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July 31 Transcript

Texas Department of Transportation Commission Meeting

Dillard College of Business
Administration Building Auditorium, Room 101
Hampstead Lane at Council Drive
Wichita Falls, Texas

Thursday, July 31, 2008

COMMISSION MEMBERS:

Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
Fred A. Underwood

STAFF:

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

PROCEEDINGS

MS. DELISI: Good morning. It is 9:03 a.m., and I would like to call the July 2008 meeting of the Texas Transportation Commission to order. Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 2:50 p.m. on July 23, 2008.

First, let me say how pleased we are to be holding this month's Transportation Commission meeting here in Wichita Falls. It's our practice to take the commission meetings on the road outside of Austin three or four times a year. It's a valuable opportunity because it gives us the chance to see firsthand how our local partners are addressing their own transportation challenges. It also provides some valuable insight to the local community and citizens about how we conduct our business.

This is only the second time in the 91-year history that this commission has met in Wichita Falls, and it's been more than twelve years since our last meeting here, so hopefully we can return again before another twelve years pass.

I'd like to thank the folks here at the Dillard College of Business and Midwestern State University for hosting us in this beautiful new facility. In fact, we've already received a hearty welcome from everyone. I would especially like to thank State Representative David Farabee for hosting the reception yesterday, and Mayor Lanham Lyne for helping make last night's dinner with TxDOT employees a great success. And I'd also like to thank our TxDOT employees who have been working very hard to make our visit here enjoyable and very productive. We've had a great time in our visit to Wichita Falls and I look forward to having a productive meeting here today.

Now, as is our custom, we'll open with comments from the other commission members, beginning with Commissioner Bill Meadows, followed by Fred Underwood, Ned Holmes and Ted Houghton. Commissioner Meadows.

MR. MEADOWS: Thank you, Madame Chairman, I very much appreciate it. And I just want to express my appreciation, like I know others will, for all the hospitality that we've been shown here in Wichita Falls. Mayor, Representative Farabee, everybody has just gone all out to welcome us and it has been an enjoyable and informative time, and we appreciate it.

I'd just like to add one other thing which has to do with the fact that as we were sweltering up here in North Texas　-- I live in Fort Worth　-- in our hot and dry climate, a couple of weeks ago I think there was an event in South Texas, Hurricane Dolly struck and caused significant damage and widespread flooding. You know, throughout that event, the commissioners were kept informed as to the activities of our employees, and I was really impressed, Amadeo, with the effort to which this department, very much behind the scenes for us and the other citizens of the state, stepped up.

I mean, they are the backbone of a recovery effort and you really see it. The transportation system is the lifeline and they got the system back up and running in a remarkable fashion, and not only do I appreciate their work, I appreciate being kept informed as to what it is that they did.

Anyway, thank you all for having us here today.

MR. UNDERWOOD: I want to associate myself with my fellow commissioners' comments. Also, to the people of Wichita Falls, you've given a new meaning to Texas hospitality. It's a much higher level than we've seen where we've traveled, and I really appreciate it. Thank you very much for your hospitality; look forward to a good, productive meeting.

MR. HOLMES: I'd also like to add my thanks for a warm welcome and hospitality. Representative Farabee, Mayor, county judges, commissioners, city council members, all the civic leaders have turned out in force to showcase your fine community, and we appreciate the time and effort that you've put into making this visit so enjoyable and informative. Look forward to hearing more and hearing your comments in a few minutes. This is a fabulous facility too. Thank you.

MR. HOUGHTON: And thank you all, folks up in this part of the world, Wichita Falls and the great state of Texas. I was reading some of the information earlier about being the gateway, economic gateway. This is the northern gateway to the great state of Texas coming in from Oklahoma and the heartland, they would say, of this country, and I live on the western gateway and it's a lot of fun being called gateways. And I want to thank you all for your hospitality and all that you've done for us and made it a great meeting. Once again, thank you very much.

MS. DELISI: Let me remind everyone if you wish to address the commission at today's meeting, we'll ask that you complete a speaker's card at the registration table in the lobby. To comment on an agenda item, we ask that you fill out a yellow card. If it's not an agenda item, we'll take your comments during the open comment period at the end of the meeting. For those comments, we ask that you fill out a blue card. Regardless of the color of card, we request that each speaker limit their comments to three minutes.

Now, Amadeo, I'll turn the meeting over to you to begin working through today's agenda.

MR. SAENZ: Thank you, Madame Chair, and good morning.

As is customary when we travel out of Austin, we want to hear from our local transportation district as well as our local transportation partners, and I'm going to call up Larry Tegtmeyer, our district engineer for Wichita Falls District. And first, Larry, I want to thank you for the hospitality. You and your folks did a great job last night, good food, good eating, good times, and thank you for the work, also, that your people are doing.

Of course, Larry oversees this district that runs along the Red River here in North Texas. He's going to tell us a little bit about what's going on in the district and then also introduce some of the leaders that he works closely with as they develop the transportation programs in this area. Larry, I'll turn it over to you.

MR. TEGTMEYER: I appreciate those comments, Mr. Saenz. I guess I wish to welcome you, Madame Chair, commissioners, administration to the great city of Wichita Falls and to the Wichita Falls District. I'm excited that the commission has chosen Wichita Falls to conduct this commission meeting. It is a great opportunity for the district, community and region to interact and discuss transportation issues with the leaders in state transportation. So far I hope you have enjoyed your stay here and I hope that you'll have pleasant and lasting memories of your visit.

At this point in time, there's a couple of individuals in the audience that I'd like to recognize. Senator Estes's office staff, Lewis Simmons, will be able to make a comment shortly. David Farabee is going to make a comment as well. Rick Hardcastle, our state representative, is unable to make it here today, and his staff member, Mike Lytle, is here today, so I just wanted to make mention that Rick Hardcastle is represented here today.

Also, we do have several district engineers here: Walter McCullough from the San Angelo District, and Terry Keener from the Childress District. I'd also like to recognize all the Wichita Falls District employees that are here, as well as the VTR employees and the travel information center, so if you will please stand real quickly. Thank you for coming this morning.

There's obviously many, many dignitaries here this morning, and if I were to try to recognize them all, I'd leave someone out, so I apologize that I'm not going to be able to recognize them all, but I do appreciate the attendance here this morning, and thank you for your participation in this great event.

The host for this meeting is Midwestern State University and at this point I'd like to bring Dr. Jesse Rogers, the president of MSU to come up here to provide a few welcoming comments. Dr. Rogers.

DR. ROGERS: Thank you, Larry. I am Jesse Rogers, and it's my pleasure to serve this great institution as its president currently. I have just one introduction that I'd like to make, I'm sitting by him, I never give him enough credit, my colleague and good friend, Dr. Howard Farrell, who is our vice president for development. And I hate to start off like this, but I just want you to know this institution recognizes the great support that we get from the State of Texas, the legislature, but we also help ourselves. Howard has helped us raise about $30 million for this institution in the last four years. A lot of it went into this great structure that we're in right now.

Howard, thanks, and thank you for being here with me this morning too.

And by the way, if you want to take some notes, I've not been asked to talk to you about anything other than welcome you, but would you run down and broaden I-35 just north of Fort Worth and everything will be just fine, because I go through there because I go to Austin so much.

(General laughter.)

DR. ROGERS: I do want to thank you for coming to Midwestern State. We're delighted to have you here. I'm going to tell you just a little bit about the university in just a moment, but I also want to tell you thank you from just a Texas transportation infrastructure user, and certainly I am, for the great what we call the flyover that connects Broad and Holiday to Kell. It is a civil engineering marvel, and I'm going to have to be very careful because every time I go by, I try to look at that structure more because I'm interested in such things.

And I also want to say I hate that I have my back to the audience. This audience reminds me of the days that I taught chemistry and physics here for about 35 years before I became president. You notice how everyone is gathered in the back of the room　-- it reminds me of my students. Only our mayor is down here. That means he's an over-achieving B student.

(General laughter.)

DR. ROGERS: Again, thank you for being with us today. I hope you enjoy being on our campus, I hope you enjoy the facilities, and I know that you're going to have a productive meeting today.

I know we have a lot of things in common as state agencies, and you remind me of the Texas Coordinating Board of Colleges and Universities as you sit there and listen to your constituencies and so forth, but much is expected of you and much is expected of higher education, and I think, to a large degree, our two agencies and with the huge responsibility we have for the future of this state, we're taken for granted.

And I think that's really a compliment because of the enormous tasks that both higher education and transportation infrastructure is faced with and our past performance, I really think that's a compliment. And I fully understand the magnitude of your tasks and I think you understand the magnitude of our tasks in higher education, of educating young Texans so that we'll continue to take advantage of the great business opportunities and keep this state strong economically. Midwestern State will certainly play a role in that.

You notice on our campus, if you get a chance to look around, a lot is going on. Midwestern State is demographically changing rapidly. We're drawing more and more and more students from outside the Wichita Falls area, we're happy for young people to come here. We must provide them a place to live and a place to live a campus life, so you will notice our recreation and health center going up on Midwestern Parkway over here that's going to be a wonderful facility for our students to exercise in and to live a good, healthy college life here on campus.

Right next to this building you're going to see a wonderful example of adaptive reuse. The old business building that's been there for many years is being totally renovated into a new mechanical engineering building that I think everybody will be very proud of, those who know this campus and for those who are visiting.

From the day that I walked on this campus as a young professor, I've wanted to have an engineering program here. It took quite a few years for us to get us there, but because of the tremendous generosity of three, four, five people and several foundations, we have established a very successful mechanical engineering program. We have about 158 to 160 majors which is huge for a university of 6,100 students. We had our first graduating class in May. Every one of them had several jobs waiting for them when they walked out of here.

So we're very proud of that; we're very proud of the people who have supported the development of that.

This building was constructed　-- when did we move in here, Howard, about three years ago? It took six years off my life, but as I stand here, I feel like it was worth it to get there. We dug deep into our pockets, but it too, about half of this building was built with private funds from local contributors and foundations that wanted Wichita Falls and wanted Midwestern State University to have a building like this for our College of Business Administration　-- which, by the way, I think we will be accredited by the highest business college accrediting body in the world probably during this next year, and this building is the cornerstone of getting that done.

So there's a lot going on at Midwestern State University. I will end with something rather strange, but I want to tell you we're a complete university, we offer programs from applied piano to mechanical engineering. I hate to say this but I keep hearing the words civil engineering mentioned. It makes my heart race a little bit, I don't know if we'll take it on, but we're pretty darn ambitious too.

The thing that I want to end with is that if you don't know a lot about Midwestern, we play sports in the Lone Star Conference. It is the largest Division II NCAA conference in the United States, one of the most competitive, and last year we had the highest scoring football team in the nation in any division and still didn't make it to the national playoffs because of Abilene Christian University in that last game.

Why I wanted to tell you that, I don't know, other than it is a complete　-- I feel like the New England Patriots　-- it is a complete university; students can live a complete university life here. We're delighted to bring students to this community, we're delighted that we have a university here with kids from Petrolia and from Crowell and Iowa Park and the surrounding areas, and we think we play a vital role in that and we're a vital cog in the higher education structure in Texas.

Again, we're delighted to have you here. We understand the huge job that you have and the huge responsibility, and thank you for doing it, and thank you for making Texas an outstanding state with a huge economy, the foundation of it. Thanks very much. Appreciate the opportunity to say something to you. Thank you, Larry.

MR. TEGTMEYER: Thank you, Dr. Rogers.

(Applause.)

MR. TEGTMEYER: Dr. Rogers, I would like to express my appreciation for all your hospitality in hosting this event, and I do want to say your staff has been fantastic, they've been very cooperative and helpful through this whole process, and thank you very much. The gentleman on your right is a fantastic individual. I'm saying that because he is, I'm not saying that because he's my neighbor, but he is a fantastic individual and I can understand how important he is to the university. So thank you for those remarks.

To start off with the district report, I would like to show a video that my public information office has prepared. In front of you there are maps of some of the projects that are going to be discussed in the video, so as the video is played, you can kind of get a perspective of where those projects are. So with that, let's go ahead and run the video.

(Whereupon, a video was shown, followed by applause.)

MR. TEGTMEYER: I will admit I've got a lot of talent here in the Wichita Falls District. I thought that was an impressive video that my PIO office put together.

Our local community is real interested in transportation and there are several individuals here today that would like to take the opportunity to make a few remarks. I'd like to start off with Lewis Simmons. He is a staff member for Senator Estes, so come on up Lewis.

MR. SIMMONS: Good morning. My mission today is to bring greetings from your hometown senator, Craig Estes. I am Lewis Simmons, his chief of staff, and he gave me some specific instructions on the phone as to what to say, so I'll try not to tarry too far from those.

Some of us spent about twelve hours together recently during a very long meeting of the Sunset Advisory Commission. For those of you in the audience who may not be aware, TxDOT is under Sunset review this legislative cycle, and Senator Estes is among five senators who serves on that commission.

He asked me to tell you that he's very encouraged by the changes in leadership and management style that he has observed in recent months at TxDOT. We've always had a very good working relationship with all of the district offices that serve the citizens in the 18 counties of Senate District 30. It is our impression that that management style, the cooperation and the communication that we have enjoyed with all these district offices is now seeming to percolate up to the level of the upper management headquarters at Austin and with the commission, and we are very encouraged and thankful and appreciative for that.

He asked me to deliver some specific comments to you, Chair Delisi. I know you know this, he wanted me to articulate for everyone in the audience today about his uppermost respect and admiration for your service to the people of the state of Texas, and with that, he's confident and it's his prayer that those qualities will continue to shine with you at the helm of TxDOT, so we're most appreciative for that.

In closing, let me say that the Senator hopes that you have a very productive meeting here today, and that you are always welcome back in any portion of Senate District 30. Thank you very much.

(Applause.)

MR. TEGTMEYER: Thank you, Mr. Simmons.

Our next speaker is going to be someone that you're real familiar with, the local state representative, David Farabee.

MR. FARABEE: Thank you, Larry.

To the chair and the commission members and executive staff that's in attendance today, we want to tell you once again thank you for bringing your meeting here to show us how you do business. We've always had confidence in your organization. As you've heard time and time again, we've been tremendously blessed.

When I think about the Falls Flyover, the Lloyd Ruby Overpass, the extension of Kell with the new bridges and the 277 project, while some of those communities aren't in my legislative district, what's good for Seymour and other communities down 277 is good for us here in Wichita County. And so we're appreciative of all of TxDOT's efforts to make those roads safe and make that trip back and forth to Abilene or wherever one that is a happy one.

We're so grateful to all of you for bringing this commission meeting here. I won't speak on and on, but while Dr. Rogers may take through Fort Worth　-- Bill, no offense　-- I take 281 and so just a thought, as I travel up and down 281 and enjoy those smaller communities of Jacksboro and on through Mineral Wells, Stephenville and on to Lampasas and into Austin　-- just a thought, as I drive down that road I think: Now, what would it be like to have two lanes on either side at any given time so maybe it's not my turn to be able to move beyond this vehicle that's in front of me, that they live here and that's fine.

But I'll wait for two miles and then I'll have two lanes and I can then pass that car. My wife is fond of saying　-- because she likes I-35 as she goes back and forth to Austin　-- she says 281 has three strikes against it: one, the people who live there don't go 70 miles per hour so she can't go 70 as she would choose　-- that's strike one; there's no cell service, strike two; and the radio signals aren't so great, they've got both kinds of music, country and western up and down 281.

(General laughter.)

MR. FARABEE: I'm sure those other two things, the cell service and the radio station choices would change if we could just get what I would call a Super Two up and down 281. But in all seriousness, I traveled that road over Thanksgiving holiday and I saw a large volume of traffic of people who chose to come over to 281 to the west as opposed to work I-35.

I think the volume of traffic that we saw over Thanksgiving holiday, we would see more frequently on the 281 corridor if they felt like they could move up and down more quickly, not wondering how long will it be before I have the opportunity to pass a vehicle. So I would call that the Super Two concept. But I know there's finance issues and bridges and other things that have to be taken into account.

It's wonderful to have you here and God bless you all.

(Applause.)

MR. TEGTMEYER: Thank you, Representative Farabee.

Next I would like to call up the Wichita County judge, the Honorable Woody Gossom.

JUDGE GOSSOM: It's great to see you all here, and if you plan this every twelve years, we'll be glad to have you back, but you can come sooner.

I do have a little bit of a power point for you. You've got the presentations. There is nothing so fantastic that you need to turn around there, but what I want to tell you is we are so glad to have you all here, and as I talked in the video that Larry presented, we do have a great relationship. This effort, often county judges and our mayors, we try to work with our TxDOT people and they've got their agenda and our people do too, but their agenda is our agenda. We couldn't ask for a better working relationship, whether it was from the floods or it's to the major projects we've got going on now.

What I want to talk to you a little bit about is bring back an opportunity you have. Representative Farabee spoke about 281 because he and I have worked on this and looked at this. 281 is a hidden secret. Driving that, I got acquainted with that in 1980, I was serving in the Texas National Guard and I happened to be the associate dean of students here at the college at the time, and the Guard really doesn't care, they just want one weekend a month but they don't care where in Texas you drill, and somebody said Austin is close. So that's where I was assigned and I drove Interstate 35 for about 20 years.

I actually backed off that in 1992. I took it because 281 seemed to be kind of crowded, and I thought that divided highway is safer. Two years after I got out of rehab from the drunk driver that came in the exit ramp on 35, I thought maybe that wasn't the best route. 281 is more peaceful. David, get her satellite radio; you can get it all the way down there. And if you'll talk to my son-in-law with U.S. Cellular, she can get cell service all the way down there too. So it's there.

(General laughter.)

JUDGE GOSSOM: Now let's go to the next slide. If you look at that, it shows you the parallel of 281 and 35, and if you look at that, and if you're like me, I head north on 35 out of Austin, I get up to Round Rock and I turn left on 29 and I go ten miles across there and I catch 183 and I go to Lampasas and I'm home　-- and even with my county judge plates, I still drive the legal speed limit, 73 miles an hour, and I slow down for small towns because I know many of the constables and the deputies there and I respect that, but it's four hours and 45 minutes.

I can drive Interstate 35 and if there's not a wreck, there's always construction projects and everything else, and I can generally make it in four hours and 55 minutes, and my hands are gripped tight on my wheel, my blood pressure is up, and I've said words that my mother wouldn't want to hear.

It's an opportunity to look at how we can make that tie-in and with the improvements on 183 out of Austin, you can come straight out and not even look at that, so it's not bad.

Let's go to the next slide. If you look at how we tie in, if you leave San Antonio and come up or you're coming in from any of those trade corridors of the ports and the entrances into that area, if you're bringing goods, you can catch in and go right on through and miss that jam in the Metroplex, miss the jam in Austin, and go on to Oklahoma City and then diverge from there to go north and east.

The next slide just gives you an overall view of Texas and what great highways we have, no matter what, no matter how we ever talk about them. Then I want to bring you to the very last slide. Now, there's a fact there that many people aren't aware of. If you check the road miles, you're 17 miles farther going San Antonio to Oklahoma City than if you go through on 35, but you're two hours closer, especially if you're a trucker.

It makes sense to fuel economy, and the interesting thing, we're doing bypasses around small towns on our highway systems, we're looking at that from fuel economy and from time, and many of the small towns will say if you do that, you'll kill us. No, you won't. They are thriving to develop and they develop new economic areas, they come out to the highway, they offer things, and you'll see more creation of the big gas stations, also you see new hotels/motels crop up. It's a stimulating factor if they'll take and grasp the opportunity.

Now, I want to try to impress on you all, I did this with your predecessors but I upped the ante. If you notice this tie I've got　-- and there's only one left in captivity　-- the State of Texas put a great map on here, right down the center is 281 and Wichita Falls, Texas there, but I'd like to share these with you all.

This is a Texas trivet, and I had marred the face of it by placing that map of San Antonio, US 281 and Wichita Falls on there, so I hope you'll keep that on your desk, on your wall or on your table to make you think every day we can change history if we can put US 281 back on the Texas corridor route and make it the highway that costs incredibly less than widening 35 and offers parallel transportation opportunities. And if you've got a trucker that just has to go back and get in the Metroplex mess, he can cut over at 377 and go there and wish he'd never done that.

Thank you all very much for coming and giving us your time and appreciate your hard work.

(Applause.)

MR. HOUGHTON: Judge, come on back, can't let you go.

JUDGE GOSSOM: I wish we were in court, I could handle this better. Yes, sir.

MR. HOUGHTON: It's fun being on this side of the dais.

JUDGE GOSSOM: Right, yes, sir, I appreciate that.

(General laughter.)

MR. HOUGHTON: I want to thank you for all your kind comments. I saw you on the video talking about the great employees and referring to our district engineer　-- Larry, there you are　-- and the fine work they do up here, and the amount of work that's going on here, I think we'll be performing an audit on the kind of money that will be spent up here.

JUDGE GOSSOM: We're spending it fast but it's going to useful things.

MR. HOUGHTON: One other thing, it's so nice to get out　-- not that I have anything against Austin　-- but it's nice to get away from the loudspeakers down there of the doomsayers about transportation and hear it from the real folks that are benefitting by our good employees across the state and the transportation initiatives that have been put into place by people like your State Representative Farabee and your State Senator Estes.

One of the things that I couldn't let go by is this 281. As you may or may not know, we're working in the San Antonio area where 281 ends　-- we think it begins up in here in this part of the world　-- where we're building a toll road or trying to build a toll road. But I encourage you and others to look at the opportunity to use the Trans-Texas Corridor language to look at the possibilities of having something like that to where you can finance something like a 281 from San Antonio all the way to Wichita Falls.

And I'll be glad to help you with it, and if I can't make it, I know Bill Meadows will because he's all about toll roads in that part of the world and he's been on that toll road authority. But I think it's a neat initiative and these initiatives are borne by the locals not by, I would say, the folks in Austin, Texas but out here in the real part of Texas.

And I thank you for your leadership and your kind comments, and where's City Council Member Elmore? Is he in here?

JUDGE GOSSOM: He's on vacation.

MR. HOUGHTON: He's on vacation. Mayor, thank him for his kind comments. I hope to see you all at session and letting the Transportation Committees, both on the House and the Senate, know the great work that our people are doing out here. They are doing a fantastic job.

JUDGE GOSSOM: Commissioner, we had a US 281 coalition, and after everything kind of left 281 out, it's somewhat faded away, but I can sure take your words of encouragement. In the Wichita Falls District, we've already done our share, it's four lane all the way out to the county line, but we could sure work on trying to get the rest of that done because over 144 miles are already four lane in that 300-plus miles.

MR. HOUGHTON: I think it's a great opportunity to fill in the pieces that need to be filled in, in an environment of revenue that is not enough revenue. As my CFO tell us, we have revenue but we don't have enough revenue to do everything. But here's initiative and opportunities with the language in Trans-Texas Corridor legislation that we can get these kind of things done. I look forward to working with you, I think it would be a fun thing to do.

JUDGE GOSSOM: Thank you, sir.

MR. HOUGHTON: Thank you.

MR. TEGTMEYER: Thank you, Judge Gossom.

Next I'd like to introduce the mayor of Wichita Falls, Lanham Lyne.

(Applause.)

MAYOR LYNE: You know, Jesse kind of gave me a hard time for being up here, but I always thought you got better grades if you sat up here, regardless if you did the work, the professors liked you better.

With the video and what everybody else has said so far, it leaves me very little left to say, but one, thank you for coming up here and making this a part of your work. We would like to have you back sooner than twelve years. The hospitality, I'd like to tell you that what we turned out for you was unique, but we do this, this is just who we are. We do like to make it special and custom fit it for whoever is coming in, and we hope we did that well for you all, but we're proud of our city, we're proud of our region up here.

And one of the things that makes it work is that from a regional standpoint, we like to think that we're all kind of pulling in the same direction. We know that Wichita Falls does not stand alone up here, we rely on our outlying communities, Burkburnett, Iowa Park, Henrietta, Archer City, everybody up here. We're all in the same boat and transportation is a big part of that.

We do like to think that we are the gateway of everything coming in from the center part of the country all the way down, and you see the highways spider webbing out from here. We have transportation that runs all through the state and almost in any direction, and that is a great opportunity for us, and the more that we can see that done　-- and 281, as Judge Gossom pointed out and Representative Farabee pointed out　-- those are great opportunities for us.

But let me thank you, first of all, for all the projects that have been here. The Falls Flyover, I told one of the councilors I would use this term but Adele told me I couldn't, he said zippity-do-da was what he liked to call it. Obviously he filed that one with Larry when they were going for the name, and thanks goodness, Larry had greater intelligence not to use that one.

The Lloyd Ruby Overpass certainly has opened up a lot for the trucking industry coming through here, it has hurt some of the businesses that were on the lower level, but we're seeing an expansion now, much like Judge Gossom was saying happens when we build these highways and corridors around towns. They move out to the highways and that's what's happened here as well.

The Loop 11, I wish Councilor Elmore was here because he would be dancing on the table for you. This is a project that has been near and dear to his heart, it's in his district. It's going to open up a lot more, but it's also a big safety factor, and Larry mentioned that a little bit in the video, but it's a huge safety factor that we're going to be able to improve all the way up through that north part towards Sheppard Air Force Base and on into Burkburnett.

And finally, Kell Freeway. There are a thousand people to thank over the 40 years that this has been a project. I can't name them all, but I can tell you the one guy that stands out is a guy that you already know, and that's Arnold Oliver. He's been a champion for this, he's worked with it and has led it, along with a lot of community leaders through the years, past and current, and like I said, the list is very long there. And it's great to see this will be finished.

A couple of other quick things. One of them is you saw the entrance of 287 coming into town with the fountain and the nice work there. That was a joint project by the local folks here and TxDOT. We certainly would be open and desirous of having more of those in other gateways coming into town, coming from Amarillo and also coming in from Burkburnett to have those types of welcome mats to the people. It kind of gives the city a little bit different flavor for people coming in. Most people don't know Wichita Falls. They go, Oh, yeah, I've been through Wichita Falls. And now we have reasons for them to stop and it's a great place to be and spend some time.

Lastly, I want to thank Larry and his staff. We wouldn't have any of these projects if they had not been proactive and having things ready to go when the time came when funding was available. That's a big part of it, thinking forward, being ready, and I think that's what TxDOT has done well throughout the years. I was visiting with Mr. Underwood last night. Sometimes we miss the boat and get behind in a place, but most of the time Texas has been far ahead in planning their transportation needs and have been able to match that. We get a little behind on I-35 sometimes. I grew up in Dallas and a little behind on Central Expressway. After about the time I was born, it was no longer useful and so they had to expand it and then expand it again, and now it seems to be kind of working　-- finally.

But that planning ahead, thinking ahead, and it comes from people like Larry and his staff that think ahead to what do we need next and how can we be ready when the time comes and the funding is available because you can't foresee the funding coming all the time. So I want to thank him and his staff.

And I want to thank Adele Lewis. She does a great job of keeping us informed of what's going on in the community. She does a great job of helping us pull things together and stay in touch and get things done, and she's a fantastic asset for Larry and his staff there and does a great job for you all as well.

So again, they said it all. Thanks for being here, thanks for making this a part of your trip, and we look forward to you coming back soon. Thank you.

(Applause.)

MR. TEGTMEYER: Our final local presenter is an individual that's the chairman of our local Cross Plains Rural Transportation group. He is also the city manager of the City of Bowie. This Cross Plains Rural Transportation group was initiated by John Barton, it's still going strong, providing a good opportunity for rural Texas to have a voice in transportation in the area, and so I wanted him to come talk about that group a little bit. James Cantwell.

MR. CANTWELL: I welcome you to the Wichita Falls District which is also home for the Cross Plains Rural Transportation Council.

The mission of Cross Plains is to advise and influence the planning and development of rural transportation needs and projects relative to the rural regions of the district and communicate those needs and recommendations to all levels of government. Our membership includes county judges, mayors, city managers, state senators and representatives, other delegates and TxDOT staff. Members coordinate with their constituents, chambers of commerce and business leaders to make representative decisions for the local area.

Cross Plains meets quarterly to review status and progress on existing transportation issues. We keep an open and consistent communication with TxDOT in order to provide awareness of project needs of local areas and regional concerns. We mean to assist TxDOT officials in prioritizing projects and we participate in planning of important highway corridors passing through the district. This allows counties, cities and rural communities the opportunity to get involved in the early stages of highway project selection.

Once a year we nominate new projects to add to the existing prioritized project list, and we re-prioritize the projects. While considering local needs and projects, corridors and regional projects are given additional emphasis. Working to prioritize projects as a group has helped the counties and communities look at the overall roadway system. Cross Plains members acquires knowledge and cohesion in forming one voice improves decision-making on prioritizing projects.

Cross Plains members consider their efforts to be very serious and beneficial to the area and we feel that district TxDOT personnel are very seriously involved with us, especially in the rural concerns. At the same time, Cross Plains members, being public officials and always subject to budget constraints and other priorities, can buffer their local needs to consider regional and corridor projects as having higher priorities when appropriate.

We highly commend district and area TxDOT officials and workers for their superb work and cooperation with local officials and citizens.

We hope that you have a very productive meeting and that you will enjoy your stay here. Thank you.

(Applause.)

MR. TEGTMEYER: Thank you, Mr. Cantwell.

Everyone has heard that TxDOT is like a family, the TxDOT family, and that is what we have here in the Wichita Falls District as well. Not only do we have spouses, children, siblings and relatives working in the 286-employee, nine-county district, we have employees that really care for each other and care for the local community. Each year during the State Employee Charitable Campaign, the donations from the employees in this district are just incredible.

Numerous offices consistently donate at 100 percent participation, and if you realize on our maintenance side we don't have real high paid employees, but routinely our maintenance forces are the most generous and giving employees we have. Last year they donated $24,303 to the SECC campaign. That is essentially $80 per employee. Even though Wichita Falls is one of the smaller districts in the state, that ranked fourth of all the districts, and I think that's indicative of what this district is like.

We also have an organization called Women Helping Others. It's an organization that has fund-raisers throughout the year, and they make donations to TxDOT families that are in need, and this organization is well received, they do fantastic work throughout the year, and why we have that organization is because our employees care.

There are too many individual events to mention where Wichita Falls employees have reached out to make a difference. That demonstrates good character and I believe it takes good character to be good employees. Yes, we are a family, but like any family, there are still jobs to get done and work to do, and that's what we do here in the Wichita Falls District is get our job done. Every office in the district is focused on their mission. Whether it's design, construction, operations or support, all perform at high standards and are always prepared for the next challenge.

In 2006, the Wichita Falls District set a district record letting of $130 million in projects, up from just $34 million in 2003. In 2008, our lettings will be $91 million. Since 2006, the district has maintained approximately $200 million in construction projects, double the amount from previous years. This is testament to the great work of our design and construction personnel. On our maintenance side, we continue to excel. As you saw in the video, I'm very proud of our response to emergencies, and I agree with Mr. Saenz that these are often our finest hour.

There are several recent and significant accomplishments that have occurred in the Wichita Falls District. One is that the Wichita Falls District has trained and mentored 25 percent of our senior executive level in the department. Both John Barton and David Casteel began their TxDOT career here, and you can either thank us for our mentoring and training or you can blame us, but I think you're going to compliment us on that.

(General laughter.)

MR. TEGTMEYER: Another accomplishment is that the district won the 2007 Environmental Achievement Award for the Native Prairie Restoration Project in Holliday. This is a partnership between numerous parties. Charles and Leslie Finnell donated the land to MSU, and I want to personally express my appreciation to Charles and Leslie Finnell for making the donation. Without their forward thinking, this project never would have happened.

I also want to express my appreciation to Texas Parks and Wildlife and to Midwestern State University. Without all the parties working together, that project never would have happened.

Quality is job one here in Wichita Falls. The Wichita Falls District is known for it's award-winning hot mix overlay projects. Almost every year the Wichita Falls District wins a Texas Asphalt Pavement Association award for the quality of its overlay projects. In fact, in 2004, our US 287 project in Wilbarger County took a national award, the Sheldon G. Hayes Award, for the best hot mix project in the nation.

As we plan for the future and continue to work to improve the 6,300 lane mile district transportation system, we will continue to have challenges. We're excited about the opportunities of the future and are prepared to meet any challenges that are brought before us. Obviously, there are many challenges. We are all well aware of our funding challenges. Another challenge, obviously, is inflation.

In maintenance, the price of liquid asphalt has increased 70 percent since 2004; our hot mix prices have increased 40 percent over the same time span. Please note that currently our vendors are unable to sell us their asphalt at requisition prices. Right now we are struggling to put out emergency purchase orders to obtain asphalt material, whether it's liquid asphalt or hot mix, and prices are 20 to 40 percent higher from our previous requisition, so essentially overnight there's a 20 to 40 percent increase in the cost of asphalt.

On the construction side, the price of asphalt has risen 180 percent since 2005, and prices have skyrocketed 50 percent in just the last few months. I think most of you are probably aware that recently a leading asphalt supplier filed for protection under bankruptcy, and we have 17 projects in this district that are affected by that alone. It has led to significant slowdowns in our construction and maintenance work.

We believe that this will have major impacts to our construction and maintenance programs for some time. However, we feel fortunate that we already completed most of our in-house overlay and seal coat work this year.

We are now using what is known as warm mix asphalt and are also expanding our use of reclaimed asphalt pavement as a means to reduce the impact of high asphalt prices on our construction and maintenance programs.

Currently there are two industries in this area that are inflicting pretty good damage on our FM road pavements. Primarily it's the oil and gas industry. There are many, many oil wells being drilled, as I speak, in the Barnett Shale. The heavy loads associated with the tanker trucks and the heavy drilling equipment is causing extensive damage to our FM system.

Another aspect of the oil and gas industry is that they are luring many of our maintenance personnel to higher paying jobs and our turnover rate is quite high.

Also, wind farms are under construction in the area. In six of our nine counties, there are either wind farms being built or being planned for, and for each windmill there are eight oversize/overweight loads for each windmill, also, again damaging our very thin pavement road sections.

Even with all these challenges, we have and will continue to provide a transportation system to be proud of. Currently we are meeting our goals in pavements and bridges in spite of these challenges. We continue to strive to make the transportation system in Wichita Falls District better and safer, safer for our employees and safer for the public. We are here ready and willing to serve the customers, the citizens of this great state of Texas.

Again, I appreciate the commission coming to visit Wichita Falls. Please feel free to visit us again. Thank you. And if you have any questions.

MS. DELISI: Thank you, Larry. Thank you for that presentation. I really appreciate the work that you and your staff put into that.

MR. TEGTMEYER: I appreciate it.

MR. HOUGHTON: Madame Chair.

Larry, don't leave. I think any measure of a district is by its leader. I was impressed by the charitable giving of the folks here in this area, I'm truly impressed by that, and like I said, it's a measure of the leadership and you exude those leadership capabilities, and thank you for your service and for mentoring Casteel and Barton. The jury is still out on that.

MR. TEGTMEYER: The jury is still out. I appreciate those comments, I truly do.

MR. HOUGHTON: Thank you very much.

MS. DELISI: At this time I'd like to take a real brief five-minute break before we proceed with the rest of the agenda.

(Whereupon, a brief recess was taken.)

MS. DELISI: The first item of business on today's agenda is the approval of the minutes from the June 26 meeting. Members, the draft minutes are in your briefing materials. Is there a motion to approve these minutes?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: All in favor, none opposed. The motion passes.

Okay, Amadeo, I'm going to turn the agenda back to you so we can get through the rest of the items.

MR. SAENZ: Thank you again, Madame Chair. the next item on the agenda, agenda item number 2, is a discussion item about our Legislative Appropriations Request for Fiscal Years 2010 and 2011. James Bass, our chief financial officer, will lead the discussion. James.

MR. BASS: Good morning. For the record, I am James Bass, chief financial officer at TxDOT.

Next month in the August commission meeting, we will be bringing to the commission, hopefully for formal adoption, the department's appropriations request for 2010-2011. What I hope to do today is to solicit input and comments from the commission on seven broad general areas from somewhat of a policy or strategic standpoint on how we should frame our appropriations request.

The first one is the full-time equivalents or the FTEs, number of employees that the department should request. Currently we are around 800 below our FTE cap in response to the lower workload in response to the cash flow situation. We've certainly heard the focus on transportation funding going forward and whether that be additional funds from Proposition 12　-- which I'll talk about in a few minutes　-- or reduced diversions from State Highway funds, we are hopeful that our appropriations for 2010-2011 will bring our workloads back up. So one broad question is on the subject of full-time equivalents, should the department seek to keep our current full allocation in hopes of having a return to a higher workload and then utilize those FTEs as appropriate, or on day one, already go in and ask for a reduction, and then if we do receive additional funding, try and raise it.

I think the staff's recommendation at this point would be to ask for the full allotment, the full allocation, and then hope and assume we're going to receive funding to raise our workload. If that doesn't happen, then the department certainly would manage and operate underneath that FTE cap commensurate with whatever our workload is in that biennium. I would welcome any input on that one subject at this time; if not, I can move on.

MR. HOUGHTON: A year ago, where were we on FTEs? What's our cap, first of all?

MR. BASS: Our cap is an ever-changing number as functions move to and move away from the department, but currently it's slightly over 14,800.

MR. HOUGHTON: So we're at 800 under that, so at 14,000.

MR. BASS: Correct.

MR. HOUGHTON: What was our employee count a year ago?

MR. BASS: A year ago, I'm trying to go back, I looked at it a couple of days ago, I can't quote you. It was not 800; we've had a steady decline and so I'm saying we were probably in the neighborhood of 250 under about a year ago as far as utilization. So we've continued to make a reduction. What the department has done is under normal procedures whenever a person retires, moves to another position or another job somewhere, that position would be re-posted and that kind of happens at the district/division level on a continuing basis. Because of the situation we find ourselves in with the administration set is that common practice is not going to happen.

When a position becomes vacant for whatever reason, it's not an automatic go out and re-post for that position; it's something that needs to be looked at and looked at at the administration level whether or not it's something that we can perhaps hold off on for a few months or something that's a little more critical in the day-to-day functions of the department that we have to have somebody filling that position, so we would go out and post for that job. And that's what's led us to the decline over the past twelve months.

MR. HOLMES: James.

MR. MEADOWS: Please go ahead.

MR. HOLMES: Sorry, Bill.

James, if I understood what you were saying, let me say it in a slightly different way, it sounded like you were attempting to size the staffing level to meet the workload which is controlled by the revenues that we ultimately receive, and it seems you have one of two approaches: you either ask for the full workforce level and then you right-size down to the revenues should those not arrive or you go the other way around. Listening to Larry, in some of the materials increase, the inflation in material pricing, is that going to impact the actual work delivered to a point where it's even more dramatic than just the reduction in revenues available for funding that?

MR. BASS: Correct. The purchasing power of those dollars, if our budget stayed exactly the same in 2010 and 2011, we would not be able to buy or deliver as much as we could today, and it's less than what we could have done two years ago. In addition to what everybody is familiar with, the petroleum, another key component　-- more so on the construction side than maintenance, obviously　-- is steel and what's going on in the steel market, not only in the U.S. but globally. China, as they have for several years, is heavy into infrastructure and here in the past few weeks they've entered into exclusive contracts with a couple of iron ore producers for steel and what they had been paying them a $1 for, as part of this exclusive contract, they're now paying them a $1.85.

And so the demand in the rest of the market is still out there, some of the supply has been cordoned off under an exclusive contract, and one can, I think, fairly reasonably assume what's going to happen to the price of steel as we go forward. And so even constant levels, what we'll be able to purchase and ultimately be able to deliver is also a factor.

MR. HOLMES: The point I was going to was I think it's going to be a continual process of right-sizing to workload because the purchasing power erosion is so dramatic.

MR. BASS: And in the state structure, as far as the agency being able to operate and react in a timely fashion, it's more efficient　-- and some would obviously say I'm biased　-- more efficient to have a cap established, kind of your peak load, and then be able to go down and utilize what you need. If your cap is lower, to be able to increase it, there are a number of external steps and approvals that the department would have to go through to be able to respond.

MR. MEADOWS: Just observations. I need to back up, I guess, first of all, and understand just historically how the commission and staff have worked through the LAR process, first; and second of all, what is the schedule?

MR. BASS: The schedule for the appropriations request is that it's due to be turned in　actually the day before the next commission meeting. We've sent over a letter that we hope and plan for the commission to adopt it at the August meeting, so the day after the August meeting, we would submit it.

One of the questions, and some that I'll get into right now, is how many dollars should we, the department, be asking for and where do they get allocated in our different functions of the department. Some of the answers/directions today will help us to finalize those dollar amounts in those different categories.

And so here, very shortly, we'll be providing to your offices summary level information on here's the total, here's the total for planning, here's the total for contractor payouts for construction, here's the total for routine maintenance. We'll begin to give you those dollar amounts within those categories but that's going to somewhat depend upon some of the feedback we receive today.

MR. MEADOWS: So historically, the commission, on an almost one-on-one basis through interaction and dialogue with staff, has formulated what, in fact, is the LAR. What I'm asking is is this the only opportunity that we will have as a commission collectively to talk about the LAR, and it sounds to me like the answer is yes, this is the only opportunity to have a public session since the schedule you just described to me would dictate that. Right?

MR. BASS: Right, and then there will also be an opportunity next month and some of it will depend on the extent　--

MR. MEADOWS: But that's the day after.

MR. BASS: Right　-- it depends upon the extent of any changes the commission may direct at that time. The commission would have an opportunity to say we'd rather allocate some of those resources to line item 3 rather than line item 5.

MR. MEADOWS: So there is an opportunity but not in a collective fashion where there is actually dialogue between the commission and staff about the formulation of our LAR.

Here's my observation: if I'm trying to prioritize and describe what the most critical action steps are that this agency has, this commission has, the formulation of the LAR is fundamental because it is the expression of our policy. Our policy is expressed through dollars as a request to the legislature, and particularly at this time as we're going through the Sunset process, I think it is of the utmost importance.

In fact, it is imperative that we're all on the same page between you all, from a senior staff perspective and the commission. Hopefully we have a shared vision　-- and we may get to that at some point　-- but the fact is that we need to really be working together to assure that we have the LAR that expresses the policy belief of this commission.

And I'm a new guy so I'm just sort of observing how this works. My comment is that we probably in the future ought to begin thinking about a different forum and a different process by which we arrive at this, because what you've basically done to me is you've said here's some critical issues and they all have to do with FTEs　-- and I understand it's very important, I've got an opinion on that　-- I know that will surprise you　-- but the fact is that I really do think we need to give some serious thought to the process by which we arrive at what the LAR is, and I would say I think we can improve on this process. I'll just leave it at that.

The right-size observation is clearly the answer because what you don't have here is there's no way, as you begin to ask me these questions, you don't know　-- there is a multi-billion dollar swing in these six paragraphs in terms of potential revenue or capital available to address projects, so you really don't know the FTE answer. What you do know is how many heads you need and really that's the answer, so to me it would seem like to achieve maximum flexibility　-- which is what this agency needs right now　-- you start off with the FTEs just as you describe at the top level and then we right-size, as Commissioner Holmes points out, based on whether or not the diversion issue is addressed one way or another or whatever these revenue issues are or capital available. So that would be my opinion on that.

And I really do think that given we don't have another public forum　-- back to the first point　-- I really would encourage and would appreciate some real interaction so that we can all understand how to put forth an LAR that really is our collective vision and wisdom about where it is this agency needs to go. Thanks.

MR. HOUGHTON: James, is this LAR a revenue-based or a needs-based?

MR. BASS: It will be needs-based　-- well, needs and ability to deliver not only by the department and our partners, be that consultant-engineers or members of the AGC, so it's not a pie-in-the-sky needs or wants, it's an achievable deliverable needs-based figure.

MR. HOUGHTON: Give me a for-instance. What are we looking at next fiscal year the amount of Category 2, new mobility that will be asked for?

MR. BASS: Mr. Barton has just gone out to the districts, and I don't know if he knows it by category, but has gone out to the districts and said　--

MR. HOUGHTON: Well, everyone is interested in new stuff.

MR. BASS: For the 2009 overall letting figure that the districts said they would be able to have projects delivered, assuming no financial constraints but the ability to deliver.

MR. HOUGHTON: We may be having that dialogue, Commissioner Meadows, right now.

MR. BARTON: For the record, my name is John Barton. I have the pleasure of working for you guys as assistant executive director for engineering operations.

We did recently go through an exercise of asking our districts and our consultant partners, our resource agency partners if all funding were made available to do whatever projects we have working and have needs identified for across the state, what could we do with no financial constraint, and the answer that we got back over the 2009, '10 and '11 year period is a little over $35 billion worth of projects that could be delivered. Those are mobility projects, those are maintenance projects, that are bridge replacement projects, those are enhancement projects, they're every type of project the department and our communities and partners work on.

MR. HOUGHTON: Put that in perspective as to what does that mean where we are today, our funding today versus this $35 billion which is roughly $12 billion a year.

MR. BARTON: Correct, it's about $12 billion per year. Today, as you know, we presented to you a Unified Transportation Program that identified about $28 billion of available revenue over the next eleven-year period of time. So what that says is we have the ability to deliver more than eleven years worth of projects if funding were available based on the current revenue streams that are available to the department.

MR. BASS: And perhaps stating slightly different, the ability to deliver the projects for award, there's the capacity within the department and the system to deliver $35 billion. Our current financial forecast in the UTP, with the assumptions that are in it, is about $7.5- over that same three-year period.

MR. BARTON: That's correct.

MR. HOUGHTON: So you're going from $7.5- to $35-.

MR. BARTON: If money were available.

MR. HOLMES: Let me ask one question, Ted.

MR. HOUGHTON: Go ahead.

MR. HOLMES: The $35 billion, John, where are we on the environmentals on those. Could we literally start those?

MR. BARTON: Again, Commissioner, when we asked the districts that information, we also asked them for the status of the environmental document as well as the right of way acquisition and utility adjustments for those projects, and staff, myself and others, looked at those, and the first year's projects are all either environmentally cleared or within the last 30 to 60 days of being cleared. The utilities and right of way have been acquired and adjusted, so those projects for 2009 are ready to go.

2010, their environmental status is either cleared or very near being cleared, and then 2011 are those that we feel like we're still 12 to 16 months away on environmental clearance. Same holds for right of way. And of course, the primary thing to keep in mind is that to be able to deliver that, we'd have to have money to buy what additional right of way needs to be bought and to pay the consultants to do the additional design and right of way acquisition and other activities we need. But those projects are far enough along in the project development process that we are very confident, as staff, if our communities can provide that, if our state can provide those resources for us, we'll be able to deliver those projects for them.

MR. SAENZ: And that's the total cost.

MR. BARTON: That's total project cost.

MR. SAENZ: Including cost of right of way, cost of engineering.

MR. BARTON: Yes, sir.

MR. HOLMES: James, as I look in my book, is this the only information that I have on the LAR, discussion item LAR?

MR. BASS: Yes, that's all that I think you have available. We met with the commission aides last week and had a discussion but we have not delivered any hard copy information. I have my notes here and I apologize that they're not a part of your packet.

MR. HOUGHTON: It's kind of hard, James, to have a dialogue when you don't have anything in front of you as to now you're telling me we're going to increase our capacity by a factor of five and with what revenue source?

MR. BASS: Well, that's some of the other items. There are some that would be identified but nothing identified that would fill a potential $28 billion gap. We get to an issue, as well, though, in the appropriations request and in the Appropriations Act, it is expenditures. And so if we're able to award and do all the right of way and the engineering for $35 billion total, we would not spend all of that $35 billion by the end of 2011. We would certainly be committing the department and everyone else for that total, but it would fall into 2012, 2013 and beyond.

MR. HOUGHTON: The same thing holds true with the current seven that you're talking about.

MR. BASS: Yes.

MR. HOUGHTON: So it's relatively speaking.

MR. BASS: Yes.

MR. HOUGHTON: Have you identified the revenue source?

MR. BASS: No. Some of them, an obvious one would be Proposition 12.

MR. HOUGHTON: That gets you five.

MR. BASS: A maximum of five current. Another question as part of this, a broad topic is the subject of diversions, or the appropriations of state highway funds to other agencies. And there's certainly been a lot of discussion about that number is going to be reduced, that number is going to be eliminated, that number is going to be available to the department.

One of the options to present within the department's LAR was　-- you can go a number of extremes　-- one would be that currently there's slightly over $1.5 billion that's appropriated out of the Highway Fund over the biennium for other purposes would be to reflect in the department's appropriations request if that $1.5 billion for the biennium was appropriated to the department, here are the projects, here are the work products that could be delivered with that funding: right of way, engineering, construction or contracted maintenance, payments on those projects.

And so a question would be kind of an assumption for the department going into the appropriations request, should we assume that diversions are going to remain where they are this current biennium, or should we present a picture of if the department were to receive this additional $1.5 billion that could go for these work products.

MR. HOUGHTON: I'm still short, big time.

MR. BASS: Yes. The other one is ultimately we'll get to a point of here is a balance that can be delivered that's an identified need and can be delivered within the time frame, if Proposition 12 is obligated, if the diversions are shown and reflected, there's still going to be a funding gap, and in the structure of the appropriations request, to put those needs in there, what would end up is a large request for General Revenue funds, and if the system would allow, it would almost be a method of finance of question mark, of these are the needs that can be delivered, we currently don't have an identified revenue stream for those out of the Highway Fund, out of Proposition 12, out of the Mobility Fund.

Those revenue streams would either have to be increased or would have to come from another area of state government in order to address those identified and deliverable needs.

MS. DELISI: Are you talking about treating the Prop 12 dollars and the diversions both within the base or as exceptional items, treating them differently?

MR. BASS: To highlight for one, when we got into the dollar figures, within the appropriations request and the structure of it, there are two basic parts of the document. One is called the baseline request and it's almost what did you get last time and if you're not asking for any more than that, you put it in the baseline. If you're asking for more than that, it would go into an exceptional item request. I think for the Proposition 12, for both the proceeds and the debt service associated with that, it would go into the exceptional item request, clear, no doubt, by definition.

The diversions is a little more flexible because by definition of the LBB instructions, that baseline and exceptional item really only applies to General Revenue or General Revenue related funds. And so I think how the diversion figure gets shown is either part of the baseline or as an exceptional item is really a direction call from the commission as to how they want to present that information, either as part of our baseline, or here's our baseline but if we get this additional money, this is how it could be utilized.

MS. DELISI: And what were the other budget instructions from leadership that was sent down?

MR. BASS: It was just the baseline for the General Revenue and General Revenue related funds.

MS. DELISI: Okay.

MR. BASS: And speaking of General Revenue, this is a broad category. I think I know the answer but something I'd want to point out because it would go into the exceptional item request dealing with General Revenue, there's kind of two groupings of General Revenue appropriations. One of them I would call old GR. Prior to fiscal year 2004, the department received appropriations out of the General Revenue fund for a few of our functions. During that 2003 session that was building the budget for 2004, General Revenue was in crisis, had concerns and so as the legislature debated the utilization of resources, they elected to continue some of those programs but to start funding those out of the Highway Fund.

A couple of examples, in public transportation we had historically received $17.6 million of General Revenue appropriation for grants out to the small urban and rural transit providers. That continued but was now funded out of the State Highway Fund. We would ask the commission or recommend that the department ask for that $17.6 million back from General Revenue.

Another example is for the operations of the Auto Burglary and Theft Prevention Authority. Within the state there's a $1 fee on auto insurance policies issued in the state of Texas that is deposited to General Revenue for the purpose of carrying out the functions of that division. The money continues to be deposited to GR but Fund 6 pays the bills for that program to the tune of roughly $32 million for the two-year period　-- not huge, it's not going to fill the overall funding gap.

And very similar to that, money going to GR but payments being made out of Fund 6, there's another roughly $15 million that occurs with some of our oversize/overweight permits. Our recommendation would be to ask for that General Revenue appropriation back and it would fall under the exceptional item portion of the LAR.

MR. SAENZ: James, I guess I'll go back, and the reason that we're treating the LAR different from what has been done in the past is when we went before Senate Finance Committee and Senate Transportation Infrastructure back in February, the senators asked what did you ask for in your LAR and we gave you everything you asked for. Because in the old way of preparing the LAR, we would look at what we had in the past and if diversions were already taken out, we carved them out, and that money was not available. What we're trying to do now is we're identifying what we can produce over the next two-year period, that same biennium, this will result in so much money that we need to pay out for those projects.

We are then now addressing all the money available to us and applying that money towards meeting what our needs are, and then any money that we don't have above that to meet those needs, we're going to ask for under an exceptional item in our LAR. We are requesting a needs-based legislative appropriation request and the method of financing is taking all available funds available to us where it's all the money that comes into Fund 6, it's all the money that comes for fees that are related to transportation, and say if we apply all of these, we can handle this much, and then we still need this much more to handle the additional needs.

And Commissioner, if you recall, when we met with the lieutenant governor, he wanted a list of projects that we could produce over the next time period that has become the basis of our Legislative Appropriations Request. So what we're trying to do is go forward with more of a needs-based, and as part of this, we're also going to submit some performance measures that we can be checked against to show that if you give us this money, we can produce this much. And at the end of the biennium, we'll be able to present the report to the legislature, here is what we were able to produce instead of going back the old way that we just look at what has happened in the past and submit the same thing for the future.

MS. DELISI: Have you had discussions with the budget writers and the leadership about this shift in philosophy? I mean, are there going to be any surprises?

MR. BASS: No. We've met with appropriations staff, and we've had one early meeting and discussion with Senator Ogden, we have another one scheduled in a couple of weeks. And some of it, I think even on the diversion issue, is that part of the baseline or is it part of an exceptional item request. Their staff had an opinion on how they would prefer that to be shown. We certainly listened to that and I think their preference was that it be shown as an exceptional item. We had somewhat of a discussion that the definition and the instructions from the Budget Board seemed to give flexibility in how that can be presented. Their preference seemed to be that that be reflected in the exceptional item portion from their staff level.

MS. DELISI: Well, from my perspective, if this is going to be the issue we're talking about right now, I understand why they would want it shown as an exceptional item, I think, given our focus on transparency and the legislature's focus on transparency, it seems to me that that should be shown in the baseline because of the purpose of Fund 6 and the idea that we're trying to return to funds being used for the purpose that they were raised for and having complete transparency in that regard.

That's why I asked the question is leadership ready for this change, that if we do come in, if there's direction from the commission　-- and I don't know what their feeling is on this　-- but if we do come in and all of a sudden we have been treating it as an exceptional item for how many years back and now we're putting it in the baseline, is that going to be a surprise, is that going to be a bad surprise?

MR. BASS: And it's almost a different approach. In the past it was almost treated as a foregone conclusion, that diversion amount. The department didn't even put it in.

MS. DELISI: And I understand there was some criticism several months ago that we were treating it as a foregone conclusion that we can't speak for what the legislature is going to do in the future. Correct?

MR. BASS: Correct.

MR. SAENZ: We have visited with some of the leadership, Senate Finance senators and representatives, and talked to them about the concept of going to this needs-based and submitting an LAR that's based on all available funds for the department, and they have not met it with resistance, they say it makes sense.

MS. DELISI: Okay.

MR. BASS: In addition to the old GR, there's a group I would refer to as new GR. The department and I believe the commission has received a letter from the Texas Transit Association seeking additional grants to small urban and rural transit providers. I think, as many of you have heard and seen with the high gas prices, not only the metro transit providers but all transit providers are seeing increased ridership and operation costs for fuel and everything else, and I think their request has been for an additional $44 million of state funding.

Of course, given our current funding situation and dedicated Fund 6, we would suggest that that be an exceptional item request for additional General Revenue appropriation. So in addition, for public transportation there would be two items: one, the method of finance swap for the $17.6 to return kind of the historic funding pattern, and then additional state assistance in that area to also come from General Revenue.

Another one that we find ourselves in is responsibilities and functions and potential projects out there dealing with rail and the rail responsibility of the department. We have a Rail Relocation and Improvement Fund and some authority to do work on rail projects. Dedicated Fund 6 is not eligible for those rail functions, and even though the Rail Relocation and Improvement Fund was kind of envisioned to operate like the Mobility Fund and be revenues dedicated to it and bonds issued, it has the ability, if money is appropriated to it, to spend it on more of a pay-as-you-go basis.

So even if there is not a long term funding mechanism statutorily enacted, if we received appropriation in the LAR for those functions, we would be able to move forward on them, and our Planning and Programming Division has looked around the state to come up with what identified needs are out there and what work could be done in that area, what would that level of work be, and ask for that through General Revenue appropriation.

MS. DELISI: What number did they come up with?

MR. BASS: I believe it was in the neighborhood of around $30 million, and one of the big numbers　-- and it obviously could be much, much larger than that　-- some of that is on preliminary engineering for projects in the future. The State owns the South Orient Rail Line that needs some improvement and some work could be done on that area, whether that's something the department, the commission would want to do, but they have a list of things that could be done in the rail area, and we'll certainly be providing that to you.

MR. HOUGHTON: Are we going to leave it to the legislature to fill in the gap, figure out how to fill in the need versus what you've given us as opportunities for revenue and the need between that baseline revenue or supplemental revenue, whatever you call it, just revenue?

MR. BASS: Within the appropriations request, I think we would, assuming the commission agrees, put in full utilization of Proposition 12, assuming that it gets enacted and we're allowed to use that.

MR. HOUGHTON: We've already accounted for that.

MR. BASS: Right. And then within the LAR there will be a funding gap, and in the administrator's statement, kind of the executive summary, I think the commission will have an opportunity, and also through the process where the commission can make recommendations on improvements to efficiencies of the department, to suggest revenue enhancements or some other way to address that funding gap. Technically it doesn't fit into the nuts and bolts of the LAR, but in the administrator's statement and then also the commission's recommendations to the legislature, I think there's opportunities.

MR. HOUGHTON: Where do you see the gap right now with all available sources of revenue identified, proposed identified, and need over that three-year period?

MR. BASS: Over the three-year period?

MR. HOUGHTON: Thirty-five and then start filling the bucket.

MR. BASS: Yes, and since the timing of it, we're going to be in the neighborhood of $25 billion, $27 billion.

MR. HOUGHTON: Short?

MR. BASS: Yes.

MR. HOUGHTON: And in the administration statement we will have proposed identified sources.

MR. BASS: There's certainly an opportunity to do that. One would be additional General Revenue, some could be additional revenues being dedicated to the Mobility Fund, indexing the gas tax, increasing vehicle registration fees, a number of options to that, and Senator Shapleigh has asked for, not directly tied as part of the LAR but kind of what are some of the options available, what are some of the menus of possible things that could be done to generate additional revenue for transportation.

MR. HOUGHTON: Have we tallied those up?

MR. BASS: I don't know if there's a grand total on that one.

MR. HOUGHTON: What you've just identified, have we tallied those up and see how we get that bucket filled?

MR. BASS: No, not to my knowledge.

MR. MEADOWS: I'd just like to ask a favor. In the next two or three weeks, I think it's so important that this Legislative Appropriations Request be our request. And when I say our, the definition of that is collective, meaning the commission working with the staff, and I think it's important that it not be a staff Legislative Appropriations Request because it's essential for us to be successful as an agency that we work together in a collaborative fashion.

So then, therefore, my favor is would somebody like give me a call? I'd like to go over it and understand everything that's in it, understand some of these issues that Commissioner Houghton is raising, that all of us have, in fact, raised. It's just essential that we are on the same page. And I'm not sure what the forum would be if there is a disagreement, if we see things differently, because I don't guess we have another opportunity to have a public meeting to discuss it.

So I'd like for you and Mr. Jackson, perhaps, to think about how we might be able to address or resolve any potential differences of opinion or perspective on the matter. Anyway, that's it. Thank you.

MR. BASS: Thank you.

MS. DELISI: I have one clarification, that funding gap of about $22 billion, that was for the total letting.

MR. BASS: Correct.

MS. DELISI: Are we going to identify a separate gap for expenditures for that two-year period, and when will that be?

MR. BASS: Right. We'll need to plug that into the model to get the actual expenditures for the two-year period, but I certainly wouldn't want to leave that commitment　once we obligate the State.

MS. DELISI: I understand.

MR. BASS: That's why I was focusing kind of on the contract, and then we would put that into our model to see what the cash flow would be. So it would be something lower than that, but obviously, once we start those projects, we're going to need that total of $25 billion. It might not be in 2010 and 2011 but we would certainly need it over time.

MR. HOUGHTON: Well, you've obligated it.

MR. BASS: Right, it's a gap overall to move those projects. Technically within the appropriations request, we'll deal with the first two years of that, but I think we need to show the long term impact and commitment of it.

MS. DELISI: Oh, I understand. This the tension between being strict to your budget cycle versus a period of time that it takes to build projects.

MR. BASS: And one of the things we've shown staff and a couple of members, because of that disconnect between letting and then the expenditures that show up in the appropriations request and the Appropriations Act is what we call a payout grid that's kind of a waterfall of letting in one year, pays out in certain years, and so you can add up the column for 2010 and see here's the total expenditures and here are the current and prior year lettings that generated that, and the reaction to date has been very favorable that that visually kind of drives home the point much better than we've been able to in discussions with them. So we're not going to end that payout grid in 2011, we would carry it on out in the future.

MR. HOUGHTON: James, are we also looking in the administrator's report, one of the things that Sunset Commission recommended, was design-build authority across all procurements?

MR. BASS: Yes, we can certainly mention that.

MR. HOUGHTON: Let me finish. And the reason I say that is when you're talking about your one, two, three, how many years, what does design-build get you as far as cost reductions or cost savings versus our regular procurement?

MR. BASS: I don't know that there's　-- no pun intended　-- a concrete answer to what the savings is. There's definitely a time and delivery savings which obviously then comes back to a cost savings as well.

MR. HOUGHTON: CPIs, you were just talking about hot mix. We're talking about commodities; we're talking about all of these things, just fast forwarding. I know some of the engineers in the state think that's a dirty word, design-build, but we may have to get fast behind that to see what the effect is on our budget.

MR. BASS: One last thing as far as the overall financial transparency　-- and many of you are involved as well　-- but the updating of the department's management information systems and the funding needed to do that. We're certainly in close coordination currently with the Comptroller's Office, who is also going through an update of their overall accounting system, and one of the discussions we're having with them today is to make sure we all have an understanding of yes, definitely our financials need to be updated, and if that fits well within the Comptroller's Office, I think that's a solution everyone would be happy with.

But there are still other systems within TxDOT that might or might fit within the Comptroller's statewide accounting system solution, some of our planning functions or project tracking systems, so if those don't fit within the Comptroller's solution, I think we obviously still want to move forward on those and will need funding associated with it. And right now with the discussions and we've gotten some estimates in discussions with the Comptroller's Office, but those are not rock solid, and so even once we submit the appropriations request, as we go through and get a clearer picture on what can be accomplished through the Comptroller's efforts and if anything has to be done on ours, I think that's something that's going to be continued to be refined throughout the legislative process.

MR. HOUGHTON: James, there's another item that you and I have been involved with　-- something that Bill Meadows could probably speak better to this than I　-- is that we're finding in the credit crunch environment in this country our tolling authority partners may be having a little difficulty with the insurance now being unavailable for a variety of reasons. Is using our credit at the State of Texas to help build toll projects that need to get built and having a revolver type credit backstopped by the State to an amount　-- I know Bill has been on the Texas Water Development Board where they do have that type of facility　-- that we may propose to the legislature to help our partners out to get some of these projects started, our RMAs, the baby RMAs starting up don't have that credit history, but something that's novel　--

It's not novel but it is to this department that we use our backstop and help these tolling agencies get these things started, and then flip it to them, spring these projects to them down the road where they, in fact, have that history, that credit history at some point in time.

MR. BASS: Right. So one of the questions would be the funding or the initial capitalization of that revolving fund by the State. And it's not exactly the same as you've described but I think the goal and intent is very similar. I know Senator Ogden, at a couple of the hearings　-- obviously not to speak for him　-- at a couple of the hearings he has mentioned on the $5 billion state GO under Proposition 12, would there be a way　-- because as you well know, when you do a toll road project, you have to get all of your capital up front so you're carrying that debt burden over the entire construction period and that leads to certain structures which are more expensive than others　--

Is there a way to issue general obligation, incrementally as your cash flow dictates, build the project, gotten construction risk out of the way, maybe get a few years of history of operations and revenue, then issue your revenue bonds and repay the GO?

MR. HOUGHTON: It's a capital structure.

MR. BASS: Right, but I think it's both working towards the same goal. So there's some thoughts out there, I think, already　--

MR. HOUGHTON: I'm doing this separate and apart from the $5 billion under Prop 12, I'm setting that aside. This is something completely different where the toll agencies or us　-- us most likely　-- would go out and procure the financing with the backstop of the State of Texas for the tolling agency or entity. At some point in time you spring that to them when they can, in fact, take on that responsibility financially.

MR. BASS: And so the initial capital for that would be something that, if the commission desired, we would put as part of the exceptional item request.

MR. HOUGHTON: I would think so.

MR. BASS: To have that initially funded, and we can work with our financial advisor to see what an appropriate amount would need to go in there to cover those.

MR. HOUGHTON: And those tolling agencies that would like to access it, that would be a wonderful thing, that's up to them.

MS. DELISI: Here's what I'm going to recommend　-- because there's a lot of outstanding questions, and because of the timing of the LAR submission, even with the extension, is the day before, that doesn't give a lot of opportunity for the commission at the next hearing to make any substantive changes　-- that we might need to get together in Austin between now and then to have another meeting just on this issue　-- because there's just a lot of questions that I don't think we even know what the numbers are, the concrete numbers　-- go through the exceptional items, have a better understanding of what treating diversions as non-exceptional items, the gap issue that we're not going to resolve today, and it doesn't give us enough time at the next hearing.

So if there's no objection to that, I'd like to head down that road.

MR. SAENZ: We can have a meeting, I guess, as early as the 8th of next month to meet the posting requirements.

MS. DELISI: Okay. We'll work on a date.

MR. BASS: Thank you.

MR. SAENZ: Any other items? You had mentioned seven items that you had questions on.

MR. BASS: It was FTEs, old GR, new GR, diversions, Prop 12, management information systems, and then the seventh one would be if the diversions move over and are part of our request, would the commission want to leverage that new revenue to the department and potentially look at issuing Proposition 14 bonds to accelerate some of those revenues. So it's a potential to go hand in hand with the diversion issue as if the diversion funding comes back over, that might provide funding for debt service.

MR. HOUGHTON: What scares me about this is exactly what we just went through, James, and the epicenter of this was when we had the big ramp-up, we had loads of cash on Prop 14, TMF, we were blowing and going and you do that great climb, but coming down the other side was a very, very painful experience that most of us or our partners said this is never going to end. Guess what. And when you do leverage up a billion five, that's a great idea but you're going to be coming down the back side of that and where's the revenue source for the next generation of projects.

MR. BASS: Right, and I think as a part of that, Mr. Simmons has had some discussion items before the commission on bond management program. Primarily the examples given were associated with Proposition 12, the $5 billion to GO debt. Obviously, that program, that approach could work for Prop 14 as well, so rather than just saying the common pool has been increased because of the proceeds, they would be identified to specific projects and moved forward, and I think that would help.

MR. HOUGHTON: That's a great idea.

MR. BASS: Doesn't completely solve it but it helps.

MR. HOUGHTON: To a maximum.

MR. BASS: The common pool increased, I think once it's identified to specific projects, it helps to address the issue of no, this is not an ongoing, continuing forever and ever revenue stream to address transportation, it's only for these limited number of projects that are going to be able to move forward with it, all the other ones are still waiting in line as they had been before.

MR. HOUGHTON: It's called sustainability. We weren't able to sustain those lettings in those years. We've got to, I think, sustain something.

MR. SAENZ: And Commissioner, that's the reason we want to be able to, as we present to the legislature, this is the capacity that we have and we can sustain for the next three years and we'll still have the same capacity, and these are projects that will meet that schedule so that they know this is what the funding is going to be needed, not just for this two-year period, we need that for sure, but this is what impact it will have in the years to come.

MR. HOUGHTON: Let's not fall into that trap again, you know, of we go way up here　-- I'm agreeing with you　-- we go way up here on the lettings, lots of revenue, but that drop is like dropping into the Grand Canyon straight down. And we have heard that the engineering community, the construction community, people are being laid off, thought the revenue was going to be there, so be warned.

MR. BASS: In preparing for this, I looked back at the discussion items associated with the LAR from two years ago　-- which was really the first time that staff, with the full commission, had a discussion on the appropriations request　-- and what was talked about and discussed at that point was at that time what was thought was that the infusion of the bond proceeds were going to help carry us through 2009 and then what wasn't shown in the appropriations request, because it was outside, was there was going to be a big drop-off in expenditures in 2010.

Well, if there's a drop-off in expenditures in 2010, you back up and that means there's reduced letting sooner. And what happened from what we were thinking two years ago, through the hard work of the districts and our transportation partners, they were able to use that money and deliver more projects sooner, and so we got to the edge faster than what we thought.

MR. HOUGHTON: And James, you didn't let me off the bus before you drove it off the cliff.

MR. BASS: Right, but we told you the cliff was coming but nobody wanted to hear it because the scenery was very pretty outside the bus.

(General laughter.)

MR. SAENZ: Going back to the beginning when we got the Mobility Fund, we got the Prop 14 bonding program, and it was always presented that this is going to be a bubble. I remember Senator Nichols. When he was on the commission, we had the bubble.

MR. HOUGHTON: We talked about it; it was his chart.

MR. BASS: I'm the bubble boy.

MR. SAENZ: That was the bubble chart.

MR. HOUGHTON: We had the burnt orange bubble.

MR. BASS: Burnt orange was on top, if I recall.

MR. SAENZ: So what we're trying to work with the legislature now is to identify this is capacity and we can sustain this capacity, but this is going to be the impact that we're going to have, and if we want to sustain this capacity, this is what we're going to have the next two years, the two years after that, and so on and so forth.

MR. HOUGHTON: Again, it's just my personal opinion, I sure wouldn't go out and leverage $1.5 billion, annually. I think some of it per project.

MR. BASS: And it may be targeted.

MR. HOUGHTON: Targeted, but you want sustainability in your program. Isn't that right, Dan Reagan, wouldn't you like sustainability?

Thank you.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Moving on, agenda item number 3 deals with Public Transportation. Eric Gleason, director of our Public Transportation Division will present two items for your consideration.

MR. GLEASON: Good morning. For the record, my name is Eric Gleason, director of the Public Transportation Division at TxDOT. I just want to know why when we go off a cliff we're always in a bus.

MR. HOUGHTON: It was the only thing that could hold us.

(General laughter.)

MR. GLEASON: All right, that's good. Agenda item 3(a) awards approximately $68,000 of Federal Section 5304 State Planning and Research funds to the City of Galveston to investigate and recommend potential serviced consolidation between Galveston, operating Island Transit, and Gulf Coast Center, operating Connect Transit, the rural public transportation providers serving Galveston and Brazoria counties. The City of Galveston will provide a 20 percent non-federal match for the project.

The study will examine current areas of potential duplication of resources and effort with two agencies providing similar services in a contiguous area. It will assess potential economies of scale and efficiencies to be used to expand services. These objectives are consistent with regional coordination planning efforts in the area.

A similar award by the commission several years ago to Concho Valley Rural Transit District resulted in a consolidation of rural and urban systems in the San Angelo area.

We recommend your approval of this minute order.

MS. DELISI: Are there any questions?

(No response.)

MR. HOLMES: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. GLEASON: Agenda item 3(b) awards $11.6 million in federal funds under the Federal Transit Administration Bus and Bus Facility Discretionary Program and over $1,600,000 in transportation development credits to urban and rural transportation providers for vehicle replacement. These funds are distributed to participating small urban and all rural transit operators based on relative fleet replacement needs, taking into consideration remaining useful life based on age and mileage and replacement costs.

The department is the single largest recipient of funds distributed by the FTA in this recent award. Metropolitan area systems in Dallas, Houston and San Antonio also benefitted in the FTA's recent decision. All told, Texas received just under $30 million of a total of $96 million distributed nationwide.

Transportation development credits are awarded along with federal program funds to meet local match requirements. Using TDCs in instances such as this allows transit providers to use their local funds for operations, something critically needed given rising fuel costs and increasing ridership demands.

We recommend your approval of this minute order.

MS. DELISI: We have one person signed up to speak for 3(b). I'd like to call up Ben Herr at this time.

MR. HERR: Thank you, Madame Chair, members of the commission.

I just want to make a couple of quick comments, if I could. First of all, TTA would like to speak in favor of this minute order, and two quick points. The first one, we'd like to compliment Eric Gleason and his staff on the manner in which this particular minute order came about. There was great cooperation between PTN and the transit industry; Eric and his staff talked to the transit industry for our needs. They did great staff work in putting together the proposal.

It was a compelling proposal that convinced the FTA to give up, as Eric said, a considerable large slice of the available 5309 funds that the FTA had available, and that did come to Texas. So great staff work there. And then the other part of that was Eric, once we knew the funds were available, he sat down with members of the TTA board of directors and discussed the best way to distribute these funds across the state.

The second point I'd like to make is this is really just the tip of the iceberg, there is a great need for additional federal funds for these buses, and TTA and the department have worked close in hand in the past, we've had letters from the commission, we've worked with Eric's staff and the department staff in making our case known to our congressional delegation in Washington. And I just want to compliment, again, Eric and the department for your past efforts in helping us with this, and we look forward to more and more opportunities to bring more buses to the state of Texas. Thank you.

MS. DELISI: Thanks, Ben.

Has anyone got any questions for Ben? Any questions on the minute order?

(No response.)

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. SAENZ: Thank you, Eric.

MR. GLEASON: Thank you.

MR. SAENZ: Agenda item number 4 deals with our Administrative Rules and we have rules in Chapter 15 for final adoption. James Bass will present some rules dealing with our bond programs.

MR. BASS: Good morning. For the record, I am still James Bass, CFO at TxDOT.

This minute order adopts amendments to the rules in the Texas Administrative Code concerning the State Highway Fund Bond Program. A discrepancy currently existed between the current rules and statute as to the dollar amount of bonds that could be issued in aggregate and annually and the amount that would be dedicated to safety projects. The amendments would remedy this by referring to the statutory parameters rather than stating a fixed dollar amount, thereby eliminating the need to amend the rules should the legislature choose to adjust the limitations on these bonds in the future.

The proposed rules were published in the Texas Register and no comments were received. Staff recommends your approval.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you. James will continue to present several minute orders under Transportation Planning, item number 5. Item 5(a) deals with some bonding. Staff was going to recommend deferral of this minute order but I would like James to present the issue to the commission to keep you informed.

MR. BASS: Associated with the Central Texas Turnpike System in Austin, when we initially financed that back in 2002, that financing package included $150 million of variable rate debt that was insured, as all the debt was insured, by Ambac. What has happened in the financial markets in the past few months has had an impact on TxDOT and our debt. Since 2002, the average interest rate we've been paying on that variable rate debt is 3-1/4 percent, roughly. For the past five weeks, the reset rate for that debt has been 9-1/2 percent. What we are pursuing　-- and we weren't able to get a firm agreement before today's meeting　-- is a replacement, an alternative structure. Rather than having the bonds insured, we'd contract with banks for a letter of credit. It would operate much the same way but it wouldn't carry with it the risk of Ambac.

What's quite odd is when you look at all of our variable rate debt, whether it's the Mobility Fund or the Highway Fund or the Central Texas Turnpike System, a few months back you see one of those lines peel off and it kind of looks like a wild hair going up to the 9-1/2 percent and that's our variable rate debt that is insured. All of our other variable rate debt is uninsured but we're paying a much higher price.

So 5(a) originally was intended to move forward on an alternative to that, we weren't able to get a firm commitment and agreement with a group of banks for the letter of credit. I would hope and expect we'll be back before you in August with a solution to this variable rate 9-1/2 percent issue.

The next item, item 5(b), seeks your approval of a work program authorizing projects in the Dallas District to utilize payments received from NTTA for the right to develop, construct, operate State Highway 121 toll project. As you know, we have sub accounts set up within the State Highway Fund to manage these dollars for the Dallas District, and staff would recommend your approval.

MR. MEADOWS: I just had one quick question. I had an opportunity to visit with Mr. Bass about this item the other day. At some point we had talked about estimated project costs and to what extent or what percentage of the total costs were directly attributable or to be assigned and paid for out of the $3.2 billion. I just would love to see that information at some point; I don't need it today.

MR. BASS: Just in kind of a broad sense, the running total, if the commission approves these projects, in addition to what the commission approved a few months back, kind of the first wave of the projects, the running total would be in the neighborhood of $1.6 billion out of the $3.2-, but we can get you project-by-project more details.

MR. MEADOWS: That's great. Thank you very much.

MS. DELISI: Is there a motion?

MR. MEADOWS: Move approval.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. BASS: Item 5 (c) is very similar except it seeks your approval of a work program authorizing a project in the Austin District utilizing the up-front payment the department received from Cintra-Zachry associated with the State Highway 130, Segment 5 and 6 project. We also have a sub account in the State Highway Fund to track the monies from that payment, and staff would recommend your approval of this minute order.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: Motion passes.

MR. SAENZ: Thank you. Agenda item 5(d), (e) and (f) will be presented by John Barton.

MR. BARTON: Good morning, commissioners, Mr. Saenz. For the record, my name is John Barton and I'm the assistant executive director for Engineering Operations for the Texas Department of Transportation.

Item 5(d) is a minute order that would appoint a member to the Grand Parkway Association Board of Directors. Under Section 15.85 of the Texas Administrative Code, it states in part that the commission will have the opportunity to review an individual's application, their financial statement and letters of reference and may appoint members to the board of directors for this corporation.

Mr. Guy Harrell of Houston was originally appointed by the commission to serve on the Grand Parkway Association Board of Directors on July 25, 2002 and has been a member in good standing since that time and has been nominated for a second six-year term to the board of directors. He has submitted the required information to the department, and based upon the review and consideration of all the relevant information that is documented and filed with the commission, and based on the board of directors' nomination, it appears that this nominee is fully eligible and qualified to continue to serve as a board member.

We, therefore, recommend your approval of Mr. Guy Harrell to the Grand Parkway Association Board of Directors with a term that would expire on July 25, 2014.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. BARTON: Item 5(e) is a minute order that approves the projects for the third project program call for the Border Colonias Access Program. In accordance with requests from the Governor's Office and Government Code Section 1403.002, the Texas Public Finance Authority is authorized to issue general obligation bonds and notes in an aggregate amount not to exceed $175 million that provides financial assistance for the Border Colonias Access Roadway projects. The department distributes these proceeds to eligible counties pursuant to Government Code Section 1403.002. The Texas Transportation Commission has established a program under these rules to administer the use of the proceeds of these bonds and notes.

The commission adopted rules to implement this program that was codified in Title 43 of the Texas Administrative Code, Section 15.100 through 15.106. In accordance with a particular section, 15.103, the first program call of $50 million was issued in 2002, the second program call for $50 million was issued in 2004, and the third program call for $75 million was issued on February 1, 2008. A total of 441 applications were received from this third program call, and these projects were ranked according to the criteria prescribed in the Administrative Code.

We are recommending your approval of 189 projects contained in 22 counties. Of those, 161 projects are based on an allocation portion of the program and 21 projects are based on a competitive portion of the program. Staff recommends approval of the projects described in Exhibit A to this minute order for the Border Colonias Access Program.

MS. DELISI: And this represents the end of the funding for the program. Right?

MR. BARTON: That's correct. This will be the final call under this program.

MR. MEADOWS: Madame Chairman, I just have a quick comment. I had an opportunity to visit with Amadeo the other day. My question to Amadeo really was about the extent to which we're coordinating this infrastructure development effort with other state and federal agencies that are providing infrastructure services in the colonias, and the point being that we need to make sure that these are coordinated such that we don't rebuild some structure or street only to have it torn up by the laying of a new waterline in the next month.

But in any event, I was very pleased to find out that this is closely coordinated with all these other agencies, including the Secretary of State's Office. So my compliments to whoever came up with that good idea.

MR. SAENZ: We learned after the first program call.

MR. MEADOWS: Move approval.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. BARTON: Item 5(f) is a minute order that would approve the selection of several bridge projects for the 2007 Unified Transportation Program. The commission previously approved, by minute order on May 29, 2008, the highway selection process for the development of the 2009 UTP, and as part of that selection process it was determined that we would make Category 6, the Bridge Replacement and Rehabilitation Program, a bank balance program selected through the Bridge Division's ranking system.

The Bridge Division has developed a financially constrained list of projects to replace and rehabilitate bridges across the state of Texas for fiscal year 2009, and several of these projects that were contained on this list, based on our prioritization, currently only have authorized DEVELOP authority under the 2007 UTP. In order to facilitate a smoother transition to move forward with these very important bridge projects in 2009, it is important that we have CONSTRUCT authority for all of those bridge projects.

Exhibit A to this minute order contains a list of those bridge projects that we are requesting authorization to move into CONSTRUCT authority. It is necessary to have this minute order to ensure that the efficient processing of these bridge projects and to allow them to move forward to construction in fiscal year 2009. By granting CONSTRUCT authority through this minute order for these bridges, these bridge projects can be processed and moved forward to construction as planned.

Staff recommends your approval of this minute order.

MS. DELISI: Any questions?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

Agenda item number 6 deals with the General Engineering Consultant quarterly progress report for the Central Texas Turnpike System project, and Phil Russell will present the report to the commission.

MR. RUSSELL: Good morning, commissioners, Mr. Saenz and Roger. For the record, I'm Phillip Russell, the assistant executive director for Innovative Project Development.

As Mr. Saenz just mentioned, agenda item 6 is our routine quarterly update for the General Engineering Consultant report. I guess since my last update in April, there's been one major completion and that's the completion of Segment 4 on State Highway 130 which is essentially the extension from just south of Bergstrom Airport all the way to 183. That is a milestone and it represents, effectively, the completion of the Central Texas Turnpike Project. There are still some minor elements that are being worked on but that was the one remaining major element of the project.

I've been giving these reports for the last four or five years; I would anticipate that this will be our last quarterly update for construction report. We will be going to a yearly basis and looking at the operational aspects of the Central Texas Turnpike System.

The project continues at this date to progress very well. Again, the Segment 4 has been completed. I think when I started giving these updates four or five years ago, I always cautioned people not to get too excited about how far the project was under budget because a lot of things could occur during the time of construction, and there have been a lot of changes and that number has always vacillated somewhere around $400 million under budget. The General Engineering Consultant now estimates that the project is $381 million under budget, so again, I think this represents some of the good work that the department has done over the years. The project was essentially delivered a year ahead of schedule, and again, as of today, $381 million under budget.

There were a lot of folks: David Powell in the TTA Division that was really essentially responsible for creating the toll management system; Bob Daigh and Tim Waite in the Austin District, I think have done a tremendous job in delivering this project under budget.

So with that, commissioners, I'd be happy to address any questions you might have.

MR. HOUGHTON: Have they turned over the title to us?

MR. RUSSELL: Very close. We're finalizing a couple of last issues.

MR. HOUGHTON: When do you expect that?

MR. RUSSELL: I think the last two projects, one will be finalized in August and I believe the last one in September, so we're very close. And these are fairly minor issues that they're finalizing.

MR. HOUGHTON: And how about 45 Southeast, when will that be completed?

MR. RUSSELL: I believe the latest schedule I saw was spring or summer of next year, and if you've been out there, Commissioner, they're really making some great progress. I noted last week on my visit to Cabela's, there were a couple of bridges that they had to still put in place, so they're really making good progress. They've got the main structure over I-35 which is still yet to be completed, and as you know, that will be a great tie. Right now people can still use 130 as a reliever route to 35, but it's a bit circuitous going down 1327 to 183 and weaving around, but when 45 is in place, that will be the gateway to 130.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. RUSSELL: Thank you, commissioners

MR. SAENZ: Thank you, Phil.

Agenda item number 7 is the acceptance of the Quarterly Investment Report as of May 31, 2008, and James will come back up and present that to the commission.

MR. BASS: Good morning. Item 7 presents the Quarterly Investment Report for the third quarter of fiscal year 2008 which ended May 31. The investments covered in the report are associated with the 2002 project of the Central Texas Turnpike System.

And one thing I would point out　-- and you may have noticed　-- that the value of the investments actually increased during this period which was unusual. We had some bond anticipation notes that were maturing in early June just after the end of the third quarter. We drew down on our TIFIA loan with the U.S. DOT in anticipation of that maturity, and those funds came in at the very end of the quarter. So if you had noticed that in the report, we went from a beginning balance of $556- up to just over $1.3-. That lasted for two or three days until the bonds matured.

So staff recommends your acceptance of the report, and if you have any other questions, I'd be happy to answer them.

MR. HOUGHTON: When do we close out?

MR. BASS: Well, after construction it appears we'll have some proceeds left over, some of that for the capitalized interest continuing for a period, and so one of the options we're looking at, with the earlier item 5(a) that got deferred, is can we utilize some of that money to just go ahead and take out some of the $150- of variable rate debt and just get it done and over with. But then we'll always have money in here as the revenues of the project come in, so even though we're moving from construction to operations, we'll continue to have a quarterly investment report because the system will always, hopefully, have revenue.

MR. HOUGHTON: But the construction phase, though.

MR. BASS: Right.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Agenda item number 8, John Barton will come back up and present the 2009 Highway Safety Plan.

MR. BARTON: Good morning again. Again for the record, my name is John Barton, assistant executive director for Engineering Operations, and as Amadeo stated, I will be presenting to you item number 8 which is a minute order that is before you seeking approval of the 2009 Highway Safety Plan which is a plan designed to reduce the number and severity of traffic crashes, injuries and fatalities we experience here in Texas through better enforcement, training and education efforts across the state.

Improving safety, of course, is our most important goal at the Texas Department of Transportation, and we're proud that between 2006 and 2007, 96 fewer Texans lost their lives on roadways here in Texas, a resulting 2.7 percent decrease in the total number of fatalities on our highways. Programs like this one included in the Highway Safety Plan helped contribute to this decrease.

The 2009 Highway Safety Plan includes the highly successful "Click-it or Ticket" program and campaign that allows us to encourage Texans to buckle up while they're operating motorized vehicles. We set a record last year for Texas, achieving a 91.83 percent safety belt use rate, and our goal for 2009 is to exceed that, reaching hopefully 93.25 percent usage.

A large portion of this funding will go directly to local law enforcement agencies as grants to allow them to conduct selective traffic enforcement program initiatives. These grants allow them to provide extra law enforcement activities that focus on reducing speeding, intersection violations, driving while under the influence of drugs and alcohol, and not using seatbelts or child safety restraints properly.

Some examples of other program areas that are included in this program include: increased training for emergency medical services; improved motorcycle safety; increasing pedestrian/bicycle safety; enhancing our crash records system; and providing valuable information and education efforts to change attitudes and behaviors related to traffic safety here in Texas.

The 2009 Highway Safety Plan consists of a budget of $69 million that will fund approximately 374 traffic safety projects across our state. Approval of the Highway Safety Plan will allow us to implement these programs and help save lives of Texas, therefore, we recommend approval of this minute order.

MR. HOLMES: Just one curiosity. John, of the motor vehicle deaths, you include motorcycle deaths in that, don't you?

MR. BARTON: That is correct.

MR. HOLMES: Do you have any idea what percentage of the total fatalities are motorcycle as opposed to car and truck?

MR. BARTON: Off the top of my head, I don't know, and I don't know if Mr. Saenz or Mr. Simmons does, but I do know this, Commissioner Holmes, unfortunately the rate of the percentage increase of those particular motorcycle-related fatalities is increasing rapidly, and it's primarily due to the repeal of the helmet laws　-- across the nation, as a matter of fact.

MR. HOLMES: I'm just curious about that.

MR. BARTON: I'll be happy to get that statistic for you.

MR. HOLMES: Yes, and I doubt that it would be possible to equate it to the VMT in both of those categories, but I suspect it is a wildly different number.

MR. BARTON: I'm sure it is, and I would be remiss if I didn't mention, it's also because a lot of us, as we mature a little bit, start riding motorcycles now for some reason, so when we get our Golden Eagles or our Hogs, apparently we've got a lot of older motorcycle riders out there as well.

MR. SAENZ: I'll let you get one.

MR. BARTON: I'll take all the e-mails and phone calls on that one.

MS. DELISI: Any other questions?

MR. HOLMES: You're going to get one from Commissioner Underwood.

(General laughter.)

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

Agenda item number 9 deals with our Strategic Plan, and Coby Chase will present this agenda item. This agenda item was set up for a minute order for you to approve the public version of the Strategic Plan. We are recommending deferring it so that we can get some additional public input as we move forward. Coby.

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.

Agenda item 9 is a minute order for the formal adoption of the public version of the Texas Department of Transportation 2009 to 2013 Strategic Plan. The public version will complement the Strategic Plan required by the Legislative Budget Board.

I'd like to request that the text for the public Strategic Plan be posted for public comment for the next 30 days and then voted on at the September commission meeting, or it can be longer if you like. A notice will appear in the Texas Register and will allow our stakeholders to provide comments on our proposed Strategic Plan.

The official Strategic Plan that you submitted to the Legislative Budget Board and the Governor's Budget Office on July 11 provides data about the department's projected performance in terms of the adopted budget structure prescribed by the Legislative Budget Board. the primary purpose of the official Strategic Plan is to allow the LBB to measure an agency's performance from year to year, using the measures and objectives essentially identified when the system was created in the early 1990s.

Given the rigid structure of that approach in directing agency strategic planning, TxDOT, for the third consecutive cycle is opting to prepare a public plan in addition to the LBB required plan. However, in order to truly reflect an agency's goals and strategies, we at TxDOT believe that the Strategic Plan should address concerns that are important to the citizens of Texas, such as reducing congestion and enhancing safety, not in accounting, necessarily, the number of lane miles contracted for resurfacing.

TxDOT has produced a separate public plan that expands upon and explains our goals and strategies and tactics in ways that more directly address the public need. We intend for this public plan to speak more effectively to the public, our partners　-- both public and private, for that matter　-- and state and federal legislators regarding what we really are about as an agency and how we plan to tackle the transportation challenge facing our state. That public plan focuses on our five goals: reduce congestion, enhance safety, improve air quality, expand economic opportunity, and preserve the value of our transportation assets.

Notice I said preserve the value of our transportation assets instead of increase the value of our transportation assets, as we have in the past. After receiving quite a bit of counsel from commission offices, this new language more accurately explains the goal. We are preserving our transportation assets when we improve pavement conditions and maintain our bridges.

We're also adding performance measures for four of the five strategic goals to our public plan this year. We will measure the travel time index to determine if we are reducing congestion. The travel time index the average amount of extra time it takes to travel during rush hour than during non-congested times. We will also measure congested peak travel times, the amount of overall travel that occurs in congested conditions. We will measure the fatality rate to examine our enhance safety goal. Vehicle emissions in Texas' non-attainment areas will be measured under the improve air quality goal. Our final two measures fall under the preserve the value of transportation assets, pavement conditions and bridge conditions.

The Legislative Budget Board required Strategic Plan also includes performance measures, but again, they're tied to the budget process. We believe that our public plan is the model for state agency planning that the public needs and demands. The LBB required plan alone is not adequate enough to explain our goals and strategies to our stakeholders.

Our five goals which we see as the true measure of progress for the department are supported by four strategies. They are: use all financial options to build transportation projects; empower local and regional leaders to solve local and regional transportation problems; harness market-based principles to maximize competition; reduce costs and guide investments and facilitate consumer-driven decisions that respond to market forces.

I'd like to make one note that isn't in my prepared text. If you look at the draft text for the public Strategic Plan, all of the data stop in 2005. That was the last time you can find all of them in one place. I'm going to suggest to the staff who are writing this that they take a snapshot into the future because some things are changing, we know to be changing. We know people are driving less because gas has gone up so much, but that's not reflected in 2005. So I think there needs to be a look-ahead snapshot introduced into this because anybody could pick it up and go, well, today I know I am driving less, we do know accidents are going down because people are driving less, and that might have a like benefit in cleaning the air.

So I will suggest to my staff and put in the next version something that looks ahead. Even though the data stop at 2005, current trends are showing this, and those current trends could change by the next time a public Strategic Plan is adopted as well.

MR. HOUGHTON: One of the strategies you said, Coby, was to reduce costs?

MR. CHASE: Yes.

MR. HOUGHTON: If Representative Farabee were to ask you today how are you reducing costs.

MR. CHASE: How is the agency reducing costs.

MR. HOUGHTON: Well, you being the agency, part of the agency.

MR. CHASE: How is my division reducing costs, or how is the agency reducing costs?

MR. HOUGHTON: The agency.

MR. CHASE: Right now we are　-- well, there are others on the management team who can speak to their elements, but most recently we've curtailed all sorts of things at the agency. Travel, we are regionalizing the agency, saving $35 million a year and some other savings that are harder to measure but they will exist. I would say, though I don't have a definite number attached to it, that some of our contracting practices are changing, such as design-build and comprehensive development agreements where we lock in costs.

MR. HOUGHTON: Do you think realistically we can get design-build across all procurements?

MR. CHASE: I think it's going to be a struggle because there are people who have built very large companies and payrolls based on things other than design-build. But it's been a number of years we've been around this issue; this is the first time I've seen it just dropped into a report without any much controversy at all. That's a positive step. But yes, it will be a challenge, absolutely.

The department has already prepared a draft Strategic Plan, and with your approval we'll submit a notice to the Texas Register to direct stakeholders to a copy and to submit comments over the next 30 days. So I do recommend deferring approval of the minute order before you until we review any comments submitted during the 30-day comment period. We will bring this minute order before you again at the September commission meeting, or later if you'd like, and I'll take any further questions you might have.

MS. DELISI: Does anyone have any questions, comments?

MR. HOUGHTON: Coby, if you had that wand that I used to kill the Road Fairy, how would you reduce costs?

MR. CHASE: How would I reduce costs at the agency?

MR. HOUGHTON: Demonstrate to the legislature that we're reducing costs, we're turning the corner using technology, et cetera.

MR. CHASE: Well, using technology, I don't know that I have a direct answer to that question, but I do know that our executive director has us on a path and a number of the assistant executive directors on scrubbing the budget, internally. Like I said, I spend less money that I used to and I'm a microcosm of this agency. I know we are doing all sorts of things around the agency to bring down costs, but I don't have if I could wave a magic wand. I tend to look at what brings in more revenue, that's my magic wand, if I could be waving one around, and design-build, CDAs, private investment, things that bring in that new revenue to the agency.

MR. SAENZ: If I could add, commissioners, a couple of things that we have implemented, and of course, we're looking at best practices across the state and trying to implement those best practices because usually when you have a best practice added, in itself will most of the time give you a savings. We're doing peer reviews between districts so that we can identify what's working well and then extend it out. We started quite a few years ago, when we started seeing the increases in construction, to identify cost-cutting measures on the construction side.

If we can get some legislation like the design-build　-- you saw Phil's report　-- we were about almost $400 million under budget on the CTTS project. Now, not all of it was a design-build project but a large portion of it was. So there is some savings there both in time and also in dollar figures.

So we're going to continue to look at everywhere where we can find a savings. We implemented a 10 percent cut in our budget for 2008 that's passed on to the 2009 budget, and it's not that we're going to give the money away, we want to take that money that we save internally and use it to build more construction projects. We've got to put more pavement on the ground.

MS. DELISI: Other questions?

(No response.)

MS. DELISI: Let's move on.

MR. SAENZ: Thank you, Coby.

Agenda item number 10 deals with a Transportation Enhancement project, and John Barton will come back up and make the presentation. I guess, commissioners, have you noticed today most of the presentations are being done by the assistant executive directors, and we reduced the number of staff that we're bringing out also as a way to save a little bit of time and money. Also, leaving them at home, they can do more work.

MR. BARTON: Leave the best people at home to do the work, that's correct.

(General laughter.)

MR. BARTON: Again, for the record, my name is John Barton, the assistant executive director for Engineering Operations for the Texas Department of Transportation.

Item number 10 places before you a minute order, and I'll explain to you briefly the background of this minute order. Rider 31 to the Texas Department of Transportation's appropriations for fiscal year 2008 through 2009, as part of the General Appropriations Act in 2007, directed the department to make available $10 million in Federal Transportation Enhancement funds for the Woodall Rodgers Deck Plaza project, provided that the project met the requirements for federal funding under the Transportation Enhancement Program as set forth in Title 23 of the United States Code. The Federal Highway Administration has reviewed this project and deemed it eligible under this program.

The commission approved the 2007 Statewide Mobility Program, or the SMP, pursuant to Minute Order 110753, dated November 16, 2006. It is necessary to amend the 2007 SMP to provide funding for this project and fund it under Category 9, Transportation Enhancements. This minute order will provide funding for this project in the amount of $10 million, as required by the appropriations and includes the project in the 2007 SMP.

Staff recommends your approval of this minute order.

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, John. John will continue to present agenda item number 11 dealing with construction contracts and maintenance contracts.

MR. BARTON: We did have some construction and maintenance contracts this month. A total of 45 projects we received bids on this month. Of those, we are recommending the approval and award of 44. There were 244 bidders for these 45 projects which averages out to 5.42 bidders per project, again, a healthy bidding environment. And a little bit different trend than we've seen over the year, we did have an overrun on the engineering estimates on these projects of 4.4 percent, but still a very accurate estimate program for us.

The one project that we recommend rejecting is a project from the Dallas District, it was in Dallas County. Its control project number is NH2008(732). This project was on State Highway 114 and it included removing the existing asphalt surface and replacing it and doing some minor riprap and ditch cleaning and pavement marking repair work.

The overall project overrun we believe is due primarily to an error in the plans that were prepared for this project, and the Dallas District believes that by re-letting this project after they have corrected this error, they will be able to receive much lower bids for this project. Therefore, we do recommend the rejection of this one project.

So with that information, staff recommends the award of all projects with the one rejection that I've listed for you.

MR. SAENZ: Just for the record, commissioners, that is agenda item 11(a)(2) for the construction contracts. John, you kind of got ahead of yourself.

MR. BARTON: Oh, I'm sorry.

MR. SAENZ: But let's go ahead and take action on that one first and then we'll go back.

MS. DELISI: Okay.

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Now we'll go back to agenda item 11(a)(1) that deals with our highway maintenance contracts.

MR. BARTON: I'm sorry, I don't have any information available to me on that, Amadeo.

MR. SAENZ: I will present the agenda item. Agenda item 11(a)(1) deals with our maintenance contracts that were let this past month. A total of twelve contracts were let and all contracts are proposed to be awarded. We had 4.67 bids per contract and were 15 percent under the estimated cost. Staff recommends award of all twelve maintenance contracts that were let this month.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. BARTON: And Commissioner Holmes, just to close the loop on a question that you asked, 10 percent of the fatalities are related to motorcycle accidents and only 4 percent of the vehicle miles traveled.

MR. HOLMES: That was very quick, John.

MR. SAENZ: Thank you, John.

Agenda item number 12 deals with the routine minute orders that deal with donations to the department, eminent domain proceedings, some financing, highway designations, load postings. We have one agenda item under agenda item 12(f)(10) that deals with a disposition of property in Tarrant County. Staff recommends deferring that minute order, and staff recommends approval of all other routine minute orders with the exception of that minute order.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

That concludes the action items on today's agenda, and I don't think there's a need for an executive session. Correct, Mr. Jackson?

MR. JACKSON: Correct.

MS. DELISI: Okay. So we'll now enter into the open comment period of the meeting, and we have three people signed up, so first I'd like to call Terry Wescoat.

MR. SAENZ: Terry, if you could please state your name for the record.

MR. WESCOAT: Sure. For the record, my name is Terry Wescoat, and I'm here representing the Callisburg Independent School District, and the location of Callisburg is very close to I-35　-- which we've talked a lot about today　-- in Cooke County which is near Gainesville, Texas.

My concern is an intersection on US Highway 82 and Farm to Market 678. We all know 82 goes east and west, farm to market goes north and south. The school district up there, we have a campus on both sides of 82, we have a high school that is located north of 82 and we have an elementary school that is located south of 82. So what happens here is every day approximately 30 school buses cross 82 either going from the south campus to the north campus or the north campus to the south campus, not to mention the inexperienced drivers we have that are either traveling to the north campus or the south campus.

This intersection is very dangerous, at best. When our school buses pull out in this intersection, they are sticking out in the turning lane either on the north side or the south side. It's limited in space and we've had numerous accidents, including fatalities at this intersection. Now, for an inexperienced driver, it's very dangerous, and when you start to throw weather into the equation, wind, rain, snow, sleet, this is a horrifying event to watch the buses cross and the inexperienced drivers cross from north to south.

It's just a matter of time that one of our school buses or two of our school buses get hit out on this intersection because we could have two school buses at this intersection at the same time, one traveling north, one traveling south.

I've talked to Larry about this problem several times. I grew up in the military and one of the things I learned in the military is if you have a problem, you present solutions. Well, we've presented several solutions and they've all been shot down, basically. One of my questions is this is a US Highway 82 and a farm to market Texas road, and I guess my question to you is is there any funding that we could get from the federal government to fix this problem. We've talked about stop lights, we've talked about school zones, and like I said, all these solutions have been shot down, and so the only solution we can come up with is an overpass going over 82.

I've been to Wichita Falls Cross Plains for help and now I basically am coming to you for help, and I was wondering if there's anything that could be done about this intersection.

MR. HOUGHTON: Do you represent officially the school district?

MR. WESCOAT: Yes.

MR. HOUGHTON: What do you do for them?

MR. WESCOAT: Well, I'm a parent.

MR. HOUGHTON: And there's a petition?

MR. WESCOAT: We've had a petition.

MR. HOUGHTON: Do they have a solution, have they presented a solution to Larry as the independent school district?

MR. WESCOAT: I can't answer that question. One of your questions is have we had a petition, yes, we have.

MR. HOUGHTON: My question, though, is has the school district petitioned Larry for a solution.

MR. WESCOAT: Well, I don't know if I'm answering the question, but one of the things that we came up with last meeting at the TxDOT meeting here at Wichita Falls is a prioritization menu, I guess, and we present the problem to them, they look at it in the terms of is it a high priority, is it a medium priority, is it a low priority project.

MR. HOUGHTON: Has the county weighed in on it?

MR. WESCOAT: Cooke County?

MR. HOUGHTON: Yes.

MR. WESCOAT: How do they weigh in on it?

MR. HOUGHTON: Have they weighed in as formally requesting to TxDOT?

MR. WESCOAT: I guess my answer is we've expressed our concern to Cooke County.

MR. HOUGHTON: Have they, in fact, voted to weigh in to say they recommend to TxDOT?

MR. WESCOAT: Can't answer that question. Are you asking me if they've filed a formal complaint?

MR. HOUGHTON: No, not a complaint, just a request.

MR. WESCOAT: Can you answer that question?

MR. HOLLOWELL: (Speaking from audience.)Yes, sir. I'm Gary Hollowell, county commissioner, Precinct 1, Cooke County. We did make a request to TxDOT.

MS. DELISI: Sir, can you come forward, please, and identify yourself and speak into the microphone?

MR. HOLLOWELL: Good morning. I certainly didn't plan to address the commission this morning. My name is Gary Hollowell. I'm the county commissioner for Precinct 1 in Cooke County.

It has been several months, maybe even a year ago that we did, indeed, approach TxDOT making the request that the overpass be constructed, and we have attended the Cross Plains meetings, we are advocates of the overpass. We do also understand financial restraints associated with it.

MR. HOUGHTON: Thank you.

MR. HOLMES: Were there any cost estimates on that?

MR. HOUGHTON: Let our district engineer come up, let him talk about costs, or the lack thereof.

MR. TEGTMEYER: For the record, I'm Larry Tegtmeyer, district engineer for the Wichita Falls District.

I believe the cost estimates are somewhere in the neighborhood of around $6 million for an overpass at this location. You know, I understand Mr. Wescoat's concern. There's been concern at this intersection for quite some time. It's a fairly rural type area, and obviously the most logical thing to do is if you're having problems at this intersection, throw in a signal light. But signal lights out in the middle of nowhere can also cause problems because we sure don't want the school buses or the school kids to think I've got a green light, I can head on through, and someone on 82 doesn't see the light and they careen on into them.

So there's been a lot of issues concerning this intersection. We did have a consultant about a year ago take a look at this intersection to see if there's any other intersection around the state that's similar to it and what has been done around the state to alleviate these concerns and these problems, and they came with some suggestions on remedial things to do, like putting in speed bumps, rumble strips on the approaching FM road, to put up speed signs, you know, you're traveling 55 miles an hour or you're traveling 65 miles and hour and the speed zone is only 55.

So we have done several smaller things on this intersection to try to improve it. I do realize the ultimate solution would probably be an overpass, but funding challenges is making it difficult to get that done.

MR. HOLMES: Larry, do you have any notion of traffic counts, vehicles per day counts?

MR. TEGTMEYER: I'm going to make a guess. I believe probably US 82 is probably in the neighborhood of 15,000 vehicles per day, and then on 678 you're probably looking at about 2,500 Vehicles.

MR. HOLMES: That's the cross street.

MR. TEGTMEYER: It's the cross. US 82 is four-lane divided at this area.

MR. HOLMES: And is there an accident history at this intersection?

MR. TEGTMEYER: Yes, there is, and we've been tracking that. Most recently we have submitted that as part of our call for projects in the HES program and we're hoping for some good results in that particular program. But yes, there is some accidents. I know his daughter had an accident there recently. About a year and a half ago there was a senior, I believe, that had a fatality at that intersection. So over the years there have been accidents there.

MR. SAENZ: Commissioners, I guess my recommendation would be that I'll get the Traffic Operations Division staff to work with the district because they're the ones that administer the HES program, as well as they can come and review some of the recommendations that were done by the consultant and see if they can come up with a plan to address it as a short term and even some long term solutions.

MS. DELISI: Thank you very much.

At this time I'd like to call up James Yohe.

MR. YOHE: Thank you very much. My name is James Yohe. I'm the executive director of economic development for the town of Nocona, and Judge Gossom is not the only one with a special tie. I get asked all the time as far as where is Nocona, and of course, you can see the Panhandle here, Highway 287 coming up from Wichita Falls, 35, and X marks the spot where Nocona is, we're about halfway in between on Highway 82.

I really appreciate everybody coming up here. I also like being able to travel over here instead of all the way down to Austin to be able to participate in these activities and like having you in the area. And I also appreciate all the work that's been done by the district, especially in the region around Wichita Falls, but it was a little bit disconcerting to me that the number one priority project for the Cross Plains Council, the expansion of Highway 82 to a four-lane, wasn't even a footnote in their presentation. That is a project that's been on the books, I think it's about 35 years, to be able to extend from Nocona all the way into Henrietta to connect up to 287.

And we are looking right now as far as at least a train overpass in Ringgold being brought up for expansion and brought up to the actual safety standards that TxDOT has for bridge overpasses, and we're just hoping that that will come about. Our county just recently allocated additional money to help participate with the right of way purchases with the promise that at some point TxDOT will actually return the money to them under the, I guess, current agreement that they do 90-10 percent type programs for that type of right of way.

I also was asked by our mayor that some of you met last night about some of the frustrations that they're looking at, and he asked me if I could provide a local article　-- and he provided me copies　-- that will explain some of the frustrations that they're looking at and some of the concerns they have as far as the 82 project.

I don't envy you at all as far as looking forward to how you find the finances for the various projects, especially when they travel back in time so far. But we want to make sure that this is kept to your attention and any assistance you can have in trying to move this forward again, we would sincerely appreciate.

MS. DELISI: Anybody have any questions for the speaker?

(No response.)

MS. DELISI: Thank you very much for coming.

And then one last card filled out is Sheila Cox.

MS. COX: Welcome to the Red River Valley. You're going to think we're slanted towards the eastern portion. I too for the record, am from Cooke County and my name is Sheila Cox. I want to thank you for several things. First of all, for my appointment to be one of the 18 that's serving on the current TTC-35 Corridor Advisory Committee. Through that, I know that you're welcoming the input, and at points we do have lively discussions but at least we're communicating.

I also would like to commend our area engineer who is here, also from Cooke County, and that is Mr. Wayne Bell　-- I believe he's sitting up here　-- and also, Larry Tegtmeyer of our district office here locally. And as you heard previous comments from one of our other citizens and one of our commissioners, Gary Hollowell, Cooke County does have some needs. We do recognize constraints of finances but we appreciate your willingness to hear all of these concerns.

I'm here to make a request. Following the press and following the comments that are made out in the communities across Texas, it's no surprise that there's a lot of people that are critical of different aspects of the Trans-Texas Corridor. Some of this, people are taking the heat that it's not their fault, and I will reference I think you on the commission are taking some public outcry heat for something that is not on your shoulders. I think officials from TxDOT, likewise, are taking heat for issues that are not on their shoulders. There are remedies to address the public concerns. Those remedies are legislative in nature, not on your shoulders entirely, not on TxDOT officials.

I would like to request your participation in this remedial process where we can work together, those of us that are representing the citizenry of Texas in our charge on this committee, and also those of you on the Transportation Commission and the fine staff in the various TxDOT offices to all work together with our current elected state officials, our senators and our representatives, to try and come to remedies on some of these issues that are of such great public concern.

Just for example, let's take the quick take provision that is in the legislation that will give 91 days from date of notice to date of acquisition of properties. For many people that may be young families with little children in school or high school, this may be a short time frame for them to select another place to relocate to. Many times it will be without funds in hand, we know that. These are main concerns.

But that 91 days, as difficult as that would be to relocate one family and one household, when we look at the scope of the plan of the Trans-Texas Corridor, we're going to have a lot of commercial properties that will be in the pathway and will have, according to current legislation, 91 days to relocate their business, their inventory, contact their customers so that they can relocate their livelihood.

Also, we're going to have a lot of farms and ranches that will have 91 days, and listen, if it's been a little while since you've been on an ag-producing property, we would invite you to come to Cooke County and let you look at the livestock, the equipment, the inventory that it would take to relocate the livelihood of an ag-producing property.

So there's a lot of things that can be worked on but it takes teamwork, and I just am so excited to be part of the process, but I do encourage with what you have going right now to listen. I do encourage that we do include our elected officials and let's get some of this heat off the shoulders where it doesn't belong and let's put some minds at ease in the citizenry.

Thank you for hearing my comments.

MS. DELISI: Thank you very much.

MR. HOLMES: Thank you for your service.

MS. COX: You're welcome. Any questions? Thank you.

MS. DELISI: Is there any other business to come before the commission? There being none, I will entertain a motion to adjourn.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Please note for the record that it is 12:14 and this meeting stands adjourned.

(Whereupon, at 12:14 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Wichita Falls, Texas
DATE: July 31, 2008
I do hereby certify that the foregoing pages, numbers 1 through 130, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.

7/05/08
(Transcriber) (Date)

On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731

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