On September 30, 2004, the Comptroller’s office was
asked by state and local officials to conduct a review
of the operations and management of the
Regional Mobility Authority (CTRMA) (Appendix 1).
This report presents the results of that review.
Texas is on the brink of a significant change in the
way it finances transportation. The state is moving from
its traditional “pay-as-you-go” method of financing road
construction, funded largely by motor fuels taxes, to an
increasing reliance on bond debt and toll roads. In
addition, new governing structures have been created to
give local governments more authority over road
construction and finance.
Laws enacted by the 2001 and 2003 Legislatures
authorized the establishment of regional mobility
authorities (RMAs) with significant powers over road
creation. Essentially, these are county or multi-county
toll-road authorities. Each RMA is a political
subdivision formed by one or more counties, with the
approval of the Texas Transportation Commission (TTC),
entrusted with financing, designing, building, operating
and maintaining toll roads and other transportation
In October 2002, the TTC approved the creation of the
Central Texas Regional Mobility Authority (CTRMA), the
state’s first RMA.
Its first project is US 183-A, an 11.6-mile toll road in
Williamson County north of Austin.
Taxation without Accountability
authorities (RMAs) are not directly
accountable to the people of Texas. No voter approval is
required for their creation; no voter approval is
required for the selection of their board members or
staff; no voter approval is required for the selection
and funding of their toll projects; nor is voter
approval required for “conversion,” as it is called in
transportation planner’s language. Comptroller Strayhorn
has repeatedly said, “the redesignation as toll roads of
roads already constructed, under construction or funded
through traditional means, such as the gasoline tax, is
RMAs can issue revenue bonds, set toll rates and, in
partnership with a taxing entity, establish a taxing
district to assist with transportation financing.
Furthermore, the Legislature authorized TTC to convert
parts of the state highway system to toll roads and
transfer them to RMAs.
Most importantly, however, RMAs have the power of
eminent domain—the right to take private property for
In effect, RMAs now have the same road-building powers
as the Texas Department of Transportation (TxDOT), so
long as their projects are consistent with local and
state transportation plans.
Central Texas transportation projects are expected to
receive revenue from the Texas Mobility Fund, which was
created by the 2001 Legislature to support state revenue
bond issues for transportation projects. Texas Mobility
funds are allocated by TxDOT.
While TxDOT officials have stated in public hearings
that regional mobility plans do not necessarily have to
include tolls in order to receive money from the Texas
Mobility Fund, other evidence, as documented on pages 11
and 12 of this report, demonstrates just the opposite.
is a unique entity in American government. Few,
if any, jurisdictions have ever embarked on a project of
the magnitude of US 183-A with so little in the way of
public supervision and oversight.
is managing a project involving hundreds of
millions in public funds. Virtually all responsibility
and accountability for this project lies in the hands of
private contractors—some of whom have been politically
active in promoting US 183-A and other toll projects in
Central Texas. And the authority’s prime contractor, its
general engineering consultant or GEC, has hired a
number of subcontractors who have long-standing
relationships with Travis and Williamson County
officials responsible for regional transportation
functioned for two years before
ever adopting an operating budget.
This review found that
is not exercising
effective control over its contractors. The review team
is managing a project worth hundreds of
millions of dollars, but had just one full-time
employee until November 2004.
Despite handing out contracts worth millions of
does not employ a contract manager.
One of the most intriguing aspects of
operations is the web of relationships among those
responsible for its creation. To a surprising extent,
this project—which will receive hundreds of millions of
dollars in public funds—is the product of close
collaboration among a handful of individuals, chosen
without competition, resulting in the appearance of
favoritism and self-enrichment.
E-mails released by the authority use terms such as
the “circle”—and “outside the circle”—in reference to
this close-knit group, which includes developers with
substantial financial interests not far from
183-A highway project.
Some of the relationships and potential conflicts of
interest involved in this circle include the following:
The chairman of the
board has a
substantial interest in more than 254 acres of real
estate within two miles of the proposed US 183-A
right of way. He began making land acquisitions in
the vicinity of US 183-A less than a month after the
Capital Area Metropolitan Planning Organization
(CAMPO) adopted plans for the road.
One of the Williamson County commissioners who
voted to create
CTRMA—and to appoint four of its
seven board members—now serves as its executive
The executive director also serves as treasurer
of Team Texas, a nonprofit forum for Texas toll
authorities and contractors that appears to be a
trade association, an apparent violation of state
The executive director’s former campaign
manager, active in Williamson County politics and a
convicted felon, is now a GEC subcontractor. He has
also billed the authority directly for thousands of
dollars in various services.
CTRMA’s general engineering consultant, which is
responsible for much of the authority’s day-to-day
operations, contracted with individuals and entities
board members and staff, CAMPO
members and elected officials in Williamson and
CTRMA’s GEC hosted an event for area public
officials at the Four Seasons in Austin, at a cost
of more than $7,000.
was listed as a co-host
for this event; this appears to violate the “no
gifts” provision of the Transportation Code.
The “media relations” coordinator for Texans for
Mobility, a private group formed to campaign for
toll projects, is also a
public relations. A subsidiary of this subcontractor
also answers queries from the public for
Another private organization, the Capital Area
Transportation Coalition, has been strongly
CTRMA’s road plans. Among its members
CTRMA contractors, including the
consulting firm that served as the authority’s
This web of relationships is troubling, given the
major expenditures of taxpayer dollars that are
These and other relationships are discussed in
greater detail in this report.
This review uncovered a number of troubling instances
of lax expenditure controls. Some examples may represent
common practice for executives of private businesses,
but not public entities. These incidents, however, point
to a significant lack of accountability for taxpayer
dollars—accountability that is particularly vital for a
project whose decision-makers never have to face voters.
Some of the incidents identified in this review
include the following:
CTRMA has authorized, as of this writing, more
than $2 million for public relations, marketing and
“outreach” services, much of it expended in areas
miles away from any impact US 183-A may have and
before any construction has started. At least 12
firms are providing public relations work for this
CTRMA hired and contracted to pay an independent
consultant $4,000 at $250 per hour to help develop a
job description for the authority’s chief financial
officer (CFO) position.
has reimbursed employees and contractors
for meals, alcoholic beverages, first-class airfare,
professional memberships and events that would be
considered impermissable by both state and local
government agencies. For example,
director was reimbursed for alcoholic beverages
purchased in Monterey, California; the executive
director approved his own expense statement.
This report contains 27 recommendations that would
build public confidence in
and help all
fulfill their mission of providing transportation
resources quickly and efficiently, with maximum
accountability to the public. Many of these
recommendations identify needed changes in state law to
ensure that all RMAs are accountable to taxpayers.
Others identify improvements that
should make to
its business practices and that should be implemented by
other RMAs at the appropriate time.
Some of the Comptroller’s recommendations to amend
state law include the following:
To prevent double taxation, prohibit the
conversion to toll-road status of any road on which
construction begins without tolls identified as a
Prohibit the Texas Department of
Transportation from making allocations from the
Texas Mobility Fund contingent upon the inclusion of
toll roads in regional road plans.
more accountable to taxpayers by
giving elected officials more oversight of
Require commissioners court approval of any
toll road project that will be built or operated
by an RMA in the court’s jurisdiction.
Require the commissioners courts of each
RMA’s constituent counties to appoint all
board members, including the board’s chair.
Allow the commissioners courts of counties
establishing RMAs to remove any board member,
including the board’s chair.
to follow provisions in the
Statewide Contract Management Guide.
to perform criminal background
checks for contractors and subcontractors and
prohibit them from contracting with convicted
to follow state guidelines
concerning the reimbursement of staff and board
from contracting for public
relations or public involvement services with any
entity engaged in transportation-related advocacy
Limit RMA board member terms to four years.
The Comptroller also recommends that
Employ a professional contract management
officer to ensure that its contractors and
subcontractors comply fully with the terms and
conditions of their contracts.
Adopt contract procedures to ensure that its
contractors and subcontractors receive contracts
based entirely on published specifications.
Employ an in-house general counsel to ensure
that the authority’s best interests are represented.
Require board members to disclose all
real estate holdings.
And finally, the Comptroller recommends that: