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September 27 Transcript

Texas Department of Transportation Commission Meeting

Commission Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483

Thursday, September 27, 2007

COMMISSION MEMBERS:

Ric Williamson, Chairman
Hope Andrade
Ted Houghton, Jr.
Ned S. Holmes
Fred A. Underwood

STAFF:

Steve Simmons, Deputy Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director
Dee Hernandez, Chief Minute Clerk

PROCEEDINGS

MR. WILLIAMSON: It is 9:05 a.m. and I would like to call the September 2007 meeting of the Texas Transportation Commission to order.

It is a pleasure to have each of you here this morning. Please note for the record, the public notice of this meeting containing all items on the agenda was filed with the Office of Secretary of State at 1:52 p.m. on September 19, 2007.

Before we begin our meeting this morning, I would appreciate it if you would join with me in removing from your pocket or purse your cell phone, Dewberry, pager, two-way radio, and whatever else you might have that would go off and disrupt the day's meeting, and place that on either the silent or vibrate mode.

Thank you very much. It is our custom to open with comments from the members of the commission. I'll begin with Mr. Underwood, followed by Mr. Holmes, Mr. Houghton, and Ms. Andrade. Fred?

MR. UNDERWOOD: Good morning. I see we have some distinguished people from El Paso, welcome. Look forward to having a good day today.

I see a very distinguished gentleman that just walked in. How are you doing, Sir?

VOICE: Very good, thank you.

MR. UNDERWOOD: You're welcome.

MR. HOLMES: Good morning. We appreciate the hospitality from El Paso Chamber and group last night. I look forward to hearing your comments today. Thank you.

MR. HOUGHTON: I echo my fellow commissioners' remarks, and regarding last night it was a lot of fun, thanks to the Chamber, and congratulations on the Inner Loop.

And, welcome. We got a lot of discussion items here today, and look forward to visiting with you all. Thank you.

MS. ANDRADE: Well, I also echo my fellow commissioners, a special welcome to our September meeting. It's not as well attended, Mr. Chairman. I'm a little concerned, but I look forward to taking care of business and moving Texas forward. Thank you.

MR. WILLIAMSON: Thank you, Members. I associate myself with the remarks of the commissioners, particularly with regard to El Paso, thank you very much for the hospitality, the warm hospitality you shared with us last night.

And we look forward to celebrating your decision to move Texas forward in El Paso if that be the will of the commission later on in today's meeting.

Let me remind everyone that if you wish to address the commission during today's meeting, we ask that you complete a speaker's card, which you can find at the registration table in the lobby to your right.

If you're going to comment on an agenda item, we would appreciate it if you would fill out a yellow card such as the one in my right hand. If you wish to comment in the Open Comment period, and not about a particular item on the agenda, we would ask that you fill out the blue card, such as the one in my right hand.

In any event, while your comments and testimony is important to the commission and we always take time to listen to everyone, we ask that you try to limit your comments to three minutes so that we can move forward with today's business as expeditiously as possible, unless you are a sitting member of the House or the Senate, in which case we ask that you take all of the time you need to make your position clear.

And we welcome to the body the Honorable Representative Joe Pickett in the second row on the left. Is　-- are there any other members of the Legislature with us this morning?

(No response.)

MR. WILLIAMSON: Okay, thank you very much. And again, thank you, Members.

Normally, the first item on the agenda is the approval of the minutes, however this is a special morning for the second-floor staff, and the commission generally, and for myself individually.

And that is, this morning we get to celebrate the 15th year of service for my administrative assistant, and the administrative assistant to the commission, Mary Anne Griss. And Mary Anne, if you wouldn't mind, I would appreciate it if you would come forward, and let us make jokes, and do the best we can to gently embarrass you.

Steve? Read the citation?

MR. SIMMONS: Mary Anne, congratulations on 15 years with the department. It's been a pleasure, I've only really gotten to work with you I guess on the second floor for the last six years.

But we do have a certificate of service that I'm　-- that I ask the commission to present to you, but it basically reads, "In recognition and appreciation of 15 years of meritorious service with the Texas Department of Transportation, the commission presents this certificate to Mary Anne A. Griss, and extends its congratulations and best wishes for a long and happy continuance of service."

So, congratulations, Mary Anne.

MR. WILLIAMSON: And we're going to let you have the last word. Members, do you have anything you want to get off your chest right now while I've got her in the limelight?

(Laughter.)

MR. UNDERWOOD: No. I just wanted to say what a　-- your attributes are obvious or you wouldn't make it to 15 years, but I really have appreciated knowing you, and I'm sure you must have started when you were twelve years old, and whatnot　-- 　

MS. GRISS: Oh, I did.

MR. UNDERWOOD: -- and also, you must feel like 40 years, working for the Chairman.

(Laughter.)

MR. UNDERWOOD: So, excuse me.

MR. HOLMES: Yes, these errors go every direction. Mary Anne, you bring a great sense of comfort and good humor, and a beautiful smile that I think makes everything work better for all of us.

Fred and I have only been here since January, and you made us feel at home, and we appreciate that.

MS. GRISS: Oh, thank you.

MR. HOLMES: Thank you.

MR. HOUGHTON: Well, I've only been here three and a half years, and it's been a delight working with you. The class of the　-- you bring a lot of class to this organization, and I look forward to working with you. Been a lot of fun, Mary Anne.

MS. ANDRADE: Oh, Mary Anne, thank you so much for everything you've done for me. The support, the guidance, and you do add a lot to the Chairman. He's lucky to have you. Thank you very much.

MR. WILLIAMSON: I have to share the story. I mean, you know what's coming.

MS. GRISS: Uh oh.

MR. WILLIAMSON: When Governor Perry called me to service in this position, I arrived from the perspective of a House member, somewhat skeptical of how the department organized its affairs.

And one of the things I had always heard as a member, and I suspect Mr. Pickett has heard the same thing, is, when a commissioner is chosen, the executive director chooses the person they wish to assist the commissioner, in order to be sure that the executive director always knows what a commissioner is up to, where he or she is going, and what they're doing.

So I made my mind up, Bob, that I was going to choose my own administrative assistant, I wasn't interested in David Laney's administrative assistant being passed along to me. And I told Wes Heald that, my first visit to the department.

I said, You know, post, and I'm going to interview, and I will choose my own person. And that was how I met Wes Heald on a formal basis. And he had not one word to say to me; he just turned around and walked out.

So we posted, we interviewed, and some of the people I interviewed are in this room. And I interviewed you; I got through, and I looked around and I said, Man, I must be crazy. This is exactly the person I need to help me with my business.

So I'm glad that you responded to the posting and didn't just leave me in the lurch, and I appreciate six years of good, hard service. Now, you can speak.

MS. GRISS: Well, thank you. Thank you for changing your mind.

You know, this is great getting so much attention for just doing my job for 15 years. This is kind of nice. Thank you, it's been my pleasure. And I have one of the best jobs in the department, getting to work with the leadership.

So it's fantastic. The administration, the commission over the years, it's been a wonderful opportunity. So I hope I can stay a little while longer, I've enjoyed it. Thank you.

(Applause.)

(Pause.)

MR. WILLIAMSON: Okay, thank you. And thank you again, Mary Anne, for 15 years of service to the State of Texas.

The first item on today's agenda is the approval of the minutes of the past three meetings: the regular meeting of August 23rd, and the two special meetings of August 29th and September 17th.

Members, the draft of the minutes were presented to you in your briefing materials, and you've had the opportunity to review them. Is there a motion?

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries, minutes are approved, thank you, Members.

Mr. Simmons?

MR. SIMMONS: Good morning, Mr. Chairman, Commissioners. Our first item of　-- on the agenda is Aviation, which is approve funding for airport improvement project and I'll ask Bill Fuller to come up.

MR. FULLER: Good morning. My name is Bill Fuller. I'm with the Aviation Division. This minute order contains a request for grant funding approval of eight airport improvement projects. The total estimated cost of all requests is shown in Exhibit A. It's $7,128,402. Of that, $6,235,562 federal, $180,000 state, and $712,840 of local match.

A public hearing was held on August 16. No comments were received. We recommend approval of this minute order.

MR. WILLIAMSON: Members, you heard the staff's explanation of this minute order, and the recommendation. Do you have questions or comments directed to staff?

(No response.)

MR. WILLIAMSON: Do we have a motion?

MR. UNDERWOOD: So move.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. FULLER: Thank you, sir.

MR. SIMMONS: Chairman, our next item is Public Transportation Item for the appointment of a new member to the Public Transportation Advisory Committee.

MR. GLEASON: Good morning. For the record, my name is Eric Gleason, TxDOT Director of Public Transportation.

This minute order authorizes the appointment of Francisco Castellanos of Brownsville, Texas, to the Public Transportation Advisory Committee. Mr. Castellanos will be representing public transportation users on the committee.

Mr. Castellanos is the executive director of Cameron Works. In his capacity, he is responsible for managing workforce development activities in Cameron County, Texas.

Public transportation systems across the state are beginning to develop partnerships with local workforce boards to address job access and training issues. We are excited at the prospect of bringing this perspective to the committee's work.

Mr. Castellanos' term of service will be effective October 1, 2007, and run through September 30, 2010. PTAC is comprised of eleven members. Board members have terms which expire on September 30, 2007.

Three new members were appointed at the August　23, 2007, commission meeting. This appointment fills the fourth and final vacancy. We recommend your approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. Do you have questions or comments directed to staff?

(No response.)

MR. HOUGHTON: So move.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Members. Thank you, Eric.

MR. GLEASON: Thank you.

MR. SIMMONS: Our next item is a discussion item. This is I guess our fourth discussion item on our financing, and impacts that the state and federal legislation has. So I'll ask Coby Chase to come up and begin the discussion.

MR. CHASE: Good morning. For the record, my name is Coby Chase and I'm the director of TxDOT's Government and Public Affairs Division. Today I will discuss our efforts at the federal level, as well as our plan to communicate the need to focus our resources on maintaining our system.

This goes hand in glove with the four previous presentations, that Amadeo Saenz, James Bass and I have made since June of this year.

First, let me bring the commission and those in the audience up to speed on our recent visit with members of the Texas Congressional Delegation. Chairman Williamson, Mr. Simmons, Chris Lippincott and I joined Cady North in Washington earlier this month to meet with members of Congress.

We had two broad objectives; communicate the financial challenges we have versus our needs, and discuss ways to improve our bottom line. Regarding our financial challenges, we discussed at length the need to refocus our attention on maintaining our aging highway system.

Because we must maintain our existing system, we simply will not have enough money to build new capacity. I'll go into further detail about this later.

We've clarified our views on earmarks. You may recall that we caught the attention of many in our Congressional delegation when we explained the effects of earmarking small amounts of money for projects that are not fully funded.

Such earmarks divert money from other identified priorities, and tie up the money until the rest of the needed funding becomes available. We had a healthy and productive discussion about this with members, and both sides now understand each other quite a bit better, and I expect good results.

Regarding possible solutions, we discussed the need to give states and regions more flexibility. You will recall that as we were making our way to D.C., someone unearthed the agency's federal priorities which we put on our website in February; actually drafts starting in December 2006.

And had been sent to lawmakers, local leaders, the media and other interested groups and individuals. Many people took exception to the item, in which we urged Congress to conform federal law to state law with respect to tolling interstates.

This was actually a timely event, and it facilitated our discussion about the need for flexibility. While I'm not supportive of surprising people, the net effect was that it prompted a healthy dialogue with members.

Our experience with the Katy Freeway project, which is nearly universally supported, was a time-consuming and extremely inefficient process to negotiate.

We need a streamlined application process when there is a compelling, publicly accepted reason to deviate from standard practice.

We had some frank discussions about the numerous federal strings that are attached to funding, and the various funding silos that seem to be established with no apparent thought put into how to measure and reward results.

Congress seems to sometimes recognize this, and they allow exceptions to certain federal requirements or prohibitions. But once it leaves Congress' hands, that's when the bureaucratic fun kicks in.

To the extent there is any flexibility in current federal law, it is a riddle wrapped in red tape inside a bureaucracy. In defense of Congress, none of this was created in one day or in any one piece of legislation, as best I can tell, and as best I can tell, never entered into maliciously.

I believe everyone recognizes it will take some time to repair the legal infrastructure that supports our transportation system. All in all, we had a very good trip. The members were receptive; they got the chance to air their concerns, and we were able to deliver a compelling message about where we stand and how we can improve our situation.

They intend to appoint a bipartisan Texas Transportation Working Group, and they have asked for a lot of data, because if nothing else, a Texan likes to be armed.

The bottom line is that we share a devotion to advancing the interests of Texas. Perhaps the most important consequence of the trip is that the delegation, and we understand that by educating each other, their constituents and our customers, we can advance our common interests much more effectively.

And now, I would like to point out that in the coming months, I believe we're　-- and I believe we're aiming for November, we will bring a set of federal priorities for you to consider, and it will be put out for public comment. I would anticipate final adoption in January or February 2008.

And I would like to discuss some of the legislation that Congress is working on. The Transportation Appropriations bill, it's more formally titled I think, Transportation Housing and Urban Development, or THUD, continues to make its way through the legislative process.

Each chamber has passed its version of the bill, and the Senate has appointed conferees, among them, Senator Hutchinson. In the meantime, Congress will need to adopt a continuing resolution to fund federal agencies after October 1; I believe the House just did this within the last 48 hours.

We believe the continuing resolution will fund programs at their current level. As we've discussed previously, both versions of the Transportation Appropriations bill contained about $3 billion in rescission　--

MR. WILLIAMSON: Stop. If this passes, you're indicating that the impact on Texas is $259 million?

MR. CHASE: Yes. Plus or minus a million.

MR. WILLIAMSON: And how much in federal rescissions have already been approved to date?

MR. CHASE: $666 million.

MR. WILLIAMSON: So if the bill passes in its current form, we will have been rescinded about $900 million?

MR. CHASE: Yes. A little short of a billion dollars we've returned to the federal government.

MR. WILLIAMSON: And the impact of rescission is, when we spend a state dollar on a federal aid program, send the invoice to the FHWA and it's approved, the state dollar gets reimbursed by the federal dollar, which then goes into Fund Six, and becomes part of our next round of state dollar expenditures.

MR. SIMMONS: Correct.

MR. WILLIAMSON: So the effect of the rescissions two years from now, literally is a billion-dollar permanent reduction in our State Fund Six balance. Assuming we continue to spend state funds.

MR. CHASE: Yes. I believe that to be correct, although let me talk to James Bass, let's bring James Bass up here in a second to　-- or when I've finished, to　--

But it is a billion dollars worth of projects we have to tell our local and regional planners and us, that do not build. Just take them off the books, there's no federal money for them. That's the practical effect.

MR. WILLIAMSON: Thank you.

MR. CHASE: And as the Chairman said, Texas' share is estimated in this round to be around $259 million.

Included in the House proposal is language restricting the flexibility of states to work with their local leaders in deciding the distribution of the rescission. The Senate version of the legislation does not have that.

Both bills are about $5 billion over the President's request, and therefore have attracted a veto threat. The Senate added an amendment by Senator Hutchinson that prohibits the use of funds to consider or approve an application to permit tolling on federal highways in Texas. Clearly, her intent is to ban complete toll convergence on interstates.

As you know, no transportation planning body in the state has any plans to propose such a total conversion, which would under state law be subject to voter approval.

However, the amendment appears to conflict with some projects in Dallas, Houston, Fort Worth, San Antonio and Austin, where we've found a way to add capacity to existing roads by adding tolled lanes or offering additional drivers a chance to use HOV lanes or to access capacity by paying a toll.

Remarks in the amendment indicate that is not her intent, so we will work with her on some clarifying language.

Unfortunately, the preference for omnibus funding bills is not　--

MR. WILLIAMSON: I'm sorry, Coby. I　--

MR. CHASE: Yes, sir.

MR. WILLIAMSON: It's just so much fun to interrupt you.

You said that the -- her amendment as offered and accepted if not clarified, would impact some projects in Dallas, Houston, Fort Worth, San Antonio and Austin.

Now, for those who are just absolutely opposed to the use of existing right of way for any type of toll project, that would be music to ears.

But I'm concerned about which projects those are; if they're projects that we don't consider to be roads of necessity or projects of necessity, maybe we don't　-- it doesn't matter to us either.

Do we have any idea what those projects are?

MR. CHASE: Oh, yes, sir: 635 in Dallas?

MR. WILLIAMSON: The depressing of 635?

MR. CHASE: Yes, sir.

MR. WILLIAMSON: That's been approved by the MPO?

MR. CHASE: Yes.

MR. WILLIAMSON: Okay.

MR. CHASE: 820 in Fort Worth.

MR. WILLIAMSON: And which part is that? The funnel project?

MR. CHASE: No　--

MR. WILLIAMSON: Or the fly　--

MR. CHASE: -- it's the Tarrant County connector; I mean the [indiscernible] North.

MR. WILLIAMSON: Really?

MR. CHASE: Yes, sir. U.S. 183 and U.S. 290 here in Austin.

MR. WILLIAMSON: Where is CAMPO on those two projects?

MR. SIMMONS: I believe they'll be voting next month on the next phase of the toll plan.

MR. SAENZ: Good morning, Commissioners. For the record, Amadeo Saenz. CAMPO in this month of October will be voting on the toll plan that would toll 290 and 183.

MR. WILLIAMSON: Is it expected that that's going to remain part of their　--

MR. SMITH: Based on what we've received in reports from the district, and the meetings that the MPO has had, it looks like that's going to be a favorable vote.

MR. WILLIAMSON: What other projects?

MR. CHASE: It's 281 in San Antonio, and I-45, U.S. 59 and U.S. 290 in Houston, which I believe are HOV to HOT re-designations.

MR. WILLIAMSON: But we're in contact with their staff, and　--

MR. CHASE: Oh, absolutely.

MR. WILLIAMSON: -- we're working together to put　--

MR. CHASE: It isn't that we're not talking. It's　-- we're definitely working towards a solution.

MR. WILLIAMSON: Okay.

MR. HOLMES: Mr. Chairman, may I ask a question?

MR. WILLIAMSON: Yes, please.

MR. HOLMES: Coby, did the Senator or her staff indicate that it was not her intention to catch those projects and eliminate those?

MR. CHASE: Yes, sir.

MR. HOUGHTON: Or like projects, Coby, in the future?

MR. CHASE: Well, these are the ones that would, within the year that's in this amendment, would be affected.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: So　-- there's no threat, for example, to adding a toll lane to 35 North, from Hillsboro to Dallas if that were to be a proposal by the MPO. Or is there a threat?

MR. CHASE: Not if it's　-- if it's not　-- if it doesn't occur in the next fiscal year, no. There's no threat.

MR. WILLIAMSON: Any other questions?

MR. HOLMES: Just one more　--

MR. WILLIAMSON: Okay.

MR. HOLMES: -- or two more. This only impacts projects in the next fiscal year. Is that　--

MR. CHASE: Yes, sir.

MR. HOLMES: -- what I understand?

MR. CHASE: Yes. It's in an appropriations bill and if I understand it correctly, the practical effect is, the United States Department of Transportation simply can't spend money to approve any of these applications; it is to do certain things.

MR. HOLMES: You did not mention the toll lanes on Interstate 10 in Houston. Presumably that has already been approved, and so that would not be caught up in this amendment. Is that correct?

MR. CHASE: Yes, sir.

MS. ANDRADE: Coby, and didn't all this start from　-- I know in San Antonio I heard a lot about it　--

(Laughter.)

MS. ANDRADE: -- is that people feel like we're going to toll existing lanes. And that's not what we're asking. Is that right?

MR. CHASE: Well, we were　-- we've never asked for the Texas Department of Transportation to unilaterally decide to pick up a piece of interstate and put tolling on it. Or to toll it.

We　-- the state law, Governor Perry and the Legislature saw to it that TxDOT, by fiat, cannot do such things. However, we do believe that there are a number of situations that could arise in the future where it would make sense to put some sort of toll on some part of an interstate system.

Whether that money is used　-- I mean, and I'm not saying this is a good idea. I'm just saying, by way of example.

The decision possibly could have been made to toll Interstate 35 through Austin, and build State Highway 130 as a tax road. I mean, that might have made more sense in the mix.

And it's　-- and there are safeguards in there that you know, a local community would have to vote to do this. You and I have gone out to　-- and not a precise example but a close enough example: you and I have gone out to see the Alameda Corridor in California, which is a rail project, which sounds　-- from an engineering standpoint it sounds simple.

You take rail lines, drop them below grade so they don't run through neighborhoods and they can　-- and help me, here. I think it took, to get from the Port of Los Angeles to the other side of downtown Los Angeles, which you can see standing at the Port of Los Angeles, something like six or eight hours.

Which really in a　-- even in car, you can do it in 30 minutes or 40 minutes. Eliminate all of those so they go　-- they don't go through neighborhoods, they go around, and out.

And when I started here almost 14 years ago, I was reading about this project; it would pop up in different bills. They couldn't just go to one place and say, We think this is a good idea, let us arrange our financing and let's go. It took all sorts of legal maneuvering to get it done.

Katy Freeway project, by way of example here in Texas: it wasn't a straightforward process. We had to go through all sorts of hoops and rings of fire and whatever the case may be, to get it. And we got it done, thank goodness, through everybody's perseverance in that case. But it needs　-- we believe it needs to be more of an automatic process, you apply to do it at one place and the decision is made, and if part of that is, we don't want　-- we want to eliminate any sort of confusion about what can be done when you're going to put new lanes on an interstate and toll them.

I mean, you might want to make the decision to toll old lanes and have the new ones not tolled, or whatever the case may be. We wanted to match federal law with state law.

And　-- or at least, yes, try to make federal law as flexible as state law. And of course, subject to whatever local voter approval　--

MS. ANDRADE: I think we confuse the public when we say, We're not going to toll an existing lane, and then we go to Washington and we say, you know, give us permission to do this.

So I'm not　-- is this the right timing, to be asking for this, and with all of the confusion that's going on? You know, we're trying to help our public understand what we're doing, but I think that sometimes we　-- they may think we're giving them a mixed message.

MR. CHASE: Okay. I agree. And it clearly points out that, explaining it in a commission meeting for four months and putting it on the Internet for seven or eight or nine months, clearly　-- and mailing it to local leaders, and　-- all over the state, isn't enough.

It just shows that I mean, there are a lot of　--

MS. ANDRADE: I think　--

MR. CHASE: -- there are a lot of ways that things can be forgotten or clouded in other things. And there was one small subset of a much larger agenda. So I don't disagree with you, and as we know, I'm trying everything I can to get things in public right now.

MS. ANDRADE: And I think those of us that are very pro-transportation, you know, will look at those things. But the public that, you know, is trying to deal with daily survival is not going to sit at the computer and look at these things.

I think we just need to be conscious of that, and　--

MR. CHASE: Absolutely.

MS. ANDRADE: -- try to clear our message. Thank you.

MR. CHASE: Absolutely. The preference for omnibus funding bills which I briefly mentioned a moment ago has not diminished under Democratic control of Congress. We are hearing that the THUD bill is one of up to ten that are likely to be rolled into one bill, and the House has done this.

The problem with omnibus funding bills is that they run into the thousands of pages; they come out of conference with little time to review them, and even if you are able to read them, there's little opportunity to amend them.

One of my favorite quotes, really, regarding the last omnibus bill came from the House Appropriations Chairman himself. He said, I don't expect people to love this proposal I don't love this proposal. And we probably have made some wrong choices.

He seems to have been quoting my wife　--

(Laughter.)

MR. CHASE: -- that pretty much says it all.

The　-- on the　-- taking the discussion up in the sky for just a second, the House approved the Federal Aviation Administration Re-Authorization bill last week. The proposal re-authorizes the Airport Improvement Program, which Texas is the shining star in that program. I say that, not because I'm a Texan but because it's true; and provides $15.8 billion through 2020. This is a 10 percent increase over the current level.

Included in it is a measure that would raise the general aviation fuel tax from 21.8 cents per gallon to 35.9 cents per gallon, and the commercial aviation fuel tax from 19.3 cents per gallon to 24.1 cents per gallon.

The extra revenue would be dedicated to air traffic control modernization.

There is some breaking news regarding the Federal Highway Trust Fund. It will still go insolvent in 2009, but the $4 billion projected shortfall has not increased since last month, so there's good news. There is hope on the horizon.

All joking aside, this matter poses a substantial challenge for Congress. You can be sure that we at the Government and Public Affairs Division will involve ourselves in the discussions about how to address that problem and how to fix that shortfall.

I'd like to shift attention to the next federal transportation bill, whatever will succeed SAFETEA-LU. One　--

MR. WILLIAMSON: Is 2009 the end of the current Authorization Act?

MR. CHASE: Yes. Yes, sir.

MR. WILLIAMSON: Do we have another rescission in 2009?

MR. CHASE: Yes, sir. We do. It is $6 billion nation　-- or, it's　-- yes. The net effect to Texas would be $600 million more in rescissions.

MR. WILLIAMSON: And that's written into the bill　--

MR. CHASE: Yes.

MR. WILLIAMSON: -- that's not a matter of an appropriations bill amending the bill. That is going to happen.

MR. CHASE: It's a poison pill at the end of the bill.

MR. WILLIAMSON: So by 2009, we will have removed?

MR. CHASE: A little less than $1.6 billion at least.

MR. WILLIAMSON: At the minimum, less than $1.6 billion would have been removed.

MR. CHASE: Yes, sir. And one of the ways we plan to establish and communicate our priorities for the next federal re-authorization bill is to work with other states and like-minded associations.

I say, re-authorization. But we will actually, if I sense our discussion, our internal discussions as they are now, we will actually propose a top-to-bottom restructuring of the federal program, rather than re-authorizing the current, tangled, unfocused mess that it is.

Congress needs to take a hard look at the roles of federal, state and local governments, and private industry, to produce an integrated, goal-driven transportation system.

Included in that should be an emphasis on flexibility in transportation finance, procurement and operation of existing and new facilities. Everything needs to be pointed toward a sustainable, multimodal transportation system.

The bottom line is that, solutions should produce measurable results, as opposed to a system that simply rewards the process.

At this time I want to merge a few issues that we've been discussing lately for the past four months. I have dissected the appropriations bill in every other state and federal law that has impacted our bottom line. Our chief financial officer, Mr. Bass has explained the effects that recent legislation has had on our projected cash flow. And Mr. Saenz has been talking about the need to redirect funding from projects that improve congestion to projects that preserve our aging highway system.

I want to be crystal clear about what weights our state when all of these factors converge in sort of a perfect storm. We are running out of money. If the public does not appreciate this fact yet, I believe they soon will.

We are going to have to be more active about alerting our audiences to the reality we face. Toward that end, I make the following recommendations.

The first step is for our agency to boil down the problem into effects that everyone can understand. What projects are not going to move forward because we don't have the money; to answer that question we need to settle on a projected letting amount that the MPOs can use to prioritize projects with less money than they were expecting.

The MPOs need to report back to the commission, to the agency and the commission, what projects will fall off the schedule. I'm not talking about delaying projects, I'm talking about canceling projects.

We can deploy our administration, commissioners and district engineers and other personnel to assist the MPOs with this unsavory task. This list is going to generate some animated discussion, I suspect.

We can't let local officials who sit on MPO boards to take all of the heat, so we must do our part to explain why this is happening.

We need to tailor the message to those communities outside MPO boundaries as well. Let's face it, the rural areas are going to take a disproportionate hit as we shift funding to the metro areas that require the most maintenance money.

And we need to ensure that legislators are prepared. Their constituents, their local elected officials and major employers in the contracting and engineering community who will see a loss of business will be looking to them for solutions.

James and Amadeo will be before you shortly to convey some of the numbers behind this situation, but before I conclude, I'd like to mention Proposition 12, which will be on the ballot in November. Prop 12 is a constitutional amendment providing for the issuance of general obligation bonds by the Texas Transportation Commission, in an amount not to exceed $5 billion, to provide funding for highway improvement projects.

If approved, the Legislature would come back next session and authorize us to issue that debt. We won't know until then how much they will authorize and what conditions will be attached.

We are starting to get some inquiries about what we would do with this money; it's a legitimate question of course. But obviously, it's too early to say how the money would be spent with any specificity.

We are advising our public information officers to point out that given the impending funding shift from construction to maintenance, there will be many projects in the pipeline that will not move forward unless a significant chunk of new money comes our way. If the full $5 billion is authorized, many more projects will move forward then would be otherwise possible.

That concludes my remarks, I'll be happy to field any further questions you might have.

MR. WILLIAMSON: Coby, I'm sure that all of the members have questions. They may want to delay them until we hear from James and Amadeo. This is, in your view this is the fourth month we've been discussing　--

MR. CHASE: Yes, sir.

MR. WILLIAMSON: -- the future cash flows. And this is the schedule last discussed for this item because, our budget starts this month, or our current operational appropriation starts this month.

And I presume Mr. Saenz is going to make us aware of the changes that now will be made, as opposed to warning us about the changes that were going to need to be made?

MR. CHASE: Yes, sir.

MR. WILLIAMSON: And I want to be clear about Proposition 12. There is no authorizing statute; if the voters approve Proposition 12 in November, it will still be, at the very least, 30 days, 60 days after the Legislature convenes, in January 2009, before we could begin the six-month process of issuing the bonds?

MR. CHASE: Yes. At the earliest. At the earliest.

MR. WILLIAMSON: Is that the case, Mr. Jackson?

MR. CHASE: Make it a little longer than that.

MR. JACKSON: Unless there was an emergency appropriation, it wouldn't go in effect until September. And then that would just start the process.

MR. WILLIAMSON: So we're, at the　-- probably two years away.

MR. JACKSON: I'm sorry, that's September '09.

MR. WILLIAMSON: Okay. Thank you, Mr. Jackson.

Okay. Members, you can question or dialogue with Coby now, or we can hear from Mr. Saenz and Mr. Bass. What's your preference?

VOICE: Saenz.

MR. WILLIAMSON: Mr. Saenz, please.

Will that be accepting to you?

MR. SAENZ: Sure.

MR. WILLIAMSON: Mr. Bass, please. Does James know he's going first, Mr. Saenz?

MR. SAENZ: Yes.

MR. WILLIAMSON: We used to call him Fast Jimmy Bass; we now call him, No Money Jimmy Bass.

MR. BASS: Broker than the Ten Commandments.

MR. WILLIAMSON: Oh, my goodness.

(Laughter.)

MR. BASS: Good morning. For the record, I'm James Bass, Chief Financial Officer at TxDOT. Just to comment on an earlier discussion when Coby was up here, the effect of the rescissions we've had in place, and those that are expected to come this year, and the billion dollars -- yes. In simplest terms, that means, over a period of time we will have $1 billion less to spend than what we had planned and expected.

MR. WILLIAMSON: I think, James, that one of the things　-- I was listening carefully to Hope's observations about communication in San Antonio and　-- on the one hand I believe that there's some validity in self-critique.

On the other hand, I do believe people choose to hear what they want to hear, and choose to interpret it like they want to interpret it in some cases.

But you know, there's plenty of fault to pass around all of us, including myself. But I think people generally don't understand the flow of cash, out of their pocketbook, to Washington, D.C. back to the state of Texas and out to the contracting community.

And it's just always good to sort of reinforce how that works.

MR. BASS: I also think in some discussions I've had in the past couple of months, just the way the department normally operates on construction projects is not very well understood or known; such that when we receive an appropriation for a two-year period, people think, Well, there's that much more new construction that's going to be going on.

And I would say roughly 40 percent of a budget that we receive for a two-year period on that first day, September 1, 40 percent of that cash flow is for projects that have already been awarded, and are already active. so it's not bringing new and additional projects; a lot of that money is just going to make the ongoing progress payments on projects that have already started.

MR. WILLIAMSON: So in other words, we schedule things　-- most of our projects last at least a year, and　-- big money projects; some as long as five. So we have a construction schedule and a payment schedule, that crosses appropriation bills.

MR. BASS: Yes.

MR. WILLIAMSON: And we can only pay out what we're appropriated to pay out. And generally, we don't ask the Legislature to appropriate us more authority than our estimated revenue plus bond proceeds, might present themselves during the two-year period, plus the balance forward.

So we're paying for example the I-10 project, we were appropriated money in this current biennium　--

MR. BASS: Uh-huh.

MR. WILLIAMSON: -- that is for that project, which is five years old now.

MR. BASS: Right. And one thing just to clarify is, as you know, the Legislature makes their appropriation based upon the Comptroller's estimates.

MR. WILLIAMSON: Yes.

MR. BASS: And the reason I bring that up is because over time, people have expressed a concern that perhaps TxDOT was trying to game the system, and that we were low-balling our revenue estimate, so when the Legislature had to make their decision on how to allocate the state's resources, we were lowering that number of resources from Fund Six, knowing that during the Session or during the biennium when those revenues came in higher, we would get them through the estimated feature.

Number one, we would never try to do anything like that, because number one, it's wrong, and number two, people are going to pretty soon discover it, and we wouldn't want to be in that position.

But the system is protected against any one agency trying to game the system, the appropriations system, through that mechanism, because it is the Comptroller, and their revenue estimates upon which the appropriations are based.

So we can't assume we're going to have a billion dollars more than we really think and try and entice the Legislature to give us that appropriation, nor can we low-ball that number, and say, Hey, they're only going to give us this, so they won't be able to give more money to DPS and when that revenue actually comes in, it will automatically flow to us.

It just　-- the system is not designed that way, and would never work that way.

MR. WILLIAMSON: But with regard to the rescissions, with regard to most federal money, the only way we　-- that money comes into our fund, the state's fund is by first expending state gas taxes on a project.

And then giving the invoice to the Federal Highway Administration, and they approve it, and they reimburse a percentage of it back to us, and that goes into our fund and becomes identified as state proceeds.

MR. BASS: Correct.

MR. WILLIAMSON: So in effect, if there's one, point　-- what did you say it was, Coby? 1.6?

MR. CHASE: A little under.

MR. WILLIAMSON: There's $1.6 billion less available to reimburse state expenditures, at a point in the future which I presume you're fixing to incorporate into your ten-year budget, that's $1.6 billion less in state funds that will be circulated back through the system.

MR. BASS: Correct. And if I might, one other thing, to clarify what I've learned over time, we've often said as a department that we're pay as you go. That means many different things to many different people. And even, there are some states who say, they are pay as you go, but they are pay as you, encumbrance.

So if they are going to award a $30 million project, to be paid for by gas tax, what they do is, they wait until they accumulate $30 million of cash, and they set that aside on Day One. They then go award the project, and pay for the project out of that.

To my knowledge and those I've worked with over the years, TxDOT has never operated that way. We do pay as you go, cash flow. So we look at that $30 million project and expect it to pay out over the next 36 months, and we know what we think those payments are going to be, we know what we think the payments are going to be on projects we've already awarded, we know what we and the Comptroller think are the revenues coming in, and we look to see if we're going to have enough cash on hand to make those payments, every month.

It's much more aggressive than the other pay as you go model, but the result of it is that projects get delivered and open to traffic much sooner, than under that other encumbrance method.

But many people don't understand the nature and the cash flow and the uncertainty that we deal with on a daily basis.

MR. WILLIAMSON: So if you, for example, to be very simplistic, if you had a one billion dollar contract that was scheduled to take five years to complete, and the payment cycle was pegged on certain milestones that told you, every month over the next 60 months, we're going to pay whatever that works out to be, $80, $160 billion　-- $160 million? Oh, $80 million?

And if one or two variables were not correctly estimated, either the cost of the contract or the flow of cash from the federal government, state government or local government　--

MR. BASS: Uh-huh.

MR. WILLIAMSON: -- then you would have to do one of two things, I'm presuming: Extend the contract, to reduce the monthly payments. Or re-scope the project mid-stream, and renegotiate with the contractor, to reduce the cost back to match up your cash flow.

MR. BASS: Not exactly. What we had done previously, in the long history of　-- if we saw expenditures accelerating, going out faster than what we had planned, the adjustment was on future letting.

We would just award fewer projects than what we had expected, and delay them to free up cash to make the accelerated payments on the other project.

Through legislation in 2001, 2003, and actually thanks to Representative Pickett he was the sponsor of the short-term borrowing; it allows the department to borrow on a short-term basis for cash flow purposes.

And what that does is, it gives us more of a time period to make those adjustments, rather than　-- I think the, Wes Heald described it before, we had short-term borrowing, and a situation would arise, we would have to slam on the brakes.

MR. WILLIAMSON: Not tap the brakes?

MR. BASS: Not tap the brakes　--

MR. WILLIAMSON: Oh.

MR. BASS: -- slam on the brakes. Now, through the ability we have through the short-term borrowing, we are able to tap the brakes, take　-- and we have more of an implementation or a transition period to adjust and manage those cash flows.

And that has been tremendously beneficial to the operations of the department.

MR. WILLIAMSON: But nonetheless, your decision I presume, or the decision of the administration would be, not to slow down I-10, to stay the course and finish it; we just wouldn't get to 281.

MR. BASS: Correct. Rather than Project X being awarded in January, it may be June or July, whatever that works out, in order to free up sufficient cash flow to make payments on the existing projects. That's always going to be priority number one.

And then we look at the cash flow on those existing projects, see how much available cash flow exists going into the future, and how many additional projects we can plug into that cash flow.

MR. WILLIAMSON: So to the point Hope was making earlier about San Antonio and 281 and 1604, I don't know, Members, how you all deal with, when you see these controversies pop up in the media; I tend to try to stay away from it and just let local leadership work out　-- work it out with our staff.

But I do read the newspapers, and it appears that there are some in your area that believe that a certain amount of gas tax cash flow was reserved for 281. If what I understand correctly is the department system, not just with regard to Bexar County but with regard to every county in the state, our district engineers are working with local and regional planners to identify and schedule projects on the assumption that certain cash flow behaviors occur.

And then as those behaviors don't　-- either do occur or don't occur, an adjustment is made throughout the state. So everyone is racing ahead, falling behind, racing ahead, falling behind, depending upon the cost of the projects, and the flow of cash.

MR. BASS: Yes. And while the Comptroller typically comes out with two estimates during a biennial cycle, the biennial revenue estimate before the Session, and then a certified revenue estimate sometime after the Session, that data and information's valuable to us, but it's not timely on our day to day operations.

So we actually produce a monthly forecast of the inflows and outflows of the State Highway Fund, to help guide the direction of, how much can we afford to award in projects, this month, next month, two months from now.

MR. WILLIAMSON: Somebody down there had a question?

MR. UNDERWOOD: I'm just trying to understand　-- now, the rescissions play effect of this, then?

MR. BASS: Right.

MR. UNDERWOOD: They really threw a monkey wrench in the works, is what it boils down to, don't they?

MR. BASS: Right. When we work through the Districts with the regional leaders, through the　-- on the MPOs, they're looking out well beyond the current appropriation bill. They're looking out ten, eleven years, looking at those revenue forecasts that we think are going to come in, not only from state gas tax, but also what's going to be available from the federal government.

And so when we hear from the federal government that they're going to take back some authority to get reimbursed, from us, and that the Highway Trust Fund is going to hit a zero balance in 2009, 2010, you can imagine two, three years ago, that was not built into the federal projection.

Once we started hearing from the Office of Management and Budget on the federal side, from FHWA, US　DOT and others, those plans have to be adjusted. That there will not be as much money as originally planned, which equals, there's not going to be as many projects.

Another factor that you well know, you may still have $3 billion even if the revenue estimate was spot on; how many projects or how many lane miles will that deliver? Well, what's inflation been? And from 1997 to 2007, a ten-year period, our highway cost index doubled.

So what used to cost, my $30 million project I mentioned earlier, if that was in 1997, it would now cost $60 million to build the same project, just ten years later.

MR. UNDERWOOD: James, I want to make sure I understand this. We spend a dollar on construction, went out building roads; we turn the invoice over to the government, and they pay us basically 90 cents back.

MR. BASS: Well, they　--

MR. UNDERWOOD: Or I'm saying, some form back; they don't give us the dollar back. Isn't that correct?

MR. BASS: Correct.

MR. UNDERWOOD: And then all of a sudden, we go along, we have a rescission, they go, We were just kidding. We're not going to give you 90 cents, we're going to give you 80 cents.

MR. BASS: Uh-huh.

MR. UNDERWOOD: Okay.

MR. BASS: Well, what　--

MR. UNDERWOOD: I just want to make sure I understand this, and　--

(Simultaneous discussion.)

MR. BASS: -- a few steps in that, and once we've got it, gotten an agreement with Federal Highway on a project, they do not, to my knowledge have they ever come in and said, No, we're going to change the amount we're going to give you, or the percentage we're going to give you for that specific project.

MR. UNDERWOOD: No, I know. But what they do is, they take it away from the coming years.

MR. BASS: Correct. The future projects we thought, Hey these ten projects we're going to be able to get federal participation on, when that money is pulled back from us, it's then either eight or nine projects that are going to be able to get federal participation, and if that revenue stream is lost, then those other projects nine and ten will be delayed, and be started in some future year.

MR. UNDERWOOD: Thank you.

MR. WILLIAMSON: Continue, James.

MR. BASS: With that intro, if I could get the overhead on　-- thank you. One of the things we spoke about last November, December, and I think they were discussions during the Session were, the cash flows within TxDOT, how that money was going to be spent.

And I apologize, but I guess I'm highlighting the challenges we face in communication by putting this chart up on the screen.

(Laughter.)

MR. BASS: The　-- this shows the cash flows within TxDOT. And the first thing I'd point out is, a lot of times in our discussion, at the dais here, we're talking programming or contract. These are not contract awards; this is actual cash flow. Progress payments on construction projects.

And that blue line　--

MR. WILLIAMSON: Wait.

MR. BASS: Yes, sir.

MR. WILLIAMSON: Now, to me and I suspect to the other commission members, cash flow is different than project payments on a construction contract. So which is it? Is this cash arriving, or is this cash leaving?

MR. BASS: This is cash leaving. So if, in year 2005, we had signed a $300 million contract, you would typically see $100 million going out, in 2005, $100 million going out in 2006, and $100 million going out in 2007, for that one $300 million project that had been awarded. When you　--

MR. WILLIAMSON: So, and the projects we stack on top of each other to get to the top line?

MR. BASS: Yes. The first line there, the big blue block, is the maintenance expenditures, maintenance and preservation expenditures from the department.

MR. WILLIAMSON: Okay, stop right there. When Governor Perry ascended, one of the first things that he wished we would do, was truly separate expenses related to maintenance from expenses related to preservation, from expenses related to rehabilitation, and expenses related to new construction for added mobility capacity.

Do these estimates reflect that separation?

MR. BASS: Yes.

MR. WILLIAMSON: So the blue, when you say, maintenance, you really mean, maintenance.

MR. BASS: And a broader term, preservation. And maybe they provide an example. There's a 35 year old two-lane highway. And demands are such that it　-- we're going to expand it to a four-lane highway.

The existing two lanes need to be replaced. We would go in, and replace the existing two lanes and add Lane 3 and 4. The replacement of the existing two is going to show in the blue line there, the blue block, as major rehabilitation, maintenance, preservation, whatever term you prefer.

Lanes 3 and 4, where they're adding capacity to the system, would show up in the green block.

MR. WILLIAMSON: So in the instance of an unexpected drop in cash flow, cash inflow, we would drop the expansion of Lane 3 and 4, and simply rehabilitate Lane 1 and 2.

MR. BASS: Yes. Similar if you're at your home I would imagine, and replacing your roof and wanting to add a room, and something happens to your family income, you're likely going to continue to replace the roof, but you're going to take a serious look and revisit whether or not you need to add that additional room to your house.

MR. WILLIAMSON: Okay. So blue is scheduled maintenance expenditures.

MR. BASS: Right. And mobility is, the green line is mobility, and that is mobility paid for by the gas tax, by traditional Fund Six revenues.

MR. WILLIAMSON: So this is the amount of contracts that we projected would be paid, for new lanes from tax receipts?

MR. BASS: Yes.

MR. WILLIAMSON: Okay.

MR. BASS: Then the red line just above that, is debt service for the Proposition 14 Bonds. So the payday loans we've referred to in the past few months, these are projects that we've accelerated, and now we're having to pay the debt service associated with those projects.

MR. WILLIAMSON: In the construction or the actual delivery, those projects occurred prior to '07?

MR. BASS: Right. Some of them you'll actually see in the light purple　-- I apologize, the colors aren't too distinguishable up on the chart there.

But just below the orange　--

MR. WILLIAMSON: Right here?

MR. BASS: -- yes, that light purple one. That is expenditures of Proposition 14 proceeds. So that line or block is building the projects; the red line is paying the debt service for building those projects sooner.

MR. WILLIAMSON: Okay. You skipped over the light blue line; what's that?

MR. BASS: The light blue line is the Texas Mobility Fund, proceeds from the Texas Mobility Fund, going to build mobility projects, primarily added capacity projects. That program allows for 30-year debt, and this shows us expending that in the neighborhood of $6.2 to $6.5 billion.

There is one thing to point out. Because it is a 30-year program, every time we move into a new fiscal year, there's a new year that slides into, and a new set of revenues that slide into that 30-year window.

The issue, and it will be a policy decision that we have not yet brought to the commission, once we get to that point, once we fully utilize that program, we're going to have outstanding debt at our limit.

And if you recall in this, if the Comptroller is projecting $110 million of revenue to the Mobility Fund in a particular year, we can have no more than $100 million in debt service. It requires a 110 coverage ratio.

Well, our plan is to fully utilize that program, and so eventually, we will be at that $100 million level, from Year One through 29. So even though year 30 becomes available to us, we will not have the ability to do a standard bond issue; that is a current interest bond where we're actually making interest payments each year, because we'll already be bumping our head on the ceiling.

So the only way we would have the ability to get to that money out in year 30 is what's called a capital appreciation bond, or you might think of it as a balloon payment, or a balloon loan. Where you loan the money and you make no payment until the very end.

We can certainly do that, and use that money, but it will be much more expensive debt than what we've had before. So even in 2011 and 2012, there may be some additional capacity of the Mobility Fund, that's not reflected on the sheet, but that is a broader policy issue that has not been addressed yet, because we're still living within the original capacity.

MR. HOUGHTON: Not only policy issue, James, but could be a legislative issue.

MR. BASS: Correct.

MR. HOUGHTON: As to how, if we get the legislation tweaked, to allow us to continue to move on out.

MR. BASS: Or if there are additional revenues that are brought into that program　--

MR. HOUGHTON: Right.

MR. BASS: -- such that our ceiling gets raised, then we would have the ability to make those current interest payments each of the first 29 years, and that is cheaper, less expensive debt.

MR. HOUGHTON: But right now, this what we have.

MR. BASS: Correct.

MR. WILLIAMSON: Where's the cash outflows related to repayment of the debt, on　--

MR. BASS: On the Mobility Fund?

MR. WILLIAMSON: -- the Mobility Fund.

MR. BASS: They are not on this sheet. The thinking on that is, because prior to the Texas Mobility Fund, those revenues were not being expended on transportation.

They were brought into the transportation sector, so it didn't　-- payment of that debt service did not adjust our plan out into the future.

If you contrast that with the State Highway Fund, or Proposition 14, that debt service is being paid by gas tax and vehicle registration fees and federal reimbursements, that were always a part of the plan and going into it.

So we looked at the Mobility Fund as a mechanism to build additional projects and to accelerate the delivery of those projects. Proposition 14 merely allowed us, I don't want to say, merely, because it's a positive, powerful tool, but it allowed us to deliver projects faster. But nothing additional.

MR. HOUGHTON: But that's not new money　--

MR. BASS: Correct.

MR. HOUGHTON: -- Fourteen is just an advance on that gas tax money.

MR. BASS: But since the revenue is dedicated the pay the debt service on Mobility Fund, previously were not being spent on transportation, we saw that as new money. It was a big win for the transportation sector.

MR. WILLIAMSON: Well, I don't want to pick nits with you, but you know, we've been sharing this data with leadership across the street, and I would think that at some point in the future they might want to understand the Mobility Fund unencumbered versus encumbered.

Because I had one member comment that, Your Mobility Fund is always ongoing, so your construction, the blue line shouldn't be dropping off in the Year 2011, and I had somewhat of a difficult time explaining to her that, you know, when you borrow up to the 29th year, all you've really got left is the 30th year　--

MR. BASS: Right.

MR. WILLIAMSON: -- which is not very much.

MR. BASS: Right. And it gets very expensive, to get access to that money 30 years out without making any payment between now and Year 30. You're able to do it, but it's much more expensive. And so that's why it's more of a policy decision that hasn't really been broached yet.

MR. WILLIAMSON: Okay, continue.

MR. BASS: The very thin line, just below the orange block there, is payments on pass-through tolls. Again, these are the payments back to the local government, so　-- or in some cases, private sector, that's developed and initially financed that project.

So the payments on the pass-through tolls are for projects that have already been opened, and open to traffic in prior years. Because again, this is cash flow, dollars going out the door.

MR. WILLIAMSON: So expenditures on pass-through toll projects aren't reflected here either.

MR. BASS: Correct. Because those are being　--

MR. WILLIAMSON: They're reflected 25 years out.

MR. BASS: They're reflected earlier in there, and they were covered by either the local governmental entity, or the private entity that initially funded the construction, or a large portion of the construction.

MR. WILLIAMSON: But from our standpoint in painting the picture for the Legislature, the picture for pass-through tolls is painted as a small amount growing over time. Because our obligation is to reimburse based on the traffic count.

(No response.)

MR. WILLIAMSON: Okay.

MR. BASS: Yes. Then what we had in the top block up there as orange is comprehensive development agreements, projects being developed by the private sector by bringing in private equity to develop those projects on a go forward basis. And that was the picture back in November, December, and early in the Legislative Session; early in calendar 2007.

And if you've absorbed that and don't have any additional questions, I'll flip to what that picture looks like today.

MR. WILLIAMSON: Well, just to put a point on it: Our projections in December '06 led us to plan towards a construction budget of about $11 and a half billion in 2010.

MR. BASS: Yes. Including debt service on the Prop 14, and pass-through toll payments.

MR. WILLIAMSON: And that's Fiscal Year 2010, 24 months away.

MR. BASS: Yes.

MR. WILLIAMSON: Okay.

MR. BASS: We now look at how that current picture looks. They're transitioned to the sombrero. The　-- you can see there are some changes. Some of them may not jump out at you initially.

But if we focus, starting at the bottom moving up, you see that the blue bar near the far right has increased; and I think Mr. Saenz will talk about that more following me.

Pavement scores have declined I think more rapidly than expected, planned, and therefore to maintain those current assets is going to take more money. In addition to just the paving scores, as we all know, the cost of asphalt and everything else has gone up. So in order to maintain the same number of lane miles, it's going to take more money. So that takes a chunk up.

We then see, because of that, the green bar and the cash flow go away in 2011. And again I want to just highlight that this is cash flow. So if we run out of cash flow, for mobility projects in 2011, we have to back up, into 2010 and 2009, there's no cash flow going into the future for these projects, so we cannot award those projects in 2009 or 2010, because of the cash flow.

The debt service has stayed the same. The next line there for the Mobility Fund has stayed the same. And the expenditure of Prop 14 bonds has stayed the same, as has the pass-through toll line.

You will notice though that in aggregate, the top of that pass-through toll line is lower than what it was prior to the Session. One question would be, Well, why is that?

One thing they usually point out is that, during the Legislative Session, in current law, there is a transfer to be made from the State Highway Fund to the TERP Fund, Texas Emissions Reduction Plan Fund.

And prior to the Session, that transfer was in place for 2009 and 2010. Starts out at roughly $92, $94 million a year, and then it grows. In 2010 it would have been $95, $96 million.

During the Legislative Session, that transfer was extended such that we will make that transfer in 2011, 2012, 2013, 2014, 2015. So it was extended five years, at roughly $100 million a year, that's half a billion dollars less that we'll have from a cash flow perspective to maintain the system for mobility projects or whatever.

And it's just a difference in what the plan was in November-December, as what the plan is today. There's less money that will be available to the department.

In addition to that, you know there are other increases, there are other agencies that operate out of the State Highway Fund. DPS troopers received a payroll increase. Not suggesting not well deserved. It's simply money that wasn't in the plan before, that is now going to DPS and the plan now.

MR. WILLIAMSON: How much was that?

MR. BASS: The　-- I believe, I should have brought the number with me, is what I believe. Believe for the biennium it's roughly $50 million.

And then in addition to that, there's additional initiatives managed by the Department of Public Safety associated with border security, and a significant amount of that is funded from the State Highway Fund.

And I apologize, I would hesitate to quote you a number off the top of my head, but I can certainly get it for you.

MR. WILLIAMSON: While we're hearing from Mr.　Saenz, can you produce that?

MR. BASS: Yes.

MR. WILLIAMSON: So that's TERP and DPS. Were there any other additional, unplanned-for transfers?

MR. BASS: There were some, but I would say the other ones really were not material, just in the numbers that we're talking about. Those are the two major ones that stick out.

MR. HOUGHTON: The CDAs that you are　-- that you have on top of the Sombrero there, identify　-- is that the 121 Project, is that the　--

MR. BASS: Six thirty-five　--

MR. HOUGHTON: Six thirty-five　--

MR. BASS: -- One sixty-one　--

MR. HOUGHTON: -- One sixty-one　--

MR. BASS: NTE, DFW connector.

MR. HOUGHTON: Right.

MR. BASS: Those projects. And so as we move to the top of the sombrero, the orange part　--

MR. HOUGHTON: So you lop off　-- you just lop just　-- I'm not picking on NTTA or North Texas, you lop off $3 billion, that's one project. Which is safe to say you could shave that, that would be a big piece of that sombrero?

MR. BASS: That would be a big piece of the sombrero, yes.

MR. HOUGHTON: So, one project　--

MR. BASS: Yes.

MR. HOUGHTON: -- had that impact on　-- okay.

MR. BASS: And so, but the real impact is, you see in 2010, '11, and '12 there is no orange in there. And the reason you have a slope is just because of the, it's an area-graph rather than a bar chart.

But there's nothing in 2010, '11, or '12. And that's because　-- and some of it's been confusing, surprise, surprise, the word of the day, in our discussions earlier about what the department can do or can't do after Senate Bill 792.

As you all know, there's a moratorium on projects to allow the private sector to collect and operate a toll road until September 1, 2009. There is the ability for TxDOT, now there are projects that are exempt from that moratorium, and those are the ones you see　-- 　

MR. HOUGHTON: Right.

MR. BASS: -- that are, remain in the orange portion up there. There is, in law a sunset on our ability to enter into a contract with a private sector that includes private sector financing. That sunset date is August 31, 2009.

And I may have my dates slip, but as you can tell they are just one day apart. And so some of our responses to questions are, can we do X, can we do Y, and the answer is yes, for the next 24 months.

And so, looking at 87 projects that we've been tasked to look at and visit with the local tolling authorities and see who is going to move forward with those, if we want to deliver those through the use of private equity, our ability to do that ends at the end of Fiscal Year 2009.

So we would have 24 months, and just the logistics working with other parties and being able to do that, obviously all 87 projects will not be done in the next 24 months, so there is a loss of the ability of the department to deliver those projects utilizing private equity. And that's why we see the orange disappear in the last three years of this chart, and going forward.

Now, we're able to continue　-- I apologize. We are able to continue managed-lane projects, or design and build projects that don't involve private equity, until 2011. But again, there's no private equity; there's not incoming revenue from the private sector on a design-build project.

MR. HOUGHTON: But a big part of our project was the orange, to sustain us into the future　--

MR. BASS: Yes.

MR. HOUGHTON: -- to fill in the $86 billion dollar gap.

MR. BASS: Yes.

MR. WILLIAMSON: James, on pass-through toll cash flow line, I'm curious. We have on the agenda for the day a pretty substantial pass-through proposal, or recommendation from staff. Do the payments associated with that pass-through, are they reflected in this cash flow projection?

MR. BASS: Yes. What we've done in the out years is looked at pass-through, and again the existing projects that are already under agreement, and those to come, and somewhat of a soft cap or a planning cap is to have the maximum payments　-- because if you'll recall on all these agreements, we have a maximum annual payment and a minimum annual payment.

And within that band, actual traffic will dictate how much we pay. To be conservative on cash flow, this assumes that we're going to hit the maximum on every one of those projects. Just to make sure we have the cash on hand, if and when those payments are due.

We have a soft planning cap of $250 million that the existing ones you've already authorized plus the one you're going to consider today, would fit within that planning cap that we have.

MR. WILLIAMSON: Amadeo, I'm going to want to ask you some questions about that, so be prepared, please.

MS. ANDRADE: I'd like to clarify something. You said, others to come on this pass-through. Are those　-- do you include those pending applications, that we've received?

MR. BASS: The ones that we've put in to date are the ones that have been executed and fully approved by the commission. You'll recall it's a two-step process. So the ones that have been fully approved, whether we've executed them or not, are in there. And there is enough money for the one for you to consider at today's meeting.

However, as we go forward with all of the applications, in looking at the cash flow, I can't tell you that every application we've received for pass-through tolls, that we're going to have sufficient cash flow in the out years to enter into agreements on --

MS. ANDRADE: So those are not included in there　--

MR. BASS: -- those projects.

MS. ANDRADE: -- okay. Thank you.

MR. HOLMES: Mr. Chairman, may I　--

MR. WILLIAMSON: Please.

MR. HOLMES: James, if I look at this, it appears that unless there is a change in funding mechanisms for the department, there is basically no money for new capacity at all after '11. Is that correct?

MR. BASS: The one question would be, I would just clarify the policy issue yet to be made on the Mobility Fund, and how and if to access that Year 30 revenue as it comes in　--

MR. HOLMES: Which would be　--

MR. BASS: -- but absent that　--

MR. HOLMES: -- extremely small, and a zero coupon, 30-year note is a very significant and difficult policy issue　--

MR. BASS: Right.

MR. HOLMES: -- to get your arms around.

MR. BASS: The issue to look at is, yes. That leverage factor　--

MR. HOLMES: Yes, that's true　--

MR. BASS: -- and then try and estimate what inflation is going to be, or when we might have access to that money under different circumstances. But yes　--

MR. SIMMONS: Commissioner, I just want to make sure, there will　-- we'll need to stop adding capacity projects, probably in '08. Those are payouts on projects that we're letting go.

MR. HOUGHTON: That was my question, yes --

MR. HOLMES: That's a good point, Steve. These would be expenditures.

MR. SIMMONS: Correct.

MR. HOLMES: And expenditures are delayed by two or three years, which means that no new project's approved beginning in about twelve months.

MR. WILLIAMSON: Yes. We're actually paying cash today for projects that the department executed in 2005.

MR. HOLMES: Right. And some, like　--

MR. BASS: Right. And 2004, and 2003.

MR. HOLMES: -- well, it　--

MR. HOLMES: Now, if you assume that the $5 billion general revenue bond passed on November, and you assume that those bond proceeds are made available by the Legislature, that really couldn't start until 2010 anyway, roughly.

MR. BASS: Right. And　--

MR. HOLMES: And it would be　-- it wouldn't even approach the kind of funding that we have historically utilized for new capacity. Might be a billion or so a year.

MR. BASS: And one of the things we're in a guessing game unfortunately, since there is no enabling legislation, we don't know what that enabling legislation is going to look at.

And if it will　-- if the Legislature will choose to give specific direction to the commission on how they want to see the program implemented on certain areas of the state, or certain types of projects, or　--

MR. HOUGHTON: You mean, earmarks?

MR. BASS: Anything and everything. Or, if it will just be open and broad, and say, you know, to develop transportation projects needed in the state.

MR. SIMMONS: I think the example is, the Prop 14 where they said, 20 percent had to be spent on safety projects. And there was numerous bills during the last Session that, another 20 percent had to be spent on border infrastructure, and another 20 percent for something else. So, that's what I think is, James is alluding to.

(Simultaneous discussion.)

MR. BASS: Well, one of the things that's difficult if I may, the　-- we get new money 24 months from now, and we find out 23 months from now that we're going to get it. You know, go start building projects, with it is the expectation of many people.

Well, the right of way likely is not acquired, and the design plans and environmental process has not been completed. Because the option is, if we said, Hey, yes we have $5 billion and we're going to go award $5 billion on projects you know, next month, and get that construction started.

That would mean that we, within this tight, revenue cash flow, we had spent and acquired right of way, environmental process and engineering plans, on projects that we weren't expecting to let for years and years.

When we could have freed up that right of way, engineering money, and environmental money, to try and gain a balance between the whole development cycle for our projects. So yes, once we have the all-go sign, I would imagine it's going to take some time to do all of the development work, to get to actual construction.

And that's what is difficult from a planning perspective, and that's why the department deals with ten, eleven year plans, to make sure that all of those pieces fit together efficiently.

MR. HOLMES: The point I was working towards was that while that $5 billion potential bond money availability would be very helpful, it doesn't really come close to addressing the full needs of the department.

MR. BASS: Correct.

MR. HOLMES: Of the state.

MR. HOUGHTON: Well, you touched on it, Mr. Chairman I guess this may be for a little later. But you touched on the issue of new construction, stopping in or greatly reducing in this year; fiscal year '08. Is that an accurate statement.

MR. BASS: Yes.

MR. HOUGHTON: So in other words, we would not be adding new capacity to the system beginning this year. Could, could.

MR. BASS: Yes. I think this year there will be some, and Amadeo I think will speak to that in more detail than I'm prepared to right now. I think there will be some in 2008, and perhaps a little in '09. But yes, you're definitely seeing a decline　--

MR. HOUGHTON: And what you　--

MR. BASS: -- and this is something we've talked about for　--

MR. HOUGHTON: -- so what you're talking about is, sealcoats and overlays　--

MR. BASS: Yes.

MR. HOUGHTON: -- to preserve the system, the integrity of the system.

MR. BASS: And we, as I was mentioning, we've talked about this for years. We talked about the bubble, if you will　--

MR. HOUGHTON: Right.

MR. BASS: -- the Mobility Fund would provide to us, of influx of cash flow. And that bubble was increased by Proposition 14 and the $3 billion, we had the　-- originally we had the ability to access through that.

And so this is going to create a bubble, and it's　-- there's an end to every bubble, and we're on the down slope.

Now, another thing in addition to this $5 billion Constitutional Amendment, the Legislature increased the capacity of the Proposition 14 program from $3 billion to $6 billion. But when you look at the green and red bars on this chart, what we've been able to do with the $3 billion that we've moving forward on is to accelerate mobility projects, and then take the debt service away from mobility projects in the future.

And the way I think of it is, Well, in Year 18 you're going to be making a payment. Do you want to be paying the bondholders and the investors in Year 18 for a project that's been open for 18 years, or do you want to be paying a contractor who is working on that project in Year 18.

Well, out of that $3 billion, we're paying the investors. If we were to tap into that second $3 billion layer of the program, the debt service would start coming out of the maintenance funds, given our current cash flow projections.

And so again, that is a large policy issue　--

MR. HOUGHTON: Yes.

MR. BASS: -- do you, does the commission, think that that is a prudent course of action to take, to build new projects today, and reduce future maintenance and future flexibility going forward.

MR. WILLIAMSON: We're not going to do that. Questions of James?

(No response.)

MR. WILLIAMSON: James, make yourself available for a moment, if you would. Amadeo?

MR. BASS: If I may, I'm going to run upstairs real quick to get the information to you.

MR. WILLIAMSON: I want to know　-- I want an answer, a crystal-clear answer to the following question: How much additional Highway Fund Six revenue was transferred in the current appropriations bill compared to the previous appropriations bill.

MR. BASS: Okay.

MR. SAENZ: Good morning, Commissioners, Mr. Simmons, I was going to call you Mr. Behrens for a little bit.

For the record, Amadeo Saenz, Assistant Executive Director for Engineering Operations. And just to kind of continue with the discussion item that the　-- Coby and James have expressed, and a lot of the things that they've covered or are going to be repeated in my presentation.

And of course we have, our goals are to improve mobility, and of course as we say, reduce congestion, but improve mobility, improve safety, improve air quality, we want to support economic opportunity and we want to also make sure that we maintain our assets.

To meet our goal will require billions of dollars more than what our current tax money brings us. You will recall that the Texas Metropolitan Mobility Plan estimated that $86 billion was needed to address what was needed to reduce congestion by 2025.

Maintenance and rehab, and we've been talking for the last four months, we say that to meet our goal by 2012, we need to spend an additional $6 billion to get to that goal of 90 percent of our roads to be in good or better condition.

Some of the impacts that we've been discussing over the last few months: We discussed inflation and the Highway Cost Index; if you recall, when we looked at it between 2002 and 2006 we had an increase of 58 percent. In 2002 to 2007, it had gone up 73 percent.

That was an estimated number that I gave you in May; we have gone through the Fiscal Year 2007 and it actually turned out to be 62 percent. So we made a little headway with respect to the cost, between '06 and '07, or between '02 and '07 but it's still 62 percent more. It cost us 62 percent more to build a project, the same project in 2007 that it cost us in 2002.

We discussed the rescissions a little while ago, we　-- have given up $666 million. We expect that another $259 million that happened this year, and of course into SAFETEA-LU is an additional $600 million that will hit at the end of SAFETEA-LU in 2009.

Additionally, AASHTO has projected that the Highway Trust Fund is going to go into the negative in 2009. Original estimates were around $700 million, but now, their estimate is $4.3 billion. This could have an impact of $16 billion in projects that could be affected, because just like James was saying, a project　-- projects are let, and you pay them over time.

To be able to make up $4.3 billion in one year, that could affect about four times that much. And that's what AASHTO has been talking about.

In 2009 we also have some diversions from Fund Six, $1.57 billion as part of our appropriations bill. That's a 15 percent increase of what was in our appropriations bill for '06 and '07. And of course, 792 restricted the tools that we had, and the access to private money.

Planning, you know, versus cash flow. Our districts, as we've talked about, we plan over a longer horizon; we plan over a ten-year horizon, we also have our long-range plans that are 25 years. But over that ten-year period, we look at what we have in state and federal dollars, what we project in state and federal dollars as money coming in, and we project what our projected lettings will be, or projected programming, which eventually leads to lettings, will be over the years.

And based on what we had when we created the Fiscal Year 2008 that was done as part of the 2005 UTP, we projected about $5.1 billion that could be let in 2008.

Now, when we look at impacts to cash flow, when we look at cash flow and working with James, and we look at our cash flow based on the things that have changed that have impacted our influx of money, we can only let somewhere between $3.6 and $4.2 billion.

So we need to take some action. This means that we got to reduce our letting for 2008 from about $900 million to one and a half billion dollars.

MR. WILLIAMSON: Okay, stop.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: I don't want to be confused, and I sure don't want anybody that's watching this to be confused. That $5.1 billion planned lettings includes maintenance, rehabilitation, preventive maintenance　--

MR. SAENZ: Yes, yes　--

MR. WILLIAMSON: -- new capacity, that's every contract of any kind having to do with the maintenance　--

MR. SAENZ: Yes.

MR. WILLIAMSON: -- or expansion of our system. MR. SAENZ: Part of our planning process, we have twelve categories, we have projects in twelve categories. The $5.1 billion is the summation of what we projected to be able to let in all twelve categories.

MR. WILLIAMSON: And when you planned $5.1 billion five years ago, and you properly inflated it, it might have been $4 billion and you've been inflating it.

MR. SAENZ: Normally, we have been using five years of what we were using, based on past history and an inflation rate of about 4 percent per year.

MR. WILLIAMSON: So the $5.1 billion is now in actual 2008 dollars; I mean, that's what you think those contracts are going to cost.

MR. SAENZ: Five point one billion is what we estimate, in　-- for 2008, what those projects would cost us.

MR. WILLIAMSON: And so when Finance tells you, as a result of the things itemized, you don't have $5.1 billion to pay out　--

MR. SAENZ: I have no choice but to go in there and work with the districts -- in fact we've already implemented that, and ask the districts to reduce projects that we can let in Fiscal Year 2008.

MR. WILLIAMSON: And are those projects automatically new capacity, or are they maintenance?

MR. SAENZ: I　-- when I went to the districts, and recognizing the additional conversations that we had been having over the last four months with respect to our condition of our payments, and the deterioration that we were seeing because of the conditions, the weather conditions that we've seen over the year, I had asked the districts to look at mobility projects, to delay mobility projects in the amount of $965 million.

For Fiscal Year 2008, they were to work with the Metropolitan Planning Organizations and identify those projects that were originally scheduled that now would have to be delayed.

There may be more delays. As I mentioned, the　-- I've got a range between $3.6 and $4.1　--

MR. HOUGHTON: Right. Amadeo, dice up the $3.6 for me; if our cash flow is $3.6, what is new mobility in there, and what is maintenance.

MR. SAENZ: Okay. If our cash flow is $3.6, we probably have zero dollars in mobility left, from the mobility categories that we can reduce.

There are some categories that we can't touch, for example enhancements, CMAQ, those are all considered mobility categories, and those projects I cannot reduce. Those are needed to meet the air quality requirements in the non-attainment areas.

MR. HOUGHTON: And what number would that be if you added those up?

MR. SAENZ: If I add　--

MR. HOUGHTON: Of the $3.6, how much will go to new mobility?

MR. SAENZ: Of the $3.6 we would have zero new mobility, I don't have the number of the categories that　--

MR. HOUGHTON: Yes.

MR. SAENZ: -- would have to remain. But it would be, I would think it would be somewhere between $200 to $300 million.

MR. HOUGHTON: For the entire state?

MR. SAENZ: Yes, sir. Those are mandated categories.

MR. HOUGHTON: Yes, for mandated categories.

MR. SAENZ: So as I mentioned, we'd instructed the districts and the MPOs to delay $965 million from their 2008 lettings, so that we can come back into balancing.

That still only gets me to the $4.2 billion. We're going to continue to look at the cash flow on almost on a daily basis, on a monthly basis, to see if we need to get more projects delayed.

MR. WILLIAMSON: I want to use the right verbs.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: When you say more projects delayed, what you really mean is, more projects eliminated.

MR. SAENZ: Well, in this case it would be up to the region to determine if they want to eliminate the　-- it will be eliminated from the 2008 letting schedule; but if it's a high priority, it may slip into 2009 if they so choose.

MR. WILLIAMSON: Well, that's where I was headed with my question.

MR. SAENZ: That's　-- why I say, delayed.

MR. WILLIAMSON: We --

MR. HOUGHTON: But with the notion that there's going to be less cash to do this.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: So they could delay it, it could be delayed for two or three years.

MR. SAENZ: Well, it's　-- just basically a domino effect.

MR. HOUGHTON: Right.

MR. SAENZ: If we don't have enough cash in 2008, we delay　-- we take projects and reduce the number of projects in 2008, if they want to move them into 2009, and if we have the cash, then　-- we were already balanced, you have to push projects from '09 to '10, and from '10 to '11, and '11 to '12.

But at some point, if we run out of cash, there will be projects eliminated. But it would be up to the region, up to the MPO to determine, once we come up with a final number, as to what projects will be delayed, or how those projects will be reshuffled or rescheduled, and what projects will be eliminated.

MR. WILLIAMSON: So we don't presume to change the path we've been going down the last six years, of extending authority to regional planners, and asking local leaders to execute; we're going to stay with that?

MR. SAENZ: That stays with that. What we're going to do is, we're going to give them the best projections that we can to be able to stay within the cash flow that　--

MR. WILLIAMSON: Okay.

MR. SAENZ: So as I mentioned, projects are pushed out, in 2008 they still　-- we still want to be able to continue, because those projects, we have been working on and have almost complete. We want to complete the planning, the design, buying the right of way for those projects, should something change and additional money comes in, those projects will be ready to go.

So I would call　-- those projects are projects that I would want to continue development, but we're so close, put them in a shelf, and those projects can then be ready to go as soon as possible, unless the MPO decides that, Well, maybe this is not as important a project as I wanted to do, and I want to delay that.

But like I mentioned, we will have a ripple effect that will mean changes to 2009 and 2010 and even points beyond. Okay? Do we want to delay mobility? We want to look at possibly delaying, why do we delay mobility before maintenance?

We got to make sure we maintain what we have. We're not meeting our maintenance goals now. We don't build more before we can maintain what we already have. So that's why we decided to delay projects in Categories Two, Three and Four before we decided to do any delay projects in maintaining the system that we currently have. And that's our recommendation.

Because as we delay mobility projects today, we still need to be continuing, plan for the future; we need to continue to plan to make sure that we're addressing our maintenance and rehab needs, that　-- the discussion over the last few months. You know, so there needs to be something to look at, to determine what our funding levels need to be, for rehabilitation and maintenance, and then what changes would have to happen to the mobility funding, to be able to get us to where we want to be.

So if you recall, the last four months in May, we presented the issue of where we were at with our, meeting our payment goals. If you recall, we were　-- our goal is to be 90 percent of our roads in good or better condition, that means that they have a pavement score of at least 70, and we were somewhere in the mid-80s; we started at 82, 83, in 2002.

And we had gone up to about 86, and then we started dropping. We dropped down to 85, 83, and then our districts, looking at trying to make sure that they were maintaining their facilities, started to expend more money or advance some of their maintenance money into earlier years, so that they could keep their pavement scores up.

So in 2006, if you remember we spent about $1.8 billion in preventive maintenance and rehabilitation, and that kept our pavement scores pretty flat. So it kept us, we know that our funding level for 2006 of about $1.8 billion would keep our pavement scores where we were at the time, around 86, 86 and a half.

In June, we discussed kind of the statewide issue, and some strategies that we were looking at, to try to come up with a mechanism to address some of our bad pavements and most of our bad pavements are along the coastal areas and our big metropolitan areas.

Our rural areas, and especially in West Texas, have much better pavement base conditions, so our payments are in much better conditions, in fact we have several, about eight districts that　-- or nine districts that are already exceeding their pavement goal scores of 90, and we're only in 2007.

Kind of what we've concluded so far is that maintenance makes sense and saves us money in the long run, if we don't maintain our roads by putting the sealcoats and the overlays, we then have to rehabilitate those roads, and it costs us a lot more than what a sealcoat and overlay would have cost us.

We're not meeting our payment goals. We would need at least $3.4 billion more between now and 2012 to be able to stay even. And we would need $6.4 million more to　-- the whole state could meet the goal. Inflation has caused us to spend future funds, just to stay even.

And I got, this chart just shows you what our highway cost index has been. As I mentioned earlier, when we presented to you in May, we had estimated based on April figures that we would be at 73 percent increase over 2002. Actually it turned out to be 62 percent.

So what we're recommending to address our maintenance situation is to in a sense, in 2008 and 2009, because our districts have already expended those monies in prior years, is that we just keep the program as it is, and just let them spend their normal program.

In 2010, we were proposing that　-- we re-prioritize $225 million that we had; we had $1.3 billion scheduled, or $325, we re-prioritize $225 million to address our highest payment needs across the state　-- and I'm sorry, in the districts that have the lowest pavement scores. Districts that do not meet the current goal.

In 2011 and 2012, we want to make sure that we keep that funding level that we have put in place to move us forward, across the state for all districts but we also need to put additional money into preventive maintenance and rehabilitation, to address additional needs that we have not covered.

So kind of what we are proposing is that we take Mobility Categories Two, Three and Four, in 2011 and 2012, and any non-committed Category 12 money, which it would impact our pass-through tolling program, Mr.　Chairman, in 2011 and 2012 and move that money into the maintenance and rehabilitation category.

And as I mentioned, in 2010, we would just go out there and re-prioritize $225 million of what we already have planned, to try to address very quickly some of the needs that we have across the state.

MR. UNDERWOOD: Amadeo　--

MR. SAENZ: Yes?

MR. UNDERWOOD: -- let me interrupt you. When you say, re-prioritize, basically you're going to take money from one district and move it to another.

MR. SAENZ: Yes, sir. I'm going to take money, I'm proposing to take money from districts that have already met their goal, $225 million from the districts that have already met their goal, and then put them across the state into districts that still need a ways to meet their goal. They need to be able to make some improvements to meet their goal.

MR. WILLIAMSON: I don't want to focus on the districts that lose right now, because I think that would be inflammatory, but tell me which, specifically which districts need this additional cash flow.

MR. SAENZ: Okay. Let me　--

MR. WILLIAMSON: Unless you were going to do that anyway.

MR. SAENZ: I've got it on a slide right here. The districts in blue are the districts that have already met their goal of 90 percent good or better. The districts in red are the districts that are below the goal of 90 percent good or better.

And if you recall in earlier presentations, most of the districts that had the lowest scores were the districts along the Coast, as well as the metropolitan districts.

The formula that we want to use to allocate this money that we're moving over will address the pavement, the current pavement scores as well as the number of lane miles, as well as the additional　-- the current pavement scores, the number of lane miles and the amount of traffic.

So we will address the districts that have the lowest pavements scores, the highest traffic, and the largest number of lane miles, and in combination with more money for them to address their pavement needs that they are falling behind under.

MR. HOUGHTON: Well, I think you have a slide in here that shows that Dallas is at the bottom of the heap as far as their average pavement scores.

MR. SAENZ: Yes, sir. I　--

MR. HOUGHTON: I mean, it kind of illustrates the　--

MR. SAENZ: Right. This is really --

MR. HOUGHTON: -- big picture.

MR. SAENZ: -- when we look at it, these are the districts that are below the three-year average; their average is 86.93　--

MR. HOUGHTON: Followed by Houston.

MR. SAENZ: Right. And the districts that have the lowest pavement scores, which would be Houston and Dallas, are at 14 percent, would be the ones, the districts that we would target to more money, more of this money that we're proposing to relocate, or to reapportion to them, to put together a plan on how we address pavements.

MR. HOUGHTON: So the issue is, at the bottom far right you're taking $1 billion out of mobility and putting it into　--

MR. SAENZ: I'm taking $1.09 billion, $225 million is in maintenance that I'm re-allocating, but the rest of it is from mobilities in 2011 and '12, to address pavements.

MR. HOUGHTON: Right.

MR. SAENZ: I'll go back a little bit, just to make sure that I cover　-- as I mentioned, we're going to distribute the additional maintenance money and rehabilitation money, and the total of $1.9 billion, to the districts that are below the 90 percent goal.

Then we're going to base it on a formula that basically takes into account what condition they're　-- what the current condition of the pavements is, the number of lane miles that they have, as well as the amount of traffic. Those districts that receive this supplement, it's going to be conditioned that we put a plan and we show how this money will be spent, to ensure that we do get it used for addressing those roads that need it the most.

At the end of the　-- each year, then we will go back and require the districts to give us a report, and we can go out there and do some testing with our pavement testing equipment to make sure that we are making some headway.

As I mentioned, these were the districts that are below, and the red districts will be distributed the money based on the schedule that we have here. This is still preliminary, the　-- based on, we have some rough numbers, we will tweak the numbers a little bit to get more digits past the decimal point so that we make sure that we do that. But this was a rough estimate of, how would we distribute the $1.09 billion.

Kind of just in summary, we're not going to meet our goals with the funding, not even with this addition. We might say we're taking from Peter to give to Paul, we're taking from the districts that already have met their goal, and trying to apply it to districts that still need some help.

But we, in the long run we will lose less ground in that we're trying to get those areas that scores are worse, where the conditions, where the pavement condition is getting me from a point that I need more than it　-- that I need more than a sealcoat and an overlay, and I'm going to go into a rehab, I'm trying to salvage that so that I can use sealcoats and overlays to bring my pavement scores up, and bring the condition of the roads up to something that's good.

This decision will result in delay and cancellation of mobility projects. We're going to implement it as part of the 2008 SMP-SVP our unified transportation program.

This chart here basically shows in a nutshell, as I mentioned, in 2010 we're taking, we　-- our funding level that we originally had for 2010 that we gave to the districts last year, had $1.325 billion for preservation, maintenance and rehabilitation.

We are taking $225 million from those allocations and redistributing them to the other districts, and then in 2011 and 2012, because we want to make sure we do not lose too much ground in the districts that we took money from the year before, we're letting our allocations remain at $1.325, and then inflating them in 2012 to almost $1.4.

And, but then we're having to take from mobility $425 million and $440 million to do additional maintenance and rehab in those districts. The total equals $1.09 of additional maintenance money that we will address at key areas of the state. I want to　--

MR. HOLMES: Amadeo, can I ask it's kind of a baseline question.

MR. SAENZ: Yes, sir.

MR. HOLMES: Moving a billion, $900 million into maintenance, is that designed to keep the paving scores where they are, or do you think that that actually will move those up, close to or　--

MR. SAENZ: I think　--

MR. HOLMES: -- at 90, to 90 percent.

MR. SAENZ: -- I would at best hope I could keep my pavement scores as they are. If you recall, in 2006 and 2007, we spent about $1.6 and $1.8 billion, and we kept our pavement scores pretty flat.

What will happen, by taking and targeting the districts that have low pavement scores, putting more money into theirs, we're going to get a raise in those pavement scores for those districts. So our average may increase, but the money that we took away from the districts that were above may lose a little bit of ground.

So I would think that at best we could stay even to where we were at in 2005 and 2006.

MR. HOLMES: In terms of the average　--

MR. SAENZ: In terms of the average.

MR. HOLMES: -- overall average.

MR. SAENZ: Right. But we will have　--

MR. HOLMES: Good ones coming down, and the　--

MR. SAENZ: -- bad ones coming up.

MR. HOLMES: -- bad ones coming up.

MR. SAENZ: We'll have everybody bunched up much closer.

MR. WILLIAMSON: I asked James about the pass-through toll, specifically the ones in front of us today. He indicated that the cash flow for the El Paso pass-through toll project was accounted for in our future cash flows.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: What number or what level of pass-through tolls do we have pending that will not be accounted for?

MR. SAENZ: I believe I've got, or we have, about six applications that, well we have at least one application that has gone through the preliminary approval, which is the city of Lubbock.

And then we have applications that have been submitted at least three or four, that are right now on hold; we're looking at those applications to find out if those projects, how those projects meet our goals, and to see if we want to be able to carry them forward.

MR. WILLIAMSON: So if we don't　--

MR. SAENZ: Finalizing and determining how much available money I have in Category 12, which is the category that we have been using to fund those projects, will depend on which of those projects will move forward.

MR. WILLIAMSON: So if we don't approve the El　Paso project today, what would happen? Would it go to the back of the line?

MR. SAENZ: The El Paso project was　-- has already been approved. The　El Paso　-- what we have, we do not have a pass-through toll project today. What we have is a toll equity request from the El Paso RMA, for doing studies. We don't have a pass-through toll project on the agenda today.

(Discussion off the record.)

MR. WILLIAMSON: But if we don't authorize the toll equity, would they be able to proceed?

MR. SAENZ: Yes, sir. The　-- that project was approved, and the　-- toll equity request that we have received from the El Paso RMA is because of the language in 792, the requirement to do market valuation for toll projects.

There are several projects, I believe six projects in El Paso, that fall under the market valuation requirements of 792. The RMA, we have to negotiate with the RMA with respect to determining the market valuation　--

MR. WILLIAMSON: Uh-huh.

MR. SAENZ: -- for those projects. They request a toll equity, we're doing a toll equity request for them, so that they can hire staff to help them with the negotiations that need to take place as part of 792.

MR. WILLIAMSON: Okay.

MR. HOUGHTON: Mr. Chairman　--

Are you finished with your presentation?

MR. SAENZ: Yes, sir. This is the last page. As I mentioned, we want　-- what we're　-- the actions that we're taking or we're presenting to you today is, we want to plan for maintenance first; we're going to have to adjust for the impacts, it's going to cost them delay of projects, and those are tough decisions that we have to make.

We're going to continue and work with the districts and the MPO to give them the number and let them make the decisions as to what projects need to be delayed or in essence eliminated.

And then of course we need additional cash to move forward. It's going to be important as　-- during the interim when this committee that was set up by 792 that's going to look at our public-private partnership model, that we get the, or get the authority or continue to have the authority to be able to bring in private cash, so that we can develop projects in the future and we can have some more of the orange.

MR. HOUGHTON: Because of the severity of the situation, and it impacts '08 on mobility projects, they're reporting back to us how fast, on which projects get shelved or pushed out? We're going to give them what?

MR. SAENZ: The, we　--

MR. HOUGHTON: Thirty days?

MR. SAENZ: -- had already requested that information from the districts, so we already know what the $965 million project list is.

MR. HOUGHTON: Yes, but you have more than that. If you got　--

MR. SAENZ: Right.

MR. HOUGHTON: -- three, point　-- you got another $600 million　--

MR. SAENZ: I -- we have to go back and we'll go back and say, Okay, I have another $600 million　--

MR. HOUGHTON: Right.

MR. SAENZ: -- we will go back to them and ask them within a week, week and a half, to give us what that project list is.

MR. HOUGHTON: All right. My　--

Mr. Chairman, we've talked　--

If that's your conclusion of the presentation, this looks like we're shuffling the deck a lot here, moving money from like you said, Peter to pay Paul.

But I don't think we've taken the harder steps of looking at how we cut expenses internally. If we're cutting these projects, delaying these projects but we're going to maintain the same level of staffing, the same level of consultants, I got to believe we got to take some other steps　--

MR. SAENZ: Yes, sir.

MR. HOUGHTON: -- whether it's, and I don't mean to be specific, but pretty tough issues, hiring freeze, having one district help the other, whatever that may be.

MR. SAENZ: I would think that the first thing that we would want to do would be that we'd look at, once we determined what the final funding levels are, and what the final list of projects is, is we determine how we can save some money that actually is an outlay from the department.

MR. HOUGHTON: Can we, Amadeo do we have the staff available to help us, at these kind of levels of planning, construction, do we need as many outside consultants as we have　--

MR. SAENZ: No, sir.

MR. HOUGHTON: -- we do not?

MR. SAENZ: If you recall, based on the FTE limits that　-- allocations that we've had and have remained the same for many, many years, a year and a half ago, two years ago when we were discussing consultant contracts, we have the capacity to be able to design at least two, two and a half billion dollars' worth of design work, in-house.

MR. HOUGHTON: And that is　--

MR. SAENZ: So if our letting goes up to $3 billion, then we can bring in consultants to assist us with just the delta, the difference.

MR. HOUGHTON: Okay.

MR. SAENZ: So that would be one way. The, by being able to save some of this consultant contract money, and also if projects are going to be delayed for an extended period of time, and we'll have to have a balance, we may not have to purchase the right of way at this time, we should be able to result in some additional dollars that we could put into construction projects.

Again, it's going to wind up being a balance. We want to make sure that if we need　-- if the project is coming soon or will continue, we want to make sure that we continue and buy that right of way, and have it ready.

But if the project is going to be delayed for an extended period of time, we might be able to delay the right-of-way functions. And if it's going to be delayed for an extended period of time, we might be able to delay the design requirements on that project, so that we can save that money to put on other construction projects that we want to do now.

MR. HOUGHTON: And　--

MR. SAENZ: So we can come up with a　-- once we identify the total cost of　-- the total dollars available to us, come up with a strategy and a plan for you to show you how we can streamline the operations.

MR. HOUGHTON: Well, I think if we're going to do these types of things to the state of Texas, I think we have to demonstrate to the public that we have to take those measures internally.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: At the same time.

MR. SAENZ: Yes, sir. We can also look at other measures and you know, expenditures with respect to capital equipment, expenditures with respect to　-- I was thinking capital, my mind went blank for a second.

MR. SIMMONS: Or capital budget, and　--

MR. SAENZ: Yes. Capital budget, to see how we can realize some savings there that we can put into our construction.

MR. SIMMONS: Mr. Houghton, this will, we already have been talking about that, and it's something we had to go through in 2005. So we know how to do it.

MR. HOUGHTON: Well, again I think if we're going to have this kind of impact on the citizens of the state of Texas, where mobility projects go to nothing, we've got to demonstrate that we're willing to pay the price too, that we have to do some things internally.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Further questions of Amadeo?

(No response.)

MR. WILLIAMSON: Mr. Bass, you got the answer to my question?

Thank you, Amadeo.

MR. WILLIAMSON: Now, Mr. Saenz put a card up that said, transfer has increased 15 percent to $1.57 billion.

MR. BASS: Uh-huh.

MR. WILLIAMSON: Is that what you discovered?

MR. BASS: Yes.

MR. WILLIAMSON: Where did the additional transfers occur?

MR. BASS: This lists all transfers and sometimes a transfer is in the eye of the beholder. So some may believe it's a transfer and some may not.

This lists most of the transfers. You can see some of them, there was no increase from the previous biennium, but they're still listed on here.

If you look at just the increases, the one of significance of course is the Department of Public Safety, the one there with $260 million. I do want to point out, however, that in an effort to provide additional detail, if you look down there at the bottom, there is a negative $47 million figure that is salary increase for Schedule C.

That is the trooper increase, salary increase that goes to DPS. They received an increase in 2006-2007; that was an additional $69 million for that biennium. That then rolled forward and became part of the base for DPS and the $1.245 billion [sic] you see in '08, '09, and then in addition, they received an additional salary increase this biennium.

I misspoke earlier; that salary increase for this biennium is roughly $22 million. So if we net all of that together, DPS went up $200 to $210 million.

I will point out for anyone who may be listening and interested in checking our numbers, this historically happens, someone will want to go and match the figures shown for the Department of Public Safety, they will open up the General Appropriations Act, they'll look at DPS and they will stop at that point.

The employees for DPS receive health insurance, retirement benefits, just as TxDOT employees do. Those expenditures on behalf of DPS employees do not show up in DPS's budget. So you have to look elsewhere in the Appropriations Act in order to get the full impact of DPS.

So you have to look at DPS itself, look at just after their recapitulation. In Article 5 you'll see the employee benefits paid out of Fund Six, since it's in that article we know it's for DPS; and then you look at Article 9 provisions where you'll find the salary increases for DPS.

And we believe, in order to get the full impact, you need to look at all of those figures.

MR. WILLIAMSON: Well, are we looking at the full impact?

MR. BASS: Yes, we are. I was merely going through those steps for others who may want to verify our figures.

MR. WILLIAMSON: So the largest increases are in DPS and medical transportation? I don't want to　--

MR. BASS: Yes. The Medicaid Match figure. There are other ones that have maintained as well, that are somewhat interesting. As the CFO of TxDOT, there's a line there for the Auto Theft Prevention, it shows an increase of just over $2 million. I point　-- highlight that one because all of us, when we get our auto insurance policy, every year we pay a dollar associated with that, and that's remitted to the state and goes into the General Revenue Fund, for the purpose of funding the activities of the Auto Theft Prevention Authority. That　--

MR. WILLIAMSON: Where's the TERP transfer you talked about earlier?

MR. BASS: TERP transfer is actually in statute; it's not in the budget itself. And so　-- it's a statutory transfer, so it doesn't show up in the Appropriations Act. So　--

MR. WILLIAMSON: What's the annual TERP transfer?

MR. BASS: It averages around $100 million a year.

MR. WILLIAMSON: What was it in Fiscal Year '07?

MR. BASS: Zero.

MR. SIMMONS: James, it doesn't begin until 2009, in the statute.

MR. WILLIAMSON: Right.

MR. SIMMONS: The TERP was already figured into the '08-'09 budget.

MR. BASS: Correct. Because in statute, before this last session, it said there would be a transfer in 2009, and 2010.

MR. WILLIAMSON: So the TERP transfer from a budgeting perspective doesn't hit us until '11 and '12.

MR. SIMMONS: And '13.

MR. BASS: Correct　--

MR. WILLIAMSON: -- '13, '14.

MR. BASS: -- because of the actions of the 80th; it hit us in '09 and '10, from actions of an earlier legislature.

MR. WILLIAMSON: Further questions of Mr. Bass?

VOICE: [indiscernible]

MR. BASS: Yes.

MR. WILLIAMSON: Mr. Chase, to close. I want to see if I understand this correctly. You told us about our efforts at the federal level to achieve flexibility, and to begin to focus positive energy on the next re-authorization bill.

You've told us that the federal government, and I'm sure there's good reasons for them doing what they do; we make no criticism of that here, will in the next few days pass a Housing and Urban Development bill that will reduce our rescission and other, $200 million and change.

You've warned us for the last four months that we've got a rescission bill coming at the end of 2009, beginning of 2009, of another $600 million. SO there's about a billion, six in future federal government reimbursements against the state gas tax that are not going to happen.

Then I heard Mr. Bass and Mr. Saenz discuss our final analysis of what we've been talking about for four months, of the impacts of inflation, the maintenance budget, Senate Bill 792, on our future cash flows.

Is there anything else about the discussion on financing that we need to be aware of before we begin to tell operational staff the changes that we want to make?

MR. CHASE: The only thing, and it's unpredictable, is, there is another appropriation, federal appropriation cycle that will be tucked in there. And if the past　-- the recent past is any indication, there will be another rescission that is yet to be determined.

That's my only additional, standing at the top of the tower, studying the top of the mountain and looking. That's the only unpredictable one that I can see at the moment.

MR. WILLIAMSON: Any other questions of Mr.　Chase?

MS. ANDRADE: I only have one, Coby. Has the committee been set up that was out of the Senate Bill 792 to review the private sector? Involve the private sector?

MR. CHASE: No, ma'am. It hasn't　-- the members of that haven't been announced yet. No, ma'am.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Okay. Well, unless we wish to give Mr. Saenz instruction at this time, a discussion item does not require us to take action. In fact we're not authorized to take certain types of action. We can dialogue with each other about how we wish administration to approach this problem.

MR. HOUGHTON: Well, I think it's laid out very succinctly here, and again it's a shuffling of monies, that we have available to us, Mr. Chairman, but I'll reiterate my points that, as we ask the citizens of this state to you know, buck up and be prepared, I think we internally need to look at our own house and see what we need to be doing. Stem to stern and no sacred cows.

MR. HOLMES: Mr. Chairman, we've been talking about this problem for a few months now. And while we see it and understand it, I'm not sure that the public does. And I think we need to make sure that it is well communicated to the House and Senate and to our MPOs and the RMAs, and the counties that will be affected.

Because people need to understand that within a very short time period there will be no new capacity added.

MR. WILLIAMSON: That's good advice.

Is there anything you want to add?

MR. UNDERWOOD: No. I agree with the　-- I agree with my colleague.

MS. ANDRADE: Well, I agree with what's been said. It sounds like we've got a pretty gloomy picture in front of us, and we've got a bumpy road ahead. You know, we　-- the public reacts to such things as what we've faced in San Antonio recently, but this is serious.

The rest is speculation, but what we're facing before us is serious, and I think when I first came on the commission it was so exciting to go out into the communities and educate them about all of the new tools they had to move　-- keep Texas moving forward, and all of a sudden we've been kind of set back, and we're going to have to really re-think this and like Ted said, also look at our internal office.

MR. CHASE: Yes. Certainly many things have changed in both the federal level and the state level.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: What I'd like, Mr. Simmons, is first, I'd like a communications plan, a draft plan　-- on the commissioners within a week. And during that time period, let's be sure we clearly communicate to the MPOs and the county judges where no MPOs are organized, what we face. That communication I would assume would go through our district engineers.

The communications plan, Mr. Chase should have as a key component direct face to face contact with each House and Senate member.

Particularly with regard to the information distilled, that James laid out and Amadeo laid out, on how our cash flow looked to us, really at the end of the 2005 Session when we fully absorbed all of the tools the Legislature laid on the table, and how that cash flow looks now, having fully absorbed the impact of the legislation the Legislature laid on the table at the end of 2007.

I know I've talk to a lot of members every day, and I think our colleagues do, and I'm convinced most members really truly don't understand the long-term impact of tapping on the brakes, and I think we need to be able to look them in the eye and show them that.

MR. CHASE: May I take the definition of House and Senate members to include Congress as well?

MR. WILLIAMSON: Well, I know you're concerned about that, Coby and I've tried desperately not to interfere in the staff decisions that occur in this agency. I will tell you, I am far less concerned about Congress than I am about the State Legislature, because I think the State Legislature has more flexibility to act, to cure this problem, and they have more flexibility to act to not cure the problem.

And you know, as hard as it is to imagine, I just don't think the federal government has near as much impact on the citizens' lives of the state, as the Legislature does.

So I know you need to indicate, educate the Congress, we don't want to communicate that we're blaming anyone for this problem, I　-- you know, the last three years has had a　-- more than its fair share of poison and misinformation. We don't want to be involved in any of that.

We just want to be straightforward with people. These are the consequences of behavior, these are the consequences of action, logic and civility command that we calmly talk through how we're going to deal with this.

And I want a communications plan that reflects that.

Members, we have a member of the Legislature wishing to be heard, a delegation that needs to catch a plane, and another member of the Legislature on a different matter that wishes to be heard.

We have however been at it two hours and 13 minutes, so what I'd like to do is take just a real quick break, and then with your permission, bring the El Paso matter forward, which will let the El Paso visitors get out a little quicker, and let one House member speak, and then we'll bring the other matter forward, to tend to the other House member if that's okay.

We're going to stand at ease for about seven minutes and 16 seconds.

(Whereupon, at 11:14 a.m., a recess was taken, to reconvene at 11:25 a.m.)

MR. WILLIAMSON: Mr. Simmons, let's take up the El Paso matter, please.

MR. SIMMONS: Yes, sir, Mr. Chairman. I'd like to call Phil Russell up, talk with us　-- to present Item 7.

MR. RUSSELL: Good morning, Commissioners, Steve and Roger. For the record, I'm Phillip Russell and I'm the director of the Turnpike Division. As Mr. Simmons said, the agenda item before you relates to a total equity request we received from the Camino Real RMA in El Paso, here a couple of months ago.

Essentially that request, and actually Mr.　Saenz talked a bit about it this morning, that request is in the amount of $330,000, and would be utilized for the RMA to hire technical experts to assist in the market valuation process.

We have twelve projects in the El Paso area that we are getting ready to initiate that market valuation process. And again, you all made the　-- or approved the preliminary request last month, and of course as a two-stage process this would, if you approve it, would be the final approval necessary to move forward with this toll equity request.

So staff would recommend approval of this agenda item, and I'd be happy to address any questions you all might have.

MS. ANDRADE: Members, do we have any questions for Phil?

(No response.)

MS. ANDRADE: We've got Representative Pickett with us this morning?

REPRESENTATIVE PICKETT: I would like to reserve my comments, to　-- unless there's some other folks first.

MS. ANDRADE: Okay.

REPRESENTATIVE PICKETT: I don't know if there's anybody?

MS. ANDRADE: All right. Mayor Cook? You didn't bring your guitar?

(Laughter.)

MAYOR COOK: -- bed. But I'm just here to support the Regional Mobility Authority, and the funding. Right now, the city is providing them with all of the resources for them to operate.

They've been challenged with twelve possible toll projects, and this would give them the funding necessary to hire the consultants to see if there is toll viability on the projects. And I'm here to answer any questions that you might have for me.

MR. HOUGHTON: Well, first of all I want to thank you for the　-- as I did last night for your courage on　-- in the city council, setting up the RMA and looking out into the future. If you would hang around, we may have some more questions for you.

MAYOR COOK: Okay, thank you. The other comment I would make is, in light of the discussion that you all have had today, we have to find other ways to fund projects, that's　-- that should be more evident than ever before.

MR. HOUGHTON: Very obvious.

MS. ANDRADE: Thank you. Thank you, Mayor, for your leadership.

Richard Dayoub?

(No response.)

MR. HOUGHTON: He's not here.

MS. ANDRADE: Okay. Representative, would you like to make any comments on　--

(No response.)

MS. ANDRADE: That's it, sir.

REPRESENTATIVE PICKETT: Good morning　--

MS. ANDRADE: Good morning.

REPRESENTATIVE PICKETT: -- I always try to start off with good news, and I hope I can end with good news. And I apologize for the casual dress; I borrowed this coat from the House Sergeants on the way over here.

After seeing the news story last night, I offered to help the Governor move into his new digs, so I was hoping to go over there, but the moving van left at 11:00.

I also appreciate the comments that were made today about my involvement with Mr. Bass. Proposition 14 bonds happen to be something that I authored as well.

And I want to, before I actually get into 7, some of the comments the Mayor just made, the funding, the update that you just had, there is still some good news out there. I don't want people to believe that everything that was presented was bad news.

I happen to be one of only four elected officials that's on the Association of Metropolitan Planning Organizations. We meet in two weeks, and we're working on the re-authorization.

And one of the things that wasn't mentioned is, Congress isn't just looking at the re-authorization. There's, DOTs all over the state are having these kind of conversations, and so you're not alone in that.

And I think you need to broaden, from the Transportation Homeland Security committees, to look at the Energy Committees, because Congress is talking about this carbon footprint and what your business has in effect on the environment, and assessing some type of fees that would be dedicated to transportation.

I also noticed that when you mentioned Category Twelve Strategic Planning monies, that there wouldn't be any more toll pass-throughs, or there would be less because there's less money. Chairman Krusee is here. Chairman Krusee was the House author of a bill that he let me make some very major, substantial changes to.

And I think that is a new tool that hasn't been spoken about enough. The mayor from El Paso and I have discussed it, and our current plan that we adopted just a couple weeks ago, we're utilizing Senate Bill 1266, and it can't really necessarily be couched as leverage, because there's so many different descriptions under your policy, unless you use leverage　-- project, you can't use mobility funds.

Well, in my mind this is still leverage, it's not mobility fund dollars that it would draw. But we're talking about setting up a TIF District. And it wasn't my idea, I just expanded on it, and it's a great idea.

Because a lot of people believe like I do, that roads sometimes can spur economic development, that's one of your lead-ins on your goals. Well, if we build a road that doesn't even exist right now, development comes, taxes, property taxes increase.

And this would be a departure. This would mean the city of El Paso in this case would be telling the public we're doing to dedicate tax dollars, property tax dollars towards education. And I obviously support that. The rescissions are a tough deal, I understand those too. Prioritizing them makes a difference. I mean, the enhancement dollars I think, Chairman you go back and forth. Years ago there was a commissioner who didn't want to deal with the enhancement dollars because there was more people came out of the woodwork, he used to hold them at the Austin Civic Center for the calls for projects.

I was a benefactor of moving a train from the university down to the city's depot. What does that have to do with mobility? Nothing.

But that was a source of money, and if I was to re-prioritize, and you were to ask me, Pickett, do you want money to move a train from the university or money to go into mobility, I would have said, I'd rather have it go into mobility. So I think we can prioritize where some of those come from.

I also think it's interesting, if you went to a DPS Commission meeting, they're complaining that TxDOT got all of the dedicated funds. I'm one of the members, and I don't know where the chairman stands on this, but I'm one of the members who believes that we shouldn't be focusing in only on Fund Six.

The Legislature needs to be putting in money above and beyond that. But because it's a dedicated fund, a lot of my colleagues take the attitude, whatever is there is there, we're not going to support you on top of that.

And I believe that that's a mistake, and I think my colleagues need to understand, we need to pump in general revenue dollars. And I'm going to move to work on that personally.

The item at hand, I sent you all a very rough letter, and I apologize, I was in that mind-set, that　-- you should be receiving it today, it's on Item Number 7. And again, it's very rough, and I apologize.

But not for the content. You know my objections to El Paso having a Regional Mobility Authority. It's still the only metropolitan city in Texas that has one.

San Antonio doesn't have one, Austin, Lubbock, Amarillo, Fort Worth-Dallas, they don't have Regional Mobility Authorities, the cities.

The regions do, and it was because of the original intent of that legislation. And I, like anybody else, can make a proposal to the Legislature, and we decide up or down. And there was an amendment that was brought forward that said, Well, forget all of that stuff, we want to be able to have one for El Paso. It passed, it's there, it's part of the law.

When this was initiated in El Paso, and the proposal came before your body, Commissioner Johnson at the time made a motion that said, Okay, let's approve this Regional Mobility Authority, contingent upon the MPO giving its blessing.

I also have communication from your staff since then, that's very clear. And that has not been done. The MPO in El Paso has not blessed the Regional Mobility Authority. In fact, the only action we took was the same action that I presented to you during that discussion, was, our MPO said, no.

So I wish we would get that clear, because you're giving me fodder; I can go back to El Paso and I really believe this, I believe you have an RMA that really doesn't exist, and I'm not sure how bond counsel is looking at something where a minute order was issued that says, You have to have ratification and that hasn't been done.

And so you know, I could not bring that to your attention; you could take care of it. You can put an item on your agenda and override my opinion; I'm just one person. But I do represent a lot of people who feel the same way I do.

As far as the item on the agenda, I object to anything that's not already been approved by our MPO. To the chairman of our current MPO, the Mayor, who's here to his credit, we have been working on trying to find some kind of compromise for quite some time.

Some people don't like that word. I think it's something that you need to do in life just in general at times. And there was a plan that I felt that wasn't conducive to the region, the MPO members in majority agreed with that, so we went back and started from scratch.

We worked on this very diligently; it wasn't always very easy. It's hard to get some of the data. We've got that, we came back and in the current plan that we have adopted, we have identified two toll components.

And that's something that our body has just approved.

And so I don't believe that this commission should be giving the Regional Mobility Authority money to look at anything other than what has been approved by the MPO.

You stand the risk of spending public dollars and then having those plans shot down, not because of data; I think, Chairman you made that comment that if everybody knew what you knew, if they had all of the detail, had the time to study this they would make different decisions based on that.

I don't believe a lot of my colleagues or constituents in El Paso are going to look at data. The issue in El Paso still is simple in most peoples' minds. You're for tolls, or against tolls.

Well, again I made the motion at last month's meeting that had two toll components. So if anybody wants to come after me politically and say, Pickett's for tolls, I'm on the record. Not only did I make the motion, but I voted for it.

So as far as the item is today, if you approve for monies other than anything that's already been approved by the MPO, I imagine it will be on our MPO agenda very soon, and maybe the　-- our members here, and the Mayor has their votes all lined up, ready to go, to run over it, but I don't think it's a good business practice under the current situation.

I think that myself and others, and again I want to give kudos to the Mayor for trying to represent the people that he believes and feels strong in, and a lot of times we elected officials do have more information than the general public, and we make decisions that they don't necessarily understand because of that information.

So it is difficult, but I would　-- I'm not going to stand up here and say, Do not offer a forgivable loan, or a loan, or a proceeds from construction dollars, for this based on the Northeast Parkway.

But as far as the other items on your agenda, whether TxDOT's identified twelve projects in El Paso, this has not been a discussion issue on the city council, county commissioners, the MPO, and I think that it actually would work contrary to what people who support the RMA want.

It's contrary to what I believe in keeping everybody informed, communicate with them, the last time I was here, Chairman, you took a recommendation that I had suggested, and　-- that we go forward even if it was contingent on that Interloop project.

And I thought that obviously because I proposed it, that was a good thing to do. And I believe it showed and sent the message that there are some technical things here. We're not holding it out, commission as a body.

And so again I'm here before you to not deny Item Number 7 in its entirety, but to only look at any projects that have already been adopted and approved by the Metropolitan Planning Organization in El Paso.

MR. WILLIAMSON: This is a pretty complicated deal, and I'm going to have some questions of staff about it. Do you wish to engage Mr. Pickett at this time?

VOICE: No, staff.

MR. WILLIAMSON: Will you hang around for a little while?

REPRESENTATIVE PICKETT: I would love to engage anyone.

MR. WILLIAMSON: I need Bob Jackson first. The minute order is to　-- let me take a step back. Is it the case that we have entered into similar agreements with other RMAs to provide them the equity with which to do their business?

MR. JACKSON: Yes.

MR. WILLIAMSON: And this request, Mr. Pickett's concerns about the entire situation in El Paso notwithstanding, would be similar to the requests that have occurred, with CTRMA, and Alamo RMA that I'm aware of.

MR. JACKSON: To a large degree, yes.

MR. WILLIAMSON: Okay. Thank you.

Amadeo? You're going to have to refresh this memory; as I get every month past 55, it gets worse for me, you know.

MR. SAENZ: I'm close behind you, so.

MR. WILLIAMSON: One of the things that concerned me when the whole matter of the El Paso RMA came up a year or so ago, was my some would say maniacal commitment to regional planning, and my concern that the MPO had not worked out their disagreement with the city on the structure of the board and the very existence of the RMA.

And my concern at that time was that we not give the RMA a project until that roughness had been worked through.

Now, is this the project that was being contemplated at that time?

MR. SAENZ: The project　-- oh. This was one of the projects　--

MR. WILLIAMSON: And my reason for asking this is　--

MR. SAENZ: And with the project that came with the RMA application.

(Discussion off the record.)

MR. WILLIAMSON: My reason for asking the question is, it's my belief that this particular project that the RMA would be negotiating the market evaluation, is the project that we obligated ourselves to the United States military, to find a way to build, as part of the economic development package to persuade them to expand the troop presence at Fort Bliss.

Am I wrong in that, or am I right in that?

MR. SAENZ: No. The project that was submitted in the RMA application, and I'm shortly below you in age, so my　-- it was either the Northeast Parkway, or the Southern Relief Route.

MR. WILLIAMSON: Okay. Can you　--

MR. SAENZ: The project which is called the Interloop, that ties the military facility, is a project that was developed through pass-through tolling. It was not developed　-- it was not brought forward by the MPO　-- by the RMA.

What　-- the action that the commission took with the RMA formation is that you approved the formation of the RMA, but you said to them that you would not approve a project until they got the approval of the MPO, to do the project. That was the action that you all took, when they came before you.

So they are an RMA, they were　-- their formation was approved by you, what this request is, is we have identified through the district, and I imagine the district coordinates into the MPO, potential toll road projects that are being, could be developed in the El Paso area.

Some of them include that Southern Relief Route, some of them include the Northeast Parkway, and what this does is, we need to, through Senate Bill 792, we have this market valuation process.

We wanted to initiate communication and conversation with the RMA, on the market valuation for these potential projects. They requested the toll equity request to be able to do some of the feasibility studies and some of the market valuation requirements, so that they could determine if these projects would move forward to be developed as toll projects, and then by whom.

MR. WILLIAMSON: I don't wish to construct a maze through which Mr. Pickett believes we're forcing him to go through, in order to continue his dialogue locally. So I really want to be clear.

I believe, based upon the information that you

and staff have provided me the last four months, that we will start on about Monday of next week begin to terminate construction contracts. I believe that.

I believe that the only construction contracts that will move forward for the next four to five years will be toll projects identified in Senate Bill 792 that goes through the market evaluation process.

So do I understand that staff's recommendation on this minute order is, only for the purpose of extending equity to the RMA, to do their market evaluations that will put them in the position of turning to the MPO　--

MR. SAENZ: The MPO, and saying, We want to develop this project.

MR. WILLIAMSON: -- this is the market evaluation, we want to develop this project, will you please approve it.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And there's no maze being created.

MR. SAENZ: No, sir.

MR. WILLIAMSON: No one's manipulating the process to make it difficult for Mr. Pickett and the people he represents to argue against in the local area.

MR. SAENZ: No, sir. We're just complying with the requirements of 792, and in addition, because of the way that you all approved the formation of the RMA, they had to go to the MPO to get their first project approved anyway.

MR. WILLIAMSON: Anyone have questions of Mr.　Saenz, Commissioners?

MR. HOLMES: I do, Mr. Chairman.

Amadeo, would it be fair to say that if the RMA does not have the funds to do the market evaluation, it could not get to the point of determining whether it would recommend and ask for approval to go forward　--

MR. SAENZ: That's correct.

MR. HOLMES: -- to the MPO. And so the lack of this commission providing those funds to the RMA basically stops the project　--

MR. SAENZ: Yes.

MR. HOLMES: -- from going forward.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: -- please.

REPRESENTATIVE PICKETT: Uh, that is not the case at all. And since El Paso is a special situation, since we're the only metropolitan city that has an RMA, that doesn't have representation outside the city of El　Paso; meaning the other municipalities, the counties, all of these impact us differently than these Regional Mobility Authorities in other places.

And if the, now intent is that that first motion was that it's a project approved by the MPO, or a project that the RMA has been brought by the MPO, because now it's even getting muddier. Because the RMA in El Paso has been given the Interloop project now.

That was never the intention. I am not going to stand in the way of that Interloop project. It's extremely important to our community and Fort Bliss. But that was an unsolicited proposal, brought to the commission by the contracting industry.

Subsequently, it's been turned over to the RMA to sell the bonds, so the RMA has something to do. And this takes the contractor off the hook. That's fine for the contractor, I think that's a good position for them.

But to go back now and because of the history and what has occurred in our region versus others, to give money to the Regional Mobility Authority to do these studies on one or two of twelve identified projects, the MPO has no knowledge　--

I believe it should be, the RMA goes to the MPO and says, We would like to go to TxDOT, getting dollars to look at studies at particular projects, is that okay, yes or no.

That's the way I perceive it to be, and that is not the case. And I said, I am not here to oppose money going for the RMA to study the Northeast Parkway, because that is a plan and a project that has been approved by the MPO.

MR. HOUGHTON: So we've done that all across the state. We've identified 87 projects, potential toll projects across the state, some that haven't been approved by an MPO. Under 792 which you voted for　--

REPRESENTATIVE PICKETT: And was on the Conference　Committee --

MR. HOUGHTON: -- which you voted for　--

REPRESENTATIVE PICKETT: -- and was on the Conference Committee; and I　-- you don't have to　--

MR. WILLIAMSON: Please, please, please gentlemen　--

MR. HOUGHTON: Let's have a　--

MR. WILLIAMSON: -- please, gentlemen.

MR. HOUGHTON: I let you speak.

MR. WILLIAMSON: Please, gentlemen.

MR. HOUGHTON: Which you voted for, we have to go through this process to identify the market valuation of those projects. They then will bring it to the MPO, do you want to do this, here is the valuation of the project.

If that does not happen, nothing goes.

REPRESENTATIVE PICKETT: So given the history, you would rather do it this way, than go to the MPO and say, We'd like your permission to do studies on X, Y, and Z project. This is the way you prefer it?

MR. HOUGHTON: This is the way we started it several months ago. We voted in this room　--

REPRESENTATIVE PICKETT: Now, it wasn't until this became　--

MR. HOUGHTON: -- 87　--

REPRESENTATIVE PICKETT: -- public, and I come before this commission　--

MR. HOUGHTON: -- no.

REPRESENTATIVE PICKETT: -- you've also used the Interloop as a political football. You have threatened to kill that project for exchange of votes　--

MR. WILLIAMSON: It would　--

REPRESENTATIVE PICKETT: -- on the MPO for the RMA.

MR. WILLIAMSON: It would behoove us all to　--

MR. HOUGHTON: Well, we have a　process --

REPRESENTATIVE PICKETT: I tried. I told you, you know, I'm going to try, but you're not.

I mean, Mr. Chairman, you sit here and you say that the Legislature doesn't understand, they don't give you support　-- I'm giving you support. I've worked with Chairman Krusee, I've worked with Chairman Corona. I've got a history of working with you.

You know, and you sit here, and, you know, I ask you something that is common sense, we have the situation in El Paso　-- you still haven't clarified the existence of the RMA. You could do that with an item on your agenda. And that hasn't been done.

And I will give you　--

MR. WILLIAMSON: Actually, Joe, what I was trying to　--

REPRESENTATIVE PICKETT: -- information with your staff that says, The RMA in El Paso has to be blessed, not a project. It says, The RMA has to be blessed by the MPO.

That has not been done. If that wasn't your intent, then you need to put an item on your agenda, and clarify that.

MR. WILLIAMSON: What I've tried to strive for mildly, Joe, is to not personalize policy differences, and to not confuse personal differences with policy. And I'm trying to establish　--

REPRESENTATIVE PICKETT: I don't have any personal differences　--

MR. WILLIAMSON: -- the information here, in order to make a rational, civil decision about what appears to be the never-ending arguments that occur west of Midland, Texas about transportation.

REPRESENTATIVE PICKETT: That's not correct.

MR. WILLIAMSON: They never go away　--

REPRESENTATIVE PICKETT: That's not correct.

MR. WILLIAMSON: -- we spend more time trying to mitigate El Paso arguments than we spend trying to mitigate Houston arguments. It's amazing --

REPRESENTATIVE PICKETT: And if you're trying to　-- No, Mr. Chairman. That's not correct. And　--

MR. HOUGHTON: Well, I want to agree with the Chair. It is the fact　--

REPRESENTATIVE PICKETT: Okay.

MR. HOUGHTON: -- of life.

REPRESENTATIVE PICKETT: Who? Who, you want to make it　--

MR. HOUGHTON: It is a fact of life.

REPRESENTATIVE PICKETT: -- personal, you want to make it personal, then who? Who presented Proposition 14 bonds? Who gave you short-term borrowing?

MR. HOUGHTON: I just　--

REPRESENTATIVE PICKETT: -- who supported toll equity on the Transportation Committee. You call that hindering? Or do you call that helping? Which one?

MR. WILLIAMSON: I seek to not personalize　--

REPRESENTATIVE PICKETT: Have I filed　--

MR. WILLIAMSON: -- policy decisions.

REPRESENTATIVE PICKETT: -- any lawsuit against TxDOT and read any executive director their Miranda rights?

MR. WILLIAMSON: To that end, I just need to establish some facts. That's all.

REPRESENTATIVE PICKETT: All right. I understand then what　-- this is like your　-- the policy. I don't have a problem with what football team you back and support. That's personal. I have nothing personal. It's policy.

Here it goes again, just like the doom and gloom that was stated here a moment ago. You didn't end on what's being worked on out there and what are the possibilities, it's all doom and gloom, let's go educate the public that we're going to　-- the sky is falling and we're cutting everything.

It's always been that way. I mean, the feds go through this every six years. The trust fund, what was it six years ago? Zero. What was it twelve years ago? Zero, before the re-authorization. That's a normal sequence in what the feds do.

All I'm asking is, we have a different situation. You want to lump it as one policy, I will ask you the question: How many cities in the state of Texas have created an RMA outside of　-- an instance for a causeway bridge?

MR. HOUGHTON: I'll answer the question, because the county of El Paso passed on the RMA opportunity about three years ago.

REPRESENTATIVE PICKETT: It's not passed on it. They can do it any　--

MR. HOUGHTON: They passed on it.

REPRESENTATIVE PICKETT: -- time they want. They can　initiate it --

MR. HOUGHTON: They said they didn't want to do it.

REPRESENTATIVE PICKETT: Right.

MR. HOUGHTON: And that's why the city　--

REPRESENTATIVE PICKETT: And they could initiate it, any time they want　--

MR. HOUGHTON: -- and the Mayor decided he wanted to do it.

REPRESENTATIVE PICKETT: And they could initiate one any time they want　--

MR. HOUGHTON: Because the county said　they didn't want to do it.

MR. WILLIAMSON: That's still the case, is it not.

VOICE: Right.

REPRESENTATIVE PICKETT: So we're going to disagree again on the policy, and I guess you know, your facts are different from my facts. I know that we have a situation as the only one like it in the state of Texas.

MR. WILLIAMSON: It is very unique.

REPRESENTATIVE PICKETT: But you want to　--

MR. HOUGHTON: It's a beautiful thing.

REPRESENTATIVE PICKETT: -- lump now, you know, policy with what we're doing with other RMAs　--

MR. WILLIAMSON: But you know, Joe　--

REPRESENTATIVE PICKETT: -- your creation of this RMA was different than all of the others.

MR. WILLIAMSON: -- the RMA is not created. The minute order is very clear. The RMA is not finally created, and I'll just quote, "This order does not constitute final commission approval of a project, which must be obtained under Chapter 370 and the applicable provisions of the RMA rules."

We have to deal with Senate Bill 792, and Senate Bill 792 is very precise about the relationship between TxDOT and local tolling authorities. The market evaluation process has to occur before a project can move forward anywhere.

I just don't see this minute order　--

REPRESENTATIVE PICKETT: Fine. It's just　--

MR. WILLIAMSON: -- based upon　--

REPRESENTATIVE PICKETT: -- cover. The reality is, and if your staff wants to tell you this privately after the meeting, are any of these projects even able to be done in the next two years, not even close.

MR. WILLIAMSON: Then let the market evaluation　--

REPRESENTATIVE PICKETT: That's why the effect of this　--

MR. WILLIAMSON: -- process　--

REPRESENTATIVE PICKETT: -- this is just to give the　-- fine. I understand what you're going to do, and you know, I guess I'll get　-- I'll be outvoted here, I guess we'll take up the issue locally, and we'll see where the MPO stands with the RMA.

Because I know how hard it's being pushed there, there's a whole other undercurrent of politics there as well, and I disagree with you, Mr. Houghton and Chairman if you think that I've been obstructionist.

That is not the case, it has never been the case. I've never come up here without offering any solution　--

MR. WILLIAMSON: Please, Joe. I didn't say you were the problem. I didn't personalize it　--

REPRESENTATIVE PICKETT: Well, you alluded to it　--

MR. WILLIAMSON: No, I didn't.

REPRESENTATIVE PICKETT: -- you're the one that said, you know.

MR. WILLIAMSON: No, I didn't. I didn't. Please don't ascribe to me that which is not accurate.

MR. HOUGHTON: And I support the Packers, by the way.

MR. WILLIAMSON: It's just　-- there's no reason for it. There's no reason for it.

REPRESENTATIVE PICKETT: I didn't start it.

MR. WILLIAMSON: Okay. Thank you.

Mr. Cook, can I visit with you a moment, sir　-- I appreciated the time last night, that doesn't keep me from discharging my duties.

When the RMA was brought to the commission, the most important matter to me was that any project the RMA undertakes has to be supported by the regional planning process. In the end did　-- when we created the RMA, we made it clear that we didn't approve a project that was before us, and wouldn't until the MPO and the RMA were in agreement with each other.

Has that ever occurred?

MAYOR COOK: It was my impression of the minute order that the RMA was created, but that we had to have the blessing on a project for us to proceed.

The very first project that we proceeded on was the one that was unanimously voted on by the Metropolitan Planning Organization, which was the Interloop, Spur 601, I think is what TxDOT is calling it.

The other projects that are on Item Number 7 on the agenda are the Northeast Parkway Tollway, which is part of the negotiation that Representative Pickett and I had, to come up with a compromise to the Southern Relief Route.

And if you look at them, it's the Northeast Parkway, the Loop 375, Cesar Chavez Border Highway Extension West, the express toll lanes on Loop 375 which could be called Border Highway East, and the only one that I don't think was on that plan would be the Montana Corridor.

So technically I guess Mr. Pickett's correct in that the US 62-180 Montana Corridor, I don't believe that that's one of the MPO projects. It might　be, but I'm not positive as to whether or not it is.

MR. WILLIAMSON: But at the time the RMA was created, our request was, or our instructions were, no project until the MPO approves it. My staff had told me that you subsequently secured a project that the MPO approved.

MAYOR COOK: Right.

MR. WILLIAMSON: And that's the case?

MAYOR COOK: That's the case. Yes, sir.

MR. WILLIAMSON: Okay. Well　--

MAYOR COOK: So I think the　-- I think what the disagreement is between this Board and Representative Pickett and I, is, Did you expect me to go back and get the MPO to bless the RMA, or to bless a project?

And they have never blessed the RMA, they have approved projects.

MR. WILLIAMSON: Well, I may be wrong but I believe the dialogue at the time was, we didn't have the authority to not approve the RMA. We only had the authority to put restrictions on it of the kind we put on it, which said to you and to Mr. Pickett and to the MPO, You're not created until a project has been approved by the MPO for the RMA.

And my staff told me that had been done, and then I had the impression from Mr. Pickett's remarks that, not necessarily. Now, are you affirming that the MPO approved a project the RMA put before them?

MAYOR COOK: Yes, sir.

MR. WILLIAMSON: Okay, thank you. And I will let　-- I need to ask Mr. Saenz one more question, then we'll let Mr. Pickett have a viewpoint again.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now, you told me six months or so ago that a project sought by the RMA was approved by the MPO, in compliance with the minute order that was passed on June 29, 2006. Is that the case?

MR. SAENZ: Yes, sir. At one time the MPO had identified the Southern Relief Route as the project. And we were working on it.

Then subsequent to that approval, the MPO went back, and looked at different options as Representative Pickett talked about, and they've now identified that Northeast Parkway project as a toll project.

Both of those projects if I　-- I don't have the application, were included in the　-- I think they were included in the original application. So　even so, the Northeast Parkway project is still a project that was part of the original application. That was approved by the MPO.

MR. WILLIAMSON: Now　--

MR. SAENZ: What Representative Pickett was saying earlier is, he has no objection to the RMA proceeding with market evaluation, with the Northeast Parkway project. But he has concerns about them being able to do market valuation on the other projects that were at one time part of the MPO plan, and at this time they're not.

MR. WILLIAMSON: Okay. Now is it not the case that anywhere else in the state, if an RMA walked into the　-- if the Alamo RMA walked into the San Antonio MPO and said, We're going to build 1604, and the MPO said, No, you're not, is it not the case that the MPO would prevail?

MR. SAENZ: Yes.

MR. WILLIAMSON: And would that be the case in the North Texas Central Council of Governments, RTCMPO?

MR. SAENZ: I believe　-- NTTA statute is a little bit different. I believe that　--

MR. WILLIAMSON: A Central Texas RMA?

MR. SAENZ: That would be exactly the same.

MR. WILLIAMSON: Okay. Then I should let Mr.　Pickett answer the next question.

I guess, with a tremendous amount of respect for the position that you hold, I just ask the question again, How can we treat one, one way and not treat the other the exact same way?

REPRESENTATIVE PICKETT: Because you just heard part of the answer. We're not the same as the others. This wasn't created the same. If you read the statute in its entirety, most of it doesn't even apply because it was written for a region, not for a city.

So it's not the same, and you yourself said, a project brought by the RMA. We have projects that have been approved. We don't have projects that have been brought by the RMA that have been approved. And I'm not trying to pick on that.

The Interloop is an approved project. It's been turned over to the RMA. We never had any say about that on the MPO.

The Northeast Parkway is an approved project. It wasn't brought to us by the RMA. You just regurgitated again, Did the RMA bring these projects, and the answer was, Yes, and that's not the case.

The RMA has not brought a single project before the MPO. What's before you is, asking for public dollars to do studies on a project that is one of　-- one that's been approved. That makes good common sense, spending taxpayer dollars.

The other projects are not approved at this point by the MPO, and I believe it's not a good expenditure of public dollars, given that this is created different than the others, and should be treated differently, and the RMA doesn't have representation from the region.

They have representation from one entity that is a member of our MPO. That makes it very different. And I apologize and I'll give you the letter, and I don't want anybody to get in trouble but someone's going to.

I have communication from the Texas Department of Transportation that is very, very simple, it is one line, and that's what I've been basing this off of. And again you can change that, by action. And I will give you this communication. It's, "To Representative Joe Pickett. The MPO in El Paso doesn't exist until it's blessed by the MPO."

So I have communication from your agency with that in writing, so if you're asking or telling me that that's a mistake, okay. No one's said that to me today. You still haven't said that to me today. Is that a mistake?

If it's a mistake, then I apologize. But until someone tells me that was not our intent, I was here at the meeting when Commissioner Johnson made the motion, I asked for follow-up after that with an explanation and I have that in writing.

So Mr. Chairman, do I question everything that comes from TxDOT? You send me a letter that's signed, do I say, This mustn't be true? I have a letter from TxDOT that says, that exact statement that I just made.

MR. WILLIAMSON: Well, that is important. And it's important　--

REPRESENTATIVE PICKETT: So I'm basing it off of that.

MR. WILLIAMSON: -- it's important for us to minimize our mistakes. We make mistakes, I make mistakes. It's important to --

REPRESENTATIVE PICKETT: My claim to fame.

MR. WILLIAMSON: -- but I have to, in the position I'm in, I have to center the conversation on the agenda item and trying to understand　the objection --

REPRESENTATIVE PICKETT: And so do I. And I'm centering it based on information that I have. And the information I have says, The RMA doesn't exist unless it's blessed by the MPO. That hasn't been done.

You keep saying that the RMA has to bring these projects before the MPO, they have brought none. I'm not objecting to the RMA receiving dollars to look at studies on projects that have been approved by the MPO.

So far, that's been the Interloop, which is not a toll project, at this point anyway　--

MR. WILLIAMSON: Well, I think you just hit　-- put your finger on the button. You don't object to providing dollars for projects the MPO has approved, you do object to providing dollars for the MPO　-- for projects the MPO hasn't approved　--

REPRESENTATIVE PICKETT: Yes, sir.

MR. WILLIAMSON: -- and yet we have provided dollars to other RMAs across the state for projects that MPOs haven't approved.

REPRESENTATIVE PICKETT: Because those MPOs are regional; they're not a city or a major　--

MR. HOUGHTON: I don't see that makes a difference, Mr. Chair.

REPRESENTATIVE PICKETT: It makes a huge difference　--

MR. HOUGHTON: No, it doesn't.

REPRESENTATIVE PICKETT: -- okay, fine.

MR. HOUGHTON: In my mind, it does not.

REPRESENTATIVE PICKETT: Fine.

MR. HOUGHTON: I don't think it makes one　--

MR. WILLIAMSON: Fred, do you have any comments about this? El Paso's your part of the world?

VOICE: The city chose to do an RMA, and　--

MR. UNDERWOOD: I'm confused. To me　--

VOICE: 　-- the Mayor wants to speak.

REPRESENTATIVE PICKETT: And there's also this objection here that there isn't on the record, and it can change because our members have changed. But our MPO is on the record of saying, We don't support an RMA.

And maybe the Mayor has his votes to change that, with the Legislature change, and you know, try to pass a bill for ten years, you can't get it, things change, all of a sudden you've got support.

There may be sufficient votes, all I know is, I'm acting under what has been out there, been told to be out there, you know　-- we took action.

Do you support the creation of a Regional Mobility Authority? Our action was, no. Went beyond that, okay.

And then the commission understood that that action took place, so you did something different already, Mr. Chairman and this commission. You already did something different than other RMAs. You made a motion with a contingency that no others had.

And so, okay. So given that information, that hasn't been met either. So you're confusing me by saying, We want this. Okay. It's not done　--

MR. WILLIAMSON: I think the mitigating circumstance is 792. That's what I'm trying to work through in my head. The　--

REPRESENTATIVE PICKETT: But 792 doesn't say, You have to go all do this right now.

MR. HOUGHTON: But we choose to.

REPRESENTATIVE PICKETT: Then you choose to　--

MR. WILLIAMSON: Well, wait, wait, wait　-- now　--

REPRESENTATIVE PICKETT: -- then you just answered the question again. You can choose to　--

MR. HOUGHTON: We've　--

REPRESENTATIVE PICKETT: -- fund a project that's been approved by the MPO　--

MR. HOUGHTON: No　--

REPRESENTATIVE PICKETT: -- that's been shown support　--

MR. WILLIAMSON: Hang on a second, Ted　--

REPRESENTATIVE PICKETT: -- and　--

MR. WILLIAMSON: Wait. Wait, please. I think we disagree with you. I think 792 does require us to send those market evaluations out.

MR. HOUGHTON: That's correct.

MR. WILLIAMSON: We're required to identify any potential toll project and notify the county toll authority or the regional toll authority in the case of Mr. McCarley and NTTA, or the RMA.

I think we have to do that.

REPRESENTATIVE PICKETT: I don't believe you have to do that, and what you're trying to do today, and I don't believe it has to be that　--

MR. WILLIAMSON: Well, that is one point we do disagree on.

REPRESENTATIVE PICKETT: Okay. I don't　--

MR. WILLIAMSON: And I think we disagree　--

REPRESENTATIVE PICKETT: -- believe it has to be public　--

MR. WILLIAMSON: What were you saying, Fred?

REPRESENTATIVE PICKETT: -- something this controversial.

MR. UNDERWOOD: Before all the discourse, I think I've lost my train of thought.

Question: On an RMA, and I'm confused on this, I'm new to this so you all bear with me and whatnot. Does it state, it has to be multiple cities, towns, counties?

VOICE: No.

MR. UNDERWOOD: So once you have an RMA, it doesn't matter whether it's a city, or multiple cities or a town or whatnot, or counties or whatnot. Is that correct? Steve?

MR. WILLIAMSON: Well, I think Mr. Pickett would　-- has eloquently argued that the El Paso RMA is just a particularly different animal.

MR. UNDERWOOD: But my point is, once you're an RMA it really doesn't matter. They need to be treated as an RMA.

REPRESENTATIVE PICKETT: But there's no language for that in the bill. The bill, again as written, and all of the testimony that was proposed, was, you're a county, I'm a county, you're a city, you're a city, we've got a major project going to cross four counties, five cities, you're going to have to give up something from each one of those, and lose a little bit of your authority, but give it over to an entity that the four counties and five cities have kind of identified, call them the Regional Mobility Authority, create it so they, one entity instead of nine, try to do this project.

Makes sense, in that context. And then the bill was amended just to say, All that stuff, all those statutes, all those references now applies to one city. A city can do all of that.

When a city isn't going to build a road through Hudspeth County, Presidio on its way to Austin. And our situation there of course is unique too. The city of El Paso is 75 percent of the area covered by the county. But they're not the county.

And our MPO recognized that some years back, and we are no longer housed at the city. The current chairman is the mayor of El Paso, but there's been　-- I'm a former chairman, Senator Shapleigh's a former chairman, county judge　-- so it moves around.

And it's regional because it's MPO. But the RMA is not. It is not regional.

MR. WILLIAMSON: So I'm going to ask you a question.

MR. SIMMONS: Commissioner, just　-- could I give you a little history on it? When the RMA language was proposed, it was based on a county operation. In other words, it could be a single county, it could be multiple counties, a county could be part of multiple RMAs, so I'm going to use like Bexar County for example. It could be just Bexar County; it could be an RMA that's also along the 35 corridor; one of multiple counties along that corridor.

It could be in another RMA that's along multiple corridors of　-- or counties on I-10.

So it was very flexible language when it comes to that. What made El Paso unique, and I think Representative Pickett will agree, it's a border　-- along a border with Mexico, it's along　-- it also butts up to New Mexico, and the bulk of the population is within the city of El Paso.

And so when the concept of this came up, it was, Well, they are a little unique, and I think it was Senator Shapleigh I think that put the amendment in there, to add El Paso city by itself.

But they're the only ones that can do that, form an RMA within a city.

MR. UNDERWOOD: But they are an RMA. And we do allow RMAs to do things that we've been　-- funding them before. Is that correct?

MR. SIMMONS: Yes, sir.

MR. UNDERWOOD: Okay.

MR. WILLIAMSON: Ned?

MR. HOLMES: Some of this dispute is a little lost on me, but just to make sure.

Steve, you said that there is specific language that allows the city of El Paso to form an RMA. You said that there is specific legislation that allows the city of El Paso to form an RMA　--

MR. SIMMONS: Yes, sir. And I　-- Bob may want to come up and explain it a little bit from a legal standpoint.

MR. HOLMES: Is that correct, Bob?

MR. JACKSON: Yes.

(Laughter.)

MR. HOLMES: And so　-- thank you. But don't leave just yet. And in fact, the city of El Paso did form an RMA, and it's appropriately legally constituted?

MR. JACKSON: Yes, sir.

MR. HOLMES: Then　-- and it has all of the powers of any other RMA?

MR. JACKSON: Yes, sir.

MR. WILLIAMSON: Ned, do you have any questions of staff?

MR. HOLMES: No.

MR. WILLIAMSON: Hope, do you have any questions of staff?

(No response.)

MR. WILLIAMSON: Phil, do you want to close?

MR. RUSSELL: Thank you, Chairman. Again, staff would recommend approval of this minute order.

MR. WILLIAMSON: Members, you have heard the staff's original explanation of this minute order.

(Pause.)

MR. WILLIAMSON: Please.

REPRESENTATIVE PICKETT: I mean, you heard from your legal counsel, but I have a letter from the Texas Department of Transportation, that says, It is not a recognized RMA until it's been blessed by the MPO.

So unless you want to rescind that action, I still believe it doesn't exist. And I promised that I would try to end on a high note, so I'm going to do that, Mr. Chairman.

You have another item on your agenda. I don't just mess with RMAs and 792 and TRZs. I wrote a very simple bill about a very complex issue regarding vehicle title registrations.

Your division has been exemplary. It's very, very complex; it's going to take us 18 months to sort out the mess I made with that bill. So I do want to end on a note that your VTR Division has been exceptional.

MR. WILLIAMSON: Well, we appreciate that. Thank you for that very much.

MR. HOUGHTON: Mr. Chair, the Mayor is raising his hand to speak.

MR. WILLIAMSON: I'm sorry. Mayor?

MAYOR COOK: Inasmuch as Representative Pickett still questions whether or not the RMA is a legal entity, either at this time or at some future meeting that you have, I would like you to issue a minute order, clarifying that issue.

Whether or not the intention was for us to get the blessing of the MPO to be an RMA, which state law doesn't require, or was it that we had to get the　-- have a project that the MPO had approved, which is in the state law, the way that it's stated. And to clarify that for us.

Otherwise, I see this argument going on and on and on like a little Ever-Ready rabbit.

MR. HOUGHTON: Well, Mayor, our general counsel just was asked two pointed questions and he affirmed that this is a legal RMA. I don't　-- personally I don't think the commission needs to revisit that issue unless Bob Jackson thinks so.

MR. WILLIAMSON: But you know, Mayor, it might be a good thing to promote the notion of regionalism, to figure out how to do that.

MAYOR COOK: Well, one of the things that I did is, I asked that state law be modified, during the last Session, to allow our RMA to have people who live outside the city limits to serve on it, because originally we couldn't.

That has been approved. I could technically put people from the　-- from New Mexico and from the county onto the RMA. It was my intention to do that, at some later time once they got established. They're just newly created, trying to get a grip on the projects they've been working on, but it was my intention to increase the membership from seven to nine.

Maybe I should do that sooner than later, and　-- in order to make the folks in the county feel like they're part of it.

MR. WILLIAMSON: Well, I understand. I mean, I fight the same battle with the Trans-Texas Corridor people that live in rural Texas, legitimately feel like they're disenfranchised in the decision making process. We hope to cure that today with some rule changes.

But I think, you know, TxDOT is in the process of trying to transfer authority and responsibility to act, from central government to regional government. I recognize that the El Paso area probably is a slightly different animal than the other regions of the state.

It just　-- I think it's in everybody's best interest to find a way to get the city and the MPO singing from the same songbook.

MAYOR COOK: Okay.

MR. WILLIAMSON: I mean, I think that's in everybody's best interest to do that. And then you center your arguments on the projects, and not on the structure. If everybody's comfortable with the structure, if the county and the adjacent counties feel like they've got a stake in the ground to hang off of, everybody feels like they can grab hold and help.

MAYOR COOK: Thank you, sir.

MR. WILLIAMSON: I just　-- I've tried to listen carefully　to -- Thank you very much. I've tried to listen carefully to the information, and it seems to me that the argument centers on, What's our obligation to treat this RMA like we treat the other RMAs. And it's nothing more than that.

You've heard the staff's explanation and recommendation. You've heard a variety of witnesses and a variety of viewpoints. What's your pleasure?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying, aye.

(A chorus of ayes.)

MR. WILLIAMSON: Opposed, no?

(No response.)

MR. WILLIAMSON: The motion carries. Thank you Members, thank you, Staff. Thank you, Mr. Pickett.

VOICE: The train's leaving, I need to leave　-- [indiscernible].

MR. WILLIAMSON: Thank you for your patience, Members. Next item.

MR. SIMMONS: Chairman, we're going to move back to Item 4(b) which is a discussion item to be led by Carlos Lopez, on the review of our design standards when it comes to our urban thoroughfares.

MR. LOPEZ: Good afternoon, Commissioners. My name is Carlos Lopez, and I'm Director of the Traffic Operations Division.

Appreciate you all putting this discussion item on your agenda, to look at our design standards that could maybe a little better incorporate walkable and mixed-used development.

The Design and Traffic Operations Divisions are working together on this effort, and I'm pinch-hitting today for Mark Marek, who's conveniently away at a management school.

Last month, Chairman Krusee approached us with a couple of suggestions. He thought we ought to look at our design guidelines, and to highlight the desires of local communities to create pedestrian-friendly and aesthetically pleasing environments in our urban designs.

Well, we thought these were good suggestions, because that could move TxDOT in a better direction in the future.

You know, for urban transportation projects, flexibility and planning is very key. We got to balance the need of all of the stakeholders. We got to balance safety, mobility, environmental needs, and economic development, all for our urban projects.

Now, this balancing process has been referred to as context-sensitive solutions, or CSS, the New Urbanism, or Smart Growth.

What this process does, it helps develop projects that are responsive to community needs, safe, multimodal, and preserve scenic and historic resources.

But the best value of this approach is that it tries to get early buy-in from all of the stakeholders.

When you get that early buy-in on a project, it makes the chances for a project to be successful much greater, and reduces any challenges to projects as they're being built or as they're being developed.

Now, some common elements of CSS, things like landscaped medians, improved pedestrian access, bike lanes, traffic calming measures, synchronized traffic signals, buffer zones between vehicles and pedestrians, and community-appropriate aesthetic features.

I got a couple of slides that will show some pictures of context-sensitive design. For example, here you look behind you, you'll see the curb extensions on this particular project.

It gives pedestrians a place of safe refuge, adds the ability to add landscaping to an intersection, but please note though that you'll see two lanes, almost in each direction on either side of that, and it is constricted at the intersection.

So you have to be very careful about where you choose to do this type of a project.

This is a roundabout. This started mainly in Europe and has slowly started to migrate here in the United States, and we've gradually really warmed up to this type of an improvement.

What you'll see here is, it gives traffic the ability to go through an intersection all without stopping, with in effect yielding, gives pedestrians a safe refuge area, and also provides a place for landscaping.

From a traffic operations standpoint, I'd rather see something like this at an intersection instead of a traffic signal that's barely warranted. Because it　-- I think it will operate much better than a traffic signal in that particular case.

MR. UNDERWOOD: Carlos　--

MR. LOPEZ: Yes?

MR. UNDERWOOD: -- before you run off, are those bike lanes, am I imagining those on the far　-- each side?

MR. LOPEZ: Yes. On the far arterial? Yes, those would be striped as bike lanes. That is correct.

MR. UNDERWOOD: Great.

MR. LOPEZ: In this particular example.

MR. UNDERWOOD: Thank you.

MR. LOPEZ: Here's an example of those medians being used as public space. You'll see they're wide, and allow benches and people to sit down, maybe wait for a bus stop, and　-- or to wait for their walk signal.

Another example of a median treatment that provides separation between traffic and pedestrians, but you'll see that kind of aesthetic features along the curb act in effect as a　-- safety-type devices that help protect the pedestrians from traffic.

Here's an example of a transit facility in Dallas, where the transit facility will have one side of the road, the parking lot on the other, and providing a pedestrian walkway underneath the roadway, again very aesthetically pleasing, and easy for pedestrians to navigate to the transit facility.

Here's an example of a sidewalk, a wide sidewalk in Culver City, California. This is very similar to what Austin did here on Second Street, where they constricted the right of way of the roadway, added very wide sidewalks, and allowed the businesses, which in this case happened to be restaurants, to put tables on the outside, so where you can eat alfresco.

A traffic calming measure in Perth, Australia. You'll note that the sidewalk and the pavement texture are different. And the use of wide-edged lines to provide differentiation between the　-- where the car should be and the pedestrians are, and also allows for some landscaped medians.

This has the effect of slowing folks down and allows the ability to lower speed limits in these areas.

The Mockingbird Lane Station on 75 in Dallas, again the Central Expressway is one of those freeways in the state where we put a lot of aesthetic features in while that was getting built. This is an access to the DART rail line.

And finally another overpass along Central Expressway, it's on Churchill Way. Again you'll see the different textures in the pavement, and in the sidewalk that give that aesthetically pleasing feeling. Also the landscaping on the bottom where people coming off the overpass can sit and relax.

Currently at TxDOT we do seek public input, involve stakeholders early, and incorporate pedestrian and transit elements in our projects whenever possible. We also try to improve pedestrian safety through our Traffic Safety Program.

In fact, we recently funded a Walk Well Texas project, that looked at pedestrian fatality statistics over the last four years, and that showed that older Texans seemed to be over-represented in those statistics.

But after doing all of this, there's　-- for sure TxDOT can benefit from an outside perspective, on our context-sensitive solutions and our pedestrian safety efforts through our Traffic Safety Program.

Another suggestion that Chairman Krusee brought forth is the creation of a team with a bunch of different disciplines that can help us look at all our design standards.

This team can highlight program, planning and design options when we're looking at our urban thoroughfare design. It can include urban planning leaders, urban designers, and people from the FHWA.

It could also and should include TxDOTers, because TxDOTers would be exposed to new techniques, and can carry the message forward to the rest of the department, about thinking about these option first rather than second or third.

In conclusion, CSS needs to be looked at from a system-wide standpoint instead of a project by project basis. It's not going to fit every urban project; some urban projects will necessarily have a high mobility and capacity need that needs to be met, but at the same time, can enhance safety.

I think what helps incorporate these type of elements is when there are existing parallel facilities. For example, here in Austin I made reference to the Second Street example. That used to have about three or four lanes going one way. It is down to two lanes, two-way traffic, and they've allowed pedestrian　-- wider sidewalks and places for restaurants to put their tables on the sidewalk.

However, Third Street, Fourth Street, Fifth Street all existed that could help carry some of that traffic off of Second Street. Same thing on Riverside Drive, between First and Riverside. Used to be a four-lane undivided roadway. It's now two lanes each way with a roundabout in the middle.

But it had Barton Springs a block away. So they can incorporate that type of design into that roadway, which fits very nicely into the new park that was developed along Town Lake.

So there's going to be some situations where we can do this, and whenever we can do CSS we ought to. Because in the end, what it does, it provides community pride, it provides for economic development, and it gives transportation a better name.

So the guidance that we ask for from you all today is, Would you agree with us forming this team, something that we can bring to you next month so that we could move forward at looking at our design standards.

MS. ANDRADE: Members, you've heard Carlos. We also have Chairman Krusee here with us.

MR. KRUSEE: Thank you, Mr. Chairman, Commission members for giving me the opportunity to speak. I don't know if it gives you any comfort, but on the House floor I've been in a lot tougher scrapes with Mr. Pickett　--

(Laughter.)

MR. KRUSEE: -- and we worked together on some issues, and we work on opposite sides of some issues.

But in the end, let me publicly say, I wish he was still here, but we did work together on several issues, that I think were constructive and productive for this agency and for the state, including the bonds, including the tourist bill and including some amendments to 792 that would have made it even worse for the state than it is.

You're　-- let me make one other reference to your session this morning. I think it just wasn't　-- it was insufficiently bleak.

(Laughter.)

MR. KRUSEE: Well, I'm on this commission, you know, on the Finance Commission in D.C. so I go up there every month and meet with other　-- my colleagues and with the US DOT and I just wanted to throw two facts out there that they gave us.

One, you know, you're looking at the rescissions, in terms of the current authorization, and then you're not really looking at what happens after the next re-authorization, because those facts just aren't in front of you; you're just looking at what the facts are right now.

But US DOT is looking at it and going, You know, we've got to assume, or it's probably wise to assume that we're going to continue just as we are; we're not going to get an increase in the gas tax.

And especially after what happened after the I-35 bridge collapse　-- you know, we're always talking about how the gas tax finance system is collapsing, the finance system for building our roads is collapsing; well, it's like literally collapsing, and people are dying, and still　--

So then the Chairman of the Committee in the House, who's from Minnesota, says, This is an emergency; my constituents are dying as the system crumbles, literally. Let's pass a gas tax. This is an emergency, we've got to repair all of these bridges so no more people die.

The members of his Committee, the Democrat House leadership, the Republican House leadership, the Democrat Senate leadership, the Republican Senate leadership, the administration, all say, flat out, no. We're not going to do it. No money; no increase.

So they're looking at that, and looking at the Highway Trust Fund, and US DOT tells us that somewhere around '10 maybe '11 there's actually　-- but you're not looking at because that's the next authorization cycle, there's going to be a $40 billion shortfall in the Highway Trust Fund.

So you could be looking at rescissions of you know, it used to be $200 million, over a billion dollars coming down.

The other thing they tell us is, they're looking at the　-- you've got your Highway Cost Index. So they tell us, Okay, this is the amount of money that we anticipate getting in the next, you know, from here until 2015.

But in real dollars, what we're getting now and what we can purchase with that money in 2015　-- the purchasing power of our money between now and '15 which is not very　-- eight years? Is going to go down 75 percent. And they said, that's a conservative estimate.

Anyway, on to something more cheerful.

(Laughter.)

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Insufficient or [indiscernible].

MR. KRUSEE: Insufficiently bleak.

I was　-- a couple of months ago, Michael Morris invited me to this Context Sensitive Solutions seminar up at　-- with, the Dallas COG was putting on.

And I was really amazed at　-- it was an overflow crowd. Mayors, council members, county judges, public works people, county commissioners, and city managers and so on.

And while I was listening to them talk about context-sensitive solutions, it occurred to me, you know, I'm very proud of the evolution that this agency has undergone in the last six years or so, where from my point of view, it's gone from kind of a road paving company that just really looks at, you know, how do we lay the asphalt to get people from A to B, into more of an economic development agency, that recognizes, well, you know, it matters how we finance a road, how quickly the road gets built, where the road is built.

In terms of economic development, and in terms of quality of life for the communities where we put these roads. But listening to　-- going to this context-sensitive solutions and seeing their interest in it, it occurs to me that the next step in that phase, looking at economic development and looking at quality of life in our communities, is, you know, besides looking at how do you finance, where do you build, the design of the road and the context of the community that it's in.

And to give you an example of that, I was in San Francisco a while back, and I rented a car because it's just such a pleasure to drive on Highway One. So just for fun I was going to drive up and down Highway One for a while.

So, you know, you'll be going 70 miles an hour, if you're me, 80 miles an hour, and you're down this highway and you're looking over the ocean and over the bluff at　-- you know, it's so pretty. But then five minutes later you're going, 10, 15 miles an hour through the middle of Carmel.

Same road, but the context changes. Now, it occurred to me that you know, in Austin, Texas, we've been talking forever about how I-35 was a scar that divides our city. And that if in retrospect if, you know, if we could go back in time, and change the way that we designed that, we wouldn't want to put a high-speed thoroughfare right through the middle of downtown of all of our cities.

And that we would rather that it change, in terms of economic development and the quality of life of the people who live around that road, we would want to change the context of that road.

And the other example that occurred to me was that, so with your help we've built 183-A around Leander, Texas. So now, it used to be you want to go out northwest, out of Austin, you have to go on 183, which is a highway that goes through the middle of the downtowns of Cedar Park and Leander. And it's appropriately congested given that context.

But now, if you want to go out northwest, you really have no business, and you're just going out to Lampasas or wherever you're going, you have no business really going on 183, you should be on 183-A, and just zip right out.

Well, given that, why don't we go back and look at 183 as it goes through the downtowns of Cedar Park and Leander. And maybe it's for a few blocks, maybe it's for more than a few blocks, we change the context of that road.

We say, this doesn't need to be a high-speed thoroughfare to get out of Austin anymore. And maybe we put in a median, maybe we make the sidewalks bigger, and add to the quality of life and economic development of those cities.

Likewise with I-35, I think if we were designing it today, we would　-- we could do just as much capacity, but treat it more as a boulevard as it goes through the middle of Austin, so it looks more like Michigan Avenue or Fifth Avenue, or K Street in Washington, which　--

Scott, you can probably correct me, but K Street has like 12 or 14 lanes in it. Probably more lanes, just as wide as I-35. But the context is very different, and doesn't create that barrier, between east and central Austin.

So that's why I suggested the commission, and I really appreciate the agency's attitude on this.

MR. WILLIAMSON: Well, Mr. Krusee it's always good for you to be here, and thank you so much for your patience as we worked through the other.

We didn't mean to imply that one member was less important or more important; we just had some El Paso people that had to catch an airplane, and　-- there were more of them than there were of Scott, so　--

MR. KRUSEE: I always enjoy listening to Mr.　Pickett.

MR. WILLIAMSON: Members, dialogue with Mr.　Krusee.

MR. KRUSEE: Sure. And Mr. Polikov is here, who taught me everything I know on the subject, and I think he has a short presentation for you.

MR. WILLIAMSON: It's always good to see you, one of the few members who kind of understands the future that we face.

MR. KRUSEE: Thank you.

MR. WILLIAMSON: We appreciate it.

MR. WILLIAMSON: Good afternoon, Scott.

MR. POLIKOV: Mr. Chairman, Members, Mr.　Simmons. I appreciate the opportunity to be here, and I thank you for your leadership, and Chairman Krusee and frankly the staff's leadership in embracing this and moving it forward.

I think properly done, Texas could become a leader in facilitating local value capture by appropriate design of either state-funded facilities or state-owned facilities in urban contexts, because of the power of the ability Representative Pickett talked about in a specific context.

But the ability for example to utilize tax-increment financing districts to facilitate supplemental funding and matching funding for state-funded facilities.

For example, on the Southwest Parkway, I serve with Mike Weaver as the city of Fort Worth's project management team on the Southwest Parkway toll road. Working with HNTB, Carter Burgess, NTTA and TxDOT, we actually did a re-design of what will be under construction here in the Southwest Parkway as it comes through the Cass Edwards Ranch just south of downtown.

Isaac Manning, the developer with the Cass Edwards family, has now created a very dense, urban village that will be at developed-out values in the hundreds of square foot, hundreds of dollars per square foot, not $60, $70, $80 per square foot, the city harnessing that new design to make it more friendly to neighboring development, that will be valued in the hundreds of millions if not billions above what trends development would be next to a conventionally-designed highway through an urban area.

The city, through voter approval, issued $60 million in bonds that we are now transferring to NTTA as part of the city of Fort Worth's $150 million dollar contribution to the toll road.

I think without that $150 million contribution, there's a big question as to whether the Southwest Parkway would be feasible.

The TIF that we created that will then utilize the value capturing mechanism of the ad valorem increase, will pay those bonds off. And the only way that TIF really is going to function properly is the proper design of the new toll road through that urban infill area, to harness a much higher and better development pattern.

And so this is a bottom line economic development issue, not just an aesthetic issue. Look at Congress Avenue. Today, under the current roadway design manual, we could not design Congress Avenue from the river to the Capitol without design exceptions.

And if Congress Avenue were designed in that stretch as it is down by St. Edward's in South Austin, we could not leverage the level of mixed-use, intense-walkable urban development we see up our revered Congress Avenue.

And so I really appreciate TxDOT's embracing this as a concept, not　-- you know, there's some good work that has been done over the last year. The ITE, in conjunction with FHWA and the Congress of the New Urbanism, has put out a proposed practice for designing major urban thoroughfares.

Working with Carlos and Mark Marek and I understand that David Casteel and Mr. Barth are going to also, possibly, if you approve the committee, to be on the committee with us　-- looking at how we can actually take some good work that's already been done in this state and around the country, and look at improvements to the design manual so that every excellent economic development project, whether it's a new project in Leander or a redevelopment of an existing downtown area, on a state-funded facility or a state-owned facility, doesn't have to go through a reinventing the wheel to see whether or not it makes sense to put parking on a particular arterial because in this one particular stretch, say on Congress Avenue, it makes sense to have on-street parking. And it is a major arterial.

So with that support from a refinement of the TxDOT standards, I think it will have a bottom line impact of hundreds of millions if not billions of dollars, of additional economic development in this state, and I think it can become a model around the country for the institutionalization of more flexibility than has been promoted by the engineering community for many, many years, and I think its time has come now to put it into practice.

The other thing I'll say and then I'll close, is that Coby, who I haven't seen in a long time, we went to school together; it's a lot of hard work lately, good job, Coby.

He said the word, sustainable multimodal transportation system. And I think that phrase is embodied in the ability for the local value capture system to work.

And in the age of diminishing resources, the ability to secure local matches for state funded or state owned facilities is going to be critical to make up this funding gap. And in that regard, it's not just empowering the area engineers to work with the development communities, in putting better designed streets on the ground.

The local public works directors also often look to the area engineer or the district engineer, or standards in the TxDOT manuals for guidance.

And similarly, roadways I think are not being properly designed in terms of context for local roads. And I think this could also provide an amazing amount of support and efficiency in terms of marrying up land use and transportation for local roads, because this will give the local public works directors and city engineers some guidance that they seek almost on a daily basis.

We look forward to working with your staff leadership on this issue, we are working　-- we've proposed some names, representatives from around the country including Mayor Norquist, who was before you a few months ago getting this dialogue started.

And we look forward very much to working with Chairman Krusee, the commission and your staff, and national experts, to take your design manual to the next level. I think it will be an exciting collaboration, I think it's a win-win for everybody, and I think at the end of the day, it's an economic development story that needs to be told.

And I think Texas could yet once again become a leader in utilizing its transportation policy and leveraging it for so much more. Thank you.

MR. WILLIAMSON: Members, do you have questions for dialogue with this witness?

MR. HOUGHTON: Thanks, Scott.

MR. POLIKOV: Thank you. Appreciate it.

MR. WILLIAMSON: Yes. We appreciate your hard work. Obviously Mr. Krusee's endorsement carries tremendous weight with the commission, but it helps when people such as yourself step forward and offer concrete recommendations and examples of how it can improve the lives of Texans.

MR. POLIKOV: Thank you.

MR. WILLIAMSON: We're increasingly an urbanized state.

MR. POLIKOV: Yes, we are.

MR. WILLIAMSON: Much as we hate to admit it.

MR. POLIKOV: We look forward to working with you. Thank you.

MS. ANDRADE: Thank you.

MR. POLIKOV: Thank you, Carlos.

MR. WILLIAMSON: Carlos, to close?

MR. LOPEZ: Commissioners, with your blessing we'll go forward and form a team and bring an order forward to you all.

MR. WILLIAMSON: I think it's a good idea. What do you think?

MS. ANDRADE: I like it. I'm excited. So moved.

MR. WILLIAMSON: Yes, let's move forward.

MR. SIMMONS: We'll get her done.

MR. LOPEZ: We'll bring a list of names for you all to act upon. This will not be a formal committee, but we want you all's backing on this.

MR. WILLIAMSON: We'll be there.

MR. LOPEZ: All right. Thank you.

MR. SIMMONS: Okay. Carlos, let's transition into the Safe Routes to Schools. So　--

MR. LOPEZ: All right. Thanks, Steve.

Commissioners, once again my name is Carlos Lopez. I'm Director of the Traffic Operations Division. The minute order before you authorizes a Safe Routes to School Program of approximately $24.7 million.

This program seeks to improve bicycle and pedestrian safety of school-age children, and also to encourage healthy and active life style choices.

The request for project was published in the January 19, 2007, issue of the Texas Register, with a deadline of May 25, 2007. Three hundred and sixty applications were evaluated by TxDOT staff, and the Department's Bicycle Advisory Committee.

Two hundred forty-three of these project were ranked highly by both the TxDOT review teams and the Bicycle Advisory Committee, and have been presented for your consideration.

The program focuses on both infrastructure, i.e., sidewalks, crosswalks, and non-infrastructure, for example, planned development and public information and education projects.

We are proposing to fund 38 percent of the funding request for infrastructure projects, and 30 percent of the funding request for non-infrastructure projects.

As a matter of information, projects that propose to develop plans for schools were ranked highly by both the Bicycle Advisory Committee and the TxDOT committee. In fact, we are proposing that every one of those projects except one be funded.

We recommend approval of this minute order.

MR. WILLIAMSON: Which one?

MR. LOPEZ: There's one in Rowlett, Texas, that happened to score a little bit lower than all of the other ones, and in order to be consistent across all categories, we felt like we had to draw the line right above them.

MR. WILLIAMSON: Well, Carlos, how much was that for?

MR. LOPEZ: Ten thousand dollars.

MR. WILLIAMSON: So what if you'd have drawn the line　-- where would you have had to drawn the line to have not had the one get kicked out?

MR. LOPEZ: We　-- where we did draw the line was right above Rowlett. And I think the score on that one was a little bit over 100. And Rowlett was in the 70s.

(Discussion off the record.)

MR. WILLIAMSON: I'm a little uncomfortable drawing a line that whacks somebody for a　-- I mean, do these guys have a bicycle program at all?

MR. LOPEZ: Well, this would be to develop what their needs would be, to develop a Safe Routes to School Program.

MR. WILLIAMSON: Tell me about the committee structure. Was this all TxDOT employees?

MR. LOPEZ: We had two committees. One was our Bicycle Advisory Committee, which was　--

MR. WILLIAMSON: Who was on there?

MR. LOPEZ: Sheila Holbrook-White, Regina McElroy, Tommy Eden, and　--

MR. WILLIAMSON: A TxDOT committee?

MR. LOPEZ: No, this is on the Bicycle Advisory Committee.

MR. WILLIAMSON: I want to know who was on the TxDOT committee.

MR. LOPEZ: TxDOT committee was, Brian Stanford, Ismael Soto [phonetic], Michael Angelica from Bryan, Paul Douglas, our Bicycle Advisory　-- or our Bicycle Coordinator, in TPP, and let's see, there was one other person, the name is　--

MR. WILLIAMSON: [indiscernible].

MR. LOPEZ: Pardon? Oh, and Pete Krause also from the Design Division was there.

Did I get everybody, you all?

VOICE: Jackie McGill　--

MR. LOPEZ: Oh, and Jackie McGill, the Traffic Safety Specialist from the Austin District.

MR. WILLIAMSON: Is she the one that recommended Rowlett be rejected?

MR. LOPEZ: It was all a consensus decision by both committees.

MR. WILLIAMSON: Now, tell me who was on the volunteer side.

MR. LOPEZ: That was Tommy Eden, Sheila Holbrook-White　--

MR. WILLIAMSON: Is Tommy my buddy?

MR. LOPEZ: Tommy, your buddy. And he's here today.

MR. WILLIAMSON: He's here. Hey, Tommy.

MR. LOPEZ: He's here today.

MR. WILLIAMSON: I hadn't seen him in a while.

MR. LOPEZ: And Regina McElroy, and the lieutenant's name from DPS escapes me right now, but those were the four people that were on there. And he's here also, yes.

MR. WILLIAMSON: Well, I'm a little bit　-- I mean, have you been to Rowlett lately?

MR. LOPEZ: I have not been to Rowlett lately.

MR. WILLIAMSON: They need a bicycle plan.

MR. LOPEZ: Okay.

MR. WILLIAMSON: So I'm a little bit concerned about cutting the line that close.

MR. LOPEZ: Okay.

MR. WILLIAMSON: I mean, this is a community that obviously wants to try to work a plan out and incorporate a bicycle plan into their system before their growth　-- before the growth wave really hits. So　--

MR. HOLMES: I agree with you, Mr. Chairman.

MR. WILLIAMSON: -- I would be interested in　--

MR. LOPEZ: The commission so desires, we can add that project.

MR. WILLIAMSON: Let's do that.

MR. LOPEZ: All right.

MR. WILLIAMSON: I understand you got to cut the line off someplace, but　--

MR. LOPEZ: Yes, sir.

MR. WILLIAMSON: Any other questions of Carlos about this?

(No response.)

MR. WILLIAMSON: Okay. Then we shall start, we have several affected parties who wish to　-- have an opinion.

Did you present these to me in the way you preferred them, Steve?

MR. SIMMONS: No, sir.

MR. WILLIAMSON: Okay. Well, let's start with Bob Gilbert.

MR. GILBERT: I'll start at the request of Tom in case there was a [indiscernible].

MR. WILLIAMSON: Okay. Were you able to listen to us knock the DPS salary deal all around this morning?

(Laughter.)

MR. GILBERT: Forty-two [indiscernible]. We're close.

MR. WILLIAMSON: Okay. Regina? Or do you pronounce it Regina?

MS. GARCIA: Regina.

MR. WILLIAMSON: Regina.

MS. GARCIA: I'm　-- good afternoon, and it's a pleasure to be here. My name is Regina Garcia. I'm the Acting Chair of your Bicycle Advisory Committee.

And first of all I'd like to say, thank you very, very much for protecting this program, and　-- this program is something that it's just heartwarming if you sit down and look at it.

And it's very heartwarming if you sit down and look at the projects that　-- or the applications that we had the opportunity to review.

A lot of these projects are ones that are striving to match this context sensitive design, but it's even one step closer to the heart, because these are projects that are within a three-mile perimeter of an elementary school or a middle school.

And these are projects that pinpoint problems where children have, getting across the street from one side of the street to the other.

And of course we're all aware of many transportation projects where we've gotten so good and so efficient in the past at putting roadways in, that we've almost engineered children out of the equation, in the sense that our roads are fast, and sometimes our roads say to us as we're driving, Get out of the way, I'm coming through.

This takes a little bit closer look at our roadways and our environments around schools, and forces us to look at ways where we can put children back into the transportation system, put people who maybe don't drive everywhere they're going back into the transportation system, and specifically, make a safe route to school for children.

So it was very heartwarming, and I'm proud to be a part of it. Of course, it was heartbreaking that we couldn't approve each and every one of the projects because they all warrant a good solid look, and it was very difficult to make our decisions.

I'll also say that after spending a week with your TxDOT staff, that I have a huge amount of respect for all of the work that they do, and the work that you all do. I respect you mountains more than I did before I entered into this.

I learned an awful lot, but I also see that there's a huge need for more projects like this in our communities. I hope you'll look at this, look at this program and grow it in the future. It's one of the most beautiful things you can do to make a schoolyard safe for children, and to create a transportation path for kids who can't yet drive themselves around. Thank you very much.

MR. WILLIAMSON: Wait, wait, wait, wait, wait.

MS. GARCIA: I'm sorry　--

MR. WILLIAMSON: They may want to talk to you.

MS. GARCIA: -- yes, sir.

MR. WILLIAMSON: Members, you've heard this witness, do you have questions for this witness? Have any dialogue for this witness?

VOICE: For your service, thank you very much.

MS. GARCIA: Thank you. Thank you very much.

MR. WILLIAMSON: We really do appreciate your service. It's　-- volunteer government's a tough deal. In fact, you've got such a great smile, we're going to assign you to be our liaison with the El Paso Safe Routes to Schools Program.

(Laughter.)

MS. GARCIA: I would love to. Sounds like fun. I love a hot ticket. Thank you very much.

MR. WILLIAMSON: All right. Thank you.

MR. WILLIAMSON: Okay, Robin?

MR. STALLINGS: For the record, I'm Robin Stallings. I'm the executive director of the Texas Bicycle Coalition. Thanks for giving me a chance to speak, Chairman and Commissioners.

We are very excited about this list of projects, they are great. The Texas Bicycle Coalition began working on Safe Routes to School in 1999. Through the State Legislature, you know, about 10 percent of our budget is a 501(c)(4), so we worked to get Safe Routes to School passed at the state level, and then passed at the federal level, then we worked it with FHWA on their guidelines, and then we worked with TxDOT on the state guidelines.

And although not quite all of our suggestions were taken, and　-- of course, but we have a strong interest in Safe Routes to School. And it wasn't enough for us to first pass it in Texas, with no fiscal note at the state level, we knew that we needed to go find the money.

So we've done this in a couple of ways. We helped pass the license plate bill in 2003, the God Bless Texas, God Bless America plates; we were kind of the ground troops for Commissioner Johnson, it was his idea.

And then we also went to the U.S. Department of Education, and we got a $500,000 a year grant to do the largest, and really the only national pilot program for Safe Routes to School, on the non-infrastructure side.

And I know it's all kind of confusing because there's a lot of different things called Safe Routes to School. But the two big divisions are infrastructure and non-infrastructure, and the purpose of the non-infrastructure is the education and encouragement part.

So that the kids get the traffic safety, they get the encouragement, and the parents get the tools and the entire school community, to change the behavior of an entire school community.

And so if we looked at that as non-infrastructure, about 4 percent of these projects would be considered non-infrastructure. The planning grants, which we love　-- we think it's very valuable. All those $10,000 planning grants, are going to be for planning infrastructure, primarily.

But we've kind of put them on the non-infrastructure side of the ledger, and so that brings us to our project.

So we did submit a project. We did communicate with TxDOT staff as, in the development of this, and many presentations on what we were doing at the national level. We've also of course given presentations all over the country at almost any kind of a national conference.

I serve on the National Safe Routes to School steering committee, and in fact I worked with Congressman Oberstar to pass the bill in the fist place.

And so we　-- finding the money and getting the bill passed wasn't enough. We wanted to prove the model, and to try to create a model that could work in Texas on a scale.

In Marin County they did the first national pilot program, in one county, 30 schools. For the same amount of money per year, we did a Texas-sized model that included 300 schools, in Lubbock, Amarillo, Fort Worth, Wichita Falls, and the surrounding small communities.

So we have　-- on　-- with the U.S. Department of Education's help we created the national model on a scale. As we tell people in other states, our project area was larger than the state of Louisiana. And so it was a decent size scale pilot program.

So Texas, of that $612 million that we passed nationally, Texas got a gross amount of $43 million. And $24 million is approved here, and that means that there is money left on the table, and what the committees may not have been aware of when they were scoring this, and I'm not sure if the staff recommendations were aware of this.

But the current existing Safe Routes to School Program, we call it, Bike Texas Safe Routes to School, the non-infrastructure, education and encouragement program, that's sought out, hired, trained all of these people for a program that never existed before. And so we have this body of experience.

It's going to be shut down, unless we get funded in this round. And the　-- I'd love to answer questions about the application, there may have been questions with　-- that the committees had that they weren't able to get answered because of the process that we had. We're all trying to come up with the best, most　-- fairest process possible.

And, but at the same time, it's a brand new program. And when somebody's looking at three hundred $10,000 applications, and suddenly they see a $3 million application, that is quite complex, naturally they would have a lot of questions about that.

But at the time when they began their deliberation there was a plan for a January call for projects. So that many of them may have believed that there was going to be another, a chance for them to get their questions answered and to have these issues resolved in time for a January call.

But we all recognize that that's too soon for a call for projects, because all of those planning grants won't quite be finished. So those people need time to finish their projects, so that in　-- you know, end of '08 or '09, the next round, you know, or the next transportation bill, as appropriate time for those to resubmit, to do something about those plans that they've created.

So if only these　-- so our request is that you would approve one of the two projects that we have recommended, and add it to the list, and out of the existing funds that are available we have what we call a seven-region project and a twelve-region project.

The twelve-region project also includes El Paso, McAllen, Laredo, Bryan-College Station, two additional people in San Antonio. But the education and encouragement part of Safe Routes to School is pretty people-intensive. And it's important that they go and they get to know the school communities.

They farm 30 schools apiece, and they really get to know that community, and many of those communities that we have been working with through our program, have been counting on us to come in with Safe Routes to School education and encouragement program.

So that's one reason you didn't see more of these applications. Because they knew that we had a model, it was going to be on a large scale so that children in Amarillo were learning the same kind of stuff that children in McAllen were.

And we've got the traffic safety element, we've got the encouragement model, and it's going to shut down. And so we will　-- Texas will lose that experience that we've invested a couple million dollars in, all that experience counting U.S. Department of Education, our matching funds　-- also as Scott Polikov was talking about, these private local matches and how valuable they are.

Just this year, we brought in $420,000 in in-kind match for our teacher training and our Safe Routes to School Program, just for traffic safety stuff.

That's typical for us. And so we leverage and we, hundreds and hundreds of volunteers with thousands and thousands of hours, the network, the system, it's all built out there.

The people that we have, that we will be having to cut are the same managerial level now with three years of experience each, almost 20 years of experience we're about to lose.

They would be the ones that would be able to train that next generation of local outreach coordinators that would help all of these communities, with　-- that they have their plans out there, that　-- all the broken piece of this is, even in a place like　--

Many communities already have good sidewalks, especially those built before World War Two, and they have community schools. But the kids have stopped biking and walking to school, because you need to re-educate. Like we all did in the 70s and 60s, we biked and walked to school, that we need to have this encouragement element.

And that's the missing piece in this, and that's the part that we can provide. The funding is there, please ask your questions, look at this application, and see what you think is best for the children of Texas. Thanks. Any questions?

MR. WILLIAMSON: Members, do you have questions or dialogue, questions of Robin or dialogue you wish to have with him?

MR. HOUGHTON: Thank you, Robin.

MS. ANDRADE: Thank you very much.

MR. WILLIAMSON: Tommy? It's good to see you again. Where have you been?

MR. EDEN: Well, I have a job now, it　--

(Laughter.)

MR. EDEN: -- keeps me busy during the hours between 9:00 a.m. and 1:00 p.m. most of the time. But I have managed to take off some time to work with this committee, and help you out with ranking the schools, and the Safe Routes to School Programs projects, the applications.

It has been a few years, since　--

MR. WILLIAMSON: It has.

MR. EDEN: -- and our committee has been meeting a few times this year, there were several years there where our committee did not meet at all, and we're hoping that it's not going to be several years between now and the next time we meet.

In fact, we are talking about the idea of coming up with some general suggestions on what can be done to improve the Safe Routes to School application process, and what, you know, ways that applications can be improved.

Perhaps some limitations on either the number of applications that a single applicant can submit, or perhaps some dollar figures that might be considered as limits on what should be applied for.

Basically I'm here to answer any questions that you have, and I think Regina pretty much covered most of what we wanted to say, you know, on behalf of the committee.

MR. WILLIAMSON: Do you feel like the process that you followed fairly apportioned the decision?

MR. EDEN: We did not actually make that apportionment. And I was not aware that there was one application that had been dropped, while all the others had been approved in terms of non-infrastructure, what was it, non-infrastructure program development applications?

MR. WILLIAMSON: Right.

MR. EDEN: We didn't actually suggest a particular cutoff point, we simply ranked the applications that　we had an opportunity to look at --

MR. WILLIAMSON: Ah, so the committees were more or less neutral about winner and losers; they just scored and got ranked, and then the available funds got applied to that ranking until it reached the bottom, and the line was drawn.

MR. EDEN: I suspect that's how it was done, I don't actually have that information. But we did not state, you know, here's the cutoff line, approve all these above here and disapprove those below it.

MR. WILLIAMSON: So you concern yourself mainly with ranking.

MR. EDEN: That's correct.

MR. WILLIAMSON: That's a pretty objective way of doing it.

MR. EDEN: You may want to ask the TxDOT staff how that was handled.

MR. WILLIAMSON: Did you get plenty of support from the TxDOT staff?

MR. EDEN: We got very good support from the TxDOT staff. They did an excellent job, I'm sure they put in a lot of comp time over　-- hours that, I don't know exactly how they're compensated for that, but they put in a lot of hours working on making it easier for us to make our decisions.

MR. WILLIAMSON: Glad to hear that.

Tommy's an old friend of the commission, Members. Any questions or comments for him?

MS. ANDRADE: Thank you.

MR. EDEN: I want you to get your just desserts.

MR. WILLIAMSON: He is a true volunteer. A guy that could be doing other things, and is interested in this, and we appreciate it very much.

MR. EDEN: And I hope that when you're working on this context-sensitive design, that you'll have someone there who is paying attention to the need for bikeways. I'm looking at the　-- some of the pictures, I saw some things that could be improved, particularly where the bike lanes seem to simply go right up onto the sidewalk, which is not necessarily the best design.

MR. WILLIAMSON: That's not good?

MR. EDEN: Bike lanes should perhaps be considered to merge in with the traffic on the road rather than to merge into the sidewalks.

MR. WILLIAMSON: How would you be safe about that? I guess you would merge in at the same place you slow the traffic down?

MR. EDEN: That's　-- well, you want the bicycle traffic to merge in with the motor vehicle traffic before you reach a choke point. Better not to have a choke point in some cases, and that's where you know this idea of bulb-outs, they may be better for pedestrians, but they're not always as good for bicyclists. So there are going to be some conflicts, and those things have to be worked out. But you need to have someone who's paying attention to the bicycle issues at the same time that you're doing the context-sensitive design for pedestrians.

MR. WILLIAMSON: I think that's a good point. It's a very good point. Thank you very much.

MR. EDEN: You're welcome.

MR. WILLIAMSON: Thanks for your volunteer work. We appreciate it.

Okay, Carlos we have a little bit of a dilemma. Robin obviously in the process isn't selected, and a long time advocate of the bicycle world is　-- didn't look too perturbed, but I bet he's pretty perturbed.

MR. LOPEZ: He's　--

MR. WILLIAMSON: Tell me about, I understand now the ranking process.

MR. LOPEZ: Right.

MR. WILLIAMSON: Now, tell me about the cutoff lines.

MR. LOPEZ: Well, the rankings, we saw the raw scores. What we looked like, it's like when we hire folks, when you score. You seek for a reasonable break in all of the scores. And that's what we tried to draw the lines.

And when we drew those lines in the non-infrastructure, which basically was the driving factor because we had a 10 percent minimum written in law, that we had to have.

We drew that line, and then we accordingly drew the line for the infrastructure projects where the non-infrastructure made up 10 percent of the program.

MR. WILLIAMSON: And Robin's business is non-infrastructure.

MR. LOPEZ: That is correct. That's the application he brought in. So that for example, the lowest score I think we funded was about a 99, his came in around, between 72 and 77 for both committees on both of his projects.

Everything about that was bunched very closely, so that's where we drew the line. But of course the commission has the authority to let us　-- to tell us to go ahead and do that, but we'd have to take it out of some future apportionment.

MR. SIMMONS: Carlos, you are holding some money back, and I didn't remember hearing you say that　--

MR. LOPEZ: Yes.

MR. SIMMONS: -- but, from the federal funding for '09 and '10?

MR. LOPEZ: For '09 if the SAFETEA-LU goes through, and then we've got an apportionment through TVP for '10.

Now, that funding level happened to come out where we drew those lines in the non-infrastructure and the infrastructure came out to what our safety allocation was through '08, plus the license plates money has been accumulating since '03.

That's what that dollar amount came out to. The remainder, we're holding back or could hold back, in order to do a future call for those projects that would be developed by all of these plans that would be developed by all of these towns.

So that was our initial intent in thinking with this particular recommendation, the commission chose to fund the TBC project. We can do that. However, we would have less money for implementation of those projects that may come out from those plans from those other　-- cities.

MR. HOLMES: Carlos, how much are you holding back for '09 and '10?

MR. LOPEZ: Approximately $13 million.

MR. HOLMES: In aggregate　--

MR. LOPEZ: In aggregate, right. Now, Robin had mentioned some　-- a different dollar amount, but there's a difference between apportionment and obligation, and it tends to come down a little lower.

But our figures have it at around $13 million.

MR. HOLMES: And this request was for $10,000?

MR. LOPEZ: No. The project that Robin's asking about, he submitted two: One was for $2.4 million, and the other one was for $3.2 million.

MR. WILLIAMSON: Carlos, do you have any opinion as to why it didn't score any higher than it did?

MR. LOPEZ: It was not the will of the committee chairman. I looked at the score sheet for that particular project because I felt that this could come up.

They tended to get very medium to low grades in the majority of the categories, which are problem identification, problem solution, the budget, they just tended to have, it looked like some issues with that.

And in fact, it was a little interesting that the TxDOT committee pretty much across the board tended to grade those projects higher than our own bike committee did. But that's where the ultimate score came out, and I couldn't　-- I didn't feel comfortable lowering that line any more because of that gap in those scores.

Not to say that that idea that Robin has isn't, you know, a good idea. But just from a purely recommendation standpoint, that's what came to you that way.

MR. WILLIAMSON: Do we have other consultant agreements with that organization?

MR. LOPEZ: Yes. Yes, our Texas Traffic Safety Program; we're about to sign a grant with the Bicycle Coalition for about $292,000 for FY '08. And they'll have another grant in FY '09 for about $265,000.

MR. WILLIAMSON: I sort of see the flashpoint here is, we've got to -- not necessarily a guy but an organization with a tremendous amount of expertise, in an area that we've been trying to move deeper into over the last few years.

On the one hand, I don't think we can reject our volunteer committee's ranking system, and artificially draw the lines just because of one person, not only is it not ethical but it might not even be legal; Mr. Jackson's over there staring at me.

On the other hand, I don't want to lose the expertise that frankly we probably have paid for over the years. And I　-- the organization's not of us, but my guess is, most of their money has been flowing from us.

So my view, despite the communications that I'm sure we've all received, is that we probably ought to approve the staff's recommendation, and then we probably ought to give Carlos a nod from the commission that we wish to not lose the expertise that's accumulated at the organization and find a way to bring a recommendation back to us.

MR. LOPEZ: Okay.

MR. HOUGHTON: Robin has a question.

MR. WILLIAMSON: Robin probably ought not to ask a question.

MR. HOUGHTON: Well, he's　--

MR. WILLIAMSON: I think you'd better think twice before you make a comment. It would be probably not good. I mean, we understand the dilemma. We're all in right here, Robin. You can only make your situation worse, you can't make it better.

MR. STALLINGS: Well, thank you very much for giving consideration to this. I really do appreciate it. There may have been some confusion in the committees about what constituted a state wide program. So, that caused us to score low because we cover many regions like Houston, and Dallas and El Paso and you know, Austin, and　-- but we don't cover 100 percent of the state, because based on our experience, there wasn't enough money for all of it.

But before the　-- we did talk to TxDOT staff, with the Safe Routes coordinator, before we turned in the application, to see, should this be a regional application, or should this be a statewide application.

So I believe that little things like that may have had a big impact on the scoring. But however you look at it, it was the highest scoring education and encouragement project on a statewide level.

So as far as, you know, these are different types of applications, different types of programs, so a score in a complex project like this may be a little bit different than it might be on some other thing that's pretty straightforward like a $10,000 plan.

And of course, like we do with the eight or nine years of successful grants where we've met every match, met every goal with TxDOT so far, that we would sit down with the program manager and work out any issues or deficiencies that may have been identified in our application. We would do that as a matter of course anyway. Thank you.

MR. WILLIAMSON: I still think that's the best course. There's expertise, there　-- whoa. Yes, sir.

MR. GILBERT: Can you help Robin?

MR. WILLIAMSON: Yes, sir. Steve's up here, he wants to know how he gets your 42 cents an hour.

(Laughter.)

MR. GILBERT: Bob Gilbert. Robin, I appreciate all the work you do. And your coalition does. But I think you probably need some feedback from us. And so I'll give you some feedback, from the private Bicycle Advisory Committee and maybe it will help you all also.

On our plan when I read it, you were going to hire 42 people to go out and do programs. Is that programs to the children, fourth and fifth graders, the Super Cyclist Program? Or 42 people to go teach the educators to teach the children?

MR. STALLINGS: Neither.

MR. GILBERT: What is it?

MR. STALLINGS: That's to, 42 people would each work with 30 schools　-- excuse me　--

MR. WILLIAMSON: Bob, is this　-- are we, what we're doing here, right?

MR. JACKSON: Yes.

MR. WILLIAMSON: I don't want to do anything wrong.

(Discussion off the record.)

MR. STALLINGS: Excuse me. Actually, this complements the teacher training program, which uses contractors. So this would be 42 people, based on the model that we did, where for example we had two people in Lubbock, and they each worked 30 schools. So combined, they could manage about 60 schools.

So those 42 people multiplied by 30 schools reaches something over 600,000 kids, that would get the encouragement working with the PTA, we've had something like 400 or 500 PTA meetings in the last three years.

That's what they do. The teachers that train fourth and fifth graders in the teacher training is a separate funding and very complementary program, that of course it's for two funds, it's supposed to run out after the end of three years.

Eventually, this program could pick up that, when that funding expires. Say in the third year we have two more years of funding, as Carlos said on the teacher training, in that third year this one was designed so it could pick up that.

But this would be a ramp-up. So it's not going to be $3 million the first year; it's going to be　-- takes a long time to train the people, and to find them, identify them, hire them. So this is basically a building process that we're several years into, that we would have to start over.

MR. GILBERT: One of the things　-- appreciate that, Robin.

DPS has 30 troopers stationed across the state. And we cover all of the counties in Texas. And we go and do seven specific programs. One of them is bicycle safety. We do 500 programs per trooper over 15,000 programs a year.

When I was looking at hiring 42 people, that really didn't　-- you wrote a great grant, but it really didn't' show the job outputs and the job measures, and what those 42 people would be doing for their $35,000 a year.

And that's what I know I had questions on the committee. What requirements we're going to have for these people.

Another issue that came up, when we go out to schools, is we're allowed to go into schools because we're already wearing this uniform. Civilians going into schools, we're told, have a hard time getting in there, just because, who they are and their background and checks and everything.

And paying someone $35,000 a year, I know our PTA when my kids were in school met like once a month. And so you have 30 schools, so you're going to one PTA meeting a year, or a day, which is an hour or two, for $35,000.

I just didn't know where the salaries came from, it seemed high. One of the things I'm going to throw out here that I thought of, it seemed like same old, same old. Things that we've been doing in the past.

Twenty-first Century, I'm thinking out of the box, I'm thinking we need to do something different, and not re-create the wheel but steal other peoples' ideas.

I can go down to Blockbuster or somewhere and get a DDC, defensive driving course, out, I can go online. For $3 million, I was kind of sitting there thinking, why doesn't the Bicycle Advisory Committee go more high tech and do something on the Net and something that these schools　-- and then they'll hit all of the schools across Texas.

And maybe better spend our $3 million. That's one of the things that I was thinking of.

MR. STALLINGS: Which is excellent. We have the best website in the country, probably for Safe Routes to School, so that we can reach everyone that we can't reach in person.

So that we can reach like for example, the Governor declared Texas Bike and Walk to School Day. Where any community, like El Paso where we didn't have staff, they were able to pull from the website and take care of that.

There was a maximum of 30 pages. Okay? Whether you were doing I think a $10,000 application, or whether you were doing a large-scale project, you only had 30 pages.

But all of those things are for example, the details and the job descriptions, they do much, much more than go to PTA meetings. That's just an example of a tiny thing they do.

And I have one of our outreach coordinators from Amarillo here, if you had any questions about what they really do, and the impact that they have, and I've got letters　-- we were the Amarillo nonprofit of the month in March 2005. You know, we are so integrated into those communities, and we've been able to make such an impact in changing the behavior of the kids, and working with the city and with the school districts, and that in fact where we do work with DPS and we do work with all of the TxDOT traffic safety districts, and we provide kind of an extra little bit of help for them.

So in all of those places where we are, Lubbock, Amarillo, Fort Worth, we have a very good relationship with the district, with the traffic safety specialists there, and we've become a little bit more of an extension of their work as well.

Otherwise　-- and we do publications that we share with everybody. So our reach is way beyond that core amount. But we're trying to change the behavior that's happened over 30 years, to get these kids to bike and walk to school.

And we know that you can't just do that by, you know, mailing out a videotape. Now, you've got to really have a lot of hand's on, and our, for example one outreach coordinator is going to have 30 volunteer team leaders, one for every school.

They've got to recruit those team leaders, they've got to train those team leaders. And this is　-- they are just the tip of the iceberg for a huge amount of leverage of volunteer activity that goes on, on an ongoing basis.

So it's not just, they get to go to PTA meetings and make $35,000 a year. Also, budgets are budgets. That gives a range of what people might make. We wanted to figure out how to tie it to, most of our people have ten, twenty years of experience; we've been really lucky because they have passion for this.

But we wanted to try to tie it to starting teachers, starting schoolteachers. And so that gave us a kind of a range, because we've been paying $30, and we've found that it's kind of starving our people out, and that's where starting teachers are sometimes making, you know, $38,000 or $40,000.

So it does seem like a lot of money but it's really not that much anymore.

MR. GILBERT: Robin does good work in his group, and thanks. They're giving DPS about 50,000 A to Z bike activity books, and I appreciate that.

But I'm just trying to give you some feedback, and let you all know what we kind of thought about. And maybe when you were asking Tommy about the changes in how things were done, when things are specific about this, maybe we could get a little bit more information, because if we had kind of like a job detailed description of what your employees would be doing, and what their expectations were, we really didn't know and we couldn't figure that out from the material that was presented to the committee.

MR. WILLIAMSON: You're kind to provide us that background. That helps a lot.

MR. GILBERT: I appreciate it. Thank you.

MS. ANDRADE: Officer, thank you so much for everything you do to protect us.

MR. GILBERT: Oh, thank you.

MR. LOPEZ: Commissioner, I think you just got a flavor of some of the deliberation that probably went on within the committees, and when they delivered those scores, I didn't feel like I could go and give any more of an educated guess.

So I guess my question is, if you would like for us to fund this project we can amend the exhibit, and do it that way, or whatever other method you would like for us to do, Chairman.

MR. HOUGHTON: I think we ought to stick with　--

MR. WILLIAMSON: Help me, Members　--

MR. HOUGHTON: -- the recommendation then, and instruct you, Carlos to go back to see how we can work with Robin's group in other ways. The Chairman has talked about how we have worked with him over the years, and have these people that we directly or indirectly have funded. But I don't think we can overrule the committee's decision, and move that line.

MR. LOPEZ: Okay.

MR. HOUGHTON: But I do believe we can　--

MR. WILLIAMSON: Well, here's the deal.

MR. HOUGHTON: -- with Robin.

MR. WILLIAMSON: And I think he falls into his own category, does he not, Carlos?

MR. LOPEZ: He's probably the only what I would call statewide application. That's why he got the highest score statewide.

MR. WILLIAMSON: Well, and I think what I　--

MR. HOUGHTON: Yes. I don't think we can move the line, but I think we can instruct you to come back next meeting and　-- next commission meeting and work something out.

MR. LOPEZ: Okay.

MR. HOUGHTON: That's something, and we'll let you figure it out. You and Bob Jackson. I saw you huddling over there, so　--

MR. LOPEZ: Okay.

MR. WILLIAMSON: Did you go out for a call for a statewide program?

MR. LOPEZ: Yes. It's for projects from all around the state; that's what we went out and called　--

MR. WILLIAMSON: Oh, I see. Could you go out and call for just a statewide program?

MR. LOPEZ: No. It was an infrastructure　--

Oh, could.

MR. WILLIAMSON: C, could.

MR. LOPEZ: Just for　-- yes, we could. We could do that.

MR. WILLIAMSON: Because I think the officer makes a good point. This is the public's money. You know, it's not free cheese.

MR. LOPEZ: Right.

MR. WILLIAMSON: So we need to be able to　--

MR. LOPEZ: Right.

MR. WILLIAMSON: -- you know, from　-- and Tommy's a very conservative Republican, from Tommy over here on the right, to Steve over here on the left, you know it's their money. And they got to know that we don't just award money because　--

VOICE: Where there's value　--

MR. WILLIAMSON: -- without reason.

MR. LOPEZ: Right.

MR. WILLIAMSON: And the officer made some good observations about the grant application, so I would feel more comfortable　-- I know what Robin wants, but I just don't think we can do what Robin wants. I would feel more comfortable if we take a step back and say, Look.

There are these local planning grants that are all-important and need to be done, that we've awarded. There's a certain level of infrastructure, you know, and we'll hear about the ones that didn't get those contracts here pretty quick.

MR. LOPEZ: Uh-huh.

MR. WILLIAMSON: And we recognize the difference between a statewide or a series of regional grants, and individual city and recreation center grants. So let's organize and go out and do one design that targets statewide programs that are big. You know, who knows, it might end up being a more　-- a stronger program for Robin to build his organization off of.

MR. LOPEZ: And who knows, maybe even DPS will apply.

MR. WILLIAMSON: Oh, I bet they will.

(Laughter.)

MR. HOUGHTON: Move to approve.

MS. ANDRADE: Second.

MR. WILLIAMSON: We have a motion and a second. All those in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: The motion carries. Thank you.

MR. LOPEZ: Thank you, Commissioners.

MS. ANDRADE: Carlos, I have a question　--

MR. LOPEZ: Yes.

MS. ANDRADE: -- on these infrastructure projects, how many applications did you receive?

MR. LOPEZ: On the infrastructure side, I'll get you that number　--

MR. WILLIAMSON: They're over here. There's a bunch of them.

MR. LOPEZ: -- there should be　-- how many have we got　-- infrastructure　-- about 127.

MS. ANDRADE: Okay.

MR. LOPEZ: Oh, 147 infrastructure.

MS. ANDRADE: Oh, thank you very much.

MR. SIMMONS: Ready to move on?

MR. WILLIAMSON: Yes, sir.

MR. SIMMONS: All right, Commissioners. We'll move into our rules, and our first item is under 6(a)(1), which regards the crash records, rules for the crash records system.

MS. RAWSON: For the record, I'm Carol Rawson, the Deputy Director　-- of the Traffic Operations Division. The minute order before you provides for preliminary adoption of amended and new rules related to crash records. On October 1, the Crash Records Bureau of the Texas Department of Public Safety will become part of TxDOT.

The amended and new sections are designed to facilitate this transfer of crash records function into TxDOT and to make for a smoother crash records process.

The amended section 3.13 incorporates the charges for the public to request a certified or non-certified copy of a crash report as allowed under state law.

New sections 25.971 through 25.973 implement House Bill 423 of the 80th Texas Legislature. This legislation requires medical examiners and justices of the peace acting as a coroner, to report certain information relating to fatal traffic crashes.

Impaired driving continues to be a significant safety issue in Texas, and under House Bill 423 and the proposed rules, reports on fatal crashes must include toxicology testing information if this testing was conducted.

New section 25.974 also allows for minor, non-technical corrections to be made to an officer's report without requiring the officer to physically change the report. We recommend approval.

MS. ANDRADE: Members, you've heard the staff's recommendation. Any questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye?

(A chorus of ayes.)

MS. ANDRADE: Motion passes. Aye.

MR. SIMMONS: Our next item is Item 6(a)(2), it will be presented by Elizabeth Hilton from our Design Division and it talks about our pass-through tolls, which is the Tax Increment Finance District.

MS. HILTON: Good afternoon. For the record, my name is Elizabeth Hilton. I'm the director of the Planned Development Section in the Design Division.

These proposed amendments clarify provisions of Transportation Code 222.104, and implement new Transportation Code 222.105, 222.106, and 222.107, as added by Senate Bill 1266, 80th Texas Legislature, 2007.

These newly enacted sections provide that a municipality or a county may designate a continuous geographic area in its jurisdiction, as a Transportation Reinvestment Zone, to fund pass-through projects developed under Transportation Code 222.104.

The amendments provide that whether a municipality or a county designates a Transportation Reinvestment Zone, is one factor considered by the commission in determining whether to enter into a pass-through agreement.

The amendments also clarify the other criteria that the department may consider when evaluating a proposal from a private entity.

Amendments to Section 5.53 prescribe additional materials and information that must be included in a proposal submitted to the department for a proposed pass-through project.

The additional information required includes a statement of proposing public entity's intentions with regard to creation of a Transportation Reinvestment Zone; amendments to Section 5.54 add to the list of factors that the commission considers when determining whether to authorize a pass-through agreement, to include the public entity has or intends to designate a Transportation Reinvestment Zone.

Amendments to Section 5.55 clarify that the department may prescribe, in a request for competing proposals to private entities, additional evaluation criteria as necessary to tailor the criteria to a specific project.

Amendments to Section 5.56 prescribe additional items that must be included in the Agreement, including deadlines for key stages of project development, provisions for termination of the Agreement, and for a public entity, a copy of the document designating a Transportation Reinvestment Zone, if such designation has been made.

Finally, amendments to Section 5.58 prescribe additional requirements with which highway projects constructed under a pass-through agreement must comply to ensure that pass-through highway projects will meet all department standards for highway design and construction, in order to ensure the safety of the traveling public.

Staff recommends approval of this minute order.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have　-- they didn't even give me a chance. We have a motion and a second, all in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Aye, motion passes. Thank you.

MS. HILTON: Thank you.

MR. SIMMONS: Our next presenter is Brett Bray, he'll be talking about Chapter 8 rules.

MR. BRAY: Madam Chair, Members, Mr. Simmons, I'm Brett Bray, Director of Motor Vehicle Division. This item is about proposed additional rules and amendments to Chapter 8 of the Department's Rules.

Prior to passage of House Bill 2216, only franchised dealers could advertise, display and offer for sale, new motor vehicles. Disabled persons in Texas shopped for these vehicles, or for vehicles that are equipped in　-- for their needs, over the Internet or through catalogues, because few if any franchised dealers actually sell motor vehicles that are designed for disabled persons.

This situation prevented disabled persons from determining if the vehicle was actually configured for their particular use, and whether the special equipment was appropriate in design and functionality.

The proposed amendments and new sections change the department's rules to reflect the new legislation regarding mobility vehicle dealers. The subject legislation was largely a result of a compromise between stakeholder groups, franchised new motor vehicle dealers, and converters of complex vehicles that have been modified for mobility-impaired individuals.

We were included in the work sessions with the stakeholders and the bill sponsor; most of this proposal has been remarkable. The most significant item is language that clarifies the legislative phrase that a mobility motor vehicle dealer may sell and deliver a new mobility motor vehicle if the transaction occurs through or by a franchise dealer of the chassis line.

Division staff have contacted the two stakeholder groups mentioned, and this proposal is a result of their input. We request approval to post and publish the proposed new rules and amendments.

MS. ANDRADE: Members, we have two individuals from the audience that would like to address us. Would you like to hear them first?

VOICE: Sure.

MS. ANDRADE: If we ask any questions on　it. Glen Hagood?

VOICE: Glen is not here right now.

MS. ANDRADE: Okay. Steve Holt?

MR. HOLT: That would be me. I was going to address some comments into the meeting if we needed to, and I don't believe this is the issue we were going to address, so.

MS. ANDRADE: All right. Thank you.

Members, you've heard staff's recommendations. Do you have any questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Aye, motion passes. Thank you.

MR. SIMMONS: Our next item will be presented by Amadeo Saenz, dealing with our Corridor Advisory Committees.

MR. SAENZ: Good afternoon, Commissioners, for the record, again Amadeo Saenz, Assistant Executive Director for Engineering Operations.

The minute order before you proposes adoption of amendments to 15.2 and adds new sections 15.9, Corridor Advisory Committees, and 24.13 concerning Corridor Segment Committees, concerning the creation of these two advisory committees to help the department in planning the corridors that we're developing across the state.

Section 15.9, the Corridor Advisory Committee concerns the development of the Trans Texas Corridor Advisory Committee for each of the individual corridors that we're developing, for example, TTC 35, which would include Interstate 35 as we're developing the Corridor; TTC 69 and any other corridors that the commission would want to set up an Advisory Committee for, across the state.

These committees will participate with and provide advice and recommendations to the department on individual and specific corridor-level planning issues in development matters.

The membership will be limited to 24 people, and may include affected property owners and business establishments, technical experts, representatives of local government entities, general public, economic development officials that the commission would then select from this group and set up for the individual corridors.

Section 24.13 sets up the Segment Advisory Committees. These concern individual segments of the Trans Texas Corridor, we have a committee that's looking at the entire Corridor. As we develop the different segments, we would have Segment Advisory Committees or Segment　-- Corridor Segment Committees that will help us in getting down to what I would say, the nuts and bolts as we plan and develop the individual segments of the Corridor.

This group would be made up of　-- also would be limited to 24 people, this group would also provide the department, as part of the analysis and formulation during the environmental process, with a recommendation of whether the Corridor should be built or not, where the Corridor would go, would go out there and help us coordinate efforts to draw out from the public what the issues and concerns are of the Corridor and point the potential solutions out.

This recommendation would then be taken by the　-- would then be considered by the commission, before we take action to　-- implementing any contracts.

Again, the membership would be limited to 24, we will include one member appointed by the county judge of every county that the segment goes through. In addition, any MPO that is within the Corridor would have one member, and the remaining members would be made up of mayoral appointments from incorporated cities within the　-- outside the MPO jurisdictions, chambers of commerce, economic development councils.

You all would name the other people; the judge would name his designee for the county, and the MPO would name his designee for the MPO.

We think that this committee structure will ensure that there is local and regional involvement in transportation decision making and will ensure that local and regional groups that have an interest in the project and where the segment or the facility will be located, will be able to provide us some key inside information to be able to make those decisions.

Staff　-- we are proposing the rule, the amendment and the new sections to the rules, they'll be published in the Texas Register for public comments. We will accept public comments until November 12 at 5:00 p.m., and then staff would recommend that we move forward with proposing the rules. I'll be happy to answer any questions on the committee structures.

MR. WILLIAMSON: Members, you heard the staff's explanation and recommendation on this minute order. First, do you have questions of Mr. Saenz.

MR. HOUGHTON: Yes. What is the earliest date that you could see the body empaneled?

MR. SAENZ: We will accept comments until November, we'll probably bring them for final approval in December. So by January, we should be able to start getting　--

MR. HOUGHTON: Members?

MR. SAENZ: -- yes, sir.

MR. HOUGHTON: Okay.

MS. ANDRADE: I missed that because I sneezed. When was it?

MR. HOUGHTON: January.

MR. SAENZ: Around the beginning of the year, Commissioner.

MS. ANDRADE: Thank you.

MR. HOUGHTON: I think it's a great idea, long needed. And I think it's being embraced because we've communicated this with the locals.

MR. SAENZ: Yes. And of course, we've discussed this the last couple of meetings, and we took a lot of the feedback we received from you all in developing the rules.

MR. HOUGHTON: Right.

MR. SAENZ: We visited with some of the coalitions out there, to get some feedback from them as we kind of put the rules together, and we look forward to hearing from them as we put this out for public comment so that we can answer any concerns that they may have.

MR. WILLIAMSON: Steve, did you have something you wanted to say?

MR. SIMMONS: Well, it looked like our counsel was going to say something　-- okay. Never mind.

MR. WILLIAMSON: Yes, Members.

Amadeo, my principal concern, first of all I wish that the Legislature had adopted this in statute, in '07. I hope we can persuade them to adopt it in '09. And asset this large, with this importance to the state, of necessity requires the cooperation and approval of everyone.

My one concern has been and continues to be, of course with the discussion about our cash flow this morning this might not matter anymore. But we continue to invest money in 35, and in segments of what could be called 69.

And I think it is wise to slow down, and give us the opportunity to get these people in place, to begin to observe whether or not we really want to condemn places like the Stagecoach Inn, to gain one more lane on 35 when we could be spending half the money or a quarter of the money and gaining two lanes someplace else.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: I just　-- I don't want this to be limited to TTC 35. I think that it's important to look at the entire Corridor, and develop citizen support for all of the improvements that need to be made, within the entire 35 corridor.

MR. SAENZ: We have that in the rules about ensuring that it not only includes the, for example the TTC Corridor, but also Interstate 35, and they look at the picture, the big picture for developing the project.

MR. WILLIAMSON: Are we condemning land right now in that area?

MR. SAENZ: We are acquiring right of way for the expansion of 35, based on the commitments that you, the commission, had made to expand it from the two lanes in each direction to three lanes in each direction.

So we are moving forward with the development of 35 to get it to a three-lane in each direction section, based on prior commitments of commissions.

MR. WILLIAMSON: Were those prior commitments predicated on having the available cash flow?

MR. SAENZ: I would be　-- yes, sir. I would think　-- yes.

MR. WILLIAMSON: Anything else, Members?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: The motion carries. Thank you.

MR. SIMMONS: Our last item will be　rules to be proposed deals with the Vehicle Titles and Registration. Mike Craig, our deputy division director will make those presentations.

MR. CRAIG: Thanks, Steve.

Mr. Chairman, Members. I'm Mike Craig, Deputy Director of the Vehicle Title and Registration Division.

We have a few amendments we'd like to propose to existing rules and plus adding a new rule to the, Chapter 17.

These appear to be non-controversial. They deal specifically in the title area, with allowing military who are going into hostile fire zones to be exempted from the title application fee; we also have the ability provided for by statute now to do electronic notification of transfer, if you sell your vehicle you can notify us electronically. In the past, you've been able to do it by mail, by hard copy form.

We also have the ability now if you　-- if an individual's fence is damaged by either the owner of the vehicle or somebody that that owner has authorized to operate the vehicle, they can then place a lien on that vehicle. Many times that vehicle's left on the property, so they have direct knowledge of what the vehicle is, and the information about it.

And we also have some clean-up information and language we're putting into some of the existing rules. So with that, we recommend approval.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: Motion and second, all those in favor signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. CRAIG: Thank you.

MR. WILLIAMSON: Thank you, Members.

MR. SIMMONS: Commissioners, we have two rules for final adoption. The first one is dealing with public access to commission meetings, and we've asked our general counsel, Bob Jackson, to come forward.

MR. JACKSON: Bob Jackson, General Counsel. This rule is final adoption, it takes out the requirement we've had for many years, the commission will allow local delegations to come speak before it.

This is no longer necessary, due to over the last few years, delegation of authority to regions. We received no public comments, and we offer no changes.

We recommend adoption of the minute order.

MR. WILLIAMSON: Members, you have heard the staff's explanation and recommendation. Do you have questions or comments?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: Motion and second. All those in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SIMMONS: Our last rules for final adoption deals with our right of way in regards to the State Participation Toll-Related Relocations. John Zimmerman.

MR. ZIMMERMAN: Good afternoon. For the record, my name is John Zimmerman. I'm the Right-Of-Way Division Acquisition Section Director.

I'd like to present for your consideration this item 6(b)(2) which provides for the final adoption of an amendment to Section 21.23 concerning state participation to toll-related utility relocations, to change the expiration date for state reimbursement for utility relocations on toll projects from September 1, 2007, to September 1, 2013.

This amendment provides that the department and a utility share equally the cost of relocation of a utility facility required by the improvement of a toll project or toll lanes. The current rule, 21.23 limits reimbursement to those eligible relocation costs that were actually incurred prior to September 1 of this year.

The commission, by Minute Order 110972 in　-- on June 28th of '07 proposed these amendments. There have been no public comments received, and the staff recommends your approval of the minute order.

MR. WILLIAMSON: Now, John. This is the first time you've been before this commission?

MR. ZIMMERMAN: It is.

MR. HOUGHTON: Welcome.

MR. WILLIAMSON: What did you do to Campbell?

MR. ZIMMERMAN: He's on his way to the big AASHTO meeting. Or he's waiting at the airport for his flight anyway.

MR. WILLIAMSON: Did he pay you extra to do this?

MR. ZIMMERMAN: Actually I was going to have hernia surgery today, but I put it off.

(Laughter.)

MR. HOUGHTON: This is better than hernia surgery?

MR. ZIMMERMAN: Yes.

Well, I'm not sure of that.

MR. WILLIAMSON: Every once in a while you get your hat handed back to you. I guess I'll leave it right there, John.

MR. ZIMMERMAN: These rules of course are being presented because this Legislature extended the date, and this is to comply with the Legislation　--

MR. WILLIAMSON: I know, John. We're just trying to figure out a way to jack with you.

MR. ZIMMERMAN: All right. I've got one　-- you've got one more chance. I'll be back.

MR. WILLIAMSON: Oh.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SIMMONS: Thanks, John. Our next item is Item 8(a), dealing with the tendered minute order for Comal County. And Wayne Dennis.

MR. DENNIS: Good afternoon, Mr. Chairman, Commissioners, Mr. Simmons. My name is Wayne Dennis, I'm the deputy director of the Transportation Planning and Programming Division.

This minute order tenders a proposal to the city of New Braunfels for a future project to extend FM　306 on a new location, from I-35 east and south to FM　1101, and then remove FM　483 from I-35 to　-- FM　1101 from the state highway system.

Constructing the proposed facility will expand economic opportunities in the area, and improve the continuity of the state highway system, by providing direct access between I-35 and FM 1101.

If approved, this minute order would tender the following proposal: "The city will design and construct the new facility to TxDOT standards, to include completion of all environmental work, public involvement, environmental mitigation, and remediation.

"The city will acquire all right of way in the name of the state, adjust utilities and provide relocation assistance in accordance with federal and state laws, rules and procedures.

"Upon completion of the construction of the proposed FM 306 extension, the city will surrender control, jurisdiction and maintenance of the new facility to the state.

"In turn, the department will review the design and construction of the proposed facility to ensure that it meets department specifications.

"And upon satisfactory completion of the FM 306 extension, the department will recommend to the commission to approve a subsequent minute order to accept the project, add FM 306 to the state highway system, remove FM　483 from the state highway system, and to declare the right-of-way surplus to the needs of the department, and recommend that the Governor execute a quitclaim deed to Comal County."

I guess in short, the entire development of this proposed project would be borne by the city of New Braunfels. Staff recommends approval of this minute order.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Wait, wait. I got one question.

MR. HOUGHTON: You got a question? I'm sorry.

MR. WILLIAMSON: Do we have any concern that the new 306 will be built in such a way as to put additional pressure on Saur Road?

MR. DENNIS: I have not had that concern expressed from the San Antonio District; we've been working with the city throughout this.

MR. WILLIAMSON: Well, this is inside the New Braunfels city limits. Right?

MR. DENNIS: The project, yes, sir, is inside the city limits.

MR. WILLIAMSON: So I would assume Saur Road, or Saur Road is a city road?

MR. DENNIS: Beyond there, I believe that is in the county.

MR. WILLIAMSON: So then my question becomes even more appropriate. Are we, ten years from now, going to be asked to　-- is the design of 306 anticipated to be different, or is the footprint of 306 anticipated to be different than the footprint of Saur Road.

And if so, are we going to be asked to extend the new footprint along Saur Road at some point in the future, with state funds.

MR. DENNIS: I do not know the answer to that, sir.

MR. WILLIAMSON: So what prescriptive steps can we take to secure right of way on Saur Road, to assure that the future year costs of that　-- it's local to me that's what will happen. Development will occur, the city will grow up, houses will be built, businesses will be created and the pressure will be on.

See, right now if you look at our liability, it's state highway, county, farm to market road, farm to market road. It's more or less, we control it. We come in with this new farm to market road, that exits right off of 35, I suspect goes straight to some real estate somebody wants to build some houses, on. Houses get built, the Saur Road right of way gets squeezed, and then we got to go in and pay five times as much to expand the road.

MR. SAENZ: For the record, Commissioners, Amadeo Saenz, Assistant Executive Director for Engineering and Operations.

In the short term, the construction of 306 will improve the traffic flow because it will connect directly to Saur Road. In the long term, you're exactly correct, Mr. Chairman in that it could lead to having to expand or widen Saur Road.

That is a　-- and looking at the map, because it's white, I'm assuming that it's in the county and not in the city at this time. Being off-system, the city or the county would be responsible for acquiring the right of way.

What we can ask our district people to work with the city and county about, trying to preserve the corridor along Saur Road for the future, to make sure that they can address that potential growth.

MR. WILLIAMSON: Even to the extent that we might be willing to help some financially　--

MR. SAENZ: Yes, sir. Right.

MR. WILLIAMSON: -- in order to lower our construction costs down the road.

MR. SAENZ: Right. You know, one of the pieces of legislation that passed this past session had to do with giving the counties authority, through the planning process, to require developers to show potential　-- identify transportation corridors and then do some　-- put some requirements in the planning process that would allow them to plan for future expansion of those corridors.

MR. WILLIAMSON: Okay. That's all. Just, I think we ought to just tell David to kind of look into that.

Members, you've heard staff's explanation and recommendation.

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: We have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SIMMONS: And if you'd go ahead and handle 8(b).

MR. DENNIS: This minute order certifies the counties eligible to participate in the Economically Disadvantaged Counties Program for Fiscal Year 2008.

And that is shown in Exhibit A to the minute order. Transportation Code Section 222.053 appoints the commission, when evaluating a proposal for a highway improvement project in a political subdivision that consists of all or a portion of an economically disadvantaged county to adjust the minimum local matching requirements, after evaluating the political subdivision's effort and ability to meet the requirement.

Transportation Code Section 222.053 also requires the commission to annually certify a county as economically disadvantaged as soon as possible after the Comptroller reports on the economic indicators specified by law.

The Comptroller has provided the necessary data to determine the eligible counties for the 2008 program. The counties' efforts and their ability to provide a local match have been considered in determining the adjustment for each county, using the criteria contained in 43　TAC　15.55.

Staff recommends the list of projects shown　-- list of counties shown in Exhibit A for certification under Fiscal Year 2008 Economically Disadvantaged Counties Program, and the establishment of their local match adjustments. Staff recommends approval of the minute order.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation. What's your pleasure?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.).

MR. WILLIAMSON: Motion carries, thank you.

MR. DENNIS: Thank you.

MR. WILLIAMSON: Thank you, Members.

MR. SIMMONS: Commissioners, you get to spend a little time with Mr. Bass now, on Items 9(a), (b), 8 and 10.

MR. BASS: Good afternoon. Again for the record, I'm James Bass, Chief Financial Officer at TxDOT.

Item 9(a) is to notify the commission that the 2002 project of the Central Texas Turnpike System has reached substantial completion. This milestone was reached earlier this year when Segment Three of State Highway 130 was opened to traffic.

And staff would recommend that you accept this report so that we may inform the trustee. The major impact of this is, there are additional reporting requirements, and inspections that will occur by the GEC since we've reached substantial completion on the project.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation. What's your pleasure?

MR. HOLMES: Move.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BASS: Item 9(b) would authorize the department to negotiate and enter into an agreement with the apparent best value proposer for lockbox and custodial services for the collection and administration of toll revenues. Staff recommends your approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments for staff?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries, thank you.

MR. BASS: Item 98 seeks your approval of a supplemental resolution for the Texas Mobility Fund. This would serve as an umbrella approval, and would allow the department to issue up to an additional $2.5 billion in bonds from this program in the future at either fixed or variable rate, and would also add UBS as a potential swap advisor.

Before we would issue any debt out of this program, I just want to emphasize again we would have to go to the Comptroller and get a certified revenue estimate, and we would come back to the commission for approval for a specific issuance.

This merely allows us to explore opportunities to enter into swaps or into, in effect, lock in the interest rate on the bonds that we know we're going to be issuing in the future, to see if we can't save some money and generate more capacity.

MR. WILLIAMSON: Members, you've heard the staff's recommendation, explanation　--

MR. HOUGHTON: So moved.

MS. ANDRADE: They did that to me also.

MR. WILLIAMSON: Do you have questions or comments for staff?

(No response.)

MR. WILLIAMSON: We have a motion.

MR. HOUGHTON: Second　-- move it.

MS. ANDRADE: And I second it.

MR. WILLIAMSON: We have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BASS: Thank you.

Item 10 is from our State Infrastructure Bank and seeks preliminary approval of a loan to the Mission Redevelopment Authority in the amount of $3 million to pay for construction related to the extension of Farm to Market 396 from the international border to US 83 in Hidalgo County.

Staff recommends your approval so that we may begin negotiations with the Authority.

MR. WILLIAMSON: How's that bridge project coming along, James, do you know?

MR. BASS: I do not know specifically. I apologize.

MS. ANDRADE: It's moving forward.

MR. SAENZ: For the record, Amadeo Saenz. The Bridge Board has let the project. It's under construction, is being constructed by Williams Brothers. They've just started their project; they have, with respect to the remainder of the connecting road project, the district wants to be able to let that project in January of this coming year so that they can coincide with the opening of the bridge.

MR. WILLIAMSON: Okay. Members, you've heard the staff's explanation and recommendation. Do you have questions or comments for staff?

(No response.)

MR. HOUGHTON: I've been moving them all day long.

MR. UNDERWOOD: Second.

MS. ANDRADE: But he didn't move it.

MR. HOUGHTON: I didn't move it.

MR. UNDERWOOD: I thought he said　--

MR. HOUGHTON: No, no.

MR. HOLMES: I'll move it.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries, thank you.

MR. BASS: Right.

MR. SIMMONS: Thanks, James. Our next item is an old friend of the commission, Mr. John Zimmerman's going to make a　--

MR. WILLIAMSON: John? You've come back.

MR. SIMMONS: -- presentation on advanced right-of-way purchasing.

MR. WILLIAMSON: Did you recover?

MR. ZIMMERMAN: I've recovered. Good afternoon. Again for the record, my name is John Zimmerman. I'm from the Right-Of-Way Division. I'd like to present for your consideration the minute order under agenda Item 11, to authorize the negotiation of options, and to expend funds for option fee payments, as well as other expenses necessary to purchase options along the proposed route for expansion and widening of FM 1460 in Williamson County.

This minute order does provide the authority for the Austin District Engineer to negotiate the execution of options, and to expend funds for option fee payments, as well as other expenses necessary to purchase options along the proposed route of expanding and widening FM 1460. Staff does recommend the approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments for staff?

MS. ANDRADE: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, John　--

MR. ZIMMERMAN: Thank you.

MR. WILLIAMSON: -- it's good to see you. Come back and see us someday.

MR. SIMMONS: Our next item is either the award or rejection of Highway Improvement Contracts by Thomas Bohuslav.

MR. BOHUSLAV: Good afternoon, Commissioners. My name is Thomas Bohuslav, I'm Director of the Construction Division.

Item 12(a)(1) is for the consideration of the award or rejection of highway maintenance and department and building construction contracts let on September 6 and 7, 2007.

We have a total number of 15 projects, average about 3.6 bids per project. We recommend award of all of the projects in the exhibit. Any questions.

MR. WILLIAMSON: Number of bids per project going up?

MR. BOHUSLAV: Through this year, we've had more bids on our projects. I think the contractors are on the back side of their payouts and the remaining amount to be paid on their contracts and they're getting hungry.

MR. WILLIAMSON: Members, you've heard Thomas's explanation and recommendation. Do you have questions or comments for him?

(No response.)

MR. WILLIAMSON: Do we have a motion?

MS. ANDRADE: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: We have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BOHUSLAV: Item 12(a)(2) is for the consideration of the award or rejection of a highway transportation enhancement building construction contract let on September 6 and 7, 2007. Seventy-six projects, average of 4.2 bidders per project and I think last year we had about 3.6 bidders per project, so you　-- if I recall that number correctly.

You have two projects we recommend for rejection. The first one's in Galveston County, and had only one bidder for this project; 63 percent over, it was for about $2.2 million. It's for some landscape work on Broadway in Galveston. They had some problems with their bid submission with another contractor, and we didn't get other bids. We have five proposals pulled.

We'd like to go back and re-bid this project and hopefully get more bids with the project. In addition, the city isn't willing to finance the overrun for the project.

The second project that's recommended for rejection is Uvalde County. It's project number 3207, there were five bids, and it's actually 5 percent under, but we've got a problem with the plan area in this project, and to make everything right, we need to go back and re-let it and correct that plan error, and hopefully we'll get bidders again and get price again.

Staff recommends award with the exceptions noted.

MR. WILLIAMSON: Is that plan [indiscernible] the reason it was so low?

MR. BOHUSLAV: No.

MR. WILLIAMSON: Members, you've heard Thomas's explanation and recommendation. Do you have questions or comments for him?

MS. ANDRADE: So moved.

MR. UNDERWOOD: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SIMMONS: Thank you, Thomas.

Commissioners, the next item is our routine minute orders, and I'll be available to answer any questions.

MR. WILLIAMSON: Tom Ramsay Highway? He hasn't passed away yet. How can we name a highway after a guy that's still alive.

MR. SIMMONS: No rule that　-- no law that prevents that. They tried to get that, but they did not pass it.

MR. WILLIAMSON: Man. Okay, Members. You've heard Steve's explanation and recommendation on the routine minute orders. You've had the opportunity to review these, observe any potential conflicts of interest or objections, do you have any conflicts of interest or objections you think you need to state for the record.

(No response.)

MR. WILLIAMSON: Do I have a motion?

MS. ANDRADE: So moved.

MR. HOLMES: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no?

(No response.)

MR. WILLIAMSON: The motion carries, thank you. In the Open Comment period we have two people that feel like they need to comment at this time.

So we'll talk to Steve Holt first?

(No response.)

MR. WILLIAMSON: We'll talk to Glen Hagood second?

(No response.)

MR. WILLIAMSON: Neither one chooses to speak, so we'll put their cards in the card slot.

Now, at this time we will recess in order for the commission to meet in executive session to discuss the election of a new executive director.

Mr. Jackson, do you have something you want to say?

MR. JACKSON: That's fine. You can do that. I just wanted to make sure that's what you intended to do as opposed to adjourning and coming back in half an hour, and then doing that.

MR. WILLIAMSON: You know, where would I be without you?

MR. JACKSON: Moving a lot quicker.

(Laughter.)

MR. WILLIAMSON: Is there a　-- yes, yes. And I guess I might want to announce that it's the intention of the commission to meet in executive session approximately 30 minutes following the adjournment of the regular session?

MR. JACKSON: Well, what you want to do is, you announce that the next meeting will begin at 2:30, and at that point you will open the meeting and then　--

MR. WILLIAMSON: And go in executive session?

MR. JACKSON: Yes.

MR. WILLIAMSON: Okay. The next meeting of the Texas Department of Transportation Commission will occur at 2:30. We will convene at this spot in approximately 30 minutes. And now the most privileged motion is in order, for the meeting in which we're currently engaged.

MR. HOUGHTON: Move.

MR. HOLMES: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(Discussion off the record.)

(Laughter.)

MR. WILLIAMSON: Motion carries. We stand adjourned at 2:00 p.m.

(Whereupon, at 2:00 p.m., the meeting was adjourned.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: September 27, 2007

I do hereby certify that the foregoing pages, numbers 1 through 253 inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Stacey Harris before the Texas Department of Transportation.

10/01/2007
(Transcriber) (Date)

On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731

 

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