March 9, 2005

Fellow Texans:

On September 30, 2004, state and local officials asked my office to conduct a review of the operations and management of the Central Texas Regional Mobility Authority (CTRMA), citing serious oversight concerns. This is the report resulting from that review.

CTRMA is the first regional mobility authority (RMA) in Texas, and it is vitally important to our state’s future that we get this first RMA right. And I am forced to say that I am troubled by what I see so far.

CTRMA is an important test case, marking the beginning of a new era of creatively financed road projects in our state. RMAs can make an important contribution to Texas. They promise to answer pressing transportation needs more quickly and efficiently than our traditional “pay as you go” approach to road construction.

And CTRMA is an interesting experiment in the interaction between government and the private sector. No other state has outsourced a road project of this magnitude so completely. CTRMA is responsible for hundreds of millions of dollars in public spending, but with only one full-time employee until November 2004, has placed most of its fundamental oversight responsibility in the hands of private contractors – a small circle of financially interested parties.

Their relationships are long-standing, complex and intertwined. Again and again among CTRMA’s contracts, officers and even in “grassroots” groups formed to promote its efforts, one encounters the same small circle of individuals, some of whom stand to profit substantially from CTRMA’s projects. It appears to be a story of favoritism and self-enrichment.

This report notes several instances in which CTRMA and its business operatives have engaged in conduct that appears to violate Texas law. In many others, though CTRMA’s activities may not have been technically illegal, fundamental procurement, contracting, expenditure, conflict of interest and ethical standards were not observed – standards that good government must strictly adhere to for Texas citizens to have the faith and confidence in government that they deserve. Public-private partnerships deserve no less.

When this many tax dollars are at stake, I believe that the legislative system under which CTRMA operates must be tightened and strengthened so that higher standards replace the inner-circle dealings this report reveals. I believe the people of Texas want to see RMAs live by a higher standard – one that recognizes the substantial stake the public has in their operations. Public accountability is critical here since the actions and decisions of the RMAs are in no way subject to voter approval.

This report contains observations and common sense business and legislative recommendations that can improve CTRMA’s operations and public accountability, and build public confidence in CTRMA. The first step should be the adoption of our recommendation calling for the resignation of the two board members whose personal holdings and business interests should have prevented their appointment in the first place. Ensuring that CTRMA’s board is stripped of members with the potential for self-enrichment should help restore public trust. Our other recommendations, once implemented, should build on this trust, provide the accountability that should exist where public funds are involved and enable CTRMA to influence the success of all subsequent regional mobility authorities.

As always, my office stands ready to help with the implementation of our recommendations.

Sincerely,

Carole Keeton Strayhorn,
Texas Comptroller