Imagine this: You finally saved enough money to lease a new luxury car. You pay all of the monthly payments and all of the maintenance for years on end, and you even finally pay the entire purchase price of the car—then you have it towed to a junk yard.
Oh, and you only ever drove the car twice.
Such a scenario is actually very much akin to reality for Austin taxpayers—except their story is far worse.
Austin Mayor Steve Adler recently announced the city’s taxpayers will be paying a whopping $460 million to buy a biomass power plant in East Texas, a plant Austinites had already coughed up $128 million to build and were paying $54 million every year to operate.
Even after all that cash over the span of six years, the plant produced energy for only two months.
The story began in 2008, when Roger Duncan, then-Austin Energy’s general manager, sketched out a plan to help achieve Austin City Council’s renewable energy goals. He wanted local citizens to pony up the cash to build the Nacogdoches Generating Facility, then pay for all of the energy produced at the biomass plant.
His plan required a 20-year, $2.3 billion contract.
The idea immediately received backlash from wide sectors of the public. Environmentalists, businesses, and good government advocates all complained about a slew of problems: The deal was done behind closed doors, there wasn’t careful study or analysis of the details (especially for a long-term contract with citizens’ money), costs would likely overrun, and there wasn’t public input. Several experts warned the archaic, inefficient wood-burning plant proposal may totally bust due to advances in the rest of the energy market.
Despite all of that, Duncan pressured the council to approve his deal just a month after it became public. They did, unanimously.
And over the following months and years, a catastrophe unfolded.
After city council spent $128 million to build the plant, it was barely used because it was so expensive to operate. Though Austinites weren’t getting any power in return, they were still on the hook for $54 million every year for the plant’s manager, Southern Power, per Duncan’s contract.
“They can’t say they couldn’t know [the risk they were taking],” said Trey Salinas with Coalition for Clean Affordable Renewable Energy, “because they were told.”
Finally, with roughly 10 years left to endure the black hole of a contract, Austin City Council recently decided to “get out” of it by just purchasing the entire power plant outright for a princely sum of $460 million. They pitched the plan as a “cheaper” alternative to just throwing away the rest of the money they owed on the deal. Now, the plant will likely just collect dust or simply be torn down.
Mayor Adler called their buyout plan a “great result.”
“We play the hand we’re dealt … we’ve been working since I got into office to get a better financial deal around the biomass plant,” he said. Adler was elected after the contract was already signed.
Unfortunately, the worst part of this tale of foolish waste is that Austin City Council keeps retelling it. For example, take the $140 million they overspent on a bad tunnel, the $450,000 blown on two public toilets, the $115,000 tossed to clean one public toilet, or the millions they literally gave away to citizens who emailed asking for cash.
In fact, city council blows so much money that they spend over $4,000 per man, woman, and child in Austin. That’s about twice as much as is spent in cities like Dallas or Houston.
Wasting $140 million here and $460 million there may seem like arbitrary numbers, but those decisions have created a harsh reality for Austinites.
The average homeowner is now forced to pay 80 percent more to city council than they did just 10 years ago. For many Austinites, that crushing tax bill is forcing them out of their homes—they can no longer scrape together enough cash to feed their government’s ravenous appetite for their hard-earned money.
When citizens struggle to pay their city council, then watch the council foolishly toss that cash out the window over and over again, the question then becomes, “How long will Austinites tolerate it?”
Austin’s $2 billion biomass boondoggle is a pathetic, yet accurate, description of Austin City Council as a whole and their history handling citizens’ money. But will anything change, or will Austinites continue letting city council tax them out of their homes just to waste their money?
Only Austinites can determine the answer to that.