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Travis County Commissioners Court

Tuesday, April 19, 2011 (Agenda)
Item 26

View captioned video.

Number number 26, receive presentation from the county auditor regarding public-private partnership project, a recently constructed civil and family law courthouse, charlotte, north carolina, and issues and opportunities related thereto.

>> thank you, judge.
I really wanted to get this report because I do support the open meetings act and I understood after people got back from this trip that they couldn't share any information with me in private, and I totally agree.
so in public, I wanted to get a report from susan sataro, our fco, who was on these trips and get her perspective on some of these issues that presenting themselves.

>> thank you, Commissioner.
let me start out with saying that we started this project inasmuch as we have a very serious need for a new civil and family courthouse.
and this project, and this has been known for quite some time, broaddus and associates came in and studded and concluded in the civil and family area that this space is slightly only more than half of what is needed to provide the services now.
but more importantly than that, not only is there not enough space, but the space is not right.
so one of the things that the county has done in terms of looking at what other courthouses would look like, what would enhance our programs, what things would give the best value for the taxpayer is that groups of us have gone to visit other courts.
and last Tuesday you mentioned the fact you wish you could have gone, but only two of you could and you wanted to know whew we learned on those trips.
let me say that I wish all five of you could have gone because seeing the courts, talking to the people that did the planning, we also talked to an architect, a construction person and a developer on different projects.
kind of gave us an opportunity to ask questions and learn more about, a, building a very effective courthouse, and secondly, to look at the idea of a public-private partnership.
and let me start out with a few introductory -- this is the cliff notes of the visit.
introductory comments.
first of all, there's a lot of talk about public-private partnerships now.
it's kind of the hype.
but the reality is with regard to courthouses in this country, there are just two.
one is in brooklyn and that is up and that's why we went to visit that one.
and the other one is in long beach, california, a project of the state of california, and the deal has been consummated, but that court is under construction.
so those are really only the two.
and I'll tell you some of the things that we noticed about those, information that we got.
some of the things are kind of what we're interested in, others are different.
so I will look at those.
I also want to talk about mecklinburg in charlotte, north carolina, because judges, Commissioners, court administrators, myself, p.b.o.
people have visited that court.
and I would say probably I could speak for the group inasmuch as they had done a wonderful job of saying our mission is to get peaceful settlements of disputes as efficiently and effective.
and they said how does a program feed into those programs and goals.
they are not using it just as a place to sit or a courtroom, but really part of the effective administration of justice for the people that are served by that courthouse.
so I want to talk about that one.
it's not a public-private partnership, but we learned a lot of things in mecklinburg and it ties into the public-private partnership.
the other thing I would like to say is that the court administrators in brooklyn and in mecklinburg were very generous with their time, spending time with us, talking about their process, giving us information.
in mecklinburg they actually gave us a copy of their program.
it was really nice.
they welcomed us and let us see everything we wanted to see.
the other thing is in other states, what we found and we kind of knew that in the first place, is that the state provides a lot of funding if not all for the top trial courts.
that is not the case in Texas.
and so when we look at brooklyn, the funding and sort of the powers to be in materials of funding were the state of new york and the city of new york.
with long beach it was the state of california, but in Texas we don't get that kind of support for our trial courts and so the funding and the structure and the I would abouting and everything would be done by Travis County.
so that is somewhat different.
there are public partnerships throughout the world.
there are courthouses that are in canada and australia are two of the countries that have more of them.
but here it is sort of a new phenomenon.
the -- there are things that are very simple and there are things that are very complex in a public-private partnership.
but I think one of the things we need to know is there is not an expert out there on civil and family courthouse p-3s and they are a little different than what we might look at.
what I focused on and I think our group did was to look at issues and sets of skills that go with a public-private partnership that we might be looking at when we're exploring the best value for our taxpayer.
so those are kind of introductory comments there.
do you want to put up -- I didn't -- Commissioner Gomez asked me to do this last week and so I i wanted to you get it this week sing there not a lot of written material out, but we have a handout, and first of all, to look at the three courts that we're talking about, and these were prepared by equis and they allowed me to use them.
to start out first, a public-private partnership as we're conceiving it really is a joint venture real estate project.
in that regard it's very simple.
and joint investment yourself take place all the time and that is a private sector firm, say a law firm is looking to have long-term office space and they have a business agreement, a real estate agreement with the developer to be the main tenant, and, you know, we've got what we would call a partnership or a joint venture.
what makes.

>> p-3 somewhat different is one of the partners is a government.
and when you bring a government into the -- into the mix, then we're looking at first there has to be the public interest, and there are many, many laws with regard to money, procurement, financing that now comes into the picture.
so in some regards that's one of the complexities is you've got a private sector phenomenon now interfacing with the government.
so this first slide just shows Travis County, if we look at this, we're looking at it, but we would look to find a private partner.
we would want them to build a building.
and the civil and family courthouse would be a tenant in that building for either a short period of time or a long period of time, and there would probably be other commercial ventures in that building.
and there are many, many configurations of that that could be looked at.
when we are in that -- excuse me, in that building, what we've seen from the two that probably we would either have a capital lease or during periods of time we would buy space in that building.
so that's kind of the simplistic view of a p-3 as we looked at the courthouse.
the first slide is a summary of mecklenburg.
I want to start there because we were in love with the way they handled business in that courthouse, to be honest.
the size of the building is very similar to what we think we need for a civil and family courthouse.
it was completed in 2007, and here you see the people that were involved in that.
it was basically a design build.
in other words, the state of north carolina with mecklenburg county contracted to build a courthouse just like we would in many of the design build projects we have done.
the a nine-story building.
they looked to the future, which we're doing.
they have 35 finished courtrooms and 12 that are shelled out.
so what they did because courthouses are very unique buildings and have features that are different from normal office builtings is they built what they needed, but they looked to the future so that when they could expand and need to do expand they would have shelf space.
so, you know, we're kind of looking at something like.
that we know what we need now.
we're looking at what we need in the future and so we're saying how can we work into that extra space that we're going to need.
so they did that.
three main challenges.
they wanted a clear, calm and cohesive environment that presses the dignity of the court's civic justice.
one of the things the court administrators said this is the third courthouse we've built and finally got it right.
they had looks at other construction projects they had and look at what makes a courthouse successful.
here's a picture of the outside of the courthouse, but it's the inside is most impressive.
what they have done -- and we need to do that -- you'll see in these other projects they did the same thing.
so it's a concept we're looking at now, we'll keep looking at it.
a very intense examination of how we do business and get that written down so we can very clearly communicate to whomever we are dealing with.
that is one of the very important points, you need to have a clear definition, not just in your head, but whoever you contract with whether it's a design build or another partner.
Travis County is well on the way of doing that.
you've been working with the judiciary planning and budget and broaddus so we're working on that.
that has to be very clear.
the other things we learned you need to utilize quality materials in a prudent way.
looks were impressive but it was primarily the sustainability and maintenance of the building.
when we met with mecklinburg, we also got to meet with turner construction, the construction company that worked on this building.
and they told us a very interesting statistic that all of us couldn't get over and that was in 20 years, usually you will spend four the five times more than the cost of the building on operating and maintenance.
so that was kind of a staggering number saying we really need to pay attention up front to not only to the design and how it works, but also the quality of the construction in that building and also the ability to have a building, a long-term building that is easily maintained.
they also talked significantly about electric and water.
because those are two of the very critical expense parts of these buildings and that is what it costs to cool, for us particularly in Texas, and also the water usage.
and they had worked on leeds where they are looking at things that are more sustainable and energy fitter and I know y'all are interested in that.
one of the men working in Texas from turner was don't forget about water.
in Texas water will be an issue, it will become more and more of an issue and I know all of you know that.
that is one of the things that how it's designed.
there were stone and marble throughout the building, and what they said is, you know, we like it, we like the way it looks, and we did, but most importantly the reason you put that in there is keep your maintenance costs down and keep the building in good shape that you can take care of it.
that of the another message we got from all three of these and that is build with life psych will costs in mind.
make sure that the initial construction is high quality, energy efficient, and easy to maintain in the future.
we learned that in all of them.
then the last thing we learned from them is that they wand to unify the diversity of program requirements including courtrooms, administrative places and civil processing areas.
this is where they really looked at what do we want to accomplish in our building, who is coming in the building, what are their needs and what do we want to do for them.
and they looked at jurors, why jurors comes, why they don't want to come, how we can make jurors want to come to court and do their civic duty.
litigants and judges and it's kind of like what you said, Commissioner Davis, the children in that building.
and in this and in brooklyn, they really paid attention to children.
and both of them had day care centers that were very nicely done.
in mecklinburg, someone donated the money to build the day care center right in the courthouse, and that day care center was used for children of jurors, children of witnesses, children that were involved in domestic relation case or c.p.i.
and in some cases they put the child there because if in fact they were going to be taken from their home, instead of taking the child out of parent's arms sitting in the hall, they were in this day care facility.
it was an incredibly neat facility and one of the things I thought was pretty nice is every child that left there got a book.
so they contracted with a community organization to run it.
it was a partnership with the court system.
and they also had information there so that families in trouble could get pro showers bs that showed what services were available.
we were extremely impressed with.
that brooklyn had the same thing, it was a little different, but they realized the need to take care of children as they are in the courthouse.
when we saw the construction of the courtrooms, they also were sensitive to where families sat, where children sat, and all of them focused very strongly on transportation patterns.
in other words, they wanted people to get this the building safely, get where they were supposed to be, not be accessibility sitting with he on-not be sitting with the warring party.
if they need to do see a court proceeding but they did not want them sitting in a room and looking at a witness and children would be one of them, they had meeting rooms in the back of the court that had one-way glass.

>> susan, how did they take care of the transportation needs?
in other words, here are persons coming in from the entire community for whatever services they need to be rendered in the building.
can you --

>> sure.

>> just tell me exactly how did they accommodate because people are -- there will be some type of transit situation or whatever.

>> the people in the building.
in other words, how do people efficiently get to where they are supposed to be.
and they had escalators, scissor stairways that went like this so they could separate people, judges could take one stairway and litigant another.
they had elevator and transportation systems for inmates.
even though this is not a criminal courthouse, occasionally an inmate or two --

>> [one moment, please, for change in captioners]

>> they had a separate garage in another location.
we didn't see longview.
it's just up.
no one talks about that .

>> as I said, in terms of operations, metlenbirg was kind of incredible.
no matter what we do, we can design a courthouse that does wonderful things.
the public private partnership is the way to finance these .
designing the exactly what you want, getting the specifications down, getting the idea of long-term maintenance, we want to do that no matter how we finance.
that was common to all three.
now brooklyn.
we wantd to go to brooklyn because we really wanted to see what a public private part ship looked and felled like.
we have a court sharing a building with the private sector.
how does that work, what does it feel like.
it's not something that is typical.
the only one in the country so it's not typical.
a very large building.
you can see the size, large like new york.
this is 1.1 million square feet.
very large building.
you can see how tall it is.
this building, the land rather, was owned by the developer, which was forest city.
that is important.
I have a scale in the back so you can see the different things.
that made a difference, in other words, the government didn't own the land.
the developer owned the land.
and the developer, forest city ratner was looking for a ten the --tenant and talked to the city and state talking about unifying their system and finding new locations for the court.
they did not have to go out for rfp because the developer already owned it.
now the deal there was between the justice, you know, the city and the state.
and forest city, rather.
they already planned a building a high rise and having pry vant tenants in the building.
and they built, two different courts, they have family courts and they have the supreme court in there.
two different court systems and then the private sector.
and way that was designed was pretty cool.
that is you went to the door where you were going.
if you were going to family urt could, it looked like that was the only entrance.
and they ended up, you know, one entered here, one here, one here.
there were separate mechanical systems and they all went out to the floors where they were located.
the commercial was on top.
so when you were in that courthouse looking around, you really couldn't tell that there were private tenants, couldn't even tell there was another court in there.
nicely kind.
in that courthouse, beli in, da arranged to have the arc trect to talk to us.
that was neat.
who he talked about was the things that he had to look at to make that building successful.
of course, one them is the security in a building like that.
once you start sharing space, there are serious security types of situations.
in new york, this is a criminal court, probably much more security conscious because of 9-11.
this was not a short-term project.
they looked and decided, they have glass walls between different kinds of facilities where they need that kind of protection.
they had different kinds of windows.
I want to bulletproof.
they don't call it that but basically high up.
one of things, because it was in the middle of a metro poll tan area, other buildings were very up.
security up on the skin of the ing as well as in the building very substantial.
when we talked to the construction people we asked about glass protection but they said they can do it but it's expensive and increases the costs of the building.
this is a very tall building and we learned that the higher the building exponentially the cost goes .
it's more complex building a high rise and there are issues that you would not have in a lower building.
in meklenberg they decided to have a lower wider building.
here in new york they went up taller.
knows --those were some of the issues there.
both them and meklenberg had very large jury assembly rooms. These were big rooms they could use for public purposes if they wanted down the road.
the other thing that they had, they had various size court rooms that were really designed very specifically for certain things.
in both brooklyn and meklenberg actually had mock court rooms built during the design process so the judges could actually go to those mock court rooms and look at them and see if they liked it and if it looked the way they thought.
what both of them said was, we found things that weren't right, like the line of site was wrong, particularly in the family courtroom.
you might not want the judge sitting there looking down on everyone.
they actually designed some of those court rooms differently depending on the kind of cases that were in there.
so that was very cool.
the next, this is really the cliff note version.
the next project, we did that afternoon, we couldn't visit long beach was it's not done.
but keith zimmerman did a training program for us and asked meridian, who was the developer and the financer for long course house.
it was kind of need.
when we went to meklenberg we construction people.
at brooklyn the arc trect and in long beach we talked to the developer and financer.
we got kind of a cross-section.
one thing that is different, I forgot to say upfront, many people are looking at p 3 because the government does not have the ability to raise the money.
I mean, we fortunately have our triple a rating renewed yesterday from s and p and moodis.
so Travis County is sitting on that rate which means we can borrow money attractive rate.
state of california has a plus and state was looking at having to build 34 courthouses that were really in terrible condition.
so they were probably in a less competitive environment that we would be on in on financing because we have strength on our own.
california and new york really did not.
those are kind of different.
in the long beach courthouse, again, the square footage ultimately that we looked at, 2035, was about the same.
it's expected to open in 2013.
this is a very, very long procurement process.
what is very interesting about this one, it is a performance based infrastructure arrangement.
we found that very interesting.
here is is what that means.
what they did, meridian and their consortium, they actually signed a contract to pay for the building and all the maintenance and operations of that building.
so what they did, in brooklyn what happened, the state of new york was going to lease the courts and buy chunks of the space as they are going on.
here what they did, they had a service contract.
and we tried to get them to tell us exactly what that amount was, which they didn't.
but they said it was between 40 and 50 million a year.

>> (off microphone)

>> we could find it later probably.
anyway, that is the ballpark they gave us.
and the state would enter into a 35-year service agreement.
what they would do, they would pay this every year for 35 years.
they would maintain it.
one of the things that people who did long beach liked they thought that really enhanced the quality and sustainability of the building because the person who built is also going to maintain it and will be responsible for those operating costs.
and that was kind of an interesting concept to look at.
now, you could do that without that.
you could say, we could do that, build the same kind of sustainability and en--energy efficiency and get those payments.
they had service payments for 35 years.
mer id yab was out of australia and were looking at this as an investment.
in other words, an investment package.
I think they said to us that they conceivably would sell to an investment group at the end.
this was a financial venture for them.
there's no commercial space in long beach.
there was in brooklyn but no extra commercial space here.
people in long beach and the state of california decided the extra space they would put government offices in.
that is a little bit different.
one of the interesting things from there, when they got down to the three finalists for the rfp, that meridian, who won, whoever won would give each of the losing vendors 500,000.
and for that they would own all the designs.
so if there were things that the other two vendors did that were really cool, meridian would own them and could integrate those.
we thought that was an interesting point.

>> let me go back.
brooklyn and long beach, the brooklyn example, the government does not own the dirt and the long beach, is that the same?

>> no, they own the dirt.

>> but they don't own the building.
they have a maintenance contract to which they pay meridian, for which they pay meridian?

>> I think that, well, I can't remember if they own the building or it becomes, do you remember, judge?

>> in long beach actually it's the city of los angeles that is the developer in addition to the state.
they own the dirt and they will own the building.
in brooklyn it was they own the dirt, and it was part of a development.

>> ratner owns.

>> with regards to the performance based contract, you know, along with the concerns about privatizing profit and socializing risk, what happens in the agreement goes south, in the performance isn't up to snuff, what resource does the government has.

>> the government simply doesn't make the payment to meridian, which is a french financer.
they just don't make payment.
and since they have obtained the financing from other bang--banks and that type of thing, they are put at risk in terms of their ability to pay.
the incentive still lives with meridian to continue to do the maintenance and cord to go to the contractual provisions.

>> does the government have the ability to demand cover by meridian, have them bring in somebody else to do the maintenance if they fall short?

>> I don't know the anance to that.
we should be anible to get an the contract.

>> it would be interesting to look at.
I can't imagine they would be put in a situation like we were.
didn't have any cover when the contracts--

>> one of the things they said on that part, it's an extremely detailed contract chal arrangement on the operations and maintenance.
if there was a significant amount of time spent developing that out because they didn't want to run into glitches later.
as the judge said.

>> and the price escalators.

>> (off microphone)

>> 35 year.

>> 35 year arrangement.

>> yeah, lock that in.
the last page that I did, what I tried to do is kind of push everything together that you could see.
in my own mind, the way I kind of saw that is that we really have a scale of complex ty.
so I put a continuum there.
you know,at the far left, what you have is kind of the simple typical structure that a government would build.
it could be design build, we might do the whole thing ourselves.
that was meklenberg.
that is design and construction given.
simple financing because the government is paying for it the usual way.
I put a duration thing, kind of ends with the successful construction.
next step up I would put brooklyn on the continue welcome --because the developer owned.
more complex financing as to what you can do and how that is laid out, and longer duration of relationship.
and you're right, Commissioner, the longer the duration, the more issues that can rise and the more detailed the contract has to be.
and there are outside people renting.
the next one on the continuum is the example of long beach.
that is more complex than design and construction, but there are no private sector tenants in that.
government tenants there.
it's more than design and construction because now you have the maintenance component in there.
and it is more complex.
it is a complex financing arrangement because you have got different financing mechanisms that have been designed.
so it's a little further out.
and the duration of the relationship is longer.
it's a 35.
then what I did, I put the very complex at the end, and I'll tell you these are some things that we talked about.
you will be looking at.
that is that, you know, it is our land.
so the developer doesn't own it.
and we would contemplate that there might be spec space in that building.
in other words, there would be other commercial tenants that would be tenants of the developer or owner of the building.
obviously, design and construction is important but it's much more real estate driven because we are really talking about a real estate deal.
in terms of financing, to be determined.
but there are many options.
our office kind of did a little report for you.
it could be a mix, all government, all private, it could be a mix of the two.
there are many options out ther.

>> (off microphone)

>> absolutely.

>> and we still, you know, we still have a committee out there looking, a bond election committee, this may be something they wrant to look at.

>> yes.

>> I understand the to be determined we haven't landed on the way to finance.
now, something I didn't see, it's very, very close to me as far as what I like to see as a part of all this, and the mecklenburg demonstration here, your long beach, of course I guess that is the public information.
they haven't finished yet.
but also the brooklyn situation.
and constructing these buildings was there any possible way that we could see what the minority participation is in the construction of these buildings?.
I'm very concerned about that.
I'm going do bring the point up over and over and over again.
what was the women-owned business, the hispanic, black, diversity that also is a part of this community.
I'm not seeing any of that anywhere.

>> no one talked about.

>> that is what I want to talk about.

>> no one talked about.

>> that is what I want to talk about when it comes to that as far as what I'm looking for.

>> sure.

>> when it comes to construction if the court decides to do these things, whatever we end up doing as far as financing, I want to make sure that folks understand where I'm coming from is that I want to see that kind of participation from those persons that provide the service.
I know it's not a part of this--

>> it will be down the road.

>> down the road, probably it will come up in another agenda item.
I'm letting everybody know up front that we are going through this process, I didn't see it here, and I am saying well, you know, I need to know what that is.

>> these were the messages that we got.
this is kind of the cliff notes as to really great days of looking and getting a lot of good information.
things for us to look at.
I think depending on where you want to go and the policy decisions you want to make will define some of the skills that you need to do this and the issues that you want to look at.
moral of the story from all of them no matter what they did, define clearly what you want, have a good relationship with the vendors and make sure you have really tight contract.

>> questions or comments?

>> thank you very much.
I guess the only other thing would be, obviously what sticks in my mind, it's been a ten-year project in order to make something very successful out of something as digny fide as a civil courthouse project is.
I do believe we ought to keep it as dignified as possible.
I think there be will be judges conducting business for the folks and folks in the community that need the attention of their judges in making fair calls on their cases.
and I have no doubt that will happen.
but I think it just goes all to the dignity of the courthouse as I envision it.
the other thing, I think the decision has been made, as far as I'm concerned, there is going to be a courthouse.
I think certainly susan did a fantastic job of driving this to make sure that we acquire some property downtown.
which I think is the first major step.
otherwise we would be looking at folks who go to high land mall or something else, I didn't think that was very dignified.
I just want to say I'm very committed to building a courthouse on the lot that we purchased downtown.
it's just a matter of how to get there in a very successful way.
I guess also in a dig nified manner.
I don't want to rush, I don't want to do things with haste.
(audio trouble, stand by).

>> enabling us to borrow money very cheaply.
now, that saves money for tax payers.
so I think in my mind, we have at least two alternatives.
the more I learn about p 3, the better for me to reach a decision.
in this particular case, we own the land.
really like that and I'm glad we took that action.
it kind of says that we, the taxpayers are in control of the project and I really like that.
and certainly especially the control, the dignity of the building that we are going to get, and then also to consider what we do here in Travis County we consider hubs.
and so we include all of that.
we talked about how Travis County respects diversity yesterday at the press conference.
I think that needs to extend to projects such as this.
I think looking back, if I made a mistake, when I first started hearing about the civil courthouse, I probably should have suggested to the court that we look at a stakeholders committee to begin looking at all of the things that the judges wanted, that staff needed that families in this community needed.
we have had other successful projects such as the one at gardener bettes.
so we are capable of building successful buildings.
where he also --we are also capable of not doing that but I think we have more successes in building successful projects.
so I do feel, judge, and dietz, I feel hurried and I don't like that feeling.
and I realize that this is, you know, I have learned through the years here how to cool my heels.
I was in a hurry when you first got here, and I thought that I could get a lot of things done by myself.
I found out very early that I have to convince at least two other people to go with me.
and if the we get four, great.
and five, super.
but I'm committed to building the civil courthouse.

>> judge dietz.

>> sorry, Commissioner, I thought you had a question.

>> I don't mean to cut in front of everybody.
I want to make sure, and judge, I know you have some good things to see.
but my concern, and thank you a lot for bringing this to us.
of course, we didn't get an opportunity to see the fantastic structures of the courthouses ank complex ty of a lot of things.
just to visualize, just being there to see these.

>> yeah.

>> I mean, this is phenomenal.
and also I guess the different avenues of how they got to the end result of producing the type of service that they need, that is rendered from these different sites.
so again, thanks for sharing this information with us.
otherwise I wouldn't have had no other way to get this kind of information per se unless it was brought this way to us.
again, I really don't want to see a repeat performance of a lot of short comings that we had with the cjc.
we had a lot of things in that situation that went through, I came in on the tail end.
I wasn't in the beginning phase when the funding and all of the other things were done prior to me being here.
but at the end of the day, a lot of errors and omissions, a lot of things that we had to deal with on the back end of that.
I'm saying that to say this.
I want to make sure that everything is proper and in order.
that is where some of the early stages say I don't mind going up any kind of request for information.
I didn't object to any stuff like that.
but I want to make sure that whatever we end up getting is something that we have enough information on to go in the right direction.
I'm still concerned about that.

>> sure.

>> and of course, in that earlier effort of the criminal justice center across the street I wanted to know basically, you know, that there had to be some minority participation in that.
that is very close to me.
I don't know what that participation was.
some of the folks may call it hub, I want to say women owned, wbe, mbe, diversity, black, hispanic, asian, across the board as far as diversity as far as this thing is concerned.
so I'm really concerned about that.
so I'm not there yet on everything.
I'm looking to see if we can get more information.
so I'm still waiting to see.
and I didn't go on that trip, but boy, it had to be fantastic.

>> it was.

>> what you presented here today this is phenomenal.
sorry, judge, I didn't mean to step ahead of you.
but I had to say it like it is.

>> I appreciate that.
susan referred to her presentation as the cliff notes.
I'm going to refer to mine as two cents.
which y'all are free to follow or disregard as you see fit.
Commissioner Gomez, you talk about timing.
as I was looking at my files in preparation for today, I saw my first letter directed to judge Biscoe and the court was February 2006, in which we outlined and laid out the need for a new courthouse.
so here we are five years later.
and I'm amount bive ash a.m.
bive lent.
part of my wants to herry .
as all of the judges, criminal and civil, have expressed to the court, we are out of space and desperately need is space.
secondly, I have good news, and that is many of the features that susan talked about contained in brooklyn, contained in charlotte at mecklenburg courthouse and in courthouses because that y'all allowed us the time, we have programmed those things already into the courthouse we want.
they include things like dispute resolution concerns.
they include things that we saw in charlotte.
they include things like the shiled care center that we have seen in brooklyn and charlotte.
in essence, we have increased the functionality of the court to include things that are more user, meaning for the public, friendly.
we have jury space, similar to what we saw in charlotte and stuff.
and so, we need to take the further step, and that is to turn those into architecturel and building specifications.
because of what y'all have allowed us to do, we are further along and not behind the curve.
the timing.
the fact of the matter is we need this project sooner rather than later.
I think judge Biscoe spoke to the real estate council here in Austin a couple of weeks ago, and as he pointed out, we're kind of a little bit behind the curve.
the fact of the matter is that using the specifications that y'all have approved, we are in about 39 percent of the space that we need right now.
and we have looked 25, 30 years into the future to 2035 and specified what we need right now.
so being in 39 percent of the space that we need right now, when is that going to affect us operationally?
well, I think I can argue that it affects us daily, but it only gets worse the further along we go.
and I need to tell you that even if we started right now, even if y'all were ready to sign the papers right now, we're still probably five to six years before a courthouse would open.
if we get it in that time frame, it's going to be just in time.
but I see the day that if we, we really don't have a choice.
if we do not proceed on this project, we will start to suffer the operational repercussions within five, six, seven years.
and how that is going to show itself that right now we have a disposition rate of about 100 percent.
I mentioned that in the courthouse right now, we are disposing of approximately 46,000 cases a year on the jp level, the probate level, and the district court level and the county court level.
it's going to affect, it will affect our disposition rate and our ability to reach the number of cases.
right now we're pretty close to a hundred percent.
on the district court level we are at a hundred percent.
we're pretty proud of that because we consistently rank among the top two in the state.
sorry Commissioner Davis is not here, in terms of minority enterprise, three district judges and two members of the court serve on the purchasing board.
I know that our conversations each year when we do our annual reviews and that type of thing, judge Biscoe has been a champion of this.
we urge our purchasing efforts to really see if we can be more inclusive in those that we award the county business.
at the same time, I want to mention this because this is have important to the district judges.
that is that we believe throughout this process, there needs to be a competitive bidding process.
for two reasons.
the first reason is that through the competition, we believe really, and this is my assumption based on what we have seen in our travels, I don't think we should be scared about who sits on the other side of the contract from us.
I think that this project and the time and what is going on in this country economically, that we will be, we will be one of the few shows in town.
I believe that we will be able to attract the best and bryce --brightest throughout this country.
I know people have been calling y'all just as they have been calling us.
we have never had an inability to talk to people on these trips.
they want to talk to us because they, in new york, all across the country they are interested in the Travis County courthouse.
so I think through that competition of the competitive bid process, we will be ail to get people that are the best and the brightest.
then secondly, and perhaps most importantly, I think it instills public confidence within our procurement process if we rely upon the competitive bid.
my message is simple.
I believe that we really don't have a choice but to go public private partnership.
but that is my belief, and it's your belief that is the important one.
and so I'm prepared, and I would recommend that if you are not prepared to say public private partnership, that you at least dedicate yourself for spending the next nine months to 12 months studying the public private partnership in depth so that you can be confident when you say to the voters that this is the best deal for the taxpayers.
now, there are a number of reasons why it appears to be the best deal.
the first and foremost, construction risks.
whenever we look at projects, and the one that I would recommend is duval county, florida.
it is jacksonville.
and they passed a bond issue in the year 2000 and they will open up their courthouse maybe next year.
the story of cost overruns and delays in the project and the funding.
and certainly we here in Travis County have experienced that from time to time.
the one advantage of the public private partnership is it allows you to transfer that risk of cost overrunsen time delays to the private sector.
and the private sector, this e have got the economic incentive to get that building up and get it up quick and having it done right.
and so, if that reason, for no other reason.
the second reason that I think that a public private partnership is warranted is it allows you to keep the property on the tax rolls.
we believe that the environmental, sorry, the regulatory envelope is the way I have chosen to refer to it, is that we believe that that lot could build up to close to 1.9 million square feet, I believe.
so under what broadest has told us, is that the courthouse in 2035 would need to be 560,000 square feet.
that allows commercial, anywhere from 500,000 to a million to million and a half of private enterprise.
that would equal a building of one million square feet, a building the size of the w hotel just across the street from the lot that you own.
and that would be one of the best tax producing, most productive tax producing lots in downtown Austin even if it's taxed.
so you keep it on the tax rolls, which has got to lessen the cost of of your project.
now, the ultimate is we have to analyze, is this going to be cheaper than public funding.
because of your prudent fiscal responsibility, Travis County enjoys a triple a rating.
there is not a better rating.
so the cost of money is cheap.
but just as we learned in charlotte, you need to look at more than just the sticker price or the construction price of the building, because you have to look over the lifetime of the building, your maintenance costs will run, as judge Biscoe was sitting there, the fellow said five times what your construction price is.
so I think you need, when you look at the maintenance in addition to the construction price, then public private partnerships, they represent that they are able to do it ten to 15 percent less than what you are able to do through public financing.
we don't know.
it needs to be studied.
but here are, I think, the lessons.
and that is there is going to be sitting between us and the private person who develops this if y'all choose this avenue, a 650 page, might even be a 800 page agreement.
sitting on the other side of this agreement are going to be people who know what they are doing.
they make a living out of this.
and the biggest challenge to us is our side of the contract.
respectfully, I think this means we may need to do business a little bit different than we have approached projects in the pass.
this is my suggestion, which you are free to disregard or not.
but number one, susan knows a lot.
I know a lot about courthouses.
cyd knows a lot about purchasing.
rodney knows a lot about planning and budget.
y'all know a lot about how to make decisions and what the public expects.
the problem is, we all have full time jobs and we do not have spare executive capacity in this county to do a project of this size, in my opinion.
now, y'all may disagree, but I don't see a lot of spare capacity.
you can put all the committees you want of whoever you want out of your executive managers, and we're still not going to gain the executive capacity necessary to do this project.
I believe that you need to be thinking about a project manager at an early stage in order to coordinate this project and do the work necessary, working with your departments, but answering to the court.
but I think y'all need that, again, sooner rather than later.
secondly, I believe that you need, and I have talked with the county attorney's office, but I think that you need legal advice regarding how we structure, because I know there are questions.
for instance, susan showed in a slide that you have all sorts of alternatives from how much give over to the private side, how much you retain.
well, I think you're going to have to answer some fundamental questions.
the problem that exists today is that we don't even know the questions to ask, nor do we know the answers.
and I believe that we need to get that expertise to advise the county attorneys, to advise the Commissioners court, to advise us as we work through this process.
third and finally, I believe that as good as the auditor's office is, that we need financial advice.
in los angeles at the long beach whether en--when we talked to meridian in new york, long beach was advised I believe by kpmg, and certainly, I think I have provided at least Commissioner Huber and judge Biscoe, a powerpoint by kpmg.
but I'm not saying them.
I say but we need somebody to look.
and does this deal make sense to us.
if they have had public private partnership experience, does this deal make sense to us fiscally, monetarily and for our budget.
because you know, one of the questions we have is, one advantages of the public private partnership is that you don't have to spend the 300 or 200, whatever the construction cost, you don't have to spend it all up in front.
like in long beach they are paying it out at 40 million, we think.
yeah, 40, 50 million a year for 35 years.
well, are we able to handle that kind of payment, that amortization schedule stretched out over 30 or 35 years versus what we would have to pay on a bond in 20 years.
quite honestly, I believe that y'all need somebody to advise the court that y'all have some confidence.
what I would request, if the y'all, I think securing public approval, of public financing, I think everybody in the room recognizes that would be difficult at this time.
if we are to do it, the may have to be at a better time or later time when the economy is improved.
but if we can wait that long.
but if y'all choose to go the public financing, number one, I think y'all need to take us off of the bond track right now.
I think it's creating conflict and a lack of direction.
but if you are not willing to commit to the public private partnership, you want to study it, then please set a deadline of nine months or 12 months, whatever y'all think is prudent for the county to study this.
and then to, please, name the team of your executive managers, who y'all have confidence in, to study this and to advise the court.
but without a deadline, I'm afraid that I'm going to be sitting here, you know, five years down the road going, okay, are we ready yet.
and so, that is my two cents, and I'll be happy to answer any questions that y'all have.

>> judge, I know we have gone back and forth on this and we have had some heated discussions but very profitable ones, I think.
you pushed back on me hard and I have pushed back on you some too.
but I can't agree with you more in your three points.
I am 100 percent in agreement with you on the three points.
the one question I have for you, with regard to your plea for competitively bidoutside assistance, I agree that the county is in a position of great strength given our aa bond rating and also ironically the economic times.
I agree and recognize that we need outside assistance with regard to expertise in project management, which includes construction and mno, with regard to legal contractual and land use aspects.
many legal questions involved in this project, whether it's bonded or whether it's a p 3.
and also the financing expertise.
given the fact, I think, that the Commissioners court is at yet unsettled as to how we would finance this, I wanted to bounce this off of you.
it seems that our first outside expertise, certainly not our last, to be competitively bid is the financial expertise to give us a hard and deadlined analysis of how we can finance this project.
what our options are and to get that decision done so we can move forward with acquiring additional outside expertise based on what type of animal we're looking at.
would you agree?

>> sometimes you have to say you don't know.
since you all are in a better spot to say.
I can't say.
y'all are in a better position to decide than I am.
I really don't have an opinion.

>> the concern that I have.

>> as amazing as that is.

>> that is.
and I'm so glad that we have a tape-recording and a video of you saying that.

>> I'm sure I'll have to eat this.

>> but given that p3 is a possibility, I would very much like to see us acquire through competitive process outside expertise that can get us the answer, or at least the options for which we must make a decision on, but as you say a time certain so that we can move this project in an effective and efficient way.
I think that is a threshold question this court hasn't answered yet.
like you said, while we have tremendous in house capacity, that in house capacity is taken up by the day-to day base of the county.
we don't do a project of this size every day, thankfully, but there are people in the world who do and we need to tap into them.

>> anything else on item 26?

>> one last comment.
no matter what we do to reach this decision, I have to insist that it's public.
it is shared with people in this community.
they are the ones who are going to foot the bill in the final analysis.
I think we need to seriously consider the economy.
teachers are laid off and fired.
state employees are going to be out of jobs.
but I think in the meantime, while maybe the economy will recover, I think we have time to then spend some time.
I know I can, and I would commit to spending all of that time, whatever time, nine months or a year, whatever, trying to educate myself on the process.
I want to make a wise decision, a wise business decision.
and I don't want to make a political decision.
this is too important.

>> y'all very much.
let me indicate my intention to try to call the following items before noon, 20, 21 and 8 in that order.
if you are not one of those numbers we probably won't reach you this morning.

The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.


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