14 May 2011

Bazan: Is Houston City Hall haunted by ghost of Lee P. Brown?

This is another of our occasional series of guest posts/essays on local topics of interest to us and our readers. Feel free to submit topical posts/essays for our consideration to bloggers-at-bloghouston.net. As with our usual blog posts, the views expressed are those of the author.


by Tom Bazan

With regard to the plan being floated to "privatize" certain city facilties: Thank God that the US Congress outlawed the "Defeased Lease" scams in 2005 which were the lump-sum cash vehicles many governmental agencies such as METRO and the City of Chicago exploited to abuse taxpayers! You know that's what the Ruling Class wants to do again if they could.

Recalling the huge give-a-ways of taxpayer assets, it's as if the ghost of Lee P. Brown haunts city hall. Taxpayers must ask "Is the 1.8 million square foot, $270 million facility only worth ten cents per square foot per month?"

Mayor Brown, and his brain trust, Jordy Tollett, dumped valuable city-owned assets such as the Compaq Center (f/k/a The Summit), while at the same time acquiring a herd of "white elephants" with taxpayers funds.

One shudders to recall the fiscal nightmare of the Brown administration, which blew through the billions of property and sales tax as well as fines, penalties and fees. Seemingly, that enormous spending was not near enough; they also added over SEVEN BILLION ($7,000,000.00) dollars in crushing bond debt. Mayor Brown, when not out-of-town, gave us the underperforming Convention Center Hotel, the City Emergency Center, the unsafe and unreliable boondoggle urban rail, and he Super-Sized an existing "White Elephant" by expanding the George R. Brown Convention Center.

Now, Houstonians are presented the specter of the #1 Texas Progressive politician spinning off one of the largest remaining city-owned assets, a proposed scheme that is truly unsettling. Is this Rice U graduate succumbing to the same illogical decisions as that of the former Mayor and renowned Rice U professor, Lee. P. Brown?

This proposed scheme may be worse than the Compaq debacle. In the Compaq scheme, the city took an up-front lease payment of about $11.87 million from a church, on terms that seemed contrary to the best interests of the taxpayer. Several years later, when the city was scrounging around for cash, it sold the property to the church for $7.5 million, less than the appraised value. What seems galling: had not the sweetheart lease terms restricted the value of the 606,000 square foot facility, nestled in the Greenway Plaza on a prime 6.945-acre site, the appraised value likely would have been much higher. The total net to the taxpayer was about $19.37 million for the whole kit and caboodle. Here is a copy of that appraisal (pdf).

The taxpayers suffered the disposal of a huge city asset for less than the appraised value of the land! Rubbing salt into the wound, the church won't be paying any property taxes on this valuable land and building, which is another significant revenue loss to the schools, county, and city totaling well over $1 million every year!

How could a bureaucrat deal be any worse? Try to ignore the reported Bayport debacle, and focus for the moment on the current proposal.

The Houston First scheme doesn't sound feasible. The Convention Center Hotel never has come close to realizing the "Feasibility" numbers generated by PKF (taxpayers paid $102K for the optimistic document yet the city ignored a request to actually order an appraisal).

Where's the beef? Where will the start-up cash come from? Is the new venture going to tap the TIRZ and or float even more tax revenue bonds?

The GRB should never have been expanded, and the Convention Center Hotel should only have been built if it would have been profitable to do so. No one cares to hear the snarky "Conservatives tried to warn the public back then" remark.

We should not allow the current Progressive Mayor to merge these two hungry "white elephants" into a questionably-capitalized privatized corporation mischievously named "Houston First." The lease is priced at ten cents per square foot per month; is that all that this humongous, $270 million facility is worth to the Ruling Class? There is but one word to describe those buying into the scheme...


* * * * *

Tom Bazan has a degree in real-estate valuation, has been a TREC licensed broker in Texas for over two decades, and has previously been licensed in Alaska, California, and Michigan. He is a property tax arbitrator, a real estate instructor, and is AQB-certified to teach appraisers the USPAP. He is one of a select group of experienced commercial real-estate appraisers who has been hired often by the City of Houston to appraise real property for the City of Houston as well as the Houston Airport system.

Posted by Kevin Whited @ 05/14/11 04:18 PM |

23 April 2010

Brutus: Unequal and deceptive -- The great water rate heist of 2010 (updated)

This is another of our occasional series of guest posts/essays on local topics of interest to us and our readers. Feel free to submit topical posts/essays for our consideration to bloggers-at-bloghouston.net. As with our usual blog posts, the views expressed are those of the author.

Unequal and deceptive: The great water rate heist of 2010

by Brutus

Probably the highest profile study performed on Public Works operations in the last year was the McKinsey Efficiency Study. Less well known, until now at least, was the Red Oak Rate Study. The City of Houston tries to set its rates according to its costs, but the details of what should or should not be counted, and projection of future needs are a highly complicated interlocking set of issues. While rate increases are generally fixed to the Consumer Price Index, that has little to do with actual cost increases. Pipelines, bond costs, and chemicals to treat water are not consumer items, after all. With the Combined Utility System (CUS) continuing to fall further behind revenue projections, the City hired Red Oak to check its assumptions and determine what the City really needed to charge for service in order to maintain and improve the system.

From page 55 of the Request for Council Authorization, available at http://www.houstontx.gov/citysec/backup/2010/042010.pdf:

The Rate Study results were presented to the Budget and Fiscal Affairs Committee on April 6, 2010, with a recommendation to set rats [sic] to support the Best Practices CIP and to use the Producer Price Index for annual automatic adjustments, to the degree allowable under the provisions of Proposition One. The Committee voted to move this recommendation forward for Council consideration but expressed some concern relative to the level of increase for the multi-family customer class. After further review, the administration recommended adopting the Best Practices rates proposed to the committee with the exception of Multi- Family Residential and Commercial customers. Those rates would be set to equal 100% of cost of service. It is estimated that these rates would result in an increase equivalent to $7.73 per month for the average apartment unit.

Now I don't know what assumptions went into this "average apartment unit" calculation, so I can't compare it directly. But I can tell you what the rates were, and what they will be. Note that homeowners have a second, higher bracket after they pass 12,000 gallons:

Brutus Graph 1: Water rates compared

In other words, the Houston Apartment Association (HAA) was squealing like stuck pigs over losing a little of their huge rate advantage over homeowners! Only… that's just the water; now there are sewer charges (which do not have a higher tier for homeowners):

Brutus Graph 2: Sewer Rates Compared

The gap here does not close at all - homeowners are getting gouged even worse!

Brutus Graph 3: Single Fam/Apts compared

All the "disparity" and "discrimination" against low-income renters actually increased the advantage held by apartments! Now, if we're going to be fair, their complaint is that the "government" money they get for having all these "poor" folks is capped, and HUD won't allow them to raise their rental rates to cover the increase, which is sure to drive them all into bankruptcy. Nice argument ... made by some very well dressed people in council offices over the last two weeks.

Oh, but it gets worse.

What is the cost of service that the apartment rates will cover? Well, the short answer is that it's everything except capital costs. To expand on this a bit, the point of this entire exercise is to keep enough money flowing in to cover not just the cost of service (which the HAA is so generously willing to do), but to cover the cost of repairs, upgrades, and replacing worn out sections of infrastructure that were built 50-75 years ago. All of those are "not costs of service," they are capital costs. And that cost will be borne solely by homeowners (and to a much lesser extent, businesses), thanks to the actions of Mayor Annise Parker and Council.

We're not done yet. It gets even worse.

The reduction in CUS revenue will be funded by decreasing the amount of "pay-as-you-go" projects in the CIP, however the total capacity for capital improvements will remain at $370 million annually for FY11 through FY15.

These are not optional projects. If you can't pay as you go, and you insist on maintaining the same expenditure level, there are only two places to get the money: borrow it or steal it. The city is already broke, and the CUS is $100 million behind, but we either continue subsidizing the system, or we go deeper in debt. Either way, the homeowners will be the ones stuck with the entire bill for system capital costs -- but the word is, the City will be borrowing.

Still not done yet. You see, they're not just reducing the pay-as-you-go. They're diverting it.

To further address the rate burden on multi-family residences, the administration is working with the Houston Apartment Association to establish a rebate program to encourage water conservation in apartment complexes that currently use much higher than average amounts of water. The planned program would provide up to $14 million in rebates each year for two years to complexes that meet the to be determined qualifications.

Yes, neighbor, not only did the HAA (and all businesses) skate out on their moral obligation to pay for the water and sewer system they depend on, apartment owners will get paid $28 million dollars out of the CUS funds for making the improvements they ought to be making out of their own pockets to reduce their utility costs! That's where your CUS "pay-as you go" money is actually going -- it's being diverted from needed system improvements to line the pockets of slumlords, under terms yet to be determined! Rumor has it that Andrew Teas is determining the terms of the program.

Is anyone taking bets on whether this gets administered through the Housing department, which goes beyond notorious for mismanaged money and receiving little or nothing for expenditures?

No, we're still not done.

Discussion is also underway regarding the rate impact specifically on low-income multi-family housing projects that have received Federal Income Tax Credits, and the administration will work to address this issue to the degree allowable under State law.

In other words "we're going to figure out a way to shovel money to, our slumlord friends."

Still. Not. Done.

But at least we have reached the final point, which is to expose the lies and crocodile tears behind the "gouging of poor renters" by the evil Public Works Department and those dastardly rates. The final point, the capper to all this, is that I've used a very misleading term throughout the article above: "Homeowner." You see, there's no such thing as a "homeowner rate." There is a "single-family rate" for houses and individually metered condos. There is a "multi-family rate" for duplexes up through large apartment complexes.

The single-family rate is based on one meter per living unit; it doesn't matter if the person living there is the owner or a renter. So all this concern, all the discounts, and all rebates from the council and mayor for poor renters applies only if the poor renter is living in an apartment complex. Might such concern be ever so slightly stronger if the poor person suffering from such an unfair rate structure lived in an apartment whose owner belonged to the politically powerful Houston Apartment Association? Perhaps I just have a suspicious nature.

Or perhaps if you're poor and pay for your own water in a rent house or condo, or if you're fortunate enough to own your own home, rich or poor, no one at City Hall cares about you. Pay up with the rest of the landowners suckers.

Now we're done.

UPDATE (04-25-2010) AND EDITOR'S NOTE: Brutus provided the following update late Friday afternoon, but travel plans precluded its posting until now.

Oops -- we're not done after all! This wasn't in the original agenda backup, but was arranged by a helpful Council Member Gonzalez:

Motion 2010-0236 - Written motion by Council Member Gonzalez to amend Item 14 as follows:

Motion to amend Item 14 to establish single family residential rates that will generate revenue equivalent to customer class cost of service over a four-year period.

This amendment will set single family residential rates as originally proposed, effective June 1, 2010, and will set single family residential rates for the subsequent three years to achieve cost of service. Rates will be increased by the following increments, in addition to any Producer Price Index adjustment:

Brutus - Annual Increases Graph

In other words:

1. The Multi-family customers get the full increase immediately, as reported in the press, council deferred half of the residential increase until 2011-2013. This means that the comparisons in the tables above don't tell the full story.

2. "Written motion" = pre-planned with the Mayor, who has total control over the agenda.

3. The actual increases can and WILL be higher than this, as "rate-of-inflation" increases are mandated above. At least they had the sense to use the PPI instead of the CPI.

4. News articles saying the rates would generate $14 million more were incorrect; obviously this means an increase of $14 million more each year -- just from Residential customers.

5. The total increase is estimated to be in the range of $370 million -- the city's utility revenue will be, on average, around $1billion per year.

Hmm... the amount in #4 is the same as what is going to feed the pigs at the tr-- , uh sorry, I meant "fine apartment owners and investors." Coincidence. No, really.

But don't forget that the city is arranging to sue itself to enforce Proposition I (and deliberately lose) in order to preclude anyone else from attempting to do so. "Hey, the judge already decided that case! Stare Decisis and all that Latin stuff!"

Are we done yet? No, not for another three years....

Brutus is the non de plume of a Houstonian who wishes to remain anonymous.

Posted by Kevin Whited @ 04/23/10 08:38 AM |

10 March 2010

Klein: More trains + short blocks -- The coming downtown mobility mess

This is another of our occasional series of guest posts/essays on local topics of interest to us and our readers. Feel free to submit topical posts/essays for our consideration to bloggers-at-bloghouston.net. As with our usual blog posts, the views expressed are those of the author.


by Barry Klein

Metro has not studied how its system will work after the five new rail lines are operational, or the sixth (Washington Avenue) to come later. On June 4, 2009 I submitted a Texas Public Information Act request to Metro in which I asked for documentation to show future rail operations after the East-West segment going through downtown is completed, to wit:

2. The documents showing projected volumes of passenger transfers from buses to rail cars, rail cars to buses, and rail cars to rail cars at each Metro rail station as rail extensions are built and operating including Washington Avenue (Inner Katy)

3. The board minutes showing the decision by the board to drop the Intermodal Terminal from Metro's plans, and the planning documents showing how bus and rail operations will change with the Intermodal Terminal removed from the plan

4. The documents showing how Metro plans to coordinate rail operations at the intersection of the "north-south" Main Street rail line and the "east-west" rail line that connects to the Harrisburg and Southeast lines.

The response from Metro dated June 17, 2009 stated that “regarding items 2-4, please be advised that no responsive information was located.”

This is worrisome in light of the information I have received from transportation consultant Tom Rubin.

Below are the comments of Mr. Rubin on the drawbacks of adding an East-West (E-W) light rail line in downtown Houston. Mr. Rubin is one of the experts I rely on to help me understand transit issues and transportation in general. He was the expert witness relied on by the Bus Riders Union in Los Angeles when it went to court in the 1990s to stop expansion of of the rail program in that city. Mr. Rubin is associated with the American Dream Coalition, a group critical of new urban rail systems, and is well acquainted with the Houston Metro rail system. He can be found on You Tube and in web searches, including his professional experience. He does not have a website. This quote from an email he sent in 2006 sums up Mr. Rubin's background...

I have been in the public transit business, including a fair amount of time in other governmental transportation and related matters, for over thirty years and have been the chief financial officer of two of the largest transit agencies in the U.S., including the Southern California Rapid Transit District in Los Angeles (now LA Co. MTA) when we started service on the Long Beach to Los Angeles Blue Line light rail line and Red Line heavy rail line. As a consultant and auditor, I worked on dozens of light rail projects and have made well over a hundred presentations at industry meetings and presented dozens of papers on transit and related topics.

May 8, 2008 email from Tom Rubin discussing rail operations in downtown Houston after completion of the five new lines

Here is one part of the posting [by a Houston transportation blogger discussing the planned East-West line] that I find astonishing:

"Another compromise: the Main Street line is relatively fast and very reliable because the trains have their own lanes and have traffic signal priority. That won't be true for this line. Like buses do now, the trains will share the curb lanes with cars, both turns and through traffic. [update, prompted by a question from Highway6 in the forums: the track will be on the south side of each street, that is, in the left lane of Capitol and the right lane of Rusk] And the signals will be operated as they are on Capitol and Rusk today: trains will find the lights are sometimes green and sometimes red, and they will stop or go accordingly."

The first sentence says, "... the Main Street line is relatively fast ..." Evidently, the author is simply not very knowledgeable on such topics. The Main Street toy trolley is one of the slowest light rail lines in the U.S. The end-to-end run time, from Metro schedules, is 31 minutes, to go 7.4 miles -- that's 14.3 mph, which is very slow by modern light rail standards. Of course, this "downtown" section of the line is the slowest portion, even slower than the 14.3 mph overall average. (The plan, as posted, would add a station, would, most likely, add another minute to the end-to-end time, slowing it further to 13.9 mph.)

If the E-W lines are going to be slower still through the CBD, well, wow. If what is described in the posting -- sharing lanes with "rubber tire" traffic -- is actually how this will operate, this will be incredibly slow. What people need to realize is that the reason that light rail operates in dedicated lanes, even when it is running on the street, is because the trains need to have the FULL LENGTH of the lane between blocks. In most cases, if there is as much as one car stopped at a red light, a two-car train cannot enter that block because it would block traffic from crossing the cross street "upstream" from the intersection where that car is stopped. Houston has fairly small city blocks in its downtown, with most being roughly square in shape, so any attempt at street running would pose huge problems in trying to operate light rail trains vs. auto's and trucks -- and pedestrians -- in the same space. Frankly, I am very surprised that that any set of transportation professionals -- by which, I mean the type of people who should be running both Metro and the City of Houston streets and roads -- would even consider such a proposal. I just don't see how this could work; if it was actually tried, I see it causing just great problems that the end result would be to banish autos from the "light rail" traffic lanes -- but, even if this were to be done, we still have various types of crossing/merging movements that would still be problematic.

What we have here is an agency, and agency leadership, that has set their priorities to build as much rail as fast as possible, as opposed to, build the best possible transit system. Even if one accepts that light rail is the best transit corridor methodology for these alignments, this is just plain very poor light rail. It is built to be as cheap as possible, in order to allow as much as possible to be built as fast as possible.

To build a "good" light rail system, you go for more separation particularly in the CBD. To go all the way, you have elevated and subway configurations. Well, in Houston, a subway configuration would often result in the electric bill for the sump pumps being more than that for propulsion power (or a switch to DMU propulsion -- with snorkels), as well as being VERY expensive to build, taking a long time, and totally tearing up large portions of the downtown while screwing up surface traffic. The elevated option would also be expensive (although nowhere near as expensive as subway), would also tear up the CBD during construction, and produce an ugly vertical eyesore, as well as taking up a lot of sidewalk space with the supports for this.

If you don't vertically separate, you are left with two possibilities, dedicated streets -- where the only vehicular movement is light rail - and dedicated lanes. We actually do have one example of the former on Main Street, that idiotic block where the train is running through a moat -- one of the dumbest ideas I've ever run into -- but the general answer is the latter. The tradeoffs to spending the amount of money are speed, carrying capacity of both the light rail line and the road network, and safety. All of these issues have occurred in Houston.

As I pointed out above, the Main Street Toy Trolley is very slow by light rail standards. It is also limited to two-car consists, rather than the three cars operated by some agencies or even four car trains operated, or planned to be operated, by a few (for a variety of reasons, four-car consists are not common in light rail and would be unlikely to be workable in Houston for a variety of reasons). Moreover, the street-running alignment for the Main Street Toy Trolley means that there is a limit on how close you can run the headways; probably not more than one train every five minutes without beginning to cause even more rubber tire traffic issues than exist now.

What this means is that the current level of service on the Main Street Toy Trolley is about as high as it is ever going to get, slow two-car trains eventually getting down to five minute headways. The problem, however, is that Metro plans on extending the Main Street Toy Trolley line in both directions -- with, one might presume, the intention of carrying more passengers than are now carried. But, if there is no way to run longer trains, and there is not much room to run trains more frequently, there is a real limit to the amount of capacity that can be added. Fortunately, the slow speed of the trains will limit demand for light rail trips -- well, that is, until Metro forces riders to use light rail by discontinuing the more faster and more convenient bus service.

By dedicating lanes on Main Street and other roads, the Main Street Toy Trolley has had a negative impact on the overall carrying capacity of Main Street, and the various types of restrictions on traffic movements, the various safety "fixes" (such as the 15-second "all reds" prior to the trains going through at certain of the most dangerous intersections) have further reduced the overall passenger/freight capacity of the CBD transportation network.

By "going cheap" -- building the downtown section of the N-S lines for street running -- the result is a slow, low capacity line that is somehow supposed to be the backbone of the system; simply not a workable idea.

Now, this same design mistake appears to be repeated for the E-W line. Not a good idea.

These people are doing very serious damage to the transportation system in the name of improving it, while wasting a whole lot of the taxpayers' dollars that could have been used far better -- including by leaving the money in the taxpayer pockets.

Posted by Kevin Whited @ 03/10/10 07:44 AM |

24 October 2009

Katz: A way to get Houston's police chief out of mayoral politics

This is another of our occasional series of guest posts/essays on local topics of interest to us and our readers. Feel free to submit topical posts/essays for our consideration to bloggers-at-bloghouston.net. As with our usual blog posts, the views expressed are those of the author.


by Howard A. Katz

Houston's strong mayoral government has led to a succession of police chiefs who are most notable for being the political puppets of whichever mayor happened to be in office. Houston will soon be saying goodbye to Mayor Bill White and the city will also be saying goodbye to police chief Harold Hurtt who will be returning to his beloved city of Phoenix.

There is a much better way to select police chiefs than to have them appointed by a mayor who requires that the first priority of his police chief is to make sure that the police department does not get in the way of his political ambitions.

The City of Houston should establish a police commission for the purpose of selecting the city's police chief. That commission would not only select the chief, but it would also establish general guidelines for the police department. The chief would then be free to operate within those guidelines, absent of political interference. The commission would also be able to fire the chief, but only for malfeasance in office and only if he fails to follow the guidelines or turns out to be incompetent.

To ensure their independence, the members of the commission should be elected rather than appointed by the mayor, as is the case in Los Angeles.

The City of Houston should be divided into five police commission districts. Candidates for a seat on the police commission would run for office in each district. A candidate would have to show proof that he/she had been an actual resident within his/her district for a minimum of five years. The election should be non-partisan -- no candidate should be identified as Democrat, Republican, Libertarian, Marxist, or whatever.

The police commission can be established at little cost to a city. Its members should be paid only one dollar a year plus their out-of-pocket expenses. In this way, only the most civic minded candidates would run for that office. The commissioners should not have to meet more than once a month unless some emergency would require additional meetings. As for staffing, the commission would only need a secretary, probably a part-timer at that.

By having a five member police commission make the selection, the Houston police chief would be free from political interference, thus allowing him to run the police department in the best interests of all Houstonians.

Howard A. Katz is a retired professor Professor of Criminal Justice. He blogs at BarkGrowlBite.

Posted by Kevin Whited @ 10/24/09 12:50 PM |

20 June 2005

In harm's way: A response nixed by the Chronicle

The following article, written by Haynes and Boone LLP attorneys James D. Braddock and Michael J. Mazzone, was submitted to the Houston Chronicle in response to the January series "In Harm's Way."

Braddock and Mazzone contacted the Chronicle during the series’ run to indicate their interest in submitting a response, submitting an initial draft for review then making a number of changes as requested by the Chronicle.

Ultimately, however, Chronicle editor Jeff Cohen (rather than editorial page editor James Howard Gibbons or Outlook editor David Langworthy) held publication of the article. Cohen said the attorneys would need to divulge a list of clients who have refinery and other operations in the area on which the series focused attention, in order to show readers that the writers were not objective. Though agreeing that transparency was a laudable goal, the attorneys felt publishing a list of their clients on such an article would be tantamount to saying they spoke for those clients on the matter -– which was not the case.

At a presentation sponsored by the Houston Property Rights Association, Braddock and Mazzone noted that all of the scientific assertions in their op-ed were submitted to two scientists (a toxicologist and an air-monitoring expert, both with long experience in their fields) for review. The professional biographies of the authors are hyperlinked at the end of the op-ed. blogHOUSTON is pleased that Braddock and Mazzone have given permission to post their op-ed here.

[Read More]

Posted by Kevin Whited @ 06/20/05 10:34 PM |


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