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October 30 Transcript

Texas Department of Transportation Commission Meeting

Ric Williamson Hearing Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483

Thursday, October 30, 2008

COMMISSION MEMBERS:

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

STAFF:

Amadeo Saenz, Executive Director
Steve Simmons, Deputy Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director

PROCEEDINGS

MS. DELISI: Good morning. It is 9:10 a.m., and I would like to call the regular October 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 4:17 p.m. on October 22, 2008.
Before we begin today's meeting, let's all take a moment to place our pagers, cell phones and other electronic devices on the silent mode, please.
It is our practice to take the commission meetings on the road out of Austin three or four times a year, it gives us a chance to see first hand how our local partners are addressing their unique transportation challenges. I hope it also provides some insights to the local community and citizens about how we conduct our business. Though this is the third meeting in the Dallas area in the past two years, it's the first time the commission has met in this current configuration and we're happy to be back in North Texas.

I'd like to thank the folks here in Dallas who have given such a hearty welcome, and especially want to thank Senator Royce West who has been our host during this visit. And of course, I want to thank all the TxDOT employees who have been working very hard to make our visit enjoyable and productive. We've had a very good time on this trip and we're looking forward to a productive meeting today.
Now, as is our custom, we'll open with comments from the other commission members, beginning with the commissioner from Fort Worth, Bill Meadows, followed by the other commissioners.
MR. MEADOWS: Thank you, Madame Chairman. And I just want to join you in expressing my appreciation, I think our appreciation to one of the great leaders in our state, Senator Royce West, who also is a great driver he got me here from downtown, and I'm from Fort Worth, I'm not sure I would have gotten here otherwise. So Senator, thank you for everything, including getting me here.

You know, we've talked the last day and a half a great deal about partnering and the importance of partnering, and I think just the recognition of the fact and I've heard it said often that without learning to partner in the world of transportation partner meaning partnerships between providers of transportation infrastructure in our state absent that, we were going to fail. Well, the fact is today on this agenda we have an example, a manifestation of partnering. In fact, we've learned to partner and I think that's the important thing, and I think that this is a very remarkable day.
I'm so pleased to see so many community leaders from North Texas that are here, I think in many respects in recognition of the fact that we're on the verge of really accomplishing something that's going to enable to provide this transportation infrastructure to the citizens that we all serve.
I guess I have to acknowledge my old friend, chairman of the North Texas Tollway Authority Board, Paul Wageman, who has worked very tirelessly for that agency and for the people of North Texas, but also very specifically on this project.
Anyway, thank you all very much for having us. We really do appreciate it.
MR. HOLMES: Thank you, welcome. I'd like to add my thanks to Senator West for hosting us yesterday afternoon and today. We appreciate all your good efforts on our behalf. The first meeting I attended in January of '07, you also were the host down in Duncanville. We're happy to be back.

I add my comments to Commissioner Meadows. It seems to me that cooperative efforts between TxDOT and its regional partners is absolutely necessary to move the transportation needs forward and to accomplish some projects. We're happy to be here today. Thanks.
MR. HOUGHTON: Well, I echo my fellow commissioners' remarks, and Senator West, thank you again for hosting us here. It was a couple of years ago as, Ned, you alluded to earlier that we were in this part of the great state of Texas. With the economic engine up here, it's appropriate that we're up here, and I look forward to the agenda items and the discussions. We've got some good things happening.
And again, thank you for the hospitality to our district and to our employees. Thank you very much.
MS. DELISI: I just wanted to let you know that Commissioner Underwood is on his way. He, ironically, is stuck in traffic. Hopefully, he'll be here soon so he can address you because, trust me, it is always entertaining when Commissioner Underwood speaks from the podium.
With that, I'd like to remind everyone that if you wish to address the commission today during today's meeting, we ask that you complete a speaker's card at the registration table outside. To comment on an agenda item, we ask that you fill out a yellow card and identify the agenda item. If it is not an agenda item, we will take your comments at the open comment period at the end of the meeting. Regardless of the color card, we ask that you please limit your comments to three minutes.

As is custom for our out-of-town commission trips, we always give local city and county officials a chance to let us know about the important activities going on within the community. So first up I'd like to call up Dallas District engineer, Bill Hale, to introduce today's presenters.
MR. HALE: Madame Chairman and commissioners, I appreciate you having us here. Mr. Saenz. On behalf of the Dallas District, I want to welcome you to the Southern Dallas community. We greatly appreciate you choosing the Dallas District to come and host this event.
It's very appropriate in the Southern Dallas area. We have strong leadership in this area and the Southern leadership has demonstrated and continues to demonstrate strong transportation leadership in this region, and specifically with the Trinity Parkway, Loop 9, the Southern Gateway, and the Project Pegasus. Because of their continuing strong leadership, they're poised for strong and sustainable development in this area, in an area that needs to grow and has the potential to grow. There's areas out here that are in position to move very fast.

They stand together in this area, they work together in this area, and they have strong leadership together. The Southern leaders have partnered with the Dallas District staff and made this video that summarizes what's fixing to happen in this area. The Southern leaders are forward-thinking, clear-visioned, they're strong-willed and like-minded.
With that, I'd like to first, before we introduce the folks that will be speaking in a second, show this video we prepared for this event.
(Whereupon, the video began.)
SENATOR WEST: Good morning and welcome to the Martin Luther King Community Center. We understand that many individuals work hard to keep Dallas on the map, however, none more so than southern Dallas senator, Royce West, director of transportation for the North Central Texas Council of Governments, Michael Morris, City of Dallas mayor, Tom Leppert, and Dallas County commissioner, John Wiley Price.
SENATOR WEST: Well, first of all, what I want to say is to welcome everyone to the great city of Dallas and welcome to the planning processes going on with TxDOT, we welcome TxDOT as a continuing partner in the development of different projects that will meet the transportation goals of the Southern Sector of Dallas.

I think that when we begin to look at long range transportation projects for Dallas, specifically the Southern Sector of Dallas, I think that there's about three of them that I really want to articulate and make certain that the commission and the staff of the commission continue to pay close attention to: the Pegasus Project, the Southern Gateway project, and Loop 9.
Those particular projects are important because of several reasons. When we begin to look at the demographics of this area and the population increase that we're going to be experiencing over the course of the next 20 years, we recognize that there has to be a transportation solution that's not only dealing with issues of roadways but also mass transit so obviously you've got to have your rails and your cars and we've got to make certain that all those things are working in concert. But we recognize that an important part of that are those three particular projects that I've mentioned.

The reality is that the commission is having an historic meeting in the Southern Sector of Dallas. I've checked with some of those persons that have gone before me in this office, and I don't know of a single time that the transportation authority has met in southern Dallas, so we welcome this new chapter in the Transportation Commission's history, and we look forward to making certain that those lines of communication between staff and opportunities for procurement, opportunities for internships are opened up not only here locally where you've got a great district manager but also at the state level and throughout the state of Texas.
MR. MORRIS: Well, I think it is the south Dallas community's time it's probably 20 or 30 years later than it should have been. We have a major focus by the Regional Transportation Council on transportation investments and land use investments in the south Dallas community.
The southern Dallas community has great vistas, has great accessibility to downtown, has a new university campus, has access to one of the largest intermodal goods movement hubs in the United States, is blessed with great interstate highway access, both north-south and east-west, has great accessibility to the Houston port. It has a combination of factors that I think makes transportation investment and growth in the southern Dallas community to be a very high priority.
Three do come to mind. I think we do have to focus on the Interstate 35E/Southern Gateway 67 corridor. I think that is critical. That is part of our Interstate 35E NAFTA investment, that is part of the ability of getting people from South Texas all the way to Oklahoma. So that would be the first one that comes to mind.

The second is the new opportunity with the intermodal hubs in the southern Dallas County area. It's critical that transportation investments again be tied simultaneous to these land use investments so transportation is there when intermodal hubs and warehousing and the whole transfer of goods and commodities across our country which is going to occur there is done in a very integrated fashion.
And probably the third, and probably just as important or most important, is to get Loop 9 up and implemented as quickly as possible. The Regional Transportation Council and the county have been funding the environmental for some time. We recently passed it off to TxDOT to get it completed.
It's very important that that environmental project get cleared and we can start construction right away on our new 240-mile regional loop, with the first phase being implemented in the southern Dallas/northern Ellis county communities along that very important corridor.

MAYOR LEPPERT: Well, TxDOT on so many of our projects is a great partner, a great partner in the planning standpoint as well as working, and we understand how important it is. We see it in the southern part of our city with the investment and development that we want to see there for so many different reasons. We understand how important the transportation is, and clearly, working with TxDOT on continuing to expand the capacity of our highway system, that becomes an important element, but we also think of it in so many other ways too. We work with TxDOT in terms of rail transportation and so many other ways too. So working with them is an important part.
Perhaps the biggest example of working with them in a productive partnership is on the Trinity Tollway project. They have been great partners with us, working in so many different ways, and that's, again, a project that's not only important for what it does for the Trinity project but how it opens up everything in the entire region, again, not just the city but the entire region.
It's fascinating when you look at a project like the Trinity because for all the things that we sometimes think of from an economic standpoint, it's really the intangible benefits that make a difference when you think about the quality of life, where we live, where we work, all of those components, and then link those back to transportation, ability to get around, ability to continue to grow, and things like air quality.

So that quality of life element, aside from the economics, is so very, very important in a world where I think there's going to be more and more emphasis on those sorts of things. When people can choose, in the world of internet and cell phones and those sorts of things, where they live and they may not be limited to a specific office, making those decisions and ensuring that our region is going to be competitive long into the future is absolutely critical, and if we don't address the transportation needs we have, either today or thinking about what we'll have to maintain the quality of life when we have a population that continues to grow, we're going to be in a precarious position.
And that's why we're working with organizations like TxDOT because it's so important, not only because of the construction but that expertise up front to plan for where this region is going to go. We've got so many opportunities in this region but we've got to be conscious of continuing to plan and continuing to invest. That's an important partnership with TxDOT.
MR. PRICE: Well, we always have to begin with the economic engine and that's the UP intermodal facility at Wilmer. When you look at that synergy that comes out of that particular project, it becomes the real economic engine for all of the arteries for entire southern Dallas. And so when you talk about that, then you talk about the Wintergreen projects, the bridge projects, you talk about the intermodal projects. These are projects that we've coordinated with TxDOT and with COG.

When you look at the United States, one-third of the top ten transportation arteries come through southern Dallas County, Interstate 35, Interstate 45, Interstate 20, and when you put that connectivity together, then you spend all of the economic growth, development, the kind of growth, and of course, TxDOT is center with all of that.
Again, I've always got to go back to Loop 9. Loop 9 has got to be our pride and joy, but there are a number of other projects. I talked about the Wintergreen overpass project, I talked about the Pleasant Run project, we talk about the Malloy bridge project, and that's further east, but again, to our neighbors in Kaufman County and deep east Dallas County.
And so as long as we continue, and as TxDOT has done, continued to have a regional overview, as COG continues to prod us, as long as we keep a regional overview, then we'll continue to try to forge those projects in terms of priorities.
I can't say enough about the TxDOT staff here locally, Bill Hale and his team, part of an alliance that we have created in southeast Dallas County called SEATA, the South East Area Transportation Association, and we welcome TxDOT to Dallas County and we know it's going to be better because your meeting here, and as a result, our projects are going to move.

MR. HALE: Southern Dallas is diverse and growing, and the Texas Department of Transportation is excited to be part of the opportunity and development in the region.
(Whereupon, the video ended.)
MR. HALE: Well, thank you. And I'd like to recognize the folks who put that together: Scott Dorsett, Deborah Jackson, Kelly Petras, and Rhonda Smith. They put this together from our section out of our Dallas office and did a very good job.
Before I get to any other presenters, I'd like to first acknowledge the presence of our TxDOT district engineers in this area: We have Larry Tegtmeyer from the Wichita Falls District; we have Lauren Garduno from the Odessa District; we have Mary Meyland from the Tyler District; and we have Maribel Chavez from the Fort Worth District here. And I'm not sure if we have any others at this time.

With that, I want to go ahead, and we're going to have a brief presentation by several folks here and it will start with the leader of the group here, Royce West, the senator from District 23. We have a partnership in this area that includes several folks, and I wanted to give them all the opportunity to say something to you as they're here, and it will start with Senator West. But we have the state representative from District 110 in this area, Barbara Mallory Caraway; we have District 7 councilwoman, Carolyn Davis which is where this is being held at this time; we have Commissioner John Wiley Price from this area; we have the councilwoman, Linda Koop she's head of the transportation section for the City of Dallas in this area; we have Michael Morris, the transportation director for the RTC, the Regional Transportation Council; and we have the NTTA chairman, Paul Wageman.
At this time I'd like to introduce our first speaker, Senator Royce West. He has served as a state senator of District 23 in Dallas County, in 1993 he came in here. Senator West is not only a major transportation leader in the southern Dallas area, but also for the past 15 years Senator West has sponsored the Dr. Emmett J. Conrad Leadership Program. This program has provided college students from Senatorial District 23 with paid employment in their respective field of study.

As a result, this program has provided many TxDOT summer hires becoming full-time employees for TxDOT. These employees are proving to be a valuable asset to continuing the TxDOT mission in this area. And in fact, he was a summer help back in his senior year at the Hutchins office where I worked before. So I'd like to introduce Senator West.
(Applause.)
SENATOR WEST: Thank you very much, Bill.
Madame Chair, members of the commission, I am a former TxDOT employee, and he's correct. Back in 1970, Madame Chair before you were born, of course I used to be a summer that was politically correct.
(General laughter.)
SENATOR WEST: I was summer intern for the Texas Department of Transportation. Welcome, for the second time within the last two or three years, to District 23. You're right, Ted, we met, and the former chair, Ric Williamson, and I signed pretty much an oath, blood oath, that we would hold a meeting at the first opportune time here at the historic Martin Luther King Center in the heart of what we call sunny South Dallas. So thank you very much for being here today.
The great thing about the leadership in the Southern Sector of Dallas, you won't hear us, Ned, talking about we want this project over here and this project over here, and I think the mayor kind of articulated the vision in terms of what we need to do.

So we speak with one voice on issues of transportation, Madame Chair, and we recognize that the Trinity Parkway must be completed and everything else needs to be sequenced from the Trinity Parkway and we must make certain that there are transportation alternatives as we deal with what we call the mixmaster issues which is the Pegasus Project. And once we are able to get those things sequenced and get them lined up with other projects that we know they compete with, then we'll be able to move forward.
Bill has indicated that the environmental for the Trinity Parkway is with TxDOT, and we ask that you move as expeditiously as possible to review that and to make the comments that are necessary so we can begin the process of dealing with the Trinity Parkway so we can begin sequencing the other projects.
Again, I want to reiterate you're not going to have a bunch of political leaders up here saying that we want this project, this project, we speak with one voice, and I think that bodes well for the commission. You won't have to worry about where we're coming from, you know where we're coming from and that the political leadership here in Dallas I won't just say southern Dallas is lined up behind those particular projects.
So I want to thank you for being here, and again, we want you to spend as much as possible, your personal money and also TxDOT's money, right here in Dallas County. Thank you very much.

(Applause.)
MR. HALE: The next person I'd like to introduce right now is Carolyn Davis. She is the voice of the southern area, this area we have right here. She is the councilwoman in this area and has expressed a lot of interest in areas that we worked up along Central Expressway, as well as the corridor we have down here in the southern gateway. Carolyn.
MS. DAVIS: First of all, I would like to thank you for being here. I had to call Linda Koop the other night and I said, Linda, I see these TxDOT signs meeting commission, and I came here the other night wanting to give my input. So I just want to say thank you so much for being here in my district, the South Dallas/Fair Park, better known as the Southern Sector.
But before I get started, I always like to recognize individuals. I don't know if she's here, I'd like to recognize State Representative Terri Hodge. This is also her district. Is Terri here? Well, if she's not, I want to put it in the record that I did recognize her. Recognize our senator, Royce West; our city manager, Mary Suhm, who is here; our mayor, Tom Leppert, who spoke a few minutes ago; State Representative Barbara Mallory Caraway, thank you for being here; also Commissioner John Wiley Price, thank you for being here.

Now they've given me a speech to say to you, and I will start on it now. Good morning, and welcome to the great City of Dallas and the Martin Luther King Junior Recreation Center. My name is Carolyn R. Davis, and I am the council member for District 7 with the City of Dallas. It is my pleasure to host the group of transportation specialists and guests here in District 7.
The Martin Luther King, Jr. Community Center has helped over 8,841 senior citizens, 1,459 children by providing meals, toys and social service. The mission is to deliver the highest quality of human health, education and other comprehensive service to people living better and providing a center for community gathering.
Some of the programs that the Martin Luther King, Jr. Community Center offers are senior programs, food assistance, toys projects, story times and after-school programs. I would like to thank the Martin Luther King, Jr. Community Center for allowing us to host the Texas Transportation Commission meeting at this facility.

The citizens of Texas need a safe and efficient transportation system. Citizens rely heavily on transportation to get back and forth to work and home, to meet their friends and deliver goods and service. The State of Texas and the City of Dallas are working hard to provide better roads, bridges, airports, railroads and ports to help the citizens of Dallas. The City of Dallas is committed to the solutions to enhance our transportation system.
An improved transportation system offers better means of travel, less congestion and less environmental pollution. I hope that we can continue to work together with our colleagues at the region, state and federal level of government and our private sector partners to better find transportation solutions for the citizens of Dallas and the state of Texas.
Now, I would like to thank my colleague, Linda Koop, for her years of service to the transportation needs here in the city of Dallas.
And as you know, there was another accident on Dead Man's Curve last night, and because of that, I'm asking you to please move forward with funding for the S.M. Wright Freeway and Dead Man's Curve. I'm also asking you to continue to support the Southern Sector when it comes to highways and bridges. For example, I-30 and I-67 which is known as I-35. I got a report the other day that just on I-30 alone it has a million cars a day that's on that highway, so it needs to be looked at.

Also, I'm asking you to continue to support the Trinity River. As Senator West and our mayor have said, we need your continued support on the Trinity River and the bridges and highway around the Trinity River.
Thank you so much, and I am so pleased to have you here in District 7. Thank you.
(Applause.)
MR. HALE: Thank you, councilwoman. The next person I would like to bring up here would be Linda Koop. She represents the transportation section, she takes care of the committee in the Dallas City Council itself, so I'd like to have her come up and say a few words, if she would.
MS. KOOP: Thank you, Bill, and thank you, Councilwoman Davis, for hosting us today, it's wonderful.
You know, I just want you to look out here amongst all these people. We appreciate so much that you're here. There are so many elected officials here today that are so highly engaged in transportation, and their learning curve is just way, way up there.
When we go to Washington D.C. and they ask me about what's going on in transportation here, I can tell them honestly that we have got such an engaged body of elected officials, and we make a lot of decisions, we make a lot of decisions for our region and we try to make the best decisions and we appreciate our partners so much.

We appreciate TxDOT; we appreciate NTTA, who is here today; we certainly appreciate Bill Hale who has worked with us on so many projects, even one right through the heart of my district which is the LBJ expansion of managed lanes project which is not an easy thing to do but we appreciate you being here as well.
Our Trinity project, as Senator West said, is a linchpin for the rest of the transportation system in Southern Dallas, and we know that we've got to get that across the goal line, and I'm dedicated, as well, I think, as is most of the region here to getting Dead Man's Curve solved.
That is a very serious situation, two accidents in the last several weeks, one which damaged the bridge considerably, and that is part of the Trinity River Parkway, it is part of the MOS, the minimally operable segment. Perhaps it could be pulled out, since it's not in the floodway, and we can go ahead and begin the Trinity project with that.
And so I'm committed to Southern Dallas, as Councilwoman Davis knows, and Representative Mallory Caraway and the senator and Commissioner Price as well, to getting that project off the ground because that project should have never happened, and if you haven't been there, we'd love to take you on a little tour after this because it is really a scary sight.

So we appreciate you being here very, very much, and if you'd like to stick around, I'm a free taxi.
(Applause.)
MR. HALE: And we are working on that bridge. We demolished the part that was messed up, it's under traffic right now, but in the near future, by Christmas we will have it opened up and the span replaced. That's for about $1,500,000, but the big project that she's talking about and that we're looking at trying to do is pull it on out and go ahead and build the section that's about 4,000 feet across to I-45.
The next person I'd like to bring up here is Commissioner John Wiley Price. He's been a commissioner since 1985, January 1985, six terms. He is, I suppose, the grandfather of the commissioners right now or the father, I would say maybe both. He has served on many boards and commissions in his role as county commissioner, including membership on Loop 9. You're my grandpa.
(General laughter.)

MR. PRICE: I'll remember that, Bill. Thank you. Madame Chair, members of the commission, I've been called a lot of things but grandpa isn't one of them and the next thing he'll be telling you I'm as old as Loop 9 which has been around since 1952, by the way. Protocol having been established with all the elected officials, and of course, my senator, Senator West, I want to also thank you for being here today.
I was back in the back and was talking to a few individuals and I'm going to make this real quick. The only thing: land is land is land. You have access, you have zoning, so what makes the difference? Public policy and planning. And I want to thank the North Central Texas Council of Governments and TxDOT for understanding the big picture issue. Unfortunately, in Dallas County, 895 square miles in that southeast sector, as Michael Morris said, we're 20 to 30 years behind the loop.
It's not as though some of us are not accustomed to being in that seat, but we know with your help we're going to be able to move this to the next level. Southeast Dallas County is the only area in this county that can give us the kind of growth and tax base that we need as we go forward and planning becomes the issue.

So we just want to say thank you for being here today, understanding big picture issues. I said in the back, the analogy was what makes one automobile different from the other. For the most part most of them have four wheels, there are a few of them around with three wheels but most of them have four wheels. The thing that makes the difference is the engine. And that's what we have in southern Dallas County, all we need is you to provide the fuel so we can get to the next level. Thank you.
(Applause.)
MR. HALE: Our next speaker is the transportation director for the RTC, the Regional Transportation Council, most of you know him, Michael Morris. If Michael would come up here.
MR. MORRIS: Madame Chair, commissioners, Amadeo, it's very nice for you to be here. I'm going to save my remarks for five items on your agenda and give you back the time here. I hope to retain my Road Hand Award after the meeting. I'm giving you a little insight on some comments on some of your items.
But while you're here, you're in the Martin Luther King building, as you know, and I had conversations with all of you over the last two years where a lot of you were unfairly criticized by some, and I would encourage you to read Martin Luther King's letter from the Birmingham jail, and if that letter doesn't change your life, I want you to tell me.
I read it often; I think it gives you strength with regard to how to deal with very sensitive subjects. So while you're here in this building and we celebrate Martin Luther King, please pull out your letter from the Birmingham jail, read it one more time, and I think it will strengthen your conviction in public policy.

Thank you very much for being here today.
(Applause.)
MR. HALE: And the last speaker I would like to present would be Paul Wageman. He's a partner with us with the NTTA Many things have occurred int his area because of Paul Wageman, and I'd like to have him come up here and make a few statements. He's the chairman of the NTTA Board.
MR. WAGEMAN: Thank you, Bill. Senator West, thank you for hosting this meeting here today in the heart of South Dallas. It's really a privilege to be with this august group of public servants, of which you are clearly one of the leaders here in North Texas, and we appreciate all you do for the region and for our state.
Good morning, Chairwoman Delisi and members of the commission and Amadeo and your staff. I am Paul Wageman and it's my privilege to serve as chairman of the board of directors of the North Texas Tollway Authority. On behalf of the NTTA, I would like to commend you and the entire commission for the spirit of partnership which our two agencies have embarked upon.

Chairwoman Delisi and Commissioners Houghton and Meadows, I would like to particularly thank you for the collaborative spirit in which you all have supported the negotiations of the terms sheet you will consider later today, advancing State Highway 161 and Southwest Parkway and Chisholm Trail.
Commissioner Meadows has a unique perspective by which to encourage this partnership as he was our former vice chairman until April of this year. He's also a resident, as you know, of North Texas, and has long sought an improved relationship between our two agencies.
Bill, I really appreciate your leadership. I've said many times over the past two weeks that it would not have been possible for the NTTA and TxDOT to arrive at this groundbreaking agreement without your commitment to working with leading transportation providers in the region to advance mobility solutions for our citizens.
It's no secret that in recent times the NTTA and TxDOT haven't always seen eye to eye, but our eyes have always been on the same prize, and that's improved mobility and safety for the citizens we serve. I didn't realize, however, how apparent our differences were to the public until I read some of the media coverage following the announcement of our agreement.
The Dallas Morning News editorial board said that we were famous for throwing elbows at each other and that we caught the collaboration bug. Well, I did some research and I found out that the collaboration bug is incurable but not fatal and is highly contagious.

I really consider this the dawn of a new relationship between our two agencies, a relationship where the NTTA and TxDOT will work tirelessly and collaboratively to advance our missions, yours admittedly much larger than ours, a relationship where we'll work together to come up with innovative solutions to confront the transportation challenges facing this region, and a relationship, ultimately, where the people we serve will benefit from the improved mobility, safety and quality of life that results from this collaboration
Commissioners and Chairwoman Delisi, again, we appreciate you being here in Dallas and thank you again for this spirit of cooperation and partnership which we've embarked upon.
(Applause.)
MR. HALE: Commissioners and Mr. Saenz, I want to thank our presenters, and the presentations they've made and the discussion we've had up here illustrate what our commitment is to the partnerships we have in this area. We have a strong partnership and it's time now for us to move on. I appreciate the time and the opportunity for Dallas to host this commission meeting here. With that, I thank you all.
(Applause.)

MS. DELISI: Thanks, Bill. Before we move on, I'd like to give an opportunity to Commissioner Underwood to address the crowd. I'm sure he's been working all night on his comments.
MR. UNDERWOOD: Thank you, Madame Chair. I think it's gone long enough. I've already seen people in the back. I don't mind you looking at your watches but when you start thumping them, I know we've been here a while.
Thank you also for the tour we had yesterday, and I agree with you on Dead Man's Curve; that's scary. Driving with my wife is scary, but that scared me more. So thank you very much for your hospitality.
(General laughter.)
MS. DELISI: Thanks. And now I'd like to turn it over to Amadeo.
MR. HOUGHTON: Can I ask a question?
MS. DELISI: Go ahead.
MR. HOUGHTON: Since we're having such a love fest here today it's kind of changed, hasn't it, Ned? I have a question of Commissioner Price.

Commissioner Price, can you come forward? I'm going to put our guys on the spot, Commissioner, because you remember a while back, Senator West, Ric Williamson drug me up here and told me to go work on Loop 9 with you, and we committed to getting that thing built. I'm going to put my staff on the spot. How are we doing, where are we?
MR. PRICE: Thank you, Commissioner Houghton. By December we will lateral to TxDOT on all the issues. It will be in your bailiwick.
MR. HOUGHTON: Amadeo, how are we doing on Loop 9?
MR. SAENZ: I'm going to ask Bill.
MR. HALE: We expect to have our environmental impact statement cleared by the end of this year. We have it ready for a development letter and a proposal from some folks right now to build the project, so we have the ability if we're willing to go with the proposal we have right now to move forward with it. So by first of 2010, you ought to be able to see something moving on that project out there.
MR. HOUGHTON: So I take it, Commissioner, that you will be watching us on this deal.
MR. PRICE: I will be watching, Mr. Commissioner, and just in case I feel myself drowning, I will call.
MR. HOUGHTON: I want to thank you for your leadership. It was a very, very interesting meeting that you and I had at the commissioners court building, and it's a project that is very important to this region.

MR. PRICE: Well, I appreciate you. Madame Chair, thank you, and if you give me a point of privilege, we've been joined by Commissioner Mike Cantrell from the Dallas County Commissioners Court. He is here also, one of my colleagues.
MR. HOUGHTON: Thank you. Sorry to put you on the spot.
MR. PRICE: No problem.
MS. DELISI: Commissioner Price, you might as well just go ahead and stand up here. I'm going to turn it over to Amadeo for another presentation.
MR. PRICE: Okay, sure.
MR. SAENZ: Thank you, Madame Chairman. Good morning.
Commissioner Price, it is my pleasure this morning to present, on behalf of the commission, and name you a Road Hand awardee for the department. But let me go through this thing first and then we'll continue to do that.

Since our transportation system is key to economic development and tourism, one of the state's largest industries, maintaining and improving this vital system would not be possible without the dedication and hard work of outstanding citizens across the state, we can't do it alone. Although these individuals come from all walks of life, they recognize the importance that transportation plays in their communities and they act on it.
To honor these citizens, former state highway engineer Luther DeBerry created the Road Hand Award in 1973. He recognized that TxDOT owes a great deal to its many friends and supporters for their efforts to make the highway program the best in the world. He created the Road Hand Award as the highest tribute to these public-spirited citizens who freely give of their time to champion transportation projects in their area. It is a heartfelt gesture to recognize and express our appreciation to these outstanding volunteers.
Over the last 36 years, this award has become an honored TxDOT tradition to acknowledge those who have made supporting Texas transportation a labor of love. The names of Road Hands are inscribed on the Road Hand Hall of Honor plaque which hangs in our Dewitt C. Greer Building in Austin. Including this year's four new recipients, there will be a total of 216 people who have been named Road Hands since 1973.

Some of the previous recipients from the Dallas area include the late Russell Perry, the late John Stemmons, the late John W. Arden, the late Andrew Gibb, Chancellor Lee Jackson, John Davis Worley, Charles Kirkland, David Griffin, the late Buck Winn III, Judge Ron Harris, Walter Human, Sandy Jacobs, Jack Hatchell, Michael Morris mentioned that he's a Road Hand, Grady Smithey became a Road Hand in 2007, and last year we named Judge Mary Horn from Denton County, and it is my pleasure today to honor you in making you a Road Hand for the Department of Transportation.
I'd like to kind of present to the people here some of the things that you've done to help us in transportation. Since you took office as Dallas County commissioner in 1985, you have dedicated your time and your energy to transportation issues by serving on various boards and commissions, including the Loop 9 Policy Advisory Group and the Southeast Area Transportation Alliance.
You formed a policy advisory group to help reinitiate the study to develop the Loop 9 corridor which runs from I-20 all the way to US 287 in Ellis County which will also serve as the outer loop for the Metroplex. The Loop 9 corridor will facilitate the east-west movement in southern Dallas County, as well as to enhance economic and sustainable growth in this corridor.

The Policy Advisory Group was so successful, Ellis County and nine of the cities in the corridor made verbal and written commitments to financially participate in the completion of the major investment study and the draft EIS.
In your role as a public servant, you have promoted public involvement, you have dedicated regular meetings with the public and business organizations and government agencies to discuss transportation related issues and to educate and inform your constituents of the importance of transportation to the quality of life for themselves and also for their children.
He has been the driving factor behind the initiation of Dallas County Southeast Area Transportation Alliance. The coalition builds partnerships among stakeholders and facilitates the sharing of information and ideas about transportation and other infrastructure issues impacting development in the southeast region of the county.
He has supported many regional economic development initiatives, including the accelerated design and construction of Cleveland Road extension in Hutchins. This $1.3 million transportation project helped facilitate the new FedEx operating center.

His responsibilities often extend beyond the realm of commissioners court. His public service and community involvement are displayed through his membership in several groups which include the Advocates for Minority and Women's Business Enterprises, vice president of the Dallas County Juvenile Board, past president of the Texas Organization of Black County Commissioners, and leadership in many other organizations.
Along with being the dedicated father of two sons and a daughter so you're not a grandfather; I'm correcting Bill he has ardently represented Dallas County for the past 23 years. During that time frame, he has worked closely with TxDOT officials to develop regional policies that would maximize the return on transportation investment using TxDOT's goals and strategies as his guide. His dedication to improving the transportation system we have today is an inspiration to us all.
It is with great honor that I announce the addition of the name of John Wiley Price to the prestigious list of Texas Road Hands. And I'd like to ask the commission if you could step down and present Commissioner Price with his plaque.
(Applause.)

MR. SAENZ: Commissioner, as they step down to present you the plaque, I would like to take a minute to read what is on the inscription on the plaque. It says "John Wiley Price is a certified members of the Texas Road Gang, having proven ability and displayed the stamina to toil long, strenuous hours for Texas transportation, and be it known that in recognition and appreciation for proven labor, the Texas Department of Transportation shall post your name on the roll of the honored and distinguished Road Hands." It is signed by the Texas Transportation commissioners and myself. Congratulations, sir, it is a pleasure to work with you.
(Applause, and pause for photos.)
MS. DELISI: Now Amadeo has two very special memorial resolutions.
MR. SAENZ: Thank you, Madame Chair. It is with great sadness that I present two resolutions to the families of two employees that have lost their lives in the line of duty. The first one is a resolution for Charles L. English.
"Whereas, it is with profound sorrow that the Texas Transportation Commission acknowledges the death of Charles L. English, who tragically lost his life on September 17, 2008, while performing his duties as an employee of the Texas Department of Transportation;
"And whereas, Charles served the Dallas District for 23-1/2 years and was considered by his coworkers to be a hard worker and a good friend;
"And whereas, Charles enjoyed big game hunting, bass and fly fishing in Texas and Colorado;

"And whereas, Charles was a certified Hunter Safety Course instructor for over 14 years;
"And whereas, Charles demonstrated his dedication and loyalty to the State of Texas and its citizens in the work he performed on a daily basis to help accomplish the goals of this agency;
"And whereas, this incident will forever serve as a reminder of the sacrifices our employees make on behalf of the department;
"And whereas, it is the desire of the Texas Department of Transportation to honor his memory;
"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend its sincerest sympathy to the relatives of Charles L. English, and that this resolution be sent to his family." Signed today 2008 by the Transportation Commission.
Charles worked in the Dallas District.
The second resolution is for an employee, Delbert L. Gann that worked in the Paris District.
"Whereas, it is with profound sorrow that the Texas Transportation Commission acknowledges the death of Delbert L. Gann, who tragically lost his life on the evening of September 16, 2008, while performing his duties as an employee of the Texas Department of Transportation;

"And whereas, Delbert served the Paris District for 24 years and he loved operating his TxDOT dump truck and being out with his coworkers on the road;
"And whereas, Delbert liked spending his spare time camping, cooking, playing horseshoes and barbecuing;
"And whereas, Delbert enjoyed life and being with his friends and family;
"And whereas, Delbert demonstrated his dedication and loyalty to the State of Texas and its citizens in the work he performed on a daily basis to help accomplish the goals of this agency;
"And whereas, this incident will forever serve as a reminder of the sacrifice our employees make on behalf of the department;
"And whereas, it is the desire of the Texas Department of Transportation to honor his memory;
"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend its sincerest sympathy to the relatives of Delbert L. Gann, and that this resolution be sent to his family." Signed, also, by the commission on this date 2008.
We lost three employees, over a very short time period, all of them performing their duties, and it is with great sadness that we have within ourselves and their families, and we want to extend this to their families.
MS. DELISI: Thank you, Amadeo.

The first business item on the today's agenda is the approval of the minutes of last month's special meeting on September 24 and the regular meeting on September 25. Members, the draft minutes are in your briefing materials. Is there a motion to approve these minutes?
MR. HOLMES: Move it.
MR. UNDERWOOD: Second.
MS. DELISI: All those in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.
MS. DELISI: Now, Amadeo, I'll turn the meeting back to you to take us through the rest of today's agenda.
MR. SAENZ: Thank you, Madame Chair. Agenda item number 3 deals with aviation, and Dave Fulton, director of our Aviation Division, will present a minute order concerning aviation.
MR. FULTON: Thank you, Amadeo. Commissioners, for the record, my name is Dave Fulton, director of the TxDOT Aviation Division.

This minute order contains a request for grant funding approval for seven airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $15.9 million: $2.6 million federal, $11.8 million state, and $1.5 million in local funding. Public hearings were held on September 18 and 30 of this year. No comments were received. We would recommend approval of this minute order.
MS. DELISI: Any questions?
MR. HOLMES: So moved.
MS. DELISI: Is there a second?
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.
MR. SAENZ: Thank you, Dave.
Moving on, agenda item number 4 deals with public transportation. Eric Gleason, director of our Public Transportation Division will present a minute order that will award some transportation development credits.
MR. GLEASON: Thank you, Amadeo. Good morning. For the record, my name is Eric Gleason, TxDOT director of Public Transportation.

Agenda item 4 awards $73,304 of transportation development credits to the City of Abilene as match for federal funds awarded to the city for fleet replacement. In December of 2006, the commission expressed its intent to award transportation development credits for projects that promote public transportation capital infrastructure projects: fleet replacement, fleet expansion, maintenance facilities, and capital projects that support regional coordination.
Using development credits as match also allows Abilene to use its local funds to support ongoing operating programs particularly important in the light of increased fuel expenses over the past year. The amount requested represents the total match requirement. Federal funds leveraged by the use of development credits total approximately $431,000 and will assist the city with replacement of 22 of their 23 vehicles used for paratransit services for elderly individuals and individuals with disabilities.
We recommend your approval of this minute order.
MS. DELISI: Any questions? Is there a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.
MR. GLEASON: Thank you.
MS. DELISI: Thank you.
MR. SAENZ: Thank you, Eric.

Moving on, agenda item number 5 deals with the promulgation of administrative rules. Agenda item 5(a) deals with proposed rules. Phil Russell will present a minute order proposing rules dealing with our Pass-Through Toll Program.
MR. RUSSELL: Thanks, Amadeo. For the record, I'm Phillip Russell, assistant executive director for Innovative Project Development. And good morning, commissioners and Roger.
As Amadeo mentioned, the proposed rules before you relate to our Pass-Through Program. Please recall in our discussion item last month I talked a little bit about the program. Again, the Pass-Through Program was initiated by the department a number of years ago, the notion being that if projects are of critical importance, that local entities, local communities might actually front the money to have the project built and allow TxDOT to pay them back over time.
Again, a lot of people had their own ideas whether that program would be successful or not. It's been wildly successful, probably beyond our own dreams. To date, we've had about 15 projects worth over a billion dollars where local entities were able to accelerate needed transportation projects. It helps us, obviously, because it allows us to feather out our cash flow.

Unfortunately, because of cash flow issues, we had to suspend the program in December, but we continued to receive a lot of interest in the program, so now, and of course, in our discussion item last month there was some interest in trying to re-institute the program, get it going again, but we also thought that it would be a good time to propose some new rules that would perhaps provide a bit more structure to the program.
In the past it's been kind of a first come/first served basis. These proposed rules now would provide a bit more order and structure that we would have a program call, very similar to some of our other TxDOT programs. Many of the concepts that we discussed at the discussion item last month are included in these proposed rules. What we've tried to do is structure to provide the ultimate amount of flexibility.
If you recall, we had some discussion that in the past we would cover all expenses of the program from design, right of way and construction. These rules allow you, on each program call, to fine-tune it: you could choose to continue to reimburse all those expenses, you could choose to only reimburse the construction expenses. Again, it provides you the ultimate amount of flexibility. We've also gone through and provided some of the criteria that we would utilize in selecting the project.

Again, my only worry is that we're still living in a pretty tough, pretty tight cash flow basis, but I think this is the right time to initiate this program, and this would be the first step on these proposed rules. The deadline for comments, if you approve them, would be December 15, and we would anticipate finalizing these probably in the January time frame.
Staff would recommend approval of these proposed rules, and I'd be happy to address any question you might have.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Phil.
Agenda item number 5(b) deals with rule review, and Bob Jackson, general counsel for the department, will present rule review dealing with Chapter 24, Trans-Texas Corridor, and Chapter 26, Regional Mobility Authorities.
MR. JACKSON: Bob Jackson, general counsel. The Government Code requires state agencies to re-adopt their rules every four years, and prior to re-adopting, to consider whether the reasons for each rule continue to exist.

Rules concerning regional mobility authorities and the Trans-Texas Corridor were reviewed during September and October. The rule review was published in the September 12 issue of the Texas Register. No comments were received regarding re-adoption. The reasons for adopting these rules do continue to exist. Recommend adopting this minute order which will continue these rules for another four years.
MS. DELISI: Any questions? Is there a motion?
MR. HOLMES: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Bob.
Agenda item number 6, commissioners, deals with approval of projects to be funded with the State Highway Fund revenue bonds, and John Barton, assistant executive director for Engineering Operations, will present the minute order.

MR. BARTON: Good morning, Madame Chair, commissioners and Mr. Saenz. For the record, my name is John Barton, and I have the pleasure of serving you as TxDOT's assistant executive director for Engineering Operations. This morning I'm here to present for your consideration a minute order regarding the use of Proposition 14 bond proceeds from the development and construction of many needed highway improvement projects across the state of Texas.
The department has the authority to issue an additional $2.9 billion in Proposition 14 bonds which are those bonds that are backed by the State Highway Fund. And commission, you recently took action to direct the department to issue in fiscal year 2009 an amount not to exceed $1.5 billion, and directed staff to develop for you a plan for the use of these Proposition 14 bond proceeds.
We have developed a recommendation for the use of these funds that would allow the department, with our implementing agencies and partners, to advance the construction of projects previously delayed due to our funding constraints and limitations, accelerate the construction of some much needed other priority projects, and to continue to develop projects throughout the state so that they might be ready to proceed in a timely manner, if and when additional funding is secured.

This minute order provides specifically your approval of our staff recommendation on the highway improvement projects that would be funded through the use and issuance of additional Proposition 14 bond programs. This list represents projects that were either mobility projects delayed in November of 2007 due to our cash flow constraints at that time, projects that will deliver the final phase of a phased project, for instance, partially completed loops and the remainder of those, closing two-lane gaps that exist in four-lane divided highways, and other areas such as that, projects that would reduce congestion, improve mobility and enhance safety in regions of the state where we were behind, so to speak, when the current reality of our financial situation was realized earlier this past year, and safety projects that will be selected as part of the $600 million worth of required safety projects that are part of the enabling legislation for this bond program.
By choosing to approve this minute order and the associated list of projects that's attached to it, the department and our MPOs will be able to incorporate these projects into their transportation improvement programs and their budgets and enable us to move forward toward construction on these much needed transportation projects.
The remainder of the Proposition 14 bond proceeds that is not accounted for by the projects shown in the list that's been provided to you will be used for additional engineering, right-of-way acquisition, construction and contingency activities to fund other needed projects throughout the state.

Staff's recommendation is that you approve this minute order, and with that, I'll answer any questions that you might have.
MS. DELISI: Does anyone have any questions of John?
(No response.)
MS. DELISI: I have one person who has signed up to speak against it, and Michael Morris, where are you?
MR. MORRIS: Madame Chair, members of the commission, thank you very much.
I think it is important to proceed with Proposition 14 bonds. My concern is with both process and with the projects. We received a list of projects, I think it was late either last night or the night before. I think it would be important for this sum of money to have a process that people would have an opportunity to participate in.
The second issue is one of equity, so I think the process isn't clear on how one went in to determine this set of projects. There are no projects from the Dallas-Fort Worth region, our metropolitan area boundary has no projects in this list. We scratch our head with regard to that. You have policies in place to make sure those regions who have taken a leadership position to advance toll revenues would not be penalized in any further allocation of gasoline tax.

This is the only item I'm standing before you today against. Later on in your agenda you'll have an item where we'll be suggesting $2 billion worth of 121 projects be put on system. We have a policy that there's a 20 percent match; that's $500 million in gas tax to match your $2 billion. We're not sure where that money is going to come from to implement the $2 billion that are going to come to your system from the 121 revenues.
So I'm sure you've already done your due diligence on Proposition 14 and your relationship with the legislature to make sure you're going to get the out year revenues to pay these bonds. I stood before you in the spring, nervous that you may sell these bonds and the legislature doesn't support you I think you've worked that out.
The question is simply one of process and then one of equity with regard to those particular projects. If, in fact, the state has projects they have started constructing, I agree with Amadeo and his staff, those projects have to be completed, so on and so forth, but the thought that Dallas-Fort Worth wouldn't have any projects that meet that particular situation is hard to do.
And I apologize on short notice. Remember, we just got the list, I think, yesterday with regard to the process.

MR. HOUGHTON: John, we've had lengthy discussions about this issue in briefings. Can you go through the process regarding the behind districts and et al on how we got to this?
MR. BARTON: Yes, sir, I can. And I would like to point out that the list available on TxDOT's internet was a draft list; it's been revised between that time and today.
MR. HOUGHTON: When did we place it on the internet?
MR. BARTON: I believe it was on Monday evening. And perhaps it will help Michael feel more comfortable, there's a $180 million worth of funding specifically designated to the Dallas District in this particular list that's before you today. Those monies are to go towards the Loop 12 and State Highway 114 project, as well as to reimburse the metropolitan planning organization and the district for some money that they advanced on a project that was of critical priority for this area, using their State Highway 121 toll revenue funds, and it's a reimbursement for that.

So 10 percent of the funding being proposed today is going to the Dallas District alone, as well as a project in the Fort Worth District on US 380 I believe it's in the Wise County area and clearly an important project for this region of the state, and total amount being asked to be committed to that is a little over $51 million. So I hope that that perhaps will give Michael and his constituents a better flavor for what this package contains.
But to answer your question specifically, Commissioner, the projects that were selected and the staff recommendation to you basically came from three different areas. In November of 2007, the department, unfortunately, had to delay approximately $1.1 billion worth of projects due to our cash flow constraints at that time, and the commission made it clear at that time that they wanted to make sure that those projects, whenever cash became available, would be advanced before all others. So the majority of this project list is advancing those projects that had been delayed in November of 2007 and have not yet moved forward to construction.
I think it's important to point out that at that time there were several projects from the Dallas region specifically that were included in that $1.1 billion worth of delayed projects, and working with our partners and through the district staff, we were able to advance the Dallas District projects before the Proposition 14 bond program was considered this year.

So we moved forward with those last year with tax revenues and that's why they don't show up on this list today because they got to go before any others in the state. So the majority of the list are those projects that are remaining to be funded that were in the $1.1 billion worth of delayed projects, and that equates to approximately $700 million worth of the projects being proposed today.
Secondly, we had many mobility projects from regions of the state that were, quote, behind whenever this cash flow situation came forward to us. Those, namely, were the Fort Worth area, the Austin area and the El Paso area. So we went forward with trying to identify mobility projects within those regions that were ready and available to move forward to construction if we were able to provide funding for them.
So projects from those regions were identified and included in the list, as well as, as I said, closing some gaps where we have two-lane sections of roadway in a corridor that is four-lane divided except for those small two-lane section gaps. There's a project that's on a much-needed hurricane evacuation route out of the Houston area in Liberty County, and then a project on Interstate 35, and I think that all of us in the state of Texas understand the importance of moving forward with the continued improvements of Interstate 35.

And then the last section of the list were projects that are being recommended to complete, if you will, partially completed commitments where we've had phased construction and we need to move forward with the last phases of a project in order to complete them. An example is State Highway 349 which is a project that provides a relief route, if you will, around Midland, Texas. We have part of that loop under construction; one of the projects selected is to complete the remainder of that loop so that it can function properly.
We also have a project on State Highway 42 in Gregg County out of the Tyler District where the local community is coming forward and providing the majority of the funding for the project, and this allows us to let them use their money that they committed to us to move forward with the project. So those are some examples of completing those phases of projects where we had already invested a great deal of the state's assets to get part of the way completed. These projects will let us complete those projects in their entirety.

And then the last section, again, are those safety required projects, and as you know, the enabling legislation required that as we issued these bonds, an additional $600 million worth of safety projects had to be identified and pursued. We've listed specifically some projects that we know provide significant safety benefit, and they are listed here in this list. They equate to approximately a little less than $200 million of the $600 million.
That leaves about $440 million or so of safety projects that we have yet to identify from across the state. To widen narrow farm to market roads is a category that might be considered, install median barriers to prevent cross-median head-on accidents, and those are the types of projects that we're currently analyzing with our crash record data in our districts to identify where we can spend this remaining safety money to provide the most effective way of improving the safety of our roadways and saving lives here in Texas.
MR. HOUGHTON: Thank you, John.
MS. DELISI: Members, any other questions? If not, is there a motion?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.

MR. SAENZ: Agenda item number 7 deals with reports. The first report will be presented by Steve Simmons, deputy executive director, on the implementation of the Sunset staff recommendations that we have undertaken. Steve.
MR. SIMMONS: Good morning, Chair, commission members, Mr. Saenz. For the record, my name is Steve Simmons, I'm the deputy executive director at TxDOT.
I'm still struggling a little bit on how to make these reports to you on the status of the Sunset, and we're still working on trying to get a formal way to not only give it to you in a written format but also get it on the internet site.
This last month we did pass the baton between Zeke Reyna, who was working for Commissioner Underwood, kind of spearheading the tracking of this stuff, to Laurie McAnally, and she's hit the ground running, trying to understand some of the issues and make sure that we can put it into layman's terms and things of that nature. So hopefully next month we will have a more formal report that will be shown on the website and will be provided to you.

Last month I reported that we had completed recommendation 4.6 and we're very close to completing recommendation 3.3 which was dealing with how we advertise for contracts in the newspaper and things of that nature, and then also 4.2 which dealt with the solicitation for contracting. And we have completed those. The solicitation was strictly looking at the legislative issues that need to be addressed and identifying where those can be done.
So if I could just talk about some of the other issues that you might be interested in. Issue 2 addresses our transportation planning and project development process, and individual items are connected and dependent upon each other's progress, but specifically item 2.3 requires the development of detailed work programs driven by milestones for major projects, and the implementation of this item is well underway.
TxDOT has developed a system for internal use right now in tracking project development milestones on projects under development in fiscal years 2009 through 2012, and we have individually shown you this computer program. The data has been populated by the districts and will soon be available through the internet through the TxDOT website.
We intend to demo this more and we will soon roll out this demo to an external focus group to see if we are on the right track and to find out what we can do to improve it to meet their needs. This focus group will also include members of the legislature and MPOs that have shown a specific interest in this issue.

Issue 3 focuses on public involvement and transparency, and specifically item 3.2 is a directive for TxDOT to improve procedures to track and analyze citizens' complaints. Sunset was correct in saying that TxDOT did not have an official method for accumulating and reporting complaints involving our department. As you can imagine, with all the various ways that a citizen can contact one of our many offices across the state. Whether it's by phone call, e-mail, letter, fax, in person, through a legislator, and on and on, each office within TxDOT handled it differently.
Our goal is to standardize this process throughout the department and collect the information uniformly. We are currently revamping our electronic document management system which includes tracking and analysis of this complaint data. We do have pilot projects underway and meeting weekly on this to keep it going, and we hope to have this fully integrated by the first of the year throughout the whole department. But training is underway right now just to get our staff to understand that we do need to collect this data and establish a uniform way to do it.

Issue 4 addresses our contracting functions, as we mentioned earlier. Newly completed is item 4.3 which is the development of clear communication policies regarding contract solicitations for professional service contracts. Generic language was developed for the communications management plans and non-disclosure statements for negotiated contracts. And if you have any questions, I'm going to call Bob Jackson up. But this information was reviewed and then language was customized for the plans and non-disclosure statements for the various other types of contracts.
Item 4.5 requires that the department set time frames for each major step in the development of professional service contracts. Time frames have been reviewed for all types of these contracts, and additional internal time frames have been added to the appropriate department manuals. There are two time frames which need to be promulgated by rules and those are set for the November agenda.
The first allows right-of-way providers and appraisers ten days to ask the department questions concerning a request for proposals, and the second requires right-of-way providers to attend a mandatory orientation meeting regarding the project within a reasonable time after the contract is awarded in order to understand the project specifics.

Item 6 regards billboard regulation and Sunset staff has recommended we ensure that the cost of regulating outdoor advertising is covered by fee revenue generated by the program. We concur that the current fee structures do not cover the cost of the program, and as you're aware, both the House and Senate have interim charges dealing with billboards.
We believe there will be substantial changes that will be addressed as a result of these interim charges and are recommending that substantial changes to our rules be delayed until the legislature has a chance to act. In November we will propose rules, though, that merely allow moving some of the billboard governance to regions or districts, and we will also be collecting new data in order to be ready to propose new fees at the appropriate time.
In summary, most of the issues are moving well, with even the more complicated ones progressing, and I can tell you that this is a high priority, once again. I think I stated that last month that this is a high priority for us to implement these recommendations and keep everybody informed of where we are. I'll be happy to answer any questions.
MR. HOLMES: Steve, I think it's important to move some of the governance to the regions and districts on billboards, but I think we need to carefully monitor how those rules and regulations are applied to make sure they're consistent between regions and districts.

MR. SIMMONS: Yes, sir, and I think that's one of the main things is we're very decentralized in that right now with 25 districts maybe giving it different types of emphasis, and by moving it to regional, I think we'll have a little bit better control over how we do it uniformly.
MR. HOLMES: This says regions or districts. You're making a distinction between the two?
MR. SIMMONS: Yes, sir. I think that the billboard regulation and Bob, correct me, or John we're looking at starting it right now at the region level but actually centralizing it.
MR. SAENZ: What we have is our rules right now are very specific and name the district engineer and so if we're moving it to the region, we need to make those administrative changes so that the process we have that we're following is in accordance to the rules, but it's not changing the procedures or anything except who they report to or who acts on it.
MS. DELISI: Thanks, Steve.
MR. SIMMONS: Thank you.
MR. SAENZ: Thank you, Steve.
Agenda item 7(b) deals with our annual report on the status of derivative transactions outstanding. James Bass, chief financial officer, will present.

MR. BASS: Good morning. For the record, I'm James Bass, chief financial officer at TxDOT.
Item 7(b) presents an annual report on the status of outstanding derivative transactions, in accordance with the commission's derivative management policy. As of August 31, the commission had $400 million in derivatives with three separate counterparties under the terms of the derivative TxDOT's and the counterparties' net payments to one another on a monthly basis, with TxDOT paying based upon a one-week tax-exempt index and receiving just under 70 percent of a ten-year taxable index.
For the fiscal year, TxDOT netted $2.6 million in payments received and the termination value of the derivatives was approximately $5.2 million at the end of August. The details of that are included in the report. Even though the report does not require that, obviously there's been some disruption in the market since September 1, and included in the report is an update on the status of the cash flows under the derivative since September 1. And I would be happy to answer any questions you may have or go into further detail on any of the items I mentioned.
MR. HOUGHTON: Do you care to wade into that derivative issue as to the security or your secure nature of those folks?

MR. BASS: There is an ongoing concern, and one of the three counterparties would not be eligible to enter into such an arrangement today, given their current credit rating, so we are aware and monitoring that situation. At the time we entered into it, they were eligible. There are additional collateral requirements in the agreement if and when they get downgraded; there is one of the three counterparties that's in that position. We continue to monitor that and see if we need to look at other opportunities involved with that one piece.
MR. HOUGHTON: What's the remedy?
MR. BASS: The remedy would be perhaps switching that to another counterparty. The one in particular is $400 million notional value that's part of this overall derivative transaction. The piece that would be in question with the one counterparty currently experiencing a downgrade would be $100 million, and so we could look at if one of the other counterparties was willing to accept that additional $100 million and moving the arrangement to the other counterparty.
MR. HOUGHTON: Opportunities have narrowed a little bit.

MR. BASS: Yes, they have. And speaking of, in the derivative management several months ago we had included and the commission had adopted adding UBS as a potential counterparty. UBS is no longer in this field so they're no longer there. We're under discussions with some other banking institutions to have them added into the pool of available counterparties, and hopefully in the coming months we'll be bringing something to the commission for action to add a possible counterparty to our pool.
MR. HOLMES: James, are we in the money on these?
MR. BASS: Yes.
MR. HOUGHTON: It looks like one weak tax-exempt variable that we're paying, receiving 69 percent of ten-year U.S. dollar LIBOR, so we ought to be in the money.
MR. BASS: Right, and through August 31 the cumulative position was plus 2.6; for the month of September we actually paid about $240,000; for the month of October we believe we're going to pay in the neighborhood of $375-, still in a cumulative position. We're still going to be in a positive position of around $2 million, but in effect, to oversimplify, when the curve is in its normal historic slope that's a benefit to us, when it starts to flatten and there's not much difference between short term and long term rates, that is a position we would prefer not to be in.

And so what we've seen in the past couple of weeks it's starting to return to normal, the shape of that curve, which is a benefit for us, so my projection would be for November we'll be back in a positive position unless something else disrupts the shape of that curve.
MR. HOLMES: We also had a change in the relationship between tax-exempts and taxables.
MR. BASS: Right. And that bid price, the 69.42 percent was the bid price on the day that we priced it and it was based upon the relationship at that point which was more flat in nature which got us a higher percentage than one would normally expect.
There's no action on this, it's just a report for the staff to bring forward to the commission, so I don't believe there's any action required by the commission, just to make you aware of it and answer any questions that you might have.
MR. SAENZ: Thank you, James.
Agenda item number 8 deals with our Transportation Corporation for private activity bonds, and James has a minute order to present to the commission.

MR. BASS: After posting proposed rules in the Texas Register in order to receive public comments, the commission adopted rules allowing for the creation of this corporation that will issue private activity bonds related to TxDOT's CDA projects, and those rules were adopted by the commission back in August.
Just as a reminder, at the federal level there is $15 billion of private activity bond allocation that is awarded by the U.S. Secretary of Transportation, and even though the proceeds of these private activity bonds would be utilized by the private sector in their efforts to finance surface transportation projects, the actual private activity bonds themselves must be issued by a tax-exempt issuer.
This minute order would approve the resolution to create that corporation and the articles of incorporation and the bylaws for the corporation, as well as appointing the three initial directors of the corporation which would all be employees of the department who would be subject to removal by the commission at any time the commission so desires.
I would be happy to go through the highlights, if you so desire; if not, staff would recommend your approval of this minute order.
MR. HOUGHTON: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.

MR. SAENZ: Thank you, James. James will continue on agenda item number 9. 9(a) deals with the authorization of 2009 Unified Transportation Program fiscal years 2009-2013 annual programming amounts.
MR. BASS: This minute order approves the programming amounts for allocation programs in funding categories 1, Preventive Maintenance and Rehabilitation, Category 11, District Discretionary, and Category 11 backlog of the 2009 Unified Transportation Program. Approval of these categories for the 2009 UTP is necessary in order to continue project planning and development for fiscal 2009 and beyond. Staff recommends your approval.
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, James. Agenda item 9(b) deals with approval to authorize additional projects with CONSTRUCT authority under the work program created by the previous minute order dealing with the Regional Transportation Council use of the 121 monies.

MR. BASS: Item 9(b) seeks your approval of a work program authorizing projects in the Dallas District, utilizing payments received from the North Texas Tollway Authority in association with the delivery of the State Highway 121 toll project. With approval of this minute order, the projects listed in Exhibit A will be authorized for CONSTRUCT authority in the work program.
And just to give you an update, as this is one in a series of minute orders over the past several months, the prior minute orders approved a total of $1.57 billion in projects to be funded by the 121 payment, this minute order would approve an additional $1.62 billion for a total of just under $3.2 billion in total. Obviously, you'll recall that the original payment was $3.2 billion and since that time, as of the end of September, an additional $93 million of interest had been earned and available in that account.
I'd be happy to answer any questions you might have, and staff recommends your approval.
MS. DELISI: Are there any questions of James?
MR. HOLMES: These projects were all provided by the RTC?
MR. BASS: Yes, and so the commission is concurring with those projects that have been selected by the RTC.
MS. DELISI: At this time I'd like to call up Michael Morris who wants to speak for the motion.

MR. MORRIS: Madame Chair, Michael Morris. I'd ask you to support this particular item. You have a memorandum of understanding to do our homework in the region. We developed 20 performance measures, from mobility to safety, incorporating all of your particular goals in project selection. The Regional Transportation Council has supported them, we've sent them to Amadeo's staff. We have very minor editorial comment on two or three of them; we'll just pass it on to Amadeo.
This is one of seven methods the Regional Transportation Council has us working on to encumber the $3.2 billion before the legislature goes back into session, and we've had a busy year working on all seven of those methods with you. We think, by you encumbering these particular projects, this would help us.
I remind you we have a very interesting future. The Regional Transportation Council has put $2 billion of these projects on your system. We're going to be trying to develop innovative partnerships with Amadeo on trying to find ways to get that 20 percent local match, but we encourage you to support James's item in item 9(b). Happy to take any questions that you have.
MS. DELISI: Any questions? Is there a motion?
MR. MEADOWS: 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. James Bass will continue this is the James Bass hour of our commission meeting. Agenda item 9(c) deals with the approval of an agreement with the North Central Texas Council of Governments for the development of the off-system portion of the projects dealing with the same 121 money.
MR. BASS: As Amadeo said, item 9(c) seeks your approval of said agreement with the North Central Texas Council of Governments involving projects off of the state highway system to be funded by the money in the State Highway 121 account. This agreement would provide for the transfer of funds for a fixed amount of the cost of an off-system project after the department receives a fully executed project agreement between the department and North Central Texas Council of Governments and with a local government with jurisdiction over those projects, depending upon who is ultimately going to deliver that project.

There are certain standards and conditions for design standards, construction specs, timing of if there's any payment left over at the end of the project, and what will happen with that, and design exceptions. I'd be happy to answer any questions you might have on those issues, and if there are no questions, staff would recommend your approval.
MS. DELISI: Are there any questions of James? If not, I'd like to go ahead and call up, starting with Michael Morris to speak on the agenda item.
MR. MORRIS: Madame Chair, Michael Morris from the Dallas-Fort Worth region.
I want to first applaud your staff over the last six months from all sorts of divisions as we tried to work out this particular agreement. This is an initiative where the districts and the MPO were working a year or two ago, encouraged 121 to be built as a toll road, whatever projects fall on-system, TxDOT would administer.
Because we are facing 8 to 10 percent inflation rates, the Regional Transportation Council is trying to get projects built as quickly as possible so why doesn't the Regional Transportation Council, working through its COG as its fiduciary agent, implement the off-system projects. So we would encourage your support of this particular item.

The devil, of course, is in the details. We have two agreements: one is a master agreement to transfer the revenue, and then we have an agreement with each of the parties with regard to the implementation of the projects. It's in that particular agreement where there is some concern on our part and we have several of the professional engineers in the region who are here best to describe as being upset with regard to this position. You have a copy of a letter, I see, that you received from the technical committee with regard to this particular item.
There are probably three basic items that we would like to discuss. The first is because we're trying to get these funds encumbered as quickly as possible, and meeting with our legislative delegation, they think a bill will be introduced to sweep these funds and they're encouraging us to work with you to do this.
The master agreement right now is that the money will be transferred when we execute each of our individual agreements. We're wishing you to transfer the $700 million when we sign the master agreement, and of course, we're trying to get those funds encumbered before the end of the year.

The second item is our region and your staff just have a different interpretation of what these funds are. Our region thinks they're local funds. These are tolls that will be collected on 121 by the North Texas Tollway Authority, they participated in a process to provide an up-front payment. Your staff argues these are state funds because they are managed through the Fund 6 process.
As a result, it adds a weird element to our relationship. If, in fact, these will always be interpreted as state funds in the future, then the local elected officials in the region will wish never these funds to go through this wall called Fund 6 because they don't want these particular rules and regulations to be placed on them.
The second item of concern is the standard which should be applied to the design. Remember, all of these projects are off-system, so these are on local streets or implemented by transportation authorities within the region who have total responsibility to maintain these projects for the completion of time. You have no obligation since they're off-system projects.
The cities prefer, obviously, their design standards to be used; this particular agreement has us using AASHTO standards on local streets. And we've tried to work this particular issue out: one staff interprets it to be state, therefore, AASHTO standards apply; another staff feels these are off-system projects.

The local professional engineers who are here today and wish to speak on it, they have the obligation to maintain these projects, their standards have worked well for a long period of time. We're very proud of our standards, and by the way, you use access control standards from local governments in your driveway permits, for example, that you issue.
The third element is the role environmentals play. I think I've talked to almost each of you with regard to the environmental process, and to now put these local projects through the statewide environmental process where local governments already have statutes in place where they have to meet appropriate environmental laws we think would be a more convenient way to implement the projects.
We're unaware of any legislative restrictions in your ability to proceed. You do have Administrative Code authority we think in place to more streamline this particular initiative. And just to give you one example, we're advancing $200 million on a passenger rail system that's gone through two years of an environmental process that's ready to go to construction which we would now have to reopen in order to see if it complies with a state environmental process to implement the passenger rail line within the region.

So the bottom line is the region is requesting: could we transfer the revenue when we sign the master agreement; could we build these to local design standards since they're off-system; and could we meet the local already existing local laws on environmental standards that have to be met that are obviously done every single day through local bond programs and other things that cities implement.
Madame Chair, I'll come back and take questions. There may be a few other people that have signed up.
MS. DELISI: There are three other people, but I'd like to open it up for questions for Michael.
MR. HOUGHTON: Who wants to take this one, who wants to take this tar baby? Bob?
MR. SAENZ: I'll take it.
MR. HOUGHTON: Well, let me ask Bob. I'll let you answer in a minute, Amadeo.
Mr. Jackson, the thing that gets my attention is standards. Under what laws are we applying to make this recommendation?
MR. JACKSON: For design or environmental?
MR. HOUGHTON: All of it.
MR. JACKSON: Design is not a legal issue, that is a policy issue.
MR. HOUGHTON: Okay. Environmental.
MR. JACKSON: Environmental, the commission has rules that require these projects to comply with your environmental and public involvement procedures.

MR. HOUGHTON: We have those?
MR. JACKSON: Yes.
MR. HOUGHTON: So it's our rules.
MR. JACKSON: Yes, sir.
MR. HOUGHTON: And there's nothing in the statutes that would prevent us from transferring these dollars using local standards and local environmental.
MR. JACKSON: Correct, there's nothing in the statute that deals with design or construction standards at all. Environmental, we have a statute that requires you to adopt rules governing environmental review and public involvement for department projects. You could, by rule, define this particular circumstance as not involving department projects.
MR. HOUGHTON: Michael, how many of these projects are not on-system?
MR. MORRIS: These are all off-system. $700 million, my memory is 20 or 30. The largest one is $200 million in passenger rail, we maybe have 15 or 20 thoroughfare streets, intersection improvements, signal timing, and the like.
MR. HOUGHTON: So Bob, we could actually say that these are not part of the system which they are not and $700 million does not have to apply to the environmental and to the standards issue.

MR. JACKSON: You can do that and it would take about three months to do that. Also, our rules do allow the department to delegate the public involvement and environmental review to the local entities, but the ultimate document would have to be approved by TxDOT.
MR. HOUGHTON: I'm lost.
MR. JACKSON: They'd have to follow our procedures governing public meetings, public hearings, the type of information that goes into the document, but we could allow
MR. HOUGHTON: So it's procedural stuff.
MR. JACKSON: Yes, but we could allow the local government to do that work which would then be approved by Dianna Noble in Environmental Affairs.
MR. HOLMES: But Bob, if we made this rule, why can't we grant an exception to it?
MR. JACKSON: The commission is not empowered to grant an exception to its rule because you adopt a rule through the formal public comment/promulgation process, so to change it you have to go through the same process.
MR. MEADOWS: And that's about three months? To promulgate new rules, that process, you said, is three months.

MR. JACKSON: Yes. Let's say if you propose rules in November, there's a 30-day public comment period, it takes a couple of weeks to get them published, so you'd be back in January, they'd be legally effective 20 days after that, so you'd be in early February.
MR. HOUGHTON: Have we experienced this before, Bob? Is this the first of its kind in this magnitude?
MR. JACKSON: Yes, it's the magnitude. We handle off-system projects through our environmental review process all the time. Here we have a large number of projects that we want built, we want the money expended very quickly. We have done the Border Colonia Program where we had a lot of projects that were off-system, and Amadeo set up a process with Environmental Affairs to expedite them, and I believe that was successful.
MR. HOUGHTON: Now, what I'm hearing you say, today I could say we're going to go and transfer this $700 million, use their standards, their rules, we could do that today.
MR. JACKSON: For design and construction.
MR. HOUGHTON: Design and construction. And Michael wants to go a little further.
MR. JACKSON: Yes.
MR. HOUGHTON: Which would require a rule change.
MR. JACKSON: Yes, sir.

MR. HOLMES: But do I understand it correctly that we could approve transferring the funds today?
MR. JACKSON: When you say approve transferring the funds, what the staff is proposing which I think is the most legally sound is we could today transfer funds to the COG for projects that the COG is implementing. For projects that they're not implementing but will be built by cities, we would not transfer the money until the COG and a particular city has entered into an agreement under this master agreement.
MR. HOUGHTON: And that takes a rule change?
MS. DELISI: No, that does not.
MR. JACKSON: No. That's what we're planning to do.
MR. HOLMES: Let's get Michael back up. Michael, how far away are you from agreement with the cities on these projects?
MR. MORRIS: There's a lot of pressure on us as staff, obviously, to make sure the $3.2 billion doesn't get swept, so I'm being told every day do everything you can to get out in front of this particular strategy.

If you approve this today, we think the master agreement is tight enough that once the master agreement is signed, our request would be to then transfer the funds a couple of weeks from now. If, in fact, you don't take us up on that and insist that each of the individual agreements have to be signed, then I hate to use this expression we would then become a horse's ass in the region and we would tell every city attorney that your money is guaranteed if you sign the agreement before Christmas and your money is not guaranteed if you sign it next year because if our money gets swept, we don't have the ability to protect that.
Now, in the master agreement the money can't be spent on any project other than the projects that you approved in the previous item. I don't see the risk that the state has. We can't go buy anything with this other than the projects that you've agreed in that previous item.
So our request is to transfer it after the master agreement, we will commit to get those agreements to you as soon as possible, but we're trying to reduce any expose risk. If some city attorney wishes to wordsmith some particular agreement and take six months
MR. HOUGHTON: They wouldn't dare do such.
MR. MORRIS: Yes, they would dare do such.
MR. HOUGHTON: None that I know of.
(General laughter.)
MR. HOLMES: Bob, why can't we do that?

MR. JACKSON: There's a pending attorney general's opinion request that will probably not be out until December on the general subject of this type of money and what can we transfer and when can we transfer it. To approve today or direct the department to transfer $700 million in one fell swoop immediately, I think is legally risky and unadvisable at this time.
MR. MORRIS: I know you didn't ask me to come back and respond.
MR. HOLMES: Come back and respond.
MR. MORRIS: But your attorney general opinion is going to be restricted, my understanding from Bob, to only apply to on-system projects. Now, I guess there's a danger that the attorney general could read that and say, Oh, wish to opine on on-system and off-system which is why the Regional Transportation Council requested you to withdraw your attorney general opinion, but staff insists that they want to go on with an on-system.
We understand that exposes some particular risk. We'd be happy to put into the master agreement that if the attorney general somehow rules in a part of the opinion that you're asking him not to rule, that I guess we would send the money back to you.
MR. JACKSON: The opinion is not limited at this time to on-system projects.

MS. DELISI: I've got three more people who wish to speak so I'm going to go ahead and call them up at this time. I'm going to start with Judge Horn.
JUDGE HORN: Well, good morning. My name is Mary Horn and I'm Denton County Judge. I need to refer everybody back to the original agreement on 121. The original agreement on 121, what we told the public, what we told everybody, what we agreed to is money raised in the region was going to stay in the region. When the money came through on 121, in my not so humble opinion, it should never have been deposited in Fund 6 in the first place. That's for openers.
As far as off-system projects, there are just that, they are off-system projects. It's our money, it's our responsibility to maintain those projects. We should have also the right to design and construct using local rules and regulations. This isn't the first time that I've been at odds with somebody's legal staff, and I'll be glad to do it again in the future.
But I'm telling you those are our funds; it's our responsibility to maintain those off-system roads; the money should never have been deposited in Fund 6 in the first place. Give us our money and I don't mean project by project; give us our $700 million. Thank you.
MS. DELISI: Any questions?

JUDGE HORN: I'm sorry, there's one more point. There's precedence as far as doling out the funds. Coppell, I believe, was allocated like $9 million for projects not today, some time ago, and Michael can probably fill in the details here for us but that didn't require a rules and regulation change. This body established those rules in God knows what year, this body should be able to modify those rules, and if it takes three months to do so, so be it, but in the meantime, give us our money. Thank you.
MS. DELISI: Thanks, Judge. Next up is Jill House.
MS. HOUSE: Good morning. My name is Jill House. I'm assistant director of Public Works and Transportation for the City of Arlington and I also serve on the surface transportation technical committee for COG. The City of Arlington fully supports the details in the letter you received from the surface transportation committee and Michael's comments.
Speaking from a historical perspective, the City of Arlington has worked with TxDOT over the years to implement various projects, including some local projects where we received federal funding of projects from COG.

I have great respect for TxDOT and the many TxDOT staff we've worked with over the years, but the process is very frustrating. TxDOT's details and standards are geared for highways, as they should be, they are not geared for local governments.
I would say that pretty much all of those projects were substantially delayed and the cost increased. We could almost build the projects with our local share had we used local standards. I challenge you to find a creative way to allow us to use local standards for this money. Thank you.
MS. DELISI: I'd like to call Antoinette Bacchus, Alberta Williams.
MS. BACCHUS: Antoinette Bacchus, Dallas County Public Works, and I'm the assistant director of transportation planning. Dallas County contributes approximately $30 million annually to local projects to leverage upwards of $60 million of transportation projects in this region, in partnership with our 32 member cities and sometimes with TxDOT and also with the COG. We would like to fully endorse Michael Morris's statements here today and the letter from the surface transportation technical committee, and we request your reconsideration. Thank you.
MR. HOUGHTON: Can I ask Amadeo a question? Amadeo, why do we not let these locals use their standards and environmental?

MR. SAENZ: For the record, Amadeo Saenz. The environmental is because of the rules, and if we start this thing, the money that was generated by 792 and the statute came from a state asset, it went in the State Highway Fund, and just to protect that, we make sure that environmental processes are done and certain standards are allowed.
What we tried to do in the agreement is several things to minimize the impact. We did work with the COG and the COG has some standards that they've identified and in the agreement it's allowed that they can bring those forward and get those signed off before and then they can be built to those standards. So we can address the standard issue by the agreement itself by the locals agreeing to use what the COG has identified as their local standards. So we have that in there.
In the issue of transferring all the money up front versus that, we have, from a legal perspective and from past history, all our agreements have always been project-specific and they've always been reimbursement agreements. This is one where we're moving forward and passing on the money in advance of the project being done. So what we did is we have this agreement and as soon as the locals sign off on their portion of the agreement, then we figure we could transfer that money there.

The environmental process, as you know, we're in a time when environmental issues are being looked at by a lot of people and we wanted to make sure that there was some environmental work done on a project. Our rules require that it be to follow the state process.
What we're implementing in the agreement and in place of the department is we're delegating the review and approval authority not the final approval authority but preliminary approval authority down to the district and the locals so that they can process those projects much faster, and then only one final approval at Austin so that it can be done as quickly as possible.
MR. HOUGHTON: But we can, in fact, change the rules that allow the locals to do the environmental, that's our rule.
MR. SAENZ: We can change the rules to allow the locals to do the environmental by changing the definition that would take some time and once we do that, then we can amend the agreement
MR. HOUGHTON: And the standards as using local standards.
MR. SAENZ: I think the agreement addresses the use of local standards already, there's a process to do that.

MR. HOUGHTON: Michael, do we have that in the agreement? If we're going to continue to do CDAs and have payments, regardless if it's up front or participation, it seems like this is going to be a recurring theme.
MR. MORRIS: Yes, I think we're the first one through this gate.
MR. HOUGHTON: So we ought to fix this thing for the future.
MR. MORRIS: Right now the standard says we have to use the AASHTO Green Book for local off-system projects.
MR. SAENZ: I believe it says we can use AASHTO Green Book which is pretty wide open, or we could use the COG standards and we were going to certify within 30 days that those standards were okay.
MR. MORRIS: The COG standards are construction standards. Your staff reviewed our standards and they said, Look, we need design standards. And we said, Look, why don't you use the local design standards that the cities have, we've developed agency-wide construction standards for all of them. And they said, Well, we wish not to use your construction standards when we're talking about the design standards. So it came back as AASHTO Green Book.
MR. HOUGHTON: My point is we can, in fact, do that, we can, in fact, use local standards. Is that an accurate statement?

MR. SAENZ: Yes, you can use local standards. They would just need to go through an exception process where local standards can be substituted.
MR. HOUGHTON: I would say this commission needs to, Bob Jackson, look at the rules, in my opinion, because we're going to be addressing this with CDAs and payments over time and we might as well address it now.
MR. MORRIS: Commissioner, why take a risk that $2 billion is going to go to your system as a result of this, and you have subparts of the region that aren't interested in this because we've got to go do environmentals on the off-system projects and get in a queue lane for Dianna Noble to sign off on our environmentals.
MR. HOUGHTON: I agree.
MR. MORRIS: You're going to lose the Judge Horns of the world that say, Look, it's a lot of sweat equity on our part. And you also should be thankful to the region that 30 percent or so of the money is off-system, most of the money is going to your system. So it's not like we took all the money and we're doing low volume roadways.

We took the sweat equity of this toll road which you know was very controversial and you were there with us to go ahead and give $2 billion back worth of on-system. We're asking for some flexibility with regard to the off-system limitation, as best as you can under your rules.
MR. HOLMES: It seems to me that if we encourage, whether it's the private sector or a local toll entity, to be aggressive in bidding on a project, we have committed that that concession payment would be used in projects within that immediate area, and that a portion of that is going to be off-system that we're under an obligation to make sure that happens. And I'd like to see us work out transferring this money.
If, Bob, we need some agreement that in the event the attorney general rules on a question we have not asked, then if we have some string to pull that back, then I think we need to go forward. I think it would be a very unfortunate circumstance to put this region or any region in a position of leveraging its system and then having that money at risk to be taken out of the area.

MR. MEADOWS: I absolutely concur, and what's interesting to me is sometimes you sense that our rule-making is in conflict with what, in fact, we feel philosophically which is at the local level empowerment, empowerment to advance and to implement these projects. And let me say just to reflect, Michael, that commitment from a philosophic standpoint, we, at your request, did pursue this AG's opinion. I mean, I think that needs to be put on the table and acknowledged.
The fact is that we've been there; we've been trying to work with you, and we've been trying to advance these things. So I want to make sure it's clear to everybody that's following the issue that they understand that we've been working hand in hand with you and the RTC in acknowledgment of our philosophic agreement with, in almost every instance, local is best.
So that being said, what we should do, we just need to back up and look at our rule-making in light of that, and again, making sure that it is consistent with statute and making sure that it's consistent with the attorney general's opinion when it does come out. But to the extent that we're able to do so, our rules need to have the flexibility that does empower the local RMA.
MR. MORRIS: The transferring of the revenue permits you to continue being in the game of encouraging local regions to think outside the box. The last thing you need is a legislature to sweep the revenue because then the grand experiment is over, so whatever you can do to help us there.

And then if we're the first person in, use us as a guinea pig to see how we can help you with regard to this negotiation. I in no way want to criticize your staff, but we've been at this for six months, and our locals are engineers, they hold responsibilities, they've got to maintain everything that's been built, hold them accountable for the implementation of what it is that we do.
MR. SAENZ: Commissioners, I think the agreement, as we've written, has a process to accept the local standards through a review and sign-off that can be addressed. The minute order allows some additional changes and gives us some latitude for some additional changes, and if the commission would want to do something with adding some language that would say we transfer the money up front and put the controls as to what happens based on what the attorney general rules, we can add that to it.
And as far as the environmental, I think we have a process in place that expedites it, and then after going through the rule process, if the rules are changed, we can always amend the agreement. But this will allow us to move forward with the agreement now and start getting some of these projects underway.

MR. HOUGHTON: Amadeo, this is one of the things, we talk about local control and I do believe we need to push all things possible out to the locals within the law and the statutes that means environmental, design, whatever we can do to push it to these locals not just one agreement, I think by rule, we need to change our rules. If they are receiving money from a project like this or a future project whether it be Houston, Austin, Dallas, El Paso, Lubbock, wherever it may be that we allow the locals to control as much under the statute, Mr. Jackson. So I would propose that we get the rule change sooner than later.
I would hope that this agreement catches Michael, don't leave. Do you want to talk, James? Because I think we need to vote on something that pushes our environmental issue and design out to locals within the statutes.
MR. BASS: On the one issue and I'd first like to respectfully request that this time not count in the tabulation of the James Bass hour on the environmental studies in the agreement, it reads, in effect, local governments shall follow the commission rules. It then says, "For the avoidance of doubt, this paragraph shall not prohibit the use of a different environmental review process if permitted by future amendments to the state's environmental rules."

So the agreement before you today contemplates that the commission very well may want to change those environmental rules in the future, and if the environmental rules are changed in the future, we don't have to then come back and amend this agreement.
MR. HOUGHTON: Well, we're not changing environmental rules, we're allowing the locals to apply.
MR. BASS: But you would have to do that because the funds, as directed by statute, are deposited to the State Highway Fund and they then become state funds, subject to the commission's rules. That's my understanding on the legal interpretation.
MR. HOUGHTON: You're playing lawyer too?
MR. BASS: It's close enough to a conference room, yes, I'll play a lawyer.
The design standards in the agreement, as Amadeo said, ask the local government which is NCTCOG to submit their design standards, and the department will then review to see if they are similar to the AASHTO standards. We have 30 days to respond; if we say nothing in 30 days, it's assumed they're the equivalent. Same for the construction specifications: ask that the standards be submitted by the COG, the department has 30 days to approve those or to say where they are deficient, and if the department says nothing in 30 days, it's assumed that they are sufficient as submitted.
MR. HOUGHTON: So silence is acquiescence.
MR. BASS: After 30 days, yes.

MS. DELISI: After 30 days of them being submitted.
MR. BASS: After they're submitted, yes. And so that's the way the current agreement reads on that. I just wanted to highlight those two items. And then also the environmental, if the rules are changed in the future, the agreement builds in that flexibility that the new rules would automatically be incorporated, I think, into the agreement.
I've really enjoyed turning the tables and trying to respond to engineering questions.
MR. HOUGHTON: We acquiesce by silence.
MS. DELISI: Right.
MR. HOUGHTON: I do believe in the long term we need to fix this.
MS. DELISI: So we have a motion before us on this long-term deal, we have the outstanding issue that I think there's a consensus on the commission to address the environmental issue.
MR. HOUGHTON: And the standards.
MS. DELISI: And the standards issue. So I think we can at least agree on that that staff needs to be directed to start that process of looking into the rules change. Correct?
MR. SAENZ: Yes, right.

MS. DELISI: Everyone?
MR. MEADOWS: Yes, I would agree.
MS. DELISI: Okay. The outstanding issue then is the dollars, the $700 million.
MR. HOUGHTON: Here comes our counsel.
MR. JACKSON: No advice.
MR. HOUGHTON: We're okay?
MS. DELISI: So far?
MR. JACKSON: No problem.
MS. DELISI: Oh, you're here just in case.
MR. HOUGHTON: You're going to jump in, I know it. Have we commented or have we acquiesced on the rules, Michael, as far as the standards and environmental?
MR. MORRIS: You remain free until you speak to the king and confirm your freedom.
MR. HOUGHTON: English philosophy?
MR. MORRIS: That's not in the letter from the Birmingham Jail.
(General laughter.)

MR. MORRIS: What I believe we're asking for is, first, a protection from a sweep. So we're asking if you approve this particular item which we're asking you to do to permit the funds to be transferred and we'll be happy to agree that if the attorney general somehow says they take a very broad opinion, obviously we'll send the money back.
Second is if these are off-system projects, could you review your rules
MS. DELISI: That's what we've already discussed.
MR. HOUGHTON: We've agreed to that.
MR. MORRIS: And then see if, in fact, you could just empower the council of governments and locals to enforce their rules in the environmental procedures versus having to take them back.
MR. HOUGHTON: Mr. Bass just gave us a great out, that if we don't comment but apparently we've already commented, you haven't commented that after 30 days we're acquiescing to your rules. Is that an accurate statement?
MR. SAENZ: No.
MS. DELISI: No.
MR. HOLMES: But whether it is or it isn't, it still doesn't address the long term issue of when this comes up again, and so we still need to fix the rules.

MR. SAENZ: Commissioners, I guess the issue of the standards, I think the agreement has enough language in it that will allow us to review and accept, through the exception process, the local standards as acceptable for them to develop the projects. The issue of the environmental, we will have to go through the rule-making process, but the agreement, as per the language that's in it now, allows that when the rules are changed, then those rules automatically apply to this agreement so we don't have to bring the agreement back.
So the final issue is just the issue of the transfer of the dollars, and if this agreement identifies the specific projects and the dollar amounts as part of the agreement, then that money is being transferred to those projects and it could be subject to attorney general ruling, and if the attorney general rules different, then the money would come back, and we can address that by adding that to the agreement.
MR. HOLMES: I think we ought to do it, and I so move.
MR. JACKSON: The direction I'm providing on the environmental rules, we don't want that in the motion, that's not on the agenda. But you've already directed staff.
MS. DELISI: Which we've already done.

MR. JACKSON: Yes, that's done, so don't include that in the motion. Just on the $700 million, include in the motion that you want that remitted upon execution of the agreement, but I want to say again that it was said that the AG opinion is to only address on-system projects. That's not correct, it's to address on/off, the whole $3.2 billion. But the motion should be to approve the minute order and then if you want the money sent immediately instead of upon each individual agreement, then put that in the motion.
Otherwise, Amadeo, under the terms of the minute order, has the ability to make some changes to the agreement.
MR. SAENZ: So the commission could direct me to make that change on the transfer of the money
MR. JACKSON: Anything else that's necessary that we see before we sign it to make sure we've complied with the intent of the commission as expressed today, we can do that.
MS. DELISI: And to be clear, the desire of the commission is to transfer the money, and should the attorney general's opinion be otherwise, the agreement would be the money would be returned by the region.
MR. SAENZ: The minute order gives me enough authority to make that change to the agreement before execution.
MR. HOUGHTON: Second.
MS. DELISI: Bob, was that a clear enough motion?
MR. JACKSON: Yes, ma'am.

MS. DELISI: So members, you have heard the motion. Is there a second?
MR. HOUGHTON: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.
MR. SAENZ: Thank you, James; thank you, Bob.
Agenda item number 10 deals with toll road projects. Agenda item 10(a) is projects in Travis and Williamson County, to accept the General Engineering Consultant quarterly progress report. Phil Russell.
MR. RUSSELL: Again for the record, I'm Phil Russell. You know, it makes you a little nervous, James was automatically jumping into all the engineering agenda items.
Commissioners, as you know, this is our regularly scheduled quarterly update. Our last update on the Central Texas Turnpike project was this summer. At the time I reported that we had all sections of the project open, there was some minor work that was going on, but we anticipated that that would probably be our last General Engineering Consultant report.

After further discussion with bond counsel and our GEC, it's been determined that even though it's open for traffic, there is still some residual work going on. Much of that is funded with local dollars or Fund 6 dollars, but still I think the suggestion was to continue to have these General Engineering Consultant reports until all elements and all work has been completed.
So with that being said, this GEC report does cover the period between June 1 and August 31. Again, all segments of the project are open to traffic; the project continues to be about $380 million under budget nothing has changed since the last GEC report. I would anticipate we'll probably have maybe one or two more of these GEC reports probably in November and the beginning of next year.
With that, staff would recommend approval of the report, and I'd be happy to address any questions you might have.
MS. DELISI: Any questions? Is there a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. RUSSELL: Thank you, commissioners.

MR. SAENZ: Agenda item 10(b) also will be presented by Phil Russell. It's to consider preliminary approval from the Alamo Regional Mobility Authority for a toll equity request.
MR. RUSSELL: Thank you, Amadeo. Agenda item 10(b) relates to a request for assistance, toll equity request from the Alamo Regional Mobility Authority. The amount is in the form of about $21.6 million; the request is for two projects, I-35 and 1604, there in the San Antonio area. The use of these funds would generally be for feasibility studies, environmental work and general oversight of the project.
Commissioners, I'd be happy to address any questions you might have.
MS. DELISI: Let me go ahead and I've got two witness cards filled out, so I'd like to start off by calling up Terry Brechtel.
MS. BRECHTEL: Good morning, commission members. My name is Terry Brechtel, executive director of the Alamo Regional Mobility Authority.
As you know, in the Bexar County we have IH-35, Loop 1604 and 281 major projects under consideration. I know the commission is familiar with the situation on 281, and as a result of where we are today, we are looking at an environmental impact study for 281.

We're also here before you today requesting additional funds for Loop 1604. The county judge is with me this morning and he has requested that we take the lead role for 281 and 1604, and with that, on Loop 1604 we would like to take control of that project and begin the environmental studies that would need to be completed to have 1604 come to fruition in a reasonable time frame.
The third project is IH-35. It's been a project that's been under consideration by the Alamo Regional Mobility Authority for some time. You know that corridor is a very heavily used corridor, there is a section in particular where we have the Fort Sam Houston military missions and BAMC which is our medical hospital. The BRAC commission has given us the responsibility of now combined military medical assignments there at Fort Sam Houston and BAMC. There's considerable economic development that will be occurring on that corridor as a result of that and a number of new jobs that will be coming to the region as a result of it. We have both those projects in front of you, Loop 1604 and 35.
Our experience with the environmental study process is that it takes a considerable amount of time to get these projects completed, and we're requesting that we begin study on both of those in the very near future.
MS. DELISI: At this point I'd like call up Hank Gilbert.

MR. GILBERT: Chairwoman Delisi, members of the commission. First of all, I apologize for not being in suit and tie, I kind of feel out of place, but I have a bunch of cattle to go look at between here and Oklahoma City, and that just doesn't match for that particular environment.
What I would like to speak on today is $21.6 million grant to the Alamo RMA. We sent a letter to Chairwoman Delisi yesterday, I believe, and if you don't mind, Chairwoman, I'm going to go through that letter.
On behalf of TURF to vote against this request for Alamo RMA for $21.6 million of preliminary engineering, feasibility and environmental studies for the proposed toll roads on Loop 1604 and I-35 in northern Bexar County.
As you're likely aware, we are in current litigation with TxDOT, the Alamo RMA, Federal Highway Administration over TxDOT's and Federal Highway Administration's approval for the US 281 and Loop 1604. TxDOT and Federal Highway Administration recently abandoned approved "findings of no significant impact" for US 281, however, this litigation is not resolved because there are no firm commitments from Federal Highway Administration and TxDOT to prepare full and honest environmental impact statements for both the Loop 1604 and 281 projects together.

Now the Alamo RMA is asking that the commission give $21.6 million to them to manage the environmental studies for Loop 1604 which we consider to be a backdoor way of getting those environmental impact statements approved. It's not possible for Alamo RMA to serve this role in a responsible and unbiased fashion. As you know, state law dictates that any effort to build a toll road on an existing roadway must provide an equal number of free lanes as currently exist.
This dictates that the RMA must pursue an oversized tolled and unnecessarily expensive and environmentally damaging project. It would be impossible for the RMA to undertake an honest evaluation of less expensive, more environmentally sound, non-tolled alternatives for Loop 1604.
Given that 1604 runs through designated critical habitat for endangered species and along and over the recharge zone of the Edwards Aquifer which is the sole source drinking water supply for the City of San Antonio, it is essential that the environmental study for 1604 be thorough and without bias in favor of a massive debt-financed toll road.

We respectfully request that you take steps to avoid further litigation and to engage in honest evaluation of less damaging non-tolled alternatives for 1604. The first step is to withhold the requested funds and engage the San Antonio community in open dialogue on how to meet transportation needs in northern Bexar County without endangering San Antonio's sole source of drinking water.
Now, in addition to this, people along the 281 corridor especially have been sent out tons of propaganda from the RMA on why they need to pursue this roadway with or without the proper environmental studies. The RMA claims that they are the entity in charge of regional transportation options which is a blatant falsehood. The elected officials who have oversight over TxDOT, especially those who sit on the MPO and vote to allocate the gas taxes and who decide on which projects are tolled and not tolled, who must agree to the market valuation and the toll rates, have a broader and more superior role in the transportation decision-making than a mere tolling authority whose only option is toll taxes.

The RMA claims no capacity can be added to 281 for three to five years. That's not so. If TxDOT would immediately agree on the original non-tolled, gas tax funded plan which was approved and all concerned groups have asked for, there are provisions in federal law that would allow for an expedited environmental assessment that would be subject to public review for a 30-day period, and the feds could reinstate the clearance and commence with the non-tolled solution immediately thereafter.
Their letter clearly states that an overpass only option has been rejected by the feds for safety concerns when that's not what the citizens have been asking for. There is no overpass only plan; the plan we refer to is TxDOT's plan promoted and promised in public hearings in 2001 that included overpasses, two extra highway lanes, and frontage lanes where needed.
There are many oppositions that we have to the RMA being granted this money. We feel like, based on the litigation that we are currently in, that this is just a method of bypassing or going around certain requirements that would enhance, with TxDOT's money, the RMA to go ahead and go through the same flawed environmental process that has been pointed out on the 281 project. Therefore, we recommend to the commission not to allow for these funds and vote against this particular item. Thank you.
MS. DELISI: Thank you.
Phil, can you come back up, please? I've got some questions on the toll equity application. Can you break out the 1604 part from the I-35 part, please?

MR. RUSSELL: Yes, ma'am, I certainly can. The 1604 portion, the request showed about $500,000 for feasibility studies, somewhere in the neighborhood of $7- to $8 million for environmental studies, there's probably three-quarters of a million just kind of program management and oversight, a little over $3 million for salaries and computers and that sort of thing. So overall, it's about slightly over a $12 million request for four years for the 1604 project.
MS. DELISI: And then for 35 it's $9 million?
MR. RUSSELL: Yes, ma'am, about $9 million, essentially the same areas: environmental, GEC program management, admin and some additional public involvement. I think the intent there is to ensure that they're going above and beyond not only the NEPA requirements but trying to engage the public even more thoroughly than what's required.
MS. DELISI: On the I-35 project, is there a financial feasibility that's been done?
MR. RUSSELL: There's a preliminary that's probably about three years old or so, and it's a pretty intensive project, it doesn't show a lot of toll viability at least at that time it didn't it's a lot of structures, it's a very expensive project to come in there and reconstruct and add additional main lanes.

MS. DELISI: I think, members of the commission, what I may want to do is amend this minute order to break out the Loop 1604 project from the I-35 project. It seems to me that maybe we need to do some more financial feasibility work on I-35 before we go forward on it because it is such an expensive project. The Loop 1604 work can be done immediately. Correct?
MR. RUSSELL: Yes, ma'am.
MS. DELISI: And I think we have a better handle on that project than on the I-35 project at this point.
MR. RUSSELL: I think we're instituting a Level 2 which is a mid-level traffic and revenue to begin to start fine-tuning some of the options, probably be completed sometime next year, but we do have some preliminary numbers.
MR. HOUGHTON: What is the number on 1604?
MR. RUSSELL: The number as far as?
MR. HOUGHTON: The project cost of 1604.
MR. RUSSELL: I think at the time Terry, help me with this I think it was something in excess of $500 million on the 1604 option. Is that close, Terry, for the 1604 option?
MR. HOUGHTON: Well, in the application you've got them lumped together, project cost on IH-35 and 1604. You have $2.8 billion for I-35/Loop 1604.
MR. RUSSELL: Closer to $2 billion.
MR. HOUGHTON: Pardon?

MS. BRECHTEL: The project construction on 1604 is closer to a total cost of $2 billion for all of 1604. That would be about 30 miles of toll lanes, many of which is a managed lane component on Loop 1604.
MR. HOUGHTON: And then I-35 would be what?
MS. BRECHTEL: About $2.8 billion for project cost significant projects, recognize that, commissioners, absolutely significant projects.
MR. HOUGHTON: Okay. So what's your recommendation?
MS. DELISI: What I would like to do is amend the minute order, let's remove the I-35 portion of it at this point and go forward with the Loop 1604.
MR. HOLMES: So it would be the $12 million?
MS. DELISI: Yes, sir. And excuse me, direct staff to work with Alamo RMA. I think we need to get a better handle on the financial feasibility of the I-35 project. So are there any other questions of Phil or Terry or Hank or anybody?
(No response.)
MS. DELISI: So that's my motion.
MR. HOUGHTON: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 108 will be presented by James Bass and it deals with a minute order in Dallas, Johnson and Tarrant counties dealing with the State Highway 161 toll project.
MR. BASS: This minute order would approve the term sheet for a TxDOT toll equity loan to the NTTA for the State Highway 161 project and for NTTA delivery and disposition of Southwest Parkway and Chisholm Trail which is attached to the minute order as Exhibit A. In addition, the minute order would grant preliminary approval, the first of a two-step process, of a toll equity loan application submitted by the NTTA and the minute order directs the executive director to negotiate a project agreement for the 161 project which would then be brought back to the commission for final adoption as the second step of the toll equity loan application.
I've had the opportunity over the past week to visit with members of the commission individually. I'd be happy to answer any additional question you may have or clarify any questions and issues we've discussed previously. If not, staff would recommend your approval.
MS. DELISI: Are there any questions of James?
(No response.)
MS. DELISI: I've got two folks signed up. It's the Michael Morris show. Come on down.

MR. MORRIS: Michael Morris. It will be interesting if removal of my Road Hand Award will be on your agenda next month.
(General laughter.)
MR. MORRIS: I want to come forward and very much thank the commissioners, all of you, for taking the time you did to resolve what is a very ticklish issue. We're now working on a new primacy position within the region and trying to move forward. Our legislative delegation doesn't want primacy in front of them, we'd like to get this advanced. So we think you've done a nice job of moving forward and leveraging state resources to do it.
I want to publicly apologize. I originally was told that Category 2 funds would be part of this, my understanding is you'll probably use something like Category 12 funds to accomplish this. I think that's a very much more easily administered approach. I think you have some interest in growing this opportunity for other parts of the state which we think is a very good idea. You're thinking about using public funds to do it.

I just introduce the thought to you that maybe you could use private sector funds. If you go back to all the criticism we've got on private sector roadways, there's lots of people that think you can pack up sections of pavement and put it into briefcases and bring it back to other nations.
If you fund your bank with private sector money, that may be an opportunity to still have private sector leveraging that you're seeking. If, in fact, you don't get all the gas tax money, Commissioner, you wish to use, that may be an opportunity to leverage with the private sector.
We'll have other projects like the Trinity project and others, here's another opportunity where you can create a statewide initiative and then maybe do a call for projects that may be similar to the 161 project that may need state backing. But I think it's a very exciting opportunity of partnering that you've done. We can focus maybe more of our time on getting projects built. You've created flexibility to move gas tax monies around to meet other needs.
So I want to applaud the initiative, Madame Chair, you and the commission have of reaching out and establishing partnerships. I think partnerships are the key, I don't think market valuation is the key, it's establishing relationships, and this is a new day and we stand ready to help implement any of these new initiatives that you have to get our projects built within our regions anywhere in the state. Thank you very much.

MS. DELISI: Now I'd like to call up Grady Smithey.
MR. SMITHEY: I'm Grady Smithey, and I don't think Michael is in any danger of losing his pin, but you may want to take this little blue pin off my lapel after I get through talking here.
First I want to say this, I served 13 years on RTC with Michael Morris and I have the utmost respect for him, and we are all trying to get across the goal line on these projects. Secondly, let me say I'm a city councilman for my 19th year, and I'm one of the original co-founders, the last remaining dog who refuses to die, on the Dallas Regional Mobility Coalition, the secretary, and the remarks I have and am getting ready to make to you absolutely are endorsed by none of those groups I want that known right up front.

When I first heard of this thing, I felt that I had been sold down the river and some of the people in this room understand what sold down the river means, it means you get to use a cane cutting knife instead of being able to stack tobacco in the sheds in Kentucky because I've been supporting you guys from the very first about trying to get public-private partnerships established. And I'm on the 792 committee as the governor's appointee to try to do those kinds of things, and we had an opportunity to get about $500 million more in Dallas County on this project.
And I've got to tell you truthfully, Dallas County has, for the most part, made all these other things possible, with Dallas North Tollway, with Bush and with those kinds of things, those were the foundations that NTTA used. And NTTA is our partner, I have absolutely no problem with them accepting this heck of deal you made them. If I was one of their board members, I would have voted for it too.
But I do have a little bit of a problem with this. I think this thing started and came from the top down rather than the bottom up. I think it would have been more appropriate if the three partners, NTTA, RTC and the local TxDOT people had brought this to you rather than having it come the other way. Maybe that couldn't have happened, I don't know.
But I will say this, that $500 million that we missed in Dallas County, we miss in many ways, but the major way we miss it is because we had a deal going on on Trinity, but because of the primacy issue, between the levees, you know who has primacy and it ain't any of us, and nobody can give it to NTTA, nobody can give it to any of us, that remains with the Corps of Engineers. So consequently, trying to get somebody to back that, it's going to be very, very difficult.

So what we were thinking about trying to do and this process got basically truncated, got cut off by this agreement was trying to figure out a way to go ahead and bid 161, take that half a billion dollars, and start on the Trinity project. Well, that's out the window now.
So if you don't want me to feel like I've been sold down the river, then figure out a way to do Trinity and figure it out as quickly as you can, because let me tell you something, you guys have caused us a problem not you because you were in elementary school probably you caused us a problem since 1986 in the southern part of Dallas County.
Because in 1986 we were at Level 1, Level 1 on expanding South R.L. Thornton, but the commission sent a letter in 1986 to the City of Dallas see, I've been around a long time, I remember these things they said you cannot expand South R.L. Thornton unless you figure out what you're going to do with that traffic once you get it downtown. And that was the genesis of the Trinity project.

Do you realize what's relying on Trinity? Trinity has to be done; otherwise, Pegasus won't work downtown, the Southern Gateway project with 35 and 67 South, all those thing that we've been talking about and waiting for for years won't happen. So when I looked at this thing, I first thought well, if I was from Tarrant County, Bill, I'd sure like this, but what happened to Trinity, where is Trinity in all this process? That's your next real challenge if you're going to do these kinds of things and figure out a way to do Trinity too.
But let's be real honest, this agreement really marks the end of the fiction that we want up-front money on public-private partnerships because, frankly, the 161 project was probably the last one in the Dallas-Fort Worth area that could generate any reasonable amount of up-front money. So I mean, if we're not going to ask for up-front money, I agree with Michael, figure out a way you can get it through some other way.
When you look at who backs NTTA's projects or anybody else any other projects, a lot of that money is foreign money. Look who handles those things, where is it coming from. We don't loan ourselves much money anymore because we don't save much. So let's don't be so afraid of foreign money that we try to close off that area.

Also, one other thing I really feel like I need to say, and that is this, if we're not going to maximize the use of toll roads to bring us any up-front money or get us any money overall, why in the world are we taking money away from gas tax supported roads to subsidize toll roads? Why in the world is TxDOT funding, in most cases, the entire cost of exchanges with toll roads that make toll roads work?
Now, if you're going to do this, then for heaven's sake, don't hurt the ones of us that have been waiting for years like we have on the expansion of South R.L. Thornton. Don't hurt us by taking money away from us in order to subsidize toll roads, don't do that. And I'm afraid that's what we see.
And all the other toll roads are going to have to be subsidized, we all understand that, but unless we can come up with a reasonable way for TxDOT to get some public monies back that can be spent on something other than toll roads. 792 says NTTA can only spend 10 percent of its money on non-tolled roads. You ought to lobby for change in that so they can pay at least half the cost of those exchanges that makes thing work.
One exchange is so many million dollars, and you guys know better than anybody, and that one exchange, the opportunity cost of using $500 million to do an exchange means you can't do $500 million worth of work elsewhere. Those are the kinds of issues that worry me.

Meanwhile, I know this is going to pass and I'll be glad to see 161 done, it's my new way to get to the airport from southwest Dallas County, but doggone, think about some of these other aspects, please, in the future. And I'll be glad to answer any questions if anybody wants to talk to me after this.
MS. DELISI: Any questions?
MR. HOUGHTON: Grady, I truly respect your prowess, your intellect and the history that you have, the capital that you bring and I've been a beneficiary of that, and some of the things that you have said we are, in fact, doing. We met last night with the mayor and Council Member Koop and Hall, and we're going to find a way to do the Trinity Parkway, and we will. Ned and I have worked on some ideas on how to maximize the use of some of the things we do at TxDOT at the State Infrastructure Bank.
So there's some great opportunities that are coming, and I do believe that you're right, that as I have discussed with Paul Wageman is that as we structure State Highway 131, we may want to look at that to where the citizens of the region and the state get a piece of the action for every transaction up front, for every car.

That's something that we need to address if we're not going to take the up-front and burden I don't want to say burden, but it is tough on those up-fronts to swallow sometime. We need to find a way to get new revenue into the system and that may be one of the ways. But we're exploring all of that, and I do believe that, in all honesty, we'll get the Trinity Parkway done.
MR. SMITHEY: I appreciate that. You know, the one thing that's encouraging about this thing to me well, there are several things one thing that's encouraging about it to me is you've had the three-part basically partnership at the local level, you've had the local TxDOT folks, you've had the Regional Transportation Council, and you've had the local toll provider, in our case NTTA.
Two of those three folks basically basic charge is to maximize mobility, but the other one, the local provider, basically has to satisfy their bond people. Since you're going to be their bond people, they've got to satisfy you, that means it's got to be local mobility now, doesn't it?
MR. HOUGHTON: Thank you, Grady.
MR. HOLMES: Grady, one point. I, for one, and I think certainly others here do not want this to be read as walking away from CDA type agreements because that is not my intent in voting to approve this motion. And I'd like to go on record for that.

MR. SMITHEY: I appreciate that. Our problem, of course, this was really the last one that would generate any significant up-front money. One could say that one of the reasons that you're here today is because NTTA probably paid a little bit more for 121 than it was worth, but that's fine, we take the money, we're glad you gave us the $700 million today, we're glad to have it. But that may have been a classic study in how not to do things right up front.
And I just hope that you will, Commissioner, be able to continue to ask for and try to get decent bids, because, frankly, the public interest is going to require more money than any of us can see how we're going to get it.
MS. DELISI: Do you have something to add? Any other questions of James?
(No response.)
MS. DELISI: So is there a motion?
MR. MEADOWS: So moved.
MR. HOUGHTON: Second.
MS. DELISI: And I heard a second. All in favor?
(A chorus of ayes.)
MS. DELISI: No opposed; the motion passes.
MR. SAENZ: Thank you, James.
Agenda item number 11 deals with pass-through tolls, a pass-through toll project for Bexar County. Phil will present.
MS. DELISI: We cleaned out the room.

MR. RUSSELL: It can't be anything I've said, I haven't said anything yet.
MS. DELISI: Just hold on one second.
(Pause.)
MR. RUSSELL: Well, at least Judge Wolff is coming up closer. That makes me feel better
MS. DELISI: All right, fire away, Phil.
MR. RUSSELL: For the record, I'm Phil Russell, assistant executive director for Innovative Project Development.
As Mr. Saenz mentioned, agenda item 11 deals with a pass-through finance application we recently received from Bexar County. The project really has two elements: it's the expansion of FM 1957 from 1604 out to 211 actually the minute order says 211, there's a little transition piece all the way to Medina County; and then also it's kind of connecting the dots on State Highway 211 from 1957 all the way up to 471. There should be a map. My apologies, it should be in there. Would you like my map?
MS. DELISI: Look, Judge Wolff has got a map for you.
(General laughter.)
MR. RUSSELL: We've got maps raining down like a rainstorm now.

The application the county estimates it's about an $83 million construction project.
MR. HOUGHTON: How much?
MR. RUSSELL: $83 million.
MR. HOUGHTON: Do we have that kind of money?
MR. RUSSELL: The county does. The county's application is for $83 million of which about $15 million is private development. The county is requesting that we enter into a pass-through agreement for the remaining $68 million, and it's predicated on about 13 cents VMT, vehicle mile traveled, and the payout stretch would be somewhere between five and ten years. Of course, this is just the first step. Ultimately, if you would authorize us to enter into negotiation, we'd bring it back to you with a final agreement.
It's probably also worth noting, and some of you probably know that as well, that the U.S. Department of Homeland Security is contemplating building a new National Bio and Agro-Defense facility. Texas is one of the five finalist states.

I believe, Judge, that announcement is going to be made in Washington probably in December, and the Texas Research Park there kind of the southwest quadrant, it would be the site in Texas. So it certainly has not only some regional but some statewide economic opportunities there.
Commissioners, I'd be happy to address any questions. I know the judge is here as well, and of course, staff would recommend approval of this application.
MS. DELISI: Any questions for Phil?
MR. HOUGHTON: Who is going to build it?
MR. RUSSELL: Judge, help me. Are you going to do a design-build contract, is that what I'm hearing?
MS. GREEN: Thank you, Commission. My name is Renee Green, I'm the county engineer for Bexar County, and right now the intention is to do a traditional design-bid-build project, and currently the design portion is being paid for out of the private sector contribution of $15 million.
MR. HOUGHTON: $15 million?
MS. GREEN: Yes, sir.
MR. HOUGHTON: Nice contribution.
MS. GREEN: Yes, sir.
MR. HOUGHTON: That's a nice participation.
MS. GREEN: Well, yes, it's part of the participation.
MR. HOUGHTON: Right.
MS. GREEN: Thank you.

MS. DELISI: Thank you. At this time I'd like to call up Judge Nelson Wolff.
JUDGE WOLFF: Thank you, Chair Delisi, and Commissioners Meadows, Houghton, Holmes and Underwood, thank you for allowing us to appear before you. This is a very timely discussion because by the end of November or early December, I believe they're going to be making the recommendation in Washington with respect to the National Bio Defense Lab. Commissioner Rodriguez and I met with the chair of that effort, Admiral Cohen, and we did bring up this particular project, one that we've been working on since 1981 when we began to acquire right of way.
The county is acquiring all of the right of way, it was mentioned the $15 million that is coming from the private sector, and then we also created a public improvement district which we were allowed to do with some additional powers that were granted to Bexar County in the last session of the legislature. We have appointed the members of that board and they've had their initial meeting. We've had good support from Medina County, Bexar County, Alamo RMA, City of San Antonio and the mobility.

We think this is a very good project, one, like I say, that we've been working on for some time and if we move this forward, we would be able to expedite the environmental review for SH-111. It completes a gap in the state highway system, improving safety and reducing congestion on parallel and connected highways.
One hundred percent of the 400-foot right of way is provided by Bexar County and through private sector donations. The right of way will be large enough to have an ultimately expressway facility with frontage roads. As mentioned, $15 million has been put in by the private sector, and the public improvement district that we've created is to finance the project as we move along.
And then it also responds to the economic growth that we're having in that area. West San Antonio is growing at a very, very rapid pace. The expansion of Potranco is absolutely necessary to get done, and it is going to improve the highway network that will advance our highway system.
So we ask for your approval of this today to begin the negotiations and we're prepared to go to work on its right of way. We hope that we could reach agreement within the next 30 days or so and bring back a final order to you perhaps by the end of the year. So we're ready to go if you'll allow us to go.
MS. DELISI: Thanks, Judge. Any questions for Judge Wolff? Well, if there are no questions, is there a motion?
MR. HOUGHTON: So moved.
MS. DELISI: Second?

MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Motion passes.
MR. RUSSELL: Thank you, commissioners.
MR. SAENZ: Thank you, Phil.
Agenda item number 12, James Bass comes back up again, presenting approval of amendments to the supplemental indenture for the CTTS project.
MR. BASS: If you'll recall, in previous months we've talked about the variable rate debt of $150 million associated with the Central Texas Turnpike System and that due to the rating downgrade of the AMBAC Assurance Corporation who is providing the insurance on it, the interest rates on those bonds has increased in the past few months, such that we're looking at other alternatives to lower the cost. In August we were looking to replace the current structure with a letter of credit, but given the current credit market conditions, we have not been able to gather $150 million of credit facility for the bonds.

So what item 12 would authorize is for the CFO to pursue a private placement of the $150 million of variable rate bonds, associated, again, with the initial financing of the Central Texas Turnpike System, and this private placement would be in place for an interim period of time, no longer than February 2010. This would be done in an effort to achieve a lower debt service cost, however, this private placement does require an amendment to the second supplemental indenture that was initially approved at the time of the original financing.
In addition, in order to accomplish this private placement, we would also need the approval of the standby bond purchase provider, the remarketing agent and AMBAC, the insurer, and we're working to get all those in place. The minute order also authorizes the necessary actions and documents required to execute this transaction. The hope is that during this interim period the credit market will improve which would allow for a successful remarketing effort on the bonds at the end of this period. And staff would recommend your approval.
MR. HOLMES: James, what's the current rate?
MR. BASS: The current rate is 9.9.
MR. HOLMES: And what do we anticipate this might be?

MR. BASS: It would be market on whatever day we reach the agreement on the private placement for whatever the term, but in the neighborhood, last week when we did kind of a spot check, we're looking say 5 percent or a little bit lower. There are other issues associated with the current state of this $150 million. It's offered at 9.9 percent here recently, it jumped to 9.00, 9.50, 9.75, last reset was at 9.90. Offering an interest rate of 9.9 percent, they've only been able to place $17 million of that. $133 million are what they call bank bonds; they are with the standby bond purchase provider.
Once the standby bond purchase provider acquires some of those bonds, there are different trigger timing mechanisms put in place, one for 90 days at such time the rate we pay on the bank bonds is associated with the fed rate it will increase, and then if they're still not able to place those, we would be required to begin on a path to pay off that $150 million of bonds. We want to avoid that situation.
If we're in the current structure and AMBAC gets downgraded further, we would be in even a shorter time period that we would have to pay off that $150 million, again, a position we don't want to find ourselves in. And so this alternative of a private placement would allow us to kind of, in effect, call a time out, have a fixed rate for this set period of time, with the hopes that as we reach the end of the interim period, the markets will have recovered/stabilized that we would be able to go back with a more traditional alternative to remove the AMBAC insurance.

MR. HOLMES: It's two-year paper? You said 2010?
MR. BASS: The term of the private placement is open, the maximum length it would be would be February 2010, so in the neighborhood of something under a year and a half.
MR. HOLMES: Does the standby holder also receive the 9.9 percent?
MR. BASS: No It's associated with the fed rate so when the fed reduced by 50 basis points, yesterday the rate we pay on the bank bonds also went down. Early what we were paying on the bank bonds was 3.50 and it went down to 3.25 and I'm guessing now with this recent, it would be in the neighborhood of only 2.75 percent that we're paying on the bank bonds.
If we reach December 20, that rate will increase again by 100 basis points. Again, it's tied to the fed rate, but it also starts other time clocks that we'd have to start paying off the debt, potentially that we don't want to find ourselves in.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Motion passes.

MR. SAENZ: Thank you, James.
Agenda item number 13 deals with the approval of the text of our Strategic Plan for 2009-2013. Coby Chase will present.
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 13 is a minute order for the formal adoption of the public version of the Texas Department of Transportation's 2009-2013 Strategic Plan.
At the commission's Wichita Falls meeting, I had asked to put out the draft plan for comment, and you agreed to do that. The comment period wrapped up on September 15. A little under 50 comments were submitted during the public comment period. All were reviewed and considered. These comments will reside on the TxDOT website alongside the Strategic Plan so anyone can access them.

The plan focuses on our five agency goals: reduce congestion, enhance safety, improve air quality, expand economic opportunity, and preserve the value of our transportation assets. Note that the word "preserve" the value of our transportation assets replaces "increase." We believe that "preserve" is more intuitive and better explains the result of improving pavement conditions and maintaining our bridges. Approving this minute order means approval of this new language.
One key element that separates this public plan from previous versions is that it adds performance measures for four of the five strategic goals. Under reducing congestion we will measure the travel time index, the average amount of extra time it takes to travel during rush hour versus non-congested times.
We will also measure congested peak travel times, the amount of overall travel that occurs in congested conditions. Enhanced safety: we will measure the fatality rate to examine our enhanced safety goal. Improve air quality: we will measure air quality in Texas's non-attainment areas. And preserve the value of transportation assets: we will measure pavement conditions and bridge conditions.
A note on the data. You'll notice that all data in the report are frozen at 2005 numbers. That's because that is the most recent point in time that all data had in common. However, plans like this are organic in nature and what was true in 2005 has been turned on its head a few times throughout 2008. Where recent data point to trends going in new directions we've noted that in the text.

Strategies. Our five goals are buttressed by four strategies: use all financial options to build transportation; 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 finally, facilitate consumer-driven decisions that respond to market forces.
Today you are approving the text of the public strategic plan. Aside from minor stylistic changes the version you will be approving is or I hope you approve is, at its core, the same as the draft submitted for the commission administration review and comments earlier this month.
Two commission offices in particular, Commissioners Meadows and Delisi, put in extra time with this report and brought greater focus to its content. Thank you both for that. And I would be remiss if I didn't thank the Research Section of the Government and Public Affairs Division for putting all of this together. They are simply superb strategic thinkers.
I recommend approval of the minute order before you, and with that, I'll take any questions you might have.
MS. DELISI: Any questions?
MR. HOUGHTON: Good work.
MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. CHASE: Thank you.
MR. SAENZ: Commissioners, just as additional information on this, if you recall when I interviewed we talked about it was important that we had goals and performance measures, something that we could measure how effective we are, and now that we've got the strategic plan that identified the key goals, I want to carry forward so that we work with our divisions, districts and offices so that we can identify the action plans and operational plans for those areas to see how the work they do meets the goals we've identified at the statewide basis.

To that end, I'm putting in what I call an Office of Strategic Planning and Performance, and I've asked Mary Meyland to move to Austin and help me run that office. That office will report to me, and it's going to be used, in essence, to enhance our goal-oriented, performance-based program and get the department going in a direction where we can identify goals, identify the measures, and then be able to collect the data and report on whether we are meeting or not meeting the goals, and that will to improve our efficiency as we move forward.
If you have any questions on that, I would be happy to answer them.
Back to the James Bass show for, hopefully, the last time. Agenda item number 14 is a report from James Bass dealing with the fiscal year 2009 Obligation Limit report for October of 2008.
MR. BASS: Thanks, Amadeo. Last month we shared with you the schedule for the October letting and I would like to update you on that as well as bring you what happened on the September local letting which occurred after last month's meeting, the details of which are provided in the report before you.
One thing that I would really like to call to your attention is, as we've talked about as part of the broad eleven-year UTP which is $28.2 billion, and the '09 piece of that from our usual taxes was $2.53 billion, and as we've talked, the UTP and even the current year letting schedule is a plan based upon a forecast based upon assumptions. I'm sure you've heard that enough times now you can repeat it yourself.

The federal dollars and what's going to happen with that is still uncertain. It could be less than our projection, or if there's a stimulus package it might be more than was projected. But what I want to call your attention to is what we've been seeing in recent months on the deposits of the state's motor fuel tax, and as part of that forecast, one of our assumptions was that the deposits to the state highway fund would grow by 1-1/2 percent per year going out into the future.
And just as a little background, in 2007 those deposits grew by just over 2 percent, and during 2008 they grew by 1.7 percent, so we were being somewhat conservative by ramping that down.
Four out of the last six months, when we compare May to May, June to June, and so on, four out of the last six months have been less than the prior period, and for September and October, the only two months that we have deposits for during our fiscal year 2009, those two months together are almost 4 percent less than what we had received in those same two months twelve months ago.

We're very anxious to see what will be deposited in November, and we'll find that out on the fifth working day, and all of this is just to say, highlight, bring to your attention that it's quite possible that in the near term, if the motor fuel tax deposits continue on this trend, we may be coming back to the commission you previously adopted an obligation limit of $2.53- for fiscal year 2009 based upon these trends of state motor fuel tax, staff may be coming back to you in the near term and may need to revise that figure down because of what we're seeing.
So in addition to all of the data on the different projects and what's scheduled, what the engineers' estimate was and the bids, that was really the primary issue that I wanted to bring to the attention of the commission through this report today, and I would be happy to answer any questions you might have.
MR. HOLMES: James, the receipts in November, if I remember correctly, it's a week from tomorrow. Right?
MR. BASS: Correct, it will be on the fifth working day that we'll receive the deposits for the month of November.
MR. HOLMES: So in the next ten days or so. Those will be receipts from sales at the rack in September?
MR. BASS: September.
MR. HOLMES: So we're still on that two-month lag.

MR. BASS: And we had a brief discussion last time: gas prices are going down so maybe people will start driving more and we'll see that trend go up. Even if that does happen, there's going to be a time delay before we see it. That definitely has an impact, but so does the purchaser at the rack with their expectation of what prices are doing. If they think prices are going to continue down, when it comes time to reorder, they may not reorder in the quantity that they normally would because they think the price is falling, so they'll get a shorter supply, if you will.
That expectation, their guess of what the market is doing also has an impact on what that deposit may be, and that's why in earlier months we've said, in our opinion, one month up or down does not a trend make, but what we've seen to date is four out of the last six months going down. It's quite possible that will reverse course and then start growing again, but at a certain point we can no longer ignore the actual deposits that are coming in and we may need to adjust our plans based upon those.
MR. HOUGHTON: In hindsight, your report should have been on the front end of this commission meeting where a greater audience would have heard that.
MR. BASS: I apologize.
MS. DELISI: I do have one person signed up to speak. Michael Morris, come on down.
MR. MORRIS: Michael Morris. Again, I applaud your staff effort on keeping up with this.

I just want to flag one item. It's not in state statute but in federal statute in the Clean Air Act, Section 176(c). As funds get tighter and tighter and tighter, we have projects that are in the air quality state implementation plans that are funded with Congestion Mitigation/Air Quality funds. They're not a lot of money.
So we'll be working with your staff in the coming months as these letting schedules get tighter; we don't want to open up regions to sanctions of roadway funds, ironically, for non-implementation of air quality projects. So we'll be working with your staff on how do we shoehorn in all these Congestion Mitigation/Air Quality projects that have to be built to maintain the state implementation plans this would be for Dallas-Fort Worth and Houston and El Paso when there's a restriction in cash flows that you would like to probably place in Category 2 or Category 12.
And all I'm flagging to you is if we don't discipline ourselves, we risk sanctions of non-implementation of air quality projects in the state implementation plan, so we're working with your staff to do that.

So when you hear from your staff or from us that we may not be able proceed with that particular project because we need $30 million of these air quality funds, it is because of the federal 176(c) that says the first projects that should be built within each state is the federal obligation of the air quality commitments that's in the state implementation plan.
Thank you.
MS. DELISI: Thank you.
MR. SAENZ: Thank you, Michael.
Agenda item number 15 deals with the contracts that were let this month, and John Barton will present two minute orders.
MR. BARTON: Good afternoon, Madame Chair and commissioners, Mr. Saenz. Again for the record, my name is John Barton, assistant executive director for engineering operations.
Item 15(a)(1) deals with a minute order that would authorize the award of highway maintenance and department building contracts that were let on October 15 and 16, 2008, for projects with an engineering estimate of $300,000 or more. We received bids on twelve projects in those two days, total number of bids was 65, representing an average number of bids per project of 5.4, again, a rather healthy bidding arena.

Staff is recommending that all projects be awarded with the exception of one, a project in the Pharr District in Hidalgo County, specifically RMC618585001. That is a sweeping contract. We received only one bid on that project.
The district staff believes that it was because of a lack of competition that the cost was as high as it was, and they believe by redesigning it and packaging it with other work, they'll be able to receive more bids on the project, and therefore, be able to get a more cost-effective and appropriate bid for it.
So staff recommends that you approve the minute order which would authorize all the awards of these contracts with the exception of the one noted.
MS. DELISI: Any questions? Is there a motion?
MR. HOLMES: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BARTON: Thank you. Item 15(a)(2) is a minute order before you that would authorize the award of highway and transportation enhancement building construction contracts let, again, on October 15 and 16, 2008. We received bids on 38 projects on those two days, total number of bids was 276 which represented an average bidding per project of 7.26 bids per project, a very healthy number again.

As you can tell, our contractors are very intent in bidding on the work that we have. The total estimated cost of those projects was a little over $382 million, the low bids received was approximately $393 million which represents an overrun of our engineers' estimate of approximately 3 percent, again, very accurate and good.
Staff is recommending the award of all of these projects with the exception of one in the Lubbock District in Crosby County on State Highway 207. This project had five bidders on it and it's for the purposes of providing some pavement widening along the roadway. The staff in Lubbock believes that the project overran primarily due to the fact that the instability in the asphalt market caused their engineer's estimate to be out of place, as well as some flexible base and mobilization issues that they believe a redesign of the project would address and allow them to get a more cost-effective bid on this project.
So the minute order before you and staff's recommendation is that you approve it but award all projects with the exception of the one noted.
MS. DELISI: Any questions?
MR. HOLMES: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?

(A chorus of ayes.)
MS. DELISI: Motion passes.
MR. SAENZ: Thank you, John.
Agenda item number 16, Commissioners, is our routine minute orders that deal with donations to the department, deal with eminent domain proceedings, some finance quarterly reports, load zones and postings, right-of-way dispositions and donations, and also speed zoning. Staff recommends approval of all these minute orders as a whole. We'll be happy to answer any questions on any of these. If you'd like to talk to James again on the quarterly report, we'll bring him back.
MS. DELISI: Is there a motion?
MR. HOLMES: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Motion passes.
That concludes all the items on today's regular agenda. Is there a need for an executive session?
MR. SAENZ: No, ma'am.
MS. DELISI: If not, we'll proceed to the open comment period. Are there any speakers signed up for open comments?
MR. SAENZ: Yes, ma'am.

MS. DELISI: I'd like to call up Jerry Thompson.
MR. SAENZ: I think he left.
MS. DELISI: Okay. Donna Halstead.
MS. HALSTEAD: Thank you, Madame Chairman. Jerry had to leave, he had a business appointment.
Thank you for letting me have a minute or two to be here with you and to deliver greetings from my chairman, John Scovill. The Citizens Council has been involved in transportation issues in North Texas for almost the entire 70 years that its been in existence, so we are particularly pleased to see you all here today.

I know we've had a rough time for the past few years. My chairman asked me to bring an olive branch today to extend to you to maybe begin to mend some fences. Unfortunately, he is in Lubbock; he has a regents meeting. He asked me to say three things to you: the first is that we are so grateful to the commission for thinking outside the box so that 121 can become a reality; we are very pleased with the creativity of the 635 project which was on your agenda today; and thirdly, he asked me to tell you that while we may have been adversaries in the past, during this next session of the legislature we will be working with you to index the gasoline tax, increase the gasoline tax, and hopefully reduce or eliminate diversions of gasoline taxes for other functions.
Again, thank you for your time, and glad you came to Dallas.
MR. UNDERWOOD: Yes, ma'am. Would you give a message back to Chairman Scovill, please, from TxDOT, that we are what we are but we're not what we were. Would you pass that on to him?
MS. HALSTEAD: I will gladly tell him that. Of course, I'm waiting to see if he comes back from Lubbock. If the game doesn't go right Saturday, he may slit his wrist. Thank you.
MR. HOUGHTON: Donna, I didn't hear a CDA authority. Did you hear the continuation of CDA authority?
MS. HALSTEAD: Well, you know what, that is not on our agenda.
MR. HOUGHTON: You've got to get that on your agenda.
MS. HALSTEAD: It's something that we probably would be willing to talk about now, but last session it didn't seem to fit best the needs of North Texas, so that's why we were on opposite sides. Actually, though, when you think about it, 635 is a CDA.
MR. HOUGHTON: That's why we need CDA authority.

MS. HALSTEAD: And that's exactly the place where CDAs need to be an option to be considered, very definitely.
MR. HOUGHTON: Right.
MS. HALSTEAD: Thank you.
MS. DELISI: Thank you. Peter Le Cody.
MR. LE CODY: Good afternoon, Madame Chair, commissioners, and Amadeo. My name is Peter Le Cody. I'm a business owner here in Dallas, also serve on your I-35 Corridor Advisory Committee, but I'm here today to represent Texas Rail Advocates. We are a non-profit organization that educates the public and elected officials about the benefit of improved rail transportation in Texas and the Southwest. Our mission is to accelerate Texas's economic growth and enhance the quality of life enjoyed by the people by advancing the development of rail service to its full potential as a carrier of freight and passengers.
With the passage of HR 2095 which is the Railroad Safety Enhancement Act that was signed into law on October 16 and if you ever want to wade through it, we've got 120 pages we can go through but we won't do that today. There are some things in there which are really going to issue a new era for passenger and freight rail development here in the state of Texas.

Language in the act calls for development of the South Central and the Gulf Coast rail corridors which have been designated by the U.S. Department of Transportation as key rail transportation corridors in the country. The South Central corridor connects the social and economic spine of Texas from way up on the border into Oklahoma and Arkansas down into San Antonio, and the Gulf Coast corridor, of course, is between Houston and easterly into New Orleans.
There are provisions in the act, and this is kind of an eye-opener for rail that's an 80 percent federal, 20 percent state match for certain developments, and Texas, though, is going to be competing with other corridors around the country for future funding on this there's about nine other corridors.
So we are urging, as Texas rail advocates to the commission because this is so new and the Secretary of Transportation is going to be issuing requests for proposals 60 days from now for corridor development to establish a task force for the corridor development action and implementation plan. And of course, I think what's important in that is that we need to get some local input, the local cities and the towns along the route, and other transportation stakeholders into an action and implementation plan.

Also, in order to meet the transportation challenges of tomorrow, we're calling for the commission to establish a Rail Division within TxDOT, as other states have done like Oklahoma and New Mexico. A Rail Division would be responsible for coordinating future high speed passenger and freight rail development, safety initiatives, industrial access to rail service to help ensure that companies have the railroad tracks needed to transport freight and materials, track and station improvements, corridor preservation, and responsibility for state safety oversight of transit agencies.
A Rail Division could also coordinate projects from the Federal Transit Administration and the Federal Railroad Administration to maximize any available federal funding, and a dedicated Rail Division would serve as the TxDOT liaison with private and public sector rail operators, shippers, communities and other stakeholders.
So in essence here, passenger and freight rail is definitely going to play a larger role than what we see today here in the state of Texas for our transportation future, and we suggest that let's lay the groundwork now, task force for the corridors, and then a Rail Division for TxDOT. Thank you.

MS. DELISI: Thank you. 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: Motion passes. Please note for the record that it is 12:23 p.m., and this meeting stands adjourned.
(Whereupon, at 12:23 p.m., the meeting was concluded.)




C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Dallas, Texas
DATE: October 30, 2008
I do hereby certify that the foregoing pages, numbers 1 through 154, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Barbara Wall before the Texas Department of Transportation.

11/04/08
(Transcriber) (Date)

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

 

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