Aggrieved citizens sue over funding Project Connect

A group of prominent citizens has filed suit against all members of City Council and members of the Austin Transit Partnership Board of Directors, claiming that ATP may not legally spend city property taxes or issue debt needed to build Project Connect because what is being built is drastically different from what was promised to voters in 2020.

Plaintiffs include former state Sen. Gonzalo Barrientos, Travis County Commissioner Margaret Gómez, former Austin Council Member Ora Houston and activist Susana Almanza. The lead plaintiff is Dirty Martin’s, which has served hamburgers on Guadalupe since 1926. Project Connect threatens the continued existence of the restaurant.

Project Connect, as presented to voters, included a $7 billion plan for two light rail lines, called Blue and Orange, and a commuter rail line, called Green, that would have gone through East Austin to the airport, a 20-block downtown transit tunnel with underground shopping. That dollar amount also would have covered new rapid bus routes as well as funds to mitigate community displacement. The estimated time for completion was 13 years.

However, the current plan is considerably more modest. As approved by Council and ATP in June, the new plan has 10.4 fewer miles of light rail, no investment in the Green Line (a 6.8-mile commuter rail), no downtown transit tunnel, 11 fewer rail stations, 64 percent less projected ridership and a 257 percent increase in cost per rider.

According to the lawsuit, because ATP and the city of Austin do not have voter approval of the current plan, they are not allowed to collect or spend property tax funds on the revised plan. Perhaps more importantly, the plaintiffs say the maintenance and operations tax citizens approved can’t be used for debt service on bonds ATP plans to issue to pay for the project.

In May, Attorney General Ken Paxton released an opinion that indicates money collected as “maintenance and operation” taxes may not be used to finance debt. The opinion states, “To the extent any term or agreement obligates the City to transfer to (ATP) the increased maintenance and operations tax revenue over a multi-year period without the ability to terminate at the end of each budget period, such a term or agreement violates article XI, section 5 of the Texas Constitution. Under particular facts, a court could find that the City essentially encumbered the tax revenue for more than one year and did not “reasonably contemplate” that the obligation would be made out of revenue available at the time the City entered into an agreement.” The city and ATP will likely argue that the vote in June did not obligate future City Councils to transfer funds to the transit agency, and the plaintiffs will argue that they did.

Attorneys Bill Aleshire and Rick Fine are representing the plaintiffs, who are asking a Travis County district court to permanently enjoin the city defendants from “continuing to assess or collect the Project Connect tax because they no longer have voter approval for the tax as required by the Texas Tax Code.”

In addition, they are asking for a permanent injunction to prohibit the city and ATP “from spending the Project Connect tax on designing, acquiring right-of-way or constructing the Third Street rail route or the Trinity Street Bridge over Lady Bird Lake.” The plaintiffs are also asking the court to prohibit the defendants from designing or constructing the bus and rail maintenance yard in the Montopolis/Del Valle neighborhood “because these elements were never submitted for voter approval.”

Houston, who retired from Council in 2019, is quoted in the lawsuit as saying, “Once again, the people of East Austin were misled. The Green Line was very important to getting the community to support Project Connect. Now, it has been removed from the plan.”

Daniel Young, manager of Dirty Martin’s, said, “I feel like a lot of people were misled and a lot of customers who also voted for it didn’t realize the destruction it would cause. I would have voted against it. If I knew it was going to destroy my favorite place on Earth.” Plaintiffs intend to hold a press conference about the lawsuit this afternoon at Dirty Martin’s.

Mayor Kirk Watson released the following statement: “The voters approved this ongoing multi-billion-dollar project that will bring much needed mobility infrastructure to the city of Austin. As part of the approved proposal by voters, an independent entity – Austin Transit Partnership – was established to spearhead implementation. We are disappointed to see the new lawsuit challenging Project Connect, but we will review all allegations carefully and take appropriate next steps.”

Casey Burack, executive vice president of business and legal affairs for the Austin Transit Partnership, said the organization “is not commenting on the pending litigation and continues to advance the project.”

Council Member Zo Qadri told the Austin Monitor, “It’s unfortunate that anyone would want to waste time and resources trying to overturn the loud and clear voice of our voters, but I’m confident progress will prevail. Project Connect remains a vital investment in better mobility, safety, affordability, and sustainability for generations to come, and Austin’s progressive majority is united in seeing it through to the finish line.”

Photo made available through a Creative Commons license.

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