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Rod Aydelotte  

Baylor forward Lauren Cox, right, scores past Texas Tech guard Lexi Gordon, left, in the second half.


How will the collapse in oil prices impact Texas? It's too soon to tell, experts say.
 
 03.09.20

Oil prices plummeted to their lowest point in decades overnight as Saudi Arabia declared a price war on Russia, adding another stressor to financial markets already reeling amid concerns over the rapid spread of a new strain of coronavirus.

While Texas’ economy and budget is highly sensitive to oil prices as the nation’s top oil-producing state, economic and energy experts and state officials said on Monday that it’s too soon to say how big of an economic hit it will take. That will depend on how long both the Saudi-Russia deadlock and COVID-19 epidemic persist.

If either one becomes a prolonged crisis, they say the impact could be devastating.

“The consequences for Texas of the drop in prices over the weekend will depend on two questions: 1) how low, and 2) how long,” Dale Craymer, president of the Texas Taxpayers and Research Association, wrote in an email. “Of course, we can’t look at the impact of a drop in oil prices on Texas in a vacuum. Behind all this is the economic impact of the coronavirus, which is still uncertain.”

Oil prices had already slipped as high production rates, in Texas and beyond, led to oversupply. And that oversupply will only worsen with Saudi Arabia’s price cuts and planned output increase — which triggered Monday’s oil price free fall. In the latter half of last year, Texas saw a significant decline in the active number of oil rigs and service companies cut thousands of jobs.

When oil production slows in Texas, employment and tax revenues decline and budget cuts at the state and local level often follow. (Craymer has estimated that the state loses $85 million per year for every $1 decrease in oil prices.)

Texas Comptroller Glenn Hegar, the state’s chief revenue estimator, predicted last year that oil prices would hover in the low- to mid-$50-per barrel range through the latter half of 2021. The price of West Texas Intermediate crude was hovering just over $30 per barrel at midday Monday.

Hegar tempered any economic panic on Monday, saying that “the fundamentals of the Texas economy remain strong” but adding that he will be closely monitoring the situation.

“Certainly Texas has exposure if oil prices remain depressed for a sustained period of time, and slowdowns in economic activity related to the COVID-19 outbreak could also be a headwind,” he said. “We are still only six months into the current budget cycle, however, and it is too early to tell with certainty how current fluctuations will impact long term economic performance and state revenues.”

Translation: If the Saudis and Russians strike a deal and COVID-19 goes dormant in the hot summer months, as some experts expect, Texas’ coffers will have time to recover before lawmakers convene in 2021 to write a new budget.

Hegar also said “state leadership has numerous financial management tools which allow the state to react to and contend with economic pressures.”

Craymer also noted that the state has some cushion: the last state budget was balanced with $2.9 billion to spare, he said. And the state has about $8 billion in its rainy day fund — though lawmakers set a $7.5 billion minimum fund balance last year in a sign of their bullishness on the economy.

But while it may be too soon to tell how Texas will fare, budget analyst Eva De Luna Castro of the Center for Public Policy Priorities noted that the state has “to kick off the budget process before anyone really knows what’s happening.” For example, revenue forecasters will have to give state agencies budgetary guidance this June.

“If things don’t rapidly improve, the agencies may be told to start cutting in their current budgets just to make room,” she said.

She said state lawmakers are more constrained now after making a commitment last year to more adequately fund public schools so local governments don’t have to increase property taxes as much.

“Just to not cut aid for students, the state has to come up with more and more money,” she said.

Experts said Texas is better positioned to handle an oil price collapse today thanks to a diversified economy. The last collapse in oil prices, in 2014, also forced the industry to cut costs and otherwise become more efficient. But University of Texas at Austin energy resources professor Michael Webber said COVID-19 throws an unprecedented economic variable into the mix.

When energy prices are low, demand for fuel typically increases. That’s not the case now amid government, corporate and self-imposed travel bans.

“There is significant demand disruption going on from coronavirus,” said Webber, who also works as chief science and technology officer at French global energy services company ENGIE. “This is unique and that could be really bad.”

Fatih Birol, executive director of the International Energy Agency, told Bloomberg that “the situation we are witnessing today seems to have no equal in oil market history.”

Todd Staples, president of the Texas Oil & Gas Association, expressed hope in a statement Monday.

“While the current circumstances are very difficult and impactful to operations and employees, Texas oil and natural gas companies have proven themselves nimble and innovative in challenging times,” he said. “Historically, when oil prices have been down, free market principles, science-based regulations and ingenuity helped Texas operators weather downturns. Recent developments remind us that benefits associated with a thriving energy sector are not guaranteed.”


Government
Elm Avenue overhaul project unearths more train tracks
 Rhiannon Saegert  / 
 03.09.20

Work on the sweeping Elm Avenue streetscape project unearthed more train tracks under the pavement, seemingly unrelated to a set of tracks found last summer.

As crews began exploring phase one of the project in early February, they discovered more railroad tracks encased in concrete in the ground, running parallel to the tracks of a defunct inter-urban line found during construction on the 700 block of Elm Ave. last June.

Jim Reed, city of Waco public works capital improvement program manager, said Barsh Construction workers were making a path for utility lines for East Waco Library when they discovered the tracks on the northbound side of the road.

“They were chiseling out trying to get the corridor cleared away and they found another line with parallel rails in it,” Reed said. “Now our contractor is working with our engineer to figure out the best approach to how we’re going to handle the impact those lines have to the water lines.”

Reed said the tracks must be removed if the road is going to be suitable for car and bicycle traffic.

“Some people think they could be restored to the point that you could maybe have a rail system again, but they’re in such poor shape,” Reed said. “They’re rusted, they’re contaminated to a point that I think the best approach is going to be to remove those so we can do maintenance on the road.”

The rail lanes run from Hood Street to Garrison Street. Barsh demolished a 50-foot section of the rail, partially as a demonstration of what it will take to remove the entire stretch from Hood St. to Martin Luther King Jr. Boulevard.

“They are working on prices, we will decide if those prices are something we can work with,” Reed said. He said once the public works department has an idea of how much the demolition, removal and disposal of the tracks will cost, the matter will go to Waco City Council.

“There’s not a lot getting done, so we have to get those answers quickly, but I think everyone understands the importance of the project and will keep it moving,” Reed said.

The $6.7 million project will replace the roadway, sidewalks, storm drains and waterlines on Elm Avenue. Reed said metal detectors haven’t found anything under the pavement from Clifton to Garrison.

“I don’t expect for us to have any more surprises,” Reed said. “If we just go in and remove both rail systems, I think it will give us… good infrastructure we can maintain.”

Reed said it’s unclear how much of a delay the unwelcome discovery will cause, but he still expects phase two to start in January or February of 2021, and phase one will continue more or less as scheduled moving forward.

“Extracting the rails and the wood ties is not the big issue,” Reed said. “The big issue is that they were entombed, more or less, in a concrete cavity that now we have to remove.”

The project is just one of several in East Waco. Work is underway on three hotels and an apartment complex. Barsh Construction is also handling $2.8 million in water line improvements along Peach Street, from across Interstate 35 to new development on Elm Avenue. A $5.5 million project that will convert Bridge Street into a pedestrian-friendly road designed for festivals and events is slated to begin in April.

Blake DeMaria, co-owner of Tony DeMaria’s Bar-B-Que in the 1000 block of Elm Avenue, said while the heavy construction in the area is unavoidable, the state of the street isn’t keeping regulars away.

“It’s definitely not helping anything, but luckily we have a back entrance, so people aren’t totally shut off,” DeMario said. “If you want to get to us you have to want it, you can’t just drive by.”

Tony DeMaria’s first opened its doors at a different Elm Avenue location in 1946 before moving to its current location on the same street in the early 90s. DeMaria said while the construction is a hassle, he’s mostly excited to see the finished Elm Avenue streetscape.

“We’ve needed this for the last 15 years,” DeMaria said. “We’re glad they’re finally doing it.”

In the meantime, Reed said he’s staying in contact with AT&T, Oncor, Time Warner and Spectrum, trying to keep everyone on the same page. The utility companies have franchise agreements with the city requiring them to move their lines during work like this, though the city is paying some additional funding to bury some electrical lines.

“I think our big challenge right now is getting all of the utility infrastructure off of Elm and into the alleyways ...,” Reed said. “That’s probably our biggest hurdle, because TxDOT requires that before we can move forward with the phase two project.”


Staff photo — Rod Aydelotte  

New construction near Elm Ave.and MLK gives a new look at that section of town.


Local
No coronavirus reported in Waco area as Texas cases continue to rise
 Brooke Crum  / 
 03.09.20

Editor's note: This article was published Monday, March 9.

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Coronavirus latest: What's happening around Waco


McLennan County has yet to see its first case of the coronavirus, while the number of Texans who tested positive for the disease it causes rapidly rose over the weekend.

Health officials believe the most recent case confirmed Monday in Collin County, north of Dallas, is the first person in Texas to contract the virus within the U.S. The man, who is in his late 30s and was in stable condition at home, recently returned from California when he received a presumptive positive test for the new coronavirus.

But Waco area residents appear not to be panicking about the outbreak, other than to snatch up almost all of the hand sanitizer available in the city limits. Waco-McLennan County Public Health District spokeswoman Kelly Craine said the health district has not received many “panicky” phone calls on its public information line from concerned residents.

Anyone with questions about the new coronavirus and the disease it causes, COVID-19, can call the Public Health Information Line at 750-1890 from 8 a.m. to 5 p.m. Monday through Friday.

Craine said most of the calls the health district has received were from health care providers ensuring they are following the proper protocols for the new coronavirus, but she encouraged anyone with questions to call.

Health care providers that suspect a patient has the coronavirus disease must contact the health district, which has a line open 24/7 to report certain conditions. The public information line is separate from that phone line and is dedicated to answering any questions about the new coronavirus.

The Centers for Disease Control and Prevention’s criteria for COVID-19 testing encourages doctors to “use their judgment” when deciding if a patient should be tested, considering factors including travel history and possible close contact with someone who has the disease. The CDC urges doctors to first test for other causes of respiratory illness, including the flu.

But cases of the flu and influenza-like illnesses appear to be on the decline in McLennan County, according to the health district. Flu cases spiked in late December, with about 800 cases reported the last week of the month. For the last week of February, the county reported 282 flu cases.

If patients meet the criteria for testing, then the health district would coordinate testing with their health care providers and send specimens to the CDC or state lab. The health district also would begin contact-tracing, or finding out who the patients came into contact with after they presented symptoms. The patients would take any quarantine or isolation measures necessary, as well.

The health district and local health care providers announced the formation of the McLennan County Leadership Response Team last week. The team will meet weekly to assess the outbreak and plan the local response. The outbreak is caused by a member of the coronavirus family, which is similar to the viruses that led to SARS and MERS outbreaks in the past.

Symptoms of COVID-19 include fever, cough and trouble breathing, according to the Centers for Disease Control and Prevention. About 80% of cases present mild illness, but for some people — older adults and those with preexisting medical conditions or compromised immune systems — the risk and the symptoms are much more severe.

Most people recover from the new virus. According to the World Health Organization, people with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover. In mainland China, where the virus first exploded, more than 80,000 people have been diagnosed and more than 58,000 have recovered so far.

The virus has infected 600 people in the United States, and at least 26 have died, most in Washington state.

In Texas, 12 cases stemmed from travel, all related to a Nile River cruise in Egypt, according to the Department of State Health Services. Harris County has reported six cases, and nearby Fort Bend County reported another six cases.

Another 11 people who caught the COVID-19 disease overseas were quarantined at Lackland Air Force Base in San Antonio. The patients at the base who tested positive for the new coronavirus have been transferred from quarantine to the Texas Center for Infectious Disease or local hospitals to receive treatment in isolation, the San Antonio Express-News reported.

But Lackland Air Force Base on Monday expected to receive “approximately 90 Texans” who were aboard a cruise ship off the California coast transferred to the base for testing for the coronavirus and the COVID-19 disease it causes, Gov. Greg Abbott said Sunday.

The Grand Princess pulled into the Port of Oakland with more than 3,500 people aboard — 21 confirmed to be infected with the new virus.

U.S. passengers will be flown or bused from the port — chosen for its proximity to an airport and a military base — to bases in California, Texas and Georgia for testing and a 14-day quarantine. The ship is carrying people from 54 countries, and foreigners will be whisked home.

The Associated Press contributed to this report.


Photo gallery: The latest from the coronavirus pandemic around the world

Photos: The latest from the coronavirus pandemic around the world

Crime
Woman indicted for South Waco hit-and-run
 Kristin Hoppa  / 
 03.09.20

A McLennan County grand jury indicted Gabriela Shay Estrada, of Waco, last week on three felony counts of intoxicated assault, aggravated assault and failure to stop and render aid for the Dec. 15, 2019 hit-and-run of 20-year-old Grace O’Heeron while she walked on the side of the roadway near South 12th Street and La Salle Avenue.

If convicted, Estrada faces up to 20 years in prison and a $10,000 fine.

Estrada, 22, is accused of striking O’Heeron, a 20-year-old Baylor University student, as she was crossing La Salle Avenue. Estrada reportedly ran a red light at about 2 a.m. O’Heeron was found lying in the roadway.

O’Heeron suffered significant injuries and was admitted to a local hospital’s intensive care unit.

Evidence collected at the scene led officers to University Apartments, 2900 Primrose Drive, where the driver was found. Officers determined Estrada was the driver of the vehicle that struck O’Heeron, according to court documents.

O’Heeron’s father, Pete O’Heeron, said Grace has continued her recovery and is now in out-patient therapy in Houston. He said she took her first steps in recovery in February and thinks the indictment is a step in getting justice.

“I just think the indictment is a testament to Baylor law enforcement and Waco police for prosecution and trying to see justice go through,” Pete O’Heeron said. “It is a testament to the investigation and their diligence and we could not be more pleased with how they are proceeding with this.”

Pete O’Heeron said his daughter has been continuing her education during recovery. He said she is expected to return to Baylor at the end of the month and will graduate this year with her classmates.

“We are so proud of her for working so hard,” Pete O’Heeron said.