DALLAS — Travis County, Texas, should issue certificates of obligation to finance its share of a $343 million courthouse in Austin under a public-private partnership, according to a committee appointed to study the matter.
By using certificates, Travis County can avoid having to get the voter approval that is required for general obligation bonds, according to a report to the Travis County Commissioners.
“The development of a new courthouse represents a critical and pressing operational need for the county and cannot be considered a discretionary project like many of the projects that are typically included in general bond elections for cities and counties,” the report said.
Submitting the issue to voters could delay financing by a year and a half, according to the report.
Then, passage would be uncertain, officials concede.
Travis County issued $135 million of GO bonds in April. It has triple-A ratings and stable outlooks from all three rating agencies.
The county expects to invest about $205 million under a P3 project to build a new civil and family courthouse several blocks from the current 82-year-old building.
The 14-member Civil and Family Courthouse Recommendation Committee said that having one private entity, rather than the county, manage the project would cost about $4 million more, but it also said that approach would provide advantages.
“As the economy begins to recover and development in the Austin area increases, construction prices are likely to rise,” the report said. “Moving forward as quickly as possible with an expeditious procurement approach is recommended.”
The P3 approach also provides transfer of risk, performance and reliability standards under contract, collaboration and flexibility, the report said.
Texas State District Judge John Dietz last year recommended that the county avoid seeking voter approval, which might prove difficult.
The committee proposed that the county pay about 60% of the project cost. The business partner would pay for 40%. The private partner would design, build, maintain and operate the building for 30 years.
Travis County’s previous construction project, the Blackwell-Thurman Criminal Justice Center, was fraught with problems and cost overruns. The $45 million project resulted in several lawsuits.
