials told the review team that these toll roads would be turned over to the authority at a later date.


CTRMA Funding

CTRMA developed its financial plan in cooperation with TxDOT, CAMPO and the two counties’ commissioners courts. The authority plans to rely on local, state and federal revenue, bond revenue, toll revenue and may receive private equity investment as well.

CTRMA’s proposed regional implementation program, as presented to CAMPO on April 12, 2004, described a series of funding sources extending through 2015, including contributions from TxDOT, CAMPO, Travis and Williamson counties, the newly created Texas Mobility Fund and proceeds from revenue bonds.

CTRMA and TxDOT originally anticipated that $452.7 million in private equity would become available through a comprehensive development agreement (CDA), an arrangement authorized by the 2001 and 2003 Legislatures that allows transportation authorities to contract with private companies for the design, construction and operation of road projects.

The proposed CDA identified in Exhibit 5 originally was intended to support projects on Loop 360. As of this writing, the CDA has been pulled from the plan due to CAMPO’s decision to defer funding issues related to this project to a later date.

All current sources of funding are being directed towards the development of CTRMA’s only ongoing project, US 183-A, or the authority’s administrative costs.

As of February 2005, CTRMA’s revenue included funds from TxDOT, Travis and Williamson counties and bonds (Exhibit 6). Exhibit 6 also identifies a federal loan through the Transportation Infrastructure Finance and Innovation Act (TIFIA). CTRMA secured this loan in February 2005, although it is not likely to draw on these funds until 2008. (The likely use of the TIFIA loan is described in the Revenue Bonds section below.)


TxDOT Contributions

TxDOT contributions to the CTRMA regional implementation plan will come from the State Highway Fund.

The fund’s primary purpose is to receive money allocated for the construction of roads and the maintenance of state highways. The fund’s primary revenue source is state and federal motor fuel tax collections, although other fees and taxes generate some state dollars for the fund.

TxDOT also will contribute funding earmarked for the Central Texas Turnpike Project (CTTP), a planned network of four toll roads in the Austin area, including SH 130, SH 45 North, Loop 1 extension and CTRMA’s US 183-A. TxDOT removed US 183-A from the CTTP to allow CTRMA to develop the road as its first project. CAMPO approved these toll roads in 2000 and TxDOT is financing the construction of the project’s first phase, including Loop 1, SH 45 North and the northern 49 miles of SH 130.[8]

TxDOT believes the SH 130 project will be less expensive than originally estimated, and plans to make the resulting savings available to CTRMA after calendar 2007. No funds from this source, however, have been allocated or are anticipated for use in financing US 183-A.

TxDOT has stated it also will provide CTRMA with rights of way and professional services. Rights of way are acquired through the purchase or condemnation of land. TxDOT can either acquire rights of way or reimburse cities and counties for acquiring them in the state’s name.

The review team could not establish what percentage of the $490 million devoted to rights of way and professional services in Exhibit 5 will actually be used for right of way acquisition. Repeated requests to the Texas Transportation Commission (TTC) failed to yield the needed information. Similarly, the review team could not establish what “Professional Services” actually includes.

Both right of way and professional services will be funded through TxDOT’s Austin District budget.


Toll Equity Grants

TxDOT’s contributions to CTRMA are likely to be made in the form of toll equity grants, funds made available under the Transportation Code for the “cost of the acquisition, construction, maintenance, or operation of a toll facility of a public or private entity.”[9]

In the past, TxDOT was authorized to provide these funds only as loans. In 2001, however, S.B. 342 removed the obligation of repayment. TxDOT now can contribute up to $800 million annually in toll equity grants to transportation projects and has recommended that the Legislature remove this cap.[10]

CTRMA already has received two toll equity grants from TxDOT to support the US 183-A project. On April 24, 2003, TxDOT awarded CTRMA $12.7 million to begin design work on the road.[11] The grant was not provided as a lump sum, but instead reimburses CTRMA for various expenses as they are incurred.

TTC approved a second toll equity grant on December 16, 2004, to help pay for the construction and initial operations of US 183-A. As of this writing, TTC has authorized a grant of between $52 million and $65 million. The exact grant amount will be subject to CTRMA’s financial need after it sells revenue bonds.

This grant is intended to help the authority cover construction costs and its operating and maintenance costs during the first years of US 183-A’s operations, until its toll revenue becomes sufficient. The grant should give CTRMA the financial flexibility it needs to meet its obligations to bondholders.[12]


Toll Equity Limitations

The 2003 grant came with restrictions spelled out in an agreement between CTRMA and TxDOT. According to this agreement, the grant is:

...to be used for the study and development of the proposed US 183-A turnpike project to the extent necessary to secure financial closing, including costs related to: (1) project management; (2) contract negotiation and preparation; (3) preliminary engineering; (4) securing federal funding; (5) preparing an investment grade traffic and revenue study; (6) the services of legal counsel and rating agencies; and (7) incidental administrative and other expenses.[13]

During an expenditure audit of CTRMA’s use of this first grant, however, TxDOT found that the agreement failed to stipulate whether the funds could be used for general administrative costs. The authority subsequently agreed to use reimbursements from the grant to fund no more than half of its general administrative costs.

CTRMA and TxDOT entered into the financial assistance agreement governing the second toll equity grant on February 3, 2005. According to the agreement, CTRMA would have wide latitude to expend these funds for the construction, operation or maintenance of US 183-A, and the funding would “not be subject to future discretionary actions of TxDOT.”[14] This flexibility underlines the importance of the toll equity grant to the US 183-A financial plan.

Other restrictions related to TxDOT funding categories (2, 11 and 12) are detailed in Appendix 3.


Texas Mobility Fund

Central Texas transportation projects also are expected to receive revenue from the Texas Mobility Fund, which was created by the 2001 Legislature to support state revenue bond issues for transportation projects.

While TxDOT officials have stated in public hearings that regional mobility plans do not necessarily have to include tolls in order to receive money from the Texas Mobility Fund, other evidence suggests the opposite.

Transportation Commissioner Robert Nichols has been quoted as telling State Representative Joe Pickett of El Paso that, “El Paso could lose some of its Texas Mobility Fund money if other communities build toll roads and have additional highway projects that they are willing to build with toll revenue.”[15] And an April 12, 2004 presentation on the proposed TxDOT/CTRMA regional implementation program included a slide specifically stating that Texas Mobility Fund revenue would be made available only to transportation plans containing toll projects (Exhibit 7).

CAMPO board member and Austin City Councilman Danny Thomas was troubled by the same issue at the January 24, 2005 CAMPO meeting. He stated that, since CAMPO’s July 2004 vote to include additional toll roads, he has repeatedly asked the TTC and CAMPO staff whether the Austin area would have lost Texas Mobility Fund dollars if it had not approved the additional toll roads. He said that he had not yet received a straightforward answer.

Travis County Commissioner and CAMPO board member Gerald Daugherty agreed with Councilman Thomas and said that he went to TTC meetings twice and was told if CAMPO didn’t “do this Plan in its totality, that [they] will lose, most likely, [their] Texas Mobility Fund dollars...that if you don’t do this, then you will lose $161 million” in promised mobility fund dollars.[16]

CTRMA Chairman Bob Tesch made the same point in an October 20, 2004 letter to Austin Councilmember Brewster McCracken. He said, “We are all acting in response to a funding mechanism dictated largely by TxDOT, and we are reacting to the policy statements and directives we receive from the department.”

In the same letter he quoted a TxDOT staff member who said, “...the staff of TxDOT feels that any deviation from the existing plan may jeopardize the funding level Central Texas could expect.”


Limitations on the Texas Mobility Fund

Bonds backed by the Texas Mobility Fund may be issued for one or more of the following purposes:

  1. to pay all or part of the costs of constructing, reconstructing, acquiring and expanding state highways, including any necessary design and acquisition of right of way, in the manner and locations determined by the commission that, according to conclusive findings of the commission, have an expected useful life, without material repair, of not less than 10 years;
  2. to provide participation by the state in the payment of part of the costs of constructing and providing publicly owned toll roads and other public transportation projects that are determined by the commission to be in the best interests of the state in its major goal of improving the mobility of the residents of the state;
  3. to create debt service reserve accounts;
  4. to pay interest on obligations for a period of not longer than two years;
  5. to refund or cancel outstanding obligations; and
  6. to pay the commission’s costs of issuance.[17]


Local Funds

State law does not require counties establishing RMAs to provide them with startup funding. Travis and Williamson counties did so, however, each providing $550,000 to begin CTRMA operations. The city of Cedar Park in Williamson County agreed to aid the county in providing rights of way.

Williamson County’s contribution was delivered in two parts. On March 1, 2003, the county provided a $250,000 grant “to pay for various expenses related to the creation and initial funding” of CTRMA during fiscal 2003.[18] Williamson County transferred operational control of this first sum to Prime Strategies, Inc., a county consultant charged with the initial tasks involved in establishing CTRMA.[19] The funds originated from a 2001 county road bond program.

On September 30, 2003, Williamson County provided the remainder of its funding, a second grant of $300,000.[20] This allotment initially came from the county’s 2000 general obligation road bond program, although a subsequent change in its interlocal agreement with CTRMA ultimately supplied the funds from county general revenue.[21]

On August 8, 2004, the city of Cedar Park and Williamson County entered into an interlocal agreement to provide rights of way needed for US 183-A. Cedar Park agreed to transfer all US 183-A right of way tracts that it had acquired within its city limits to Williamson County for CTRMA’s eventual use. Williamson County agreed to acquire the remaining rights of way and turn them over to CTRMA before construction begins.

Travis County also provided CTRMA with an initial $250,000 startup grant on June 4, 2003.[22] The county transferred the entire amount directly to CTRMA. A second grant of $300,000 on October 16, 2003 was intended to support CTRMA operations in fiscal 2004. The second grant allowed CTRMA to spend the money for “general administrative purposes.”[23] In both cases, the grant money originally came from Capital Metro’s Transportation and Mobility Enhancement Fund, also called the quarter-cent rebate fund.


Limitations on Local Funds

In providing this startup funding, the Travis and Williamson County commissioners courts agreed that CTRMA should not be unduly burdened with spending restrictions, as they wanted to provide the young authority with enough flexibility to meet unforeseen problems.[24]

Since CTRMA may use TxDOT toll equity grants to cover only half of its administrative costs, it relies on Williamson and Travis County funds for the remainder until it secures bond proceeds. This motivated CTRMA’s executive director to renegotiate the terms of the authority’s second, $300,000 grant from Williamson County. The director feared that the money’s origin in a 2000 road bond program would prevent CTRMA from spending these funds exclusively on general administrative expenses. To overcome this hurdle, CTRMA and the county amended their interlocal agreement. In effect, CTRMA returned the bond proceeds to Williamson County, which replaced them with an equal amount of unencumbered funds from the county general revenue fund.[25]

Since Travis County’s funding originally came from Capital Metro, the funds are subject to Capital Metro’s spending restrictions. Principally, these require CTRMA to use the funds to support projects within Capital Metro’s jurisdiction that enhance regional mobility. The US 183-A project qualifies.

CTRMA’s interlocal agreements with its parent counties also require it to spend county-provided funds only on items described in the budgets it provides to the counties, and to follow state purchasing laws in its spending. CTRMA provides both counties with financial reports on a monthly basis, describing operational costs after they are incurred.

The only other significant restriction includes a prohibition against using Travis County funds “for entertainment, liquor or recreational activities.”[26] This sort of restriction highlights the importance of closely tracking expenditures by their source of funding, a subject discussed in Chapter 3.

In addition, the in-kind right of way commitments from Williamson County and Cedar Park came with specific construction requirements and other progress measures that will trigger the return of donated rights of way to city and county control if CTRMA does not meet the progress measures.


Revenue Bonds

CTRMA issued approximately $234 million of bond debt in the form of insured senior lien revenue bonds ($168 million) and bond anticipation notes (BANs-$66 million) on February 16, 2005. BANs are short-term, interest bearing securities. Standard & Poor’s gave the revenue bonds an underlying rating of Baa3 and an insured rating of Aaa. Another major rating agency, Moody’s, assessed the underlying rating at BBB- and the insured rating at AAA. Standard & Poor’s and Moody’s assigned ratings of Aa3 and AA respectively to CTRMA’s uninsured BANs. These investment grade ratings translated into CTRMA achieving an overall cost of financing of 4.6 percent.[27]

CTRMA intends to use the proceeds from this bond sale for US 183-A’s construction, operations and initial debt service.

The bond rating is based on the creditworthiness of the issuing entity and the financial viability of the project expected to generate the repayment revenue. CTRMA’s creditworthiness is based on the revenue it expects to receive from toll collections on US 183-A, TxDOT grants, TIFIA loans and an assessment by the market of CTRMA’s governance. The state and federal contributions, while helping to establish the project’s creditworthiness, do not obligate the state and federal governments to assume responsibility for any default on the authority’s part. The constituent counties are similarly free of any obligation in case of default.

Vollmer Associates LLP, a CTRMA consultant, performed a traffic and revenue (T&R) study to develop revenue estimates for the US 183-A project. This study was critical in assessing the overall financial viability of the project. One of the required assumptions for this study was the toll rate CTRMA planned to charge. The amount charged reflected 2007 dollars, when the toll road is scheduled to open. The final Vollmer T&R study indicated CTRMA would charge $2 to travel 12 miles from SH 45/RM 620 to the northern terminus, averaging 16.7 cents per mile. The report acknowledged that the portion of project north of FM 1431 would consist of non-tolled frontage road with room for main tolled lanes to be constructed at a later date. The study also identified the most expensive segment of the project to be of a trip between FM 1431 and Brushy Creek Road. CTRMA would charge $1.50 for this 1.5-mile trip, averaging $1 per mile.[28]

CTRMA financial advisors used the results of the T&R study to structure the financial plan for US 183-A. They expect toll collections to begin in 2007, with the authority able to rely exclusively on toll revenue for annual debt service and operations and maintenance costs by 2013.[29]

The early stage of a toll road project’s life, before toll revenues mature, is called the “ramp-up phase.” CTRMA plans to leverage multiple sources of revenue to ensure that the authority maintains a minimum revenue-to-primary debt service ratio of 1.75 each year (the minimum ratio required by rating agencies to certify the bonds as investment grade). During the later years, CTRMA financial advisors expect this ratio to be as large as 7.55, providing the authority with significant flexibility if toll revenue doesn’t meet expectations during the early years. To cover debt service during the ramp-up phase, CTRMA will use “capitalized interest”—excess revenue derived from the bond issue, over the anticipated cost of the project itself—and BANs. CTRMA will also leverage a portion of TxDOT’s second toll equity grant to cover ramp-up phase operations and maintenance costs, thus freeing early toll revenues to service its bond debt.

As mentioned earlier, CTRMA insured the $168 million in senior lien bonds. CTRMA’s financial advisors considered bond insurance vital, as they were concerned that there would not be a market for uninsured bonds issued by a start-up toll road authority. Financial Guaranty Insurance Company (FGIC) insured the revenue bonds at a cost of approximately $9 million to CTRMA. The insurance helped CTRMA obtain a better rating for their bonds, thus reducing the total amount that the authority needed to borrow to support the project.

Chapter 370 of the Transportation Code requires bond principal and interest to be paid solely by:

  1. the revenue of the transportation project for which the bonds are issued;
  2. payments made under an agreement with the commission, the department, or other governmental entity as provided by Subchapter G (toll equity grants);
  3. money derived from any other source available to the authority, other than money derived from a transportation project that is not part of the same system or money derived from a different system, except to the extent that the surplus revenue of a transportation project or system has been pledged for that purpose; and
  4. amounts received under a credit agreement relating to the transportation project for which the bonds are issued.[30]

In 2008, CTRMA may draw on its TIFIA loan to pay back $66 million in BANs used to fund debt service during the ramp-up phase. CTRMA’s integration of funds from such a wide variety of sources indicates a strong commitment to make its public dollars stretch as far as possible.

As other CTRMA projects begin, similar bond issues may be employed. Under the 2003 legislation, if toll revenues from one project exceed debt service and other obligations, the surplus can be used to fund new projects.


Limitations of Revenue Bonds

The primary document governing the use of revenue bond proceeds is the “trust indenture” between CTRMA and its bond trustee, the independent third party charged with overseeing the terms of the agreement. This agreement is a contract describing the financial arrangements and binding each party to uphold certain agreements.

CTRMA has developed a master trust indenture with its US 183-A revenue bond trustee, JP Morgan Chase. CTRMA also has supplemental indentures for the 2005 series revenue bonds and BANs issued for US 183-A. These indentures outline how the bond proceeds can be spent and CTRMA’s payment obligations to its bondholders. Indentures are intended to secure the interests of investors by clearly identifying the terms and priority of repayment.

The supplemental trust indentures provide limits on CTRMA’s uses of the revenue bond and BAN proceeds, such as for costs associated with the “2005 project,” which currently consists of only US 183-A, or for bond issuance costs, or even for the cost of “studying, evaluating and designing additional turnpike projects.”[31]

The trust indentures establish separate accounts for the variety of uses of bond revenue, such as a construction account or debt service account.[32] These accounts inform investors how CTRMA will manage the revenues and costs associated with the bond issue and the US 183-A project. CTRMA is obligated to adhere to this structure. The supplemental indentures also provide specific restrictions, such as prohibiting CTRMA from using bond proceeds in any way that would jeopardize the bonds’ tax-exempt status.[33]

In addition, the bond agreements identify a priority for CTRMA’s expenditure of toll revenue. The agreement requires the authority to use toll revenue to sustain the project’s operating and maintenance (O&M) needs before paying bondholders. After these O&M needs are met and the investors receive their annual debt service payments, CTRMA may use the remaining revenue for other purposes, including future road projects.[34]

Another significant restriction in the bond agreements is a “covenant not to build competing systems.”[35] This restriction is in the master trust indenture and therefore will apply to all subsequent bond issues. The covenant obliges CTRMA to refrain from participating in or building any motor vehicle transportation system, or part of such a system, that might compete with US 183-A for revenue.

The covenant is intended to protect the bondholders’ investment in US 183-A, and is vital to maintaining the bonds’ rating. This provision, however, also effectively prevents CTRMA from improving vehicular mobility in the vicinity of US 183-A.


CAMPO Metropolitan Mobility Funds

According to the regional implementation plan, CAMPO has committed $23.7 million in highway funds within its authority to CTRMA transportation projects. These dollars will be used for projects that were in CAMPO’s original TIP, before the July 2004 amendment. None of these CAMPO funds, however, will be used on the current US 183-A project.


Limitations on CAMPO Mobility Funds

CAMPO must follow a complex series of state and federal restrictions (TxDOT funding category 7) summarized in Appendix 3.


Recommendations

1. To prevent double taxation, state law should be amended to prohibit the conversion to toll-road status of any road on which construction begins without tolls identified as a funding source.

2. State law should be amended to prohibit the Texas Department of Transportation from making allocations from the Texas Mobility Fund contingent upon the inclusion of toll roads in regional road plans.

3. State law should be amended to require commissioners court approval of any toll road project that will be built or operated by an RMA in the court’s jurisdiction.

Current law does not provide sufficient accountability to voters for RMA projects. RMAs are, at best, indirectly accountable to voters, and as the controversy over CTRMA’s toll plans indicates, voters do not have a direct relationship to any of the entities crafting and implementing RMA projects. County commissioners, however, are directly elected. Therefore, requiring commissioners courts to approve RMA projects in their counties would improve accountability to voters.

In addition, current law requires that county commissioners only approve the initial RMA project as part of the petition to establish the RMA. For a RMA to be a true state/local partnership, local authorities should continue to exercise approval authority over subsequent RMA transportation projects.

4. State law should be amended to require the commissioners courts of each RMA’s constituent counties to appoint all RMA board members, including the board’s chair.

If more than one county jointly petitions TTC to create a multi-county RMA, the counties’ commissioners should include a plan for appointing the board’s chair in their petition.

5. State law should be amended to allow the commissioners courts of counties establishing RMAs to remove any board member, including the board’s chair.

6. The Texas Constitution and the Transportation Code should be amended to require board members of regional mobility authorities (RMAs) to serve four-year terms.

Current law, stipulating six-year terms for RMA board members, appears to violate the Texas Constitution, which allows only two-year terms for such local governing bodies. Furthermore, county commissioners who serve four-year terms appoint the board members of RMAs. Making the terms of RMA board members consistent with the terms of county commissioners could improve the accountability of such bodies to elected commissioners courts.