Texas Department of Transportation Commission Meeting
Ric Williamson Hearing Room
Dewitt Greer Building
1125 East 11th Street
Wednesday, July 28, 2010
Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
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 afternoon. It's 1:34 p.m. and I call this meeting of the Texas Transportation Commission to order. Public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:21 p.m. on July 20, 2010.
Before we begin, please place your cell phones and other communication devices on the off or silent mode, please. During today's meeting we'll accept public comment that is relevant to the posted agenda items; we will not have an open comment period. To comment on an agenda item, please complete a yellow speaker's card and identify the agenda item on which you'll speak. You can find these cards at the registration table in the lobby. And we request that each speaker limit their remarks to three minutes.
Before we begin with the agenda, I just wanted to start by congratulating TxDOT employees and our Executive Director Amadeo Saenz on being recognized by the American Road and Transportation Builders Association. Amadeo was named the public sector entrepreneur of the year, and they also honored the LBJ Express and the NTE CDA projects as the public-private partnership projects of the year. So congratulations to you, Amadeo, and also to our employees, particularly those who worked on the projects up in the DFW area.
MR. SAENZ: Thank you.
MS. DELISI: With that, commissioners, does anyone have any comments?
MS. DELISI: All right. So then I'd like to start off by inviting Jay Kimbrough up to the podium to give a report on his activities on the implementation of the Grant Thornton management organizational review.
MR. KIMBROUGH: Howdy! I was told I could say that.
MR. KIMBROUGH: Anyway, thank you very much for the opportunity to be here with you this afternoon, and to talk to you a little bit about what I've been doing for the last three weeks. And particularly, I want to thank you for the opportunity to serve in this project and to serve the people of Texas and to work with this agency on this particular very, very vital mission.
And obviously, the mission is pretty straightforward: to modernize this agency and to maximize this efficiency and to do all that we can to ensure that the transportation infrastructure of this state is moving forward and being prepared and repaired in this millennium as we go forward to this incredible growth period that Texas will be facing.
My update for you today will be very brief because, essentially, during the last three weeks, what I have been doing is having a lot of meetings and reading a lot of documents. But let me say to you also, I want to thank the TxDOT staff for being 110 percent supportive and responsive to me in the last three weeks as I have been seeking information and input. That has been excellent on their part and I want to thank them for that, and I want you to be aware of that.
So certainly, over these last three weeks, a lot of meeting with staff and others, talking about their impressions of things, as well as getting context and awareness for me in terms of what's gone on just in the last few months, as well, certainly, as the last few years. And all the way from reading the Grant Thornton report, to the Sunset Commission report, to reports prepared by Texas Transportation Institute and others, it has been a very valuable time for me to obtain context and situational awareness and orientation about the issues that the commission and the agency and the state face together.
Next week, as you probably know, Mr. Wolf will be here in Austin, and he and I will be setting up some office space in the Sam Houston Building. We've already been working on that the last several days, and here again, TxDOT staff has taken the lead on helping us get that set up. And that will be where, essentially, we begin our office process, if you will, to begin to analyze and bring forward ideas and suggestions to the commission for how we can modernize and implement so many of the recommendations and observations that were contained in the Grant Thornton report.
And as we all know, with any governmental agency, there is a continuing evolution of opportunities, given new technologies and et cetera, to seek new levels of effectiveness and efficiencies, and that's exactly what this effort is about, and clearly the Grant Thornton report provides a basis for us to move forward and to reach out to others and communities and certainly employees, and to find out new ways, new methodologies to address the issues that Texas faces.
And I will tell you that I'm confident that we all share one same goal, and that is to serve the people of Texas, to ensure that this agency is as efficient and as effective and as modern as anywhere in the country, and we'll all be 110 percent committed to that effect.
I know that you meet on a monthly basis and I will tell you that my goal will be at your next meeting ‑‑ between now and then, of course, we'll be communicating with you on status and updates and that sort of thing, but by that next meeting to have a more formal report with Mr. Wolf involved, of course, about implementing the changes and modernizing the agency.
With that, I will conclude. Any questions?
MR. HOUGHTON: Welcome aboard.
MR. KIMBROUGH: Thank you.
MS. DELISI: Was that a question?
MR. HOUGHTON: Welcome aboard.
MR. KIMBROUGH: And see, I didn't take the bait. All right. Thank you very much. Have a good day.
MS. DELISI: With that, Amadeo, I'll turn over the rest of the agenda items to you.
MR. SAENZ: Thank you, Madame Chair. We're going to skip around a little bit, got some IT technical problems, so I'm going to go on to agenda item number 4, and James Bass will give you an update on the Legislative Appropriations Request for Fiscal Years 2012-2013. So, James.
MR. BASS: Mr. Saenz, thank you. For the record, I'm James Bass, chief financial officer at TxDOT. I do want to just give you a brief update on the status of the Legislative Appropriations Request that we discussed last month and gave you a draft of the document. The timeline is that that appropriations request is due to the Legislative Budget Board at the end of August, and so our plan would be to bring the final Legislative Appropriations Request at your August meeting for adoption so that we can submit it.
A couple of items I wanted to bring to your attention today deal with the level of rail funding in the appropriations request and then also our rider revisions.
Currently, in the draft that we presented to you last month there was $150 million, roughly, of a request for general revenue listed as exceptional items, and that dealt primarily with a number of different rail projects: Austin-San Antonio commuter rail project, the Houston freight improvements, Heartland Flyer, and South Orient Rail.
In addition to that, what staff would like to add, from the last time we met, is a request for an additional $100 million of general revenue each year of the biennium to serve as the initial debt service for debt to be issued out the Rail Relocation and Improvement Fund. We would like to include that request as an exceptional item within the appropriations request. In addition, we would like to make sure that we include the potential or possibility for any federal funds that might be available for rail within our appropriations request, and I believe I may have mentioned in an earlier meeting, the only concern I would point out there is that if we request the federal dollars and the Texas Legislature approves but Congress does not, then it might appear that we weren't fully spending all of our appropriations. So I think we would just want to be clear to the appropriators that the level of funding we're requesting for rail was dependent upon federal action and federal support for those levels.
The other thing I would mention, in addition, there are a number of rider requests dealing with the ability of the department to make appropriation transfers, reporting requirements of the department on various activities that we are updating and wanting to revise. There are a number of revisions. There are some that are, I think, potentially of more interest to the commission than others, and what I've provided to your offices is a list of those riders, designating which ones, in my opinion, you might want to, in your limited time, have the ability to focus on and look at those, one of those being, as an example, the ability of the department to transfer appropriation from one strategy to the other.
Currently, in this current biennium, the department can independently make no such transfer. We have to seek approval of the Legislative Budget Board and then do it. The draft that you have before you would narrow that in any of the strategies that deal with project funding which still require Legislative Budget Board approval, but more on the operations side if a district or a division wanted to move money from design to maintenance, the way we had crafted that rider, it would allow that change to be made.
Again, the detailed schedule with the ones highlighted have been provided to your office. We are happy to come meet with you in person or discuss it over the telephone if you have questions over those riders. And at this point I would open it up to see if you have any questions on either the riders or the rail funding or if there are any other areas within the appropriations request that you would like to see.
And I'll backtrack on that a little bit. Commissioner Underwood, you expressed a concern over our level of IT funding as we move forward in updating the department and integrating a lot of the recommendations we've seen over the past few years. And I'll mention that currently in the draft of the LAR in our capital budget area there's a management information systems project, and the intent of that project is to modernize and update a number of the legacy systems, primarily those legacy systems that would not be addressed through our participation in the Comptroller's Project One project. In the current draft we are requesting $23 million in 2012 and another $23 million in 2013 to begin that modernization and updating of a number of the legacy systems within the department.
MR. UNDERWOOD: James, is that going to be enough money to do that, the $23- in one year?
MR. BASS: I don't think it will be enough to fully update all of the systems. I also don't think all of that updating will happen within that two-year period. So I would imagine as we move forward and go into 2014 and beyond that there would be a need for additional funding. Right now there's not a detailed timeline or plan of which system would go in 2013 or sooner or which one might go after, but my thought is that that total of $46 million likely would not be enough to address all of the IT needs of the department.
MR. UNDERWOOD: Just a thought, James, you drag this out over two, three, four, actually over four or five years, by the fifth year the equipment that you bought the first year is obsolete.
MR. BASS: Right.
MR. UNDERWOOD: So after this, when we have some time, I'd like to sit down and talk to you about that, please.
MR. BASS: Okay. One of the concerns on that is having the manpower and the focus and contracting to be able to do it in the short term, but I certainly understand your concern with that and we'll visit with you on that.
MR. UNDERWOOD: I think it's going to be a fact that it's going to be outdated. Basically the hardware will be for sure. So I would like to sit down and talk about that afterwards, but I don't want to waste these people's time now.
MR. HOUGHTON: What is the total cost of this project?
MR. BASS: Currently in the current appropriations bill for '10 and '11, the department is participating at $26 million for Project One which is the Comptroller's statewide system. Then currently in 2011 there's another $26 million to begin work on these management information systems.
There's a question in my mind, if in no one else's, at this point whether or not some of that $26 million for the MIS project may need to be used to supplement the delivery of the Project One which would be our financial system. There are some things that the department may want to add to the scope of that project that we might need to look at ways to be able to offer the funding to get that done.
So there's $26 million for this management information systems in 2011 currently and then another $23- in 2012 and another $23- in 2013 in the draft LAR.
MR. UNDERWOOD: James, we're having trouble getting timely information and the longer we drag out getting that timely information, we're not going to be as efficient as we need to be. To me, we need to be pushing more funds towards getting the information out timely so that we can deliver a project better and on time.
MR. BASS: Right. One of the concerns I've heard is just how big of a project can one effectively manage within a short time frame, and I certainly understand the desire and the direction that it needs to be done quickly. And the IT professionals within the department could better comment on the challenges of fitting that within a specified time frame or how long that might need to take, but I have heard them mention those concerns.
MR. HOUGHTON: You mean physically able.
MR. BASS: Yes. One thing is you can hire contractors ‑‑ you can hire additional staff to do that.
MR. HOUGHTON: Which costs.
MR. BASS: Which costs money. But you also need someone to oversee and manage either the additional in-house staff or the contractors to make sure it's being managed effectively.
MR. UNDERWOOD: You need it to be somebody that really understands what they're managing too, not just a manager.
MR. BASS: Correct.
MR. HOLMES: James, I want to make sure that I fully understand the numbers we're talking about. If the $26 million that's currently in the budget for the MIS system is moved in large part to Project One, then you're not talking $26-, $23-, $23-, you're talking $23-, $23-, something.
MR. BASS: Question mark thereafter. Correct.
MR. HOLMES: And so do I kind of take it from there that we're really talking maybe three years or four years at a burn rate of $23 million plus or minus?
MR. BASS: Again, I think the IT department could mention that better. What I have is '12 and '13 and I know that there is likely more needed after that. What I have not seen, and our IT department may have, is a detailed plan showing which systems over what time frame would be implemented. And I apologize but I don't know, and we could certainly get that information for you, if they see that happening over a three-year period or if their plan would be six years.
MR. HOLMES: Well, let me ask it in a different way. If you currently have in your numbers $26- which has already been approved, plus $23- and another $23-, then the implication of that is that you're at whatever that is, $60-some odd, nearly $70 million? Is that what I'm hearing?
MR. BASS: We're at $52- right now currently in the Appropriations Act broken into two pieces, $26- for Project One which is the statewide ERP system managed by the Comptroller, and $26- for the remaining legacy systems within the department. That is what is approved for $52 million.
In the draft LAR, the current plan right now is to request another $46 million, getting us close to a total of $100-, to continue addressing those remaining legacy systems within the department.
MR. HOLMES: But the assumption is that $26- of that first $52- is going to be used for MIS.
MR. BASS: Currently that was definitely the assumption, and it may or may not be as we move forward on the Project One.
MR. HOLMES: And if it is needed to complete Project One, to make Project One actually effective, then it needs to be replaced, or is that $23- and $23- replacing it?
MR. BASS: It would need to be replaced. The $23- and $23- would not be replacing it.
MR. HOLMES: So the $23- and $23- is on top of it.
MR. BASS: Correct. And so the might be well, could we change the $23- and $23- to $36- and $36-, breaking the $26 million that may now go for another purpose. The question I would have there again is I would defer to the IT department, is $36 million a number that can be effectively managed within a one-year time frame, or would that $26 million that might get redirected need to get added as a third year or an additional year under the management information systems project.
MR. HOLMES: But we really haven't gone through all the MIS pieces to know exactly what we would do.
MR. BASS: Correct.
MR. HOLMES: And we don't have any cost numbers, et cetera. So this is basically a placeholder or an educated guess as to what the cost might be?
MR. BASS: Yes, and making sure that there would at least be enough money to get started. And even to your point, I don't believe they're at the point of saying all of the remaining systems we'll do at one time, we'll update them all in one project, or if those themselves would need to be phased over time and maybe address four or five of those legacy systems in phase one and then move on to a second group of those projects subsequent to that.
MR. HOUGHTON: Does anybody have a master plan put together of all of this?
MR. BASS: Not that I've seen. And that's one of the points, we had gone out previously, I believe, a year or two ago with an RFP to bring somebody onboard to look at that and to develop a master plan and a timeline associated with it. That RFP got suspended or canceled, and I apologize, for reasons that I'm not fully in tune with. But I, as one person, would think that would be very beneficial to have that kind of detailed plan laid out.
MR. HOUGHTON: It's not fair, James, that you're sitting up here having to field the questions from a financial, we understand the budgetary process, but it's the direction.
MR. BASS: Correct. And as you are well aware, it's a very large management information system with a number of subsystems within that, and we've seen in some of the reports perhaps too many subsystems and too many separate databases, and so a desire to move forward and address that. And yes, I, as one, would think we'd want a detailed plan and timeline to move forward in addressing this.
MR. HOUGHTON: You've tried to defer a couple of times today this afternoon as to IT as what direction we are taking. Does anybody have an idea of what direction we're heading?
MR. BASS: And my deferral to them was more so I don't want to be up here promising to the commission that yes, the IT department can deliver a $30 million project each and every year going forward. I'm not close enough to them to make that promise on their behalf. But I understand the question and I'll certainly visit with them and get that information back to the commission, but I don't feel comfortable at this point making that level of commitment on their behalf.
MR. HOLMES: Do you think it would be appropriate to have a game plan slightly more fleshed out to go with the LAR request of $23- and $23-.
MR. BASS: One of the questions, unfortunately, is the timing and that can a detailed plan ‑‑ the LAR is required to be submitted at the end of August, I highly doubt that a detailed plan can be put together in a month. The other thing, though, is that the appropriations process obviously does not end on August 31 or our request, and so I would hope we would be able to put a request formally in the LAR, develop the detailed plan and have it in place for when the legislature does convene and the appropriations hearings start to happen that we'd have a more detailed and fleshed out plan at that point.
MR. HOUGHTON: Does that conclude?
MR. BASS: That concludes my remarks unless there are additional questions.
MR. HOUGHTON: Thank goodness.
MR. BASS: Thank you.
MR. SAENZ: Thank you, James.
MS. DELISI: I'm sorry. We've got someone signed up.
MR. HOUGHTON: I'm sorry. I apologize.
MS. DELISI: Sorry, Jeff, come on down. Jeff Heckler.
MR. HECKLER: Jeff Heckler, executive director of the Texas Transit Association. I'm glad I wore my boots today. I don't know if you guys have any influence with the City of Austin. I got acquainted with a pothole full of water. At any rate, I understand full well that this is the absolute worst time to ask for an appropriations increase. I also understand you'll be receiving a somewhat dire report on the status of Fund 6, and we certainly are sensitive to all the transportation needs of Texas and the need for additional resources. But even a modest increase to support the best rural and small urban transit system in the nation will go a very long way as these dollars can be matched with federal dollars.
As you know, state funding levels for public transportation for the rural and small urban areas of Texas haven't changed since 2000. Ridership is up 15 percent, cost related to operations, fuel and inflation are up, and the economic downturn is driving more folks to use public transportation.
We support the Public Transportation Advisory Committee, PTAC's recommendation including the $55 million increase above the current 2010-11 funding level in the baseline LAR and Fund 6. Our request, as you know, is based on calculations of inflation, population growth, 2010 Census impacts, and the department's 2030 Report outlining the need for additional services.
Finally, and however, an increase ensconced in the department's exception items will most likely to be doomed in the legislative process, so we respectfully request that you adopt the PTAC recommendation or some portion of the PTAC recommendation in the department's baseline budget request.
I think I made it under three minutes, so if there's any additional questions, comments, concerns, I'm done. Thank you.
MS. DELISI: Thank you.
MR. SAENZ: Commission, we'll go back to agenda item number 2. I think Bill Glavin will give us a presentation and an update on the Texas Rail Plan. Bill.
MR. GLAVIN: For the record, I'm Bill Glavin. I'm the director for the Rail Division of the Texas Department of Transportation. It's been a rough morning. I apologize.
As you recall, back at the March commission meeting we presented the Texas Rail Plan update in conjunction with the Statewide Long-Range Transportation Plan and the TxDOT Strategic Plan. The Rail Plan, as a reference, is a chapter within the Statewide Long-Range Transportation Plan and will probably be included at the level of an executive summary with reference to the complete plan.
The planning process for the Rail Plan is in compliance with the rules proposed before the commission in May for the planning process and were developed in response to the Sunset Commission. We indicated what the key features of the Rail Plan needed to be in order to comply with the Passenger Rail Investment and Improvement Act.
And I'm shortening this because you went through all of this once before and you probably don't want to hear it all again.
We are also in compliance with the state legislative mandate specified by Senate Bill 1382 referring to passenger rail networks only that require an annual update of the plan.
We were telling you that we were going to go out and hold a series of rail visioning workshops. We did that in May. We sent out 371 invitations, either by mail or by email. We had 264 individuals attend the workshops. The attendance was anywhere between 20 to 60 people per meeting. Some individuals did attend more than one meeting and some guests did come to the meetings as well. Overall, we estimate that we achieved 50 percent representation by the invitees in attendance. One of the negatives was that none of the re-regulation advocates that were invited attended and only two members of rail labor attended the various meetings.
We set up a stakeholder committee to review the draft plan that was submitted in July. We had all of the Class I railroads involved: Joe Adams from the UP, Eric Hegeman and Dean Wise from the BNSF, and Kevin McIntosh from the KCS. From the short lines we have Steve George from the Fort Worth and Western, and Bruce Carswell of the West Texas and Lubbock. From the rail advocates we have Travis Kelly from the Texas High Speed Rail and Transportation Corporation, Tim Vaughan from the East Texas Corridor Council, and Peter LeCody from Texas Rail Advocates. From transit we have Audrey Tode, Houston. From the ports, Fred Babbin from the Port of Corpus Christi. From the rail districts, Maureen Crocker, Gulf Coast Rail District. Alamo RMA was represented by Bob Thompson; Longview MPO, Karen Owen; and E'Lisa Smetana from the San Angelo MPO.
We are now in the process of getting ready to go out for public outreach meetings starting next week. We will be in El Paso on August 16, DFW on August 4, Lubbock on August 18, Tyler on August 19, Houston on August 2, Corpus Christi on August 3, Pharr on August 9, San Antonio on August 5, and Austin on August 10. We expanded the number of public meetings from the seven that we had for the stakeholders to these nine meetings based on feedback and ended up adding Pharr and San Antonio. All these meetings will take place between 6:00 p.m. and 8:00 p.m., beginning with a 30-minute open house, followed by a structured presentation on the Rail Plan and a question and answer period.
From the initial presentation in March, you can see that we've slipped a month in the preparation of the rail plan. We will not have it ready for presentation to the commission until the October commission meeting.
The expectations continue to be that we will meet or exceed the PRIIA; we will meet or exceed Senate Bill 1382 requirements. We will have the list of potential improvements and the impacts of those improvements upon both public and private, for freight, as well as those having passenger implications. We will propose a rating system for potential improvements.
We will define the next steps for where we need to go and how we need to get there for advancing passenger rail within the State of Texas, including statewide ridership analysis, corridor analysis, and service development plans. We're not waiting right now; we are starting that process of doing that analysis. It will be iterative, it will not be concurrent, and concurrent, it will not be sequential to the extent possible so that we can expedite the results.
Key dates to keep in mind. High speed intercity passenger rail 1.5 had $100 million available to it with application date of 5/19, and the anticipated award is next month. We have proposed four corridors under that, as we covered in a previous commission meeting. That includes the DFW-Houston corridor, the Oklahoma City to South Texas corridor in cooperation with the State of Oklahoma; the Texas portion of that alone is a separate proposal and the Houston to Austin as suggested by a TTI study.
Of the $2.37 billion that is available under high speed intercity passenger rail that has a closing date of August 6, the notice of funding availability came out on July 1 so it's a very short fuse on this money. A minimum of $2.125 billion of that money will be for service development programs on identified corridors. Texas does not yet qualify to apply for grants under that category. That leaves $245 million available for individual projects.
Our Class I partners are focused on Tower 55 and are not wanting to participate in a lot of other projects right now for fear of diluting the message on Tower 55. On that basis, we've only got two projects that we're going to progress on August 6: that's a project for the new Amtrak station at Krum, a new stop on the Heartland Flyer route, and some improvements to grade crossings in New Braunfels to improve grade crossing safety in preparation for increased passenger operations in that corridor, we will create a closed corridor, and it will also provide for the potential implementation of a quiet zone.
I'd be pleased to address any questions that the commission may have.
MR. HOUGHTON: So the focus is Tower 55 by the Class I's in the State of Texas?
MR. GLAVIN: That is correct.
MR. HOUGHTON: Two of the three Class I's. Right?
MR. GLAVIN: Yes, sir.
MR. HOUGHTON: Tower 55, what congressional districts are part of Tower 55?
MR. GLAVIN: Almost everybody in North Texas is supporting Tower 55 even if they're not part of that congressional district, even outside that congressional district, that's Kay Granger's district.
MR. HOUGHTON: That's Kay's district?
MR. GLAVIN: Yes. But the reason for that is that the Tower 55 not only has local ramifications, it has regional ramifications, and it has national ramifications as well.
MR. MEADOWS: I think it's important to point out, just specifically in response to Commissioner Houghton's question, that the northern reaches or the approaches to Tower 55, some of that actually is in Congressman Burgess's district, and the same thing similarly to the south, as trains stack up staging to go through Tower 55 would extend into Congressman Edwards' district. So there are three congressional districts that directly are impacted or affected, and again, in a very direct fashion by Tower 55 operations.
In addition to that, as Bill has just pointed out, it's much broader than that in terms of its impact not on that region, just on a statewide basis. I think it's also important to point out ‑‑ I know the commission is aware of this ‑‑ our railroad partners in the last few days have announced an increased capital contribution to the project itself, bringing the total amount of private funding available for the project to in excess of $50 million which makes it, I think, a particularly attractive project because, in fact, there would be more private money in it than public funding.
MR. SAENZ: Bill, just to make sure, even though Tower 55 was not submitted under the High Speed Rail Program, we are going to talk about it under the next program that you'll present.
MR. GLAVIN: Yes. Under TIGER II.
MR. SAENZ: Commission, if there's no more questions, I'm going to move on to agenda item number 3 which is related to the Rail Plan but it's what we call the TIGER II Program; it's the National Infrastructure Investment Program, and there is a program callout and request for projects, and under that program is where we're talking about submitting a proposal for Tower 55 as well as others, and Bill and Jim Randall will make that presentation.
MR. GLAVIN: Again, for the record, my name is Bill Glavin. I'm the director of the Rail Division for the Texas Department of Transportation.
At your June 8 special meeting, Mr. Randall led a discussion of the TIGER II discretionary grants program. At that time, staff was directed to pursue up to ten projects as evaluated by a selection task force.
As background, the US DOT has authorized an award of $600 million in discretionary grants pursuant to the federal Fiscal Year 2010 Appropriations Act. Funds will be awarded on a competitive basis for projects that will have a significant impact on the nation, a metropolitan area or a region. No more than $150 million can be awarded to any single state or $200 million for a multi-state involvement. $140 million has been set aside for rural projects, and up to $35 million can be dedicated to planning grants.
The project selection task force was made up of: Ray Gilyard, El Paso MPO; Tom Niskala, Corpus Christi MPO; Melba Owens, Midland-Odessa MPO; John Roby representing the Texas Ports Association; Dennis Kerns representing the Texas Rail Association; and Sirinda Marwah who represented Doug Allen representing the Texas Transit Association.
US DOT will consider the following criteria in the selection of projects: state of good repair, economic competitiveness, livability, sustainability, safety, job creation and economic stimulus, innovation, and partnership. The task force adopted this same approach in their evaluation.
The list of projects shown in your briefing book and on the screen represent the projects that TxDOT has submitted pre-applications for. These pre-applications were due on July 26 and are listed in order of the selection the task force, for their recommendations. The projects now total $107.9 million in grant requests for $174.3 million in total project costs.
Seven projects have progressed to this stage, all seven are rail. Two projects are for planning grants; the remaining five are for infrastructure improvements. Three proposals are in urban areas, three are in rural areas, and our one multi-state with Oklahoma and Arkansas for the rehabilitation of DG&O, the TNER and the KRR has work elements in both rural and urban locations.
As you will note, three projects have been withdrawn from consideration for various reasons. Others have been significantly modified, most notably, as Commissioner Meadows referred to earlier, BNSF and UP have increased their match on Tower 55 by $20 million so private funding is now at 56 percent of the total project cost. Also, the Gulf Coast Rail District project in Houston is now positioned as a planning grant for preliminary engineering and design rather than for infrastructure improvements.
The application deadline is August 23. Based on past experience, the cost figures provided are still subject to change and may change throughout this application phase. Such cost changes may significantly impact the cost benefit analysis as well as local funding capabilities. This, in turn, my lead to the withdrawal of additional projects.
Jim Randall is here with me from the Transportation Planning and Programming Division. If you have any specific questions about these projects, we can address them at this time.
MR. HOUGHTON: One question, projects around the state, other nominators can nominate projects without going through us.
MR. GLAVIN: That is correct.
MR. HOUGHTON: And has there been other projects nominated?
MR. GLAVIN: Yes. Last count, the US DOT was expecting some 1,400 applications for 15 to 21 awards of less than 1 percent, they're up to 1,685.
MR. HOUGHTON: 1,685.
MR. GLAVIN: 1,685, so it's way less than one percent now that will be awarded.
MR. HOUGHTON: Like the lottery.
MR. GLAVIN: I think you might stand a better chance on the lottery.
MR. SAENZ: Thank you, Bill.
MR. GLAVIN: Thank you.
MR. SAENZ: Commission, agenda item number 5, Brian Ragland, Finance Division director, will make a presentation that will share with us the budget and revenues for Fiscal Year 2010 and give you a little bit on budget status.
MR. RAGLAND: Thank you for skipping around on us today. For the record, I'm Brian Ragland, director of the Finance Division.
This particular report is a report that was requested in part because of our continued discussions about our declining revenues and how we're able to manage our case resources, and then we also have an initiative to get more simplified financial data out on the website, and so this particular report might become a part of that effort.
The report lays out the cash position and the cash activity of Fund 6 for the fiscal year to date as of June 30, so it's ten months into the fiscal year. And when I say Fund 6, I'm talking about the traditional operating account of the department. I'm excluding things that are individually managed like Prop 14, State Highway 121, excess toll account and the SIB sub-account.
Before I talk a little bit about the numbers, I wanted to make a couple of important disclaimers. First of all, I want to make it clear that this is a cash basis and it's not necessarily in line with our appropriations or our fiscal year budgets. If I say revenue or expenditure, I'm not talking about those things in the accrual sense, but more so in the sense of inflows and outflows of cash. Also, any balances you see here are completely committed and then some. I just want to make that clear that they're not available for us to run out and spend, they're committed in the future.
And then one last mention is that some of the variances you will see is because this is an interim report and timing differences can skew the figures for things that have either occurred or have not occurred because we've got two months left in the fiscal year.
So looking at the first page, we started out the year with $192 million in cash, and as of June 30, we had $321 million cash in bank, if you will. I looked today and the number is at right about $250 million. Below that top box on the first page are summaries of how the cash activity for both the inflows and the outflows compare to what we projected back in September. Inflows are down 3.9 percent which is about $196 million, and outflows are down 8.4 percent which equates to about $436 million. And then below those are breakdowns of the actual revenue and expenditure or inflow and outflow categories.
The second page of the report is intended to show where the projections are off or where they vary. I'm going to touch on a few that are large either in dollar amounts and/or percentages, and then try and answer any questions you may have from there.
Starting with the outflows on the right-hand side, the line items labeled Administrative Support, Maintenance Work, Contracted Routine Maintenance and PE/CE Engineering are all down as a result of us streamlining our operations and right-sizing our workforce in line with the efficiencies we needed to stay ahead of the declining motor fuels tax that we did not anticipate back in September. So I would characterize those things as true savings.
The largest dollar amount which sticks out shows us paying out about $675 million less than we anticipated in contractor payments for maintenance and construction. There's a couple of big reasons for that large variance, the biggest of which is our CDA program. We were able to substitute some stimulus funds on the front-end, particularly on the NTE in the amount of $250 million, and then there were other anticipated payout on the CDAs that did not occur as quickly in the year as we thought they would.
The other big factor, I'm told, is the weather.
MR. MEADOWS: I don't remember $250 million going to the NTE. Was it not the Connector?
MR. RAGLAND: I could have the wrong project, that's quite possible.
MR. SAENZ: Yes, sir, the DFW Connector.
MR. RAGLAND: I'm sorry.
MR. MEADOWS: I was just puzzled. Okay, thank you.
MR. RAGLAND: I get all those ‑‑ yes.
MR. MEADOWS: It happens to all of us.
MR. RAGLAND: They're in my head, but they're ‑‑
MR. HOUGHTON: Whatever it was, it was an exorbitant amount going to that project.
MR. RAGLAND: It was.
MR. MEADOWS: May I point out that it was, once again, only fair and the right thing to do. Thank you, Commissioner Houghton.
MR. RAGLAND: And then the weather, the very wet winter and spring slowed our payments to our contractors and that had a significant effect on our cash outflows of which, I'm told, that we would expect some higher than projected payouts in the coming months because of, unlike today, the drier weather we're experiencing and expecting across the state.
One more thing to mention is that in light of our commercial paper balance at the beginning of the year, we did reprogram some Fund 6 projects over to Prop 14 which freed up some cash available to help pay down our commercial paper program.
MR. HOLMES: Brian, what is the balance in our commercial paper?
MR. RAGLAND: $65 million. We've been able to pay it down. You look at the bottom of both sides of this sheet, you'll see an inflow at the beginning of the year. We borrowed an additional $60- even, but over the course of the year we've paid down $295-, so the net of those two for the year is a pay down of $235-, so we're down to $65- now.
One more item on the expenditure side I wanted to mention. There's a 123 percent variance on a Vehicle Registration line. That is completely attributable to not having projected the payout on the settlement on the Meyers lawsuit. That got paid in the first two months of the fiscal year.
MR. HOLMES: What was that? I guess I don't recall the amount of the Meyers settlement.
MR. RAGLAND: What was that? With attorneys' fees it came in at about $22.3 million.
MR. HOLMES: Are you going to put a little color on that, Steve?
MR. SIMMONS: For the record, Steve Simmons, deputy executive director. If you remember this lawsuit, it was dealing with disabled placards and under the Americans with Disabilities Act whether or not you could require them to be paid for. Working through the Attorney General's Office and our general counsel, we agreed upon the settlement, and that's where it came from.
It originated like seven years ago, Bob? Is that close? The lawsuit originated about seven years ago and it was one of those lawsuits that started in other states and just progressed and finally got to Texas after watching everything else.
MR. RAGLAND: One more mention on the Meyers lawsuit, I think the period for claimants to come forward on that class action suit has expired and they've experienced very low claims against that settlement fund. So the agreement calls for 50 percent of whatever is left to be donated to a select group of charities, and then the other 50 percent will come back to the state. So we're working with the DMV to figure out the logic on that portion that will come back to the state.
MR. HOLMES: Does it come back to Fund 6, the other half?
MR. RAGLAND: Yes. It comes back to wherever it was paid from.
MR. SAENZ: Fifty percent comes back to Fund 6.
MR. HOLMES: You said the state.
MR. RAGLAND: Yes.
MR. SAENZ: Fifty percent comes back to Fund 6 and the other 50 percent will be used for programs that are tied to the Americans with Disabilities Act.
MR. RAGLAND: And we don't get any rebate on the attorneys' fees is my understanding.
On the revenue side on the left, the very large figures you see that are in red are amounts that we did not collect from FHWA, and those are directly attributable to the lower payouts to the contractors. There is no correlation to federal reauthorization or rescissions or anything like that. It's just straight math; it's 80 percent of our lower payments to contractors.
And then one more item on the revenue side that we've talked about repeatedly is the decline in motor fuel taxes. I am becoming cautiously optimistic because of the last three months, and I'll talk about it more tomorrow, the last three months' up-ticks we've seen.
MR. HOUGHTON: What is the difference in the actual between diesel and gasoline, personal vehicles, generally speaking?
MR. RAGLAND: Percentage-wise? Through the first eleven months, diesel is down about 3 percent; gasoline is up about 1 percent. So the net of those two on a weighted average basis is the total motor fuel taxes are down about a half a percent over 2009.
MR. HOLMES: Of the total revenues between diesel and gasoline, gasoline is about 80 percent, 75 percent? What is that percentage of the total?
MR. RAGLAND: $650 million into $2.8-, my calculator is not working right now.
MR. HOLMES: Twenty-some-odd percent, 25 percent, roughly.
MR. RAGLAND: And that's why that weighted average is only a negative .5.
MR. HOUGHTON: And motor vehicle licensing fees are nine-tenths of a percent increase. How many vehicles year to date, more vehicles, less vehicles on the State of Texas registered?
MR. RAGLAND: I would assume more. I think it's around 22 million per year.
MR. HOUGHTON: You had a nine-tenths of one percent increase in revenue, the actual variance. It's the first line item on the second page, left-hand side.
MR. RAGLAND: Yes, and, again, because this is on a cash ‑‑ we're actually up, I want to say, around 4 percent for the year, so part of this could be because it's a cash basis.
MR. HOLMES: Well, this is on actual to budget, or actual to actual?
MR. RAGLAND: I'm sorry. You're right. This is our variance from what we projected.
MR. HOUGHTON: Right.
MR. RAGLAND: So we did a pretty good job of projecting.
MR. HOUGHTON: But our actual is roughly, when you look at the actual numbers, it's about 4 percent increase?
MR. RAGLAND: Four, four and a half.
MR. SAENZ: Over last year.
MR. RAGLAND: Over last year, yes. It's in line.
MR. HOUGHTON: Growth is huge.
MR. RAGLAND: It's a little bit higher than what we projected.
MR. HOLMES: And that's actual registrations because the fees didn't change. Right?
MR. RAGLAND: That's right. The fees are due to change, I believe, September 1 of '11, but the fiscal note on those changes was neutral or it was like plus $400,000 or something like that. They took the big list of fees and they narrowed them down to three, but it was a revenue-neutral bill.
And then I was going to mention what we had paid down on the commercial paper this year but you already asked me that. That's all I have for remarks and would be happy to take any additional questions.
MR. SAENZ: Brian, Commission, I guess just looking at this thing here, based on what we projected, we're about a couple hundred million below on our revenues based on savings that we've realized, and the ones I look at is I don't count the contractor construction cost savings because those projects still need to pay out.
MR. RAGLAND: That's a postponement, not a savings.
MR. SAENZ: A postponement. But the savings that we're seeing in the administrative costs, that savings that we're seeing in maintenance work and the savings that we're seeing in preliminary engineering, that's about $128- or $130 million. So for next fiscal year, if we were to stop today, we would probably have to adjust our letting by the difference between the $196- and about $128-.
MR. HOUGHTON: You said you're going to report different numbers, eleven months tomorrow and this is through June?
MR. RAGLAND: No. The eleven-month number I'll report to you is motor fuel tax.
MR. HOUGHTON: Tomorrow.
MR. RAGLAND: Yes. Because those receipts come in on the fifth working day.
MR. HOUGHTON: And you said the difference between the two, if you take those eleven months, is what? What's the difference?
MR. RAGLAND: Between diesel and gasoline.
MR. HOUGHTON: No. Total.
MR. SAENZ: The number you're reporting tomorrow will get us closer to our projection or closer to our budget number.
MR. HOUGHTON: What's our budgeted number versus actual?
MR. RAGLAND: Our budgeted number was to increase half a percent for the year. We are down half a percent. So the variance, theoretically, if this report was through eleven months. would be one percent plus point five plus point five. Does that make sense?
MR. HOLMES: I'm sorry. Plus what?
MR. RAGLAND: Plus point five plus point five.
MR. HOLMES: Twenty-some-odd million.
MR. RAGLAND: Right. Which this is showing $24-. I think this points out the dynamic nature of our forecast and the difficulty in projecting out one year, much less eleven years into the future, but we adjust monthly. So this is a look back at September but we've already taken care of adjusting for all these variances into the current cash forecast. Thank you.
MR. SAENZ: Thank you, Brian. Commission, this report will allow us, say, on a six-month period to look at how we're doing with respect to revenues and expenditures and to let our partners know, the MPOs, if they have to take any action for the remainder of the year, or really more importantly, as we plan for the future years.
Good job, Brian.
MR. RAGLAND: Thank you.
MR. SAENZ: Agenda item number 6, commission, is a presentation by Mark Tomlinson. He will lead us to discuss a project that we've been working on that deals with low carbon emitting freight transportation facilities and options that are available to development of those types of facilities.
MR. HOLMES: Amadeo, before you start, when did we start using this format for the Fund 6 presentation?
MR. SAENZ: It was created between last meeting and this meeting.
MR. HOLMES: It's a good format.
MR. SAENZ: There's some tweaks that I'd like to make and then some conclusions that would go to kind of where we stand, but what we've been trying to do is I'd like to be able to get ‑‑ this is how much money I projected I was going to have, this is how much money we have received to date, this was what our budget was and this is how much we've spent, and basically it's a balance sheet.
MR. HOLMES: And subject to further refining, how often are you going to bring this back to us?
MR. SAENZ: I'd like to bring this to the commission probably on a quarterly basis.
MR. UNDERWOOD: That's exactly what we were talking about.
MR. SAENZ: I think every month you won't see the true, but on a quarterly basis. And what I'd like to use is on a semiannual basis use it to see if we have to make any adjustments to lettings and adjustments to future lettings, so that our partners and the MPOs know that they might have to make some changes to advance or delay projects.
MR. UNDERWOOD: So what you're saying is that we will start receiving this quarterly and then you'll make adjustments semiannually.
MR. SAENZ: Yes, sir.
MR. UNDERWOOD: Thank you.
MR. SAENZ: Or recommendations for adjustments semiannually if they need to be made.
MR. TOMLINSON: Good afternoon. My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT. Good afternoon, commissioners, Mr. Saenz.
I would like to discuss with you an effort we'd like to undertake. You'll probably recall a while back we issued a request for information regarding this catchy title we came up with: Low Carbon Emitting Freight Transportation Facilities. We did receive some input during that time and since that time, actually, and have given that thoughtful consideration and I'll talk through our thought process there. But we'd like to hopefully move forward with an effort that we think holds promise here.
Reasons for effort you know well and I won't spend a lot of time on, but we have expansion of freight transportation throughout the state, a huge amount of freight travels in through our state going to all destinations. We know that will only increase, and as it increases, there are negatives such as congestion, increased maintenance on our highways, air quality impacts, and we have less and less funding to address any of those concerns.
We also recognize Texas is a vibrant place with major ports of entry like Houston, Laredo, Corpus Christi, Brownsville, El Paso, major inland ports. And the truth is that freight moves throughout our state to every city, to every corner of the state. Much of it moves on our transportation system and it's stressing that system more and more.
TxDOT's research program and the projects, for several years, explored alternative freight-moving technologies, and it was around the end of 2008 where our administration felt that it might be that the state of that technology advancement and application could be that at least we'd like to make an effort to see what's out there, see what's in the industry, and see what opportunities there might be. So we did issue the request for information and we had ten responses that we received and, really, just the concept was, bring us any thoughtful, useful idea, innovative in nature and environmentally sensitive, that could give us an alternative to moving so much freight on trucks on our roadways.
Key elements of the RFI, we were open to considering partnerships for the development of these technologies. We asked proposers to define existing corridors or new corridors they thought held promise and give us a feel for their business plans and how they would develop and implement their technology, of course, again, with a big emphasis on an environmentally friendly solution.
So just briefly, we did receive ten applications or information packages, and just to give you a feel for what we received, I'll kind of start at the bottom. The two program assistance recommendations, one was from a consultant to offer to help us in proposal evaluation and development. We received some information from the NCTCOG about programs they have used and their suggestion that TxDOT develop a statewide freight transportation plan which, of course, we are now doing, Bill Glavin and the Rail Division.
The two corridor strategies were essentially suggestions that we develop rail bypasses around metro areas and purchase right of way in rural areas along existing rail corridors, move toward electrifying locomotives with overhead power and moving freight around the state. The other corridor suggestion was regarding high speed rail and suggested a pilot project to construct high speed rail between Houston and Dallas.
The existing rail technology enhancements, one was using existing rails and locomotives, adding outriggers outside the existing rails so that you could widen flat cars, carry more freight. Also, it could have drive‑on/drive-off capabilities so a truck could just pull on and head down a rail. A land ferry which was a very similar concept, driving trucks onto an existing flat car, have a passenger car for the riders and then transfer the entire package across corridors in the state.
Had another suggestion about using compressed air technology to propel existing trains. I'm not sure how possible that is. And then the three new technology applications, mono-freight which is computer-guided electric power trolleys suspended from elevated guide ways. Freight shuttle, many people have heard of already. It's computer‑guided steel wheel transports with linear induction motors carrying containers or trailers on elevated guideways. And then cargo rail, also known as mega-rail which carries containerized cargo transport on elevated guideways, electric power, of course with permanent magnet rubber wheel motors.
So you can see you can get a flavor for the innovation that exists out there. As I mentioned, I did hear from some other companies, similar generally, in concept to what we talked about there.
So after receiving the information from the RFI, we have spent a considerable amount of time talking and thinking about how we might move forward here. Options for procurement, we really have come down to three, and going into the RFI process, I would tell you I thought personally that our most likely development procedure would be through a CDA, the third bullet there, and it is still a possibility, but we have some limiting factors in regards to developing something here through a CDA. We don't have explicit legal language for developing rails under a CDA. It's our general counsel's opinion that we can do that, but it's also a reality probably that since it's not explicit, it could be a challenge for companies to gain bonding capacity there for whatever they might develop. So it's still a possibility but probably not what we'll recommend at this point.
Then the second bullet, potentially leasing a TxDOT rail facility, is also legal and also a possibility. One limiting factor is our rail facilities now are not in a condition that probably a developer would need them to be, so substantial resources either from TxDOT or the developer would be needed. And it's been a basic premise, I should emphasize, that we really haven't planned to invest much or any state resources in here just because of the scarcity of it that we have.
So the top bullet, really leasing highway right of way, and we were told throughout the RFI process that probably our greatest resource and the greatest opportunity that we have is with the existing right of way that we have in corridors throughout the state. We do have legal authority to lease that right of way.
The existing rules that we have could work; they're probably not the optimal that we would suggest, so really our suggestion, our recommendation, is to move ahead with a right of way competitive lease procurement and hope to move toward issue a request for proposals, but an interim step we would need to take is, most likely, to create some new rules so that it's a clean interpretation, it's easy for developers to understand and it's really designed to apply to this use.
The purpose of the RFP, of course, would be to have developers identify potential opportunities around the state, land that we might lease to them for the movement of freight in their innovative concept. So the recommendation would be to move ahead with developing some new rules. Again, we have existing rules for leasing right of way. They're not really intended for long corridor application, longitudinal application; it's typically small crossings or small little pieces here and there. So OGC is recommending to us that we develop some new rules. Of course, those would come before you and go through the entire rulemaking process, but it would then be designed for this potential application.
And again, our greatest resource out there probably is the right of way along potentially any corridor. We may want to exclude some corridors. We do need to think about high growth corridors and whether the space we have should be best preserved for expansion. Of course, that's tempered by the lack of resources that we have too. But potentially, we want to be as open-ended and open-minded as we can be. It could be that these applications would go along at grade in some places, most likely paralleling existing highways, crossing others.
We would ask developers in this concept to tell us where they would like to develop the corridors they think are optimal. And I should say it's conceivable in a procurement such as this that it won't just be one developer that we would choose. If they have different applications in different corridors, it could be that we find one or more developers are well suited to develop their application in a particular corridor. It's possible that some of these may be underground, not really likely. We didn't see any of that in the information we've gathered so far.
The requirements we would put in a proposal, theoretical proposal, of course, we'd want to know how much carbon reduction we would see from their application, how much freight they would move off of the existing roadway. We need to know how much revenue the lease would generate for the state. Most likely, we're going to keep it pretty open to almost any or possibly any right of way corridor in the state. We would ask them to give us details about the specific corridor and essentially their business plan for developing in that corridor. We would appraise the value independently of that land so we could have a comparison, but the competitive procurement ultimately would be a large factor in how much they're offering for that right of way.
Of course, we keenly need to keep in mind the safety of the traveling public and the existing roadway capacity that we have. We'd want to minimize impact and keep the opportunities for our own future roadway expansion as much as possible and consider that in the proposal process as well, of course, meet all the environmental and permitting rules. And our focus right now is on freight, not really passenger movement. I think we feel that would be the biggest impact and greatest benefit to TxDOT.
We would set up evaluation criteria regarding the proposal contents, lease duration, lease payments, how much right of way was required, again, congestion reduction and carbon reduction, safety impacts and mitigating factors. Again, we wouldn't want to sacrifice safety. And potentially economic development.
Potential respondents, that list is possible. My feeling most likely is it's going to be companies that are probably fairly new and developing around their own technology development or application.
And this is a very preliminary timeline. I would appreciate your thoughts or questions or direction. We think, based on the information we've seen in the RFI, and through talking with other potential developers around the state, that the time is pretty close to being right that some of this might be implemented in the state. We think at least some groups are far enough along in their technology development and in development of a business model that can work that at least we'd like to try to move ahead with rule development, bringing those before you, and then, of course, with the thought that we would move forward with a competitive lease procurement at some point.
So with that, I'll pause for any questions that you might have.
MR. MEADOWS: Mark, who do you foresee being the evaluation panel internally?
MR. TOMLINSON: We would probably put, kind of like we do on CDAs and other consultant selection, kind of a multi-disciplined panel. I think Rail Division would definitely need to be involved, Probably Design, TP&P, TTA, Finance. We haven't really developed it yet, but Right of Way Division. It touches a lot of parts of the agency so I think a panel that has a broad background would be good ‑‑ my thoughts, at least.
MR. MEADOWS: It just occurs to me that some of what we're talking about, particularly with the new technology companies, I'm familiar with a couple of them, that some of that really is leading edge, and I'm not sure that any of us really are qualified or have the expertise, background or experience really to be able to effectively assess the relative performance of one versus another.
I mean, I assume this is a sort of situation where we might be able to get some outside assistance if we determined it was needed?
MR. TOMLINSON: Certainly could. And another aspect, I guess, of approaching it this way is to a degree we would be judging the business and the technology but, in large part, we're offering the land and they're going to have to make their own business work, if they're granted that lease, within that footprint that we allow. And so we would hope that they would and we would give them every opportunity to be successful, but we wouldn't be running their business.
MR. HOLMES: Just as a follow-on to Commissioner Meadows, some of the technology proposals that I've seen are very high tech, futuristic, and I think probably not in existence anywhere. And so one of the conversations or two of the conversations I'd had, they were talking about some type of a demonstration project. It sounds to me like you're going beyond a demonstration project; you're talking about a fully developed low carbon emitting freight system. Is that right that it's not a demonstration?
MR. TOMLINSON: And that's true, that's correct. We wouldn't close our minds to a demonstration project. Of course, a demonstration project costs money and, again, one of our basic premises has been that we would have a lot of state dollars or federal dollars to put into this. And so it could be that a pilot is the top end of what we receive in a request for proposals, but I would hope, too, that it has either a staged implementation toward being economically viable or had at least the hope of being viable on its own.
So I guess we have not felt that we could supplement or provide a public subsidy for this, and again, it's reason for the kind of pretty hands-off approach of just offering the right of way but really requiring the developer to bring a business model that at least they feel works.
MR. HOLMES: Just so you understand the way I feel, I do not believe it's appropriate to put TxDOT money into experimental projects such as this, it needs to be private dollars. And it may be that offering the right of way in some fashion could be a non-cash contribution toward that effort.
MR. TOMLINSON: Yes, sir.
MR. BARTON: For the record, John Barton, assistant executive director for Engineering Operations.
And just to add to Mark's response to those two comments, Commissioners Meadows and Holmes, I think that part of the concept here is that we don't know exactly what type of responses we would receive in this offering to lease parts of the department's and the state's right of way, but in doing that, obviously, as we move forward we'll have to build in protections for the state's interest. We don't want somebody to go and build something that they then cannot sustain and so we have this infrastructure of some sort in our rights of way.
We also want to make sure that whatever they do has a reasonable chance of success so there will be some proof of concept analysis. That's where we would pull on the expertise of others that perhaps are outside the agency to look at what they're proposing and see if that technology has any reasonableness of being viable. And that's where we can pull on those other resources and then to make sure that we structure whatever deal we do in a way that protects the state's interest so that we're not out any costs if they fail or if their business model ultimately is not viable.
So as we move forward, we'll make sure that we incorporate those types of things into this process, keep you informed as we do that, and assure that the state is providing an opportunity for something very, very positive, but at the same time is protecting our interest in terms of the quality of our rights of way and the financial interest that we might have in it.
MR. TOMLINSON: Thank you very much.
MR. SAENZ: Thank you, Mark.
MS. DELISI: That concludes the posted items on today's agenda. Is there any other business to come before the commission?
MR. SAENZ: No, ma'am.
MS. DELISI: There being none, I will entertain a motion to adjourn.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Please note for the record that it is 2:53 p.m. and this meeting stands adjourned.
(Whereupon, at 2:53 p.m., the meeting was concluded.)
MEETING OF: Texas Transportation Commission Workshop
LOCATION: Austin, Texas
DATE: July 28, 2010
I do hereby certify that the foregoing pages, numbers 1 through 58, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Transportation Commission.
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731