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Texas Department of Transportation Commission Meeting

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

Thursday, March 26, 2009


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


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


MS. DELISI: Good morning. It is 9:06 a.m., and I call the regular March 2009 meeting of the Texas Transportation Commission to order. Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:48 p.m. on March 18, 2009.

Before we begin today's meeting, please take a moment to place your cell phones and other electronic devices in the off or silent mode, please.

As is our custom, we will open with comments from the members, and Commissioner Meadows, we will begin with you.

MR. MEADOWS: Well, as soon as I make sure my cell phone is off, I'll get around to that.

You know, last night many of us enjoyed a delightful reception put on by the Partners in Mobility from the Metroplex, North Central part of our state, and during that reception several of us were given the opportunity to make some comments, and I really appreciated the comments made by my friend and colleague from Houston, Ned Holmes -- very gracious, and in fact, very accurate comment about the successes that we have enjoyed in North Central Texas as a result of utilizing the tools that have been made available to us to deliver important, significant and really needed projects.

It is so true. That's what has enabled us to have those sort of successes that have only in the last few months been announced, LBJ managed lanes, North Tarrant Express -- we could go on and on. It's every one of those -- the configuration, the financing structure in every instance is a little bit different. It's a little bit different meaning than we've utilized every tool in the toolbox, if you will. Partnership with the North Texas Tollway Authority -- I know Chairman Wageman is here today, has worked so hard to achieve those sort of partnerships.

These successes, though, in every instance are directly attributable to good partnering which is what this is all about here today, and that really is true. We have -- the major providers of transportation infrastructure and operations are represented here today and in many instances -- in most instances have all served and worked together as partners to ensure that we serve the public we're supposed to serve in the most efficient and effective manner possible. And it's impressive that you all are here today because of what it is that you do represent.

You know, I'm reminded of the necessity of good partnering when you think about the Metroplex. When you think about Tarrant County, Mayor Barr, 35, 36, 37 municipalities in that county alone -- 40. In one county there are 40 municipalities. Spread that over North Central Texas and you see that that demands, that necessitates good partnering in order to be successful to deliver the projects that are, in fact, delivering.

Anyway, thank you all very much for last night and thank you for being here. I know we're all looking forward to your presentation today.

MR. UNDERWOOD: I want to associate myself with my colleague's remarks and reiterate the fact that by you all working together you'll always be successful.

I also want to thank our staff -- I was negligent last time -- on the hard work that they've done on the stimulus program. There have been a lot of hard, hard hours -- I know I've seen a lot of them coming and going at times and hours I thought they should have been home with their family. And I want to thank our staff for that. I really appreciate it.

MR. HOLMES: As I said last night at the Partners in Mobility reception, I'm very impressed with the progress that the Metroplex has made and I've used that in speeches in Houston, challenging them to get their act together. Congratulations, you're doing a great job.

MR. HOUGHTON: Meadows, as usual, didn't leave much for anybody else to say.

(General laughter.)

MR. HOUGHTON: But I do want to echo the remarks of my fellow commissioners, and we use it about partnering, talk about team play, and you have gone above and beyond that in this state. And I do the same as Commissioner Holmes. I go back to El Paso and say, Look to Dallas-Fort Worth, that region, the Metroplex area, as to what they're doing and they've got their act together. And I commend you all for that.

Again, welcome. We've got a whole lot of folks in the room -- it looks like we're giving away something today, a drawing -- so thanks for being here.

MS. DELISI: I also want to say welcome to our partners from the Metroplex. I'm sorry I couldn't be with you yesterday evening. I tell people I have a great excuse, though. I have two little boys who were busy trying to turn my house into a transportation zone, so I had to get home to them. But welcome, we look forward to the presentation.

I understand the region has a very important and significant presentation to make to us. If everyone will beg my indulgence, we have two members of the legislature who are here right now to speak on agenda item 4 which is the Enhancements. So I would like to go ahead, if everyone is okay with that, bring up number 4, so Senator Seliger and Representative Swinford can go. So we're going to get John Barton, who will present, but I will go ahead and recognize Senator Seliger and Representative David Swinford to testify on agenda item number 4.

SENATOR SWINFORD: Madam Chair and members of the commission, Mr. Saenz, thank you very much for the opportunity to speak to you this morning and for kind of moving us ahead so we can get back to the Capitol. I'm here to speak on item 4 which is the enhancement project submitted by the City of Stratford and I'm here today to speak about this based upon the timing, the chronology of this particular project.

To refresh everyone's memory, the original agreement with TxDOT and the City of Stratford was executed -- the funding agreement was done in 2002 and the agreement executed and sent to Stratford in 2003. In 2003 the TxDOT district requested a portion of the payment and received $94,000; in 2007 the district asked for the remaining funding of $386,000 and in April of 2007 received $729,000 from the City of Stratford.

The point is a brief and concise one: the City of Stratford has done everything that it was required to do under the agreement and Representative Swinford and I are here today now simply to request that TxDOT make good on its part of the commitment and perform the work that was set out in the agreement in 2002. And I appreciate very much the opportunity to express that to you this morning.

MS. DELISI: Thank you, Senator.

MR. SWINFORD: Madam Chair and members, Stratford is a little community in my district that is about 20 miles from my house and it is a prize, I'm telling you. It's a wonderful community, a beautiful town, wonderful people, and they've been struggling with this project for many years and it's very vital to this community, and we appreciate so much you having the consideration to put them on this list. We want to thank you for doing that. We do have some people from Stratford here that may want to make remarks later.

Stratford is a small town but it's on the crossroads of Highway 54 which is the main road going down to El Paso from Oklahoma that -- we don't have too much of that road in Texas but it's a very important road, and the Ports to Plains Corridor, the one north and south. So it's a small town but it has lots of traffic. And their town is beautiful and they're in need of repair down their main street and things, so this will be a wonderful project.

Thank you for letting us come over today.

MS. DELISI: Thank you, Representative.

John, will you come up and present number 4, please?

MR. BARTON: Yes. For the record, my name is John Barton, and I have the pleasure of working for you as the assistant executive director for Engineering Operations here at the Texas Department of Transportation. And I would like to ask if the Senator and Representative might stay. I think they'll be pleased to hear the information that's going to be shared with you today.

The American Recovery and Reinvestment Act provides for investments in transportation enhancement projects, as you know, and the Federal Transportation Enhancement Program -- just briefly giving you a history -- was first created in the Intermodal Surface Transportation Efficiency Act, referred to as ISTEA, that was enacted by the national Congress in 1991.

And this program provides for opportunities to enhance and contribute to the transportation system in activities that are carried out through non-traditional transportation-related activities that the Federal Highway Administration defines as qualifying projects and activities which include these things, but are not limited for: facilities for pedestrians and bicycles; safety and educational activities for pedestrians and bicyclists; scenic and historic sites and highway programs; landscaping and other scenic beautification activities; the preservation, rehabilitation and operation of historic transportation buildings, structures and facilities; and the establishment of transportation museums; just to name a few. The focus of these activities is to improve the transportation experience that citizens enjoy as they travel in and through local communities.

In order for a project to be considered by the commission for funding under the Enhancement Program, the Federal Highway Administration must determine that it is federally eligible, and in the past, as funding became available, potential projects were solicited from across the state by the department through open program calls which took approximately twelve months to complete and conclude. That brought an issue as we considered this opportunity through the American Recovery and Reinvestment Act. As we've talked to the commission about several times in the last few months, the timelines that are presented within the American Recovery and Reinvestment Act present challenges for us and specifically for a special Enhancement Program call. Because it takes about twelve months to do that, issuing a special Enhancement Program call didn't seem to be feasible under the auspices of the American Recovery and Reinvestment Act.

Therefore, staff is recommending to you today that we utilize several previously authorized enhancement projects that can be ready to let within the required time frame of the Act for funding under the enhancement portion of the American Recovery and Reinvestment Act. These projects were selected in past Enhancement Program calls that previous commissions have issued, but because of the projects' issues or cash flows, they have been slowed down and were not able to proceed to construction.

So in essence, this action today would allow us to move forward with previous commitments that previous commissions have already made to local communities and get these projects that are already on the books underway so that they can proceed to construction which otherwise they would not be able to do until future years when cash flow would allow that to happen.

The list of enhancement projects that are recommended for funding to you today are a complete list of all the enhancement projects that are still pending across the state that have not yet moved forward to construction that will be able to go within the time frames of the American Recovery and Reinvestment Act. And for the Representative and Senator, I would like to specifically note that the project they just spoke to you about is on this list of recommended projects.

In order to make the Transportation Enhancement Program whole with respect to the federal funding that is being provided, we would also suggest and propose that the commission issue a future program call, albeit a very limited amount of funding available for it, to restore the $67-1/2 million that we are currently suggesting we move forward with under the American Recovery and Reinvestment Act to be a separate call under the Enhancement Program for future funding in fiscal years 2010 and beyond.

I believe that you have been provided a list of the projects that are being recommended. It was also a part of the minute order, although there was a revision to the draft minute order that needs to be made, removing a project that was shown for a Texas Parks and Wildlife Department project in Childress, Texas.

And with that, I will conclude my remarks on this particular item, and again, staff recommends that you adopt the minute order that is before you today to authorize funding from the American Recovery and Reinvestment Act for these enhancement projects. And I'll be happy to answer any questions you may have.

MR. MEADOWS: Madam Chair, I just had a couple of quick questions. One is I just want to make sure that I understand this. It appears that all these backlogged projects, some $70 million worth of community projects, enhancement projects will be funded with these immediate funds. And then following this, as I understand you to say, we would issue a new call which would enable another equal amount of money, or roughly equal amount of money of projects to be delivered in the state.

MR. BARTON: That's correct, Commissioner Meadows, and the specific reason for that is we wanted to make sure that there were no winners and losers, that everybody had a chance for their project to compete and be considered, as intended under the American Recovery and Reinvestment Act, and we were able to do two things: move forward with the projects that are ready to go now today with the stimulus funding, and then have a call of a like size for all projects that communities around the state would like to see considered.

MR. MEADOWS: Well, I'd really like to commend you all for what I think is a pretty creative approach that really enables us to deliver a number of these projects across the state.

The only comment I would make is based on our experience with a good process of determining which projects actually were awarded stimulus money, we need to make sure that we learned well that lesson, that good process yields good and fair result and a constructive process with very clear parameters for all the communities through the MPOs and local communities to participate in this next round. And I know that you will do that, but I just know the state was served well by having good process on the other stimulus dollars, we need to make sure we do the same thing in this instance.

MR. BARTON: Thank you for that comment, and again, I applaud the leadership of the commission in directing staff to reach out to our stakeholders. Even in this situation, we have been discussing this with all of our metropolitan planning organizations and other partners on our weekly conference calls. I think they all understood the issues facing us and agreed with this approach, and we are pleased that we are recommending a future program call.

When we make that call, we need to make sure we provide clear directions on how projects can be nominated, and some have even suggested that we use the selection criteria and priorities established by the American Recovery and Reinvestment Act for this future program call, even though it would be with funding separate from that.

MR. MEADOWS: Okay, great. Thank you.

MR. UNDERWOOD: Madam Chair. Also, I want to reinforce what I said earlier, John, be sure and tell all the men and women that are involved in this process how much we appreciate the hard work and the long, long hours they've put in. Please, John.

MR. BARTON: Okay, thank you, Commissioner Underwood. I will certainly do that, and they deserve a lot of credit, not just the department's employees but the employees of all the implementing partners.

I think that you have the new revised exhibit in front of you that shows a total of about $73,474,249, approximately, in funding from the stimulus package. And clearly that's more than $67-1/2 million, we will have to supplement that stimulus funding with some traditional state and federal funds in order to meet this level but it's close enough and we certainly feel like that's a commitment that we can recommend that you make on behalf of the department.

MR. HOUGHTON: So, John, this cleans up our enhancement, I would say, inventory that we have?

MR. BARTON: It helps us clean up. We would still have a handful of projects that have not been able to proceed to a point where they were ready to move forward within the next year which is the requirement of the American Recovery and Reinvestment Act.

MR. HOUGHTON: But we have some?

MR. BARTON: But we have some, and we are committed to working with those communities through our district staffs and our divisional staffs to make sure we get all those projects ready and implementable in a way that honors those commitments made by previous commissions to those communities.

MR. HOUGHTON: And another question, by region how is the money allocated?

MR. BARTON: It, again, broke out simply because of the projects that were available to us, but for the North Region there's about $47.8 million in total projects that includes a couple of large projects, a safety rest area project in Navarro County and then some support for the Woodall Rodgers Deck Plaza Park in the Dallas area. About $2.5 million in the South Region for a couple of projects here in the Austin area; $4.5 million in the West Region including the project in Stratford; and then projects totaling about $18.5 million in the East Region in the Beaumont and Houston area.

MR. HOUGHTON: And what do we have in inventory after this?

MR. BARTON: After this I think that our remaining inventory will be about $70 million.

MR. HOUGHTON: About $70-?

MR. BARTON: Yes, sir.

MR. HOUGHTON: And can you identify where that $70- is?

MR. BARTON: Yes, sir. In fact, what we'd like to do is make that remaining list of projects available on our website so people will know the projects that were selected and the projects that remain to be carried forward.

MR. HOUGHTON: Because the percentage breakdown is disproportionate here.

MR. BARTON: That's correct. On one hand that might appear to be a bad thing, on the other hand it's actually a good thing for those communities that don't have their projects on this list because that means they've been moved forward, they've been implemented. We've had a lot of questions from communities about which projects may or may not be on this list, and some communities and some TxDOT districts, all of their enhancement projects that were previously approved have already been constructed and are in place, so they're receiving the benefit of those projects already.

MR. HOUGHTON: I think it would be helpful for the commission -- and I don't remember, I know there was disagreements on enhancement projects when and if they should have been and historic preservations and those things -- a list of what we've done in the past five years.

MR. BARTON: We can do that.

MR. HOUGHTON: And where in the regions we have done those.

MR. BARTON: Okay, we can provide a complete listing of the entire Enhancement Program and the history here in the department. It's not that large, not that voluminous.

MR. HOUGHTON: Because you break it down by region and this percentage as to how much money is being spent in that region.

MR. BARTON: Yes, sir, we'll be happy to do that for you and have it ready to you before the next commission meeting.

MR. HOLMES: John, when you make available the list of projects that constitute the $70 million to be let, you'll break that down by region as well?

MR. BARTON: Yes, sir.

MR. HOLMES: Did I understand you to say that that list is basically comprised of projects that would not be ready within twelve months?

MR. BARTON: That's correct.

MR. HOLMES: And do you have a sense of what that timeline might be for those?

MR. BARTON: In order to prepare this list of projects, staff at our Design Division -- Barry Cogburn who oversees our landscape section, led the charge on this -- she contacted all of the districts that had pending projects, spoke to them, who in turn spoke to the project sponsors. And so we've got kind of a timeline established, and I think that the longest, far-reaching, outstanding project appears to be implementable in the 2011-2012 time frame.

There are some riders that have been put into place by the legislature through previous actions on the Enhancement Program for the preservation of some courthouses and things like that, and that's still a very sketchy issue on whether or not we will be able to move forward with that in consultation with the Texas Historical Commission and the Federal Highway Administration. But apart from those riders, we should have it pretty clear definition on the rest of the projects.

MR. HOLMES: And the project that was mentioned by members of the Senate and the House, in Stratford, this is the one in the Amarillo District?

MR. BARTON: Yes, sir, Amarillo District in Sherman County.

MR. HOLMES: On Woodall Rodgers, kind of refresh my memory as to where that project is in terms of its total funding requirements and what this particular stimulus piece does for it.

MR. BARTON: Yes, sir. The total project cost for this particular phase of the project is a little over $40 million, I think it's approximately $43 million that required local participation of just over $4 million, and then through previous legislative action, we were directed to spend $20 million on it, I believe, two $10 million commitments. The project, as it was proposed by the MPO -- and, of course, is out there on the list of projects ready to implement -- had $16.7 million that you're seeing there on recommended stimulus funding that can be used to do activities that were going to have to be done by local participation. That frees up that local participation to now be used for other activities on the project that were not eligible for stimulus funding.

So it's kind of a leveraging of those local funds to get a bigger project with more of the elements that the community is looking and searching for without having to take advantage of that local participation; otherwise, the overall scale of the project would have been reduced by $16.7 million.

MS. DELISI: Thanks, John.

At this time I'd like to call up Duane Mungia.

MR. MUNGIA: Thank you very much. Duane Mungia, representing the City of Stratford. Thank you very much, Honorable Chair, Commissioners. I'm a little nervous today, this is a lot larger scale that I'm used to speaking on.

We have a city of under 2,000 people, so the commitment that we have made towards our project is quite extensive, and I know it's kind of laughable for some of the other rest of the sides of the State of Texas, but we are part of Texas and we have definitely committed to a project that will not only enhance our business district but will also provide some safety areas and necessary items for people in our business district.

So we are asking and requesting respectfully to be funded for this project. We have patiently waited, we have worked hard along with the local TxDOT facilities, and we are excited about the project. I guarantee if you were to speak to any citizen in Stratford, they are still looking forward to the project and want it to be taken care of.

MS. DELISI: Thank you very much.

MR. HOUGHTON: I have a question. Do you know where Romero Station is at US 54?

MR. MUNGIA: Romero, yes, near Amistad, kind of moving in that direction close to New Mexico. Yes, sir.

MR. HOUGHTON: I used to cut off at 54 down there to the Houghton Ranch, so I've been through Stratford many, many times.

MR. HOLMES: Is that why this is on this deal?

MR. MUNGIA: If it helps, yes, that is why it's on there; if it doesn't, then no, sir, I have no idea.

MR. HOUGHTON: It may not help today.

(General laughter.)

MR. MUNGIA: Thank you very much for your time. I do appreciate it.

MS. DELISI: Thank you very much.

There's nobody else signed up, so with that, is there a motion?

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

A couple of housekeeping things. First of all, to everybody in the audience, if you'd like to comment on an agenda item, please fill out a yellow card and identify the agenda item. If you wish to talk about an issue not on the agenda, we'll take your comments in the open comment period at the end of the meeting, and for those comments, please fill out a blue card. Regardless of the color of your card, please try and limit your remarks to three minutes.

The next thing we need to do is approve the minutes for the February 25 and 26 meetings and the March 5 meeting of the commission. Members, the minutes have been provided in your briefing materials. Is there a motion to approve?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

Before we continue on to the rest of the posted agenda, I do want to make sure everybody knows it's my intention to take up item 9(e), the CDA award for the DFW Connector Project immediately following the presentation from the DFW Partners in Mobility.

So with that, Amadeo, I'm going to turn it over to you.

MR. SAENZ: Thank you, Madam Chair. Good morning, Commissioners. And for Mr. Meadows, buenos dias, Mr. Meadows. He likes for me to talk to him in Spanish.

MR. MEADOWS: Y tu tambien.

MR. SAENZ: We've been kind of deliberating in Spanish for a while. Sometimes we don't understand each other very well, but I'll let you decide who doesn't understand whom.

MR. HOUGHTON: Hey, even when the guy speaks English you can't understand him. You'd think the guy is from the East Coast, he talks so dad gum fast.

MR. SAENZ: You should hear him talk in Spanish; English is slow compared to that.

(General laughter.)

MR. SAENZ: Good morning. Our first agenda item today, we will hear from the Dallas-Fort Worth Partners in Mobility. Former Mayor Ken Barr will lead the charge. Mayor, welcome. I apologize for not making the reception last night but I had some responsibilities and some assignments that were assigned to me by the pink building across the street that I needed to take care of last night.

MAYOR BARR: Well, we missed you. I do want to thank the commissioners who joined us last night.

Good morning, Madam Chair and members of the commission and Director Saenz. I'm Kenneth Barr, here today on behalf of the Dallas-Fort Worth Area Partners in Mobility, the North Texas Commission -- which it's my privilege to chair -- and the business community from across the Dallas-Fort Worth region. I'm proud to kick off our fifteenth annual Partners in Mobility presentation to the commission.

This is an exciting time to be here talking about transportation in our region, considering the decision you will make today on the DFW Connector and the other major projects that you've awarded this year, as Mr. Meadows pointed out a while ago, LBJ, the North Tarrant Express and the economic recovery projects. We're here today to showcase what partnerships between our region and the commission have accomplished, to highlight the transportation improvements being made this year, and to share with you what's on the horizon.

Our Partners in Mobility coalition is represented today by more than 200 elected officials, city managers, chamber, business and civic leaders and transportation professionals from throughout North Texas, each of whom, just like you, are dedicated to improving our transportation system. I'd like to ask our delegation to please stand and be recognized at this time. Thank you to each one of the members of this delegation for being a part of this fifteenth presentation. And I will just mention to you several people in this group have been to every one of these fifteen presentations and I know a number of them were here for the first one.

We distributed our 2009 State of the Region report, and you should have a copy of this. This comprehensive report includes information on regional performance measures, how we are utilizing innovative finance, and what projects are on the verge of construction after decades of planning. I think it's interesting to note that our report and this presentation come at a time when the U.S. Census Bureau has just released population figures for the nation. In 2008 our region grew by over 146,000 people -- 146,000 people, you know, that's one pretty good size little city. This shows that even with the nationwide economic downturn, North Texas is still attracting new residents and new businesses. Improving our transportation system will help us handle this growth.

As we move through this presentation, I ask everyone to keep something in mind: if gasoline taxes met our needs, building transportation projects would be a lot easier. In fact, we would not need to be as innovative and we would not need to reach out to establish new partnerships. Over the past 15 years we have experienced an absence of leadership from federal and state legislators on revenue. In spite of this absence of leadership, our local elected officials have not put our heads in the sand and given up. We have risen to the occasion by providing leadership, by working with this commission to create outstanding projects, and by entering into successful regional partnerships, and by using innovative finance.

Now, Commissioner Houghton, I agree with you, what Commissioner Meadows said a while ago about partnerships, he said a lot about it, in fact, so much that I thought he had a copy of my script for a little while -- and he's not above that, by the way.

(General laughter.)

MAYOR BARR: We could spend a long time talking about partnerships but I think there are three examples we want to highlight for you this morning. First and foremost, this commission took an early and outspoken lead on using public-private partnerships to advance transportation projects. Frankly, you were often criticized for that decision, but our region is here to thank you for your vision. By looking at comprehensive development agreements, design-build contracting, partnering with the North Texas Tollway Authority and managed lanes, projects that have been on the books for decades are moving into construction. Our local governments and transportation partners have also been tremendous assets through transit sales tax and bond programs. Innovation and local partnerships are generating nearly 65 percent of transportation funding in North Texas.

A second example of success is the entire State Highway 121 process. The announcement of the $3.2 billion payment by the North Texas Tollway Authority was amazing in itself. But what came afterward was a partnership between local governments, the Texas Department of Transportation, the North Texas Tollway Authority, and the metropolitan planning organization. Local governments have selected hundreds of transportation projects through the regional toll revenue initiative. Our emphasis was on air quality, roadway and transit projects with nearly three-quarters of the funds going to on-system projects.

We want to thank the commission for your willingness to help the local governments in North Texas and allow local contracting, local design standards and local environmental review of the off-system projects. And if this entire process was not an innovative enough partnership on its own, part of the payment will be used to construct the rail line from Denton to Carrollton. This kind of multi-modalism is probably not found anywhere else in the nation and just demonstrates the types of leaders we have in our local elected officials and in this commission.

This leads to our final example of successful partnership with and amongst the three transportation authorities: the Dallas Area Rapid Transit, the Denton County Transportation Authority, and the Fort Worth Transportation Authority. The Denton County Transportation Authority's "A" Train is a 21-mile commuter rail line that will connect Denton with Carrollton, Dallas, and eventually the Dallas-Fort Worth International Airport.

In addition, DART is currently working to construct the longest light rail project in the nation, the 28-mile Green Line from Fair Park to Carrollton. This project received a record $700 million federal transit grant which is helping to leverage local sales tax dollars.

Another exciting transit project is the T's southwest to northeast line that will connect southwest Fort Worth to the Dallas-Fort Worth International Airport. This rail line is being paired with the Cotton Belt project in Dallas and Collin counties to bring airport access to Plano, Richardson and Addison.

Now that we've given you a view of what has led us to this point, let me turn our presentation over to Rob Franke to discuss what is happening now in transportation.

MR. HOUGHTON: Hold on, Mayor, let me ask you a question. It's impressive every time you come here, this group, and you talk about the innovative and creative things that have been used -- we call it tools in the toolbox. I think Senate Transportation is meeting today. Is that true? Can you take this crowd over to Senate Transportation -- well, Finance, both, it's what it is -- and give this same presentation. It would be, I would say, profound that others hear from this region across the street on what is going on in transportation -- not that they don't know.

MAYOR BARR: I certainly hope that they know. We would welcome an opportunity to do that, it is a great story.

MR. HOUGHTON: It is a tremendous story what you all have done up there.

MAYOR BARR: I am continually impressed by the partnerships and by the innovation. We've certainly got a great MPO and the Regional Transportation Council and Michael Morris and that staff, but I believe our region comes together better at the RTC table than just about anywhere, and it's truly amazing what's been accomplished.

We'll look into seeing what we might do in that direction, that's a good idea.

MR. HOUGHTON: Again, I'm kind of kidding you a little bit, but this story needs to be told more and more and more around this state on how you get things done.

MAYOR BARR: Well, we appreciate the opportunity to be here, and frankly, I think it helps us get our act together knowing that we're going to have the opportunity to come here and tell our story to the commission, and we thank you very much.

Mayor Franke.

MAYOR FRANKE: I didn't jump up too early that time. Madam Chair, Commissioners, Director Saenz, good to be here. I've come to these a number of years and I usually sit in the back row so it's kind of exciting to be up here in the second row, maybe someday I can get up here in the front row, it would be really interesting. It's a whole different view up here. Nice to be here.

(General laughter.)

MAYOR FRANKE: You know, it's easy to say we're in some interesting times, a lot of people say it's pretty difficult times, frankly, but in our region we're considering it a time of opportunity. It's really encouraging to think of all the jobs we're going to be creating in our area, and that's what I'd like to talk about a little bit, but really, that comes from the foundation laid by this commission. The things that you've done to prepare us for that have been really exciting.

Now, we've been showing you this map since 2005. I hope you're not tired of it because to us it speaks of home, it also speaks of progress. Every chance we get we're advancing these projects that you see. Right now we've got billions of dollars involved in construction projects.

Right now 121 in Collin County is well underway; Lewisville Lake Bridge is going to open this summer; President George Bush Turnpike Eastern Extension is under construction right now; 161 a massive project underway right now; TxDOT, NTTA, Regional Transportation Council, we work together now to fund and get started and really complete a lot of Southwest Parkway; additional funding for 161 can move forward also. The supplemental draft EIS for the Trinity Parkway project was released. We remain committed to that project and mobility in the Dallas area.

There's a table of toll roads here. All these projects you'll see are a result of this commission, NTTA, the board of directors recognizing the incredible vital link that we have to work together to improve transportation in North Texas. If you look at this, it's really innovative also. You'll see the projects are funded in different ways, everything from NTTA system funding, surplus revenue, toll equity and revenue

sharing -- just another item that speaks of our partnership.

People will ask why these are all toll projects. Well, what was stated earlier, we all know that we've had a lack of leadership from Congress, from our legislators in really coming up with funding mechanisms, but our region has a $109 billion shortfall between now and the 2030 plan, so we have to do something, we simply have to progress these things. We need to keep moving on improving mobility, reliability, air quality and just the quality of life in North Texas to keep people moving.

Managed lanes is also an important issue. Managed lanes are another important component of our regional system. The corridors we're rebuilding now, a lot of these corridors are going to have managed lanes. There an additional element of choice, really, for the commuters, they get to make part of the decision. We'll have traditional highway lanes, at least as many as are currently available, we'll also have additional lanes in the corridor, continuous frontage roads so that people can access the businesses and residences.

And frankly, there's been a lot of misinformation put out on managed lanes. We feel that's part of our responsibility to get the word out. We partnered up with TxDOT to launch a major education campaign to really explain how the managed lanes work. In fact, I think we've distributed a little flyer that came out with our State of the Region to just kind of show how they work.

But to summarize how they work, you've got the additional lanes that are managed lanes that will be tolled in the center. You'll have the tolls will change, they will rise and fall with the demand, so people can make a decision about what they want to do. You'll also have a guaranteed speed in the managed lanes for reliability. There will be discounts for car pools, van pools, transit vehicles will have free access to the lanes, and if there's ever an emergency or emergency traffic or we have to do an evacuation, the lanes can be opened up for that mobility.

If you look at the managed lane table, in addition to I-30 currently under construction, there's three managed lane projects that we're quickly moving forward, again, thanks to the commission. You've helped us select the best value proposals and that's really advancing a lot of the projects.

In January you approved the North Tarrant Express along 820 and State Highway 183. With a $600 million state funding commitment, the sector is putting in to make that up to a $1.8 billion project -- incredible leveraging once again. Last month you approved Interstate 635 LBJ project -- thank you for that. It's one of the most congested corridors in the state, and a $445 million state commitment is producing a $2 billion project -- leveraging. The decade long effort is sensitive to needs of neighborhoods and businesses -- which we're thankful for because I work up in that area, and it's going to be completed in five years.

Finally, we're looking forward and hopeful today that you'll approve the DFW Connector, another design-build partnership with the private sector to unclog the roads just north of DFW Airport.

When you combine the toll roads, the rail projects we've already discussed, it's an unprecedented -- it's actually an incredible level of construction and much needed source of jobs in our region. For the success of the projects, again, we thank the commission.

Let's talk about economic recovery now. Another successful partnership is the recent selection of American Recovery and Reinvestment Act projects, another exciting thing for our region. We'd like to really thank you, sincerely thank you for the DFW Connector for the portion of the $1.2 billion allocation from TxDOT. We also got $143 million allocation directly and RTC selected two interchanges on Southwest Parkway with this money; the I-20 and the Highway 67 are going to be built with the funds, it's the right thing to do.

Selection of projects on the western side of the region -- this is coming from a guy on the eastern side of the region -- we were able to free up revenue from State Highway 121 payment that was intended for Tarrant County -- again, it was the right thing to do. The selection of Southwest Parkway will also ensure commitments that we made to put funding in that project are met and allow both Southwest Parkway and State Highway 121 to proceed. Again, Texas Department of Transportation and NTTA agreement was critical in that.

Overall, it's about $4 billion worth of transportation investment going on in our region. It's leveraging, it's partnership, it's the leadership of this commission. For that we're very thankful.

My conclusion, again, is really much the same as Mayor Barr's, that these projects wouldn't be moving forward without strong leadership all the way from the local elected officials to this commission. Very pleased to be here and very thankful.

I'll get Mayor Shetter up here now to proceed with some of our presentation.

MAYOR SHETTER: Thank you, Mayor Franke. Good morning, Madam Chair, Commissioners and Director Saenz. I'm Ken Shetter, the mayor of Burleson and chairman of the Tarrant Regional Transportation Coalition. I have the pleasure this morning of talking about what is next for North Texas. My remarks will continue the theme of innovation, partnership and leadership.

North Texas is focused right now on one initiative that could mean more to the future of our region than any other transportation initiative and that is passage of the Texas Local Option Transportation Act, sponsored by Senator John Carona and Representative Vicki Truitt. This is the culmination of six years worth of meetings, technical review and policy development by hundreds of individuals putting in thousands of hours of work. For the past year the effort was led by Fort Worth City Council member Jungus Jordan and Dallas City Council member Linda Koop. On behalf of the entire region, I would like to take a moment to publicly thank them for their Herculean effort.


MAYOR SHETTER: Through the Texas Local Option Transportation Act, our region could be able to fund 251 miles of commuter rail throughout North Texas. Once the vision becomes a reality, it will be possible to take a train from Cleburne or Burleson to McKinney, or from Denton to Waxahachie. The Dallas-Fort Worth International Airport and Love Field will be more accessible as will colleges and universities, entertainment venues and major employment centers. Some have questioned whether this kind of investment makes sense. I would argue that it not only makes sense but it is vital to Dallas-Fort Worth's continued success. People are desperate for an alternative to driving and being stuck in congestion.

The region's transportation authorities have seen huge increases in riders this year. Much of the growth was seen last summer when gas prices were over $4 a gallon. Rail works in North Texas. However, rail is not the only option under the Texas Local Option Transportation Act; as its name indicates, it is a transportation funding bill. It is an opportunity to provide our local elected officials -- who have clearly demonstrated leadership on transportation issues, as we have discussed throughout this presentation -- with a new way to improve our region.

This bill will allow local officials a process to select the highest priority projects and put together a menu of funding options that makes sense for each county and put that list of projects and taxes to a vote of the public. This plan is complicated and it is not perfect, but our local officials are doing what they can to provide transportation options for the 6.5 million residents we have now and the 9 million residents we will have by 2030.

It's easy to get lost in the woods of this complicated legislation and the complex political process, and there are those who will pick apart the details of the plan without offering constructive alternatives. But we have to remember that the North Texas region is the fastest growing metropolitan region in the entire United States of America, and at the end of the day, the Texas Local Option Transportation Act is about our continued economic viability, our environmental sustainability, and our quality of life.

We are very close to being able to achieve our rail vision but we have several more intermodal projects on the horizon that will complete the total transportation system for North Texas. On the roadway side, we are looking to projects like State Highway 360, State Highway 170, the President George Bush Turnpike East Branch, and Loop 9. These are all corridors that will require significant partnerships between multiple agencies within our region.

We do not feel confident that transportation revenues will be increased in the near future. This legislative session is no different. We believe that toll roads and managed lanes will continue to be part of a regional transportation system. It is crucial that public-private partnerships continue to be a tool in our toolbox to complete these projects.

Tower 55 is a very different partnership project, one that involves local governments, the Regional Transportation Council, homeowners and business groups, and two private railroad companies trying to solve the largest freight rail bottleneck in the country. And this is not just about rail congestion, it's not just about economic development, getting goods to the marketplace, it's also a homeland security issue.

Finally, I will mention the Regional Outer Loop, a 240-mile corridor around the Dallas-Fort Worth area. Local elected officials and regional planners are working to expedite environmental review and secure right of way, but at the same time balance transportation and land use needs so the corridor does not cause additional sprawl. This corridor is critical to moving goods and people around and through North Texas.

Now it's my pleasure to introduce my colleague and good friend, Linda Koop, to conclude our presentation.

MR. HOUGHTON: I want to ask you a question about that original slide you had of 251 miles of rail. Is that on existing line or a combination of existing/new line? Because I saw BNSF, UP.

MAYOR SHETTER: Well, it is through existing rail corridors.

MR. HOUGHTON: Corridors, okay.

MAYOR SHETTER: Right. And you may get different answers about -- and some of our planners could answer this better than I could, perhaps -- but there may be some room for some capacity on existing rail, but at some point clearly it's going to be necessary to build parallel lines to existing rail lines.


MS. KOOP: Thank you, Mayor Shetter. Is that first chair violin? I was never that, it was always second chair, so I don't know. I didn't realize I'd made it that far. Okay, I'm batting cleanup. Since my son played hockey -- I won't do that today.

(General laughter.)

MS. KOOP: I'm Linda Koop, I'm chair of the Regional Transportation Council and a member of the Dallas City Council. And I want you to look back at our presentation, at that time the business community was just beginning to get involved with transportation and we were planning a few toll roads way back 15 years ago. We had a mere $9.4 billion shortfall -- ah, those were the days -- and we were here asking for money, and what a difference this 15 years makes.

If we go on to the innovative finance table, I want you to think back, the commission, along with local elected officials, has made possible or is working on getting over $20 billion worth of projects to construction between 2006 and 2013, with additional projects when the TLOT Act becomes a reality, and this includes State Highway 121, all the regional toll revenue projects, toll roads being developed by the North Texas Tollway Authority, managed lanes, leveraging, private sector dollars, massive light and commuter rail projects, federal economic recovery projects, and the list goes on and on and on. This is leadership, innovation and partnerships, and this is what we can accomplish by using those mechanisms.

This morning we've laid out a fantastic future of an integrated seamless multimodal transportation system, and while I, too, am confident that we can get to that future, we do need legislative assistance and we ask for your support on these legislative initiatives. We have extensively covered the local option funding initiative, but the Regional Transportation Council is also calling for increased statewide funding. We support the efforts of Senator Carona to index the motor fuels tax to inflation. We also support his efforts to end or reduce diversions of transportation revenues to non-transportation uses.

Another funding option is to provide general revenue for the $5 billion in bonds authorized by voters across Texas through Proposition 12 in 2007. Funding for freight rail relocation is critically important to our region as well. We mentioned Tower 55 and finding a source to that bottleneck earlier, and the Rail Relocation Improvement Fund authorized by Texas in 2005 should be funded by the legislature this year.

And finally, the process to identify the agency to develop toll roads and managed lanes in our region needs to be simplified and moved to a more coordinated and partnership oriented process. The market valuation created in 2007 is too cumbersome and not in the region's best interests. We must also ensure that any future surplus toll revenue or CDA concession payments be returned to the region for local elected officials to utilize for transportation projects.

We have been working hard on these issues all year long and we continue to hit this message hard across the street until the session is over. Many of our officials with us here today from the region have been visiting with their state representatives and state senators yesterday and today in a major advocacy effort.

In addition to legislative initiatives in Texas, this year marks the expiration of SAFETEA-LU. What we are anticipating is not simply another re-authorization but a completely new bill that will move the nation towards a more sustainable transportation future. Last week a number of us were at NLC, National League of Cities, in Washington, D.C. Whoever happened to be standing in the lobby at the time, we grabbed and took them over to Congress with us to talk not only to our Congress men and women but also to their staff to get a dialogue going between our region and their staff. I think we were well received. Larry, from Congresswoman Johnson's office, has reached out to help us do that in that effort, and so we're very thankful that Congresswoman Johnson's office will help us in that effort as well.

The Regional Transportation Council will soon develop a legislative program calling in a major change in focus from donor-donee states fighting for dollars, hundreds of modal programs acting independently and thousands of earmarks. This new bill will focus on mega-regions and providing local elected officials in those regions flexibility to identify problems, implement solutions and report on performance. Funding should be increased but also be flexible enough to truly create a multimodal transportation system.

The new bill also needs to address energy independence through new technology and better land use and transportation connections. This represents a radical departure from business as usual, but as we have shown today, our region and this commission are no strangers to charting new territory and breaking through barriers, and we thank you for that.

We are calling today on our state legislators and U.S. representatives and senators to join us and show leadership and courage in providing adequate resources and flexibility to the state and to the nation for needed transportation investments. The problem has been identified. Your 2030 Commission found over $300 billion worth of need statewide over the next 21 years, a staggering figure. What we need to do better is educate the public and legislators not only about the problem but the solutions that we have identified and seek their ideas on additional solutions and build consensus around ways to improve transportation. But what we really need is for all of us to find and nurture the political will to become leaders on this issue. If we can do that, we can get to a better future in transportation.

I want to thank you again for the opportunity to speak to you today. My colleagues and I will be happy to address any questions you might have. You have been wonderful partners with us, you have reached out to all of us, we appreciate every commission member for listening to what we have to say and to being so gracious to our region, and always having your door open to us is greatly appreciated. Thank you.

MR. HOUGHTON: Don't leave, Councilwoman.

MS. KOOP: Thank you, Commissioner.

MR. HOUGHTON: Do you want to go first?

MR. HOLMES: Thank you for your presentation and I appreciate your remarks about the new federal bill. Just in case you don't know, TxDOT and the DOTs from Utah, Indiana, Florida and New Hampshire, along with a number of private entities, have formed a group called the Transportation Transformation Group, T2 Group, that is working on the new federal bill, and many of the items that you noted as changes in that new federal bill are principles that T2 has put forward. And I would encourage you to work with the folks in T2 because we have very similar goals.

MS. KOOP: Okay. And we'd like to get a copy of anything that you have so that we can review that. We did review the Conference of Mayors white paper on the new bill and we have lots of leaders here that are on the transportation committee for NLC and they have, of course, a robust agenda there as well. I think working together, and what has proven to me that when we went up on the hill to talk about this bill with the staffers that we here in our area and in Texas really have leadership to show as to what we're doing. And they were very, very interested, as I'm sure your commission is finding out, your group is finding out as well.

MR. HOLMES: Steve, was that last week -- Monday, this week, working with staffers and presenting some of the findings and views. I'm delighted to hear that your group was there as well.

MS. KOOP: Right. It's our time and I think we just need to coordinate our efforts because it really is our time to put in what we think will be transforming transportation in the future, and also getting ourselves off of energy dependence from foreign oil, will be very important to us in the future. Thank you.

MR. HOLMES: Thank you for your work.

MR. HOUGHTON: There was a couple of things in your presentation and in the mayor's presentation that preceded you. Mayor, I can't believe that you have detractors, that anybody would throw rocks at your program and ideas, it's hard to believe that and bring those solutions. But join the crowd, welcome.

(General laughter.)

MR. HOUGHTON: My question is we get criticized sometimes we take too much of a focus on toll roads. Michael or somebody in the crowd, our district engineer from that area, can somebody tell me how many lane miles we have in the Dallas-Fort Worth Metroplex on the state highway system? Do you have any idea?

MR. SAENZ: No, but I think Bill Hale is here.

MR. HOUGHTON: Is Hale here, or anyone that would know the answer?

MR. HOUGHTON: Bill, do you know how many lane miles we have on the state highway system in the Metroplex?

(Inaudible speaker from audience.)

MR. SAENZ: Eleven thousand.

MR. HOUGHTON: Eleven thousand?

(Inaudible speaker from audience.)

MR. SAENZ: Let's call it 22-.

MR. HOUGHTON: Call it 22,000 lane miles? Paul Wageman, how many toll road miles do we have in the region? I'm testing people.

MR. WAGEMAN: (From audience) Less than a hundred.

MR. HOUGHTON: Is that right? I mean, we get criticized for that and we need to point those facts out. As my kids tell me, when you get a little out there and you kind of exaggerate things, they say, Dad, that's BS. And sometimes we've just got to stand up and say, No, here are the facts, that we have 22,000 lane miles and we're talking about 100, Paul, thereabouts.

MS. KOOP: I never put it in the perspective like that. That's amazing really. Yes, we don't have our message out. It's a combination of modalities.

MR. HOUGHTON: It's a message. And the earmarking issue, we've been fighting this for a long time and sometimes we get beat over it because sometimes the legislators that are sent to Congress believe they have to do that, and it's unfortunate. I think in the last omnibus bill that was just passed by Congress there were 9,000 earmarks in that bill -- 9,000. And it's like a crack-head on cocaine, they can't get off it, and it's unfortunate. I'm sorry, I don't know how, Linda, you get there.

MR. HOLMES: You made the Chair leave on that comment.

MR. HOUGHTON: The Chair left. I think Coby is telling me I shouldn't say those sort of things.

(General laughter.)

MR. HOUGHTON: But we all have to get in that boat and row together, and I applaud the Dallas region for taking up all of these issues. The concession fees, this body voted in the region when we went to Dallas-Fort Worth to push that out to the region. Michael, we voted based upon your recommendation, and unfortunately, it just didn't work, but hopefully we can make that happen in the future. And I thank you all very much.

MR. HOLMES: Just for the record, Congress did not put in any earmarks on the stimulus money and one of the messages from Eddie Bernice Johnson was we shouldn't be doing that locally as well.

MS. DELISI: Any other questions or comments? Thank you very much for your presentation.

MS. KOOP: Thank you.

MR. SAENZ: Thank you to the Dallas-Fort Worth region for your fine presentation; we'll look forward to number sixteen next year. And Michael, it's great working with you, appreciate all the great work that you do, and all the folks out there, we look forward to working with you.

Commissioners, now we're going to move on to agenda item number 9(e), as was mentioned by our Chair earlier. Agenda item 9(e), Mark Tomlinson, director of our Turnpike Division, will present a minute order to you where we are presenting to you our best value selection for the DFW Connector Project.

MR. TOMLINSON: Good morning, Mr. Saenz, good morning, Commissioners. My name is Mark Tomlinson, director of the Texas Turnpike Authority Division, and I am here to talk about a project which really needs no introduction to most of this audience.

As you'll recall, over the past two months, two months ago you awarded, as has been mentioned, the North Tarrant Express Project, a total project value of about $2.5 billion, last month you awarded the LBJ Project, total project value of about $4 billion. That's a total of about $6.5 billion. Of that total project cost, a little over a billion dollars was public subsidy, so about $5-1/2 billion was private equity coming into the region.

So we're pleased today to come and present the connector to you. The DFW Connector is a different project than the previous two that we talked about. It's been called one big interchange, it's a series of interchanges actually, but it is a number of highways coming together just north of the Dallas-Fort Worth International Airport. The district observes that the biggest problems in this area are merging and weaving, access is a huge issue, both to the airport and businesses and industry in the area. There are, in this project, managed lanes which we hope to construct through the complex interchange area, but a lot of the movement, a lot of the problems are related to merging and weaving.

So the connector project is a design-build CDA, it's not a concession. We have to pay for whatever we build here with a public subsidy of some sort. It is ultimately a 14.4-mile project, it has huge reconstruction efforts throughout seven highways, six interchanges, major connections, again, to high traffic volume facilities. We do hope to add one to two tolled managed lanes, express lanes through the interchange area, and the toll rates for that, like the two previous projects, will be operated based on the RTC managed lane policy.

We also have, because this is a design-build CDA, we won't have a developer onboard over a long 50-year concession term. We do have three optional capital maintenance agreements that are in place in the contract that can be exercised at TxDOT's discretion. It will be a future decision whether to exercise those or not.

I probably don't need to reiterate how well the region has talked about the need for this and other projects in that region, but this project is intended to improve mobility, air quality, safety and address congestion in this area. I hope to show you, hopefully pretty vividly, how much existing infrastructure and how massive the non-tolled elements of this project will be -- clearly, as they've said, a high priority to the region. And I did want to note the managed lanes will be complete electronic toll collection, interoperable. The toll collection will be done by NTTA but there is no concessionaire, the funds will come through TxDOT and be used back in the region.

I think the original concept for this project back about a little over three years ago, because there are tolled elements, but the thinking, I believe, that the rest of the project was so massive in comparison to the managed lanes that they really couldn't capitalize on revenue from the managed lanes to build the project, but there will be funds that do come from this project that will go towards possibly maintenance if we don't exercise those options, or other projects in the region.

Came into the procurement with about $667 million in funds available for the project, probably 99 percent of the time over the procurement that was the case and the reality that the district and the divisions had to deal with. Late in the game, stimulus money became available so it upped the ante, but you'll kind of see as we go through the history that we had to make adjustments near the end to try to take advantage of that.

In looking at the history, it was back a little over three years ago that we issued our request for proposals, short-listed three proposers; in July of 2008 we received three proposals, and unfortunately, at that point the concept was the entire projects, a pretty massive project, and we couldn't afford any of those proposals that we received. So working with the Federal Highway Administration, local leaders and our districts, a very significant, I'd say, re-scoping of the project took place. Engineers and staff from across TxDOT went to meet with the Fort Worth District staff and they essentially made three configurations out of the overall project that had originally been proposed, and I'll talk more in detail about those configurations.

But based on those configurations we went back out for a best and final offer in December. Then in January we received proposals for those configurations from three proposers. It was about then, just after that, or in that time frame, really, that discussion of stimulus funding had become available, and that's very significant because we, I think, prior to that time had been holding firmly to that $667 million of available funding, that really we didn't see hope of additional funding until the stimulus funding came to be discussed.

But that did change the landscape significantly, so in March we went back out. Again, through cooperation with the Federal Highway Administration, we were allowed to request revised pricing which we received on March 16, and so based on that we do suggest to you, will suggest to you an apparent best value proposer today.

The proposer teams we received prices from, there are two: Gateway Connector Constructors, led by Fluor Enterprises and Balfour Beatty, among some other firms; and then NorthGate Constructors, Kiewit and Zachry led, a number of other firms that are familiar to transportation in Texas. So we have two teams we ended up with.

Scoring of the proposals, similar in some respects to previous CDAs: 100 points total, 80 points based on pricing, 20 points based on qualitative technical evaluation. We did get prices for each of the three configurations that are kind of cumulative and we'll show that. And very important in this project, technical solutions, project management plan, quality management plan were also evaluated up to a 20-point potential score.

For the 80 points that were based on cost, those were broken out by configuration. Configuration 1 was given by far the most emphasis, again, because our concept through much of this procurement was we were going to be held to a very strict budget, and so we placed the highest priority on trying to achieve Configuration 1 and then lesser point totals for 2 and 3. Price value was calculated as some of the present value of the monthly construction payments, so the way the developers structured their request for payments was significant as well, as well as alternate technical concepts and that potential for 15 years of capital maintenance that we mentioned.

So the three configurations that the proposers were looking at are the highlighted areas, and for Configuration 1 it's composed of managed lanes. That is the new capacity that would be built in the area but only one in each direction on State Highway 114 from Southlake Boulevard which is on the left side of the screen -- the pointer doesn't really show up here -- but the State Highway 114 shield on the left side, that's about where Southlake Boulevard is, International Parkway is the road that goes into the DFW International Airport. So managed lanes, one in each direction through that entire area. And then reconstruction, four to seven lanes through that corridor as well, those are non-tolled lanes, reconstruct frontage roads throughout most of that area as well.

In the next slide I hope to show you a simulation, but I don't want it to be confusing at the same time. It's meant to show you a lot of Configuration 1 but it's really showing the entire build-out from about the Southlake Boulevard through to about the Main Street overpass which is just east of the 121-114 interchange on the left. So I did want to give you a good picture, really, of how significant a project this is but don't be confused, this won't be the entire Configuration 1, but hopefully it will illustrate some key things for you.

This is starting on the westernmost side of the project, coming onto that Northwest Highway/Southlake Boulevard depressed section, flyover ramp for FM 1719, and kind of cruising through the corridor. Just a huge amount of infrastructure to be reconstructed. The district's schematic will hopefully address a lot of that merging and weaving problems that they see now coming on William Tate, if you're familiar with the animation. There's a north arrow up in the left-hand corner to keep you oriented and in the right-hand inset it kind of shows you the direction of the flyover.

We're coming into the 121 interchange, direct connectors through that region; now we're looking pretty much due north as we wheel around the interchange. Haven't made it quite to the entrance to the airport yet but it's fairly close, just to the east. A number of restaurants, shops, other businesses in this interchange area, so again, access to those and keeping access so the project will be very important. And now we close in on the Main Street overpass, I believe. So far you can probably see that nothing straightforward, it's a very complex interchange.

So Configuration 2 -- and again, remember that a lot of Configuration 1 extended beyond what you just saw, again, hopefully gives you a little better picture of what the ultimate configuration could be -- Configuration 2 would include all of Configuration 1 that we just talked about plus extending the project to the north along up to Interstate 35, it includes ramps to that interchange and 2499 as well. In this concept instead of one managed lane in each direction, we would construct two in each direction for pretty much the entire area from Southlake over to the airport, reconstruct those main lanes we talked about, six to seven in each direction, and reconstruction of a lot of frontage roads as well.

So we're starting a little east of where we ended and we'll continue on to the east. Closing in on the State Highway 114/121 interchange and the entrance to International Tollway which goes into the airport. You can see a large number of direct connectors, some very complex and important expensive construction in this interchange area. I think we'll end up looking south into the airport entrance and stop in just a moment. 114 does continue on to the east and both of these configurations do include connections, managed lane, at least one and two in Configuration 2 over connecting on to the east.

And then finally, Configuration 3 extends the project to the north, reconstructing main lanes, ramps up to FM 2499, a very important connection up to Denton County, also extends the project to the south through that interchange and over to south, the 121/360 split. Now, just to get you oriented, when we come back to the last animation, we've been going from west to east through the interchange, we're going to go up north near that FM 2499 sign and we'll be heading south for the entire length of this. Coming back toward the airport entrance and the big interchange.

So I guess no further fanfare is needed, we'll go ahead and talk about what we think is the best value proposer, NorthGate Constructors, Kiewit and Zachry, a number of other firms associated with them. As we mentioned, the budget on this project was a huge part of the consideration as we went through entire development of the project.

The prices that we have been given from NorthGate to date, and they're shown as Configuration 1 price as just under $600 million, Configuration 2 a little over a billion dollars, Configuration 3 $1.5 billion, we're asking today that you consider awarding our recommendation of a best value proposer. We'd like, if you do grant that, to have some steps forward that further define the project they actually construct. There is a negotiation conceived in the CDA, we'd like to enter into that negotiation, and all of the value engineering that we've done to date has been internal to TxDOT, we've had some of our best people looking at it.

But now that we potentially have a constructor that we can work with, we are hopeful that we can trim down some of the price that we saw on that Configuration 2, possibly Configuration 3, but trim down some of the prices that they've quoted overall. We'd like to get more from the project, the most from the project that we can with the available public subsidy, and we're optimistic that we can make some headway there.

Environmental approval is something to be noted, it's crucial in the progress of this project but also the use of stimulus dollars here, but our environmental division has been working day and night with the district and the resource agencies. They anticipate spring 2009, I believe it's June 2009 approval, so we think we're on track there. A public hearing does have to be held, and of course, we'll need all of the usual concurrences with FHWA, Attorney General, Legislative Budget Board, State Auditor's Office, and working through all that, hope to have final execution of the CDA by the spring of 2009, really very quickly.

But again, it's a little different from the other two and so I wanted to point out that difference. We'd like, again, your approval to work with a developer with definition of the project that they do to be worked cooperatively with them, and hopefully we can get the most that we can for the available dollars that we have.

I would like to mention, hopefully you've got a feel for how massive this project is. The procurement alone lasted three years and I know the district development of the project has gone back much further than that. The leadership of Maribel Chavez there in the Fort Worth District, Brian Barth, of course, our administration here has been actively involved in the project for a long time, Mr. Saenz, Phillip Russell, Steve Simmons -- these are the folks, I believe, that really made it happen -- Ed Pensock from our staff, John Munoz from Finance, from the district, Sam Swan, Curtis Hannon, Brian Barth, just yeoman's work there, and a whole host of other divisions. And the OGC role and the financial role, the Finance Division's role here is extremely significant. Plus we had outside observers in this procurement, as we have all the others, and those were members from city government, DFW Airport, the COG and other leaders throughout that region.

So with that, we would recommend your approval and be glad to try to answer any questions I can.

MS. DELISI: Are there any questions for Mark?

MR. MEADOWS: I probably have a question in this and I'm not sure what it is yet, but what I think would be perhaps helpful is for me to summarize what I think I heard you just say, so that everybody in this audience that has a real interest in this project will understand what it is that we are exactly proposing to deliver. I think that's important.

MR. TOMLINSON: Yes, sir.

MR. MEADOWS: What we're proposing to deliver is a $667 million Configuration 1 project that you outlined, beautifully outlined with animation and all that. In addition, we are, I think, blessed to have, through cooperation and coordination with a number of different parties, allocated $250 million to the project that further enhances the project beyond Configuration 1. Is that correct?

MR. TOMLINSON: Yes, sir.

MR. MEADOWS: That's the question. In addition to that, I think what I've heard from you and this agency staff that we are going to exert considerable effort, working with our transportation partners, many of whom are in this room, to identify further resources that might be brought to bear on this project to enable it to be further enhanced beyond the $250 million on top of the $667 million base Configuration 1. Is that correct?

MR. TOMLINSON: I understand that to be correct, yes, sir.

MR. MEADOWS: I just wanted to make sure everybody understands because I see Configuration 3 shown up here and I'm reminded a little bit of something like going to my wife and handing her the keys to the brand new KIA that I bought here and we're all very pleased that we have this KIA because it's very reliable because it's going to get us down the road -- or perhaps I should say Chevrolet -- and at the same time that I do this I say, Oh, by the way, and here's the photograph of the new Mercedes that we can't afford but it really would be nice.

So I want to make sure that we're clear with everybody in this room and anybody that might be listening that this is really exciting, we're really advancing a significant and important bit of transportation infrastructure but it's not to the full level that was described here today. And I don't want anybody to be misled or anybody to think that we've got the resources that have been identified at this point to enable us to deliver that project fully scoped out -- I hope some day that we will, and I think that we're all committed to significantly enhancing what it is that we have here.

But I just want to make sure that people are clear on what it is that we actually are going to be able to provide -- which I don't want to diminish in any way whatsoever because it is extremely important. It's extremely important to 62 percent, in fact, of the people that utilize that infrastructure -- as I recall statistics -- live in Denton and Dallas counties. That's kind of interesting. So it really, truly is a regional project. It is a project that serves the third busiest airport in the world. I think that's important, the fact that we continue to support that airport's operation, facilitate the flow of traffic and people and goods in and out of that airport is absolutely essential. I'm glad that we're doing that, I'm thrilled.

I think it's also important to point out -- in your presentation you touched on it but I just want to emphasize it -- this, again, is a project that is distinctly different from any project that we've delivered in the Metroplex before in terms of delivery methodology. Number one, it is design-build, that's innovative, it's unique, and it's enabled us to deliver this project, I think, in a more rapid and cost-effective manner than we've done before. I think the second point I'd make is that the North Texas Tollway Authority on the managed lanes they'll be the collector of the tolls, another partner.

You think about the partnership, collaboration, cooperation discussion between Tarrant County, I know Judge Whitley is here, Denton County, City of Grapevine, Representative Truitt is here, Senator Nelson may be here, the list is long, the RTC, Michael Morris, all partners, all the people who came to the table recognized the importance of this to the citizens that we are serving, and made their contribution to the project, whether it was in dollars or words or strategy or just facilitation of the project. So this is an exciting day for us, it's an exciting day because we're going to deliver exactly what I just described. It's not everything that we saw on the map here, and I want to make sure we'll talk about that later.

MR. TOMLINSON: Yes, definitely appreciate that.

MR. HOUGHTON: Let me ask a question. With the risk of negotiating here from the dais, how do you propose on getting more money to reach the ultimate goal of, I guess, Option 2? Where are the opportunities to get the money to get to Option 2, at least Option 2?

MR. TOMLINSON: Well, one option we believe exists, in the iterations that I talked about on the project history, in the last iteration, the proposers were able to refine their Configuration 1 price, they were not allowed to on Configuration 2 and 3, and in the recent time here we have seen a decrease in cost and so we're hopeful, if we're allowed to move ahead with a developer, again, working closely with them -- and these are, as you know, very well experienced, they've done huge projects around the world -- we're hoping they can refine their prices, one, and find innovations to construct more efficiently that larger scale, or a larger scale.

MR. HOUGHTON: You think you can make up roughly $200 million in that?

MR. TOMLINSON: Probably would be a little overly optimistic but I think we can move on that direction.

MR. HOUGHTON: Where are the other options?

MR. TOMLINSON: I probably would not be the best to speak about that.

MR. HOUGHTON: Amadeo, are there other opportunities that we can identify like partners up there that may have some resources?

MR. SAENZ: For the record, Amadeo Saenz, executive director of TxDOT. A couple of other options is, of course, the right of way has to be purchased for this project, we have some partners in that arena. For example, we're purchasing quite a bit of right of way from the airport, if we could negotiate a good price or a donation, that would, in essence, reduce the cost of the project. That would be number one.

MR. HOUGHTON: Can I stop you there?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Can you give me an idea of what's been identified as a right of way cost, do we know? Again, I don't want to get hung up on it but I just want some of the locals to understand we may need their help in this.

MR. SAENZ: I think the right of way cost of the project is around $80 million.

MR. TOMLINSON: Yes, $78 million for that configuration.

MR. HOUGHTON: Is that airport property?

MR. SAENZ: That's the entire cost of the right of way.

MR. HOUGHTON: Entire cost.

MR. TOMLINSON: About $42 million, we understand, from the airport.

MR. SAENZ: About half of that is airport property.

MR. HOUGHTON: And this benefits the airport, doesn't it, this project?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: So right of way cost, value engineering and what other?

MR. SAENZ: Well, there's probably some alternative design concepts which kind of tie into the value engineering that we have not only from this proposer but from the other proposer, since we do buy the work product of the stipend that we can maybe go back and incorporate and use that in the value engineering that will allow us to do that.

MR. HOUGHTON: Okay. Madam Chair, you and I, and I think we all have either directly or indirectly said we've got to build this project, and I'm amenable to that, I think we have to, as Commissioner Meadows talked about the amount of people that use this thing. I think we need to sharpen our pencil, bring our partners back in and find a way to get to at least Option 2 and bring it back to this commission as soon as possible. That would be my recommendation.

MS. DELISI: I agree.

Mark, will you check my math here -- we've done a lot, January, February, March, every month we've done a project -- by my math, and tell me if I'm right, on the three CDA projects up in the Metroplex it's been about a $2 billion public commitment of funds, in exchange, the people of the state are getting -- if my math is correct -- about $7.5 billion in projects, assuming that we can make Configuration 2?

MR. TOMLINSON: Yes, ma'am, that's correct.

MS. DELISI: Great investment.

MR. HOUGHTON: Seven billion?

MS. DELISI: $7-1/2 billion.

MR. HOLMES: But you add to that 121 and all the transit that they're doing, it's about $13 billion all in. Right?

MR. TOMLINSON: That probably would be correct.

MS. DELISI: The region showed a lot of foresight two years ago on the moratorium on getting these projects out of it to make sure that these projects go forward.

MR. TOMLINSON: Yes, ma'am, they did.

MS. DELISI: Michael Morris.

MR. MORRIS: Commissioner Houghton, just to help you a little bit on the partnership, we stand ready to work with you, we know this is very important, has been for a long period of time.

A couple of observations. I think Mr. Meadows indicated value engineering is a good way to look at this particular project, it's a very complicated set of interchanges, we stand ready to go in and look at the most important parts of this particular item, and work closely with whoever your recommended constructor is. Central Expressway went through a value engineering exercise. I think that is one item.

I'd be a hair cautious on right of way at the airport, only because a lot of that right of way was purchased from the Federal Aviation Administration, we've already met with the Federal Aviation Administration. There are two or three other funding sources, gasoline tax, the region stands ready to see where we are and how we can get it across the goal line. We talked to Commissioner Meadows about that yesterday.

You have not yet included any of the revenues from the managed lanes. Remember this is a design-build, not a design-build-finance, so you have a revenue source that potentially the RTC could float, potentially, meaning the RTC takes a risk, they float it, the revenues come back to pay the RTC back. That's a conversation we could have with the RTC.

A third source as you indicated -- and we did some detailed traffic simulation for Commissioner Meadows -- this is a huge project to Denton County and to get to 2499, you have 2499 that's sitting on 121 revenue that can't be flexed to the west. Senator Davis has introduced legislation to create some flexibility there so you have potential 121 money that potentially could be moved, literally a driver and a 7-iron, into the middle of this interchange.

So the partners stand ready, we understand the importance, we've been around trees like this before. As Mr. Saenz articulated, doing value engineering on the cost side, continuing having the partners working on the revenue side, we stand ready to help you.

MR. HOUGHTON: Madam Chair, how do we move ahead and express our preference on getting at least 2 done. Michael brought some good points up that I wasn't aware of.

MS. DELISI: I believe that the proper course of action would be for us to go ahead and vote to approve this so that staff can start negotiating with their recommended bidder, and working with the winner of the CDA as well as the locals and Michael and bringing everybody to the table to start aggressively coming up with ways to bring this price down so we can achieve what we all want to achieve, getting to Configuration 2.


MS. DELISI: I do have a couple more people who want to testify. Joe Wingerter from Kiewit/NorthGate is here, and I'm sure would be able to answer any questions, if anybody has anything of him.

MR. HOUGHTON: Where's Joe? Come on up, Joe, I see you there. I've asked this same question twice to the winning bidder on the other projects we just awarded since the first of the year. How many people will this project employ up and down the food chain.

MR. WINGERTER: Well, thank you, first, for the recommendation.

MR. HOUGHTON: You haven't won yet, we haven't voted yet.

(General laughter.)

MR. WINGERTER: I'm anticipating the vote. But thank you very much, Joe Wingerter, for the record. We look at, during the peak period, a workforce of about a thousand people, significant economic impact, and our workforce is primarily local. Between Kiewit and Zachry we've been working in the transportation market here in the State of Texas for close to 100 years. We have great relationships. We've had a lot of discussion today, Commissioner Meadows, about partnerships. I can't tell you just the amount of partnership that's gone on between the fine folks at TxDOT and the local communities that are represented here today.

MR. HOUGHTON: Thanks, Joe.

MS. DELISI: I have one question. Can we count on your help to work with us as well as the local communities to help us reach the goal of Configuration number 2?

MR. WINGERTER: Absolutely.

MS. DELISI: Thank you very much.

MR. WINGERTER: Thank you.

MS. DELISI: I'd like to call up Mayor William Tate.

MR. HOUGHTON: What city?

MS. DELISI: The mayor of Grapevine.

MR. HOUGHTON: That's right, I heard you were coming.

MAYOR TATE: Madam Chair, members of the commission, Mr. Director. Commissioner Meadows just made my presentation, so perhaps I just should pronounce the benediction and take my seat.

It's an argument that any leader from our region could make that's knowledgeable of the problems that we face, and that's why we have so many public officials from throughout our region here today to be witness to this historic day. And I think they join with me in congratulating the commission and TxDOT for years of cooperation, for your ingenuity and creativity to be able to stretch the tax dollar and build as many highways as you can, for your ability to design and to plan and to go to contract on these complex issues. It's really a difficult challenge for you and we appreciate your talent and your willingness to give your time and ability to make those tough decisions.

This connector project, when it's completed, will be a life-changing event for my community, it will change our landscape forever. As you know, there's two great land barriers in our city, Grapevine Lake and DFW Airport, and so we're limited on the east-west corridors, and at the same time you have this enormous growth in north Dallas and southern Collin County and southern Denton and northern Tarrant County, so much of this growth has to pass through Grapevine and the DFW Connector, and we've wondered for years how we could accomplish that and you're about to deliver that answer today with your decision, and we appreciate that, we thank you for that.

What I've learned through this process is we're going to have to depend more on rail in the future. These highways become too big, too costly, they're not environmentally friendly and they take too long, and so that's why you've heard so much today from our region about rail and we're looking forward to that.

Our people are just a small community and we've tried to be the running horse through Mr. Jerry Hodge on this connector project, but also our people a couple of years ago voted, by a vote of 75 percent, to increase their sales tax to bring the Cotton Belt from Fort Worth to Grapevine and to tie the T and the DART together at DFW Airport, and I don't think we realize the importance of that, that is going to be a giant leap for the people of our region.

And so we would like to thank Maribel Chavez for her hands-on treatment in this project; Michael Morris, what a godsend he is to our region and this state; to Judge Whitley and Commissioner Fickes and Mayor Trevino and all the stakeholders, all the public officials throughout our region who have put this partnership together, who have tried to unify our region and who are working very hard to give us a future.

And so we thank you for the opportunity to speak and we thank you for your service to this great state. Thank you very much.

MS. DELISI: Thank you.

I've got two letters that I've been requested to read before we take a vote. The first one says, "It's my understanding that at this morning's Texas Department of Transportation Commission meeting the commission will take up an agenda item to select the best value proposal to construct and build the DFW Connector Project. The successful completion of this project will bring much needed relief to the region. This project will be a great addition with up to 16 miles of new lanes that will allow the motorists in the DFW area to travel with much more ease.

"The purpose of this letter is to advise you of my support for the selection of the DFW Connector proposer and getting this road one step closer to being completed and to less congestion in a region that is growing larger daily. Sincerely, Chris Harris, Texas State Senator, District 9."

Also, "I wanted to be there personally today but unfortunately the Senate schedule prevents me from attending to offer my strong support for the DFW Connector Project. Our region has been advocating for this project for many years. I have great memories of all of our community leaders chartering buses to Austin to bring attention to the State Highway 114 corridor, I remember taking a former commissioner on a helicopter flyover so that he could see the need firsthand, and I remember how grateful we were after bringing the governor to the area and gaining his support for the necessary funding.

"Now the time has come for this project to proceed. No transportation project in Texas is of greater urgency, not just for the Metroplex but for our entire state. The success of our state economy is inextricably linked to our regional economic success. If we fail to deliver the highway infrastructure needed to continue our prosperity, the entire state will suffer. Transportation is not just a quality of life issue in our North Texas, it affects our air quality, our emergency response times, our commerce and our ability to create jobs for our citizens. The epicenter of our mobility challenge is located exactly where State Highway 121 and 114 converge north of the DFW Airport which is why it is so critical that this project move as quickly as possible.

"I know that you share our goal of improving transportation throughout our state. To achieve that goal, we need to work together as a team, legislators, commissioners and the local leadership. I want to thank our Regional Transportation Council, Partners in Mobility, and transportation leaders in North Texas for their tireless efforts on behalf of this project. And I would urge swift action today and in the weeks and months ahead to make this project a reality. Very truly yours, Senator Jane Nelson."

I don't think we have anybody else at this time right now to testify. I'd like to go ahead and take a vote and then call up Representative Truitt who would like to address the commission.

MR. MEADOWS: Madam Chair, I'd move approval.


MS. DELISI: All those in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes. Congratulations.


MS. DELISI: At this time I'd like to call up Representative Vicki Truitt.

MS. TRUITT: Good morning, Madam Chair, Commissioners. Long time coming. I believe the year was -- and I remember the bus trip too, I was on one of those buses -- I believe the year was 2001, the location was Laredo, and if I'm not mistaken, Amadeo, I believe that's the first time I met you.

MR. SAENZ: Yes, ma'am.

MS. TRUITT: Was in Laredo, Steve introduced us when I came down and we talked about this project way back then. On October 2, 2002, Governor Perry, in a very public way, indicated his sustained support for this project before a group of several hundred people up at Texas Motor Speedway, talking about this project and his commitment to the people of North Texas.

Most of the project described here today is located in my district, but the significance to the people of the area, it goes far beyond, far beyond the boundaries of my district, it's the entire North Texas region, in fact, it's the entire state and beyond, the people who use DFW Airport. The numbers of people who travel through this area that will be impacted by these improvements, it's a huge undertaking and it's extremely important.

Amadeo, I've seen you sit in some meetings and take some pretty serious lashings, often undeserved, and I've seen the entire TxDOT staff take that. I just would like to take this moment to thank Governor Perry, thank you, Chair Delisi, Commissioner Houghton, Commissioner Meadows, all of you commissioners, Amadeo, Steve, Maribel, all of the TxDOT staff for your dedication and commitment to the people of North Texas and this important project. You said you were going to help us get it done and there's a lot left to do, but I just want to personally express my appreciation on behalf of myself and all the people I represent in the 98th Texas House District and the folks in North Texas who desperately need this project, and thank you very much for your commitment and dedication to us.

MR. HOUGHTON: Representative Truitt, the Chair alluded to it earlier, but your foresight in the last legislative session on pulling these projects out of that moratorium was key and critical to the success of what we've done the last three months here, $7-1/2 billion worth of projects were awarded. I applaud you for your courage and your foresight, and this has been loads of fun.

MS. TRUITT: There are defining moments in legislative careers -- sometimes we don't see them coming -- that morning was one of those. There was something very big at stake, at the time I didn't realize how big it was.

MR. HOUGHTON: Well, it's a $7-1/2 billion leap of faith, and to date, we're not finished.

MS. TRUITT: Oh, I know.

MR. HOUGHTON: So thank you.

MS. TRUITT: You're welcome. Thank you.


MR. SAENZ: Thank you, Commissioners. I guess before we move on, I would like to thank all the staff, Mark, all your folks, the folks from the Fort Worth District, our consultants and advisors, again, thank you for a job well done. Thank you, Michael, for all your help and all the partners. We got this project past the goal line almost. This was the last of the CDA projects that we had that were exempt from the moratorium, so for a short time we're out of the CDA business. We need to see kind of what happens this session so that we can get back on this horse. Thank you all.

MS. DELISI: At this time I'd like to take a short break. There's going to be a press conference about the action we just took, and it will give people time to move on. Thanks.

(Whereupon, a brief recess was taken.)

MS. DELISI: All right, Steve.

MR. SIMMONS: Thank you, Chair. For the record, Mr. Saenz had to step across the street for a hearing in Senate Finance and he asked me to assume his duties, so we'll start with resuming item number 3, a report on the discussion about the American Recovery and Reinvestment Act.

MR. BARTON: Thank you. For the record, again, my name is John Barton, I'm your assistant executive director for Engineering Operations here at the Texas Department of Transportation. And this morning I wanted to discuss two items with the commission and receive feedback from you, if you will, on the direction you'd like to have us move on two issues.

First, I would like to discuss the current status of our efforts to use the funding that you've provided to projects under the American Recovery and Reinvestment Act, and secondly, I would like to, with respect to the mobility and preservation projects that are being developed under the Act, I want to discuss with you a project substitution methodology that we recommend using should any of those projects that you previously approved have difficulty moving forward during the development process.

So for the status of the American Recovery and Reinvestment Act program, during your normal February meeting and your special called meeting in March, you approved maintenance projects valued at approximately $500 million, if you'll recall, and mobility or major construction projects valued at about $1.2 billion in stimulus funding that meet the requirements of the American Recovery and Reinvestment Act. This discussion is timely because as we continue to move forward, we are receiving additional information from the Federal Highway Administration, the U.S. Department of Transportation, and the Secretary of Transportation's Office regarding the implementation of the Act, as well as clarification on what we need to do in reporting in developing these projects.

I would like to note for your attention that our local division office here in Texas of the Federal Highway Administration has been extremely cooperative, working with us through this process and helping us maintain our project development schedules, and we're grateful and thankful for that.

In order to manage the implementation of these projects, the department has created a database that our districts are populating each week with updated information about the projects so that we can monitor the progress of the projects, and based on that information, we're able to now plan for and marshal the necessary resources to get these projects developed, monitor their performance, clear any bottlenecks or hurdles that we identify that are in the way and make sure that we're providing a transparent report on the progress and process of these transportation improvement projects to stimulate the economy here in Texas.

As we work on the American Recovery and Reinvestment Act highway and bridge program here in Texas, I would like to share with you that I believe it's progressing very, very well at this early stage in the game. We have submitted the governor's certification for the maintenance of effort level for the State of Texas, which is one of the requirements, and we'll be submitting our first project certification later this week in order to move forward with the actual letting of some projects. And then on or before April 3, we will ask Governor Perry to issue and submit a certification requesting the funds for these projects which is the third piece of the required certification process.

Also, we will be submitting our first report on the stimulus funded projects to the U.S. Department of Transportation secretary of Transportation's Office, and the Federal Highway Administration by March 31 which is a requirement of our reporting process. And we plan to have that report prepared either later tomorrow or over the weekend.

I guess the good news that I'd like to share with you is that we will be taking bids on our first stimulus funded projects, a little over 140 of them, in a second called letting in April, and they have an estimated construction value of just over $450 million which includes both preservation and major construction projects. So we are about to implement projects to put Texans back to work.

We do have a solid plan for exceeding the requirements to obligate 50 percent of the stimulus funding available to the commission before June 30 of 2009, and as this plan progresses, we anticipate taking bids on most, if not all, of the remaining preservation projects by June of 2009, as well as several of the major construction projects that you've funded. And as we move forward through this summer and early into the fall, we expect that many of the other major construction projects will go to contract as we begin to approach that final obligation date of March 2010.

We're continuing to hold weekly conference calls with our planning and implementing partners across the state and have created our own version of what has been nationally referred to as a Tiger Team in order for districts and division staff to monitor and spearhead the efforts on this. This team of individuals is led by Larry Tegtmeyer, our district engineer from the Wichita Falls District, and Mr. Mark Marek, your division director for the Design Division, and they're working with groups of individuals both at the district and division level to monitor our progress and to shepherd us through this important program.

I'd like to also note that David Casteel and your district engineers are providing strong leadership in this effort, making sure that the efforts of the districts are put forward to get these projects ready to go to contract. And Steve Simmons and your division directors are also providing strong direction and support to make sure that we have all available resources necessary to do these projects, to monitor the process and the practices that we have in place to get them quickly implemented, and then to work with our outside resource agencies and federal partners to make sure these projects stay on track.

And I think we clearly have articulated to the staff of the department and our implementing partners that this is the most important priority for the department and our industry and successfully implementing it is paramount.

Secondly, I'd like to just share with you that as we clearly focus on the goals and the importance of this activity -- which is the entire focus of the department at this time -- in making sure that we implement the commission-approved projects that are on the preferred list, as I will refer to it, we also think it's important that at this time we not step back from this too far and forget that there might be situations that occur because of the requirements and timelines associated with the Act that could prevent projects from moving forward, and therefore, it's important that we have a backup plan available to us to supplement or introduce a new project.

In that regard, we have been in the process of establishing a backup plan and I would like to recommend to you today for consideration a concept on what this plan might do and how we could make sure that we have projects ready to fulfill the requirements of the Act should one of your preferred projects run into any problems. We have been working with our transportation partners from around the state and through your direction and leadership, we developed what I believe was a very important plan that allowed us to select those preferred projects, and again, it's important that these projects now have a backup plan, that we can refer to as alternate projects, in place to ensure the successful completion of the American Recovery and Reinvestment Act for transportation here in Texas.

The projects the commission has approved, we have developed, based on their recommendations, and open and transparent process that we've gone through before, and building on that success, we've brought in our state MPOs, tolling authorities and other local leaders to consult them on not only the criteria for selecting alternative projects but a process for doing that. Through our weekly conference calls and then through a special called meeting we had earlier this week here in Austin, we have developed what I have been referring to as a backup plan for implementing part of our stimulus program strategy. Through these weekly conference calls we've been able to gather a lot of good ideas, and so what I'd like to do is share with you today a little bit of information about how this alternate process might work.

Any of the alternate projects that might be needed for the particular issues that we've already discussed need to be developed on a parallel track with the preferred projects so that they're ready to step forward should the opportunity become available or the need arise. And so it's important that we make sure that we clearly identify projects that are ready to go, and just to make sure you understand, some of them are in a position that they could move forward immediately, I think, others may need some more extensive project development processes to be completed and coordination activities to occur.

And all of these will, of course, require additional steps and resources and energy as well as the involvement of our transportation partners from around the state. But having that as a goal and understanding, on a positive note, I think that as we develop these projects, ultimately, whether they proceed through this program or not, they would be the next highest priorities for the state that are ready to move forward as additional federal and state resources do become available. So in order to ensure that these alternate projects are prepared and ready to go in the event that they're needed, it's important that we identify them now and that we continue to develop them on a parallel track, as I mentioned, as our preferred projects.

As we've thought through this process, discussing it with our MPOs and other transportation partners, collaborating with them, we have reached kind of a consensus that we should use the list of projects that was originally short-listed by our metropolitan planning organizations, toll authorities, transit agencies and districts that we then use to evaluate the priorities that we had established for the state and ultimately then reduced to the preferred project list that you have approved in previous meetings. These projects do represent the highest priorities for the regions and therefore are the projects that they would be working toward advancing in future years whether the stimulus funding program had become available or not.

In discussions we have also concluded that there may be a very small number of additional projects that for whatever reasons were not identified as priorities in this first round of consideration and we'd like to suggest that we provide an opportunity for our district engineers and our metropolitan planning organizations to work with one another to determine if there are additional projects to include in this alternate list. I don't expect that there would be a lot of them, perhaps five or maybe even less than that, from around the state, could be as many as ten but I certainly don't expect it to be 25 or more.

And once this list is kind of finalized and vetted out through our transportation partners, we would suggest that we bring this forward to the commission for your final review and approval so that we can begin the implementation of these projects or at least the development of them so that they could be ready to go to ensure that Texas reaps the full benefits of the American Recovery and Reinvestment Act should one of our preferred projects run into any kind of unforeseen problems.

I would like now to just briefly discuss how we recommend the commission ultimately would then select projects from that alternative list of projects, should the need arise. We, again working with our transportation partners, have developed a methodology for selecting these substitute or alternate projects from the previously approved preferred list of projects that were not able to move forward during the selection process. This methodology describes a process for asking a series of questions and evaluating responses to then determine if you have suitable replacement projects from the alternate list.

Basically -- and I think you have a handout that's been provided to you, there's kind of a decision-making process that's outlined -- if an original project simply cannot be rescued, is not able to move forward for the unforeseen reasons that we've already talked about, then we would ask a series of questions to determine which alternate projects would be the best to replace it. It basically would look for alternate projects that are in economically distressed areas of the districts or regions from which the preferred project was lost and that could be delivered within the same time frame as the preferred project because there are different time frames associated with the Act itself. If there's not a project that's within the economically distressed areas, we would then turn to non-economically distressed areas within the region, the district and the state. And it's clearly laid out, I think, in this presentation material that's available to you.

As we do this process, if there are multiple projects that are considered of equal value in terms of their location within the economically distressed areas of our state, as well as the regions and districts, then there would be a series of evaluation criteria, similar to those that were used during the process of selecting the preferred projects to look at areas such as the value in terms of safety improvements, whether or not the projects are on statewide or regionally significant corridors, the economic benefits that these projects provide in the long term, and if we're still able to maintain a fair and equitable distribution around the state, and then last, because of the fact that a lot of leveraging was offered in the preferred list, whether any of these projects have leveraging opportunities associated with them.

MR. HOUGHTON: I have a question, John.


MR. HOUGHTON: Can you take a breath?

MR. BARTON: Absolutely.

MR. HOUGHTON: The question, we're going to vote here in a couple of minutes on some toll projects and they have to do with stimulus. For instance, Central Texas RMA, my friend, Michael Heiligenstein cannot deliver, and I voted here to send him -- how much are we sending?

MR. BARTON: I believe it's $90 million.

MR. HOUGHTON: Ninety million dollars, for some reason that project falls out of bed, doesn't work, how do I get my money back? I've authorized him by minute order.

MR. BARTON: That's correct. We would do a correction minute order.

MR. HOUGHTON: Okay, so there would be a correction minute order.

MR. BARTON: Yes, sir, we would have to do a corrective minute order to establish the new projects that will be funded with that funding and then, of course, the action that you're going to be taking in a few minutes has to do with just the project development process and the agreements that need to be in place.

MR. HOUGHTON: That's my question: if for some reason we've got partners out there, the other partners that we've established around the state, some of these partners will be delivering those projects, not us.

MR. BARTON: That's correct.

MR. HOUGHTON: So if one of these projects just falls out of bed, doesn't work for some reason, we have to come back and re-vote to establish a new project, unwind what we've done.

MR. BARTON: That is correct.

MR. HOUGHTON: Okay, that's what I needed to know. Thanks.

MR. BARTON: Any other questions at this time?

MR. HOLMES: John, in looking at this, it's not clear to me whether substitute projects would come from the same region and then it would go through a series of criteria in terms of which projects within that region. Is that what you're proposing?

MR. BARTON: That is. If you'll look at the first page of the handout that I provided to you, if a project is not able to stay on track for whatever reasons, then the first criteria we would look at for the major mobility projects is whether or not substitute projects within economically distressed areas of that particular region are available to be delivered within the same time period, and of course, that's because the Act does require that we place priority on projects within economically distressed areas and we wanted to maintain that fair and equitable balance by looking for projects within that region first.

MR. HOLMES: And in the mix of projects that were within economically distressed counties versus ones that were not, if I recall from the previous vote, you felt like we had a fair distribution.

MR. BARTON: That is correct.

MR. HOLMES: And so are you talking about changing that distribution in the event that a project falls out and it happened to be in a non-economically distressed area and you're then moving it into an economically distressed area? Is that what this priority says?

MR. BARTON: That is what this priority says, yes, sir.

MR. HOLMES: And why would you do that if you are already in a fair distribution?

MR. BARTON: I think that the intent was that as we looked at substitute projects that we go back to that criterion that's in the Act which is to look for projects in economically distressed areas first.

MR. HOLMES: And would we be in contravention of the Act if we took a project that had fallen out and left it in an area that was not economically distressed?

MR. BARTON: I don't think if the ultimate decision came out that way that we would be in contradiction of the Act, it's just that we need to make sure we've evaluated if there are opportunities to do projects in economically distressed areas as a priority.

MR. HOLMES: And so if a project fell out of Dallas, Tarrant, Travis, Bexar, Harris County, by your definition, you would not look to put it back into those areas?

MR. BARTON: We would look to put it back into the region first in areas that are economically distressed.

MR. HOLMES: Well, I know, but those are not economically disadvantaged counties.

MR. BARTON: Correct.

MR. HOLMES: And so you would take that money from those counties and put it somewhere else.

MR. BARTON: Not necessarily. The process would call for us to look for projects within those economically distressed areas of that region first. If they aren't available, we would look for projects that are in economically distressed areas in the state, and then if there aren't others available of priority order, then we would go back to the district within the non-economically distressed areas.

MR. HOLMES: And you have no weighting for congestion relief and economic benefit if a third weighting and a fair and equitable distribution is fourth?

MR. BARTON: The order of those is not necessarily the value of the criteria on this.

MR. HOLMES: That's not what it says, it says in order of importance.

MR. BARTON: Okay. I think that the reason for that was that the leverage-ability was one that we talked about as a group on Monday that the opportunities for leveraging had been kind of maximized during the preferred selection process, and so we wanted it to be a criterion but the lowest criterion. The top four, quite frankly, I'm not sure are ranked in any particular order other than that we all know that safety is our most important priority.

MR. HOLMES: Well, I'm having a little bit of difficulty with the way that you're proposing this.

MS. DELISI: Well, if leverage-ability is the bottom and all the other four are equal, why wouldn't we just strike "in order of importance" first and foremost?

MR. BARTON: And we certainly can.

MR. HOLMES: And why wouldn't you have congestion relief as one of the issues?

MR. BARTON: It's not that congestion relief isn't important, Commissioner Holmes, by any stretch of the imagination. I think that it, in and of itself, is incorporated into a couple of areas that are here: safety improvements as well as economic benefits. But these are the criteria that we reached through the consensus process with our metropolitan planning partners and transit authorities as we developed our process for evaluating our preferred alternative projects.

MR. HOLMES: You had about 150 in this audience earlier that was basically driven by congestion issues.

MR. BARTON: Correct, and if the commission would like for us to add that as an evaluation criteria.

MR. HOLMES: I absolutely would add it. I mean, it's one of our stated principles and goals, so why we wouldn't have it would be a mystery to me.

MR. HOUGHTON: Commissioner Holmes and John, congestion relief was one of the factors that we used. Maybe you've embedded it in these others, like you have said, but I always thought congestion relief was one of the criteria.

MR. BARTON: And as we develop all of our projects, we do consider the goals of the department and there are five of those, and of course, reducing congestion, improving air quality are two of those.

MR. HOUGHTON: Can we add congestion relief too?

MR. BARTON: Absolutely. At the direction of the commission, we'll be happy to do that.


MR. BARTON: And we can move "in order of importance" except for leveraging, if you would prefer, as well. That's what we're here to do today, to get direction on it.

Any other questions?

MR. HOUGHTON: We have a lot of congestion in El Paso.

MR. BARTON: I'm sure we do, Commissioner Houghton. I probably have experienced some of that myself as I've traveled from the airport to meetings.

Just a few closing remarks. I think this approach provides a sound methodology for stepping through the process of identifying projects that could be suitable replacements for those projects that are preferred and doing it in a way that's unbiased and is without influence while we're going through probably a very difficult and time-sensitive decision-making process, should that need arise. So that was the purpose for presenting it and recommending that we consider something like this as a tool in a strategy in forwarding the program under the American Recovery and Reinvestment Act.

I'll just close by saying that I'm very proud to share with the commission that through your hard work and leadership and through that of our executive director, Mr. Amadeo Saenz, as well as the support and collaboration of our statewide transportation partners, and the staff, both at the department as well as at these implementing agencies and entities that I believe Texas is very well positioned to move forward with a quick implementation of the Act itself and to develop a program of transportation that will not only benefit the citizens of Texas and those who are in need of employment, but our communities at large. And so we will continue to work hard for you to implement this program in both a transparent and accountable fashion, while providing complete and timely information to the commission and the public at large through these types of briefings as well as through information available on our website.

So that concludes my report on this matter for you today, and again, I appreciate your advice, counsel and direction on what you would like for us to do, and I'd be happy to answer any more questions that you have at this time.

MR. HOLMES: I want to understand the column on the left part of the page, Preferred Mobility Projects.

MR. BARTON: Yes, sir.

MR. HOLMES: What order of importance are these? Are these in some sort of ranking or are these all criteria that you weigh equally, how does that work?

MR. BARTON: The column to the left are the questions that you would ask as a project that was on the preferred list is identified to be unable to proceed, so the first question, of course, is a simple one, is the project on schedule, and if it is, then you continue to move forward with the development of it and move toward letting. Is there any way to save the project if you start seeing that there's delivery issues, and if there is, we can put additional resources on it, we can expedite the review of some of the plan sets or whatever the case may be, that we would do that to salvage that project and have it move forward to letting as planned.

Then you get into the next series of questions and they're in the order that you would ask them, it's kind of a flow chart, if you will. Are there substitute mobility projects, in this case, within the region in economically distressed counties that can be moved forward to contract or let within this same period of time? And if the answer is yes, then you would use these criteria to the right in determining which of those projects that you would select as your alternate for the preferred project that was in distress. If there are not, then you would ask are there substitute projects within the State of Texas in economically distressed counties that can be let within that same time period, and then again, if there are, you would move to the right and start evaluating those based on this criteria.

If there are no projects either within the region or the State of Texas in economically distressed areas that are available to move forward, then we would move back and ask if there are projects within the district itself where the project that was on the preferred list had been lost that could be able to move forward within the time period that this preferred project was, and if there were not, then we would look within the region for another project, and finally we would select a project from somewhere else in the state in order to make sure that we fully utilized all of the stimulus funding.

MR. HOLMES: I don't agree with that ranking, John, because effectively what would happen is you would eliminate the four or five largest counties in the state that comprise 70 or 80 percent of the population from consideration, and I just think that's inappropriate. And so I would move the mobility projects within districts in the district and non-economically distressed counties up. It seems to me to unweight against a fair and equitable distribution, it's just inappropriate. I mean, I don't know how you would justify that.

MR. BARTON: I understand the comment and there was a lot of discussion in our meetings with our transportation partners about that, and as we discussed it and the requirement in the Act to give priority to economically distressed counties, that's a big issue. So I understand the point, and again, we'll be happy to move in whatever direction.

MR. HOLMES: You know, there are economically distressed areas within each one of these major counties, and while it may not fit the definition, it certainly fits the spirit.

MR. BARTON: Well, if I could address that issue because you've raised a good point, and we'll be happy to move in that direction if it's the consideration and desire of the commission. The Federal Highway Administration has provided to us, as well as the Secretary of Transportation, clear guidance that information on the definition of economically distressed communities is clearly defined in current law, but it doesn't describe the database from which that information has to be extracted, so they've encouraged us and allowed us, if we have available to us additional information about the per capita income, the unemployment level, or if the Secretary of Commerce has issued a specific decision about economic distress in areas that are not related to unemployment or per capita income, that we can use that available to us.

And so what has been provided by the Federal Highway Administration was at a county level but there are data sets that are available that are at census block levels. And so if you do an analysis of several of these projects at that closer level, if you will -- and I'll just take an example of one here on US 290 and 183 here in Austin, while Travis County is not economically distressed, if you look at the census blocks around that interchange, several of those census blocks would qualify as economically distressed communities.

MR. HOUGHTON: It's micro versus macro.

MR. BARTON: It's micro versus macro analysis. And we could certainly go back, if the commission would like for us to do that, and do a micro analysis on the projects that are on the preferred list as well as the projects that we believe should be on the alternate list, in terms of economically distressed.

MR. HOLMES: Well, that's not what this says, this says counties.

MR. BARTON: Clearly, and like I said, we could certainly change that at the direction of the commission.

MR. HOLMES: Well, I believe you went to great lengths: one, to comply with the requirements in the law, and two, to have a fair and equitable distribution around the state. If you believe that you were, in fact, in compliance when you did it in the first place, then I question why you would then un-weight that now in the event that a project fell out.

MR. BARTON: I think the most important thing to point out there, Commissioner Holmes, is that the projects that were selected were based on several criteria but one of them was the value of those individual projects. And so taking an example that I've already used, if the US 290/183 interchange here in Austin were to fall out, it doesn't necessarily mean that the next best and highest priority project within this region would be in Travis County. And so I think what we were talking about with the transportation planning professionals was making sure that we picked the best projects and trying to still maintain that fair and equitable balance within the region but not necessarily on a district-by-district basis.

MR. HOLMES: Well, it doesn't seem to me that picking the best project is consistent with having it being required to be in an economically distressed county. Those don't necessarily go together.

MR. BARTON: That's true, and of course, the requirement for the economically distressed areas of the state, it doesn't require it be at the county level but economically distressed areas of state is just a requirement of the Act that we give priority to those areas.

MR. HOLMES: But you've already done that and you were in compliance.

MR. BARTON: Yes, sir.

MR. HOLMES: Well, I'm having problems with it. I think that the fifth point are the substitute mobility projects within the district and non-economically distressed counties, I would move that up into that block above it, two blocks above.

MR. BARTON: I think that you certainly have -- just so I can paraphrase it, perhaps, because I think whether it's non-economically distressed or economically distressed is not the issue that you're raising. If there are substitute projects within the district, that should be our first priority.

MR. HOLMES: Certainly within the region and probably within the district, but certainly within the region.


MS. DELISI: John, I would encourage you to sort of take a more -- I know the challenge falls off, one project comes in so it's a different beast than what you did before with larger project loads and being able to weight, but I think you were so successful last time because you did take a holistic approach to it, taking all this disparate factors that Congress threw at us that we have to take into account, but you were able to do that without being a slave to a flow chart, if not this, then that. So I think -- if no one disagrees -- you should probably go back and rework this and bring that approach to the substitute list like you brought to the original list, because I think it worked well there and it might be a little bit of a different beast but I think we need to focus on the best projects within the region and keeping all of those factors that we took great pains to keep in mind to keep them as balanced as possible.

MR. MEADOWS: I agree, and I think that given the time element issues, we've got sufficient time to go back and work this to bring it back even next month. I'd hate to embark upon a process of amending and try to restructure that here without really having the benefit of Commissioner Holmes's continued input and all of our input to working with Mr. Barton. It seems to me like that's the best way to approach it.

MR. SIMMONS: And Commissioners, I guess this wasn't an action item, this was a discussion item, and that's why we wanted to get your input on how we rank it so we could go back and discuss that with our partners and things of that nature. So it was just a discussion item. I hope nobody assumed that we were going to move forward on this right away. We wanted that input from you on how we could improve the selection process.

MR. UNDERWOOD: Well, we were a little nervous, I'm glad you clarified that.

(General laughter.)

MR. HOLMES: There's also the point of once you actually apply it, what's the result.

MR. BARTON: Absolutely.

MR. HOLMES: And to me, the result is going to be the thing that's critical. I mean, we have to have a sensible process but if we had a good process in the first place, why are we changing it now. And so I'm interested in the process and then the result.

MS. DELISI: Speaking of that process, have we received any sort of indication from Federal Highway about the administration, about our process and what we've gone through and what their opinion of the process we've gone through up to this point is?

MR. BARTON: We have. Following some of the previous meetings we've had as well as, I guess, review by others outside the department, we submitted our process that we had developed and the history of that to the Federal Highway Administration here in Texas at the division level, and of course, they were intimately involved in the discussions as we went through the project development selection process and prioritization process as well. But we memorialized that in the form of reports, submitted that to FHWA, Federal Highway Administration division office here in Texas and received a letter back from them that basically says that the process we went through was thorough, well thought out and complied with the requirements of the Act.

MR. SIMMONS: And I might also point out, I realize the heading of this says "Substitution Selection" and that's what we've kind of focused on, but this is also -- if you remember last month we had a substantial underrun, and we want to be able, if we do anticipate or see underruns of projects of how we select the backfill of those underruns.

MS. DELISI: And that brings up another question. I know we don't have the rules from US DOT yet on the Secretary's discretionary fund. Are you going to come back to us at some point once we have the rules with a separate selection process for those projects that we may want to submit to the Secretary?

MR. BARTON: We might. I think it would be a little bit different approach at that point in time because I think we're looking at picking a group of projects from across the state and perhaps you're trying to find the best projects in terms of the rules that are written for that discretionary program to put forward as candidate projects for the state.

I guess I would say that this list of alternate projects that we're talking about --

MR. HOUGHTON: John, let me stop you real quick. When you talk about the DOT and the discretionary money, it's limited per state. Right?

MR. BARTON: Correct, no more than $300 million per state.

MR. HOUGHTON: Three hundred million, one project.

MR. BARTON: That's correct.

MR. HOUGHTON: The best project across the state. It's going to be a beauty contest.

MR. BARTON: Well, and I'll say the projects have to range no smaller than $20 million without an exception that's granted by the Secretary of Transportation -- which you can ask for -- and no more than $300 million.

MR. HOUGHTON: Do that again.

MR. BARTON: The rules that were laid out in the Act said that projects that are submitted for this particular program, the $1.5 billion discretionary program, have to be $20 million or greater in size and $300 million or less in size, unless a state wants to ask for special consideration for a smaller project by the Secretary of Transportation.

MR. HOUGHTON: My point is so North Dakota has $350 million. Right?

MR. BARTON: Yes, sir.

MR. HOUGHTON: We have $350 million.

MR. BARTON: And no state can get more than $300 million.

MR. HOUGHTON: No state can get more than $350 million.

MR. BARTON: That's correct.

MR. HOLMES: Is it $300- or $350-?

MR. BARTON: It's $300 million.

MR. HOUGHTON: Excuse me, $300 million.

MR. BARTON: The project size are capped at $300- and no state can get more than $300 million.

MR. HOUGHTON: I wonder what the annual letting in North Dakota is on an annual basis.

MR. BARTON: I do not know but I'm sure it's less than $3 billion.

MR. SIMMONS: We have area offices that have more work than North Dakota.

MR. HOUGHTON: $300 million across the board.

MR. SIMMONS: I mean, if you think about it, $300 million out of a $1.5 billion program, that's five states if they max out.

MR. BARTON: Right. It's 20 percent maximum participation at any state, so it could be a very few number of states that get projects or relatively smaller projects that are selected.

MR. SIMMONS: And I guess word we got from D.C. is that we may have the rules next week for the submittal of that. But again, it gets down to the question of do we shoot for a bunch of $20 million hoping the shotgun effect, or do we get the rifle out and zero in on one $300 million project. That's going to be the question that we're going to ask your assistance in figuring that out.

MR. BARTON: And I just wanted to make one point. I think that this list of alternate projects, whether they're as substitutes to our preferred projects or backfill if additional funding becomes available to us or for consideration for the discretionary program, it would be the same groups of projects because those are what the communities, what we, as well as the MPOs feel like are our best and most important projects.

MR. HOLMES: John, when the MPOs and districts were working on the original list of projects for the stimulus money, they had lists that were significantly greater than the state allocation, in most of the regions.

MR. BARTON: Absolutely.

MR. HOLMES: Presumably, some of the projects on those lists that did not make the initial cut would be high priorities from those areas that had developed the list in the first place, so would we be most likely picking or looking at substitute projects that were on the original list?

MR. BARTON: Yes, sir. As I tried to point out

earlier -- probably was speaking too fast -- what we are recommending is that we had this large universe of projects that totaled billions of dollars and we reduced it down to a smaller list of about $2.4 billion worth of stimulus funding, about $4-1/2 billion in total project value, and from that we selected 28 projects to move forward that you've funded through your discretionary program, if you will. We are suggesting that the remainder of that larger list that was reduced to 28 would be our list of alternate projects with perhaps a handful of additional projects that have since come up as high priorities from around the state.

MR. HOLMES: And that would have been my assumption, but the way I read this is that you would simply eliminate every one of those projects from one of the large counties.

MR. BARTON: No, sir.

MR. HOLMES: The way this priority is set up, that's what that would do.

MR. BARTON: Well, and it may, in effect, do that, but the list of alternate projects would be that list that was ultimately reduced down to the 28 with perhaps the addition of maybe five or six from around the state, so they would be in the mix for consideration. And as we've talked about, we took a holistic approach to this before, looking at all the issues in the Act: economically distressed counties or those projects that can be completed in three years, making sure we provided long term economic benefit, maximizing job creation opportunities, and doing that in a fair and equitable manner so that all areas of the state benefitted, and you have to meld all that together into some decision-making process.

MR. SIMMONS: Commissioners, we'll take your comments and discuss it with you and bring it back.

MR. BARTON: Okay, thank you.

MR. SIMMONS: Thank you, John.

Is James Bass still here or did he have to go across the street? Okay, we'll move on to item 5, Dave Fulton will give our Aviation minute order.

MR. FULTON: Thank you, Steve. For the record, my name is Dave Fulton, director of TxDOT Aviation Division.

This minute order contains a request for grant funding approval for two airport improvement projects. The total estimated cost of both projects, as shown in Exhibit A, is approximately $1.8 million: approximately $1.7 million federal, $100,000 in local funding. A public hearing was held on February 19, no comments were received. We would recommend approval of this minute order.

MS. DELISI: Is there a motion?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. FULTON: Thank you.

MR. SIMMONS: Thank you, Dave.

The next item is item 6(a), a discussion on our Regional Support Centers. David Casteel will give that.

MR. CASTEEL: Good afternoon. For the record, my name is David Casteel and I work for you as assistant executive director for District Operations.

Last fall, our executive director, Amadeo Saenz, appeared before you and led a thorough discussion of an initiative to improve efficiency, accountability, and transparency by regionalizing many of our field support functions. Since his presentation last fall, staff has worked diligently with a consultant partner to further define the plan and I have a brief presentation for you today.

This regionalization initiative is focused on achieving performance measures bound by our goals. Regionalization is only a part of a larger restructuring process being led by Director Saenz to improve the efficiency of the department processes, the accountability of the department's performance and the transparency of the department's decisions to our many stakeholders, partners and customers. While regionalization is a big step for the department, we realize it is merely one phase of a larger restructuring effort.

The design of regional business support centers, as described previously by Director Saenz, has two primary objectives: number one, improve the efficiency of field operations such as accounting, purchasing, equipment utilization; and two, dedicate resources to improve the management and reporting of project delivery in areas such as design, consultant management, environmental and right of way. This structural realignment will permit districts to focus more on their core mission of project delivery, construction and maintenance and operations while the new business center directors and the regional business support offices will focus on optimizing the business processes supporting field operations. These business professionals will ensure a best practice focus that's aiding the district engineers in making better and more informed decisions.

The regionalization concept was developed through a very deliberate, inclusive, thorough and transparent process. Starting in 2007 as we prepared for Sunset, our self-directed audits identified efficiencies that could be achieved by consolidating many of the functions that are presently duplicated in each district. With Amadeo Saenz stepping up to lead the department as the executive director, he brought new ideas to improve the department's transparency and business process efficiencies.

Steve Simmons, our chief operating officer, assembled core teams of department leaders to conduct an organizational assessment. These teams examined the 2007 self-directed audit recommendations and developed opportunities to improve. The teams led by Mr. Simmons determined the 2007 audit recommendations could quickly be implemented to improve field operations. They recommended a phased approach to department restructuring, identifying phase 1 as regionalization. Phase 2 of the restructuring effort is proposed to support a department-wide organizational review which Mr. Serna will discuss later in the meeting today. We recognize the phases are not mutually exclusive and there will be a continual review of the regionalization as we go forward, but the benefits of regionalization clearly warrant proceeding now.

Following the core team recommendation, Director Saenz named interim business managers for each of the four regions proposed. These interim managers have public planning degrees, business degrees, multimodal or outside management experience, or a combination of all these. These interim business managers took the framework from the Simmons team and developed detailed implementation plans. The interim business managers continually reviewed and considered Sunset staff recommendations in the preparation of the regionalization plan.

To develop the detailed implementation plans, the interim business managers formed functional work groups from more than 100 department employee subject matter experts in further refining the plan. These work group members came from across the state to examine the current business processes and review and refine the regionalization plan. The work group members produced the details to support the implementation of regionalization and included performance and production expectation analyses.

With the vision from Saenz, a framework from Simmons and details from the interim business managers and the work groups, a detailed regionalization plan was developed. This plan was then further reviewed by Deloitte, our external management consultant, and compared to the 2007 self-directed audit recommendations to ensure that we were on track. Deloitte's review of the plan was underway when Director Saenz briefed you last fall.

The Deloitte review of the draft plan found it to be directionally sound in both work product and process.

Deloitte -- and Jay Riley is here today with Deloitte -- expressed that they were impressed with the comprehensive nature of our planning effort versus the typical if it's not broke, don't fix it minimalist review of change that some might have expected from a government agency. They reviewed all 19 functional business areas that the teams evaluated for regionalization.

Director Saenz has stated that the hallmark of his tenure as executive director will be communication and transparency, and regionalization demonstrates this commitment. In December he published the plan for employee review and comments as well as communicated with employees through memos, videos and through the interim business managers. The employees made comments and Director Saenz provided responses to these which were posted on our internal website for all employees. The employee review provided additional insight, details and clarity to help us improve and further develop the plan.

This leads to today's request for a minute order to establish the regions and begin the implementation of an improved business approach to our field support operations. With the approval of this minute order detail for this item, you authorize Director Saenz to establish the regional business support centers and staff them accordingly, and help us to optimize our business delivery systems in the field operations area. These business managers will coordinate their transition with the recommendations from phase 2 of the restructuring effort that, again, Mr. Serna will soon be discussing.

At the heart of regionalization is a fundamental shift in the business approach and processes. District engineers will concentrate on their core functions of project delivery, construction, maintenance and operations. They will be expected to work closely together to assist the new business directors in the optimization of available resources and the standardization of shared best practices. Field operations will shift emphasis from comparison to average to real-time implementation of best practices, operating more fully and cross-functionally in frontier mode.

With the frontier advantage, the department's best ideas will be quickly analyzed and implemented through strategic coordination of regional business directors and district engineers. Then the best becomes standard as new bests are continually developed. This is a fundamental shift from the slow ship turns that have plagued our past due to our overly disaggregated structure. This will allow TxDOT field operations to operate more like a business in facilitating rapid, data-rich decision-making, analyzing processes and improving outcomes.

By consolidating these functional areas into the regional business support centers, we have eliminated redundancy, improved communication and streamlined processes as envisioned by Director Saenz, as well as concentrated resources on project delivery management to assist the district engineers in moving forward. The regional business centers are proposed to be physically located within the existing headquarters office complexes of Lubbock, Fort Worth, San Antonio, and Houston districts, each supporting a group of district engineers with common issues and geographic concerns.

Implementation of the plan yields many positive results. For example, the work group's staffing plan designed to fully utilize available personnel and equipment produced a savings of more than 460 employee positions, achieved through attrition, with a net annual savings upon full implementation of more than $30 million a year.

Staff recommends approval of the minute order to establish Regional Support Centers and authorize the executive director to staff appropriately. And I'll be available for any questions.

MR. UNDERWOOD: I have a couple questions, David.

MR. CASTEEL: Yes, sir.

MR. UNDERWOOD: I just want to remind you these questions, first rule of chemistry, don't lick the spoon.

(General laughter.)

MR. UNDERWOOD: You picked four regions. Elaborate on that one more time as to why you picked them, please, why you picked those specific locations.

MR. CASTEEL: The specific locations within the regions?

MR. UNDERWOOD: Right. Why Lubbock and not El Paso?

MR. CASTEEL: Yes, sir. We had a lot of debate and analysis amongst the core teams and through the interim directors as we worked through this process. We looked at which areas would, first, have available facilities, we wouldn't have to build a new building; secondly, which areas have the ability to travel between the offices.

MR. UNDERWOOD: Centrally located, you're trying to say, so to speak.

MR. CASTEEL: Well, I would say centrally located by travel distance, not necessarily geographically centrally located. The one that we had the most debate about was between Lubbock and Odessa for the Western Region. Lubbock is more centrally located geographically -- Odessa is more geographically centrally located, but Lubbock, you can get there by air easier between Lubbock and El Paso. And of course, El Paso is the largest population center for West Texas.


MR. HOUGHTON: And the center of the universe, by the way.

MR. CASTEEL: I was there Monday and Tuesday.

MR. HOUGHTON: Fred, I'm all for Lubbock if I can have one concession.

MR. UNDERWOOD: I understand that. That will be a fun trade, won't it.

MR. HOUGHTON: No, the concession is that they move the service center on the east from Houston to Bryan-College Station.

MR. UNDERWOOD: I'm not going down that road.

(General laughter.)

MR. UNDERWOOD: Okay, one your fancy words used was "directionally sound." Can you explain that?

MR. CASTEEL: Yes, sir. That came out of our consultant's report, and the way we took it, and we asked them this question -- and of course, Mr. Riley is here as well -- in the context of directionally sound for their analysis, we meant that we were headed in the right direction as a business operation, and it also meant that we were in line with our own self-audits that came out, and it means, more importantly, that we are being efficient and effective with Texans' money as we move forward to serve Texas. So that's what we took "directionally sound" to mean as far as the work product. As far as the work process, that we were very inclusive and open and we looked at lots of possibilities as we went through there.

MR. UNDERWOOD: Okay, you understand with these new district offices that there will be a different skill set for these employees for this manager. Isn't that correct?

MR. CASTEEL: It is a different skill set. What we are doing in this process fundamentally, in my mind, is we're raising the business management skills of the department, those people with business backgrounds, those people with the MBAs and the CPAs, we're raising them up in the department to help us make better decisions. Currently in our districts we have people like that so the skills are out there but we have them somewhat buried in the organization. So we're raising it to a different level to help our district engineers make better decisions. So the skill sets will change somewhat but I think most importantly is that the people are there that can do this, we just need to harness that brainpower in a little different way to help us.

MR. UNDERWOOD: Okay. So what you're saying is we're going to put business people -- and I'm not knocking the engineers, I don't need any rocks and stones or whatnot --

MR. CASTEEL: I am one.

MR. UNDERWOOD: -- but we're looking at putting a business person over these regions, isn't that correct, with a CPA or a degree, a master's in management of some form. Is that correct?

MR. CASTEEL: Yes, someone like that. You know, ideally when you look at the functions -- and if we can hit that functional chart -- the functions that they oversee are many of the same things, management of our equipment fleet, accounting processes, purchasing processes, warehousing processes, training and getting our employees staffed there, as well as helping us work with our district engineers on breaking through those bottlenecks that hold up our project development process.

MR. UNDERWOOD: This is a business function is what you're saying, not an engineering function.

MR. CASTEEL: Yes, sir, it's a business function.

MR. UNDERWOOD: Okay. Last thing is are we going to be adding a bunch of payroll?

MR. CASTEEL: No, sir, we'll not add a bunch of payroll. I personally feel, after working with the interim business directors and the hundreds of employees that we brought in to help us, that the skill sets are out there, the people are out there if we can get them in the right positions. It could be that some new folks will come in during this but in anticipation of that, we held back on hiring for the last over a year and we held back especially in the areas that are being functionally realigned to allow us some flexibility there. So everything is within existing authorized budgets and within existing authorized personnel levels. In field operations right now, from our allocation level, we're about 1,130 employee FTE levels below the authorized level at this time.

MR. UNDERWOOD: But from how I understood you now -- don't let me put words in your mouth -- but somebody from outside, it doesn't have to be a TxDOT employee, could apply for this job.

MR. CASTEEL: Absolutely, and I think we'll probably encourage that in a lot of cases. You know, that skill set really matches some people who might have been a city manager at some point in their life, that skill set looks like that.

MR. UNDERWOOD: Great. And I also want to remind the commission that this process was started before Sunset, that we didn't try to jump out in front of Sunset.

MR. HOUGHTON: Good point.

MR. UNDERWOOD: So please take that home with you. We were not trying to circumvent the Sunset process, we look forward to it, it's not a pleasant process, but then again, improving yourself never is. So thank you.

MR. CASTEEL: Thank you, Commissioner.

MR. HOLMES: David, it appears to me that you've gone through a very thoughtful process in identifying ways to improve the efficiency and deliver more service with less dollars and that you've engaged really hundreds and hundreds of people, in some cases thousands of people within TxDOT, and some outside in helping you through this process, and I think that you're to be commended for that.

MR. CASTEEL: I would redirect that towards Executive Director Saenz, his leadership.

MR. HOLMES: Executive Director Saenz, we'll commend him for that process because he really was the one that started it.

MR. CASTEEL: He's the guiding force, yes, sir.

MR. HOLMES: Right. I'm reminded of the story that every time that FHWA tried to shorten the time period and improve the processes of approving projects that it actually got longer, and not that this will prove unsuccessful, but I would encourage you to go back and look over time with how it worked and reevaluate it and make sure that if there is additional fine-tuning or maybe major changes that we stay flexible, because sometimes there are unintended consequences to big changes like this.

And just one of the thoughts is in the right of way acquisition. I'm not sure how you're going to accomplish that when you have people in districts that are very close to landowners within their district, they know the right of way, they know the people, and if you consolidate that and they are now a few hundred miles away from them, it may not work quite as well. So I want you to go through kind of a continual reevaluation process as to how it actually worked once you've implemented it.

MR. CASTEEL: Absolutely, sir and those are excellent comments, and they mirror the comments that some of the functional work teams gave to us that we realized the potential benefits but we realized on some of these issues there's some risk involved, and they said you need to reevaluate this, and they specified about 18 months after implementation have a full reevaluation. Mr. Serna's presentation that he's going to give to you in a minute will also help us do that continual reevaluation. So appreciate those comments, sir.

MR. SIMMONS: Commissioner, David mentioned it, but Jay Riley is here, and one of the things when we asked them to look at what we did compared to what they recommended, David mentioned that they were kind of surprised that we were going as far as we did because most organizations don't do that.

And I don't know, Jay, if you want to make any comments? We don't want to put words in your mouth, but if you want to say something about that because I think it does say something for the department.

MR. RILEY: Can I do it from back here?

MS. DELISI: You need to come to the microphone.

MR. SIMMONS: Jay broke his leg during the process.

MR. HOUGHTON: They broke your leg during the process.

MR. RILEY: Yes, that was it, I wasn't giving the right type of recommendations.

(General laughter.)

MR. RILEY: Normally as we do a consulting project, we find a lot of recommendations --

MS. DELISI: Excuse me. Can you state your name for the record?

MR. RILEY: Oh, I'm sorry. I'm Jay Riley, director with Deloitte Consulting here in Austin.

Usually when you do a consulting project you find all negatives and in this we found a lot of positives as far as what had been done all the way back to the very strong involvement of employees, the fact that there was clear direction from the top, and more importantly, very much involvement from the top toward supporting this type of service delivery mechanism. And I think there was a recommendation that came early on, I believe, from Amadeo was the fact that we want to do business differently, so I think that's a very positive that we did find here.

So at this point, to your comment earlier, Mr. Underwood and also Mr. Holmes, it basically is a different type of business model. You're looking more at a share service type of business model, not just a different organization. The other thing that was important that was stressed in our report was this just isn't another level of bureaucracy, it is something that's designed to hit those three or four key aspects as far as transparency, as far as the openness that you want to have and to go forward in a very positive way.

MR. UNDERWOOD: So what you're saying is that TxDOT was very transparent when you tried to go through this process.

MR. RILEY: Absolutely.

MR. UNDERWOOD: We were very open with how we dealt with it, and we went from top to bottom.


MR. UNDERWOOD: Thank you.

MR. HOLMES: When we go back and look at it with history of a few months, whether it's a year or 18 months, however that works, how will we measure the success or lack or success? What measurement standard will we use?

MR. RILEY: That is a recommendation that's in our report was that you develop performance metrics and performance measures. That is something that TxDOT said we've got a long way to go. I know David and I had several conversations related to that, but that specific metrics would be developed for each of the functional areas so that you can judge success.

Also in our report, as you just mentioned, we did recommend that it's an iterative process and the fact that organizations do change and that organizational models may need to change, and so to look at those things not only to judge success but judge those things that are not working and what kind of adjustments may need to be made to the functional area.

MR. SIMMONS: And Commissioners, I might add that we're looking at an agenda item for next month where we'll have Mary Meyland talk to you about where we're at in developing those performance measures and matrixes. Thanks, Jay.

MR. RILEY: You bet, Steve.

MS. DELISI: Are there any other questions? If not, can I get a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. CASTEEL: Thank you.

MR. SIMMONS: Thank you, David. And I don't know if David recognized Tim Powers, Mary Meyland, I saw Mario over here -- how could I miss Mario. These were guys and gals that were on the front line in developing this and I thank you for your hard work.

The next item is item 6(b), I'll call upon Ed Serna to make a presentation regarding an RFP for the next phase of this.

MR. SERNA: Good afternoon, Madam Chair, Commissioners, Mr. Simmons. For the record, my name is Ed Serna and I'm the assistant executive director for Support Operations at TxDOT, and I promise any consultants that we hire, I won't break their legs.

The minute order before you authorizes staff to issue a request for proposals, evaluate those proposals and conduct negotiations with a subset of responding consultants. Our intent, in going through this process, is to make a recommendation to the commission for the selection of a single firm to conduct a thorough management and organizational review of the department.

As you've just heard from Mr. Casteel, the department has been working on an extensive examination of its organization and operations. As phase 2 of its ongoing efforts to improve operations, staff was already developing an RFP to hire a consultant to conduct a review of its headquarters operations. However, in mid February we received a letter from the chairman of the Senate Committee on Transportation and Homeland Security that requested that the department conduct a top-down organizational and operational audit. In response to that request, staff has modified the RFP it was developing and now will be seeking a firm to conduct a thorough review of the department's management and organizational structure, including an examination of its staffing levels and business processes, and that was specifically mentioned in Senator Carona's letter.

In a nutshell, the only position that will not be reviewed and evaluated are the five commissioners and the executive director. In a conversation that I had with Commissioner Underwood earlier this week, he asked me why these positions were being excluded from the review, and I explained that the roles and responsibilities of these positions are established by law and can't really be changed without legislative action -- after all, we went through the Sunset process and the legislature is debating that right now. However, most likely the consultant will review the non-statutory functions being performed by the executive director and include those in their findings in the final report.

Those staff that will be working with the firm that's hired, we plan to have them report interim findings as well as final results directly to the commission, so this is a commission directed review. If approved, we will issue an RFP on April 10 of this year, and that's the earliest date that we can post it in the Texas Register. After the evaluation and negotiations are complete, staff will come back to the commission and present the results and our recommendations for approval to execute a contract to start the project.

I want to assure you that while we'll be moving through the procurement process very quickly, we will not finalize a procurement until after the legislative session is over. This will allow us to include any requirements or instructions that we receive from the legislature in this project.

I recommend approval of this minute order and I'll answer any questions that you have about it.

MR. SIMMONS: Ed, I'm sorry, did you mention that we patterned this after the Department of Public Safety's model?

MR. SERNA: No, sir, but that's a good point. One of the things that Chairman Carona's letter asked is that we -- or he referenced was the review that the Department of Public Safety has recently done which was a thorough, top-down review. We've looked at that RFP, we've looked at the results of their request for proposals, and we've incorporated elements where we can from that request for proposals into the document that we're building. We've also looked at what the State of North Carolina did. They did a thorough review and reorganization of their DOT and we've looked at their bid document and the results from that bid document and we kind of picked the best pieces from there as well to incorporate them into our RFP.

The one unfortunate thing is I can't at this time share with you a copy of the RFP for two reasons: one, we're still finalizing some of the elements in it; and two, because of the way things work, that would end up posting the RFP before we officially posted it in the Texas Register, and then we'd be in violation of some procurement rules and laws and we don't want to do that. That's why we don't have a copy of that in the document. And I'm sure that a lot of the vendor community would then be scouring our commission book looking for that early draft to kind of get a leg up on what we'll be doing.

MR. UNDERWOOD: I'll say like King Henry VIII said to each one of his wives: I won't keep you long.

MR. SERNA: Just don't end the meeting the same way.

(General laughter.)

MR. UNDERWOOD: I've got a question for you. You answered my question that by law, statute or whatnot, the commission and the executive director will not be analyzed, so to speak, but they will go back and look at the duties that we have. Isn't that correct?

MR. SERNA: Yes, sir. We'll ask the consultant to look at the non-statutory functions, and that's what I meant by that, the non-statutory ones because we really can't affect the statutory.

MR. UNDERWOOD: Right, but I just want to make sure that's understood, that they will look at functions or whatnot, it's just the statutory, as you said, will not be analyzed.

MR. SERNA: Yes, sir.

MR. UNDERWOOD: Thank you.

MS. DELISI: If there are no other questions, can I get a motion?

MR. UNDERWOOD: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SERNA: Thank you.

MR. SIMMONS: Commission, the next item, item 7, is being deferred. We're not to a point to bring that minute order forward at this time, so we'll move on to item 8, Corridor Segment Committees, and I'll ask Mark Tomlinson to begin his many items on the agenda.

MR. TOMLINSON: Thank you, Mr. Simmons. Again, my name is Mark Tomlinson, director of the Turnpike Authority Division for TxDOT.

The I-35 and I-69 corridor advisory committees and segment committees were conceived to encourage local participation in corridor planning and enhance the coordination between TxDOT and local governments, local transportation providers and the public. The commission created the corridor advisory committees and the segment committees for I-35 and I-69, and the first phase of appointments was initiated by choosing the counties and metropolitan planning organizations that were in those segments.

On September 25, 2008, the second phase of appointments was initiated and this was a recommendation from staff to you including cities, economic development corporations, chambers of commerce and ports. Then in February of 2009, the rules were changed to broaden representation on the segment committees. These rule changes allowed other entities and even individuals to be named.

So today's action we are requesting your consideration and approval of adding two organizations to our segment committees, and those organizations are the Farm Bureau and the City of St. Hedwig. For the Farm Bureau, we would suggest that one Farm Bureau spot be added to each of the nine segment committees; and then the St. Hedwig selection would only be for the I-35 Committee 4, it's the segment that goes from San Antonio down to Laredo.

Just as a briefing, I guess, currently on the I-69 Corridor we have five committees. Statute allows 24 seats to be named on these types of committees. Previously you awarded between 20 and 22 in each of those segments. Entities have named between 13 and 18, generally between 18 and 19 of those seats, so there's a few extra seats available, although the additions we're recommending today will take one to two in one case of those.

We do have a plan for moving forward. We have scheduled kickoff meetings for both the I-69 and I-35 corridor segment committees. The I-69 meetings will be held, we're kind of combining for this kickoff meeting two to three segments. We anticipate after the kickoff meetings we'll have meetings in those segments, individual segment meetings in those segments. The first meetings are scheduled for April 13 in Corpus Christi and April 15 in Nacogdoches, that's for the I-69 Corridor; then for I-35, April 21 in San Marcos and April 23 in Arlington.

So with that, I would recommend your approval and answer any questions you might have.

MR. HOUGHTON: Question, Mark. You said you're adding nine slots?

MR. TOMLINSON: That would be correct, yes.

MR. HOUGHTON: For Farm Bureau.

MR. TOMLINSON: It's nine for Farm Bureau and one for St. Hedwig.

MR. HOUGHTON: On 69 and 35. Right?

MR. TOMLINSON: Yes, one for every segment committee that we have.

MR. HOUGHTON: Great, I appreciate that.

MR. TOMLINSON: And I meant to mention with these entities, from the time we changed the rules to the present, we didn't have any individuals approach us for inclusion -- of course, that's possible in the future, and I'm thinking as we do move forward and actually activate the committees, we may hear from other entities.

MR. HOUGHTON: Are those segment committees now being populated?

MR. TOMLINSON: Yes, in fact, we have probably 70 to 80 percent named. I think we'll get a few more once we actually get active. And there are names attached to all the Farm Bureau spots, they've already told us who they want to select, and St. Hedwig as well, it's Kathy Palmer from St. Hedwig.

MR. HOUGHTON: Great. And a commissioner will be at those kickoff meetings?

MR. TOMLINSON: That's what I heard you say.

MS. DELISI: I guess you will be.

MR. HOUGHTON: No, no, that's Holmes and Meadows, the closest to the region is my understanding. Wasn't that the last minute order?

MR. TOMLINSON: I'm not sure that made it into the minute order.

MR. HOUGHTON: Wasn't that the last minute order, Mark, don't you remember that?

MR. TOMLINSON: I'll have to check the record, I think.

(General talking and laughter.)

MS. DELISI: Any other questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: Mark, if you'd go ahead and start all the agenda items under 9, Toll Projects.

MR. TOMLINSON: Yes, sir. Item 9(a) is a Bexar County Alamo RMA project agreement. Item 9(a) authorizes the Alamo RMA to construct improvements to the state highway system, design and construction of improvements on US 281 and Loop 1604. Back in March of 2009, this month, the commission authorized and directed the department to commit about $60 million in the ARRA, or stimulus funds, to this project. March 24, the authority submitted a request to request our required project agreement be initiated. So this minute order authorizes Mr. Saenz to execute that necessary project agreement for this project. So we would recommend your approval.

MS. DELISI: Any questions?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Moving on to 9(b), this minute order would approve the connection of the State Highway 161 toll project which extends from State Highway 183 south to Interstate 20, with a segment of the state highway system which, of course, is Interstate 20 and State Highway 183. This authorizes the NTTA to make improvements to the state highway system in connection with the project and authorizes our executive director to enter into a similar project agreement with NTTA so that they can provide those improvements.

We would recommend that you approve this one as well.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Moving on to 9(c), this is a toll equity request from the Camino Real Regional Mobility Authority. The minute order would grant final approval of a request for financing for CRRMA to be used for the cost of project management, data collection and evaluation, and preparation of a regional toll plan for development of the Loop 375, Phase I, II and III, Southern Corridor projects, and development of the Northeast Parkway Phase I Corridor. The request is for a $1.1 million loan and it will be used for financial assistance, engineering, environmental, legal, financial and public outreach services.

We'd recommend your approval of this minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: 9(d) is moving on to a toll equity request from Grayson County, this is also final approval of that request. It grants final approval of a request for financing from Grayson County RMA to pay for costs associated with the development of a potential toll facility from Collin County line to US 75 north of the City of Denison. This is an extension of the Dallas North Tollway in that region.

The authority submitted a request for about $10 million; the request is broken into two parts: $6.5 million for preliminary engineering documents and public outreach and education efforts, and an estimated $3.5 million for the purposes of financial advisory services, traffic and revenue studies, and project management services.

It's been decided and agreed upon between the RMA and TxDOT, pending your approval, that the $6.5 million be used by the Paris District to procure engineering services, really on behalf of the RMA and guide and monitor those projects and really lead that project effort. The $3.5 million would be a loan that would go directly to the RMA for those services that I mentioned.

Staff would recommend your approval of the minute order.

MS. DELISI: Are there any questions for Mark on this?

(No response.)

MS. DELISI: I'd like to call up Judge Drue Bynum.

JUDGE BYNUM: Thank you. I'm the county judge in Grayson County and I want to just say thank you for the opportunity to address you today and thank you for your willingness to work with us.

Very briefly want to just tell you a couple of reasons why this is extremely important to us. The growth -- and you heard folks in the Metroplex earlier this morning -- by default, we're coming closer and closer to being part of the Metroplex. We have the luxury, however, to I think continue to plan our growth and this is an extension of that plan. We need to use the money to literally draw a line in the sand. We've got the developers coming up into our county thinking they know where the tollway is going to go and we need to use this money judiciously to not put the cart before the horse. We need to do some environmental studies, some engineering studies, and ultimately get that route from the county line up to the Red River. That allows us to then be diligent in what we do for the next steps.

And then secondly, I'd like to just explain the relationship that the county commissioners court has with our regional mobility authority. Our mobility authority was established several years ago to function as a facility unit for the State Highway 289 project which Commissioner Jerdy Gary will brief you on here momentarily. The county ultimately took that over and we've decided that this is the project for the RMA, the extension of the North Dallas Tollway.

I know a lot of regional mobility authorities may not have quite the relationship that we have in the county with ours, so we're a partnership -- and that name has been mentioned, thrown out several times -- we truly are a partnership with our regional mobility authority. We have the ultimate faith in the fact that they're going to do the right thing to the point that this previous year we've gotten rid of our airport board and made the regional mobility authority the governing body for our airport. One of the reasons we did that, we're using this as a marketing strategy to attract business to North Texas, and suddenly the project of two 9,000 foot runways becomes a bigger deal because now we have a tollway coming to that airport and we have other economic development engines as well.

So I want to assure the commission that we have the ultimate faith and trust in our regional mobility authority and we will work hand in hand, and this is not a case of building fiefdoms or kingdoms, but Grayson County will work together on this. And thank you very much.

MS. DELISI: Thanks, Judge.

MR. HOUGHTON: Judge, how many employees does your RMA employ?

JUDGE BYNUM: We have five wonderful volunteers that have never asked for a dime from the county. We have funded what little expenses there has been through the county's general fund. Another reason that we combined the airport underneath their auspices to use some airport staff to do that. They've never asked for a lot of money, we're a pretty conservative, tightknit commissioners court, we don't give out a lot of money, but now is the time that they need some seed money to implement this next step.

MR. HOUGHTON: We look forward to working with you, Judge.

JUDGE BYNUM: Thank you.

MS. DELISI: Jerdy Gary.

MR. GARY: I'd just like to echo what the judge just said, but Madam Chair, members of the commission, Mr. Simmons, I first want to thank you for providing this resource for us. We're very excited about this toll road, this project, and we have a lot of support for it and we've had a lot going into this. I personally also want to thank Phil Russell and Amadeo and our own state representative, Larry Phillips.

But today I just want you to know that we're going to move forward with this project, and as we move forward with it, we're going to be open to all the options out there, we will look at everything because we feel confident when we finish the study on this project that it's going to be feasible, that's connecting back to US 75, that it's going to create an opportunity here for us to have a lot of options to look at.

So with that, I would also like to go back a few years when a gentleman and I that's here with me today, and I'll introduce as Commissioner Gene Sharp, a longtime commissioner of our commission. He is the granddaddy of the SH 289 project. He has been spearheading this all the time and we started out by getting approval here to do it as a RMA project, but when enabling legislation let it go back to judicial and counties and metropolitan areas to go ahead, we flipped it back to them but we've been at the table with them the entire time, and I would just like to report on that.

Commissioner Houghton here was on the commission at that time, and when we went back and started this project. And just last night I was talking to our developer on this project with Pate Transportation, we did the groundbreaking on this project last April, and she told me last night that we would have a ribbon cutting on it in July this year. That happens to be over ten years sooner than it would have been if we had gone through the traditional process of this with TxDOT. That sets us a goal out there to do the same thing with this project and we're confident that we can with your support.

I'd be happy to answer any questions you might have.

MS. DELISI: Thank you very much.

MR. HOUGHTON: Congratulations, it's been a lot of fun.

MR. GARY: Thank you again.

MS. DELISI: Can I get a motion?

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: Jerdy, thanks for recognizing Commissioner Short, I was wondering if you were going to leave him out, but at that groundbreaking I also got to present Commissioner Short with his Road Hand Award, so he's one of our Road Hand Award recipients. So Gene, good to see you.

MS. DELISI: Thank you.

MR. TOMLINSON: Thanks very much. Moving on to item 9(f), this authorizes the NTTA to construct improvements to the state highway system in connection with design and construction of State Highway 121 and Interstate 20. In March of 2009, the NTTA submitted a request to allow that organization to make these improvements. The department, the MPO and the NTTA have worked together to identify an approach to provide the funding and development of this project and others.

We would recommend your approval of the minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Item 9(g) is for Travis County. The Central Texas RMA would like to be authorized to construct improvements to the state highway system in connection with the design and construction of US 290 and US 183 direct connectors. In March of 2009, the commission authorized and directed the department to commit about $90 million in ARRA or stimulus funds to the project. In March of 2009, the CTRMA submitted a request for a project development agreement for the direct connection ramps that will be constructed by the RMA.

MR. HOUGHTON: How are they going to build this, a design-build agreement, or how are they going to do this?

MR. TOMLINSON: I believe you're correct. I would defer to Mr. Heiligenstein, if he's still here.

MR. SIMMONS: I think he went across the street.

MR. TOMLINSON: Is that your understanding?

MR. HOUGHTON: If he's not here, we can't approve this.

MR. SIMMONS: He asked permission and I allowed him.

MR. HOUGHTON: You've got to be here to get your money.

(General laughter.)

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Must be present to win, huh?

Item 9(h) is setting the toll rates for the State Highway 45 Southeast toll project. We understand from the district that they are trying to achieve a late April opening of State Highway 45 Southeast and that if they are able to make that -- of course, the weather lately hasn't helped that -- but they will have that open and have crucial connections down to I-35 and over to State Highway 130.

This minute order establishes the toll rates that essentially are very similar to the rest of the Central Texas Turnpike System. We did use traffic and revenue studies to establish bands to consider, and the vehicle classification type and location of the facility were also used in selecting the toll rate. If you'd like details about the actual toll rate, I can get into that; otherwise, we would recommend your approval.

MR. HOUGHTON: You said April opening?

MR. TOMLINSON: Late April, I think right at the end of April.

MR. HOUGHTON: My understanding there is a groundbreaking around the same time, April-May for the extension of 130 South? Is that right, Steve?

MR. TOMLINSON: I know there's an event for State Highway 45 Southeast?

MR. HOUGHTON: No, no, no. SH 130 South.

MR. SIMMONS: I don't know if there's going to be a groundbreaking or not, but that is when they expect to start work.

MR. HOUGHTON: Okay. So who's cutting the ribbon this, the Chair, since it's her region?

MR. TOMLINSON: That works for me.

MR. HOUGHTON: You're cutting a ribbon.

MR. SIMMONS: Let your boys do it.

MS. DELISI: The boys can do it.

MR. HOUGHTON: There you go.

MS. DELISI: They would tear it apart.

(General laughter.)

MS. DELISI: Any other questions?

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: 9(i) is a report on our Central Texas Turnpike System, it's our quarterly report but it's the year-to-date actually. The minute order accepts the report of actual traffic and revenue on the system as of February 28, 2009. This report, as all others before it, compares current traffic and revenue data with data from the prior fiscal year 2008, as well as the T&R projections from the 2002 study that initiated the system.

The 65-mile system is now complete and fully open to traffic. We generated more than 34 million transactions and $27 million in revenue through the second quarter of 2009; average monthly revenue in that time period exceeded projections by about 12 percent. In the second quarter I guess highlights would be: the average monthly revenue is about $4.6 million and that exceeded revenue in the period last year by about 17 percent; transactions and revenue surpassed expectations by 26 percent and 11 percent, respectively; we still have high TxTag usage, about 74 percent of all transactions are posted with TxTag accounts -- it's actually a 1 percent increase over last quarter.

We are very excited about the opening of State Highway 45 Southeast. It's not technically a part of the system but because it connects and makes that connection back to Interstate 35, we think it's going to be a great asset to the system as a whole.

Be glad to answer any questions you might have.

MR. HOUGHTON: What do you attribute the revenue increases? We haven't increased the toll rate.

MR. TOMLINSON: No, we haven't.

MR. HOUGHTON: It's traffic, obviously.

MR. TOMLINSON: Just growth of the system.

MR. HOUGHTON: Significant growth.

MR. TOMLINSON: Continue that, that's been the trend.

MR. HOLMES: It's grown overall. What's going on on Loop 1?

MR. TOMLINSON: Well, the small asterisk note at the bottom of the page, it's a little deceiving because the system as a whole, we report all revenue, including the pay-by-mail. Unfortunately, we can't break out for those individual roadways those pay-by-mail transactions, and I think on that roadway it's about 14 or so percent, so there's some revenue, we're just not showing on the individual roadway segments, but it's in the system report as a whole. We think had those been shown, we'd be up very close to that revenue projection level on both that and State Highway 130.

MR. HOLMES: That would be correct on projected but I was looking at last year/this year, and presumably the pay-by-mail was reported the same way in both of those.

MR. TOMLINSON: Oh, it was. Okay, I'm sorry.

MR. HOLMES: It's not much of a decline but it is, in fact, a decline.

MR. TOMLINSON: Yes, that's true, and my thought is I think we've resisted the effects of the economic downturn for a long time, we've been very resilient, and maybe we are feeling that a little bit. Otherwise, there's still a lot of growth in the area so I'm not sure. That's, I guess, what I personally attribute that to.

MR. HOLMES: It would just merit watching.

MR. TOMLINSON: Sure, we'll continue to monitor that.

MR. HOUGHTON: How long have we been open?

MR. TOMLINSON: Well, completely open --


MR. TOMLINSON: Oh, on Loop 1, I think 2005.

MR. SIMMONS: It was right around there. Mark, did any of the Loop 1 have to do with the configuration change around Parmer and that area where it changed ramp configurations?

MR. TOMLINSON: It could possibly.

MR. SIMMONS: If you remember that issue that came up where the entrance to the Toll plaza was and getting to Parmer Lane there was a problem, and so we had to do some adjustments there, and that may have led to some of these numbers too.

MR. HOLMES: And those adjustments were made within this time frame.

MR. SIMMONS: Yes, sir, the improvements would have been completed where they would be functioning now, between the last reporting and this reporting.

MR. HOLMES: So the improvements might have decreased the revenue?

MR. SIMMONS: Well, I think we knew that was going to happen is what I'm saying because it was forcing traffic to go through a tolled ramp in order to get to it without a free alternative.

MR. HOUGHTON: It seems like the champion here is the 130.

MR. TOMLINSON: It's doing very well, 45 is strong as well.

I have a note here and I think maybe it will address the previous question. The first 27 miles of the system were open November 1 of 2006, so I believe Steve is correct to say that Loop 1 was included in that, so it was November of 2006.

MS. DELISI: Any other questions? Is there a second?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Item 9(j) is setting toll rates in Webb County on the Camino Colombia toll project. We've done some work down there to update our equipment and eliminate some diversion of toll collection. So we're re-establishing toll rates there; we used the same process, really, as on State Highway 45 and other parts of our system as well, used traffic and revenue studies and also vehicle classification type and location of the facility.

The fee structure is pretty similar to what it was from the original inception of the facility. It's very similar, I guess, if you'd look at a mileage evaluation, it's about 12 to 14 cents a mile, much like it is on the CTTS system.

MR. HOUGHTON: We bought that what, Mark, for about $20 million at auction?

MR. TOMLINSON: That sounds about right, yes, sir.

MR. HOUGHTON: What's our revenue?

MR. TOMLINSON: I'm pretty sure I don't have that with me; we can get that.

MR. SIMMONS: Mario, do you know? Are we breaking even on our operations, is that an easy way to say it? Mario, of course, used to be the district engineer in Laredo.

MR. MEDINA: For the record, I'm Mario Medina, San Antonio district engineer.

Based on my recollection, I think we were collecting about $30,000 a month, and that was the profit.

MR. HOUGHTON: What's the net effect after operations?

MR. MEDINA: That was.

MR. HOUGHTON: Net is 30 grand.

MR. MEDINA: Yes, about 30 grand.

MR. HOUGHTON: And maintenance?

MR. MEDINA: Maintenance we weren't covering it at all.

MR. HOUGHTON: So we're upside down is what you're saying.

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

MR. SIMMONS: But a lot of it had to do with the configuration and what this does is allow us to reconfigure the location of the toll plaza in order to capture more of the folks that were circumventing the system.

MR. HOUGHTON: There's a broader question here, but go ahead, Ned.

MR. HOLMES: Mario, is it primarily truck traffic?

MR. MEDINA: There's some truck traffic but I wouldn't say primarily, no, sir. I can't remember exactly what the counts were. The revenue we were gaining, a lot of it was coming from trucks because they paid a heavier fee.

MR. HOLMES: A $9 and $15 depending on one or two trailers.

MR. MEDINA: Yes, sir.

MR. HOLMES: Do you get many two-trailer trucks?

MR. MEDINA: No, sir.

MR. SIMMONS: Thank you, Mario.

MR. HOUGHTON: I think it's a broader question, an analysis on every toll road that we own, where are we as far as net revenue -- and I mean net-net after operations, maintenance -- ought to be presented to each commissioner and commission: Camino Colombia, the 45 Southeast, we set the toll rates, what's the anticipated revenue. What did that cost us, $150 million? What was the cost of that road?

MR. SIMMONS: I think it was right around that number.

MR. HOUGHTON: About $150 million, so are we going to cash flow that or are we going to subsidize that like we are doing the Central Texas?

MR. TOMLINSON: We definitely can gather that for you.

MR. HOUGHTON: We need to look at all of that because I do believe we need to look at the toll rates, we need to look at operations, maintenance, the whole works.

MR. TOMLINSON: We can certainly do that.

MR. SIMMONS: And another item that we've done recently is put together a team to look at our operational efficiencies and reporting and how we operate with the department, whether some of this should be in the TTA function or whether it should be in Finance. So we're looking at some of those ideas to improve the reporting ability, too. And I see Mr. Bass walked back in so he may just nod yes. But we'll get that information to you.


MS. DELISI: Can I get a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: Ready to go to number 10, Mark?

MR. TOMLINSON: Yes. It's the withdrawal of Hopkins County from the Sulphur River RMA. This minute order would just authorize that removal. It was requested by Hopkins County and was approved by their board of directors. There's no bond indebtedness and Hopkins County has no financial obligations to the authority that would prevent it being removed. We would recommend your approval of the minute order.

MS. DELISI: Any questions?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: Thank you, Mark.

MR. TOMLINSON: Thank you.

MR. SIMMONS: And tell your staff thank you for what they did for all the CDA work.

Item number 11, some items on Proposition 14.

MR. BARTON: Good morning. For the record again, my name is John Barton, assistant executive director for Engineering Operations, and I'm going to be talking about stimulus funding, Commissioner Holmes, so you might want to get ready for this as well.

MR. HOUGHTON: Sounds like you're a little gun shy.

MR. BARTON: I'm a little gun shy right now -- no, just kidding, appreciate the guidance earlier today.

The minute order before you would provide the use of some of the State Highway Fund revenue bonds, commonly referred to as Proposition 14 Bond proceeds, to be applied to a couple of priority projects for the Department of Transportation here in the State of Texas.

In previous actions taken by the commission at last month's meeting and further actions taken today, you have committed stimulus funding to a couple of projects across the state, namely the US 281 at Loop 1604 interchange in the San Antonio District in the City of San Antonio which is proposed to be funded to the magnitude of $140 million, with $60 million coming from the stimulus funding available to the discretion of the commission, $20 million that was committed by the MPO stimulus funding available at the discretion of the San Antonio Bexar County MPO, and the remaining $60 million to be funded through the use of Proposition 14 Bond proceeds.

The second project is the Dallas-Fort Worth DFW Connector Project that was discussed this morning, referred to as State Highway 121 and State Highway 114, and the department's plan for this project has always included covering the cost of right of way through normal department proceeds. It's estimated that the project cost for right of way in its entirety will be $82.1 million, based on the discussions that we've had with the district and the TTA Division. And therefore, the minute order before you today would provide Proposition 14 Bond proceeds funding in order of magnitude of $82.1 million for the right of way acquisition for this particular project.

So staff recommends your approval of this minute order and I'd be happy to answer any questions that you may have.

MS. DELISI: How much do we have left in Prop 14 to obligate?

MR. BARTON: In terms of these two particular areas, if this is approved, you will have an additional $140 million in commission discretion for projects as we have it. You will have approximately $118 million for right of way acquisition, based on the plan that was presented to you back in October of 2008. And then there is a contingency fund that's a little over $130 million. So all in total, doing the math, roughly that would be anywhere from $450- to $500 million remaining of unobligated Proposition 14 Bond proceeds. And of course, not all those bonds have been sold and not all those projects that we have committed them to have been moving forward. So as we move forward in the future, there may be adjustments necessary to those plans.

MR. HOUGHTON: Well, this begs the question, we just talked about on the Connector, we talked about some of the opportunities on filling in the gap was right of way. Now we're going to ask for funding for that right of way before we negotiate.

MR. BARTON: That's correct. And based, again, on the conversations I've had with the TTA staff and the district's staff, the proposal that was presented and the developers presented on was that this funding would be provided for right of way.

I don't know if Mark is still available; he left the room as quickly as possible.

MR. HOUGHTON: It gives away a negotiating position, in my opinion, that we now say wait a minute, we've got Michael in the region that says I may have some money, we can take it from here, put it there -- you've heard his testimony.

MR. BARTON: Yes, sir.

MR. HOUGHTON: The developer said they were going to get in the boat with us and work on it, the airport has the right of way. Now, if we fund this, that means we've just given up that negotiating position. That's my opinion.

MR. BARTON: I think your opinion is probably correct.

MR. HOUGHTON: And we're sure that on the other project in Bexar County that that project is ready to go.

MR. BARTON: Yes, sir.

MR. HOUGHTON: Under the federal stimulus, environmentally cleared.

MR. BARTON: Yes, sir, it was cleared as a category exclusion previously.

MR. HOLMES: Do I remember, John, from earlier testimony that part of the right of way is airport right of way that was acquired with Federal Aviation funds? Is that what they said?

MR. BARTON: Yes, sir, that is correct.

MR. HOLMES: And that the airport authority would be unable to contribute that?

MR. BARTON: I believe that is what has been said. I cannot confirm if that is, in reality, the case.

MR. HOLMES: Whether that's a fact.

MR. HOUGHTON: I will say that those involved in here on the Spur 601 in El Paso that included airport property, military property, the military dedicated the right of way, the airport dedicated the right of way which was FAA acquired with their funds that property. So I think there's opportunities with the FAA.

MR. MEADOWS: Let me say that if you recall what was actually stated today was that it was, quote, a complicating factor. What we didn't hear for a fact, one way or another. So I think we should probably not speculate on it and there will be an answer to that, and we know that if that is an opportunity, it's an opportunity that is going to be aggressively pursued.

MR. HOUGHTON: On that begs the question, though, Bill, and that is why would we approve this and give away that negotiating position.

MR. MEADOWS: Well, it's an interesting point that you raise. I actually raised a very similar point yesterday in a discussion about this very subject with our staff, and I was somewhat surprised to see it move forward in this fashion today.

MR. HOLMES: Maybe we ought to wait.

MR. MEADOWS: I'm happy to wait until such time as we feel like we've achieved the full opportunity that is there through the negotiating process.

MR. HOUGHTON: And know what the bogey is that we have to fill in, if, in fact, the commission wants to fill that in.

MS. DELISI: And you're talking about waiting on the Dallas-Fort Worth but going ahead on the San Antonio?

MR. HOLMES: Right.

MS. DELISI: Is there any problems with that?

MR. BARTON: I would defer to our legal counsel but I think we could amend the minute order.

MS. DELISI: But there's no problem from your perspective -- I care deeply about the legal issues, but I'm talking about in terms of the engineering and project development and all that.

MR. MEADOWS: As we all do.

(General laughter.)

MR. BARTON: From a project development perspective on the DFW Connector, there would not be a problem postponing this action.

MR. SIMMONS: Mark showed back up and I also see Maribel out in the audience if you have some other questions about the right of way in particular. I know that one of the issues on the DFW Connector -- Maribel, you might want to start heading up here -- I mean on the airport is how you value the property in the appraisal.

MS. DELISI: Well, if it's not going to harm the project development or the process, then Bob, can I take a substitute motion to amend the minute order, or does the minute order actually have to be -- can I take a motion from somebody to amend the minute order and vote on that?


MR. HOLMES: I move that we amend the minute order on the DFW portion of it and approve the San Antonio portion.

MR. MEADOWS: Let me just ask a clarifying point in terms of an amendment. I certainly am on the same page on this, I'm just wondering if there is a way in which we can -- is there an action we take that could defer a decision on that which basically keeps it so designated, if you will, until such time as we maximize the opportunity. I don't want someone from the Metroplex, this large group that was here today to think that we're not committed.

MR. HOLMES: It's just removing it from the motion.

MR. MEADOWS: From this action. And that's fine, I think we all are on the same page on this.

MR. HOLMES: We wouldn't be voting it down.

MS. DELISI: Correct me if I'm wrong, the public subsidy, aside from the $250 million of the stimulus money, the previous $667 million, included in that money a certain amount of money for right of way. Correct?

MR. BARTON: That is correct.

MS. DELISI: So the commitment is still there and continues to be there.

MR. HOUGHTON: This is to defer the Connector item.

MR. HOLMES: We're just separating it out.

MR. HOUGHTON: We're going to separate it out and then defer it. Can we do that, separate and defer?


MS. DELISI: Until such time staff comes back to us.

MR. HOUGHTON: With a recommendation.

MS. DELISI: Right. So Bob, the motion from Commissioner Holmes was appropriate?


MS. DELISI: Okay, there's a motion.



MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARTON: Thank you.

MR. SIMMONS: Thanks, John.

The next item is item 12(a) dealing with appointment to our Port Advisory Committee, Jim Randall.

MR. RANDALL: Good afternoon, Commissioners. Jim Randall with the Planning and Programming Division.

Item 12(a), this minute order appoints two members to the commissions Port Authority Advisory Committee. This seven-member committee provides a forum for the exchange of information between the Texas Transportation Commission, the department and committee members representing the Texas port industry and others who have an interest in Texas water ports.

These members need to be appointed to fill two of the Upper Coast positions which are currently vacant. The following individuals are recommended to serve for three-year terms, expiring on February 29, 2012. Mr. Gene Bouillion with the Orange County Navigation and Port District, and Mr. Pete Reixach, Port of Freeport. Staff recommends approval of these appointments.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RANDALL: Item 12(b), in 2001 the legislature established a $170 million program to provide financial assistance for Border Colonia access roadway projects. The department distributed the funds to the eligible counties in three program calls. This minute approves the reallocation of funds from the third program call within Cameron County.

Title 43, TAC, Section 15.105(10) provides that a county may use unexpended funds from a project on any other commission-selected county colonia project. Cameron County's request for approval to transfer a portion of their non-committed funds to other eligible county projects is shown in Exhibit A. Staff recommends approval of Cameron County's request.

MR. MEADOWS: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RANDALL: Item 12(c), this minute order is very similar to the one I just presented, it approves the reallocation of funds from the third program call of the Border Colonia Access Program within Maverick County. Maverick County's request for approval to transfer a portion of the non-committed funds from Hopedale Colonia to Sauz Creek Colonia. Staff recommends approval of Maverick County's request.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RANDALL: Thank you.

MR. SIMMONS: Thank you, Jim.

The next item is item 13 dealing with the State Infrastructure Bank, and Brian Ragland, our director of our Finance Division, will give this one.

MR. RAGLAND: Thanks, Steve. For the record, my name is Brian Ragland, director of the Finance Division.

The first item is a proposed minute order which provides for preliminary approval of a SIB application submitted by the City of Rosenberg requesting $450,000 to pay for sewer and water line relocation costs along state Highway 36 from US 90A to Avenue M. Staff recommends approval.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RAGLAND: The next item is a proposed minute order for the preliminary approval of a SIB application submitted by the City of Stamford, requesting a loan for $300,000 to pay for sewer and water line relocation costs along FM 1226. Staff recommends your approval.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RAGLAND: The next proposed minute order is a final approval of a SIB application submitted by the City of Kyle. They're requesting $11 million for improvements to I-35 southbound frontage roads and ramps between County Road 210 and FM 1626, and the reconstruction of County Road 210 overpass in Kyle. The loan will be repaid over 20 years at a 4-1/4 percent interest rate, and staff recommends your approval.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: If we can go to item 14, Brian.

MR. RAGLAND: Yes. Item 14 is the update on our implementation of the State Auditor's report on our Cash Financial Forecasting and Fund Allocation. Before I address the one item, I want to mention that I think there's agreement that I not necessarily report on this audit on a monthly basis going forward unless there's a significant change. So I'll assume you are in agreement with that unless you say otherwise.

MS. DELISI: That's fine with me.

MR. RAGLAND: I'm happy to do it. It's just we're kind of in between.

MR. HOLMES: What do you consider significant?

MR. RAGLAND: Well, for instance, if an item is completed or if an item has a significant effort that causes me to describe that significant progress into the report. But merely sending something to a third party, to me may not be significant unless it truly impacts the recommendation. Again, I'm happy to do it every month but sometimes it's hard. We're in between all of the things that were quite easy to fix and the things that are taking a longer period of time because of computer programming or the 2030 Committee, for instance. It's just becoming hard to find things to report on.

MS. DELISI: The other thing is because there is now an Audit Subcommittee, I think if you're not going to report on a monthly basis, you better stay in close contact with your committee members, particularly your chairman, because he'll be able to provide a lot of input into what they believe constitutes a significant change that needs to be briefed before the commission.

MR. RAGLAND: Yes, and I am also updating the State Auditor's Office on a monthly basis. They have an online application where you input any changes there, and at the same time we are keeping the Senate Finance Committee and the House Appropriations Committee aware of this progress.

The one item I wanted to report on is item number 14.a and the recommendation there was to continue our efforts related to the funding gap, including development and implementation of a process to implement the recommendations of the 2030 Committee. Our response at the time was that we would evaluate the recommendations and share them with the legislature. Pending receipt of that report and any subsequent guidance from the legislature, TxDOT would implement a plan as necessary.

The current status is that the 2030 Committee presented their final report to you in February, the commission adopted the report by minute order and directed agency staff to develop a report in conjunction with this partners on the development of the Texas Transportation Plan. So this report, while it will identify and implement the recommendations of the 2030 Committee the agency anticipates incorporating those findings into the development of the Texas Transportation Plan, and of course, subject to any other direction from the legislature.

And that's all I have on that. Thanks.

MR. SIMMONS: Thanks, Brian.

The next item is item 15, our Construction and Maintenance Funding Report, if Mr. Bass will come forward.

MR. BASS: Good afternoon. For the record, I'm James Bass, chief financial officer at TxDOT. And it is raining outside -- or it was.

MR. HOUGHTON: How was your hearing?

MR. BASS: It went well, I believe.

MS. DELISI: Was this the hearing on the Carona bill?

MR. BASS: Yes, on the 1350, the Transportation Revolving Fund. There were witnesses from potential applicants to such a program that stated they had some minor concerns that they hoped to continue to work with some tweaks -- I think as they called it -- to continue to work with the senator. The Senate Finance Committee seemed to have a general agreement of something needs to be done in this area and to continue to move forward with that bill. But it was not passed out of the committee, there was hope that whatever tweaks may need to be done could be put in place and then Senate Finance may reconsider a vote on that particular bill next Thursday.

Agenda item 15 is a report, requires no action on your part, but it is a continuing report on the obligation limit for 2009 or the construction and maintenance limit of contracts that we have, the oft-heard number, hopefully, of $2.53 billion. We continue to be on track and think we can do the $2.53 billion. Low bids on projects continue to come in under the engineers' estimates.

This report focuses merely on the dollars that are in the UTP, the State Highway Fund dollars. Although it includes, it doesn't focus on 121 numbers, and so information you hear from Thomas Bohuslav or the Construction Division later, will be from a broader overall perspective. My comments are really focused on those UTP dollars, the dollars that are tracked in the UTP, and what we've seen is roughly 20-25 percent underrun in those estimates such that through March, assuming your acceptance of the bids, is around $214 million underrun.

MR. HOUGHTON: $214- cumulative?

MR. BASS: Cumulative, yes, through March, fiscal year to date. So there would be options to backfill additional projects, perhaps reserve those savings for other purposes. I think executive staff is still having discussions on potential options for those funds.

A couple of things just to continue to update you on the traffic count, the data I have is through February. February of 2009 was lower than February of 2008, so that trend continues, not surprisingly. The gas tax, the receipts continue to be lower than the prior year such that through March, fiscal year to date, we are about 2-1/2 percent lower than deposits to the Highway Fund at the same time last year.

Digging a little deeper -- this may or may not be of interest -- looking at it from the State perspective, the gross receipts that the Comptroller receives -- the 2-1/2 percent I was talking about were the actual deposits to the Highway Fund after education and refunds and everything else, but if we kind of move higher up and look at the gross receipts to the State and then narrow it down between diesel and gasoline, the gross receipts to the State through March are 1-1/4 percent for gasoline, for diesel they are lower by 8-1/2 percent. So they are both lower but most of the weight has been for diesel. Now, roughly 25 percent or so of the collections comes from diesel and the other three-quarters comes from gasoline, but I thought that was somewhat interesting that there is a variance in the decrease between those two sources.

The other thing that I'll comment on to make sure that the commission is aware of dealing with the $2.53- obligation limit this year is that through Congress there has been announced an additional rescission. As you may recall, between 2006 and 2009 to date Congress has rescinded roughly $924 million of apportionment -- and you can think of that as planning dollars -- and this new rescission will estimated impact Texas by an additional $270 million of planning dollars, for a total of just under $1.2 billion.

In addition to that, continuing to loom on the horizon is another $720 million rescission that has always been a part of the SAFETEA-LU package, the six-year transportation bill, it was always out there in year six. There had been some discussion during the economic stimulus debate of attempting to remove that last rescission out of the bill; that did not happen in the final package, so it is still out there. We have not received the specific directions or instructions from Federal Highways on this latest $270 million rescission.

What I can say for sure is that TxDOT and our transportation partners, the MPOs, over time we'll have the ability -- not the ability -- we'll be forced to have $270 million worth of fewer projects in our planning documents moving forward. At this point we do not think that it will have a material impact on our ability to award the $2.53- in contract dollars this year, but again, we haven't seen the specific directions or instructions from Federal Highways. So just wanted to make sure the commission was aware of what's going on in the rescission world.

MR. SIMMONS: On the $271 million rescission that we're faced with right now, if you remember we had a working group that I think Senator Watson encouraged us to put together for future rescissions. We're bringing that group back together to look at where we are today in time with our unobligated balances and help us make a recommendation to you all which ones to approve. But as James said, we haven't gotten the actual message from the Federal Highway Administration officially to do it yet. We know it was approved in the bill and our take on the bill is they're leaving the discretion this time up to us on where to take it. So that is different from the last one. If you remember, they said take X amount from this and Y amount from that. So we will have that group put together shortly to help us make a recommendation.

MR. BASS: Those were the items I wanted to cover as part of this report. I'd be happy to attempt to answer any questions that you may have.

MS. DELISI: What are the latest numbers for how much we get back on the dollar?

MR. BASS: From the Feds it's in the neighborhood of 70 cents for highways; there's an additional amount that goes into the transit account, but for highways it's around 70 cents.

MR. HOLMES: (Inaudible; microphone not turned on.)

MR. BASS: If I'm recalling right, there's a guaranteed minimum in the bill. The problem with that is that that guaranteed minimum does not apply to 100 percent of the funds, and so you're guaranteed to get a percentage of a percentage, so you're guaranteed to get 92 percent of 90 percent, as an example. The remainder may be through discretionary programs that typically the State of Texas has received a lower percentage than we have through the formula program.

MR. HOUGHTON: (Inaudible; microphone not turned on.)

MR. BASS: For highways the latest number is between 68 to 70 cents.

MS. DELISI: And that includes the discretionary dollars for highways?

MR. BASS: On the 70 cents, yes.

MS. DELISI: What's our minimum guarantee?

MR. BASS: The minimum guarantee I think is 92-1/2 percent for the formula funds.

MR. SIMMONS: On about 85 percent of the programs.

MS. DELISI: So 92 percent on 85 percent of the programs. Is that right?

MR. SIMMONS: Yes, ma'am, I believe that's right.

MR. BASS: And one of the things that gets confusing, it's confused staffers across the street and others who deal with our programs is Federal Highways goes through the allocation of the formulas and then tries to ensure that every state has reached that minimum required, and it used to be there was a category called Minimum Guarantee, that if a state through all the other formulas fell short of that minimum required by law, they received additional money through Minimum Guarantee.

I believe it was in SAFETEA-LU that program is now referred to as the Equity Bonus Program, and so many people infer from equity bonus that this is extra money that you've gotten, it's a bonus, and no, it's a bonus from the Federal Government giving you the minimum they're required to give you by law.

MS. DELISI: I want to make sure. Is it apples to apples to say there's a minimum guarantee of 92 percent but we only get 70 cents on the dollar? No, right?

MR. BASS: No, because as Mr. Simmons said, the 92-1/2 percent does not apply to the full dollar, it's only the 85 cents of that dollar that we're guaranteed to get 92 percent back.

MR. SIMMONS: Well, I guess to say it another way, there's about 85 cents of every dollar goes to highway but 15 percent goes to transit, so you're already starting at 85 cents for highways, and then out of that 85 cents, 80 percent of that is under the minimum guarantee of the 92-1/2, so you start doing the percentage down. So it's 85 percent of 85 percent that we get 92-1/2 percent of.

MR. BASS: Federal Highway Administration produces a highway statistics book that we have been tracking this rate of return, if you will, over the years, and we have through 2005 -- it generally lags behind a couple of years. Unfortunately, what we've discovered in the last twelve months is that the different elements for us to perform our calculation, they're no longer producing all of those elements. We've had conversations with the people producing that and they're going to go back and recalculate those numbers and provide them to us. But the latest information we have using the official Federal Highway numbers is I believe from 2005.

MR. HOUGHTON: Where do we rank as far as donor states?

MR. BASS: That would be, depending upon your perspective, either number one or -- well, actually you have to include Puerto Rico and D.C., so we'd be 52, I think. Well, let me change it, we are the biggest donor to the program.

MR. HOLMES: Biggest donor percentage-wise or biggest donor dollar-wise?

MR. BASS: Biggest dollar-wise.

MR. HOLMES: And we're the second biggest state.

MR. BASS: Correct, but to be honest, I have that data, I can look at it and sort it that way. I've always focused on the dollars since the inception of the program, and since the mid '50s, something we've donated over $5 billion, I think California is number two, somewhere in the $2-1/2 billion. So there is a big dollar difference between number one and number two

MR. HOUGHTON: And the money is coming back (inaudible).

MR. BASS: I apologize, I'm not sure on a percentage basis, on a dollar volume basis as far as who has donated and who has received more, dollar basis, we've donated more than anyone else. I don't know if that necessarily equates to the same ranking on a percentage basis, but we can calculate that.

MR. SIMMONS: And I can tell you I just went through the Federal Highway program, how they got to this, and we are the state that receives the largest equity bonus and that shows you how bad we do in the other formulas, but to get to that number of the equity bonus is like making sausage, it's ugly.

MR. BASS: Thank you.

MR. SIMMONS: Thank you, James.

The next item will be the award of our contracts, and Toribio Garza, who is our interim director of the Maintenance Division, will make the next presentation. Toribio, is this your first time?

MR. GARZA: No, sir, I've been up here a couple of times.

MR. SIMMONS: Okay. They like fresh meat.

MR. GARZA: And for the record, I'm not Thomas Bohuslav. I have a couple of minute orders before you, Commissioners. Good afternoon. For the record, I'm Toribio Garza, interim director for the Maintenance Division.

But before I get into the minute orders asking you to award the contracts that were let this month in construction and maintenance, I wanted to follow up a little bit on a discussion that the commission has had with staff regarding what we're seeing in our construction project underruns. And what you're seeing here, and I don't know if you've seen this graph before, but this is our highway cost index -- I apologize, it's a little busy -- but it was developed by TxDOT for TxDOT construction projects, and I'll go through it in a minute.

The index is a volume-weighted value that's based on quantities and prices from 1997. It tracks our low bid prices. About 70 percent of our construction projects are tracked, not all of them are, and those items are broken up into four major categories and there's an index curve for each one of those categories, I'll briefly go through those. The first category is earth work items and it has excavation and embankment items in there. The second category is our subgrade or base course items and it has lime-treated subgrade items and flex base items on all in that category. The third category is a surfacing item which includes our seal coats and overlays and hot mix and concrete paving. And then the fourth category is our structures item which has concrete structures, metal for structures, retaining walls, beams, and so forth.

MR. SIMMONS: Toribio, before you get started, our general counsel is a little concerned that we've got to get on the agenda item first and then they can ask the questions, so I need you to make the presentation on the first agenda item.

MR. GARZA: Yes, sir. Go through the minute order?

MR. SIMMONS: Yes, if you don't mind.

MR. GARZA: We have two minute orders, the first one is item 16(a)(1) and it's consideration for the award or rejection of Highway Maintenance and Department Building Construction that were let on March 10 and 11, 2009. We had 17 projects; the average number of bidders for the maintenance projects was 5.29; we did have a 23.2 percent underrun on these maintenance projects. Staff recommends award of all these projects.

MR. HOLMES: So moved.


MR. SIMMONS: And I guess the reason why he was making this presentation is because you can see the large underrun and you're probably wondering why and I think that's what we were trying to get to to show this to you, but we had to get to the agenda item first. Pardon me, Toribio.

MR. HOUGHTON: (Inaudible; microphone not turned on.)

MS. DELISI: In terms of the vote or the presentation?


MR. SIMMONS: I would think that you would have a question on why we're so much under.

(General talking and laughter.)

MR. HOLMES: A minute ago I noticed on those monitors back there that they had focused a camera on that, but I can't see it on this screen or up here. Can you bring that closer?

MR. HOUGHTON: Because you can't tell what that is.

MR. HOLMES: It's really hard to see, or just put the camera on it. It was on those two monitors back there behind you.

MR. SIMMONS: I think they're working on it.

(Discussion about getting camera focused on chart.)

MR. GARZA: I was going to point to it but I'm not going to point to it anymore. It's up there, and again, I apologize, Commissioners, I didn't realize you weren't going to be able to see this that well.

MR. HOUGHTON: What you're saying is that we're having spiking.

MR. GARZA: Well, historically we can see that from '97 to about '03 the highway cost index was going up about 4 to 5 percent. We saw that between '03 and '06 in here somewhere within those three years we had huge spikes. Instead of the 4 to 5 percent, we had more like 18 to 20 percent. Some of the things that happened in this time period was we had some very big lettings, we had an average of about 3.9, 3.7 bidders during that time. It was also during this period of time nationwide there was a shortage of steel and cement and we saw almost doubling of those type of commodities in our business. So that's what we're anticipating happened with this time period.

Between '06 and '08 in here -- and I jumped the gun a little bit -- the first graph that's a little bit volatile here is a one-month running average, the second one is a three-month running average, and then this one in here is a twelve-month running average. The twelve-month running average is more reliable. Because it takes into account twelve months, you may have prices going up for eleven months and then as they start to come down on the twelfth month, you may not see it a little bit because it averages in those high prices, so it lags a little bit.

But again, between '06 and '08 we can see that prices stayed high, it was almost like a leveling off of costs in here, and then right about in here was the summer last year where we had the $4 for gas and we're thinking this is what happened here, and it brings us to January of '09 which as Mr. Bass mentioned earlier, for the past three lettings we've had an average of 22 percent underruns on our projects.

Why is that happening, do we think it will continue or not? In talking to industry, of course, fuel prices are down again, there's plenty of labor available, I know that a lot of the equipment companies are having some good deals to try and move some equipment, our agency partners tell us that there's plenty of materials because we've had relatively low lettings the past few months that maybe that's part of it. So it just seems like all those factors have helped us to bring all those prices back down. And we're seeing the cost index as similar back to '05 in some of those items that came in in this March letting.

So I think those preservation projects that we're getting ready to let next month, I think we're going to get a real good price for those because we're in a real good position.

Again, I apologize for the graphics here. I wanted to give you an idea of where we're at, what we're seeing, and see if you had any questions.

MS. DELISI: Can I get a motion, because I didn't exactly hear that, I heard the second but I didn't hear the motion.

MR. GARZA: I need to read the second one.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GARZA: Now the second one. Item 16(a)(2) is for the consideration of award or rejection of Highway and Transportation Enhancement Building Construction projects for March 10 and 11 of '09. We had 77 projects with an average of 6.5 bidders per project, an underrun of 21.6. Staff recommends award of all the projects.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GARZA: Thank you.

MR. SIMMONS: Thank you, Toribio.

If we didn't note it, Toribio led pretty much our effort during Hurricane Ike and I want to thank you.

The next item is item 17, some Contested Cases. Rich O'Connell from our Office of General Counsel will make those presentations.

MR. O'CONNELL: Good afternoon, Commissioners. Item number 17 is a proposal for a decision prepared by the State Office of Administrative Hearings. This is an enforcement case about an outdoor advertising sign. The staff of the department brought this enforcement case, they documented two violations by a sign owner named Magic Media in Hill County. They documented the violations, the person asked for a hearing, they testified at the hearing. The ALJ agreed with the department staff and concluded that there were the violations and the permit should be canceled, and that was the ALJ's recommendation.

We recommend that you adopt the ALJ's findings of fact and conclusions of law as part of your order. That's General Counsel Office's recommendation to you. I'd be happy to answer any questions if you'd like.

MR. MEADOWS: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. O'CONNELL: I do have a second item which is 17(b). This too is an enforcement case. This one is from Sutton County, and in this case the sign owner which is Lamar Advantage Outdoor has a permitted sign. The staff moved to cancel the permit because they documented that the sign owner was gaining access to the sign from the right of way to do maintenance work. When they moved to cancel the sign, the sign owner asked for a hearing and the case was referred to the State Office of Administrative Hearings again, but in this case the administrative law judge found that there was no violation of the department's rules and so recommends that the enforcement case be dismissed and that the sign owner keep his sign.

The Office of General Counsel, we agree with the ALJ's findings of fact and conclusions of law, and so we recommend that your order adopt them too, and that is our recommendation.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. O'CONNELL: Thank you.

MR. SIMMONS: Thank you, Rich.

Commission, the last item is our Routine Minute Orders and we just recommend approval.

MS. DELISI: Can I get a motion?

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: That's all we have on the agenda. I don't know of any other items to bring before the commission, and we have no open comment.

MS. DELISI: There being no more business to come before the commission, I will entertain a motion to adjourn.

MR. UNDERWOOD: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Please note for the record that it is 1:42 p.m. and this meeting stands adjourned.

(Whereupon, at 1:42 p.m., the meeting was concluded.)


MEETING OF: Texas Transportation Commission

LOCATION: Austin, Texas

DATE: March 26, 2009

I do hereby certify that the foregoing pages, numbers 1 through 201, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.





(Transcriber) (Date)

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