August 29 Transcript

Texas Department of Transportation Commission Meeting

COMMISSION MEMBERS:

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

STAFF:

Michael W. Behrens, P.E., Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director

MR. WILLIAMSON: Good morning. It's 9:07 a.m.

MALE VOICE: Good morning.

MR. WILLIAMSON: Good morning. And I would like to call this special meeting of the Texas Transportation Commission to order. It's a pleasure to have all of you here this morning.

I'll note for the record that public notice of this special meeting containing all items on the agenda was filed with the Office of the Secretary of State at 4:12 p.m. on August 21, 2007.

Before we begin today's meeting, please take a moment to join with me in placing your pagers, cell phones, and other electronic devices on the silent mode, or page mode, or vibrating mode, or whatever will not disrupt our testimony. Thank you very much.

We call this special meeting for the primary purpose of conducting interviews with candidates for the position of executive director of the Texas Department of Transportation. In a few minutes we will recess this meeting and enter into executive session for those interviews.

At the end of the round of interviews we will either name a new executive director, select an interim director until a new director is named, or defer action altogether. We will return to open session at either a recess or at the conclusion of the interview process and announce which of these actions we will take.

Does anyone have any questions about this process, or do the Commissioners wish to make a comment?

MR. UNDERWOOD: I was looking over my notes. What's a DAT? I've gotten drafts before, but never a DAT.

MR. BEHRENS: It's a special draft.

MR. UNDERWOOD: Okay. Thank you.

MR. BEHRENS: Yes.

MR. WILLIAMSON: What is a DAT?

MR. BEHRENS: It's a printer anomaly.

MR. SAENZ: It prints every other letter. The R and the F will probably be on the next page.

MR. BEHRENS: Exactly.

MR. WILLIAMSON: Only TxDOT would come up with something like that.

MR. SAENZ: I don't know. That's a wild guess.

MALE VOICE: Blame it on our consultants.

MR. UNDERWOOD: Thank you, Mr. Chair.

MR. WILLIAMSON: Yes, sir, Mr. Underwood.

Any other questions or comments, Members?

(No response.)

MR. WILLIAMSON: Okay. I have no comments other than to note for the record the interview process, for those of you here watching it, will be quite lengthy and I don't anticipate that we'll be back in here until late in the evening.

Before we recess into executive session, there's one piece of business on our agenda that we need to tend to.

Mike, if you would, please introduce Item Number 1 on the agenda.

MR. BEHRENS: Thank you, Mr. Chairman.

You remember last week at our regular meeting we took care of Items 1(a) and 1(b), so we don't need any further action on those today. And I'll call Amadeo up to talk about 1(c), which is dealing with the removal of the state　-- from the state system and transfer a section of the State 121 in Dallas and Denton Counties.

MR. SAENZ: Thank you, Mr. Behrens.

Good morning, Commissioners. For the record, Amadeo Saenz, assistant executive director for engineering operations.

The minute order before you provides for the removal from the state highway system and the transfer to the North Texas Tollway Authority, NTTA, a portion of State Highway 121 comprising of the mainlanes only and the associated right of way that's needed for those mainlanes from a point .23 miles east of Business 121 to the ramp pair just to the west side of FM 2281. That's kind of from the west side of Lewisville to the east side of Lewisville. It is segment one of the 121 project.

We're only transferring a portion of the first segment of the 121 project at this time. This is the part that's already open to traffic and is currently being tolled. Segment two under construction and that will be transferred at a later time.

As part of the transfer process, we had to have a public hearing. A public hearing was held on August 7 in Coppell, Texas, and on August 9 in Lewisville, Texas. We received no comments, both written or oral.

Staff would recommend that you approve the minute order that would remove State Highway　-- this segment of State Highway 121 from the state highway system and also transfer it to NTTA.

This would be subject to the Governor approving the transfer, and would also be subject　-- and based on the agreement, the actual transfer would not happen till about 11 months from now after segment two is completed, when we get　-- that they get the actual notice of beginning tolling on their part.

Be happy to answer any questions.

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

MR. UNDERWOOD: Yes.

MR. WILLIAMSON: Mr. Underwood.

MR. UNDERWOOD: Yes, Amadeo, who receives the income from the tolling that's taking place now?

MR. SAENZ: We do, sir.

MR. UNDERWOOD: Will we keep that income up until the time in which it's formally transferred to them?

MR. SAENZ: Yes, sir, up until the time that it's actually transferred, which we believe is somewhere in July of 2008, we will retain that income that comes　--

MR. UNDERWOOD: And that will go back into Fund VI. Is that correct?

MR. SAENZ: Yes, sir.

MR. UNDERWOOD: Thank you.

MR. HOUGHTON: It'll go back in that facility, will it not?

MR. SAENZ: Well, we don't have any debt on this　facility.

MR. HOUGHTON: There's no debt?

MR. SAENZ: There's no debt on that facility.

MR. HOUGHTON: Okay.

MR. SAENZ: The facility was built with Fund VI.

MR. WILLIAMSON: Yes, in order that I feel comfortable that the answer Mr. Underwood received is clear in his mind, do we not have a commitment to the region to retain and commit that revenue to the region?

MR. SAENZ: Yes, sir. Prior commitments that the Commission has made is that toll revenues received that are considered surplus　-- in this case this is surplus revenue since there's no debt on it　-- will go to the region for them to select more projects.

MR. WILLIAMSON: And through the RTC process they'll make a determination of what money is to be　--

MR. UNDERWOOD: So this would be beyond the actual NTTA payment, these toll roads will be added to that then　--

MR. WILLIAMSON: Yes.

MR. UNDERWOOD: 　-- for them to be able to spend in their region.

MR. WILLIAMSON: Yes, sir.

MR. UNDERWOOD: So the money is not leaving their region and going into Austin. It will stay in that region.

MR. SAENZ: It just goes　--

MR. UNDERWOOD: That's what I'm　--

MR. SAENZ: 　-- into Fund VI. We　--

MR. UNDERWOOD: 　-- getting at. Thank you for clarifying, Mr. Chairman.

(Pause.)

MR. HOLMES: Amadeo, can you give me an estimate of what you think　-- or what the current monthly run rate is on the toll revenues on the portion of 121 that is already open?

MR. SAENZ: I will　-- I don't have that information with me, but I can have them give me a report and send it over to you all.

MR. HOLMES: Do we know whether it is under or over what the original projected revenue might be?

MR. SAENZ: Since the project was originally　-- construction started before and we did not issue any debt, we did　-- probably did not do the full investment grade revenue, toll　-- revenue studies.

So it's hard to tell because we　-- you know, as I said, we were going to　-- we cleared it as a non-toll project, we re-evaluated the environmental and converted this thing to a toll project.

We don't have the traffic and revenue studies to that high a level to be able to have estimated what the actual traffic was going to be projected to be　-- not actual, but the traffic that was going to be projected to be. So I don't have a comparison. But I can give you some traffic numbers based on maybe some of the early studies so that I can　-- and I just have those calculations prepared.

MR. HOLMES: The actual monthly run rate would be interesting.

MR. SAENZ: We will get that to you.

MR. HOLMES: Now if I understand this correctly, the operating cost, does that　-- does the operating cost come out of the revenue that then goes back to the RTC to　--

MR. SAENZ: Yes.

MR. HOLMES: 　-- reallocate within the　--

MR. SAENZ: Yes.

MR. HOLMES: 　-- region?

MR. SAENZ: We will consider surplus revenue anything above operational and maintenance. Now as we transfer the project to NTTA, they are then going to be responsible for the operation and maintenance.

But right now the　-- from the money that we're generating, we will deduct the operation and maintenance costs for the system and then the reminder will be surplus that will go to　-- that we'll basically allocate to the region for them to select projects from.

MR. HOLMES: And approving this now, basically is　-- shows the action of the Commission that will be accomplished at some point in the future when the balance of the project is complete?

MR. SAENZ: Yes, sir. As they finish segment two, which we estimate to be next July, then we will transfer segment two and that will be considered the service commencement date for the agreement with NTTA, and at that point forward we'll transfer segment two and segment one follows with it, and then at that point they will then start collecting the tolls.

But prior to that, when they close within the 45 days after environmental is cleared, we will get the agreed amount　-- the agreed upon amount of $3.33 billion　--

MR. HOLMES: Which presumably will be well in advance of next　--

MR. SAENZ: Yes.

MR. HOLMES: 　-- summer.

MR. SAENZ: We hope that it's　-- environmental　-- I have not received any other reports. I'm still going on the reports that we had last month, or earlier this month, and we think that we will have environmental clearance from the Federal Highway Administration by the end of　-- by the middle to the end of September, so the 45 day window starts upon　-- about　-- let's say at the latest at the end of September.

MR. HOLMES: Well, we look forward to that date.

MR. SAENZ: I hope　they do too.

MR. WILLIAMSON: Other questions or comments, Members?

MR. SAENZ: Just, Mr. Chairman, just to make sure. Like I said, this is still subject to approval of the Governor, and the Governor will in essence finalize this transaction, and we will wait till we get the closing on the project before we go forward with that transaction.

Also, the　-- we will have a tolling agreement　-- or a transfer agreement that we'll finalize, and then this minute order authorizes the executive director to enter into that agreement, which would be just a simple transfer agreement.

MR. WILLIAMSON: Okay. Members, you've heard the answers to your questions, and we've heard comments. What's your pleasure?

MR. HOUGHTON: So move.

MR. UNDERWOOD: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you　--

MR. SAENZ: Thank you.

MR. WILLIAMSON: 　-- Members. Thank you, Amadeo.

At this time we will now recess our open meeting to go into executive session under Section 551.074 of the Government Code to interview and discuss the election of the executive director of the Texas Transportation Commission and/or to appoint an interim executive director. It is now 9:17 a.m.

(Whereupon, the Commission went into executive session.)

MR. WILLIAMSON: The meeting of the Commission is called back to order. We are back to order at 2:20 p.m. At this time we'll be taking a break from executive session in order to have lunch, and we'll recess this meeting until approximately 3:00 p.m. Thank you.

(Whereupon, at 2:20 p.m., the meeting was recessed, to reconvene later this same day, Wednesday, August 29, 2007.)

A F T E R N O O N S E S S I O N

Time: 3:05 p.m.

MR. WILLIAMSON: The meeting of the Texas Transportation Commission is reconvened. We're back from recess for lunch.

We will now recess the meeting and reconvene into executive session to continue the interview and discussion process for the election of an executive director or to appoint an interim executive director. It is now 3:06 p.m. We came back in at 3:05 p.m., it's now 3:06 p.m. We're in executive session.

(Whereupon, the Commission reconvened into executive session.)

MR. WILLIAMSON: The meeting of the Texas Transportation Commission is reconvened. For the record, the time is 6:31 p.m.

The Commission has concluded in its executive session that it made a grievous mistake in accepting the retirement letter of Michael Behrens, and we have decided to withdraw the acceptance of that letter.

Can we do that? No?

MR. BEHRENS: No.

MR. WILLIAMSON: Oh, well, I was just kidding.

We announce the following action. We need to select an interim executive director.

Mr. Serna, do you have a recommendation for us?

MR. SERNA: Good evening. My name　-- for the record, my name is Ed Serna. I'm the assistant executive director for support operations. Mr. Chairman, Members, staff recommends that current deputy executive director Steve Simmons be appointed interim executive director. In addition, we recommend that the executive　-- the interim executive director be compensated at 192,500 a year for the period that he serves as interim.

MR. WILLIAMSON: Thank you, Mr. Serna, for being so quick to respond to my request.

Members, you've heard Mr. Serna's explanation and recommendation. Do we want to ask Mr. Simmons if he's willing to assume this responsibility, or do we want to just assume that he will?

Mr. Simmons, would you come forward, please?

MR. SIMMONS: Yes, Mr. Chairman.

MR. WILLIAMSON: You heard Mr. Serna's recommendation. Are you willing to serve in the capacity of interim　--

MR. SIMMONS: For the record, my name is Steve Simmons. I'm deputy executive director of the Department. I'd be honored to fill the position of interim executive director for the Department.

MR. WILLIAMSON: Questions for Mr. Simmons, Members?

(No response.)

MR. WILLIAMSON: Thank you. We appreciate your willingness to do that, Mr. Simmons. It may be months and months and months before we break this log jam.

Okay. You've heard staff's recommendation. Do I have a motion?

MR. HOUGHTON: So move.

MR. WILLIAMSON: Mr. Serna, I'm sorry; Mr. Houghton withdraws his motion.

MR. SERNA: We'll make the appropriate change, sir.

MR. WILLIAMSON: Yes, we're approving at 192.

MR. SERNA: Yes, sir. Just so you get that　--

MR. WILLIAMSON: Yes, we're approving　--

MR. SERNA: We'll make adjustments to　--

MR. WILLIAMSON: Okay. Mr. Houghton has moved. Do I have a second?

MR. HOLMES: I second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: The motion carries. Thank you. Thank you, Mr. Serna.

MR. SERNA: Thank you.

MR. WILLIAMSON: As announced, the Commission took no action and made no decisions during its executive session. We will no doubt meet again soon at a time and a place to be announced through the normal channels prescribed by law.

Anything else we need to do, Mr. Jackson?

MR. JACKSON: No.

MR. WILLIAMSON: Okay. Is there any other business to come before the Commission?

(No response.)

MR. WILLIAMSON: There being none, I will entertain a motion to adjourn.

MR. HOUGHTON: So move.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Members. We're adjourned at 6:35 p.m.

(Whereupon, at 6:35 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: August 29, 2007

I do hereby certify that the foregoing pages, numbers 1 through 18, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Sunny L. Peer before the Texas Transportation Commission.

8/30/2007
(Transcriber) (Date)

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

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