October 25 Transcript

Texas Department of Transportation Commission Meeting

STAFF MEMBERS:

AMADEO SAENZ, JR., Executive Director
STEVE SIMMONS, Deputy Executive Director
BOB JACKSON, General Counsel
ROGER POLSON, Executive Assistant to the Deputy Executive Director

MR. WILLIAMSON: Good morning. It is 9:08 a.m., and I would like to call the October 2007 meeting of the Texas Transportation Commission to order. It is a great pleasure to be here in Eagle Pass on the Rio Grande at the southern gateway to our great state.

It's our practice to take the commission meetings on the road, out and away from Austin, three or four times each year. It gives us a chance to see firsthand how our local partners and regional planners are solving their transportation challenges. I hope it also provides each of you with some insight into how the Texas Transportation Commission and the Texas Department of Transportation conducts its business.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of Secretary of State at 3:33 p.m. on October 17, 2007.

Before we begin today's meeting, we would appreciate it if you would join with us in a monthly ritual by taking your pager, your cell phone, your BlackBerry or what other electronic device you carry out of your pocket or purse and placing it on the silent or vibrate mode. Thank you.

We've been greeted this week with that famous South Texas hospitality and we thank the officials from the city of Eagle Pass and from the county of Maverick for their work in helping us make our meeting here a success. Though the commission has met before in Laredo, which is the location of our district office for the Laredo District, this is the first time that we have brought the state's transportation resources to Eagle Pass.

It's interesting to note, as we travel around the state, what transportation has meant to the different regions of our state. It's often a railroad or perhaps an interstate that has transformed the community, but in your case more than 300 years ago a route was blazed across Mexico and Texas into Louisiana that has been called the Old San Antonio Road or the El Camino Real, the King's Highway. Our researchers have identified a spot a few miles down the river from here at El Indio where that road crossed into what is now the great state of Texas.

I think few would dispute the importance of that route in terms of exploration, trade and the eventual colonization of the state. It could well be that the immeasurable role the El Camino Real played in the early development of Texas is now today in our era being repeated with new routes such as the Ports-to-Plains Trade Corridor and the various Trans-Texas Corridor routes that have been developed by the commission over the last few years.

It's our custom to open our meeting with comments from each of the commissioners, and we always begin with Commissioner Underwood, who is to my far right, your far left, from the Lubbock area, and then he will be followed by Commissioner Ned Holmes, Commissioner Ted Houghton, and Commissioner Hope Andrade.

Again, thank you for your hospitality here in Eagle Pass. Fred.

MR. UNDERWOOD: Thank you very much for your hospitality. You made me feel like family, I felt like I was at home right here in Eagle Pass, and thank you very much, really appreciate it. And really appreciate the work that everybody does with TxDOT.

MR. HOLMES: Representative King, Judge, Mayor Foster, we appreciate your taking good care of us last night, yesterday in the reception. I enjoyed our very brief tour riding through Eagle Pass. I know that you have some challenges with rail in the middle of your city, and we look forward to Mario helping you with those.

Did we give you a big enough job there, Mario?

(General laughter.)

MR. HOLMES: We really appreciate the welcoming that you've given us. As Fred said, you made us feel at home. Thank you.

MR. HOUGHTON: I echo my fellow commissioners' remarks about the hospitality. It was just a short period of time, less than 36 hours, but Mayor and Judge, it was a fabulous visit, a lot of opportunities happening down here: trade, the international bridge, the rail bridge. And again, thank you for the hospitality, and look forward to working with you all on solving some of the transportation issues in this region.

MS. ANDRADE: Good morning. Judge, Mayor, Representative King, and Mario and our staff, thank you so much. It's been a great visit here. When I first heard that we were holding our commission meeting, about a year ago, in Eagle Pass, I was delighted, and I shared my excitement with the judge and the mayor, and you certainly have lived up to everything that I've been telling my fellow commissioners that Eagle Pass and this region is all about. Thank you all so much.

MR. WILLIAMSON: I, once again, also express my appreciation for the hospitality, Mr. King, Judge and Mayor. I appreciate so much how we and our staff have been treated by the citizens of this part of our great state.

I was last in Eagle Pass a little over two years ago. It's my custom to drive; I don't fly unless I absolutely have to. If I'm going to be someplace, I always try to get there from an hour to a day early and drive around and check on our road projects and on the community.

And prior to 2-1/2 years ago, I hadn't been to Eagle Pass in about ten years, and I was amazed 2-1/2 years ago at the change that had occurred in the previous ten years, and I realized just kind of driving around and looking at things, how much change was going to occur in the very near future.

There were a few people talking about that change, but the difficulty I've found in 22 years of public service, of understanding what's going to happen tomorrow is that all of us live our lives through the prism of yesterday, and if yesterday was a dark and cloudy day, it's very hard to think about tomorrow in terms of sunshine. If all your experience in life is from one angle and one parameter, it's very hard to understand what tomorrow might be.

One of the great things about this agency is we are all about trying to understand what tomorrow might be, and I didn't realize that as a legislator, Tracy, as much as I realize it now as a commission member. There are from 14,300 to 15,000 employees at this agency at any one time, and the entire agency, from the beginning barrier inspector to the executive director to my immediate left, is all about, everyday planning, and if you're going to be a planner, you have to try to understand what tomorrow is going to look like　-- if you're going to be a successful planner.

So when I made my pass through Eagle Pass, it was easy for me to see the earmarks of the growth to come. Hope had long been interested in Eagle Pass on a personal basis, and I went to her and said, I think you're right about Eagle Pass; I think there are some things going on down there that we generally don't comprehend, so let's keep a focus on Eagle Pass and let's do what we can to help that part of the state get ready for the tsunami of trade that's fixing to occur.

Can I use tsunami? I know it's not popular to use foreign words　-- whatever foreign is.

(General laughter.)

MR. WILLIAMSON: But again, thank you for your hospitality. Thank you for opening your doors and letting us conduct our meeting here in a relaxed and focused manner.

I need to remind everyone that if you wish to address the commission today, we need for you to complete a speaker's card which you can find at the registration table right outside the door. If you're going to comment on an item that's on our agenda, I need for you to fill out a yellow card such as the one that's in my left hand. If you don't want to comment on a specific thing related to the agenda but you have something you want to say anyway, I need for you to select the blue card and complete it.

Regardless of the color of the card, we ask that you try and limit your comments to about three minutes to give everyone the opportunity to speak and to give us the opportunity to finish our meeting somewhat on time, unless you're a member of the legislature, Mr. King, in which case you may take as long as you wish to express your opinion.

At this point I'd like to turn the meeting over to the executive director of the department, Mr. Amadeo Saenz, to my left. This will be Mr. Saenz's first commission meeting in this post so we will ask you ahead of time to forgive Mr. Saenz if he stumbles over himself and embarrasses the entire commission.

(General laughter.)

MR. WILLIAMSON: You're not going to do that, are you? Mr. Saenz will do well. Amadeo.

MR. SAENZ: Thank you, Mr. Chairman, Commissioners. First, before we start, I'd like to go ahead and thank Mario and the employees of the Laredo District for hosting us and for the fine hospitality that you gave us last night. It was good to be able to sit and visit with you all and share some food and break some bread and then talk about what's going on with the department. Mario, you and your people are doing a great job, and we appreciate that.

Of course, our local elected officials, the mayor and the judge　-- I saw him earlier today also　-- and I think, Representative King, you were there yesterday afternoon, thank you very much for the hospitality. And we really enjoy our trips out of Austin because it gives us a chance to see what's happening out there and gives us a chance to learn from the locals as to what the issues are and what the problems are, and sometimes we kind of are able to come up with some solutions as we're there. So thank you very much for the hospitality.

To get our meeting started, I want to go ahead and call up Mario Medina, our district engineer for the Laredo District. The district encompasses eight counties and stretches from Del Rio south all the way down to Laredo. He will lead and present the report from the district, along with local elected officials, and with that, I'll turn the program over to Mario.

MR. MEDINA: Chairman, Commissioners, Mr. Saenz, welcome to the Laredo District and to the great city of Eagle Pass. It's a pleasure for you to be here. I really appreciate you all coming down here and giving us this opportunity

I first would like to go ahead and start by introducing and getting a few folks up here, and I'd like to start off with a man that for the folks he represents, he does an excellent job working to try to solve transportation issues. Mayor, if you'd come up here. Mayor Chad Foster of the city of Eagle Pass.

MAYOR FOSTER: I hope you can appreciate how proud I am to be the mayor of the city of Eagle Pass, and on behalf of the city council and the citizens of Eagle Pass, how proud we are to have the opportunity to host this great event and have you come into our community. We are the best-kept secret on the border.

Carlos Guerra, our reporter for the San Antonio Express, did the tour of Eagle Pass and Piedras Negras, and his tag line on that article was "Safe and Simple." And that's what we feel we are. But at the same time, both towns are booming. My chosen area of endeavor is real estate and you cannot show a big-box user Eagle Pass without showing Piedras Negras, and to date, no one has said anything less than Piedras Negras is the cleanest border town they've ever been in.

We are two countries but we continue to operate as one community. If there's a fire in Piedras Negras, our fire fighters respond to that fire. On April 24 of this year, we had a tornado that hit in Piedras Negras. My first call was to Alcalde Jesus Mario Flores in Piedras, not knowing that that tornado did not respect the border and came into Maverick County. The governor of Coahuila was in Piedras Negras within two hours of that event, helped Piedras Negras with their cleanup. Once they had cleaned up, he brought manpower and equipment into Maverick County to help us with our cleanup. He didn't charge a nickel, and as to this date, FEMA has not paid us a dime.

One of the things that's very interesting is Highway 57 is the only highway numbered the same on both sides of the border, and it's our direct access into the interior of Mexico and our access into the interior of the United States, and the development that we see going on on Highway 57 is just absolutely overwhelming.

Historically, Coahuila and Maverick County have been agriculturally based, but due to NAFTA, we have some tremendous economic development going on, and what that does to the community is that facilitates our young people coming back and we have young pharmacists, young attorneys, young professionals that are coming back into the community and they will be the future leaders of our community.

As we all know, Texas is Mexico's largest trading partner. Ninety percent of the rail traffic that comes into Mexico comes through the state of Texas. Laredo is the largest rail port; Eagle Pass and El Paso continue to go back and forth as the second largest rail port.

Grupo Modelo has chosen Nava Municipio which is 20 minutes from where we stand today to build the largest brewery in the Americas. It's a $1.7 billion investment, and it's hard for me to comprehend the impact that that investment is going to have on our community and our region. Eighty percent of their raw products will be railed in; 20 percent will be trucked in, but when they get in production within two years, they'll be railing out 200 additional railcars of Corona a day.

MR. WILLIAMSON: Of beer?

MAYOR FOSTER: Of beer. That's a lot of beer, Commissioner. It's our challenge to consume it.

(General laughter.)

MAYOR FOSTER: Governor Moreira Valdez, the governor of Coahuila, has made the comment, and rightly so, the State of Coahuila represents 2.5 percent of the population of Mexico, but at the same time, the State of Coahuila is generating 25 percent of the new jobs in Mexico. Trinity [phonetic] Steel　-- we saw their facility yesterday　-- Altos Ordinos [phonetic] which is a steel mill three miles south of Piedras Negras. Trinity has historically imported their product. Now they're fabricating that product in Salinas, Coahuila; they're fabricating rail cars in Salinas. There are wind towers in Frontera which is outside of Monclova.

There's been an article published in one of the Mexico City newspapers where they're projecting within the next 20 years 40 percent of the population of Mexico will be living in the border states due to the job opportunities. That's an additional 50 million people that will be coming to the border states of Mexico within the next 20 years, and that brings a tremendous demand on the border infrastructure.

We mentioned the Camino Real de los Tejas; that's an historic trail. Paso de Francia in south Maverick County right next to Guerrero, that is a prehistoric trail. When Santa Ana went to the Alamo, that is where he crossed. And we're very proud of that. Senator Hutchinson came down two years ago and dedicated that trail as a federally designated trail.

Again, there's a book written, Boomtown U.S.A. by Jack Schultz. Mr. Schultz identified a hundred municipalities with a population of 50,000 or less　-- and of course, I would not make mention of that today were not Eagle Pass included in that book　-- and what he did is he tied together the commonality of these communities. One is they were all previously agriculturally based, and that agricultural base is indicative of high work ethic, strong values, and in these communities we have a can-do attitude; we feel that one person can make a difference.

Again, we'd like to thank you again for the projects that we have ongoing in Eagle Pass and take this opportunity to thank you for the blessing that Mario Medina has been to this district. And we continue to work with Mario and we could not ask for any better than what Mario has done for us in this community.

And again, on behalf of the city of Eagle Pass, we just want to tell you how tremendously proud we are to have the ability to have you in our community today. Thank you.

MR. WILLIAMSON: We thank you for that, Mayor. And members, any dialogue with the mayor at this time?

(No response.)

MR. WILLIAMSON: You don't know, but you won the Peppy last night. The Peppy is an award we give internally for the local official with the shortest welcome to our city, and you were right to the point. You said, "We're glad you're here; enjoy yourselves." That was great.

(General laughter.)

MAYOR FOSTER: And we sincerely are glad you're here and hope you enjoy your stay, and hope that you can appreciate the tremendous vibrance that we see all along the border and then the tremendous transition that's taking place in Eagle Pass and Maverick County as we speak. But again, thank you.

MR. WILLIAMSON: Thank you very much, Mayor, we appreciate it.

MR. MEDINA: And really, I consider the mayor to be the left hand; the county judge is the right hand. Both of these gentlemen, both the City of Eagle Pass and Maverick County, they work together, and it makes my job a whole lot easier. We don't always have that across the state, and I'm lucky in my district because a majority of them do work together. It makes my job easier, but these gentlemen take it to another level. So County Judge Pepe Aranda.

JUDGE ARANDA: Thank you. I appreciate it.

Commissioners, good morning. Thank you for naming that award after me.

(General laughter.)

JUDGE ARANDA: Let me just say, Chairman Williamson, Commissioners Andrade, Houghton, Underwood and Holmes, thank you for making this decision of having this meeting in Maverick County. It is with great honor that we welcome you on behalf of the commissioners court and also on a very appreciative community, and as you can see, a very growing and energetic community that is always working to make things better for ourselves.

Additionally, let me also congratulate you on having Amadeo Saenz as your new executive director. As a South Texan, it makes us very proud. We know that Amadeo has worked very hard for TxDOT for several years already and has earned this recognition and this appointment. So on behalf of the entire South Texas area, I take the liberty to say thank you to all of you.

And to all of you on the commission, congratulations. You know, the great state of Texas is getting greater every day but we do have our challenges: population growth, population shifts, border trade, an $86 billion gap in TxDOT. It really takes creative people like all of you to be able to get things done. But it wouldn't happen without the support of local people like Maverick County and the city of Eagle Pass.

And I will tell you that as we look into the future, this community has already invested quite a bit and it's not afraid to invest into the future. If you take a look at what's going on in this community, it has not just happened on its own. You've seen in the last ten years a brand new international bridge, Bridge 2, Camino Real Bridge, named after the historic trail. In addition to that, we do have this project that you see here, this great new trade center with a vision to be able to host commission meetings or be able to host other types of meetings in this community.

We do have　-- and you saw a part of that yesterday　-- a $103 million water project that is still undergoing a brand new water treatment plant, brand new water distribution system, and in the near future an additional sewer plant on the south side of Maverick County, all of this because we do know this community

can grow, we have faith in what's going on here.

You saw the Colonia paving. We have demonstrated that we can be good partners and not only do we just invest the money into simple paving, but we enhance that with the monies that TxDOT has provided to us. And we look forward, also, to the fact that Amadeo shared with us yesterday that we do have some additional monies coming in in January, an additional $75 million.

In the near future also, I will tell you that we do have a brand new landfill that has just been approved by TCEQ, and that will commence construction in the next couple of months. We do have a 650-bed detention center that is currently under construction, and it will also bring in new jobs to Maverick County and also additional revenue to Maverick County. In addition to that, we have just announced an earmark for a public training safety center where the law enforcement public safety personnel in the region do not have to travel so far to be able to get that training that Homeland Security is now expecting of all public safety and first responders. So we are committed to being able to do different things.

In addition to the things that I've just mentioned, the school district in Eagle Pass has also done a magnificent job in the last ten years: four new elementaries, a brand new junior high, and also a new high school that you see over here to my left and to your right　-- all of this because we do believe in Maverick County, we do believe in our community, and that we know that we have to take control of our destiny within our own hands.

And the reason I share this with you, Commissioner Houghton, is that we're ready to take on the challenge to be able to work with TxDOT, to be able to make a bigger difference in transportation needs. Our challenges for the future continue to be two things: one is transportation, to be able to improve that; the other is education, continuing to improve the education so that our youth, our future can be secured and be able to make it an even better community　-- but not just for us but so that we can have, even better, a greater state of Texas.

Again, on behalf of commissioners court, this entire community, we're very, very proud that you're here, and we want to welcome you in the future. And any time you're here, please don't hesitate to call. Thank you.

MR. WILLIAMSON: Thank you, Judge. Members, any dialogue with the judge?

MR. HOUGHTON: Thank you, Judge.

MR. WILLIAMSON: Thank you very much. We appreciate it, sir.

MR. MEDINA: Last, but not least, I'd like to go ahead and call up the man who really has been quite supportive in our transportation effort here in Maverick County and the surrounding area, and that is Representative Tracy King. Tracy.

MR. KING: Thank you, Mario, and thank all of you for being here today. On behalf of the Texas House of Representatives, District 80, I want to welcome each and every one of you to Maverick County and Eagle Pass, Texas, and the district that I've been so privileged to represent for several years now. There are seven counties in this district and we have a lot of transportation needs, and I've had the opportunity to visit with several of you, particularly Commissioner Andrade and Amadeo, over the years, about those issues, and we look forward to working with you on some solutions that will carry us into the next century, hopefully, and certainly for the next 50 years.

There's not a lot that I can add to what the mayor and the county judge, Mayor Chad Foster and County Judge Jose Aranda, told you about our needs here in this immediate area and throughout this region. They both do that very eloquently. Each and every time that we have the opportunity, they do a wonderful job of representing the city of Eagle Pass and the county of Maverick, and we're very blessed to have capable public officials like them.

But in closing, just let me tell you that it is indeed a historic occasion and a wonderful opportunity for our area that you have chosen to meet here in Eagle Pass this time and please know that we are appreciative of that and certainly aware of the historic nature of it. So welcome to our area and thank you so much, and please call on me personally if there's anything I can do to help you.

And Chairman Williamson　-- as many of you have heard me say　-- I served with you in the legislature, and when I was watching you yesterday, I realized that you haven't lost a single talent, that you were just as good yesterday answering those questions as you ever were on the floor of the Texas House of Representatives. And you certainly carried some pretty big issues while you were there and you did a remarkable job on them, so it's good to be working with you again.

MR. WILLIAMSON: That's kind of you. I appreciate that.

Members, dialogue with Mr. King?

(No response.)

MR. WILLIAMSON: We thank you so much, Tracy. Thank you for your leadership and thank you for the hospitality.

MR. MEDINA: At this point, what I'd like to do is start by giving our district report to the commission.

MR. WILLIAMSON: You were looking at the screen rather skeptically like you didn't think it was going to happen.

MR. MEDINA: Well, we're not sure. Here's the issue: we'd like to go ahead and show a short video and hopefully it's going to work.

(Whereupon, a video was shown.)

MR. MEDINA: Well, sir, I appreciate that. There's a lot of folks that have been involved to provide for this commission meeting and also this video, and at the end of my presentation, if you'll give me the opportunity to go ahead and thank them, I would appreciate that.

MR. WILLIAMSON: Absolutely.

MR. MEDINA: The video went ahead and covered a lot of issues, gave you a lot of information. What I'd like to do is go ahead and detail out some of the things regarding the Laredo District and regarding how we're structured, what we're trying to do with our personnel down here, what we consider to be the biggest challenges we have, along with the proposed projects we believe will alleviate a lot of these issues and meet our five goals.

First, I'd like to go ahead and start by discussing our structure. I was hoping we'd be able to do this without any technical difficulties, but I guess that's not the case.

MR. WILLIAMSON: I want to tell you a funny story on myself.

MR. MEDINA: Yes, sir.

MR. WILLIAMSON: Do you watch TV?

MR. MEDINA: Yes, sir.

MR. WILLIAMSON: Do you happen to watch the series "Shark"?

MR. MEDINA: A long time ago.

MR. WILLIAMSON: Anybody out there watch "Shark"? I'm sitting here watching the film, listening to you and enjoying myself, and I looked through the door and that young man walking away in a T-shirt was standing back against that wall, and for about five minutes I sat and looked at him and said, You know, that's the latest new star on "Shark" the young lawyer they just brought into the series to prosecute certain types of trials. I was sure that's who that guy was because he is a dead-ringer　-- look at that guy, he is a dead-ringer for that actor, even down to the smile. Well, maybe he comes from Eagle Pass and he's here to say hello.

(General laughter.)

MR. MEDINA: Folks, I've been on this job going on 18 months now, and I'm still trying to learn how to be a DE, to be quite truthful for you, and I have a lot of support from the employees to allow me to go ahead and make those mistakes, to learn from them. When I first came onboard, I asked our personnel, our employees to go ahead and figure out what's the right thing to do, do it right, and do it right now, and I challenged them to do that.

We're broken out pretty much with our area offices, and our areas offices are the local folks, they are the front lines. The first area office is our Del Rio Area Office which covers Val Verde, Kinney, and Maverick counties. Our Carrizo Springs Area Office handles Zavala, Dimmitt and LaSalle. And then we have our Webb and Duval counties are covered by our Laredo Area Office.

These gentlemen are those area engineers. They're not the best looking bunch of guys, but they are the face of TxDOT in the local communities. I'd like for them to go ahead and stand up now. Carlos Rodriguez is our Laredo area engineer, Antonio Perea from Del Rio, and David Salazar is out of our Carrizo Springs Area Office. They're not the best looking bunch of guys, but they're there for the folks out there.

And I'll give you a funny story. Carlos, when I first came onboard, he told me: Look, Mario, now that you're onboard, I'm going to have to go out there and do more things and take on these challenges. I've got people now coming up to me asking questions. In fact, one time he was in the line for communion and he got asked by people: Hey, what's going on with this project; what's going on with that project?

Yes, ma'am?

MS. ANDRADE: Mario, I will save you on that one. I will tell you that as I travel this region and I hear all the good things about what these men are doing; they're the best good looking guys in my eyes.

(General laughter and applause.)

MR. MEDINA: Under these folks we have approximately 110 maintenance folks, and I'm proudest of them most because they are out there, day-in, day-out, working to try to maintain and preserve our system. They're making calls out there that before I got here, they felt they would have to go to the district to go ahead and do those things. Now they're going ahead and going out there, and I'll give you a good example.

We had some issues on US 57 that if you came down US 57, if you had come down about three months ago, there was a portion just before you got to La Pryor that was in pretty bad shape. Our folks went out there; they got equipment from the Brownwood District to come up there and patch that roadway and go ahead and make it usable for the traveling public.

A good example is our Cotulla maintenance folks have gone out there and they determined that it was a problem on a bridge abutment after a flood. They went out there and figured out a way to go ahead and shore up that abutment, using some concrete, and they got it in there and filled those voids behind that abutment. If we had gone ahead and designed and then gone to contract to do those jobs, it would have cost us ten times more. So those are just some of the examples of what our maintenance folks are doing down here.

I also want to point out that I've empowered these gentlemen to move forward and make decisions. However, we're not sitting back at the district kind of twiddling our thumbs with our feet on our desks. I've got a good example. Rosa Trevino is our director of construction. She's going out there, day-in, day-out, inspecting construction projects and working with these gentlemen to go ahead and support them with their decisions to make them, do them right, do them right now.

We also have our director of maintenance, Albert Quintanilla, who is working with our maintenance supervisors to go ahead and allocate our maintenance resources. Alma Fermin is our director of administration and she's helping them with personnel issues.

And then Danny McGee, who is our director of transportation operations, who is working with these guys to go ahead and provide the proper traffic signals. Here in Eagle Pass alone, I think we've put up somewhere in the neighborhood of four new signals to help with the movement of traffic in and around here. A good example is the one right here in front of Bob Rogers and 57 in order to let people come into the Trade Center.

I'd like those guys to go ahead and stand up real quick.

(Applause.)

MR. MEDINA: Finally, a man who has really helped me　-- and Amadeo, I know when you were the DE down in Pharr, you had a gentleman named Behrooz, and Beh was your right-hand man　-- I was lucky enough to go ahead and find somebody just like Beh, and that's Mohammad Moabed.

Mo, are you back there?

(Applause.)

MR. MEDINA: Now, he's our deputy district engineer; he's also our transportation planning and development director, so he's in charge of going ahead and developing all of our planning work, all of plans. That's all centralized in the Laredo District under him.

Let's go ahead and move on. Let's discuss challenges.

This is a 2003 NAFTA trade flow map. This shows NAFTA traffic, and as you can see, the majority of that traffic is going up Interstate 35 and that's in 2003, coming out of Laredo. We have US 57 here coming out of Eagle Pass that's got lighter traffic in the neighborhood of about 750 trucks per day. Interstate 35 is carrying over 2,500. And then we have the yellow bands of US 90, 277, along with this portion of 277 down here. We also have this green line here which indicates US 59 and you can see that movement.

Now, based on our latest study, if we don't do anything, this is 2003, this is what the colors look like in 2030.

MR. WILLIAMSON: And the colors, for those who can't see, green means less congested, blue means a little more congested, red means the most congested?

MR. MEDINA: It starts off with yellow being the least, moving all the way up to this purple which is the most. In 2030 we're looking at over 15,000 trucks per day, just for NAFTA. This doesn't include the normal population growth traffic that we expect, the vehicular traffic, this is just NAFTA. So you can see this 15,000. You notice here that US 59 is now blue and it's carrying over 2,000. Now you see 277 went from yellow to green, along with US 90, 277 up north went to green from the yellow.

This is what concerns us the most regarding what's happening down here, but we're doing things about it. You realize some of the major mobility projects we have going on. The first one is the Port-to-Port Corridor. The whole purpose of this corridor right now is to provide for a truck-only toll facility which would connect the Port of Laredo with the container port of LaQuinta for the Port of Corpus Christi, to provide for those movements, along with providing that leg from Laredo to Trans-Texas Corridor 69.

We also have Trans-Texas Corridor 35. Now, 35 for our district, a lot of the proposed improvements, based on the preferred alignment will be handled within or around existing 35.

Then finally, Ports-to-Plains. Ports-to-Plains will come up from Corpus and head north through Carrizo Springs, Eagle Pass, Del Rio and points north.

Let me go ahead and discuss some of the things we have to do in order to provide interconnectivity within the Laredo District. Now, as you all know, the major gorilla, from a highway standpoint, is Interstate 35. We spend approximately 10 to 15 percent of our current preservation dollars on Interstate 35. Then we have these connections or these roadways. The main ones are our US highways. A good example here is US 59 and then State Highway 44 that connects to Corpus; US 83 goes across our district but here at Carrizo Springs it connects with 277 and goes out to Eagle Pass, Del Rio and points north.

Now, some of the things we are trying to do that we'd like to go ahead and look at. It's going to be, based on our current cash flow, very difficult for us to move forward with trying to go ahead and do four lanes on 277 or 83, or 59, for that matter. But what we are trying to do right now is use our rehab dollars smartly and go ahead and use them to provide more safety and enhance somewhat the mobility by going ahead and doing what we call Super 2 designs. Super 2 designs, we're requiring more passing lanes through these roadways, and that's the plan.

We've already done it for 59 and 44 and those projects are about to be completed. We're currently working on 57. Frio County which is right in here, they've already gone to construction; this portion of 57 went to bid this month, and you should be approving that today; and then the remainder coming into Eagle Pass, we hope to go ahead and get that to bid in February.

We also are working with our rural transportation providers in the area, approximately $2 million, especially in the Webb and Dimmitt County and Del Rio areas.

We have our crossings and that's where it really all starts. With our crossings we also have what are called our Border Safety Inspection Facilities. We have yet to build one; we've been at it for quite a while. I would say that the one at Camino Colombia down in Laredo will go to bid this December. The Camino Real, we just are about to conclude the environmental process with that and should have it to bid, we're hoping, December of '08.

And then the World Trade Bridge　-- for those of you commission members that have been here the longest, you probably know some of the situations regarding that BSIF. We have gone ahead and are working currently with the City of Laredo. We believe we have found an alternative that makes sense to all the stakeholders, and we're hoping to move on that and get it to letting by '09.

Let me go ahead and now discuss our projects that we have in the works. Back in April you approved a pass through finance deal for the Del Rio Outer Loop for a two-lane facility, along with this connection into the Air Force base. We anticipate going ahead, if things work out and if Mr. Saenz is willing to sign it, hopefully we can go ahead and execute that agreement by the end of the year. We also right now are working on the environmental process to see if we can widen US 90 to a four-lane facility.

Down in Laredo, we are experiencing a lot of congestion along US 83. As you can see, right now there is no true north-south corridor for Laredo. Right now you're down here south, you go up 83 through a lot of traffic signals, come into downtown Laredo or Old Laredo and through more traffic signals before you're finally able to get on 35 to head north. We've had tremendous growth in south Laredo so what this will provide is a relief route for 83, and we are in the works for that. We've run into a hangup regarding right-of-way acquisition but we believe we've come to a point now where we've worked that out and hopefully we'll get that to bid September of '08.

MR. WILLIAMSON: Mario, are there other plans to extend that golden line further north to 35?

MR. MEDINA: Well, let me get to that. You see right now this little line right here, that's the existing Loop 20. Now, Loop 20 right now really doesn't have any interchanges other than one we're building right now at 59. In December of this year we're going to build another interchange here at 359 and the loop, but the loop currently goes down this way. What our plans are is to really go ahead and give this portion of the loop to the city, take this on system, and this will be the full loop around Laredo.

What we're trying to do right now, using our innovative tools, to go ahead and look at possibly tolling the main lanes on here, the interchanges, tolling those main lanes, along with going ahead and looking at doing a transportation reinvestment zone for the full loop. And we're currently in discussions right now with Webb County and the City of Laredo on that.

MS. ANDRADE: Mario, is that one of the projects that's being considered perhaps as an RMA project?

MR. MEDINA: Yes, ma'am, that is.

The other big thing, both the city and county have gone ahead and they're working together to build a fifth bridge down south, somewhere in this area. The location has yet to be determined, but they are working together to determine that. Now, once that bridge is built, I've already explained to them that we really can't put that traffic on 83, that really that main connection should go all the way to Cuatro Vientos, or to our Loop 20.

Now, the outer loop which is here, and I envision that by us taking it this far north that really we would go ahead and hit our toll road up here that connects to Camino Colombia, and you notice that our full outer loop would go ahead and connect all the international bridges.

MR. WILLIAMSON: I'm just curious, why would we want to build an inner loop and outer loop both?

MR. MEDINA: Well　-- and here's the issue　-- due to the current growth and the development along this portion of the loop and if this bridge becomes a commercial bridge, it will be very difficult to have all these trucks going back and forth up here. The outer loop really would serve as a truck route, along with going ahead and providing that connection to those major corridors that we're talking about which is Trans-Texas Corridor 69, Trans-Texas Corridor 35, and that Port-to-Port.

So again, there's no money for it. It has to be done through innovative funding, and it's probably going to be a toll and we think it's probably going to first start off as a truck route, or a possible rail loop. So we're kind of developing this outer loop for that. We've got two proposed rail bridges, we're not sure which one will go first. The city and the county are going with this one, the folks on the Mexican side, the Tamaulipas side, would prefer to see something south. So that has to be played out.

And now Eagle Pass. As I mentioned earlier, we're working on that US 57 Super 2. We also are going to work on a two-lane outer loop around Eagle Pass. We're currently working with the county judge to go ahead and once this is built　-- well, prior to it being built, go ahead and develop some type of transportation reinvestment zone so they can go ahead and we can figure out a way to fund the additional two lanes because we're only going to build two. Our initial thought was to build it to four.

MR. HOLMES: Is that $150 million for two lanes or four lanes?

MR. MEDINA: Actually, it's what we have authorized. Now, whether we get it authorized or not, actually we think it's going to run to the neighborhood of about $80- to $90 million, when it's all said and done, for the two lanes.

And then solving that rail issue. We have our railroad overpass. I was really hoping to have a ground breaking yesterday on this. I am still awaiting a railroad agreement from Union Pacific on the matter. We hope to get it within 30 to 45 days. Once that's done, we will release our contractor to work.

MR. WILLIAMSON: Oh, good, we'll have another reason to come down here.

MR. MEDINA: Yes, sir.

MS. ANDRADE: I'll hold you to it.

MR. MEDINA: And then we have our FM 1021 railroad overpass in the southern portion of Eagle Pass. We hope to go ahead and get that under construction here in December of '08. When both of these overpasses are completed, Eagle Pass will be served by three overpasses: one on the north end of town, one on the south, and then one central on US 57. Will this ultimately solve the issue? If Corona keeps moving beer and their market grows, we may be having to look at some other things, either building more or looking at maybe getting the rail out of Eagle Pass, or the FRA will not allow for the air brakes to happen within the city limits of Eagle Pass and doing that outside the area.

MR. WILLIAMSON: The current pass through agreement we're working on, where does it fall on that blue line?

MR. MEDINA: Right here. The railroad?

MR. WILLIAMSON: The pass through toll, the loop.

MR. MEDINA: The pass through toll loop is in Del Rio, not in Eagle Pass.

MR. WILLIAMSON: I thought we had a pass through toll project working in Eagle Pass.

MR. MEDINA: No, sir.

MR. WILLIAMSON: That's the one you say is coming. Okay.

Mario, do your local community leaders understand that the source of our pass through repayments back to them?

MR. MEDINA: Yes, sir.

MR. WILLIAMSON: They understand that that is our free cash flow from our other operations? And if our free cash flow is restricted by legislation, that means ultimately we can't do any more pass through tolls?

MR. MEDINA: Yes, sir.

MR. WILLIAMSON: So they realize that they have a vested interest in what happens with the private equity toll legislation?

MR. MEDINA: Yes, sir. And the ones that we have in the works, I've pretty much told them they're no-go right now.

MS. ANDRADE: Mario, I know we had started the discussions of an RMA. Have we made any progress?

MR. MEDINA: A little bit. We're still discussing it with Del Rio and Eagle Pass. I can't speak for the county judges but I believe they're willing to discuss it, so it's just a matter of getting them in the room, I think.

MS. ANDRADE: But if I remember correctly, we've been discussing it now for at least two years. We had a workshop?

MR. MEDINA: Yes, ma'am. But I haven't had a workshop with both entities in the same room yet.

MR. WILLIAMSON: It's kind of like a marriage, Hope, you know, you've got to negotiate it a long time to be sure it works out.

MS. ANDRADE: Yes, but I've been working at it for a long time.

(General laughter.)

MR. MEDINA: I've got two more slides left, and that's achieving our goals.

Reducing congestion. The way we see it in Laredo, we're going to have to use our innovative funding tools, there's no way around it. We've got to go ahead and we're developing new corridors. We're looking at utilizing truck-only corridors which is kind of new. And then utilizing what we call our vehicle incident management plan　-- this is done in our metropolitan areas; we're trying to go ahead and implement it in Laredo　-- and that's when we have an accident on the highway, going ahead and getting that cleared. Right now, a lot of times we have an accident on Interstate 35, the police will get out there and they fail to call us to help with the cleanup and it has a tendency to just shut down lanes. So we're working on that.

Enhance safety. Again, I'm looking at the Super 2 more and more; looking at going ahead and upgrading our safety devices and widening the structures on our US highways especially; completion of those Border Safety Inspection Facilities; and construction of railroad overpasses. Eagle Pass has an issue, Laredo has got issues, Del Rio has got issues, and I even have issues in small towns outside of the area regarding railroad overpasses.

And we want to go ahead and effectively utilize our safety programs, things like our Click-it or Ticket. Right now we recently had an accident regarding a teenage boy that was coming from his high school and crossing US 83, he got hit. Currently he's in San Antonio, we wish him the best. But he wasn't going ahead and using the existing crosswalks there. So we're trying right now to educate a lot of our high school kids on crossing the street.

Achieving our goals, expanding economic opportunities. Those new trade corridors that we're working on; we want to increase our capacity on our initial bridge connections. Right now I'm working with the City of Laredo to go ahead and provide for more toll booths at their plaza through some federal dollars that are available. We're doing the same here in Eagle Pass for the Camino Real Bridge. And working with our local business leaders and officials on those economic opportunities.

Improve air quality. To be quite frank, we really don't have an air quality issue, but if we don't do something, it will become an issue. So we're going to work with our transit partners, explore alternatives with our partners to reduce congestion. And then finally　-- which is something that we need to work better on　-- we need to increase our usage of alternate fuels within our own fleet here in the district　-- we're not there yet.

And then value of transportation assets, utilizing our existing right of way for expansion. A good example is Port-to-Port, US 59, I think we've got some room there. There may be some opportunities there for us to go ahead and use that. Development of parallel corridors, and again, that planning for the multimodal options, for rail.

Now, we didn't do this overnight; we've been working on this for about six months. And to tell you the truth, I did the best to stay out of it because I probably would just make it worse. There's been a lot of folks that have spent a lot of time to go ahead and provide for the commission meeting and also preparing for this presentation, and I'd like to go ahead and thank those folks.

The first thing I'd like to do is thank the folks up front, all these folks up here who assisted you with driving, luggage, providing you rides to and from the hotel, working the front desk. They've been a great help. I also want to go ahead and thank for yesterday's dinner, Alma Fermin and Miss Rosa Trevino, who is not here, along with Sammy Salazar who is our safety officer who right now is currently in Austin working the Truck Rodeo.

Melissa Mata and her staff for helping us with the presentation I just gave you. Alberto Adalpe and Rolando Guerra, they went ahead and worked on our district video. And last but not least, I would like to go ahead　-- if I can get him in front of the camera　-- Raul Leal, who has spent many sleepless nights the last week trying to put all of this together, and he's the one that was the brains behind the video presentation.

MR. WILLIAMSON: Thank you.

(Applause.)

MR. HOLMES: How many miles of Super 2 are you working on in your district?

MR. MEDINA: Well, with the 59/44, I believe it's probably 100 miles that we're about to complete.

MR. HOLMES: And those are on 59 and 44?

MR. MEDINA: On 59/44.

MR. HOLMES: And so do they take you all the way out to the edge of your district?

MR. MEDINA: Yes, sir, all the way to the good city of San Diego. We also have gone ahead and we're working on the portion from 83 to 57 which is about 16 miles, and then we have the remainder that has to be done. Then what we hope to go ahead and move forward on next is go ahead and work on the portion from 83 to 277 in Del Rio, and that will probably take us, based on current rehab dollars, about five to six years to do that.

Now, Mr. Saenz, I believe the thoughts are to provide more money for preservation, and then we'll be able to do it sooner.

MR. HOUGHTON: Do the folks in Laredo/Webb County have the opportunity to add that fee on top of vehicle registration? Were they part of that bracketed bill?

MR. MEDINA: No, sir. It was just Hidalgo and Cameron counties, and if I remember, the way that worked is the legislature carried it initially it was just going to be for Hidalgo County, and Cameron County found out about it and they kind of piled on. I kind of mentioned that to our local officials down in Webb County about that possibility but they had other legislation they were trying to go ahead and deal with.

MR. HOUGHTON: Are they understanding in this part of the state the shortfall in cash? Are they understanding, especially in Webb County with the trucks, with your initiative on loops and outer loops?

MR. MEDINA: To be quite frank with you, I think they understand the issue but they feel　-- and because it's happened to them before　-- when they've gone into an issue, somehow, some way there is an earmark that provides what they need, and they keep thinking that the federal government　--

MR. HOUGHTON: The Road Fairy has shown up and sprinkled fairy dust?

MR. MEDINA: Well, yes. Their congressman is going to go ahead and take care of it. So we're still trying to work with them on that.

MR. WILLIAMSON: Well, let me ask you something, Mario. What would happen if the commission wasn't willing to wait on the Road Fairy and we just went ahead and said we're going to build the loop as a toll facility ourselves?

MR. MEDINA: Actually, sir, based on what I've already explained to them, I think they don't really have a problem with it. And the reason why is because right now if you look at Loop 20 itself, you have stop lights and people will still have that free alternative to go through that stop light. So we think there is a lot of potential that we could go ahead and they'd be willing to take that on.

MR. HOUGHTON: How much work has been done on that as far as the viability of a toll facility?

MR. MEDINA: We're still waiting for our initial Level One toll numbers to come down from TTA.

MR. WILLIAMSON: It's almost like we should be moving in that direction anyway. I mean, if that's what's going to have to happen anyway and if they're not comfortable doing it themselves, maybe it's just the opposite, Ned, of the Harris County and Dallas County view which is: We do want to do it ourselves, stay out of our way. Maybe this is just the exact opposite: We don't want to do it ourselves, please come build.

MR. MEDINA: But I am trying to work very closely to go ahead and explain to them that by them taking the lead, those resources will stay within the area, they will be making the decisions on those resources.

MR. HOUGHTON: You're talking about the formation of an RMA.

MR. MEDINA: Yes, sir, very much so.

MR. HOLMES: But Mr. Chairman, even if somehow the Road Fairy came and earmarked a portion for that loop, it would just be a portion and you'd still need a source of additional funds for it.

MR. WILLIAMSON: A staggering amount of additional funds.

A couple of things that occurred to me, Mario, and this isn't actually specific to you, but I think, Amadeo, specific to all of our border with Republic of Mexico districts. I think in the future our presentations need to include the inland part of the Republic, at least as far as the transportation grid goes. Because one of the things that has been driven home to me in the last couple of years, we can plan until the cows come home but if we ignore the population and the traffic patterns on the other side of the border, we're not really planning, we're just kind of playing. And it would help a little bit to be able to see these transportation grids on the other side for maybe 20 miles in. That's a general observation.

A specific question on the future loop around this community, it seems that it could never be built cheaper or faster than soon, but you've always got the problem of how you figure out the traffic flow in order to get the money to do it if the local community doesn't want to put the money up themselves. And if we don't cure our equity problem, we're not going to have the state money to build it.

I think it might be nice to have a dialogue with local leadership　-- not today but after we leave　-- to begin to think about whether or not they could support a concession or a public-private partnership if we could convince somebody to come in and take the long term view about Eagle Pass. I think that would be worth exploring.

MR. MEDINA: Yes, sir.

MR. HOUGHTON: Another question, Mario. I attended a presentation on international bridges. In El Paso, the analysis is that they would have to add five new bridges by the year 2030, double the number of bridges they have today. Is there any analysis on that in this part of the world on how many international bridges? I'm piggybacking the chairman talking about looking on the other side of the fence.

MR. MEDINA: I think that's an excellent idea, it's something for us to look into. The issue that we run into　-- and the NAFTA study kind of gives us an idea, but we still haven't really looked at those points of entry and what it would take to go ahead and improve them or to build additional structures. So those are things that I think normally we've left that to the local folks, to the cities to handle, and maybe that's not what we should be doing.

MR. WILLIAMSON: Out of curiosity, does the flow of freight through Eagle Pass originate in different places in the Republic than Laredo, or are they competing for the same origination points?

MR. MEDINA: Mayor, do you want to answer that before I go ahead and give my spiel?

MAYOR FOSTER: Highway 57 is the last undeveloped trade corridor into Mexico and that's why you see such tremendous growth along the Highway 57 corridor. That is growth that's underway as we speak, but due to congestion at the Port of Laredo, we are seeing some traffic that would go to Laredo is coming to the Port of Eagle Pass. Eagle Pass or Highway 57 would historically pick up anything west from Torreon, Coahuila. Then you get to Saltillo and you have the decision for Mexico City or the coastline, Manzanilla, that traffic has a choice of going to the Port of Laredo or the Port of Eagle Pass, and we do see some overflow from Laredo is coming, to a degree, to the Port of Eagle Pass. But again, long term we're seeing tremendous development along the Highway 57 corridor itself in the State of Coahuila.

MR. WILLIAMSON: Well, does 57 on the Republic of Mexico side terminate at Saltillo, or does it go on to the west coast?

MAYOR FOSTER: It goes on to Mexico City.

MR. WILLIAMSON: Mexico City, not the west coast.

MAYOR FOSTER: No, sir. It goes to Mexico City, and then from Mexico City you get to the west coast.

MR. WILLIAMSON: So we have to be somewhat sensitive to the fact that the Laredo industrial complex and the Eagle Pass industrial complex at some point are going to be competing for some of the same traffic.

MAYOR FOSTER: Yes, sir. And of course, in that competition, Eagle Pass will prevail.

(General laughter.)

MS. ANDRADE: Mayor, I'm trying to get us to work together, not compete with each other.

MAYOR FOSTER: I was not the one that brought the issue up.

MR. HOUGHTON: Competition is good.

MS. ANDRADE: I realize that, but you have to understand that first we have to start working together, but I think there's going to be enough business for everyone.

MAYOR FOSTER: The issue is not enough business, the issue is there's more business. The activity is realistically overwhelming to the border communities.

MS. ANDRADE: We just need to be preparing for it.

MR. HOUGHTON: Amadeo, the judge or anybody can answer this question. Do we have an analysis of the requirements or the proposed requirements for international crossings? We talk about our 2030 plan, how many roads and lane miles and $86 billion gap, but when I saw that analysis by the consultants on the El Paso issues regarding five new international bridges by the year 2030 that are going to be required to handle traffic, do we have that kind of analysis?

MR. SAENZ: We don't have an analysis on a statewide basis. Some of the areas, like El Paso, have looked at the crossing needs in and around El Paso and they said, Based on this, this is what we need. For example, down in the Rio Grande Valley, as those communities are looking at what's coming across at Hidalgo and at Pharr, they've identified that they need additional crossings and they've been working through the planning process to move those projects forward. Same thing in Brownsville. But we have not looked at anything as a whole.

Now, we have coordinated with Mexico, the SET, Secretaria de Economica y Transporte, and shown them what our plans are with respect to Trans-Texas Corridor and the major corridors that are leaving the border so that we can have a coordinated approach to be able to make sure that we are planning improvements on both sides.

In Laredo, for example, the State of Nuevo Leon has been working very closely with Webb County on the development of that rail corridor down into Monterrey, as well as a Trans-Texas-like corridor that would go from Colombia down into Monterrey. Again, that would compete with traffic that comes from Monterrey that comes into Laredo proper, but it's a different Mexican state.

MR. HOUGHTON: Well, all of these transportation assets, these bridges, Mario, attached to the state highway system. So the chicken is there, we've got the state highway system that's going to have to be improved to accommodate these bridges, it seems like. We are an authority to approve bridges　-- if that is an accurate statement　-- if we're an authority to approve bridges, it seems to me there would need to be more coordinated planning on where these bridges　-- I understand there's political aspects to it and business aspects, but from a transportation standpoint, what makes sense on these international bridges.

MR. WILLIAMSON: Judge, did you have something you wanted to say?

JUDGE ARANDA: I just wanted to add another factor to when you're talking about where the bridges are going to be built, and when you take a look at how much traffic there is at each port. A lot of it has to do not necessarily with the trucking companies or the roads, it has to do with custom house brokers and where they are from. The custom house brokers are the ones that pretty much will dictate the flow of traffic and whether it's going to be here or Laredo or wherever, and chances are right now that it's in Laredo.

MR. HOUGHTON: Is it a path of least resistance?

JUDGE ARANDA: No. It's a matter of how much money the custom house broker is making.

MR. HOUGHTON: What do you mean making? What's the difference if they cross it here or cross it in Laredo?

JUDGE ARANDA: His fee for getting that done. In other words, if I'm a custom house broker and I'm housed out of Laredo, for me it's easier to bring everything to where my offices are at instead of sending it through the Port of Eagle Pass.

MR. HOUGHTON: Oh, sure, okay.

JUDGE ARANDA: That is an issue. Another issue is the logistics companies. You get them up on the Canadian border, the Port of Windsor, Ontario, logistically speaking, once that port becomes saturated, they look at alternatives, and the Port of Eagle Pass has been historically an alternative to the Port of Laredo. We're just seeing, due to the particulate, due to environmental issues, wait time, we're seeing some of that traffic and that would come through Coahuila, that has gone historically to Port of Laredo, is coming back to 57 and to the Port of Eagle Pass.

MR. WILLIAMSON: If there were direct high speed truck lanes on 57, what is the probability　-- and maybe the answer is we don't know and we need to study this　-- but what would be the probability that freight inbound Dallas or San Antonio would almost automatically select the Eagle Pass entry point and freight eastbound Corpus Christi into Houston would select the Laredo gateway? Has anyone thought about those concepts?

MAYOR FOSTER: Inbound, just off the top of my head, would be looking at Highway 35. That's just a direct shot into the Port of Laredo. Highway 57, logistically speaking, it's somewhat challenging from the Port of Eagle Pass to a connection with 35.

MR. HOLMES: But what about from Eagle Pass into the point of origin or destination in Mexico?

MAYOR FOSTER: No, it's developing tremendously. You're getting inbound traffic. The supplies going into Mexico　-- again just using Modelo as an example, 80 percent would be railed in, 20 percent will be trucked into their location.

MR. HOLMES: Their location is going to be where?

MAYOR FOSTER: It's in Municipio de Nava but it's 20 minutes south of Eagle Pass.

MR. HOLMES: In Coahuila?

MAYOR FOSTER: Yes, sir, in Coahuila. As we speak, a lot of the rail traffic that's going inbound is grain, outbound is automotive. I was invited by the governor of Coahuila to his state of the state address which was Monday two weeks ago, and he addressed the infrastructure needs for the State of Coahuila to be able to keep up with this accelerated growth. Again, looking at 2.5 percent of the population yet generating 25 percent of the new jobs, Coahuila is challenged. Within the next two years, Coahuila will be importing labor from other states in Mexico and the projections, again, coming out of Mexico City is within the next 20 years 40 percent of the population will be on the border states due to the economic opportunities for that labor force in Mexico. So there will be a migration of somewhere in the neighborhood of 40 million people to the border states.

JUDGE ARANDA: And just to add a little bit, I guess what I get from the commission here is that you're looking at how to be able to spread some of that traffic, and those are thoughts that, I guess, in the last ten years we have been discussing with previous commissioners and chairmen, and how to be able to do that. The issue that I just brought up about custom house brokers, it's a very real one, and when we talk about the politics of importing/exporting, that would be a great solution where you don't have to invest so much money and just keep on pouring more money to one area, be able to spread that out and get the support of different communities to be able to do that.

But I think it's an issue that really has to be studied. A lot of it has to do with state governments in Mexico because they get a fee out of everything that goes through their ports also, so there is a lot of lobbying going on there, and if you could study this whole process, it would really make a big difference.

And correct me if I'm wrong, but our truck traffic, as compared to, let's say, five years ago, has not really grown or it's actually gone down, and we've got Customs here.

MAYOR FOSTER: It's gone up.

MS. CANALES: The truck traffic has been on a steady increase but the passenger vehicles has been on the decrease.

JUDGE ARANDA: But there's still a lot of area for growth when it comes down to truck traffic.

MAYOR FOSTER: Now, one of the issues on the truck traffic due to the size of the Port of Laredo, the inspection by DOT and DPS is not as extensive as it is in the Port of Eagle Pass. At the Port of Eagle Pass, DOT and DPS inspect 100 percent of our commercial carriers, but due to the overwhelming volume of commercial activity at the Port of Laredo, the inspection at that port is not as comprehensive as it is at the Port of Eagle Pass. And some of the trucking companies, if they have an issue with their equipment, they're much better served to go through the Port of Laredo because the odds are they're going to get through. At the Port of Eagle Pass, due to 100 percent inspection, well, they know if they're in violation, that violation will be picked up. And that's really good long term because we have not seen the issues at the Port of Eagle Pass that we've seen at other ports due to that 100 percent inspection.

MS. ANDRADE: And Mr. Chairman, I actually asked for a study to be done on the international crossings and a plan be developed a couple of years ago, but it didn't get anywhere. So maybe now that we've brought this back up again, we may want to pursue it.

I will tell you that a month ago I was in Mexico City and did meet with the sub-secretary of Transportation and they're very interested in opening communication. President Calderon has made transportation a priority for his country and they're just waiting to be invited to meetings where both countries can plan and improve also their quality of life and advance economic opportunities in the country.

MR. MEDINA: One of the things that we want to echo is really it's a political/business issue with the custom brokers. We have, I think, an antiquated system that we're dealing with with the states over there on the Mexican side regarding movement of trucks across. A good example, down in Laredo, if you go ahead and get anywhere near an international bridge between the hours of two and eight o'clock at night, you aren't getting out any time soon, because at two o'clock that is when the paperwork is received for that trucker to go ahead and move forward. With the customs brokers, we've been in discussions for years trying to get them: Hey, is there any way you can go ahead and distribute that truck traffic during the day. And they can't because of that custom brokers issue.

MAYOR FOSTER: And if I may, I want to reiterate that is an issue at all ports. The trucking company is there at the port ready to go but he can't until the brokerage house gives him his paperwork. There's peaks and valleys in the daily flow, there's no contiguous flow. If it were laid out over the time of operation, it would be very much more smooth, but the trucking companies are there waiting on documentation so that they will be able to facilitate that crossing. So you have backlogs at times of day, but then, by the same token, there will be voids in commercial traffic.

MR. HOLMES: And they can't pre-clear that?

MAYOR FOSTER: Well, there's some programs in place that are being tweaked, as we speak, that it will be all electrical transmissions, and that's in the process. But as we speak, you see peaks and valleys in the daily flow due to the paperwork. Here they come and they all ball up at ten o'clock to twelve o'clock. The bridge is basically vacant between 8:00 and 10:00 and that's a matter of paperwork. But that's being worked out with some technological advancements at all ports.

MR. MEDINA: Any other questions?

MR. WILLIAMSON: Members?

MR. HOLMES: It's been very interesting.

MR. WILLIAMSON: It was very interesting and very complete and very thorough.

MR. MEDINA: One thing I want to finalize by saying there's been a lot of talk Mario has done this, Mario has done that over the last two days. I had very little to do with it. I'm just the guy who's representing the folks in the back, and all 274 employees that we have in the Laredo District, they're the guys making it happen. So I want to let you guys know that's where the praise should go.

Appreciate being here, we stand ready for the challenge, and we'll do our best to meet our goals and provide the best transportation system for this great state. So thank you.

MR. HOUGHTON: Thank you, Mario.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Members and participants in the audience, I think at this point we might take a ten-minute break, let everybody get caught up and kind of catch their breath. So we'll be back in here and start back up at 10:50.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We've returned from our brief recess. The first action item on today's agenda is the approval of the minutes of the regular and special meetings held September 27 and the special meeting we had in College Station on October 16. Members, the draft minutes are in your briefing materials. Is there a motion?

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: There's a motion and a second to approve the various minutes. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries, minutes approved. Thank you, members.

Mr. Amadeo, please proceed.

MR. SAENZ: Again, thank you, Mr. Chairman.

The next item, item number 2, deals with Toll Projects. There are two items under item 2. The first item is in Tarrant County and it will authorize the issuance of requests for proposals for a very important corridor in Fort Worth, locally known as the Funnel, or the DFW Connector, and Phil Russell will present that item.

MR. RUSSELL: Thanks, Amadeo. Good morning, Commissioners and Amadeo and Roger. For the record, I'm Phillip Russell and I'm director of the Turnpike Division.

As Mr. Saenz just commented, the agenda item before you is an important project for that north Dallas Metroplex area, Dallas-Fort Worth. Amadeo is right, when I was up there in the late '80s and early '90s, it was called the Funnel and now it's the Connector. It represents a very complex area for that mid cities area. It's a confluence of several different roadways that come into play, primarily State Highway 121, State Highway 114. So the project would be for the reconstruction of that very complex interchange area, some additional managed lanes on the 114 element of the project.

If you'll remember, last year we went out for request for qualifications. We received four teams and we short-listed three of those four teams. So the agenda item before you, if approved, would do two things: first off, it would authorize us to go out to detailed proposals for those three teams; and it would also authorize the use of a stipend for those unsuccessful proposers. The stipend amount for this project would be up to $500,000.

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

MR. WILLIAMSON: Members, you've heard the staff's explanation of this minute order. What questions do you have for Phillip or what dialogue do we need to have?

MR. HOLMES: Phil, in the last two lines of this it says, "Other facilities to the extent necessary for connectivity." Do you have an idea about what those are?

MR. RUSSELL: Commissioner, those are kind of words of art, a kind of catch-all. It does relate back to the statutory language that gives us the ability to work on the project, but also any other connector facilities that a developer might suggest in their proposal.

As an example, on State Highway 130 there in the Austin area, the project itself might be just on State Highway 130, Point A to Point B, but we want to keep it flexible so that different developers can come in with their ideas on how they might build and finance the project. So we would entertain ideas of what happens if we could build a little piece of US 79 which is a connector to 130.

So generally, that's the idea on all of these, it's generally a catch-all, and this project is no different.

MR. HOLMES: But there are not specific ones other than the ones shown on the map that you already know about?

MR. RUSSELL: No, sir, not that I'm aware of. We'll see when those proposals come in.

MR. HOLMES: Are these subject to market valuation?

MR. RUSSELL: The Funnel I believe is exempt, isn't it?

MR. SAENZ: This one was exempt from the market valuation. It was an ongoing procurement that was exempted in 792. In addition, Commissioner, as the project is developed and there could be some access and local roads that need to be connected, this phrase here will allow us the opportunity to be able to go out there and make those connections so that we can ensure connectivity of the whole interchange.

That's some of the other words that are put into this thing that allows us and gives us the authority to be able to make those connections that are needed on those minor streets.

MR. HOLMES: Amadeo, excuse me. I was being reprimanded for not having my microphone on and I didn't hear the first part of the answer about 792.

MR. SAENZ: This project is exempt from 792, one of the exempt projects. It was already an ongoing procurement considered under managed lanes, so we don't have to go through market valuation.

MR. RUSSELL: But again, just to re-emphasize, Commissioner, we don't know right now what projects would be those other connected facilities, we'll wait until those three proposals come in. And every one could be a little different; each one will have their own idea of critical connector projects.

MR. HOLMES: Thank you.

MR. WILLIAMSON: Other questions of staff or other dialogue, members?

(No response.)

MR. WILLIAMSON: Okay. Do I have a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SAENZ: Item 2(b) is in Travis and Williamson Counties, Commissioners, and this is the acceptance of the General Engineering Consultant quarterly progress report for the CTTS project in the Austin area. Phil.

MR. RUSSELL: Thanks, Amadeo. Again, this is the quarterly update; it covers the period from June to August; it's the companion to the report that James will be giving here in a few minutes.

Just as a general prognosis, the project continues to move forward. The project as of the end of August showed that we're $373 million under budget and still making good progress. The report, of course, since it only goes through August 31, showed that we're making good progress on Segment 3. I drove on Segment 3 going to the airport this morning, so it is open. We opened it on September 6 or 7. It's outside the auspices of this report but it is open.

Now, if you'll remember back to my last update which was probably about July, I guess, I mentioned that Segment 4 was struggling, from a construction completion standpoint, due to some weather issues and the lawsuit on 45 Southeast, and I promised you all that we would come back, get with the district and come back with a time line or a month when we thought the Segment 4 would be completed. The general engineering consultant, working in concert with the district, has done that, they've analyzed any sort of schedule delays on Segment 4.

And I should have explained, Segment 4 is that piece from State Highway 71 going around the south of the airport all the way down to 183. But they've analyzed the effects of the wet year that we've had, as well as the lawsuit on State Highway 45 Southeast, and they anticipate that this segment will be open in April of next year. If you remember, originally in the bond indenture back in 2002 we'd estimated the project would be open in December, so that's about a four-month delay, and they feel comfortable, weather permitting, that they will be able to make that April time line for that southern piece of State Highway 130.

MR. HOUGHTON: Is that going to impact the perceived savings to date, anticipated savings to date?

MR. RUSSELL: I don't think so, Commissioner. I don't anticipate it will affect that $373 million. That number will change, of course, as we finalize our condemnation and right-of-way acquisition process for those remaining parcels, so it will adjust a little bit. I would not anticipate that number being affected greatly by a four-month delay on the project.

MR. HOUGHTON: In the last issue on here it talks about LSI, inability, contractual substantial completion date. Are there some issues with LSI as to bumps in the road?

MR. RUSSELL: Well, you mean as far as completing it in April?

MR. HOUGHTON: Period.

MR. RUSSELL: Well, I think as to December, we'll certainly have to sit down and visit with LSI and look at what the original schedule was and then see what the effects, if any, were from a weather delay or possibly from that lawsuit on 45 Southeast, and we are sitting down and we'll have that discussion.

As to April, do you see any bumps in the road between now and April, in visiting with the district, I'm very confident that they can make that April completion date, unless we get that uncommonly wet year like we did this year, and then it could slide a bit further.

MR. HOLMES: Phil, I don't want to count our chickens before they hatch on this $300 million of savings, but just on a process question. What happens to those savings? Who benefits from those? We had partners in this deal from Williamson County and Austin, et cetera, that put $500 million total in it. Assuming that there are some savings at the end of the day, where do those go, and who bore the risk if there had been an overrun?

MR. RUSSELL: Mr. Saenz, do you want to handle that or do you want me to?

MR. SAENZ: Go ahead and I'll add to it.

MR. RUSSELL: The breakdown on that $373 million, there's a percentage of it that was attributed to the right of way. Right now about $233 million of that savings would be from right-of-way savings. And you are correct, there was about a $500 million cost that Williamson County, Travis County, City of Round Rock, City of Austin put in on 130, as well as 45 and Loop 1, and so a portion of that could be prorated out and to determine exactly what those savings would be for right of way. Construction costs, all of those things were TxDOT contributions, so all that money comes from TxDOT.

Ultimately, I think that money　-- or at least the discussion was　that that money was put into the project to make the project solvent. Clearly there are plenty of local interests that would like that money to stay locally within that Austin area.

Mr. Saenz, I think that's going to be ultimately the determination of the administration and the commission where any cost savings go.

MR. HOUGHTON: Well, let me ask. SH 130 is part of the system, it's not a stand-alone, it's 45/Loop 1/130. So it's not just a linear piece of transportation asset.

MR. RUSSELL: And Commissioner, I guess that's my point. The $373 million is for the entire system, not just 130, 45 and Loop 1, it's for the entire system. Those counties and those two cities put in the $500 million for the entire system, but that $373 million, again, that I'm talking about today, it does relate to the overall project. If Segment 4, as you mentioned, if that number vacillates back and forth a bit, then it would be reduced or be higher than $373 million.

MR. HOLMES: Was there a provision in the original transaction that related to either savings on the one hand or overruns on the other, and if so, what was that?

MR. BASS: For the record, I'm James Bass, chief financial officer at TxDOT.

There were different funding agreements when we were dealing with the local government entities for right of way. What we said in the indenture　-- which is our contract between the department and the investors and the bondholders　-- was that if there were cost overruns on right of way, the department would ensure that the money was there so the project would be completed on time, and then the department would go back and collect the money from the local governments if there was an overrun. But even that is an over-generalization because each of the governmental entities had a separate agreement between TxDOT and the local government for that right of way.

As an example, the City of Austin had $90 million from bond proceeds. Those bond proceeds could only be spent on right of way for 130. So if we only spent $75 million　-- and I'm completely making up $75 million　-- I know where that $15 million is going. And if it had been $100 million, the agreement said they're only giving us $90-. So to give you a full answer, we would really need to go entity by entity, agreement by agreement because there were differences between them.

MR. HOLMES: It could be a heads I win/tails you lose on that example.

Let me take you now to the next thought that I had. This was basically done on a municipal model. Right? Assuming that traffic volumes are such that it would have supported significantly higher level of financing, could you refinance or reorganize the finance in some fashion to pull some of the equity back out of it?

MR. BASS: That's definitely one of the things we're looking at right now currently. And in its simplest form　-- the way I've explained it to some people because it's big money and people wonder well, what are you doing, you're refinancing　-- the analogy I use is you have a 7 percent mortgage on your house and you pick up the paper and you see that you can get a 30-year mortgage for 5.75, maybe I ought to refinance that. And so we do the same thing on the toll road. We know what rate we're paying, we know what market rates are, we know that there are opportunities out there to either get some of the money out. Or an interesting comparison, in this muni model, we, the state, are backstopping it for operations and maintenance, so if the tolls don't generate enough revenue to pay the debt service and all the operations and maintenance, we have that liability.

As you know, in a private concession, that is all with the private sector. And so one of the thoughts is because some of the models from the traffic and revenue estimators and from the engineers show we will be contributing some level for operations and maintenance for years and years, so when we refinance, do you try and pull your money up front or do you reduce your liability going forward into the future. And those are some of the things we're currently looking at and considering if and when to go to the market to refinance.

MR. HOLMES: I'm not sure you would really know the answer to what would be in the best long term interest until you have basically all of it open.

MR. RUSSELL: Commissioner, the only thing I would add, you talked about one of the largest risks, that being the traffic risk, that now we know what the traffic is going to be and it's established, but the other thing　-- and similar to James's housing analogy　-- we've already absorbed now whatever construction risk was there as well, and that's a huge thing that we can start looking at for refinancing or anything else. So there's a number of risks now that we've been able to move through those profiles.

MR. WILLIAMSON: So by extension, when you eliminate the risk, you are probably maximizing the ability to get top value on your refinance.

MR. RUSSELL: Absolutely, yes.

MR. WILLIAMSON: Other questions or is there any dialogue, members?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SAENZ: Item number 3, Commissioners, deals with Finance. James Bass will present items 3(a) and 3(b). This is the counterpart report dealing with the investment of the CTTS project, as well as other investments that we have, and then item (b) deals with training requirements of the Public Funds Investment Act.

MR. BASS: Good morning again. I'm still James Bass, CFO at TxDOT, for the record.

Item 3(a) presents the Quarterly Investment Report for the fourth quarter of fiscal year 2007 which ended on August 31. The investments that are covered in the report are associated with the 2002 project of the Central Texas Turnpike Project, as well as the lease with an option to purchase for the Houston District headquarters facility. The details of these investments have been provided to you in the quarterly report.

Staff recommends your acceptance of the report, and I would be happy to answer any questions that you may have.

MR. WILLIAMSON: Should we have questions?

MR. BASS: No, you should not.

(General laughter.)

MR. BASS: One thing I will point out, in the next quarterly report, or two from now, the lease with option to purchase for the Houston District headquarters facility will go away because those investments will have been used and we transferred that project over.

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Item 3(b) is an item that requires no action on your part but it is a requirement of the Public Funds Investment Act that we report to you on any changes made to the act, and I'm happy to report that there's nothing to report. There were no significant changes to that law during the last legislative session. And I can also report that the department and the commission is in compliance with all the training requirements under the Public Funds Investment Act.

MR. WILLIAMSON: Staff has explained this item, members. Do you have questions or comments you wish to offer?

(No response.)

MR. WILLIAMSON: You don't require a vote on this matter. Right?

MR. BASS: No.

MR. WILLIAMSON: Okay. I thank you.

MR. SAENZ: Thank you. Moving on, item number 4 deals with State Infrastructure Bank. Commissioners, I will say that item 4(c), a SIB loan with the Mission Redevelopment Authority will be deferred this month. This is so that the district and the Redevelopment Authority can coordinate a couple more issues as well as some work that's needed with TPP.

James will present two items: one in Collin County and one in El Paso County.

MR. BASS: Item 4(a) seeks preliminary approval of a loan to the Culleoka Water Supply Corporation in the amount of approximately $1.9 million to pay for water line relocation costs resulting from the expansion of Farm to Market 982 in Collin County. Staff recommends your approval so that we may begin negotiations with the corporation.

MR. HOUGHTON: What is the interest rate?

MR. BASS: On that one there is no interest rate currently; we'll come up and arrive at that in the next phase with the negotiations as we work on both the interest rate and the terms.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: James said he was shooting for 11 percent.

MR. HOUGHTON: Eleven. We don't have usury laws in the state anymore, do we?

MR. WILLIAMSON: No, and like James said, we need cash.

(General laughter.)

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BASS: Thank you. Item 4(b) would rescind an earlier minute order that granted preliminary approval for a loan to the City of El Paso for three international bridges and would grant preliminary approval of a revised application for $6.1 million to pay for improvements to the Stanton International Bridge.

Staff recommends your approval so that we may begin negotiations with the city.

MR. WILLIAMSON: Members, you've heard the explanation of the minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Item number 5 deals with the Urban Thoroughfare Design Team. Steve Simmons will present a minute order creating an informal Urban Design Team.

MR. SIMMONS: Good morning, Chairman, Commissioners. For the record, my name is Steve Simmons and I'm the deputy executive director of the Texas Department of Transportation. And also for the record, my BlackBerry is turned off so you can't blame that on me.

(General laughter.)

MR. SIMMONS: And before I get to this item, James mentioned that the Houston lease with option to purchase was going on. I got an e-mail this morning, they're actually moving today into the new building. So if you try to contact them, you won't be able to.

Item 5 is a minute order that proposes to direct department staff to appoint members to serve on an informal Urban Thoroughfare Team to assist the department in reviewing our design standards and policies as they relate to the design of urban thoroughfares and incorporating this new approach into our department manuals and programs as appropriate.

As discussed at last month's commission meeting, urban thoroughfares work is an overall enhancement to the community and provide a unique opportunity for local jurisdictions to create aesthetically pleasing transportation facilities for all transportation modes and can promoted denser and more pedestrian-friendly development.

Flexibility in project development and design is necessary to balance safety, mobility, economic development and environmental issues for new and redesigned urban transportation facilities. This flexibility in project planning and the inclusion of stakeholders early in the process has also been referred to as smart growth, context-sensitive solutions, sustainable development, and new urbanism.

Last month you indicated your desire to promote this flexibility in design for urban thoroughfares and to include the urban design and planning community. This minute order would allow a multi-disciplined team to assist with this promotion of design flexibility in both the department's programs and criteria for these urban thoroughfares.

The minute order contains the names of six outstanding professionals with expertise in this area, a member from the Federal Highway Administration, and TxDOT members from our San Antonio District, our Dallas District, our division directors of Traffic Operations and the Design Division.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation on this minute order. Do you have questions of Steve?

MR. HOLMES: Yes, I just have one question of Steve. I notice that you have some of the urban areas represented but not all of them. Any particular reason that Austin or Houston wouldn't be?

MR. SIMMONS: If you remember, this was a recommendation from one of our legislators and these are some names that they had recommended, and so we were using those folks. A lot of these metropolitan areas already have a policy going on and so we were bringing that expertise in.

MR. HOLMES: And the Austin area and Houston area have ongoing urban planning that mirrors this?

MR. SIMMONS: Yes, sir. And this is the beginning. If we see we need some additional expertise, we'll come back to you.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

I think, Steve, we don't want to confuse an input committee with an expertise committee, and I know you know that. I believe I can infer Ned's concerns, if we're going to start publishing rules, then we certainly want the six large urban areas of the state represented on any rulemaking.

I think this first shot, Ned, is to give us access to people who have knowledge of this stuff to give us some recommendations on our rules, but we'll certainly include all six of the urban areas before we start passing rules that affect those areas.

MR. HOLMES: I failed to mention the Rio Grande Valley too. They might have a thought or two about it.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: Thank you, Steve. On a personal note, I appreciate you working on this. This was very important to a couple of legislators who have been very leadership-focused on this department and we honor their hard work for us by looking into their interests as well.

MR. SAENZ: Thank you, Commissioners. Item number 6 deals with the Contracts that were let earlier this month and dealing with the award or rejection. Steve Simmons will present these two minute orders.

MR. SIMMONS: For the record again, my name is Steve Simmons, deputy executive director for the department, substituting for Thomas Bohuslav.

Item 6(a)(1) is for the consideration of the award or rejection of Highway Maintenance and Department Building Construction contracts let on October 9 and 10, 2007. We let 20 projects worth a total of $16,983,221.95, and had an average of 4.2 bidders per project. Staff recommends award of all these projects.

MR. WILLIAMSON: Did Thomas indicate, Steve, whether or not that average of 4.2 was up or down?

MR. SIMMONS: It is up a little bit and our bid prices actually came in under our engineers' estimates by about 16.4 percent.

MR. WILLIAMSON: So it's indicating a softening market in our business.

MR. SIMMONS: Yes, sir.

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

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SIMMONS: Item 6(a)(2) is for the consideration of the award or rejection of the Highway and Transportation Enhancement Building Construction contracts let on October 9 and 10. We let 54 projects worth a total of $179,445,958.97 and had an average of 4.1 bidders per project.

We do recommend one project for rejection. The project is in Potter County, Job Number 3027 in the Amarillo District. The project only had one bidder and the bid was 41 percent over the engineer's estimate. This project is for pavement crack sealing. We had a similar project let the same day and the prices were much more in line with the engineer's estimate. The similar project with more reasonable prices did not require pre-qualification and we received five bids. This project was of a size that it required the bidding contractors to be pre-qualified. We propose to re-let and waive the pre-qualification requirements in hopes of getting more bidders and better prices.

Staff recommends award of all projects with the exception noted.

MR. WILLIAMSON: And again, the total volume appears to be down a little bit from previous months.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: And the number of bids per project appears to be up.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: And obviously the price is down. So not only on the maintenance side but on the construction side we're beginning to see a softening.

MR. SIMMONS: Yes, sir.

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

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SAENZ: Thank you, Steve.

Item number 7, Commissioners, is the Routine Minute Orders dealing with donations that are provided to the department, dealing with eminent domain proceedings, acceptance of our quarterly cash report that's as of the end of August 2007, some highway designations, load zones and postings, the disposition of some of our right of way, and speed zones.

We have reviewed the minute orders and we do not see that there is any conflict with any of the commissioners, and staff would recommend approval of these minute orders.

MR. WILLIAMSON: Members, take a moment to be sure that you're familiar with each of these items.

MR. SAENZ: I'd be happy to answer any questions dealing with these items.

MR. WILLIAMSON: James, are you still out there? Ever since Amadeo presented with us in June his concerns about the impact of legislation on our cash flow and thus on our maintenance and construction operations, I know you've been also concerned about cash flow. So probably every month for a while I'm going to be asking some questions about it.

Is there anything in this cash report that you think you need to specifically bring up and talk with us about this month?

MR. BASS: No, not in this one in particular. As all of you know, we have a short term borrowing program within the department to allow us to manage our cash flows, that if expenditures are coming in faster than anticipated or revenues are coming in slower, then we have the ability to go out and borrow money on a short term basis. We currently have that in place for up to $500 million. This morning we have roughly $250 million outstanding. Here in the next few days, early next week when the Texas Education Agency wants to get their $50 million of State Highway Fund out of the appropriations bill to the school district for school bus transportation, we will need to issue an additional $50 million of short term borrowing so we will then have $300 outstanding and we only have $500-.

So the whole intent and purpose of the $500- is a safety net. Well, our safety net is now less than half of the intention, and so again, something that staff is looking at　-- I can't yet say that we will be bringing anything to you in the near future　-- but we're looking at and considering do we need to increase that overall cap of $500 million, do we need to bump it up, and if so, to what level. The statutory authority would allow us to do two months' revenue which would be something in excess of $1 billion. So we have statutory ability but we're trying to manage and think what is important.

I wouldn't want that to be unexpected news for you to hear anywhere else. We have $250 million cash management borrowing outstanding, we're going to get at least another $50- next week. I'm not sure what's going to happen for the next month. Typically what happens as we enter into the winter, our contractor payments begin to decline and our revenues　-- ignoring federal reimbursements which are driven by our expenditures　-- but gas tax and vehicle registration fees are fairly flat. So what we would expect to see in the next three to four months is to be able to pay off some of that.

But anyway, that's kind of the key issue from a cash management and from a finance perspective today, very near term.

MR. WILLIAMSON: Anything else in this report you want to specifically bring to our attention?

MR. BASS: No, sir.

MR. WILLIAMSON: Ned, please.

MR. HOLMES: James, when was the last time we cleaned up that line of credit?

MR. BASS: It was about nine months ago, and by cleaning it up, we got it down to $50 million. Back in September and October of '05, and the U.S. Congress was debating the federal appropriations bill, we found ourselves in the position of having expenses that were eligible to be reimbursed by the federal government yet the federal government had no ability to reimburse us. Once they got their budget approved and everything else, we would get our money from them. So at that point we issued $300 million to cover us through that federal uncertainty. As we got reimbursed, we brought that number down to roughly $50- and then about nine months ago we started to climb back up to the current level.

MR. HOLMES: In the foreseeable future, being the next six, nine, twelve months, is there a possibility that it would be reduced back to zero?

MR. BASS: I think yes, it's possible　-- all things are possible.

MR. HOLMES: How about probable?

MR. BASS: I hope so. The Department of Transportation loves to build things; that's what we're all about: maintaining and building. The unfortunate reality is in order to pay off this money, we cannot award as many contracts as we would like to or that we will be ready to because once we award the contract, we've got to pay somebody money for doing the work. I need to pay off these people who have loaned us the $250-, soon to be $300 million so the DPS payroll didn't bounce last month, so TEA can get their money and send it out to the school districts so they can use it for school bus transportation. The harsh reality is we will not be able to award as many projects as we were ready to or as we would hope to, and that's normally very difficult for TxDOT. We would prefer to be awarding contracts but the cash flow will not allow us to do that.

MR. WILLIAMSON: Before we act on this, let's talk with Steve a moment, if you don't mind, members. Thank you, James. I'll be asking James about cash flow each month.

Do you need to share with the commission some of the steps you're taking to get ready for the next two years, or are you not ready to do that?

MR. SIMMONS: I think I'd be ready next time, but we've got a tough row to hoe the next 18 months to two years with getting ready for the legislative process we're going to have to go through, the funding shortfall we're dealing with, and then the federal side of it, the rescissions and the re-authorization of the bill.

We're working right now to look at scaling back the use of consultant engineers, right-of-way purchase because we are not moving forward on projects for added capacity so we need to do what is necessary but we have a group that is looking at that right now.

MR. WILLIAMSON: So you'd be more comfortable presenting something more formal next time.

MR. SIMMONS: Yes, sir, and I believe next month I'll also be coming back to you with a recommendation on how much we anticipate to move from added capacity to maintenance.

MR. WILLIAMSON: Okay. Well, I didn't want to be premature, but if you had a thought you wanted to share, I wanted to give you a chance to do that.

Okay, members, you've heard the staff's explanation and recommendation, we've had questions and comments on that sub item, and you've got before you all the items of the minute order. Are there any other questions or comments about any of these items?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

Mr. Saenz, is there any reason that you know of for us to go into Executive Session?

MR. SAENZ: No, sir.

MR. WILLIAMSON: If not, we'll enter the Open Comment period of the meeting. Do we have Open Comment witnesses?

MR. SAENZ: We did not get any Open Comment cards.

MR. WILLIAMSON: To your knowledge, Mr. Saenz, staff or Commission members, is there any other business that needs to come before the commission today?

MR. SAENZ: None from staff.

MR. WILLIAMSON: We once again thank the City of Eagle Pass, Maverick County and our employees throughout the Laredo District for the kindness you've shown. We've enjoyed being in Eagle Pass; we hope it won't be a millennium before we come back.

With that, I will entertain the most privileged motion.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. We stand adjourned at 11:34 a.m. Thank you.

(Whereupon, at 11:34 a.m., the meeting was concluded.)

MEETING OF: Texas Transportation Commission
LOCATION: Eagle Pass, Texas
DATE: October 25, 2007

I do hereby certify that the foregoing pages, numbers 1 through 88 inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Department of Transportation.

 10/30/2007
(Transcriber) (Date)

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

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