Watson, Adler look to expand I-35 without city bond money


I was out of town late last month when Austin Mayor Steve Adler and Central Texas Mayor Kirk Watson (well, OK, state Sen. Watson) did a sort of transportation two-step. Even from a time zone away, I had to admire the choreography.

Watson led off at a May 26 luncheon by saying that the massive (but as yet only minimally funded) improvements planned for Interstate 35, at a potential cost of $4.6 billion, could be paid for by a witches’ brew of money: toll bonds, money promised to the community by our local toll agency, state money saved if the city of Austin takes over maintenance of state-owned streets in town like North Lamar Boulevard, contributions by counties along I-35, even a novel “credit swap” where the city would borrow money at the lower interest available to it, and the Texas Department of Transportation would pay it back.

Conspicuously missing was general obligation bond money from the city of Austin, the sort that requires a bond election and gets paid back by property tax revenue (although that credit swap thing would seem to be a cousin of that). Adler in previous months had talked about the city putting bonds on the November ballot to help pay for expanding I-35.

Then, a few hours after Watson’s luncheon, Adler gave a speech in which he unveiled what seemed at the time a crazy-large $720 million transportation bond proposal for November, but one that would provide no city money for I-35. Instead, Adler said, all of that $720 million (almost five times larger than any transportation bond proposal ever approved by Austinites) would go to other city street projects, mostly for makeovers of major arterials that would make them user-friendly for bikes, pedestrians and transit buses as well as ripe for the denser development of the sort that city leaders see as the centerpiece of Austin’s future.

Deft, and no accident.

That Adler proposal in the weeks since, while he has tinkered with it to gain City Council acceptance, has gone from a forehead slapper to the official policy of the city of Austin. The council, on an 8-3 vote in the wee morning hours Friday, approved a resolution in support of Adler’s plan. In August, unless the council changes its collective mind during a six-week break, the members will vote to put Adler’s proposition on the November ballot.

I-35, it appears, failed Adler’s consensus test. The mayor said over and over this month that he needed a bond program that could get general (if not unanimous) support on the council and in the community. And among many of the people who make their voices most heard in city politics, adding tolled highway lanes through the middle of Austin is an unpopular idea. Or, at the very least, TxDOT’s fiscal responsibility rather than the city’s.

So, what of I-35 and that $4.6 billion?

Watson and TxDOT last week invited the media in to talk about that. They still insist, even without any significant city contribution, that the money can be scrounged up and the work all completed by 2025.

Already, TxDOT has committed to (and has started or even completed construction on parts of) about $300 million of the work. That includes a “diverging diamond” intersection at FM 1431 and new ramps south of U.S. 79 in Round Rock, flyovers at U.S. 183 and intersection changes at East 51st Street in North Austin, and new overpasses, turnaround bridges and added lanes at Oltorf Street, Stassney Lane, William Cannon Drive and Slaughter Creek Drive in South Austin.

As TxDOT Austin district engineer Terry McCoy pointed out, $300 million and construction of those projects represent significant spending and near-term relief for I-35 drivers. As recently as 2011, McCoy said, there was no detailed long-range plan for I-35 through Central Texas, and no money at all set aside. So $300 million is not nothing.

But it is also $4 billion or so short of what is needed to make it all happen. Watson professes not to be worried. And he says this is the natural order of things when it comes to big public works like this: make a plan, then go find the money.

“I feel very comfortable that in relatively short order we’ll be able to fund a big chunk of the plan,” he said.

It is his job, of course, and Watson’s general practice, to evince optimism about such things. But what are the specifics?

The primary element of the plan, and thus the largest cost, is an express toll lane to be added on both sides of I-35 all the way from FM 1431 in Round Rock to Texas 45 Southeast near Buda. TxDOT will be able to sell toll bonds based on anticipated toll revenue from those lanes, which is likely to be substantial given the huge demand and agonizing congestion on I-35. A lot of people likely will be willing to pay to go faster than they can on the free lanes.

But the toll lanes also create a funding problem. TxDOT has billions of additional dollars coming in now or very soon, thanks to voters approving state Prop 1 in 2014 and Prop 7 in 2015. But those constitutional amendments specify that money cannot be spent on toll projects. So TxDOT, as Watson acknowledged in May, will have to be very selective about which I-35 projects get money from those sources.

But Watson said I-35 could be folded into the Central Texas Turnpike System (which has four toll roads, including Texas 130). Refunding existing debt on that system, he said, could raise as much as $1 billion for I-35 work.

So I-35 is a (funding) work in progress on the area’s most critical transportation problem. But that work won’t include this November’s bond election.


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