The Wizard admits that he is belatedly trying to wrap his mind around the staggering news that President Bush is trying to browbeat Congress into approving a whopping $700 billion to bail out Wall Street.
With that in mind, I present to the public a Microsoft power point presentation that should help explain to the viewer in easy terms how Wall Street and the financial community at large got itself into the sub prime mortgage mess in the first place. Note that the power point presentation is about 2.5mb in size, ergo it will take a minute or so to download, depending upon your Internet connection. Follow the usual power point instructions to go through the presentation; press the ESC button to get out and the up and down arrows to go forward and backwards in the presentation.
I get a laugh every time I go through it and laughs are few and far between these days.
Enjoy!
Wizard
In the August 7th, 2008 edition of Houston's newspaper of note, Leslie Casimir wrote the story of how it takes Houstonians Pablo Camarillo and 72 year old Margaret Jenkins hours of their precious time during their busy days in order for them to get to work. The Chronicle included an online map showing Mrs. Jenkins' torturous daily commute to her home off of Airport Boulevard on Houston's south side to her job on South Loop West.
Mrs. Jenkins' daily commute, the Chronicle reported, takes an estimated 83 minutes. The Wizard decided to punch in Mrs. Jenkins' home and work locations on Google Maps, using the terms 3300 Airport Blvd and 2616 South Loop as the two end locations in order to determine the distance between her home and job. Google Maps reported that the fastest trip was what I expected. Simply take Airport Blvd in a west bound direction until you hit 288, then turn north on 288. When you reach the intersection of 288 and South Loop, turn west and around. The distance is six miles and Google Maps estimates that the trip takes 9 minutes, right in line with what Mrs. Jenkins says in the story. She says the trip by car takes 10 minutes.
Clearly the story generated a firestorm of comments on the Chronicle's website. Tory writes about the issue here. Tory asks whether we have our big government transit monopoly priorities straight?
The Wizard believes that there may be an answer to Mrs. Jenkins' and Mr. Camarillo's dilemma that doesn't involve having a monopolistic government transit agency spend $100 million or more per mile on rail lines, not that any of Metro's proposed rail lines would not help either Mr. Camarillo or Mrs. Jenkins get to their jobs since they won't run where they need to go anyway. That solution involves loosening up the City of Houston ordinances governing the operations of jitneys.
Jitneys are a form of transportation that are widely used in poorer countries, in places that don't have billions of taxpayer dollars to fund grandiose transit monuments. The Wizard has taken jitney trips in several countries, including the Philippines (where they are called Jeepney's), and in Thailand. Steven Baron extensively discussed the use of jitneys in Houston in his book Houston Electric. In that book, Baron notes that Houston City Council outlawed the operation of jitneys in 1924, at which they had captured nearly 25 percent of the passenger market in Houston. However at the 2008 American Dream Coalition conference in Houston last May, I heard Alfredo Santos tell of his story where he started operating a jitney illegally. HPRA President and public activist Barry Klein helped Mr. Santos get legal help, which eventually led to the overturning of the jitney ordinance some years ago and their legalization.
So why aren't jitneys more widely used in Houston? Well, whenever something is legal but rarely used, the Wizard immediately starts suspecting government interference and sure enough, if one decides to pay a visit to the City of Houston ordinances governing the operation of jitneys (Chapter 46, Article VI), one immediately notices some very serious regulatory barriers to entry that would be jitney operators face in entering the competitive field for transportation. Notably:
1) A vehicle used for jitney operations cannot be more than five years old! So, my 19 year old Honda which has over 180,000 miles on it, and which could continue to be safely operated for years to come could not be used as a jitney vehicle.
Imagine if Metro was told that their $500,000 buses, which are usually designed to last for roughly 12 years and 500,000 miles of operation, could not by law be allowed to operate for more than five years? Imagine if Metro's $3.2 million rail cars, which usually last for some 30-35 years with some overhauls, could not be allowed to operate for more than five years? The public would go completely bananas.
2) Jitney vehicle operators must submit an operating plan to the City, including a fixed route and fares. Jitney operators are not allowed to travel elsewhere unless they submit a new route to the City. That means that jitney operators and would be passengers are not allowed to negotiate fares, something that is standard practice in other countries.
It also means that jitney operators cannot fully utilize the full flexibility of their vehicles by servicing an entire area of town and potentially capturing more customers with door to door service. I've been on a number of bus and jitney trips abroad where vehicle operators stopped off on the side of the road or wandered off course on behalf of some passengers. Imagine if a Domino's Pizza franchisee opens a store in your area of town with intentions of servicing a 4 mile radius area around the store, but then is told by the City that they can only service homes or businesses that are on a handful of streets and nowhere else. How many Domino's stores would now be in existence?
3) Jitney operators face bonding and insurance requirements that Metro does not. Under the Texas Tort Claims Act, your life is only worth $100,000 if you suffer injury or death while involved with any kind of accident with a Metro vehicle. It should be obvious to everyone that jitney operators don't enjoy such governmental immunity.
There are more, but no doubt that the usual rationale would be offered as to why these regulations are in place and that is that we need to protect the public. It should be equally obvious to everyone that this ordinance doesn't protect the public from anything, but was instead written to protect Yellow Cab and Metro from market competition, not to help the citizens of Houston get around more quickly or conveniently.
Jitneys also present another problem, this one in the political marketplace. Jitneys don't allow politicians to spend billions of dollars in cost overruns on big transportation make work projects, they don't allow for photo opportunities or to put their names into the history books, nor do they help politicians obtain millions in campaign contributions. They also would drive lovers of government transit berserk. However by lifting lifting the regulatory barriers to entry to jitney operations, the City just might allow a solution to come forward which could allow Mrs. Jenkins to get to her job in 10 minutes and to succeed where taxpayer funded public transit fails.
Are you a class warfare type who is worried that Mrs. Jenkins might have to pay $10 for her twelve mile round trip back and forth to work everyday? Good! All that goes to show is that you don't know how much Mrs. Jenkins values her time. Who knows? She just might be willing to pay that kind of money so that she can get 2 hours and 20 minutes of her day back. Who knows, maybe a friendly jitney operator may decide to cut a deal and price discriminate for her so that she could get a round trip for $5 per day, but we won't know unless City regulations are loosened up.
Next, I write about having lunch with Bill King.
Wizard
Between December 2006 and April 2007, I was sent to the UK three times by my Big Evil Company employer. The first trip was a stop over on my way to Algeria, while the latter two trips were made to backfill for my counterpart while he took time off for knee surgery and for paternity leave. I spent a total of nine weeks over in the Sceptered Isles.
While I was on the other side of the pond, it was impossible not to notice the amount of environmental hysteria that was being broadcast in the news, whether watching the BBC or reading the newspapers. Hardly a day went by where it seemed that there wasn't some reference to the Kyoto Treaty or that the Labour government was working towards some commitment to cutting greenhouse gases and telling the public that it must have shared sacrifices and belt tightening, all in the name of the Greater Good.
Well, lo and behold, here were are in July 2008 and we now hear of the news that in a recent by-election, the Labour Party lost a stronghold Parliamentary seat in Glascow. For those of you who are not quite up to snuff on your British politics, the world - very broadly - breaks down like this. The Labour Party has long held a very strong grip on Scotland and the north, while the Conservatives do better in southern England. To reiterate, this is a generalization, but as a broad picture statement, it does hold true. Hence, the fact that the Labour Party lost a long time seat to the Scottish National Party is quite a shocker.
As things stand now, the Labour Party majority in Westminster is now down to about 60. When Tony Blair first ascended to power in 1997, Labour had 418 seats. Now Labour has under 350 out of some 646 seats. It is in this context that the loss of a seat in Labour stronghold does not bode well for the Party come 2010, which is when the next general election must be contested. However, it may well be that there may need to be a coalition government formed in order to maintain a majority in the next general election.
But circling back to Labour's woes, much of the political commentary has been centering on the idea that people are starting to get fed up with paying high taxes on fossil fuels, all in the name of environmentalism. One adviser to the Labour government, Richard Parry Jones, warns that if Labour does not ditch its heavy taxes on automobiles, then UK voters are going to throw them out at the next election.
This is a fate that has happened to the Socialists in France and in Germany, where Sarkozy's rightists outright defeated the Socialists and Angela Merkel came to power via a grand coalition. As as this article points out:
In recent years, almost all of Europe's social democratic parties have lost in national elections. The collapse of support for Gordon Brown and his policies reveals a general decline of Europe's social democracy as a whole.
There are many good reasons for the deterioration of the centre-left's political influence and power. But perhaps one of the most crucial is the abandonment of their traditional core value of progressive optimism. After all, the left used to derive large amounts of its popular appeal from a firm belief in social and technological advancement, a political philosophy of societal optimism and hope. During the last couple of decades, however, it has eagerly adopted a green ideology that has replaced its confidence in future progress with the ever more intimidating prediction of climate catastrophe and environmental disaster, culminating in calls for economic sacrifices and collective belt-tightening.
In short, Britain's Labour Party has discarded its "progressive" principles for environmental fear-mongering and salvationist rhetoric in the expectation that voters would accept that only government control, central planning and higher taxes could prevent global disaster.
...
Eighteen months ago, Labour's David Miliband proposed the introduction of carbon "credit cards" that would be issued as part of a nationwide carbon rationing scheme. He suggested the allocation of an annual allowance for basic needs such as travel, energy or food. Two days after Labour's disastrous defeat in the local elections, the whole scheme was hastily abandoned.
Motorists in the UK are paying the highest fuel taxes in Europe, an average of almost £900 annually. In the name of climate change mitigation, the government has progressively increased fuel, road and car taxes. It has burdened companies with a so-called Climate Change Levy and introduced an emissions trading scheme -- costly policies that have had damaging effects on British competitiveness, energy prices and living standards. As a direct result, a record number of people, particularly Britain's poorest, oldest and most vulnerable, are increasingly falling on hard times. As many as five million households, more than 20% of the UK's population, are today living in "fuel poverty."
Progressives in America have, in many ways, followed a similar pattern. It used to be in the early years of the 20th century that progressivism meant that there was a belief in scientific and technological progress that would make our world a better place. This belief would be coupled with some kind of redistributive and social safety type measures to uplift the poor and catch those who had fallen through the cracks. Instead, it seems that Progressivism now substantially means that technological advancements are not to be pursued because of fears or objections to science and technology. Instead, we are told that we have to cut back, all in the name of saving the planet from some imagined environmental catastrophies, damned the cost.
All the Wizard has to say is that Progressives had better take a look at what has happened across the water and pause, lest they find that voters decide eventually to drive them off of political agenda.
Wizard
On June 17, 2008, National Public Radio picked up on a property rights battle, previously covered by the Wall Street Journal, involving a friend of the Wizard named Brooks Porter. Brooks, along with his wife Merry, own a beach front property in Surfside Texas, near Freeport, which they have held for 25 years.
As the NPR story relates, the Porters purchased the house as a rental and occasional weekend beach house. The problem is that over the past 25 years, the Gulf of Mexico has eroded the local beach heads dozens of feet, sweeping grasses and dunes with it. The Porters, along with some other locals, now have housing that sits just yards away from the shoreline. That in turn puts them on the beach which is in violation of the Texas Open Beaches Act, which states that the beach is effectively a park.
Brooks told me a while back that the problem is that the beach erosion is not entirely a natural phenomenon, due to acts from the Army Corps of Engineers and other entities. He and the wife intend to stay put.
As the NPR story correctly concludes, this is a big looming problem. To quote NPR:
How this case gets resolved could set a precedent far beyond Texas. What if rising seas threaten one day to swamp skyscrapers in Manhattan or entire towns in Florida? Whose responsibility will it be to move buildings out of the way? Who will take the hit for the lost property value?
Mr. and Mrs. Porter have fought this battle for 10 years now. Stay tuned.
Sigh...
Wizard.
Recently, it came out that Harris County Metro was promoting a nation wide effort for Americans to use public transportation. I was not aware of this, but I did find out about it via BlogHouston.
Unlike 95-96 percent of Houstonians - and probably nearly all of the loudest promoters of public transportation in this City - the Wizard actually decided to take the bus from home to work this past Friday. In reality, I had been thinking of doing this for about two weeks. I've been doing some research, collecting data on transit speeds on various bus routes, wait times, and so forth. What I have been doing when I go on bus trips is that I write down how long it took for me to access the transit stop, the time I get on the bus, record all stops, the amount of time the bus stops, and time of arrival when I get to where I am going.
Without going into a blow by blow account of my trip on Friday, here is an overview of my trip to work and back home. I live about 9 miles from downtown and happen to have a bus stop at the corner of Westheimer and the street I live at. Of course, when it comes to public transportation, all roads really do lead to downtown, ergo if one does not have a job in downtown like I do, and some 93 percent of people who live in Harris County do not, then the possibilities of transit working for anyone in an urban area diminish substantially.
Here are the general details of what happened.
Going to work
1) I walk out my front door at 7:17:50 am. The bus stop is about 2/10th's of a mile away from where I live. I reach the bus stop at 7:21:12 am, so my walk to the bus stop has taken me 3 minutes and 22 seconds. I see a Metro bus at the next light, but it is not the route I want to take. As it is, that route will also get me to work and might have gotten there as fast as, or faster, than the route I took today. As it is, I let the #53 go by and wait for the #82.
2) The #82 arrives at 7:27:10am. As I get onboard and waive my Metro Q-Card, I keep thinking to myself that I could be nearly half way to work by now if I had taken my car. I also think that I am paying $2 for a round trip today, whereas my cost of gas is about $3. As for the opportunity cost of my time, well gentle readers, that is another story...
3) The #82 is standing room only, so I stand for the first two miles until we get to the Galleria. Most are minorities and working class people. I am the only one dressed in slacks and shirt. There, several people get off and I sit down.
4) At 7:37:05 am, we cross 610 Loop. I would have been reaching my workplace by now in my car.
5) At 7:44:49am, we reach Lamar High School and St. John's private school. There to my surprise, seven students get off the bus and start walking towards Lamar High School. I have seen Lamar students get on the bus in the afternoon, but somehow didn't expect this in the morning.
6) At 7:57:20am, we pass Numbers night club. At 7:59:15am, we reach Louisiana and turn left towards downtown. On the way, I see Houston Police pointing speed guns at drivers along Louisiana. We reach Polk at 8:04:10am. My walk to the office is seven minutes.
Results: My overall trip time door to door was 54 minutes, which is what I was generally expecting. That means my car saves me about 50-60 minutes per day in a round trip.
The actual time in transit was 37 minutes. There were a total of 37 bus stops made, which took a grand total of approximately 602 seconds (ten minutes and two seconds). That works out to an average stop time of 16.27 seconds per stop, but some stops were substantially longer than that. The stop for the light at Kirby and Westheimer, for example took, 62 seconds. If I had taken the #53 instead, I may have gotten to work faster.
The average stop time for the #82 is actually less than for some other bus routes I have taken. For example, for the #15 Fulton bus route, I discovered that the average stop time was about 21 seconds per stop. I did this while doing research in response to the public comment period for the North Corridor rail transit line.
The average speed of my entire trip was 10 miles per hour, if you count walk time and wait times. If you count only time in transit, the speed of the bus was approximately 14 miles per hour. That also happens to be the average speed of travel of the Main Street rail line.
My trip home
1) I left my job Friday evening at 5:55pm. I reached a covered bus stop on Smith at 5:58pm and wait. It rained on Friday. That reminded me that 30 years after being voted into existence, a large percentage of Metro's bus stops still do not have covered shelters at them. The #53 has a bus at the light, but I was on the other side of the street and traffic was steady. Once again, I let the #53 go and decide to take the #82 home.
2) 6:02:10pm, board the next #82 bus. The bus currently has about 15 passengers, including 2-3 professional types. I later discover the professional types all get off at Wesleyan. The bus starts in transit at 6:03:06pm.
3) 6:12:00pm. The bus turns onto Elgin, which of course turns into Westheimer. This time many more people get on and off at random stops and there are several people who request bus stops along the route. I have been finding that Metro buses stop an average of about once every quarter mile. In contrast, the planned light rail lines will have a stop roughly every three fourths of a mile to one mile. I suspect that travel speeds would be faster for a bus than a train if Metro were to run supplemental limited stop buses along the proposed rail lines that were to stop as infrequently as trains do.
While I sit on this trip writing down my times, I found myself occasionally staring out the window and starting to dwell on the thought of public transportation being an amenity of an urban area. Maybe it was the fact of actually being on a bus and taking it to work which concentrated my mind on this matter, rather than writing abstractly from an analytical view. Amenities of all kinds have costs related in producing them. The key is to minimize amenity costs in order to achieve results, especially if you are using public monies for the amenity. Otherwise you wind up with sunk costs and ultimately tax increases in order to pay for the amenity. It should be noted that for the first 22 years of the agency's existence, Metro - incredibly for a government transit agency - never got into financial trouble. Transit agencies that only run buses never do. Once a transit agency crosses that line and starts building big rail networks, the thoughts and worries about where are we going to get more money never quit. Since the rail line was built and talk started of building rail lines in all directions, there has been nothing but talk on how are we going to pay for this. Get used to that.
The increased costs of fuel for Metro from the $1.83 per gallon contract they signed five years ago to updated market prices will cost some $30 million per year, which amounts to increasing the system wide subsidy costs to carry patrons by bus by about 6 cents per passenger mile. In contrast, building the rail line for the North Corridor will result in spending about $3.50 - $4 per passenger mile to attract a new transit rider using light rail as your means of doing so.
And no gentle readers, there is no fuzzy math in that statement. I did not say that the cost would be $4 per gallon of fuel, I said the social costs are about $3.50 - $4 per passenger mile to attract a new rider to transit using light rail as your means of doing it. I arrived at that calculation assuming each and every new rail boarding would result in a five mile trip (which is about the average distance a transit rider travels when taking public transportation), using Metro's own stated forecasts (Metro states that the corridor has 19,000 bus boardings now and will have 29,000 boardings after rail is built), their own cost estimates ($677 million), and the FTA's own mandated cost structures to arrive at that figure. Furthermore, Metro says 55 percent of the riders for the North Corridor alignment will be bus riders arriving at train stop via bus, so instead of getting to take a bus straight into downtown, they will have to probably transfer to the rail line in order to complete their trip.
Imagine having a four seat sedan as your car and that you pick up three of your co-workers to go back and forth to work, driving 10 miles back and forth, or about 5,000 miles per year in the process. Now imagine having to trade up to a five seat Lexus type minivan because another co-worker who happens to live nearby (say a mile away) wants to join your car pool. Then imagine the cost of making that switch would cost you an additional $17,500 - $20,000 per year over and above your current transportation costs. That's what we are getting into when we trade up now from buses to light rail. So would you make that switch and buy that minivan, or would you consider trying to do something cheaper, or do nothing at all? If your answer is yes you would buy that minivan, then that also is what Metro, the Houston Chronicle, and the rail constituency want to do.
Note that none of these figures incorporate losses to patronage from bus routes which have had their routes truncated, rerouted, or eliminated in an effort to accomodate the demands that rail will place on the agency. Metro lost some 23,000 - 25,000 boardings on the 16 main bus routes that intersect the Main Street rail line after the line was built. Expect more of this if the other five rail lines get built. Once again, all we are doing is trading up, and what an expensive trade up that is.
Proper pricing of amenities via using private markets for transportation, which is what actors in the free market and private sector would have to do in order to survive, would cut all of this out. That in turn would allow us to get rid of this notion that everyone should live at the expense of everyone else.
4) The bus reaches 610 Loop at 6:34:40pm and reaches the Galleria 1 minute later. When it does, 14 people get off the bus.
5) I get off the bus at 6:48:40pm. It takes me 90 seconds to cross Westheimer because I don't have the green light when I get off the bus. I get to my front door at 6:54:05pm.
Results: The overall time from door to door is 59 minutes and 5 seconds. The actual time in transit was 45 minutes and 34 seconds, reflecting heavier traffic. There were 38 stops made on the way home. The time spent at stops was 816 seconds, or 13 minutes and 36 seconds. The average time spent at stops was 21.5 seconds.
The average speed of my trip home, door to door, was 9 miles per hour, if you count walk time and wait times. If you count only time in transit, the speed of the bus was approximately 12 miles per hour. I have so far found on traveling four different bus routes that the average travel speed of a Metro bus in transit is some 12-14 miles per hour. If Metro were to introduce a Rapid Bus or Signature bus line down Westheimer, that would eliminate about 75 percent of the bus stops along my bus route and cut the time in transit down by somewhere around 7.5 - 10 minutes in each direction.
One of the things I wrote in my reply to the North Corridor Supplemental Final Environmental Impact Statement was that simply running a bus straight to Northline Mall with the same number of stops as the planned rail line would take approximately 19 minutes. That almost certainly matches the speed of the proposed rail line which would have its own dedicated lane verses a bus which now has to operate in mixed traffic; ergo there would be little or no travel savings to be reaped by spending all that money by building a rail line. What's worse is that Metro plans to cut off road lanes along Fulton (and has floated the idea of doing that to Richmond Avenue), which will cause greater traffic congestion along the route.
One other thought went through my head. The cost of building an at grade light rail line from my home to work would probably cost at least $1,200,000,000, if not far more. It would involve widening and acquiring property along all of Westheimer. Even worse, a rail line traveling 15 miles per hour in transit would have only saved me time on my work trip home. It would have traveled at the same speed on my way in.
Enough for now. I will be going to a visitation this evening for a young colleague who unexpected was taken by a sudden illness. It is a reminder of how cruel life can be. My ADC stories will resume next week.
Wizard.
I had the week off from the day job a couple of weeks ago and took the opportunity to attended an April 9, 2008 TexITE luncheon where Councilman Peter Brown was the featured speaker. And it was a speech to remember.
Mr. Brown started off by saying that he has been a member of the ITE since 1995, when he mentioned that some of its members had started getting caught up in New Urbanism. He stated that he has worked in some 25 states with master planned developments and 130,000 units.
He stated emphatically that he represents the City of Houston. He insisted that the Houston metropolitan area needed a "strong central city", but as have so many other speakers who have made this claim, I should note that he failed to explicitly explain why is it necessary to have one. What's so special about a particular municipality when both homeowners and businesses are footloose?
Mr. Brown stated that the efficiency and character of the built environment must go together. He also said that Houston must become a Sustainable City. For those of you that need some help reading between the lines, this means that Houston must have urban consolidation, despite the fact that Houston has been gaining density at a rate of about 500 people per square mile per decade since circa 1990. In this encoded language, this means that we must have more compact development, use less energy, meaning that we have to get away from autos and use public transportation regardless of its decline in use. In other words, it's no longer the City's job to merely provide police protection, fire suppression, or other services. It is now the City's job to compel you to cut down on how much energy you use regardless of your own habits or desires.
There is now a new Council committee called the Committee of Sustainable Growth. Of course, Mr. Brown is the chair of this committee and I would not doubt that some of his "Smart Growth" friends are advising him.
Mr. Brown says that we recycle only 7 percent of our waste, while Seattle recycles much more. He forgot to mention that recycling was one of those fads that started in the 1980's, but municipalities everywhere quickly discovered that recycling was largely a money waster. In fact the City of Houston, which started a recycling plan under former Mayor Kathy Whitmire, has tried on a number of occasions over the past 15-20 years to get out of the recycling business because it was consuming taxpayer dollars. However, recycling is politically popular, ergo the City continues to waste taxpayer dollars doing it because the taxpayers like wasting their taxpayer dollars this way.
Read this post as to why recycling is often a money waster:
Well one of the reasons they want you to take your recyclables to a depository is because curbside recycling is extremely energy inefficient. And seriously money losing in most places unless landfill fees are exorbitant like in NY, CA or Seattle. I think in SanFran you have to sort your recyclables. In Texas, Austin has a weekly curbside program which loses money. In Houston we have a biweekly curbside pickup which loses money, and is only available in the closer in more dense areas, maybe 1/3 of the city area. The trucks squander so much fuel that the money from selling recyclables doesn't pay for fuel costs. This is even worse in lower population density cities like Nashville and 'burbs because of the distance between pickups. Houston was losing intolerable money from this when it was weekly, so they changed to biweekly. Unless you're in an area where land for landfills is extremely tight, and pop. density is high like in major cities on the coasts, curbside recycling is window dressing, a "feel good" solution causing more waste than saving. It's not a matter of Nashville being behind San Jose at all, just reasonable economics for the local situation. The political entities there are saying to you to combine a trip to the store with a trip to the depository and save fuel. I do this with glass since Houston does not take glass at the curbside.
Mr. Brown informed the audience that the City of Houston now has a comprehensive mobility plan and a comprehensive drainage plan in place. A "Green Building Code" will be getting adopted, though he did not go into details of its contents. There are definitive plans for Interconnected Green Belts and flood control plans. At the same time, CM Brown lamented that the City has no source of money for flood control.
Mr. Brown is convinced that new resources for transportation infrastructure funding will be available at the federal level. He reemphasized that Houston needs a plan.
Mr. Brown supports the Texas Triangle Bullet Train connecting DFW, Austin & San Antonio, and Houston. He says that costs will be $21 billion, a figure I'll believe when I see it. He said that Southwest Airlines is probably dropping their opposition to such a plan because there is no money to be made on short haul air traffic. As was to be expected, Mr. Brown emphatically supports dramatically increased light rail and commuter rail expansions. Of course he would because he will be dead before he has to ask taxpayers to bail out Metro when the cost overruns come and bus service goes to pot to continue rail service. All this for a form of transportation that will probably never achieve more than 10-15 percent of work trips no matter how high the price of fuel becomes.
One item I should interject here about a Texas triangle train. One needs to remember that such a scheme will only be built within the boundaries of Texas. As such, people should not expect that a financially strapped federal government, which will be feeling the full brunt of the baby boomer entitlement burden coming within the next decade, to fund such a scheme simply because you are asking that 49 other states fund it without getting anything in return. It will need to be done either privately or be done from the confines of the Texas Legislature.
CM Brown says Dallas is 10-15 years ahead of Houston when it comes to rail, but he failed to mention that rail has done nothing to improve traffic congestion, which is as bad as Houston's. He also didn't talk about the recent massive escalations in rail costs which have sent shockwaves throughout the Dallas political classes and have driven Dallas's rail expansions into the ditch. He said Houstonians will not tolerate eminent domain for new roads. That's good to know because if we are going to have the much ballyhooed 3.5 million new residents show up by 2035, then we will probably have another 2 million or more vehicles on our roads.
Mr. Brown says that Houston must be pro-growth and development, as only 15 percent of new area population and 23 percent of new area jobs are landing in Houston proper, as the people and jobs are going outside city limits. Strangely, moments later he proclaimed that "there is a great migration where people are moving back to the central city". The creative classes want an exciting, vibrant lifestyle and we need to improve the "Quality of Place". I suppose that we are to have no more of those quiet, boring, suburban bedroom communities with good schools and lots of open space which might attract new residents.
Mr. Brown said we have reactive and complaint driven government, where for example a developer says they need a pair of lanes for their new development in order to make it work. This is not efficient, Mr. Brown proclaimed. Instead, "we need to do things like figure out where the high density development is supposed to go". Mr. Brown didn't mention the idea that developers might be the ones whose job it is to figure out where high density development might go, nor did Mr. Brown go into details as to why a developer might need a pair of road lanes to get their new developments to work.
Transportation planning: Area planning will require overlaying TX-DOT's plans, TIRZ maps, and the city's plans. Houston will soon have a classification of city streets, which he says have led to "insipid neighborhood layouts", though Mr. Brown did not go into detail as to what constituted insipid neighborhood layouts. Mr. Brown is not happy with current transportation modeling at H-GAC, claiming it is primitive. Other cities have "much more advanced" modeling.
Mr. Brown then said a major goal of Houston's comprehensive mobility plan is to substantially reduce per capita vehicle miles traveled ! He said Houstonians spend $12,000 per year in auto expenses. He derided that Houston is a cheap city to live, saying that despite cheap housing costs, Houston is very expensive, partly because taxes are high. There is a trade off between housing and transportation costs. "We need to find a balance", presumably through even more planning. Major Thoroughfares are to be rationalized, efficient, and neat. Mr. Brown did not go into any further details as to what the City was going to do to compel its citizens to not travel so many miles, regardless of what their means or travel desires were.
Mr. Brown has traffic calming on his agenda, as well as road dieting. In case you need translations of these terms, these are part and parcel of the Smart Growth agenda, terms which mean that roads need to have lots of money spent putting various barriers in the way for pedestrians, which in turn cut down on vehicle speeds and mobility. Road dieting means cutting down on road lane miles and redeploying them for bikes and walking. In other words, Mr. Brown wants to make Houston more automobile hostile, build up traffic congestion, and make it slower and more difficult to get around so that people will walk more. In other words, this means making Houston look like London.
If you need a clarification of what "road dieting is", imagine this. Westheimer inside 610 Loop is mostly two lanes in both directions with no medians. Now then, imagine taking the outer 5 feet off of the outer two lanes and redeploying them for (seldom used) bike paths. That wipes away one full lane off the street configuration. Then with the remaining three lanes, use the center lane as a turn lane and put an occasional pedestrian island on it. This leaves us with only one full lane for vehicle traffic in either direction.
Don't laugh. I went to a Metro meeting some months ago on the Wheeler / Richmond rail alignment where Metro is looking at allowing only one lane of traffic to operate in either direction during off peak time travel hours. All this in the name of "promoting a pedestrian realm".
Here are just a few of hundreds of photos I took of London when I was there in 2007:
1) This photo shows a 300+ year old neighborhood where there is only on street parking and which only has one lane for cars.
2) This photo is a window ad at a real estate firm where two apartment flats are for sale. The first is for $1,850,000 and the second is for $1,500,000.
3) This apartment was going for $850 per week. The apartment below was going for $800 per week, which is about the average apartment rent in London right now.
The difference between carrying a 30 year $150,000 mortgage at 6 percent in Houston and a $600,000 mortgage in London (the average price of a home in London is about 300,000 pounds) is $32,400 per year, enough to purchase and maintain 5-6 cars per household. My colleague whom I went to London to backfill for is a Scotsman who lives in Aberdeen. He cannot afford to move to London because the UK government takes too much of his salary away in taxes and the City is too expensive for him, his wife, and their 3 kids, even though he is probably making $100,000 per year and would be living in a national capital which has a legendary public transportation system which is heavily subsidized.
Mr. Brown says that Dallas has a comprehensive development plan, but strangely, in order to come up with this new plan, they had to do away with antiquated zoning which was getting in the way of the new plan. Mr. Brown didn't mention stories like this or this when talking about Dallas's latest plans.
Houston does not do fiscal impacts on development says Mr. Brown. People are fed up with taxes and we need to promote development. My take on these remarks is that these studies are often used to justify whether "development pays for itself", presumably meaning that if a developer spots a market for single family homes somewhere and wants to build them, the City could then stop this development on some theoretical grounds that the infrastructure will be too costly to implement and that the development will not contribute enough tax monies to justify planners permitting its construction. In other words, such grounds could be used to deny where people live, where development is located, what type of development it is, and its attendant satisfaction of market participants on the grounds that this development is somehow detrimental to municipal finance of all things. In other words, such a device could be used to hinder development, if that development is presumed to be of the kind that is somehow not to be desired.
The questions started: One engineer who had spent his entire career in traffic engineering, talked abaout the traffic and transportation department, which was dissolved in the 1990's, but is now in PW&E and part of a giant bureaucracy. Gonzalo Camacho was also there. He said that 30 percent of early morning rush hour traffic is school traffic. People move to the suburbs for better schools and cheap housing.
Mr. Brown's response: "We need a Marshall Plan for schools and health care!" Great - yet another plan. That must have been the twentieth time Mr. Brown used the word plan in his talk. He lamented that the City spent lots of money in the Clinton Park area to revive it and make it desirable to live there, but then HISD closed the elementary school so parents won't want to live anywhere near there. Of course the answer to this planning error requires yet more coordination and even more planning so that these mistakes don't get made again.
So there you have it. Mr. Brown fully intends to implement the entire tool set of "Smart Growth" policies to make Houston more congested, full of green belts, with lots of planners doing lots of comprehensive planning which will probably make your life as a Houstonian more expensive and inconvenient. Rising costs will also drive more people out to the urban fringe, regardless of what people's attitudes are towards accomodating new growth. Rising housing costs may stem from an increasingly inelastic and unresponsive housing market, as well as pouring more resources into expensive rail transit projects which are far away from where most people live and work, and do not go where people want to go.
And so it was. This is the City that Peter Brown and his friends want to have. I drove home to put some cotton swabs in my ears to stop the bleeding and started writing. Tomorrow's another day.
Sigh...
Wizard
In an act that borders on serendipity, KHOU-TV's Jeremy Diesel ran a story the day before tax day on the City of Houston's Floodway Ordinance. Diesel's story can be read here.
Amongst the property rights disasters include the loss of $38 - $70 million per year in tax revenues. O'Connor and Associates pegs the City's property regulatory takings at $1.9 - $3.5 billion. Diesel says that the loss to Houston could be bigger than the entire tax base of any city in Harris County except Pasadena.
The Wizard first told this story back in June 2007. It only took Houston's paper of note four months to catch up on the story.
The Wizard spoke to Pat O'Connor and told him that information in real estate markets on the effects of the Floodway Ordinance changes were not well known because the City of Houston made this ordinance change in secret. And one wonders why - pray tell - would the City do that? This is alluded to in the report published by KHOU-TV and which can be read here.
Look for the Floodway Coalition's Nancy Wilcox to speak at the upcoming American Dream Coalition conference on May 17, 2008. The Wizard knows that lawsuits are pending...
Wizard
This past Wednesday, December 12, 2007, HPRA member Brooks Porter was featured in the Wall Street Journal in a story entitled Whose Beach Is This Anyway? Now we humble property rights advocates here in Houston have to deal with the fact that one of our members is world famous!
Amusement aside, as can be read from the story, Mr. Brooks and his staunch hold out neighbors have been fighting a property rights battle for some years now. At stake is the fact that Mr. Brooks purchased a pair of beach houses 25 years ago, but over time the Gulf of Mexico has slowly eroded away the beach at a rate of several feet per year. Now their homes lie within the vegetation line, ergo they are on the beach which is open access as per the 1959 Texas Open Beaches Act. Some of the holdouts basically want the State of Texas to buy them out, while others absolutely refuse to move at all. They say that State action to move the Brazos River has altered water flows which have greatly hastened beach erosion. Meanwhile, the Open Beaches Act apparently makes little provision for issues like beach erosion.
But as one might expect about the political classes, the Great State of Texas isn't about to pay up for a fully valued condemnation, something I have often discovered is the case when governments face the prospect of having to actually pay for swiping things away from people. As can be denoted from the story, the State is willing to pay money for relocation costs only.
Needlessly making life annoying for the beach home owners is the fact that the Texas Surf Riders Association asked (and was allowed) to join the suit on the side of the State. It seems the Surf Riders group has done rather well for itself over the years suing various property groups. The accompanying film shows a member of the Surf Riders complaining about rebar and septic tanks left on the beaches, but rebar was put in place by villages and those septic tanks could be found from anywhere and put on the beach for dramatic purposes.
Moreover, I have an incredibly hard time understanding how it is that the Surf Riders would get wound up by this. Unless the homeowners would actually try to define away the entire beach as their own property (something not talked about in the story), then as an interested bystander, it seems to me that both groups could co-exist. The homeowners could get their homes, while the Surf Riders and beach goers get their beach access. What's the problem?
As an advocate of property rights, I have a hard time understanding how the State cannot cough up money for a full condemnation buyout of some of the hold outs who may accept a full buyout offer. If the Act also makes little provision for erosion (and I have to admit I have not read the Act while writing this), then the issue needs to be sorely revisited before more people get caught up in problems like this.
Then there's a philosophical issue that certain groups say that property rights are defined and granted by society to members of that society. If that is the case, then I ask such people a rhetorical question. That would be that if property rights are bestowed by some act of noblesse oblige by society, then it would seem that property rights can be swiped away by society by effectively defining them away, can they not? That indeed is what is going on here and in every place where zoning is in effect.
Wizard
So the other day, I found myself watching the local municipal channel and saw the hearings on the Metro board decision to railroad Richmond and Wheeler Avenues. This is part of the proposed 30.1 mile expansion of the current Main Street rail line, which itself cost $520 million and not the advertised $324 million (and of which Frank Wilson immediately asked for another $104 million to upgrade). The advertised price of the expansion is $2.2 billion, but other documentation I have in my possession (and of which I will write about below) states that another cost estimate will be $2.6 billion (including the estimated 300 million for the Northside Intermodal temple). Either way, for further purposes, I will go with the $3 billion for the 37.5 miles of rail since nearly all transportation infrastructure projects have cost overruns.
So what to make of all of this? The point of this article is to make some rough back of a napkin comparisons of what the opportunity costs of spending $3 billion on 37 miles of rail verses what could be done with that amount of money with alternative forms of public transportation. It is also to air my thoughts on this whole mess.
Addendum edit - December 8, 2007: Please read my updated entry on Metro's $3 billion $4.7 billion limousine.
On August 8, 2007, the Examiner News, one of the Houston Community Newspapers, carried a story about a transportation solution that was implemented for the needy (one day access can be purchased to access the story) which are served by the Spring Branch Family Development Center of Houston and interviewed its director, a man by the name of Richardo Barnes. As it is, the SBFDC services immigrants studying English to improve themselves, single mothers and those who are otherwise struggling financially.
Mr. Barnes tells of how he has been on a crusade to get Harris County Metro to implement a series of bus routes to better serve the Spring Branch area. He correctly notes that the agency - scandalously in my view - does not run a regular bus route along Hillcroft, which turns into Voss road as it goes through Memorial, and into Spring Branch. Hence the agency does not even have a way to connect would be patrons from the heart of the Galleria to Spring Branch. It also does not have a direct route running along Chimney Rock, which turns into Wirt Road as it reaches Spring Branch. More to the point, Mr. Barnes believes that the Spring Branch area would better be served by a circulator route. I grew up in Spring Branch and cannot agree with him more. Instead, the agency makes sure that the routes in the area make it to the nearby transit center.
So what has Mr. Barnes done instead? Well, the Examiner article goes on to say that his Center received an anonymous donation of $60,000 to purchase a bus from Texas Bus Sales. Said Barnes,
The bus goes where people need to go and the schedule is made up based on their needs. "Sometimes they have to compromise a bit," he said. "If several people need to go grocery shopping, we ask that they go at the same time."
Barnes illustrates what some of his clients are up against by pointing out that a woman who lives in an apartment near Interstate 10 and Gessner must take three Metro buses in order to bring her baby to the WIC clinic.
"The trip takes about three hours," he said. "Our bus can pick them up and have them here in 20 minutes."
Barnes went on to say that there are more than 250 people who have signed up for the bus service and that they pay $10 per month. Their monthly fee barely pays for gas, however one might ask how much does it cost per month to maintain the bus?
The question of what to do here could use some reasonable framing. In Metro's National Transit Database profile for both 2004 and 2005, the agency states that the 7.5 mile MetroRail line costs $14 million per year to operate. This is more or less in line with the annual operating costs of other rail lines, which often take about 2-5 percent per annum of original capital costs to operate. Or, I should say that they do in their early years, until it comes time to do major maintenance of switchgear, signaling, wear out on rail cars, and so on. Still, a reasonable estimate will be that in its early years of operation, the 37.5 miles of trains will cost some $60-70 million - give or take some millions - per year to operate. Bear in mind that the agency has been stating that the ticket revenues for the train have been less than $2 million per year. This matters because that implies the agency has not been even coming close to collecting the annual operating expenses needed to operate the Main Street train, much less having those same passengers pay for the capital costs of building the train. This in turn leaves open the long run specter of the agency having to break its 2003 Metro Solutions bond election promise that it would not have to raise taxes in order to implement its plans. However, what rail fans are counting on is that once the rail tracks are in place, there will be - how shall I say - facts on the ground, which will force matters in the future and for which people will say that we have sunk those costs, we can't just tear them up now!
Moving onwards. The same NTD profiles state that for Metro to operate its 1,000 buses (the agency has over 1,400 buses in its fleet, 20% plus of which are spares), cost $263 million in 2005. This implies that the annual cost per year to operate a bus is some $250,000. This might seem outrageous, but maybe not. If you pay a bus driver $50,000 - $60,000 total compensation (wages, benefits, health care, 401k) per annum, that it would take 2 bus drivers to operate a bus for 18 hours per day, then thrown in fuel costs and maintenance, then that figure may well be accurate. I do have it on good word that "typical" buses operated by mass transit agencies get about 3.5 miles per gallon, bearing in mind that buses are the ultimate stop and go vehicles when operating in urban areas. Throw in the fuel costs have gone up about $1 per gallon since 2004-2005 and you are probably looking at another $20,000 per year (for $270,000), assuming that the bus runs 180 miles (10 mph for 18 hours) per day at 3.5 mpg.
Now then, believe it or not one of my biggest complaints against Metro as it has been run all these years has nothing to do with rail. It has to do with how it spends money on buses. The latest transit industry hybrid fuel buses cost $450,000 - $550,000. They do get some 20-30 percent better fuel economy, but that is absolutely absurd to think that this is a bargain when you can look at the Texas Bus Sales website and find used buses for as little as $4,500!
And where would you deploy such buses? This is another part of my complaint. Going back to the 2004 and 2005 NTD profiles for Metro, one will notice another metric. This one is the unlinked passenger trips per vehicle revenue mile metric. For the year 2005, one notices that Metro has 81.546 million unlinked trips for buses, while traveling 41.555 million miles. This equates to Metro buses carrying an average of 1.96 passengers per vehicle revenue mile traveled. That is statistical language for saying that Metro's buses run empty most of the time, something that should be obvious to anyone who spends time watching those buses go by. What makes the issue even more scandalous is to then view double attached buses run empty.
Moreover, even the 1.96 passengers per vehicle revenue mile is statistically skewed, probably with a very interesting kurtosis, by the fact that the agency does have a number of very productive bus routes, such as the #82 and #53, both of which operate on Westheimer and which I often see with nearly full buses everyday since I live right off of Westheimer. The #2 Bellaire is another route which gets good boardings. This anecdotal evidence should leave little room for doubt that a handful of very productive routes achieve much higher passenger per vehicle revenue mile metrics.
I also should bring up the Main Street rail line here, while on the passengers per vehicle revenue mile metric. One might notice that the Main Street train achieves much higher (about 14) passengers per vehicle revenue miles than does the bus fleet. Bearing in mind what was said about the bus fleet above, one also has to remember that the Main Street train was placed on the corridor which had the heaviest concentration of buses and boardings patronage. As far as I can tell, there were some 25,000 - 30,000 boardings along the Main Street corridor (some argue much differently) before the train was implemented. It would therefore make sense that the train would get high levels of passengers per vehicle revenue mile because the agency already knew that the Main Street corridor represented its highest and best corridor for ridership. In other words, the agency picked off its lowest hanging fruit. Now, in wanting to build out trains to other corridors, it will be spending vast sums of capital on successively lower performing routes, including the #50 Harrisburg whose entire route achieves a mere 4,500 boardings per day and which has few other routes around it which can be truncated towards it. I should state here that some people I know who live or work along the corridors have tried spending entire days counting the number of people on bus routes and have told me that these numbers are full of - well, you know what.
What would make vastly more sense for agency bus operations would be for Metro to actually match bus vehicles to the demand curve for its services. Small cheap buses could be deployed on vast majority of routes which have fewer than 5,000 boardings per day. According to my spreadsheet, only 17 of Metro's 133 bus routes (including shuttles and local routes) achieved an average of more than 5,000 boardings per day in FY 2006, the year of Metro's highest ever ridership. Such vehicles would most certainly get much better fuel economy than the massive buses that the agency operates today, indeed my research into the matter indicates that many of these vehicles can get 12 or so miles per gallon. The agency should continue to operate the current bus fleet on its routes of heaviest patronage and in fact could consider the idea of operating double decker buses on its heaviest routes such as Westheimer. However, as we shall see, even that idea might not even be needed if I were in charge.
So let us circle back to the question of what the opportunity costs are of spending $3 billion on rail, along with an estimated $60-$70 million per year on basic maintenance. An alternate idea of what we are looking at looks something like this. The agency could otherwise (but cannot as we will see below) purchase 500 buses and add them to the existing bus fleet. Of these, 70 (or 14 percent) could be used to augment the existing buses that are on Metro's bus routes of more than 5,000 riders, giving them four more buses running on them. The other 430 could be used on all other routes. The 70 buses on Metro's heaviest routes could be similar to those running already, costing the above mentioned $450,000 apiece. The other 430 could be from a company like Texas Bus Sales or other fleet vendor and could purchased at a cost of $60,000 each. This would result in a capital outlay of a paltry $60 million.
So what to do with the other $2.94 billion? One idea would be to take that sum of money and have Metro invest in 30 year U.S.Treasury bonds, which are currently yielding 4.6%. Investing $2.94 billion at 4.6 percent would yield $135.2 million per year, which could be employed for bus operations. The agency collects a mere $50 million from bus fares. If improved bus services were to yield a mere $15 million in additional bus fares, that would bring us up to $150 million for bus operations. Since we have estimated that bus operations are some $250,000 per bus per year (and which we could bump up to $300,000 per year), then we should be able to sustain the estimated extra 500 vehicles on the road.
So what could we do with those extra 500 vehicles? One of my favorite pet peeves is what happened to the #18 Kirby route. The #18 Kirby is one of the casualties of the hugely expensive rail centric transit system. The #18 used to get some 1,500 boardings per day in the late 1990's, but that figure dropped to the current 1,000 boardings per day after the frequency of bus service was sliced in half when Shirley Delibero burned through Metro's cash horde to build the Main Street rail line. All routes could get more frequent service, cutting down some of those horrific wait times that people have to suffer through. Many routes now have bus service that runs every 45-60 minutes during off peak hours. Entirely new routes could be devised, including ones which run from the Galleria along Voss and Chimney Rock to Spring Branch. Mr. Barnes would get his circulator routes with very little fuss, but he won't get a thing anytime soon by dumping all that money to run rail down streets like Wheeler, a street which Metro, in its entire history, has never had a bus route run down. Having never, in its entire history, run a crosstown bus which connects the University of Houston and TSU directly to Westheimer, West Alabama, or to Richmond, the agency and rail fans now politically demand that a $800 million train be laid down which does this. The agency loudly proclaims that college students are a big market of users for public transportation. If that is the case, then why has the agency never bothered to run a bus route directly across town before?
Are you worried that the world is about to run out of oil soon? Great! With $3 billion on hand, why doesn't the agency go out on a limb and ask the Tesla Roadster folks to manufacture 24 seats buses which run on lithium ion electric batteries? Surely they could do such a thing for less than $500,000 per vehicle? We may have cellulose ethanol available to us soon anyway, but if you are someone who believes that civilization is about to come crashing down because we are exhausting economical oil supplies (and for which you believe that there are absolutely no substitutes), then you might want to ask yourself why are we spending billions of dollars to run light rail to airports of all places?
Other benefits of a bus based public transportation scheme would include not having to tear up streets and roads along the corridors, which have deeply upset those who live along them. Residents who happen to live within a 1,500 feet radial of a proposed train stop would not find the deeds to their homes under the shadow of future condemnation because of their proximity to a Metro train stop. Metro may or may not condemn their property, but one needs to remember that Metro is not the only player in this game. Metro has formed a public private partnership with Washington Group International and I have some very good intelligence that WGI has made some - how shall I say - very interesting proposals to Metro regarding what might go on around the Intermodal Transit temple and around train stations. Without going into too much detail, there is a very strong argument to be made that this entire project has absolutely nothing to do with transportation, but does in fact have quite a bit to do with the politicizing of land use via real estate redevelopment. The building of rail lines represents, from the view of the economist in me, a massive concentration of capital along narrow strips of territory. The only way in which one can justify doing something like that would be because there already is a massive concentration of other capital directly in the area.
But I digress. What would ridership have been like with all these extra vehicles on the road? That is a good question. Metro achieved 68 million boardings in 1982. The agency achieved 82 million boardings in 1990 and 101 million in the year 2000. This steady increase of ridership over time was snapped after the light rail line was built. The latest 2007 figures show Metro with 97-98 million boardings even after 500,000 residents have been added to the county population.
It is quite likely, in contrast, that given population increases that the agency would have continued to slowly but steadily improve boardings. As things are, the agency is projecting to have some 120 million boardings after rail is built, but spending a whopping $3 billion to get a mere extra 60,000 net boardings per day (about 3 freeway lanes of passengers in SOV vehicles) is quite a feat. Indeed it is conceivable, based on past trends, that the agency could have achieved 115-120 million boardings by now without ever having spent a dime on rail.
The reason for the relatively paltry 20 percent gain in overall boardings for having spent this kind of money is because of what I wrote about above concerning the fact that Metro is not even collecting operating costs of the rail line, much less capital costs. Since the operational costs of the new rail lines will not be covered, that will force another truncation of bus routes towards the trains, cutting bus service to the wider area. My back of the napkin calculations are that Metro will have to cut back bus service by some $50 million in operational monies per year, which makes me think that about 20 percent of current bus service will be slashed after the trains are built. One also might think that Metro promised in the 2003 Metro Solutions ballot that it would improve bus service by 50 percent, but Metro stated a while back that there was no demand for an increase in bus service. That in turn makes one wonder why it was that the agency made such a promise and how is it exactly that the agency "knows" that the demand curve for extra bus service has been saturated? Read further down for what I say about politlcal markets and real world markets.
I have a story to tell about Metro telling the public that there is no demand for more bus service. Metro used to run a bus route, the #54 Aldine - Hollyvale Circulator. As one can notice from reading my boardings spreadsheet, the Aldine-Hollyvale route used to take in nearly 1,000 passengers at its peak in 2000. However, the Aldine-Hollyvale was one of the victims of Metro's cuts in bus service. Boardings went down in the early part of this decade, reaching a low of 510-690 patrons per day in its last months of operation in 2004 - 2005. In December 2004 (as part of its service improvements), Metro announced that the route would need to achieve an average of 855 boardings per day in order to justify continuing running the bus route - and I still have the publicly issued pamphlet in my possession to prove it. What the agency did not tell the public was that the route once upon a time actually was getting that kind of patronage! So in effect, the agency, having doomed the route to "fail" to begin with by cutting frequency of bus service, self justified its decision to shut the route down because of its supposed lack of success in drawing patrons and because of high operational costs.
Unfortunately, since we are going to a rail centric network, Mr. Barnes still won't get his routes even after we have spent $3 billion on rail transit, and we should investigate why that is so. The big problem with having the federal government diversion of the 2.8 cents per gallon gasoline tax diverted to transit is that because the way that the rules are written, the New Starts grant money can only be used for capital expenditures. Federal money is not to be used to operations expenses. Moreover, only public transit agencies are eligible for the start up grants. This in turn creates the following, warped incentives:
1) Local governments all over America had huge incentives to buy out any privately operated transit companies which still might have been around in the 1960's and 1970's. In their place, government transit agencies would be created and chartered, if for no other reason than to be eligible to get in line for federal handouts for transit. Who cares whether anyone bothered to take public transportation? What really mattered (and still matters) is that local interest groups get the grant money.
2) Since Congress has geared FTA programs towards capital expenditures, essentially the rules say that "we will give you big capital grants, but its up to you to come up with operating funds." This state of affairs completely warps the incentives facing local political elites,transit agencies, and transit supporters. The game is tilted towards spending huge sums of money on expensive rail lines which may cost dozens of times more money to build, but don't cost quite as much to operate. That in turn creates a ripple effect because very few transit agencies cover their operating expenses. That means that bus service usually is cut and reconfigured towards rail lines since doing anything else makes absolutely no sense at all.
I should say, in the light of what was said regarding Stephen Kleinberg's most recent transit survey, that there is a very big difference between political markets and real world markets. Someone participating in a real world market must come up with ideas that will pay their way on their own merits, otherwise, they are forced to exit the field. That, gentle readers, is a good thing. On the other hand, in political markets, ideas only have to win 50% plus one voter and the idea wins, regardless of what the conseqences are and regardless of whether the idea actually succeeds in doing what people think it will actually do.
If the current Main Street rail line were built in a real world market by a private operator, a good idea of what the train would take to be built would look something like this. Since the train cost $520 million and is costing $14 million per year to operate, the estimated annual carrying costs of capital (at 5% interest) would be $26 million. Add $14 million in operating expenses and you get $40 million per year. A private operator would probably have to pay off a loan at 2-3% per year, so the private train operator would need to collect some $50 million per year (if not more) for the idea to be viable in real world markets. Since the train had 11 million riders in 2007, that would equate to a private operator needing to charge about $5 per person per boarding (Metro would need to charge about $6 per boarding to fully pay its own way in the world instead of $1). Very few would be willing to pay that price to ride the train, ergo that is why you do not see rail being built by the private sector. But what you do see is the Houston Chronicle and rail fans in the political markets cheering on rail building while saying that "there is no demand for the increase in bus service".
One issue hanging out over the horizon concerns the 25 percent general mobility monies that Metro pays out to its constituent municipalities for road building and other transportation projects. This arrangement is set to expire in 2014. In theory, the agency could devote all of the money to improving bus service as promised which could fulfill the 50 percent bus service improvement aspect of the 2003 bond election vote, but that is contingent on the idea that the member cities and Harris County are going to actually come to an agreement that the current arrangement will end. That, ladies and gentlemen, is not a done deal. That issue also cropped up in Metro's Westpark rail line DEIS, as well as the FEIS's for the North and Southeast Corridors. In those documents, Metro claimed to the FTA and to the public that it would have $8 billion in cash on hand in the year 2030. Now let me tell you gentle readers something about myself and that is that I have read an awful lot about politics. If there is one thing I know, that is that no politician or group of politicians are going to let $8 billion in cash pile up without spending it. I do not know what will happen, but that money will be spent somewhere. So why did the agency make such a claim? Let just say that we already have covered that. It's because there are all of those all important federal grants to chase after and who gives a damn about what the consequences of that really are.
So we could have (or could have had) one of two things. We could have $3 billion in rail lines, with about 20-25 percent of the entire year 2000 bus system service cut and truncated. That would have offset any (if there were or are any) benefits which might have been gained from rail. Or were could have added 500 bus vehicles to the year 2000 fleet which was already in existence, which could be deployed anywhere - including some for Spring Branch which would help Mr. Barnes and those disadvantaged souls at the Spring Branch Family Development Center.
More Fireballs, Lightning Bolts, and Hell Storms to follow.
Wizard
On Friday, November 16, 2007, the Houston Property Rights Association welcomed retired governmental auditor Bob Lemer, author of the TABOR inspired Proposition 2, to give an update on what is happening with the various city charter amendments concerning finance issues.
Before Lemer took to the podium, several HPRA members brought news on a few fronts. One said that he attended a John Culberson related function where the Congressman has lately been active on the immigration front. Culberson flew to El Paso a while back and watched incognito as border patrol personnel waved vehicles to go on by. Eventually Culberson himself stepped in and identified himself, at which point the bureaucrats predictably called out extra personnel and dogs to beef up security. This same person went that Wednesday to a League of Women Voters meeting where Stephen Kleinberg and Gordon Quan complained that the opposite was good - that immigration led to diversity and that diversity is good. Quan said that there are 20 million illegals in America now and that deporting them would take years. Some states of drivers licenses for illegals. Incidently, the idea that racial and cultural diversity is good for civic engagement has taken a very serious hit recently. Not only that, the hit was delivered by one of its longtime stalwarts, Professor Robert Putman.
Talk also drifted to the Astrodome proposal. One HPRA member who is politically well connected, talked to Oliver Luck. Apparently Dome Development officials were hoping for a $750 million redevelopment proposal on the Dome, but that a proposal has not materialized. This gentleman, who has been working with Mike Roselle and Mr. Luck, has reminded them that you cannot do anything to destroy a prospectus on a business deal, which seems to be the strategy that the Houston Texans and Rodeo are trying to do. Instead, this gentleman suggested that the easy way out of Harris County would be to do an economic impact statement showing that the Dome costs $5-7 million per year to operate and to let the impact statement do the talking that the Dome needs to be demolished.
The fellow in question also said up front that bonds are still in play for refurbishing the Astrodome! The claim is that the hotel and motel tax can cover it, but there probably isn't enough money in that fund to float a massive bond for Dome redevelopment - read here for some refresher history about previous public funding of Dome upkeeping. A question was raised as to whether the Houston Texans and Rodeo could actually stop new redevelopment and the contention is that yes, the tenants could do it through their agreements.
HPRA President Barry Klein, who recently completed cancer treatments, attended the gathering today. He took briefly to the microphone to say that there have been polls cited recently saying that the public supports keeping the Astrodome and maybe redeveloping it, but he pointed out that the polls in question do not ask such questions as whether taxpayers were willing to see their taxes go up to support Astrodome maintenance or redevelopment. He also went on to say that Metro's current market share of transportation trips is only about 2 percent of all trips and that the massive light rail build out would not make any dent in this overall pattern of development. Metro's own numbers show that its share of trips is still going to only be 2 percent of trips in 2025. Klein says that what is needed is a public education campaign that tells people about the fallacies of transit, including that it can relieve congestion. He pointed out that he has a file on Metro's commuter rail plans, which they have been planning away on since 1979 and for which they still won't make any sense.
But onto Bob Lemer. Lemer's talk concerned Propositions 1 & 2, as well as City Charter propositions G and H from 2004. All were approved, but all of them are also now in court. Lemer said that Proposition 2 was an outgrowth of something called TaxVote 97, which he contends had a flaw in that it applied the idea of rate of increase in allowed governmental expenditures to inflation and population growth, but did so to all rate structures. According to Lemer, this would have resulted in complex accounting problems. The Proposition 2 initiative was a refinement of that original idea.
Lemer went on to stress that Proposition 2, what he calls the Houston TABOR, does not prevent anything! It merely said that if the City of Houston wanted to increase expenditures by a rate greater than that of population growth and inflation, then the City needed voter approval. But oh my goodness! From the belly aching you heard from the City, the Houston Chronicle, and the allied interest groups, this was just preposterous and absolutely unacceptable!
On the other hand, Proposition 1:
1) Supposedly capped property tax increases to either the lower of 4.5% per year, or to population growth rate plus inflation.
2) Supposedly extended the homestead exemptions which were already in place, and
3) Supposedly kept growth in water and sewer rates at a level below population and inflation rates.
Lemer went on to say that Carroll Robinson, Jeff Daily, and Bruce Hotze joined together and went to an appelate court, first having to ask that the City report the result that Prop 2 passed to the Secretary of State. Then these men had to go back to court asking the court to tell the City to put Prop 2 into the City Charter. Mayor White has not done this. This in turn leads to the question as to whether Proposition 2 will be operative? Mayor White and City Council asked for a summary judgment saying no it doesn't have to be, but the judiciary said no. Robinson, Daily, and Hotze asked for a summary judgment in favor of putting Proposition 2 into effect and the judiciary agreed. Naturally the City has appealed.
Now here was the interesting part of Lemer's presentation. According to Lemer, under Proposition 1 and Proposition 2, the City owes taxpayers money. However, under Proposition 1, the City owes taxpayers about $129 million, while under Proposition 2, the City owes taxpayers only $30 million! That's right gentle readers. The Mayor's plan actually backfired and is turning out to be better for taxpayers than the plan put forth by the opposition.
However before everyone starts celebrating their good fortune, there is a problem with Proposition 1. Namely, Proposition 1 does not have a provision for refunding money and there is no remedy available to enforce the Proposition. This was one of the issues that Lemer was trying to stress during the 2004 elections. CM Toni Lawrence brought this issue up in City Council and the Mayor asked in public, "Do we have to replay money? No! Then we don't do anything." Lemer expects the matter of refunds and enforcement of Proposition 2 to go to court soon. This is not good for a city whose pension bond obligations are seen as being under stress.
A question was asked why it was that Proposition 1 has been more effective so far than Proposition 2? Lemer replied it was because that, though the airports were exempt, as well an enterprise funds (i.e. franchise fees, hotel / motel occupancy taxes), those taxes have been flat over the past few years, whereas property values have been going up.
Another person asked whether it could be construed that Mayor White's actions could be seen as having a fraudulent intent? In other words, if the Mayor put the Proposition on the ballot and did not intend to give any monies back if it were deemed to do so, then could the Mayor be charged with something? Lemer said he did not know. The Proposition was presented as a relief act to be incorporated into the Charter as an amendment. It would be up to the lawyers to see if anything could be filed.
One member of the audience, an attorney, mentioned that the true remedy is actually political in nature, namely that the voters are in theory supposed to vote out the current Council which is reluctant to implement these propositions and to vote one in that will. This gentleman expressed the idea that these Propositions are aspirational in nature. There was also a question of who has standing, but I do remember that Proposition 2 actually said that any Houstonian could claim standing when it came to enforcement of it.
The City has no obvious incentive to enforce both propositions, indeed Lemer told the audience that the City had given Vinson and Elkins $150,000 to fight the appelate battle, a figure V&E blew through very quickly. White will be out in two years, and Lemer thinks that the City will not approve any more money to contest appelate rulings on the propositions, and it is important to remember that City Council as a group is party to these suits.
Barry Klein interjected at this point to remind the audience that when the City goes out and hires a law firm like V&E, the City is also buying whatever influence the law firm can wield because V&E is tied into the establishment and such a big contributor to both political and judicial campaigns.
Mr. Lemer went on with discussing the situation involving Propositions G and H. Lemer pointed out that neither of these propositions acknowledge Proposition 2. They also remove so called "enterprise funds" - meaning money reaped at the airports, water and sewer fees, and other infrastructure from the revenue cap. Proposition H asked for an increase of $90 million regardless of any other caps which may exist. Lemer said that the City is also trying to get drainage monies back into general funds.
Lemer explained to the audience that when it came to the City airports, Hobby and George Bush Intercontinental, that the City is effectively a landlord only. Outside of a few police officers, the vast majority of people who work at the airports work for either the airlines or for other government agencies. What the revenue cap would have done with regards to the airports is that it would have forced a public vote on any airport expansions and the airlines did not want that. Lemer stated that the airport bonds are effectively junk bonds. An obscure piece of legislation allows for the City to authorize up to 5 cents per $100 property tax valuation to pay for airport bonding in the event that the airport system gets into trouble. Meanwhile, Lemer says that the City has been hitting up John Culberson for money to expand and refurbish the airports - while simultaneously demonizing Mr. Culberson about rail at the same time I might add.
Lemer stated that the Mayor's actions effectively say that propositions G&H are in effect, but that Propositions 1 and 2 are not. Logically you cannot have both. Lemer said that Proposition 1 is a hoax on taxpayers and that the Mayor should not continue pretending that it is not. Meanwhile the Mayor has received, without his asking, a substantially lowered valuation on the price of his property, allegedly because he lives in a flood plan. That however only goes to prove that property taxes at the local level are no different than corporate or income taxes at the federal level when it comes to lobbying and favoritism in order to be relieved from their burdens.
On a final note, Lemer recently received a confidential email from auditor at Deloitte and Touche, stating that "the City of Houston has material weaknesses in its internal audit controls", which is layman's language for saying that the financial sector thinks that you have been doing Enron Accounting and cannot effectively trust your books. Lemer stated that if this were to happen In the private sector, heads would start rolling. Lemer asked the auditors for more information on why they stated this, but D&T said that the City was determining the scope of their auditing. Moreover, the City has said in response to recent enactment of tighter GASB and GAAP controls on governmental entities that the City will interpret whether its own books are in compliance with these measures.
As Marshall Sam Gerard once famously said of one train wreck, "My, my, my, my - what a mess!"
Addendum: If blog readers want to listen to the podcast from which this blog entry was transcribed, they can download it here. The podcast is approximately 80 minutes in length and is 18mb in size. I will keep it available until December 1, 2007.
Wizard
On the eve of election day 2007, I found myself tonight going over to pay a visit to my fellow Houstonian Tory's blog and reading about his ideas for what to do with Houston's original grand temple to the Sports gods, the Astrodome. I also digested commentary from others who visited his blog.
This of course put the Wizard into contemplative mode. Hmmm. So what to do about the Dome?
We all know the story. This past week the politically powerful Houston Texans and Houston Livestock Show and Rodeo stuck a fork into the idea of reusing the Astrodome as a $450 million massive convention center and hotel. It should go without saying that both parties probably want the Astrodome demolished and I'd have to say that I cannot agree with them more. I have come out before saying that the Dome should be demolished, possibly either for parking space or for possible construction of some sort. Moreover both parties probably saved we peasantry from having to shoulder yet another levy being slapped on our backs by the political classes via having to taxpayer finance such a ridiculous scheme.
But despite of my Libertarianism, I am also enough of a political realist to know that the Dome will not be torn down anytime soon, mostly because the Harris County Commissioners are scared to death of being accused of demolishing the Dome. At the same time, we the peasantry are paying for a $1.5 million per year levy just to keep the Dome in modestly environmentally usable condition.
So what to do? Tory's ideas are going along the right path, along with his back of a napkin financial analysis of any massive hotel complex. The problem is that this is politics and for decades there has been this desperate hope amongst the political classes in this city that somehow they can turn Houston into a convention city. Never mind that the convention business has been dominated for years by Orlando, Las Vegas, New York and Chicago, and that the political classes in dozens of other cities in America have all been building convention facilities in a desperate battle over the convention market scraps despite the fact that trade show attendance has been dropping off.
Tory suggests turning the Dome into a speakers facility in addition to opening up the Dome for festivals. The speaker idea probably isn't too bad, though there are lots of places where speakers can be heard. As for the idea of holding festivals in the Dome, my intuitive feeling about festivals (in addition to those comments made in his replies) is that festivals are more of an outdoors type activity. There is also a kind of ritual to holding festivals. Most festivals are held annually (or semi - annually) at set times during the year. They serve as a kind of marker that we have come full circle reached another season in the cycle of our lives.
However it is along the right track. The idea is a low risk, low cost idea. If it fails, then Harris County taxpayers are not left with an even larger white elephant hanging around their necks. Moreover, we can say that we tried the idea and if it doesn't work out, then we haven't lost all that much.
Which brings me to my idea. What if the Dome authorities were to simply throw the doors to the Dome open to holding weekend bazaars at the Dome? Perhaps they could be held Friday nights, Saturday all day, then Sunday afternoons? They would not be held when the Texans were holding their football games, when other sporting events would be scheduled, nor when the Rodeo was in progress. And come to think about it, isn't the Rodeo itself a festival?
Running with the shopping bazaar idea, parking could be charged at a nominal fee, say $2-3 (or even free), to encourage attendance. Booth fees could be collected, in addition to beverages, though one might think of being careful about this and simply collecting sales taxes on lower priced items. The organizers themselves could be held responsible for cleanup after each weekend. Other ideas would include the possibility that if this idea were to become successful, then expansion would simply be done through allowing new booths to operate outdoors.
The beauty of this idea is similar to Tory's. The bazaars could be held nearly every weekend. Marketing the idea would probably not be too much trouble as everyone knows where the Dome is. This also would have the added attraction of being a low risk idea, which if it were to not be successful financially, then the operation could be shutdown quickly and taxpayers would not be left on the hook for a massive sum of money.
On the downside, I can imagine that some would object to turning the Dome into a marketplace simply on emotional or symbolic grounds. Their hearts might break at the thought of their cherished Dome being used for such tawdry commercial reasons, though it was exactly for commercial reasons that the Dome was put to during the glory days of Nolan Ryan and Earl Campbell. So what's the difference?
Another possible downside might be objections from other flea market or open market operations around town. More tellingly, maybe the Dome authority and the Commissioners themselves might not be happy, on the grounds that they might not be able to reward their campaign contributors with fat contracts from the building of some new fancy facility.
While stewing over this idea tonight, I was struck by the issue that the Dome (despite the fact that I think it should be torn down) at least symbolically means a lot to people in Houston. I have to admit that one of the most special days of my life when I was growing up happened at the Dome. On December 3rd, 1982, when I was a teenager, I along with a few of my friends attended my first rock and roll concert at the Dome. And Who was the band that we went to go see that night, the ones who initiated me and my friends into the joys of concerts and the nightlife? Let me give you a hint - I've already told you the name of that band.
Ah yes. One cannot imagine how emotional that night was for me. In fact I can still remember it nearly 25 years later as though it happened yesterday.
So what is all this nostalgia leading to? Well how about this. If people are so tied up emotionally in a mere building, then if we Houstonians are going to keep the Dome in operation for symbolic or emotional reasons, then why not use the Dome for emotional reasons? How is this for a suggestion: Why not allow Houstonians buy space along the walkways of each of the levels of the Dome where they can put momentoes of their most cherished memories of their times that they spent in the Astrodome? For example, for $200 why not allow a person or a family to purchase a 2 square foot wall area of the Dome walkways where they can etch images or hang photographs along the walls where they can tell stories of their experiences? Why not allow for larger spaces for a higher price, say a 5x5 foot mural space for $1,000? In my case, I would tell everyone of what happened to myself and my friends that night and why the Dome means so much to me. Others might tell of watching the Oilers play the Pittsburgh Steelers during the days of Luv ya' Blue. Maybe some of the old Olier legends like Dan Pastorini or Earl Campbell could add their own memorabilia. Maybe fans could see the famous Monday Night Football footage where a solitary Oliers fan gave the camera the finger on national television.
In other words, why not turn the Dome into a kind of museum where the people of Houston would share their fondest memories of what happened there? Proceeds from the sale of mural spaces could be put into a fund which would be invested in bonds which would draw interest that in turn could be used to help offset the costs of operating the Dome. Since the Dome is 710 feet in diameter, that would mean that each level is 2,230 feet in circumference. I could see 5,000 or more murals decorating each level of the Dome, maybe more if we would allow the concrete walkways to be decorated. I could easily see $5 - $10 million being raised by such an idea. Augment that with parking fees, sales taxes from weekend bazaars and you may actually have a viable operation which would pay for itself.
Enough for now. It's time for me to lie down and face another day.
Wizard
On Friday, October 26, 2007 the Houston Property Rights Association hosted a trio of speakers to talk about several of the ridiculous number of bond issues which have been placed on the November 2007 ballot. Some talk was also given over towards discussing the 16 or so State of Texas constitutional amendments, some of which are also bond and finance related.
Before going any further, from my own personal perspective, I've decided already to go ahead and vote no on all of the bond proposals. Some regular readers of my blog will probably note this as a kind of knee jerk anti-government reaction to all of these proposals. And, I will say that largely you are right. It is quite disturbing to see so many of these things being put on the ballot all at once. That in turn reminds me of a proposal that Tom Bazan made a while back. He suggested that there be a minimal level of registered voter participation in an election for a bond proposal to pass. For example, if there are 100,000 voters in a school district, there should be a requirement that 25 percent (25,000) of all voters participate or else a bond issue automatically fails, regardless of whether a majority of those participating voted for it or not. As things are, it is quite possible for low voter turnout (see final paragraph for more) to cause as few as 3-5 percent of voters in a political subdivision to commit the other 95+ percent of voters to paying for a bond issue.
I have yet to spend a few hours of time wending my way through all these constitutional amendments. As always, even for a knowledgeable, tuned in guy like me, there are, how shall I say, informational issues involved in trying to keep up with all of these matters. Now then, for those of you who fervently believe in Democracy, if a guy like me has a hard time keeping up with all of this, then how do you expect the average Jane or Joe to do so? More to the point, what does that mean for how decisions are made in republics and democracies?
But we will leave these issues and my own voting plans aside for now. What follows is what transpired at the HPRA meeting.
The first speaker was Larry Tobin, speaking on the Port of Houston Authority's $250 million bond proposal.
As can be seen by looking at the links above, Mr. Tobin, a Taylor Lake Village Council member, has long been a watchdog of the Port and has been speaking out against port, or pork bonds. Tobin started his talk by asking the audience if anyone knew the primary difference between the PoH and most of the rest of the ports in America? When nobody raised their hands, Mr. Tobin then told them two things. First, the PoH has mostly liquids as its main source of cargoes, and second that the PoH is the only port in America that does not pay the bulk of its capital costs. Instead, the PoH lives primarily off of the levies of Harris County taxpayers. He stated that, in his view, the Port has practically no accountability. It is not a component of the City of Houston, Pasadena, or any other entity. He said that, "the board is composed of a bunch of flunky appointees that are running this thing."
Tobin told the audience that the really tough questions should come to heel at the Harris County Commissioners Court, but our esteemed Commissioners do not ask the tough questions needed to really turn things around. Tobin continued, saying that we could run the port with private terminal operators, with leaseholds which could cover debt service. He then noted that every time there is a new bond issue to be voted on, the campaigners for the bonds always talk about the jobs, jobs, jobs that will be created if we pass the bonds. Tobin asked the audience, who pays for all this? It's the pigs feeding at the trough.
Tobin told the audience that the cruise terminal operations cannot find new passenger ships for the immediate future, as Norweigan has left and only two ships call every week. However, these terminals can make for nice meeting facilities. Go figure.
Tobin told the audience that the Bayport terminal is not being served by rail, nor will it be for quite some time. He says he has $12 million worth of cranes that are idle and that the Bayport facility is poorly designed. Tobin said we are shipping freight to Barbours Cut to get cargo to rail heads. Additionally, Tobin told the audience that Long Beach has private operators who pay their own way. If they can, then so can the PoH.
Tobin said originally the PoH came before the Harris County Commissioners and asked for a $500 million bond issue, but the commissioners apparently didn't ask the PoH exactly what all this money was needed for. They seem to have simply gotten scared over the price tag of that bond request at an election where many other bond issues were on the ballot. The Commissioners simply cut the bond issue in half to $250 million and put it on the agenda. Tobin said we need to remove the levy off of the Harris County property owners who have $586 million in debt service to carry for 30 years, along with this bond issue.
Next came a debate over the 2007 $805 million HISD bond issue between City of Bellaire Commissioner Bill Borden and Ron Brunner, two Republicans active in local politics. Borden told the audience that the Harris County Republican Party formed 4 committees for studying the various bond proposals on the 2007 ballot. The HCRP came out neutral on port bonds, in opposition on SBISD bonds, in opposition on Cy Fair bonds, and neutral on HISD bonds. After going on with making normative statements concerning public schools in general, Borden then asked why HISD does not have in its budget money set aside every year for repairs or maintenance? Does it ever have intentions to set up a reserve fund for repairs?
Borden told the audience that HISD does not do this, but instead accused HISD of letting schools fall apart, then hitting up the public for bond issues for grand reconstruction projects. He noted that HISD keeps telling the public that there will be no tax rate increase, but asked what about the levels of taxes due to rising appraisals?
Borden asserted that HISD has a credibility problem. One issue he brought up is that HISD has a few schools where there are few nearby students living in the neighborhood. Borden suggests that HISD sell land if possible and use the proceeds to help build schools somewhere else. Borden also raised the issue of whether property owners should be the only ones who are allowed to vote in such bond elections.
Addendum: I should take a moment out here before going any further to address an issue which has plagued the HISD bond election. One prominent group which has been fighting the bond issue is the black community, I think for reasons that more than a few of schools in areas of town which have predominantly black residents are slated to be consolidated or closed.
I knew this was going to happen. I can tell a story here which happened in 1985 in SPISD. At the time, the SPISD district was experiencing declining enrollment of students because of the demographic passing of the baby boomer generation into young adulthood and the raising of the Generation X group, which was a much smaller cohort. I am one of those so called Gen-X types.
The result of this was that the sitting SPISD board of the day decided to close two public high schools for reasons that they were more expensive to operate. This reasonably rational decision was greeted with threats of lawsuits on the part of various parent groups whose kids went to some of the schools because the parent groups whose kids went to those schools were going to do everything within their worldly power to make sure their school did not get shut down! The result was that the district ended up closing two schools whose parent groups had not organized very effectively. You ended up with two public high schools that were only about one mile away from each other, while others were bussed for miles to attend their school.
This is the sort of stuff you get when you decide to use politics and the arm of government as a means of educating kids. The usual fighting over who is going to get what breaks out, and that is exactly what leaders in the black community are fighting over. They might understand that demographics is a reason for shutting down schools since HISD is expected to see a modest decline in enrollment, but people are forgetting that this rational fact is running straight into politics. "Go shutdown or consolidate some schools, but what? Y'all are going to shut down my school? You people are not going to shutdown my school!" And so the fighting starts, with possible lawsuits to be seen over the HISD plan until it gets resolved.
Continued: Ron Brunner, a local GOP precinct chair, spoke in favor of the HISD bond proposal. He first started off by saying he has no kids in HISD schools, but went into the debate open minded. He spoke with Diane Johnson, Harvy Moore, Sylvester Turner, Carol Mimns Galloway, and HISD Superintendent Abe Savedra.
Brunner stated that the bond issue is for capital improvements and cannot be used for teaching funds. In 1997, the HCRP rejected the first of these massive HISD bond proposals, which helped lead to its defeat. What the HCRP said was that the 1997 proposal was massive and that HISD was asking for a blank check. Brunner noted that HISD said nothing in the 1997 proposal about where the district intended to spend the bond monies.
Brunner then went on to tell HPRA that HISD came back in subsequent bond proposals that denoted line items where and which schools were to get rebuilt and refurbished. The first $678 million proposal passed and in 2002 the district asked for another $700 million, which passed without too much controversy. Brunner noted that there has not been mismanagement of funds. He challenged the group to name news scandals or corruption in HISD bond monies. He said that HISD has not been spending $80 - $100 million on football or athletic fields as has Cy Fair ISD.
Brunner stated that the real key to these proposals is to hold the bond issuers' feet to the fire. The schools that were listed have been the ones getting redone. The schools (sadly) are getting security mechanisms installed, new science labs and computers. The current HISD policy is when repair or renovation costs come near the costs of outright replacement, then they replace the school. 134 schools are on the list.
Brunner contrasted the HISD approach with the SPISD approach which he says is a band aid approach. He stated that HISD's maintenance budget is in the hundreds of thousands of dollars, which is questionable for a district of this size.
Brunner went on to talk about the upcoming State Constitutional amendments, stating that State amendments 2, 4, 12, 15, and 16 should be voted against. This includes the Proposition 15 $3 billion Cancer Institute vote. Brunner stated that this should not be construed that we are against cancer or cancer research, but that this allows the Legislature to get into the cancer research business which there is plenty of work going on to begin with. He noted this is a grant and not a loan, ergo it will never get repaid. The monies are also not line itemed, as it is an open grant. Brunner also noted amendment #12 is a $5 billion open check to Tx-DOT for which there is no prohibition for use in the Trans Texas Corridor.
Questions were raised by the audience, such as why is HISD letting the schools fall apart, then asking for the authority to issue bonds? Another interesting question was whether it is necessary to build new schools to have a quality education? In other words, when has a particular building been the driving force in a great education? Another person mentioned that there seems to be a very contestable assumption that more money means a better education, which in putting that money into buildings takes away from the stress behind education.
Bill Borden mentioned that the cost to educate an HISD student is $4,200 per student which he says is higher than that of a private school. HISD has boasted that it has greatly increased the number of advanced placement student, but failed to mention that 70% of those advanced placement students come from two schools - Westside and Bellaire. He advocates looking into breaking up HISD and also looking into how HISD handles its statistics. He also was critical of the issue that HISD does not budget very much money for maintenance.
The meeting ended with more commentary by Mr. Tobin. Tobin said in response to a question that the Port of Houston wants general obligation bond issues. That way, if they can float a general obligation bond, then he asserted that the Port Authority can build down on Pelican Island, as the island is not within the navigation zone. Tobin said that we may be seeing a changing set of economics in the Port soon, since he characterized the Port as being in the cul de sac of the Gulf of Mexico. In 2005, Kansas City Southern purchased controlling interest in Grupo Transportacion Ferroviaria Mexicana, possibly for use with the Trans Texas Corridor. Ships would not sail to Houston, but rather land in western Mexico, then transport overland.
And so it was. It was an interesting meeting, but early voting ended this evening as I was writing this. The turnout during early voting was light and turnout on election day is also expected to be light. Meanwhile we await the fate of those bonds, bonds, bonds.
Wizard
And so it was that Houstonians woke up to the news that the Metropolitan Transit Authority decided that, at the added cost of, well who knows how much money, that the agency is going to aggrandize itself via building 30 more miles of light rail. I will do some analysis sometime within the next few days.
Of course the boys at 801 Texas Avenue cheered at the news, noting that 60,000 jobs were going to be created at its peak. This is almost certainly tacking on a zero onto the number of jobs that might be temporarily created. If 60,000 jobs are to be created and, say for argument's sake that each job pays (with benefits) $50,000 per year, then the labor costs alone for the project would run $3 billion. The numbers can be massaged around, but you should get the picture. It is notable that the Hearst boys were very careful in their editorial not to make claims that the project would do anything to alleviate traffic congestion.
But analysis about that are to come later this week. Today we are going to talk about one person who already has found employment with Metro, courtesy of current Metro President Frank Wilson. That man's name is one, Mr. Frank Russo. Details about Mr. Russo's current employment can be downloaded here. This is a Power Point presentation that is 3.1 mb in size.
Addendum edit: It has been pointed out to me that several of the pages in the contract are missing. That is because there were several pages in the contract which involved dealing with issues such as the fact that Mr. Russo was to follow federal laws not discriminating against race, creed, sex, ethnicity, and so forth in hiring subcontractors, if any were needed. There were other - what I would call generic clauses in
