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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, May 28, 2009


COMMISSION MEMBERS:

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

STAFF:

Phillip Russell (for Amadeo Saenz, Executive Director)
Angie Parker, Office of General Counsel
Roger Polson, Executive Assistant to the Deputy Executive Director
Dee Hernandez, Chief Minute Clerk

PROCEEDINGS

MS. DELISI: Good morning. It is 9:03 a.m. and I call the May 2009 regular 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 4:46 p.m. on May 20, 2009.

Before we begin, please take a moment to place your cell phones and other electronic devices on the silent mode, please.

As is our custom, we'll open with comments from members, and we'll begin with Commissioner Meadows.

MR. MEADOWS: Thank you, Madame Chair.

I certainly am wise enough not to opine on the activities that are going on across the street at this point, but what I would observe -- and I've observed this over the last six weeks -- and that is our senior staff and their ability to produce information, volumes of information that have helped our legislators make good decisions. I know there have been many, many, many long hours, and I'd just like to acknowledge the fact that that is the case and it's appreciated. Thank you.

MR. UNDERWOOD: I'd like to associate myself with my colleague's remarks, but also, watching some of the legislation -- I've said this to some of my fellow commissioners at one point in time -- I feel like a termite in a wooden yo-yo, I'm going up and down or spinning around.

One thought, Chair, watching the legislature and whatnot, if quitters never win and winners never quit, who came up with quit while you're ahead? Thank you.

(General laughter.)

MR. HOLMES: I'd like to associate myself with part of these comments. I'm still working on this termite in the yo-yo thing.

(General laughter.)

MR. HOLMES: I'd like to congratulate our esteemed colleague, Commissioner Meadows, on his recent award. We're proud of you, Bill.

MR. MEADOWS: Thank you very much.

MR. HOLMES: And I'm interested to see the dedicated audience here today -- I see most of you actually work for TxDOT and everybody else is across the street. Look forward to it today.

MR. HOUGHTON: And likewise, I'd like to congratulate Mr. Meadows on his award, the Golden Deeds Award -- we call him Goldfinger now.

MR. MEADOWS: Thank you very much.

MR. HOUGHTON: And welcome to everyone and look forward to a good, productive meeting.

MS. DELISI: Five more days for the legislature to finish its business, and I have to say staff is doing an excellent job. It's been a long 135 days so far, not easy at all times, but I'm very confident at the end of the day we're going to get a good Sunset Bill -- a long Sunset Bill, but a good Sunset Bill, and it's going to deliver everything we need to do to deliver projects over the next two years. So my hats off to the staff. They've done yeoman's work under very difficult circumstances this session.

As a reminder, I'd like to tell everybody if you wish to address the commission during today's meeting, please complete a speaker's card at the registration table in the lobby. To comment on an agenda item, fill out a yellow card and identify the agenda item; if it's not an agenda item you wish to speak on, we'll take your comments at the open comment period at the end of the meeting, for those comments, please fill out a blue card. Regardless of the color of the card, please try to limit your remarks to three minutes.

Our first item of business today is approval of minutes of the regular April 30 meeting, and we have been requested to approve revised minutes for the meetings held on March 5 and March 26. Members, these documents 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.

And at this time, I'll turn it over to Phil Russell, who is pinch-hitting for Amadeo today. Amadeo is across the street working on legislative business. So Phil, it's all yours.

MR. RUSSELL: Thank you, Madame Chair. I had a whopping 15 minutes to go through the agenda quickly with Mr. Saenz this morning, although it's a full agenda, it looks like it's a fairly straightforward agenda -- famous last words.

The first agenda item has two reports. The first, 2(a), David Casteel will be leading the charge in that effort, he'll be talking a little bit or updating the commission on the TEMPO work group's efforts. As you'll recall, they're working on the new revenue projection tool for us. David.

MR. CASTEEL: Thank you, Mr. Russell, and commissioners, for the record, my name is David Casteel, and I work for you as the assistant executive director for district operations.

A 2008 study by the State Auditor's Office found insufficient uniformity among metropolitan planning organizations in estimating future revenues within their long range plans. Item 2.1 of the 2008 Sunset Commission staff report noted that TxDOT and the MPOs should collaborate for long range federal and state funding forecasts. Legislation currently under consideration indicates that planning organizations should collaborate with the department to develop mutually acceptable assumptions for the purpose of long range federal and state funding forecasts and then use those assumptions to guide their long range planning efforts.

Under the direction of Deputy Executive Director Steve Simmons, a work group was established last year, composed of members of the Texas Association of Metropolitan Planning Organizations, TEMPO, and TxDOT employees, to address the need for better and more uniform long range financial forecasting and planning.

In December of 2008, that work group presented to the commission its first initial draft finding concerning gross revenue forecasts. At the January 2009 commission meeting, David Ellis and Tim Lomax, researchers from the Texas Transportation Institute, related the work group's revenue findings to the 2030 Committee need forecast to help us focus definition on the transportation challenge we face in Texas. Dr. Ellis is also the lead researcher developing a forecasting model called TRENDS that is a product of the TEMPO/TxDOT work group.

Today, the chair of the joint TEMPO/TxDOT work group, Dan Kessler, of the North Texas Council of Governments and also TEMPO president, will present the final work product of that group. Mr. Kessler will be joined by special assistant to the executive director for performance measures, Mary Meyland, in the presentation. Together, Mr. Kessler and Ms. Meyland will discuss how the work group's efforts will be used in metropolitan and state level planning efforts. After their presentation, TxDOT and TTI staff will be available for discussion and direction from the commission.

I'll turn it over to Mr. Dan Kessler.

MR. KESSLER: Good morning, Chair Delisi, commissioners; good morning, Mr. Russell. Thank you, David.

I want to give you very quickly a summary of where we're at. As David mentioned, for the record, I am Dan Kessler, assistant director of transportation at the North Central Texas Council of Governments, and I also serve as the executive director of TEMPO which is our statewide association of metropolitan planning organizations, and on behalf of our work group, both TxDOT and the MPO staff, we're happy to present to you our final report that summarizes basically our work over the last 12 to 14 months. We were here with you in December of '08 and gave you interim study findings, and today I'll quickly catch you up on the work we've done since then and our final conclusions.

I want to cover basically four points with you. I want to give you a very quick overview of the model that we've developed, we're proud of it, we think it's going to be a good tool. I want to give you a quick estimate of what we think our revenue forecasts are based on that model. Of course, in the time that we were doing our work, Chair Delisi's 2030 Committee was active; in parallel, they came up with an assessment of needs. Part of our work group's effort was to take those needs and compare them against our available revenue forecasts to provide you some idea of the funding shortfall that we're facing. And then most importantly, I think, where do we go from here in looking at this challenge of metropolitan funding.

As David mentioned, we had a tremendous staff and resources available to us. Brian Barth, who is the deputy district engineer in the Fort Worth District, and I co-chaired this effort. Probably commuting up and down I-35 for the last 14 months has done more to improve MPO and TxDOT relations in our part of the world than anything as Brian and I have not only spent a lot of time working together but have gotten to be good friends which is a great byproduct of this.

But you can see the staff that worked on this. I certainly want to compliment TxDOT staff, and particularly the work and support we got from TTI. David mentioned, but there are three staff, in particular that I think are due some significant recognition.

The first is Ron Hagquist -- I'm not sure if Ron is with us -- but he is with your Government and Public Affairs Division. Ron is the brains and the work that's gone behind all of the assessment of the likelihood that we will have improved technologies with regard to fuel efficiencies and building a technology market penetration MPG model into a finance model. Quite frankly, we think this is groundbreaking research, we don't know of anybody else in the country that has this level of sophisticated model that looks at technology and miles per gallon as this model does, and Ron deserves a lot of praise for that.

Second, Jessica Castiglione is here, she's an engineer out of your San Antonio District. Jessica did a tremendous job building this original model, it was the foundation that we started all this work, and quite frankly, we couldn't have made any progress without it.

And then as David mentioned, also David Ellis with TTI. David has done a superior job of taking the model and advancing and I'll talk about some of the advances that we've made over the last several months with David's help.

Our charge, as listed, was to develop a transportation revenue forecasting model, a set of model assumptions, and utilize this model to develop estimates of future funding available for capacity improvements. And I think it's very critical that the word capacity improvements is emphasized because, quite frankly, I think we've answered the charge, we do have a model, we do have a set of, we think, a range of assumptions, but this whole question about the amount of funding available for capacity improvements is going to be driven by your decisions regarding how much funding we ultimately need to spend on maintenance.

And that's the issue that we've had a lot of discussion on in the development of this process and ultimately come full circle -- and I think you're having this discussion, and I talked to Mr. Casteel, I know in a workshop scheduled in June -- that really is the bottom line of this analysis. We think we have a model for you, we think we're comfortable with our revenue estimates, but ultimately, until the state comes together and we make a decision on the level of investment that's appropriate for maintenance, that ultimately is what's going to drive our decision.

Our model, now called TRENDS -- stands for Transportation Revenue Estimator and Needs Determination System -- is a web-based model, it's fully functional. This website is now available, it is password protected currently, and we'd encourage all of you, if you have the time and energy, to go out and look at it. We can certainly provide you the access to it. What we thought was key about it is we wanted to have a rapid multi-scenario development model based on user input assumptions. We feel like that's what we've built and that's basically what we made available to you.

When we were here in December, I talked to you about the importance of population growth assumptions. We've looked at an entire range of population growth assumptions. They are the key driver behind what revenue comes available to the state. There's a wide range of scenarios out there on what the population future is in Texas and we felt like we needed to have a model that has sensitivity to those population scenarios, and that's certainly key to this process.

Also, the big giant in this discussion, the gorilla in the room on this issue, quite frankly, is the impact that future fuel efficiency is going to have on our revenue stream. We did a lot of work as part of this. TxDOT had commissioned a study by Cambridge Systematics two years ago, TTI has done a lot of followup work. Similar to population scenarios, there are scenarios that you can assume about how quickly there will be hybrid technology into the market. Our research showed that within model years 2010 and '11, automobile manufacturers are ready to introduce over 35 new hybrid vehicles. You saw in the last several weeks the initiative by the Obama administration to introduce more hybrids and more fuel-efficient vehicles by 2016.

Just to give you some idea of sensitivity to this, we've done some brief analysis, and based on when those hybrids get introduced, what level of market penetration you have, but easily we could see in all of our scenarios that just based on the advancement of those technology and CAFÉ standards, in the last several weeks we've heard literally could reduce our estimates by billions of dollars. There is an extreme closely tied relationship between MPG and revenue.

As we testified in front of Senator Carona's Transportation committee, where you really see the impact of this is that our revenue models will show you that by 2030 the State of Texas will actually be receiving less gas tax receipts for state gas tax revenue than it is today, despite adding 12-1/2 million more people to the region. So think about that: less state gas tax revenue 20 years from now than today, despite adding 12-1/2 million people to the region. So that really shows you what the impact that this MPG and fuel economy is going to have on our revenue stream.

We've all seen this coming, obviously we think we're headed towards a need for some other revenue model, perhaps a VMT-based, a mileage-based model is the answer, but the one thing we're providing is a model that captures that and that's something that we think is critical to this analysis.

MR. HOUGHTON: Excuse me. Is that everything constant?

MR. KESSLER: Everything else held constant.

MR. HOUGHTON: Everything else held constant. Okay. No CPI involved in those numbers?

MR. KESSLER: No. My experts behind me say no, the mathematicians say no.

MR. HOUGHTON: Okay.

MR. KESSLER: So in addition to population growth and fuel efficiency, there are some other key variables that we felt like had to be included in the TRENDS model. Obviously, the issue we're all facing across the street, the percent of revenue going to diversions, so we have built in this model different scenarios and assumptions that you can make. We'd hoped that we could run this model now and tell you that we've reduced a lot of diversions, what we're hearing so far is that, in fact, we're not, but the capacity is in there to calculate that.

Federal rate of return to Texas, that's a very key variable in the assumption of what the future rate of revenue will be. We've built into the model that the user can specify those percentages and we spent a lot of time ensuring that we're replicating that. Again, the level of funding dedicated to system maintenance, this is a bottom line assessment that we need to make in order to estimate the amount of dollars available for capacity improvements.

There are other user specified variables in the model that we thought were critical to include. You can include state both gasoline and diesel tax assumptions. The model allows us to provide scenarios of increasing those taxes at various points in time at various levels, the same way with federal. The model is built so we can index those gas taxes and we'll be able to show you the power of the indexing. Vehicle registration fees, since we were here in December, we talked to you about the importance of looking at a VMT-based tax system, we've now built that into the model -- and that's work that TTI and David have done over the last several months -- so we can tell you what type of VMT tax we would need if we were going to replace our traditional financing system. And then obviously, levels of bond financing, that's a key strategy that we've had in the state over the last five years and that's an input assumption that we can make.

MR. HOUGHTON: David, one more question: replace the system with VMT or augment it?

MR. KESSLER: Either. We can provide you an analysis of any of those scenarios, either replacing it, augmenting it, or a combination of those.

MR. UNDERWOOD: You're saying through your program that it gives the user the ability is what you're saying.

MR. KESSLER: Right. So if you were to come to us and say we want to augment our system with a VMT tax, we can do the models. And that, quite frankly, is a point I want to mention, the strength of the model -- and you see it in this next slide -- is the model allows us to combine all these variables and combine different assumptions and scenarios to give us a range of forecasts.

One of the things the work group was very uncomfortable about was standing up in front of you and saying with an exact precision that this is the amount of money you're going to have over the next 20 years. There's way too many variables for us to ever try to tell you that. We had no idea, for example, that the Obama administration would push this idea of hybrid vehicles and CAFÉ standards sooner.

So what this slide shows you -- and this is a slide that I think we all have a relatively high degree of confidence in -- we developed nine scenarios that look at the range of a high population growth scenario with a very low MPG estimate -- that's the best we could hope for, that we basically would have virtually no increases in miles per gallon which is probably not realistic -- but also have extremely high population growth, and under that scenario we've estimated that the state would have $180 billion of revenue on a statewide basis for the next 21 years, holding all other variables constant, no gas tax increase, no vehicle registration fee.

We also did a scenario at the other end of the perspective where you have very low population growth in Texas -- which we don't think is the case -- and very high MPG estimates. So that gives us a range of what we think the most likely low available revenue is and the most likely high revenue, so we can say, with some degree of certainty, that somewhere between approximately $137- to $140 billion on the low side and $180 billion on the high side is the amount of revenue that TxDOT could expect to have over the next 21 years, varying population and MPG assumptions which are the two that clearly have the most impact on your revenue stream.

MR. UNDERWOOD: I want to stop you right there, if I may, sir.

MR. KESSLER: You bet, sir.

MR. UNDERWOOD: With the TRENDS program, does it give you the flexibility to go back in and adjust the miles per gallon as the vehicles change? Isn't that a big selling point of it?

MR. KESSLER: Yes, absolutely.

MR. UNDERWOOD: You don't feel comfortable projecting 20 years out but with the program we can be able to track it each year and have a much better idea of where we are and be able to show the legislature the actual demands that we have.

MR. KESSLER: Absolutely. In fact, that's what these folks behind me have already started doing is to look at these new CAFÉ standards that the Obama administration has announced, put those new curves in the revenue model, rerun it, and tell us exactly what implications that would have on revenue.

One of the really interesting things that I noticed about when all of the press conferences and information came out about the new CAFÉ standards -- we all support them, they're great for the economy, they're great for the environment, they're great for reducing fuel dependency -- but never in any of those discussions on CNN or Public Television or all the places did anyone ever tie back the impact of increased fuel efficiency on highway revenue, and that's something, I think, that the education process needs to take place. I think clearly there is a huge disconnect between people understanding the relevance of those two.

MR. UNDERWOOD: But that's what this TRENDS will be able to show.

MR. KESSLER: Absolutely will show.

MR. UNDERWOOD: And it will also be a tool that we, as TxDOT, should be able to use. Isn't that correct?

MR. KESSLER: Absolutely.

MR. UNDERWOOD: I need some heads nodding out in the audience. Okay, thank you.

MR. HOLMES: One more short diversion. If President Obama's new standards are enacted and then implemented and achieved, doesn't that cause -- if I'm just looking at the graph, does it cause the high scenario, red line on my chart, to go even steeper earlier?

MR. KESSLER: Yes, steeper earlier. Your interpretation is exactly correct.

MR. HOLMES: And so the worst case scenario gets worse.

MR. KESSLER: Gets worse, right.

Now, we've provided you a range of scenarios but we also felt like it was important to give you our best guess because we felt like it was important that you have some understanding of where do you think you really are at over the next 21 years. And so holding all other variables constant and looking at our best guess of population growth and our best guess of the most likely fuel economy, we estimated that you should have approximately $155 billion available over the next 21 years to TxDOT for funding.

Here this slide shows you the breakdown of the source of that in the model, and that's the other interesting thing about the model is that it actually provides you an estimate of revenue by source, so when you go in and you look at different alternative scenarios, for example, if you want to look at increasing vehicle registration fees, the model is going to instantly tell you how much additional revenue you could expect to increase by virtue of a strategy that would increase those fees.

So once we got to the point of basically our work having a baseline forecast, we had our 2030 Committee folks come along, did a tremendous job showing us what the needs of the state were, we then spent some time comparing our work with the work they did. Just for the purposes of catching us up, remember that the 2030 Committee recommended four scenarios that they looked at: the current funding trend; the maintain economic competitiveness; of course, they settled on a recommendation to you the third scenario which is prevent worsening congestion; and then ideally, we would like to have and get to the point of being able to reduce congestion but I think the consensus is that that's probably a goal that we would not be able to achieve.

And so what I thought would be interesting to do is compare the costs of those scenarios versus the amount of revenue that we think, in fact, that we're going to have available. To get us through this analysis, remember that if you go back the $171 billion, that's the amount of capacity dollars that would be available to the state in that scenario. TTI took us through analysis, you add that $171 billion with the $89 billion in pavement, the $36 billion in bridges, the $19 billion in rural mobility and safety for a total of $315 billion. Then we had to account for inflation for $488 billion, and then we had a state share which is the $387 billion, so that's the number that you saw in the proposal from the 2030 Committee for the scenario that was approved.

So what I did was looked at what was the cost, so you see the third scenario again, the one that's circled was the $387 billion, we've talked about TxDOT having $100 billion in encumbrances -- and I know you've had that conversation -- so you see the total cost of that scenario over the next 21 years is $487 billion. What I put on the graph for you in the green bar is the amount of funding that we would have available -- again back to the $155 billion from our revenue -- and what these red bars show you is the shortfall that we would have in order to reach each of those scenarios, and as we testified before Senator Carona's committee -- and I was there with Mr. Holmes -- in fact, we have a $322 billion shortfall in the amount of revenue available based on our analysis and the recommended funding by the committee.

But what I thought would also be interesting was to compare that revenue estimate to the other trends, and so this week -- and I don't want you to hold me exactly to these numbers, these are numbers of proportionality that Tim Lomax and I worked on -- but I think the key number to look at over here is over on the left which is our current funding trend, and our current funding trend is based on essentially we built that number based on the assumptions that were out there in the 25 metropolitan planning organizations current transportation plans. But what, in fact, this analysis is leading us to show -- and what, of course, Michael and I are talking about in our shop already -- is the reality of where we're at is it's very likely that we cannot afford our current plans, let alone any of these three scenarios in the future.

And so I think it's important to reiterate the analysis that we're showing that we have some serious homework to do in regard to looking at the metropolitan plans on a statewide level and obviously in the efforts that need to be done at a statewide level in terms of a statewide transportation plan to take a hard look at where we're at on transportation plans. The reality is, and what Michael and I are discussing about in our office, is for MPOs this means projects are going to have to come out of plans. We have a 2035 plan due in two years in 2011, and if we cannot find a way to enhance the revenue stream and find a way to show enhanced revenue to this, basically our financially constrained plans are going to have to be significantly reduced. Unfortunately, that's the implications of where we're at.

Is that all necessarily bad? No. We're always in the camp that constraint breeds innovation, we can find better ways to do it, TxDOT and MPOs can work closer together, we can be more efficient, but what scares all of us about that scenario is the fact that the state is not going to stop growing. If the state were to stop growing today, that would not be nearly as scary, bu the reality is -- in Dallas-Fort Worth you hear it from us every year, we're adding 150,000 people a year -- the scenario of not having money for capacity improvements at the growth rates that we're looking at is not one that I think any of us are happy with. So that's where we're at.

MR. UNDERWOOD: Let me stop you one more time, and I don't mean to make you break stride or whatnot.

MR. KESSLER: I'm glad you are, that's why I'm here.

MR. UNDERWOOD: From what you're saying from the studies that you have done, looking at the needs that we have, correct, from the 2030 and whatnot, is it fair to say basically we've kind of been under-funded for mobility for the past 20 years?

MR. KESSLER: That's very fair.

MR. UNDERWOOD: And maybe by a third or two-thirds?

MR. KESSLER: Yes, and I think it's very consistent with the testimony that we gave the Senate in this scenario -- and this is what we're all talking about -- at some point very quickly we anticipate there won't be any funds available for capacity improvements, all our funding is going to go towards maintenance, and again, I think that's a scenario that none of us think is the right one. But yes, I think your implication -- and we say it all the time -- we've not had a state gas tax increase since 1990 or '91, we've not had federal gas tax increases, and to have the growth that we've had in travel and population in the state over the last 20 years and not have the growth in revenue stream has essentially got us in the circumstance we're in.

MR. UNDERWOOD: Okay, thanks.

MR. HOLMES: Let me follow up on a comment that you made. You said that it's not necessarily all bad because it creates a motivation for people to be more creative in finding solutions, and while I agree to that, isn't there another side to this, that when MPOs begin to put their financially constrained plans together and they start taking projects off of those plans, in non-attainment areas such as Dallas-Fort Worth and Houston, what would be the implications of taking projects off the plans for the non-attainment issue?

MR. KESSLER: The implications are very serious. That's an iteration of a process that we're going to have to go through, but I can tell you in Dallas-Fort Worth currently we're only meeting the attainment standard by fractions. To go in and not be able to build additional managed lanes, certainly to not make progress on implementing our rail system is very likely to have serious implications on attainment.

The one thing about non-attainment areas that we do know is over the long run improvements on vehicle technology and cleaner vehicles in the time period probably eight to ten years from now meeting attainment will not be nearly as difficult as it is in the next four to five years. Right now we are on the margins of only fractionally being able to show that we meet the standard. Over time, technology is going to help us a lot, but in the near term, in our inability to make progress on all the things we talk about every day could have serious implications. And at the same time, you have he Environmental Protection Agency lowering the standards by which we have to meet, and so yes, I think it's safe to say by 2011 we would have serious concerns about our ability to meet attainment if we have to start pulling projects out of the plan.

MR. UNDERWOOD: A followup on that is what do you mean by serious? Basically, you're going to lose federal funds.

MR. KESSLER: Well, the implications of that is ultimately you would lose federal funds.

MR. UNDERWOOD: I mean, the audience needs to understand that. You can sit there and say this is serious, is this a rash or is it cancer?

(General laughter.)

MR. KESSLER: You're absolutely correct.

MR. HOLMES: You know, I want to follow Fred's comment. If you execute a plan or develop a plan that's financially constrained and you take projects off of it, then there's no way to show that you can achieve the standards, the air quality standards you need, you lose federal funds, and then is it reasonable to hope that fuel efficiency in vehicles and cleaner emissions out of vehicles takes you out of that gap eight or ten years later? I mean, that seems to me like a stretch. If you're at the margins today and you take projects off of the list and then you lose federal funding, to hope that somehow more fuel efficient and cleaner engines are going to take you out of that problem seems to be a real stretch.

MR. KESSLER: Well, it gets complicated pretty fast but it's worth spending a little time talking about what are the circumstances that would cause you to lose federal funding. You don't lose federal funds by failing to meet the standard, you lose federal funds by failing to implement the projects that you said you would implement in a state implementation plan that are part of that process. So what would happen, indeed if we took projects out of a metropolitan transportation plan and we couldn't pass conformity, basically we would have a non-conforming metropolitan transportation plan, and in that circumstance, what would happen is we could not build projects. So it wouldn't be in the sense that you would necessarily lose the money but you would be highly constrained about what you would be able to build in your plan as a result of having a plan that didn't meet the conformity standard.

When you risk federal funding is when you sign up as a region and commit and say we are going to build these managed lanes and they are going to be operational by 2015 and we collectively fail to meet that standard, and those are projects that are in what's called the state implementation plan for air quality, it's at that point that the EPA is going to step in and say you failed to meet your commitments and you have jeopardized your federal highway funding. So there is an important distinction that is complicated but it's important to make note of. But they all get you to the same point. The reality is if we're not able to have the revenue to show that we can implement the projects in our plan, it's going to cause us issues in the air quality area as well as the congestion side.

What's hard for me to give you a specific answer about that is we haven't gone through this analysis of actually pulling projects out, run all the congestion models, run all the air quality models for me to stand here with any precision and tell you exactly what the ramifications of that would be, but our sense is it would not be good.

MR. MEADOWS: I so appreciate your comments and I really hope the citizenry begins to really appreciate and recognize the gravity of the situation. The fact is that we're talking as if this is all speculation, that it's theoretic, the fact is it is not, and absent significant new resources to meet the transportation needs of the citizens of the State of Texas, we are going to be pulling projects out of the plan. And the ramifications of that are clear. Let's begin with just mobility, just being able to get around, and then overlay critical issues like air quality. The fact is that is exactly where it is that we are.

I had the opportunity to talk to Michael Morris last night and we were talking about the reality of having to remove projects from the plan, and I don't know if people understand what that really means, but these are real projects that have been anticipated, counted on, assumed were going to happen, and they're not.

MR. KESSLER: Well, I can tell, as Brian and I discussed at breakfast this morning, what's going to happen is Brian is going to call me and say why can't we continue work on development of this corridor because that project is no longer in the metropolitan transportation plan. And so the first thing that's going to happen is your districts are going to be frustrated with your MPO and that there's projects that they thought would go towards development that can no longer move forward because they're not in the plan. That's the very reality of what's going to happen.

And you know, Michael and I talk about this virtually every day. I mean, maybe that's what we need to get to, maybe we need to get to the point where the public sees that the reality between financing and it's not an assumption that these roads just appear, and we have to go through the painful exercise of prioritization and pulling projects out and people reaching the reality that these things are really not going to be built unless we actually do something about it. That's not a process that any of us are looking forward to but it appears that we finally got to that process that we're going to have to tell people that's the reality of where we're at.

If I could just finish very quickly and then get to some solutions. What are we doing? We're providing our model to all the MPOs to use, it's out there, it's available, we want people to use it, we've offered it to the legislature. Quite frankly, I've said to Senator Davis and Senator Carona and others: We have a model to help you look at financial revenue strategies, we want you to use it, we'll be glad to help you use it. We're anticipating using this model now to develop financial forecasts, we have a 2035 metropolitan transportation plan due in two years, all the MPOs in Texas are working on their new plans, so we need to develop financial estimates.

We're going to monitor various conditions. Revenue forecasts that come out of your chief financial officer are critical that we make sure that we have a model that's actually replicating what your financial experts in this building say is happening. The credibility of the model is absolutely critical, there's too much on the line that we make sure that it's accurate. We're going to monitor state and federal legislation to see if there's any progress we make, either in authorization or across the street. Population and growth in fuel efficiency, we talked about the importance of those two variables we're going to model.

The other thing we realize in Dallas-Fort Worth somewhere between about 60 to 70 percent of our revenues in transportation are locally generated, the same is true in Houston. We need to have the capability at the MPO levels across the state to estimate local revenues at the same level of precision that we now have with state and federal revenues. So our next big hurdle -- and we've begun the process of working with TTI and CTR on it -- is develop a sub-model in the TRENDS model for each of the 25 metropolitan areas. So if the folks in Lubbock say, you know, we want to promote an increased vehicle registration fee, what would that do in Lubbock in terms of providing mobility, the Lubbock MPO will have a financial model that's built sensitivity to Lubbock that will provide them an estimate of local revenue.

More and more -- and you see this currently in the House bill, the 300 bill, and the TLOT initiative -- more and more we talk about local option revenue as part of our financing strategy, and we've got to have the same tool available to estimate local revenue as we do federal.

So that's where we're at in the process and I want to hand this off to Mary but I do need to emphasize the point of where we really are at and where the MPOs need your help and where the state, I think, needs your help is this decision about what level of maintenance investment we need to make over the next 21 years, because that number is what we are going to subtract from the total funds available to tell the MPOs the amount of money that's actually available for capacity. Now, the way it stands right now, that may be a very small number and it may, in fact, be a number that there is no money available for capacity, but this discussion about what is the appropriate level of maintenance funding for the state is going to be absolutely critical over the next six to nine months to drive the next round of metropolitan transportation plans that we're all looking to develop.

MR. UNDERWOOD: Question for you. Two things. One, by having this model and whatnot -- and you're saying that there may not be any money -- can't they also use that and interpolate backwards and say: Look, we need these projects, what is it going to take us to get to that point?

MR. KESSLER: Absolutely.

MR. UNDERWOOD: And the second point I have is I think it's great that you're going to provide, shall we say, this TRENDS program to the MPOs and you're going to, as I call it, dumb it down for the smaller MPOs and whatnot -- don't quote me on that, I'm going to get in trouble -- but I'm just saying you'll make it easier to use -- that's the word I'm looking for. But the point is just having that is like giving me the keys to a Lear Jet, if you don't teach me how to fly it, all it is is a nice ornament in my front yard.

(General laughter.)

MR. KESSLER: Commissioner, you're absolutely correct. And in fact, the way we have built this model with the user interface, the way you use the model is through a series of questions and it's not just for the small MPOs, it's for all users, the large and small. The one thing I would encourage you to do when you get the time to look at this model -- and we can show you this -- to show you access of how complicated this model has actually gotten to be. It is a huge model, it is amazing to me what it took to get this thing built.

So what we had to do was build this so there's a user interface where there's a series of questions that the model prompts you and you answer those questions and most or a majority are yes or no or when or how much, and you put those numbers in up front and you push the button and it spits out the results. So the model has really been designed to be a very user-friendly application.

MR. HOLMES: Yes, user-friendly is the term. When do you think that you might have the application that allows the Michael Morrises and Allen Clarks and others of the world to put a local option, series of local options in?

MR. KESSLER: End of August.

MR. HOLMES: I think that's a wonderful version of this model.

MR. KESSLER: We have developed a similar, a much less sophisticated model in Dallas-Fort Worth in advance of the TLOT initiative because we had to tell people if we want to build this rail system, we know we need $487 million a year and what would be the local revenue strategies it would take to raise that kind of money, so we have a version of this model, but the model we developed now that takes into account particularly this issue of fuel efficiency is a much more sophisticated approach to go about this.

Thank you very much, I appreciate your time, and I'm here to answer any other questions you have, and let me turn it over to Mary and talk about where we think TxDOT needs to go from here. Thank you.

MS. MEYLAND: Good morning. My name is Mary Meyland, I'm currently working as the special assistant to the executive director working with performance management, and I want to take the discussion that Dan has just so eloquently presented to you and kind of iterate where we're going to go with it as TxDOT. It's very important that the team put together such an enormous effort to put us in a place where we've never really been, to scientifically analyze our process of revenue and give us a position to forecast and put those numbers into planning efforts. So we want to just show what we can do with this now.

Just as an iteration of how this all works, we have developed the funding funnel. We've got to start, and Dan mentioned that the MTPs in the development for the 2030 scenarios. Before that is accomplished, it would be nice for them to have the blueprint and the vision for transportation in Texas for the next 20-25 years, so we've got to go through an effort to redevelop our transportation plan. That's the number one thing on the top of the funnel. That would basically be an investment prioritization looking at all of our forecast need of revenue -- which you've already seen the two elements: you've had the 2030 Committee tell you what they believe the needs are, and now you have the revenue forecast instrument which we've really never had. This will help us make better decisions and maybe set some goals specific to those investment levels that we would like to obtain for each individual category of funding.

And of course, once you have the transportation plan developed which is your long-range planning document, we would be able to develop a project plan which would give you more of a sense of what you expect in the next 20 years. This is in line with some other work that's being done with the UTP, the Unified Transportation Plan, they are also thinking in this same general direction of developing a project plan of 20-year projects that will help us detail with a financial plan for each project of where the money is going to come. It's become very complex, this is not the same world that we've been in for the last 20 years about funding projects. We have so many opportunities to intermingle and leverage funds that each individual project, particularly a mobility project, will be taken care of through our financial plan, and we have an organization and a presentation of what that financial plan may look like. But those would be the things that would make the projects viable and/or approachable in the 20-year plan.

And of course, the last thing -- and you've heard this out of the House bill -- they've been wanting a work plan, something that would be responsive and updated every one to two years, and that's what we're proposing in that last element down at the end of the funnel which would basically be your transportation projects and your programs, basically a four-year work plan with performance measurements in it. It tells you where you're going, how you're accomplishing it and what value each project will be. So that's just to give you an overview, systematically and graphically of what we anticipate.

Question?

MR. UNDERWOOD: Yes, ma'am, a quick question. By providing this, this will help in our transparency issues too, won't it?

MS. MEYLAND: Absolutely. It puts everything out to the public, and I'm going to show you in our schedule how we hope to do that. We've got to get this out publicly, I think we've said it over and over again. We've known this, we kind of knew it was coming, I think the obvious thing is it's critical and it's time to start bringing that out publicly and getting other people's buy-ins and understanding of the process.

MS. DELISI: Are you talking about editing what we already have and building on what we already have, or are we talking about wiping the slate clean and starting all over again with a clean piece of paper?

MS. MEYLAND: I believe it's both. We have to integrate what we have, as Dan was talking about, we're going to have to wipe some of the slate clean because obviously the resources aren't there to support the plans that have been built and that are currently in place. So by setting up our goals, we actually need to look at what is TxDOT with it's partners going to be able to accomplish with the revenue streams. Those are some of the big questions that are going to need to be answered as we move forward into the planning process. So yes, it is kind of looking at what we can do and maybe integrating back what the highest priorities are. In a sense, it's a re-prioritization based on our revenue capabilities and/or the priorities that you as our leadership and executive management want to tell us what you want to pursue, and the public as well.

MR. UNDERWOOD: But the TRENDS itself will allow the MPOs to make better decisions to give us better input. Isn't that correct? That's what we're shooting for.

MS. MEYLAND: Absolutely. And the bottom line is the base, we've got to determine what that revenue base is and then obviously the MPOs get a portion of the base so that we make the critical decision -- and Dan left you with this same question -- is the base substantial enough to support our maintenance levels that we have grown accustomed to in this state, or how do we need to prioritize and utilize that base resource level to take care of the preservation needs as well as the mobility needs. That's going to be a critical point of discussion, a critical point of developing our goals and setting out our performance objectives for the future.

MR. UNDERWOOD: But what this really does -- coach me if I'm wrong now -- what this really does it allows the MPOs to really drive this train by the input. Isn't that correct?

MS. MEYLAND: Absolutely.

MR. UNDERWOOD: This is not a top down, this is a bottom up with the MPOs giving direction to TxDOT, but we're doing it, thanks to TRENDS, knowing how much actual money we have to play with, so to speak -- I used the wrong word with play but I'm saying to use. I'm sorry.

MS. MEYLAND: Absolutely. We all agree that that baseline is what it is and that none of the MPOs work out with their own little idea of what that base means. We have a base that everybody agrees on, TxDOT and the MPOs together.

MR. KESSLER: Commissioner, if I might add, I think you're right but I think this is where this collaborative process needs to take place, and it's back to this issue of the MPOs have historically relied on TxDOT for you to tell us this is the amount of funding that you need to set aside in your plans for maintenance and the rest the MPOs have worked towards prioritization. So this is where this collaboration needs to take place this summer and fall, what level of maintenance do we need to take off the top to determine what level of funding the MPOs are going to have available to them to then prioritize that project and give you that feedback in terms of what those projects would be. So it really is a collaborative process that has to take place almost simultaneously.

MR. HOUGHTON: Wait a minute. You just said you're going to take maintenance money off the top?

MR. KESSLER: Yes.

MR. HOUGHTON: Whose decision is that? Are you deferring that decision on the MPO on how to maintain the system?

MR. KESSLER: Historically we have relied on the state and that has been your decision to provide us what level of funding you need to maintain your system. Our metropolitan planning organization and RTC Policy Board has always taken the position that maintenance is the number one priority, we have to maintain the system that we have before we can propose to you to build additional facilities.

MR. HOUGHTON: Right.

MR. KESSLER: And so we've relied on your districts to tell us this is the maintenance levels you need to have in your plan, and based on that, this is the additional funding that's available for capacity. So I think that's the collaborative conversation that we all need to have in terms of what is the maintenance levels that we all need to assume we're working with statewide to know what is the balance of funds that are available for funding.

MR. HOUGHTON: I think that is a very iffy issue. So you're going to deflect that decision down to the MPO level on how you're going to maintain your system?

MR. KESSLER: No. I'm saying the opposite.

MR. HOUGHTON: Okay.

MR. KESSLER: Maybe I haven't stated it well enough, but basically, yes, we're looking for this commission and your administration and your districts to give guidance to the metropolitan areas: this is the amount of total funding we have available and this is the amount of funding that we think we need for the maintenance levels that need to be provided. Once we've established that level, we'll then see what's available for capacity improvements.

MR. HOLMES: And to what extent would the MPOs have input into that level of maintenance?

MR. KESSLER: I think we're in a new era and we're in a new era of fiscal constraint, and I think that's a conversation that we all need to collectively have. I can't really speak for the policy officials on our board or across the state, but I would think that's a dialogue that we would want to have with this commission and policy officials about what is the right maintenance levels that we ought to be assuming. Clearly, though, MPOs are not maintenance experts, we are going to rely on TxDOT to tell us what is the benefits and the costs associated with the maintenance, and I know David and all your guys are working on this issue.

You know, one of the big discussions we had all spring was there's a cost of -- you all know this as well as I -- there's a cost of not maintaining facilities, there's the cost to the vehicles, additional accidents, the threshold that we're going to get to where if you don't maintain the road, you're going to have to rebuild it completely. So I think that's the level of expertise and guidance that the MPOs are going to look for from the state as we move forward.

MR. HOUGHTON: Well, you hit it on the head about the MPOs not being maintenance people and preservation folks, so to have that conversation I would say is a one-sided conversation. I think we had some angst up here as to taking money out of maintenance and preservation and putting it over; I would say it was heartburn to do such of a couple of the commissioners up here to move that money. So I'm not necessarily in favor of having the MPOs directing us or having that level of input as to how the system is going to be maintained because of your statement that you're not in that business, you're in the business of building new stuff.

MR. KESSLER: Commissioner Houghton, I think the key that needs to happen is that local elected officials and MPOs, quite frankly, we all need to be more educated about what the true maintenance costs are and what the implications are if we don't spend the money on maintenance.

MR. HOUGHTON: I absolutely agree with that statement. That's right, we may have not done a very good job on educating the public as to what it costs to maintain the largest system in the country, and I think if we were in the world, we're right up there in the top two or three systems and the system is aging, especially in the farm to market roads that are aging and need to be improved. So yes, I think education is key to that.

MS. MEYLAND: And to follow up and conclude, to take us where we need to be is a pretty robust schedule, but if we adopt TRENDS as being the new analytical tool that we've been so desperately needing, hopefully by presenting it to you today that we could go ahead and send that over and get some feedback from our state auditor or comptroller to make sure that it's the robust tool that they would concur with the utilization of for forecasting. We think that's very important.

And then start in July with public outreach to talk about the very same thing that you brought up, Commissioner Houghton, is that we've got to educate the public and our stakeholders more about the goals and the measures that we can use as we move forward with the revenue stream, particularly as it pertains to maintenance which will probably be our most prominent objective in the future, and we hope to do that this summer and utilize the expertise of our consultant that we're going to bring on to look at our management structure who will also be looking at our goals and our mission statement as a department to do our organizational structure. So that's July-September time frame.

We're hoping to adopt that certified forecast which is so important to build our plans on in September and October time frame. Again go back out to the public with the match of the goals and the financial obligations to those goals so that the public will get an idea of why we've done what we've done, and then put it into the transportation plan with a goal measured document with assessment of assets to it -- which is something we haven't seen at that level of planning -- and then finally, adoption in January.

MR. HOLMES: Mary, did you say send it over to the state auditor or the comptroller?

MS. MEYLAND: We haven't made that decision yet.

MR. HOLMES: Wouldn't you send it to both?

MS. MEYLAND: We could, we certainly could. I think that would be the right thing to do to get their feedback and review. That's very good. Thank you, sir.

MS. DELISI: Well, and I think also the first thing that needs to be done is see what the outcome is of the next five days and then the model needs to be updated. It may make it a little bit more depressing, that's possible. But we've got to see what the final outcome on the budget is. Assuming the Sunset Bill passes because so much of our revenue now is in that one bill, but I think it's going to have to be updated clearly to get the clear picture.

MS. MEYLAND: I think the tools are in place to do it.

MR. HOLMES: And just as a follow-on, I assume that on at least an annual basis we're going to benchmark it back to what reality is at that moment and then forecast for it.

MS. MEYLAND: Absolutely. There will be adjustment every year, and using the TRENDS analogy, be able to bring that through our plans every year. As you get down to that final work plan, it will be adjusted every year based on the forecast.

MR. HOLMES: But you're going to adjust it after the session but before you send it, is that what I just understood?

MS. MEYLAND: Yes. We're not in a position to do that now. We appreciate your questions, very good.

MR. CASTEEL: Commissioners, that concludes the presentation, I appreciate the discussion. If there's no more questions, we can work on that. Three things I would like to highlight, if it's permissible. First of all, Dan Kessler and Jessica and David Ellis and Ron Hagquist and this group, along with Brian Barth, have done outstanding work for over a year now. And of course, Dan has another job as well as working for us through this effort, and I just really want to express my appreciation for Dan and also for Chris and Ashby and the other guys from the MPOs that worked so hard on this.

The second thing I'd like to emphasize is Dan touched on it three or four times is the discussion about the cost of maintenance and our Deputy Director Simmons has asked John and I to coordinate a discussion item with you in June about pavements and bridges. We've had all our district engineers and division staff working on this for about a year as well, so I think we can have a good discussion in June and really get that discussion underway.

And then the third item is the public interface is important and we appreciate Coby's leadership on that.

So with that, I would ask you to let me go, Chair?

MS. DELISI: Go, go.

(General laughter.)

MR. HOUGHTON: I have one question, whoever wants to field this. The vehicle miles traveled got glossed over in this analysis. What's the criteria for it?

MR. CASTEEL: The criteria for vehicle miles traveled? For the tax or for the model basis?

MR. HOUGHTON: Don't say that ugly word A tax@ ; they don't like that across the street.

MS. DELISI: A fee.

MR. HOUGHTON: VMT.

MR. CASTEEL: Where is it at in this? It's a plug-in module, and David Ellis here from Texas Transportation Institute is the expert on that. How we use VMT in the model is we use population as a surrogate for VMT in forecasting fuel tax revenues, and then the other which is the vehicle miles traveled fee, that's a plug-in module that comes in and you can base it, and again, it has population as a surrogate for that to develop the revenue forecast for that.

Dr. Ellis -- I didn't take a class from him at A&M but I think I did okay.

DR. ELLIS: You did great. David Ellis, TTI and Texas A&M. Just real quickly, the model does incorporate a VMT component, as Dan mentioned earlier, and it allows you to make a decision about if you wanted to impose a VMT fee, you can do that, specify which year you want that to start, when you want a fuel tax to stop if you don't want to do both at the same time. It allows you to discriminate between a different rate for commercial vehicles versus personal vehicles which can be important.

And Commissioner, with respect to forecasting those kind of things, as David mentioned, there's a very close correlation between population and total VMT and then we just segregate that between commercial and personal VMT, we look at those rates and changes over time and adjust the equation accordingly to get these projections out into the future. So it's an additional tool in the model that allows you to kind of play various what-if scenarios in terms of revenue options that might be available. Hope that answered your question.

MR. HOUGHTON: Well, I think it would be productive to take a project, a what-if project in some community, whether it be Houston or the bigger areas, the Metroplex, and impose that VMT and see what it does for you. Now it's a what-if, it's hypothetical, but if you say if we get X amount per mile, what if, what does it do for you, and start down that road. Because I'm not saying I'm giving up but I just don't see doubling vehicle registration or indexing the gas tax or any diversions right now, there's no appetite for it.

DR. ELLIS: And the magnitude of the problem is of such significance that they pretty much don't get you there anyway in large measure, and then you're also hit, as was mentioned earlier, with the gas tax not having been increased since 1991, the purchasing power of the gas tax, if you just look at the CPI, has gone from 20 cents gas tax down to about 12-13 cents, and then you add on that the impact of increased fuel efficiency that has occurred since 1991, and so you have more VMT consuming less fuel. And then the fact that we always deflate the purchasing power of the gas tax by the CPI, but the fact of the matter is the cost of construction has increased significantly faster than the CPI, and so the purchasing power that you've lost is actually even greater than that. And so you're ending up fighting a huge battle with a really short stick.

MR. HOUGHTON: Well, I don't know what it would cost us, but I'd sure like to take a real live approach to it to the bigger areas of the state and start presenting this to our partners across the street and saying here's an option. It could be a local option, it could be a state option, obviously a local option, on meeting the needs. Because like I said, I don't see any of these going to happen over the next years.

DR. ELLIS: I know Mary has interest in a pilot project hopefully to be underway in East Texas where some of those issues might be addressed in actuality over the course of the next several years.

MR. HOUGHTON: Well, with all due respect to East Texas, I think the bigger Metroplex areas ought to -- that's where the real issues are, with all due respect. We've got big, big areas that are in great need, and if we show Allen Clark and Judge Emmett and the leadership in those areas on here are some things on vehicle miles traveled and you take charge of your own destiny, here's what it can do for you, and you get buy-in, because, again, I don't see much of this happening.

DR. ELLIS: I agree with you.

MS. DELISI: Thank you very much.

Now before we go on to our next report, I just want to recognize a group of students who are joining us today from the University of North Texas. I think they're there in the back. Come on, stand up. They're here with their professor, Dr. Benavides, and they're in a master of public administration course at UNT, and they're hopefully learning something here today. So welcome, glad to have you here.

(Applause.)

MR. RUSSELL: Okay, commissioners, the second part of our report, agenda item 2(b), is our normal update on the Internal Compliance Program. Mr. Simmons is in Washington this morning, so Suzanne Mann will be handling this update.

MS. MANN: Hi, good morning. For the record, my name is Suzanne Mann, and for the last six months I've had the pleasure of serving as the interim director of the Internal Compliance Office.

In November of 2007, as you'll recall, you passed a minute order asking the department to create an Internal Compliance Program, the purpose of which was to detect criminal conduct and otherwise promote an organizational culture that encourages ethical behavior and a commitment to compliance with the law. In that minute order, you requested that we give updates on the program every six months, and that's the purpose of this report. You were given a report back in November, and since November I'm here to tell you and walk through what we've done in the program and what we're working on currently.

We have completed a standards of conduct document that is both online and has been given to every employee of TxDOT. The purpose of that was to gather in one place all the policies of the department in a user-friendly -- that term seems to have been thrown around a lot this morning -- a user-friendly format that everybody can click on on the internet or look at in a document form and find all of our policies regarding employee behavior and ethical conduct.

We have also conducted training of all of our employees, 99 percent of our employees have received a four-hour training course that's called IDEA, Increasing Departmental Ethical Awareness, and it was training on the standards of conduct and our TxDOT ethics policies.

I'd like to take this opportunity now to personally thank those in the Training Quality and Development Section of the Human Resources Division, Office of General Counsel and Audit for their efforts for that class. It was amazing. We started that class in December -- started talking about it in December and we actually got 99 percent of the employees trained in a four-hour class by April, so that was an amazing accomplishment.

We also have been working on both internal and external awareness of our ethics policy and program. We have training posters, we have posters advertising our ethics hotline to our employees, we have a website for our Internal Compliance Program, we also have a website click on our TxDOT external website that you can see what we're doing in internal compliance. All employees' performance evaluations are being updated to include an ethical component in their performance plans to make each employee aware that they are to uphold ethical conduct and make it a priority.

Commissioner Delisi established the Commission Ethics Subcommittee back in January. The TxDOT Watch Hotline has been up and going since October 1, we've established procedures for that, and we've received to date 214 complaints through the hotline, 70 percent remain anonymous; there are 62 open cases. We've received 66 more since our training so it's increased awareness, the training increased awareness.

We passed rules in January requiring organizations that receive funds from the department to certify that they have an ethics and compliance program in place. Transportation corporation and toll facilities that receive funds from the department must adopt and enforce an internal compliance program, and contracting sanction rules have been changed to provide a possible mitigating circumstance for imposing sanctions if a contractor did have an ethics and compliance program in place at the time of their offense.

Currently we are working on new training, since every employee has now been involved in the four-hour training. We're going to have annual training of each of our employees, we're going to produce a video for that online on the I-WAY. We are also working on a department-wide risk assessment. We've researched various entities on how they conducted this and we're conducting it similar to the University of Texas at Austin, how they did theirs. By August 3, each division office is going to identify the risks associated with their major function areas, with the goal being eventually to develop standard operating procedures on how they accomplish each one of those functions to mitigate risks.

We are working on potential conflict of interest and nepotism disclosures, both for our employees and contractors. We're also working on possibly contract changes to include language regarding ethics and our policies. We're working on an audit recommendation implementation. Currently our Audit Office does audits, they come up with a recommendation for the office that's being audited, and then they have a year followup. We're working on how are we going to make sure that that happens during that year, how are we going to make sure that those recommendations of Audit are implemented, and so we're working on how to make sure that that happens before that year comes up that they've started actually working on those changes.

Finally, we've been working with GPA on educating the public. Like I said, we have a link on our TxDOT website that takes them to some information about our policies and our ethical policies, and we're working on an educational brochure for the public so they can see what we're working towards and what our goals are.

And that's pretty much what we've been doing the last six months -- we've been extremely busy -- and where we're headed. Any questions?

MR. UNDERWOOD: Yes, ma'am. On your educational brochure, I'd like to make a recommendation that you make sure that those get out to the legislators showing them what we're doing and how we're taking care of it, and not just at the pink building but at their local offices or whatnot, so that they can see in their regions or their areas that they represent what we're doing.

MS. MANN: Yes, sir, that's a great idea.

MR. UNDERWOOD: And how professional that we are in handling our business and whatnot.

MS. MANN: Yes, sir.

MR. UNDERWOOD: Thank you.

MS. MANN: Anyone else?

MR. RUSSELL: Thanks, Suzanne.

Okay, commissioners, agenda item 3, John Barton will come up and give the update on the stimulus package projects.

MR. BARTON: Good morning, Madame Chair, commissioners. For the record, my name is John Barton, and like my brother, David Casteel, I have the pleasure of working for you as the assistant executive director for Engineering Operations here at TxDOT.

Today I just wanted to briefly discuss with you three items related to the Recovery Act -- as we now refer to it. The first is to just provide you a status report on where we are in implementing the Recovery Act for transportation here in Texas; secondly, I want to share with you some information about the underruns that we've been seeing on our projects, as we've taken bids on them, compared to our engineers' estimates; and third, I would like to present a minute order to you for consideration that would allow us to clean up some technical issues on the projects that you've already approved to allow us to continue to implement projects through this program.

To briefly review where we've been, as you know, you approved approximately $500 million worth of maintenance and preservation projects for highways and bridges here in Texas back in February and March. You also approved about $1.2 billion for mobility-related projects through the program, and about $73 million for enhancement projects.

Now we're about four months into implementing this program here in the State of Texas and I just wanted to share with you that we still receive -- even daily, as late as this morning -- additional and continuing to change guidance from the Office of Secretary of Transportation as well as FHWA. Most notably, these are the reporting requirements that we have to follow in turning in information about the projects that we're developing, and these continuous revisions do require a significant amount of staff's time to respond to them as the scenario changes under which we've been working, but in my opinion, your staff has been doing a great job in managing this program and getting these projects moving forward.

We continue to meet with our federal partners each week on Monday mornings to review the status of our projects, to make sure they're moving along smoothly and that we are addressing any issues that might be associated with them. And we also continue to host weekly conference calls with all of our transportation partners around the state to talk about evolving and new issues as they come up. And all of our partners have been working very well with us to implement this program.

This month there are several issues that I think deserve special note that I would like to share with you real briefly. First is we've had our first meetings with the Government Accountability Office -- they are obviously responsible for overseeing the implementation of the program across the nation -- they met with us here in Austin, they then met with our federal partners here in Austin, and have since gone out to visit with our staff in the San Antonio District and I think this week are meeting with our Fort Worth District to talk about the projects that might be implemented there.

Earlier this month we also received the draft rules for the $1.5 billion discretionary grant program that's been much anticipated and long awaited. Just to briefly cover with you, projects submitted under this need to be between $20 million in value and $300 million in value; no state can receive more than $300 million in total. The rules indicated that the U.S. Secretary of Transportation will give priority to projects that have a significant impact on several key long-term desired outcomes for the nation or a metropolitan area or region, and they include things like improving the condition of our existing systems, contributing to the economic competitiveness of our nation compared to others, improving the quality of life for the communities affected by the projects, helping us to become less energy-dependent on foreign oil, and reducing greenhouse gas emissions, and then improving the safety of our system.

I think it's also important to note that they have suggested that they will give priority to those things that are obvious with the program, projects that will quickly create jobs and preserve jobs for people across our nation and provide benefits for those economically distressed areas of our nation, incorporating innovative strategies in the process of developing these long-term outcomes I've already mentioned, and then building strong partnerships and collaboration among a lot of groups of people and individuals and entities.

So we've taken this information, we've shared it with all of our transportation partners from across the state and we'll be working on your behalf with them throughout the next three months to develop a list of projects that we feel like best meet these criteria and would serve our state best for the commission to consider submitting on behalf of the State of Texas. Applications are due in to the Office of Secretary of Transportation by September 15, so we have a little bit of time to work on those.

MR. MEADOWS: John, have you given thought -- just working with those partners you just referenced -- to the process we'll actually employ?

MR. BARTON: No, we haven't.

MR. MEADOWS: It's the same issue we encountered before.

MR. BARTON: It is the same issue and we've talked about building upon that success and to coming up with another process over the next two or three weeks to bring to you in your June commission meeting for consideration. It's clearly important that we have a well thought-out collaborative process that's defined that everybody can understand.

MR. MEADOWS: I think the one lesson I might have learned from the last time is as inclusive as we are, there's always someone that you say you wish you would have included, and I think we did hear from some legislators that they felt like they at least needed to be kept abreast of what was developing and what the process was. I don't know how to incorporate all that in there and that's something I know you all are working on, but it's important.

MR. BARTON: And that's a very important point. We, too, heard the same things, obviously.

MR. MEADOWS: I suspected you might.

MR. BARTON: And I think that working with Coby Chase and his staff in Government and Public Affairs Division, a couple of things we want to do certainly right off the bat is make sure they know through the issuance of letters or e-mails to them, and then encouraging them to communicate back to their metropolitan planning organizations on what they believe the priorities for their particular districts are.

Now for the best news of my presentation to you today, I'd like to share with you --

MR. HOUGHTON: Hold on, John, real quick. On the $1.5 billion -- and it's a $20 million minimum, $300 million per state, right, maximum $300 million?

MR. BARTON: Maximum $300 million per state.

MR. HOUGHTON: So North Dakota has $300 million, we have $300 million. If that is not utilized, will there will be a redistribution of those funds?

MR. BARTON: The rules do not specifically talk about that. I think the intent was that the projects identified would obviously be ready to go and they would be utilized. But in the other parts of the Act there is a redistribution mechanism at the end of the bidding process for all the projects.

MR. HOUGHTON: And when is that?

MR. BARTON: For the normal program it will occur before September of 2010; for this particular program it would probably have to occur, quite frankly, within that same time frame, September 2010.

MR. HOUGHTON: And how are we going to handle the vetting of all the projects that we have in this state and a $300 million maximum?

MR. BARTON: That is a challenge facing us. With all the projects that haven't already been funded that are still out there to consider clearly will be much greater than a total of $300 million, and so how do we identify those projects. Now, knowing that, we don't have to submit a total package of $300 million or less, we can submit a billion dollars worth of projects, the Secretary of Transportation can only select $300 million of those to come to Texas.

MR. HOUGHTON: So we can leave it up to them to select.

MR. BARTON: And I think that clearly we want to put that monkey on somebody else's back if we can.

(General laughter.)

MR. HOLMES: Well, I think there's another way to characterize that, and that is that if we submit $300 million, there may be projects that they don't value very highly in Washington.

MR. HOUGHTON: Do they have the final say?

MR. HOLMES: Whereas, if we have a billion, maybe they can find $300 million out of it.

MR. BARTON: That's correct, and of course, you want to maximize your chances for return.

MR. HOLMES: Which maximizes the opportunity. Right?

MR. BARTON: So I think the prudent thing to do is to turn in all the projects you think meet the criteria and are worthy candidate projects, and we will clearly have more than $300 million, but ultimately, the Office of the Secretary of Transportation has the final say on which projects are funded from around the nation. And again, doing the simple math for you, if Texas got $300 million and four other states got $300 million each, that's the $1.5 billion.

MR. HOLMES: Is there a guaranteed minimum?

MR. BARTON: No, sir.

MR. HOLMES: It could be zero. Right?

MR. BARTON: And in fact, I think there will be several states that probably end up getting zero dollars out of this.

Again, for some really good news, we have executed several of our Recovery Act funded projects and they will begin construction soon. I believe the first to actually begin construction will start on Monday in Commissioner Houghton's hometown of El Paso. It's a project on Loop 375 which is in the south and west side of El Paso, right along the Texas-Mexico border, certainly a community that could use the benefits of construction in their area, and so we're excited about that. And as these projects begin, I think there will be a lot of coverage n the media about it.

MR. HOUGHTON: For the record, John, was that the first project contracted?

MR. BARTON: It was the first contract executed, yes, sir.

MR. HOUGHTON: Thank you.

MR. BARTON: And so we have the opportunity to start employing Texans all over the state in the very near future, as early as next week actually seeing activities on the ground.

And then perhaps the best news of all I'd like to share with you, I'm pleased to announce that as of this morning we have obligated $728 million towards the $787 million minimum requirement within the first 120 days of the Act -- which is 92 percent of the required amount. We also have issued over to the Federal Highway Administration over $43 million of additional obligations that we expect to receive within the next few days, and several others that are pending to be sent over later this week or early next week. So clearly, before the 120-day time expires on June 30, we will have far exceeded the $787 million requirement. In fact, our plan calls for obligating just over $1 billion.

So I am extremely proud of the efforts of our district staffs in getting these projects ready, our division and Federal Highway Administration staff here in Austin processing them through, and of our transportation planning partners at the MPOs of doing the planing process required to get these projects ready to submit and obligate. So a team effort that's been successful and we're just on the brink of making that requirement today.

MR. HOLMES: John, what was that $700 million?

MR. BARTON: We've obligated, as of this morning, $728 million.

MR. HOLMES: $728-, and that's the engineering estimate.

MR. BARTON: Yes, sir. And that's compared to the requirement of $787 million.

MR. HOLMES: Yes.

MR. HOUGHTON: With respect to the El Paso that you have now contracted/executed, what was the engineer's estimate and what was the actual bid?

MR. BARTON: That particular project, I believe, Commissioner, the engineer's estimate was a little over $2 million and it came in, I think, at $1.3 million.

MR. HOUGHTON: $1.3-?

MR. BARTON: Yes, sir.

MR. HOUGHTON: So we're seeing some underruns.

MR. BARTON: Yes, sir, absolutely, and that was the next item I was going to talk about.

As you've pointed out we do have a lot of attention being focused on the underruns being experienced on the projects that we've taken bids on. I would like to note that this is not a situation that unique to Texas or to TxDOT, it's happening all over our nation and also within counties and cities. In fact, our brothers and sisters at HCTRA recently had a project that came in 50 percent of the engineer's estimate. So it's a tremendous situation facing all of us in the transportation industry, and it's partly due to the fact that the raw material demands are lower, it's just a simple supply and demand economy.

In some cases, while steel, cement, asphalt and fuel prices are lower because the demand is lower, it's also a product of the fact that many of the contractors are simply trying to keep their crews working and are therefore bidding with margins that are lower on profits than they might have done in the past. So it's a recent trend but I think that it's something we'll see throughout the remainder of this summer. I talked to the Associated General Contractors representatives earlier this week and they indicated to me that they don't see this trend changing in the near term until commodity prices begin to rise as we expect they might and until the marketplace changes a little bit.

Just to highlight the impact of this, as Commissioner Houghton pointed out, we took bids on 129 projects on April 21 and 22, the engineers' estimates for those projects was a approximately $400 million, the low bids we received for those was about $274 million, so clearly we had a 30 percent underrun on those projects as an aggregate, and we experienced similar bid underruns on our projects that we took bids on during the month of May, and Thomas Bohuslav will be up before you later this morning to share with you the details on that.

The federal regulations regarding this program do require that within 90 days of a project being awarded -- which is what you do each month at your commission meetings -- if there's a discrepancy between the low bid that was received and the obligated amount of more than $250,000, we have to ask for that money to be de-obligated or taken away from that project, if you will. The underrun amount has to be put aside or drawn back to be put on other projects. So as we move forward into the future, in the not too distant future, we will be provided with an opportunity to consider other projects to fund through the Recovery Act as we de-obligate those commitments that we've previously made.

And that's a situation that I think deserves some attention and consideration by the commission. There are obviously a lot of opportunities to do many different things. You could, for example, take the underruns on projects and direct staff to put that money back on other projects within that same district and on the same type of project. On the other hand, you could take all that money, pull it together and select projects from around the state of various types and sizes, and then, of course, if you wanted to, you could again pull that money and allocate it towards those much needed mobility projects that were not able to make the first cut. So there's a lot of different options. In fact, the options are probably as limitless as the idea that the five of you, along with staff and other transportation professionals, could come up with.

So as you can see, we do have an opportunity here but in my opinion, it's important that you be thinking about that and provide guidance to us as staff so that we can prepare whatever information you might need to help make decisions on this in the very near future because the window of time for the Recovery Act.

MR. HOUGHTON: How near future?

MR. BARTON: I think that in the June commission meeting we need to have a definitive plan of action of how we're going to move forward.

MR. HOUGHTON: That's near.

MR. BARTON: That is near term.

MR. HOLMES: John, did we think that the distribution between maintenance and new capacity of the funds when we allocated that a month or two ago, did we think that was an accurate distribution of the stimulus money?

MR. BARTON: Yes, sir. It was 25 percent towards maintenance and then the 75 percent, if you will, towards the remainder of the program.

MR. HOLMES: Would there be logic to changing that? If it was correct then, did we make a mistake then or is that still correct?

MR. BARTON: No. The commission always makes very wise and perfect decisions, you never make a mistake as a commission. (General laughter.)

MR. BARTON: And so as the professional that you've asked to work with, again, my brother, David Casteel, in maintaining our system, I would encourage you to consider keeping that balance at that level, and so obviously I'm suggesting that those funds that were underrun on maintenance projects be put back into additional maintenance projects. But that's a decision the commission clearly has to make, and there may be a difference of opinion.

MR. UNDERWOOD: I understand and I like Ned's logic.

MR. BARTON: Again, this is an issue that I think the commission needs to be deliberating on, and we certainly are here to provide whatever information you need in terms of the magnitude of the underruns and what we suspect. Speculation on my part is that before we get to the end of the Recovery Act initial phase -- which is March of 2010 -- the underruns we will experience from the total of $2.25 billion that the state had available to us will be in the order of magnitude of $500 million. That's speculative on my part, but we're already over $200 million towards that $500 million.

MR. HOLMES: You mean on this $400 million that came in at $274-, that's running at 31 percent?

MR. BARTON: Yes, sir. And then we saw similar underruns this month as well.

MR. HOLMES: That's huge.

MR. BARTON: And I think that number will start to trend down but not as quickly as perhaps --

MR. HOLMES: Is it trending down because engineering estimates are coming down or because commodity prices and bid prices are going up, or some combination?

MR. BARTON: It's a combination of both but primarily because our engineering estimates are being adjusted downward.

MS. DELISI: Related to stimulus but not these projects in particular, the question I get asked about the most -- and there's a lot going on across the street that impacts us as well -- is on the high speed rail funding. Can you talk a little bit about that, where it is and how we're positioned as a state to compete for some of those funds and what the likely outcome is from what they're deliberating across the street about, how Texas would compete if we're going to compete for those funds?

MR. BARTON: Thank you very much. The rules on the high speed rail portion of the program have not been released to my knowledge. Currently we're not positioned as well as perhaps we could be to compete for those funds. Other states obviously have high speed rail corridors and tracks in place that they can improve to get higher operating speeds on them. Texas' approach would be to get funding to support further studies and analysis of high speed rail corridors within the state. Pending legislation that may make it through, it appears that it has an opportunity to make it through, would create some high speed rail components of our agency as well as outside the agency in terms of designating certain areas of the state to be high speed rail corridors.

And so with those things in place, it would strengthen our ability to compete for funding to do those studies necessary to determine if, in fact, high speed rail is a viable option in certain areas, and if so, what kind of improvements would need to be made, what kind of rights of way would be necessary and that sort of thing. So it's important that the legislative process be completed pretty soon and that we have an opportunity to move forward with that as the rules for the high speed rail come forward.

David just shared with me that Ashby Johnson from the Houston-Galveston Area Council of Governments MPO says that they will be having a meeting regarding the high speed rail initiative within their areas next week -- oh, it's tomorrow.

MS. DELISI: This is with the Federal Rail Administration. Correct?

MR. BARTON: Ashby, would you like to come up and talk about that?

MR. JOHNSON: Good morning, commissioners. For the record, my name is Ashby Johnson, I'm the deputy MPO director for the Houston-Galveston Area Council. We have been in contact with the Federal Railroad Administration for now about two weeks, and there is a meeting scheduled for tomorrow afternoon starting at one o'clock at the Marriott at the Intercontinental Airport on John F. Kennedy Boulevard, and Administrator Karen Rae is coming. I'm not sure who else is coming, but they're coming to talk about the high speed rail proposal as it's being put together, they're looking for comments as to how to structure the program, so if any of you are available to come.

MR. HOUGHTON: Ashby to and to where?

MR. JOHNSON: That hasn't been revealed to us. They're not saying that we're going to be a starting point for anything, they're just coming to have a meeting.

MR. HOUGHTON: That's interesting.

MR. RUSSELL: Commissioners, I will be there tomorrow at the presentation, I'll be representing the department. Fundamentally, there are two high speed rail corridors in the state, there are eleven across the country, there are two in the state: South Central comes down from Oklahoma City, Arkansas, Dallas-Fort Worth, all the way down the 35 corridor, and the Gulf Coast corridor goes from Houston on through Louisiana. So we will, as Ashby indicated, have a good discussion tomorrow with Karen Rae and we'll be looking at those two corridors, as well as any other options to connect those, and there are certainly groups that are out there that have different ideas and designs on how to connect those.

The other thing, commissioners, I'll mention in June, of course, we'll start our workshops again and the rail discussion in general will be a topic in our workshop in June, and we'll talk probably about some of the high speed rail ideas and how it might apply for the $8 billion in stimulus funding, as well as all the other rail options that are out there, whether it's freight rail improvement, whether it's a practical rail suggestion of utilizing -- kind of like Amtrak on utilizing existing tracks. So I think we'll have a very thorough discussion in the workshop as well.

MR. HOUGHTON: Well, logic would seem to say that Houston and Dallas-Fort Worth.

MR. JOHNSON: Yes, and we, the MPO, have tried to make sure that we have somebody there to talk to them about that concept, and we think we have at least two people locked down, one of them being Harris County Judge Emmett, and the other being former Harris County Judge Robert Eckels, who chairs the Texas T-Bone. I know we have Judge Emmett confirmed, but I'm not sure about Judge Eckels.

MR. HOUGHTON: That's why I questioned to and from. Houston and Dallas-Fort Worth seems to be a natural, but maybe not.

MR. BARTON: And just to be clear, I think Ashby is saying that the intent of tomorrow's meeting is for the secretary to get input from the State of Texas on what the rules ought to be, not specific on routes, and so obviously, I think we want to suggest that the rules ought to be that at least 30 percent of those funds should come to Texas. But nonetheless, you have an opportunity.

MS. DELISI: Why stop at 30?

MR. BARTON: Go all the way to 50.

(General laughter.)

MR. BARTON: But it is an opportunity for Texans and obviously, Phil Russell will represent us, as well as the MPOs, to share our thoughts on what the program rules ought to be to allow for the maximum beneficial use of those limited dollars for real important high speed rail concerns.

MS. DELISI: Besides give us all the money, what's the message going to be?

MR. HOUGHTON: Yes, I'm really interested in the message.

MR. BARTON: And Phil might be able to speak more to that than I, but I think that the main message we would like to present is contrary to what we've heard nationwide so far which is they want to put the money into hardware, and that's important for obviously those areas that already have a rail line in place that's operating maybe at 100 miles an hour and they want to go to 250. But what we would like to see, I think, is priority given to the planning of expanded rail opportunities across the nation because, quite frankly, here in Texas we're just not ready to start building track today, we need to have some money to do the planning necessary to build the track. So Phil, I don't know if you want to add to that but I think that would be the message.

MR. RUSSELL: I think generally that will be it. There's really only one corridor, in my view, that's really ready to go and that's the northeast corridor, they've got the little higher speed rail line now between D.C. and New York, so it's still not going to be high speed, it will be higher speed. And everyone else is in a different state of planning, California, Florida, Texas and so on and so forth. I think our message tomorrow we'll try to make sure we have comments that will allow Texas to take advantage of as many of those dollars as possible, but ultimately I think we need to talk about Texas as a whole, some of the population growth, some of the things you saw during the TRENDS model and the needs. and the reality is, at least when I talk to a lot of the rail guys, Texas is a very fertile ground for that, not only because of the population and density that's occurring but also the geography is such that if high speed rail ever makes economic business sense, the 35 corridor or the 45 corridor really ought to be very high priorities for that.

We have a different geography than other states, so I think we're very well strategically placed to take advantage of some of these funds, and as John said, I think right now we need more emphasis on some of the planning. And Commissioner, I think you hit the nail on the head, we'll have to have revenue studies, and we need to ascertain where is the best corridor, is it the 35 corridor, is it the 45 corridor, where should those stops be, is it the Texas T-Bone, all those questions need to be addressed.

MR. HOLMES: And if I kind of follow the logic, if there is not a portion of the $8 billion dedicated to planning and there's really only one corridor that is ready for hardware implementation, then it all goes to that one corridor. Is that basically right?

MR. RUSSELL: No. I'm very confident, Commissioner, that we'll be able to get some of those planning funds. There has been some of that discussion that it will be focused on the northeast corridor. I think the reality is a lot of those other states are in very similar positions that we are of needing some of those revenue planning studies to figure out where it should be. I think Karen Rae had her first FRA meeting here a week or two ago in North Carolina, so she's going through and trying to hit all of those focus states. Theoretically, I suppose that could be the case, reality is I wouldn't anticipate that would ever happen.

MR. HOLMES: Are any of our U.S. Congress members from the Texas delegation going to be in the meeting tomorrow?

MR. RUSSELL: Ashby, I think several of them have been invited, haven't they?

MR. JOHNSON: Several have been invited; I know of no positive responses yet.

MR. HOUGHTON: How about their staff?

MR. JOHNSON: Same answer.

MS. DELISI: So that leads to the next question: Are we as positioned as we can be up in Washington to impact the rule making? What do we need to do?

MR. BARTON: Speaking on behalf of staff, I think that building upon tomorrow's meeting we need to get a better understanding of where we realistically believe the future is on this and get Coby and his staff with key leadership of the commission as well as perhaps others outside of the agency to make those communications known to the key decision-makers. And I don't know, Coby, if you want to add anything to it, but I certainly think that being educated and then taking the opportunity to educate others is really where we need to be.

MR. RUSSELL: The only thing I would also mention, commissioners, we're working, Coby and TP&P is working with CTR and Dr. Mike Walton to help us develop a cohesive strategy in looking at all the elements, whether it's high speed rail, whether it's other legislation that might affect improvements for freight rail or commuter rail, and so I think Dr. Walton will be providing some very good input for us over the next several months.

MR. CHASE: For the record, I'm Coby Chase.

Kind of going back to some of the questions, every member of the Texas Congressional delegation and their staff knows about this, every member of the Texas Legislature knows about this meeting, has been informed about this meeting, and we have been working with H-GAC and the FRA to notify every possible stakeholder we could possibly find that has an interest in rail. And the way I understand the workshop will be structured is the FRA will be welcomed by Judge Emmett or a local dignitary, some presentations will be made, one of them will be ours and two other presentations will be made, and then Deputy Administrator Karen Rae will speak on kind of what their hopes, dreams and aspirations are, then they'll break everybody out into groups with FRA personnel to have a more intense discussion back and forth on how they should spend the money.

Now, when Commissioner Holmes and I were in D.C. -- it all runs together, was that two weeks ago? -- we took two different paths at one point during the day and the path I took, I wound up in a presentation that Deputy Administrator Karen Rae was giving, and while they hadn't obviously written the rules yet, they were talking a whole lot like our meeting at U.S. DOT, that they want to show some big wins. They're going to try to avoid a bunch of little projects that don't accomplish anything; they consider this a down payment on a much bigger program and the very first things out of the chute; they want to see something that actually is going to work and they can point to to say that this worked instead of funding a bunch of little programs.

Texas, 15-20 years ago, we would have been the state to beat but we kind of changed our mind on high speed rail.

MR. HOUGHTON: I don't think we did, somebody else did.

MR. CHASE: Right, yes, we doesn't include me. Let's make that clear.

(General laughter.)

MR. CHASE: But now Texas is -- we have a lot of people talking -- there's a lot of enthusiasm, let me kind of put this on the record, a lot of enthusiasm about underdeveloped ideas for high speed rail in Texas and a lot of the discussion is focused on passenger rail which is good, everybody wants a high speed train, that's good. What Phil Russell and TP&P and Mr. Saenz have done -- and it's not a question of if we're going to get a formalized rail function, it's just does it occur on June 2, and the agency is trying to figure out how to position itself to take full advantage of that, how to fit into stimulus, how to fit into the next round of funding too, because the Obama administration intends this to be step one of a very large program.

Frankly, Texas is not in a position to be buying train cars and laying track yet, so as Mr. Barton and Mr. Russell pointed out, we need to get some planning dollars, and then the much less sexy freight rail component is going to be just as -- well, I don't want to say that -- it's going to have at least as much of an impact getting trucks off the road as it is building high speed passenger trains, except people find high speed passenger trains a lot more interesting to talk about. But we've brought on CTR and Cambridge Systematics to help position us for passenger rail, high speed passenger rail and higher speed, freight same thing, and to help create a rail function within TxDOT and we have to update the state rail plan which is going to be very important and require a certain level of public outreach.

And I've spent too much time at the microphone, but that's kind of where we are.

And in terms of D.C., yes, FRA has been -- we've had one and a half conversations with them. Professor Walton and Allan Rutter at Cambridge Systematics, former head of the FRA, has sat down with them and explained the Texas interest in this, but we're going to need to do a lot more, a whole lot more.

MR. BARTON: Go ahead, Ashby.

MR. JOHNSON: I just wanted to make one last comment about this issue on rail. The Federal Railroad Administration has traditionally not been set up to administer this sort of program, they've generally focused on safety over a long period of time, and my point in saying this to you is I think we have an opportunity here to influence them because they're looking for direction since they're so new at this, and I hope what we can do as a state is we can help them develop the guidance that benefits us and that we also go after this $1.5 billion, a portion of it that they have available, and we also go after the $1.5 billion that the secretary has available for what they call legacy projects for stimulus funding. I think we can link those two things and accomplish some things that we'd like to do in the state, whether we're talking about freight rail or commuter rail. And to me, you're not going to get commuter rail to where you need it to be in the state until you deal with some of the freight rail issues because the quickest way to get trains running for passenger rail is to work out an agreement with the existing freight rail because we don't have to put new track in everywhere.

MS. DELISI: Thank you.

MR. BARTON: Any other questions on the information I've shared with you this morning before I move on to the minute order?

(No response.)

MR. BARTON: Okay. I would like to share with you finally today your consideration of a minute order to revise the previously approved mobility, maintenance and transportation enhancement projects list. As you know, through two previous minute orders, one on March 5, 2009, numbered 111734, and another later on on March 26, numbered 111735, and lastly, last month in April a third cleanup minute order, if you will, you took action to implement these projects across the state. As we continue the development of these projects and implementation, we've run into some issues that need to be clarified.

There was one project in the Pharr District that through this minute order we are going to make a technical correction to the project limits. We referred to it as its current city street name and didn't put the limits from where and to, and so this change would simply put the technical limits of the beginning and ending of the project on the ground. And there are no other changes in this minute order to the mobility project list.

For the preventive maintenance and preservation and rehabilitation projects, the projects that we previously submitted to you, we had three. One in the Abilene District that we are asking to be removed because it had a previous federal obligation on record for it although it never proceeded to contract, obviously, and because the technical rules that FHWA has regarding this particular program, it is impossible for us to put Recovery Act funds on that project, so we'll have to fund that project through our normal funding streams at some later date, and for that the Abilene District has suggested to substitute a project on State Highway 36 to replace it.

The same situation occurred on a project in the Corpus Christi District, we had a project there that we are having to remove because it had a previous federal obligation on record for it, although it also never had any federal money spent on it, and because of the rules that the FHWA has implemented, we are suggesting, through the Corpus Christi District's recommendation, to substitute a project on US 77 to replace it in San Patricio County.

And then the last one is a project in the Dallas District, again having to be removed for the same reason, and we are suggesting to replace it, through the Dallas District's recommendation, with a project on Business Interstate 45 in Ellis County.

These projects are of similar magnitude and scope as the projects they are replacing, and so this minute order would remove the three that FHWA would not allow us to put Recovery Act funds on and replace it with these three projects.

And then lastly, in the enhancement program area, for the same reasons that I've just discussed on the preservation projects, four of the enhancement projects that we had selected had previously been shown in our records to have federal obligations committed to them, although we did not proceed with those, and therefore, technically FHWA will not let us put Recovery Act funding on them. Knowing the commitments that we've made to the communities involved for these projects, we've worked out a strategy to take projects that we had in our current letting schedule funded through the normal enhancement program, although they did not have any current federal obligations on them, fund them with these Recovery Act funds and take the normal funding that was available for those and put it on these Recovery Act selected projects. So we're just doing a shell-game funding swap to meet the technical bureaucratic requirements of the Federal Highway Administration.

MR. HOLMES: John, before you get too far away from the Pharr project, we're not changing the limits of the project, you're just changing the definition.

MR. BARTON: We're clarifying the definition. On the minute order we just said it was this road up to State Highway 48, I believe it is, yes, sir, and when we got ready to put it in the program, they said we need to have where it begins and ends and not just that it's Old Brazoria Road to State Highway 48, it needs to say it's from mile point to mile point, so we're just clarifying the limits of it. The limits aren't changing, the project is not changing, it's just I made a mistake in preparing the minute order and didn't have those beginning and ending points clearly identified.

And then lastly, on the minute order for the enhancement projects, in doing the cleanup we did identify that some of the funding that we showed on the original minute order were for activities like the design and right of way acquisition of some of those projects that's already occurred, that money has been out the door, so it provided a little bit more money, and what we've done is suggested putting in five landscaping projects that are currently designed, ready to go to contract, and Federal Highway Administration reviewed with us that are eligible for the program. One is in Houston on US 59 in Fort Bend County, the other four are in various locations across the San Antonio District. So we just want to make sure we have more than enough projects identified to take advantage of all the enhancement program money that's available under the Recovery Act, again, knowing later this year we'll go out with an enhancement program call at the direction of the commission.

So this minute order that is before you provides a cleanup to those things, and I hope that we will soon get to a point where these minute order corrections are not needed, but as we move forward with developing the program, these type of technical corrections may be necessary. So staff would recommend your approval of the minute order that's before you and I'll be happy to answer any questions you have.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes. Thanks, John.

MR. BARTON: Thank you.

MR. RUSSELL: Commissioners, our next agenda item we'll take all together, agenda items 4(a), (b), (c) and (d) relate to allocation of monies on several different transit programs. Eric Gleason will be providing that presentation. And Madame Chair, just for your purposes, we do have a speaker registered for items 4(a) and 4(b).

MR. GLEASON: Thank you. Good morning. For the record, I'm Eric Gleason, TxDOT director of Public Transportation. Just for my purposes, would you like for me to through all of them at once, or do you want to take them one at a time? I wasn't clear on the introduction.

MR. RUSSELL: Let's take them one at a time.

MR. GLEASON: Okay, good. Agenda item 4(a) awards $7,586,307 of Federal Transit Administration fiscal year 2009 Non-Urbanized Program funds to rural transit districts to assist with increases in rural program expenses. Growth, changing demographics, new directions in healthcare service delivery, increasing congestion levels affecting service schedules and operating requirements, an increased focus on public transportation as a key strategy to reduce greenhouse emissions and promote energy independence, and an expanding role in hurricane and other natural disaster relief efforts continue to place enormous challenges on our rural transit districts across the state.

In accordance with the formula established in Title 43, Section 31.36 of the Texas Administrative Code, the commission may award these funds under the 5311 program on a pro rata basis, competitively, or a combination of both. In this case, funds will be awarded on a pro rata distribution as described in Exhibit A, using reported system revenue miles during fiscal year 2008 as a surrogate for system needs. With the exception of $500,000 set aside for use in the case of an emergency, such as hurricane relief, and approximately $940,000 recommended for award in the next agenda item, the amount recommended for award with this agenda item is the remaining balance of funds in this program. We recommend your approval of this minute order.

MS. DELISI: Are there any questions of Eric?

(No response.)

MS. DELISI: At this time then I'd like to call up Ben Herr.

MR. HERR: Thank you, Madame Chair, commission. For the record, my name is Ben Herr, I'm the executive director of the Texas Transit Association.

The Texas Transit Association is in support of this particular minute order. Yesterday the TTA board of directors discussed this minute order and were extremely pleased to see the commission discretionary funds being awarded to the rural transit agencies. Not only are the majority of the available funds being awarded, but this award is being made quickly, only about 30 days from when the FTA made these funds available to TxDOT.

In the past, these commission discretionary funds have been a major source of contention between the transit industry and the department. They have led to a growing mistrust of the department by the TTA leadership. Today the TTA leadership sees this minute order as a positive sign of the department's commitment to supporting the transit industry in the rural communities, and we'd like to thank the commission, as well as Eric Gleason and the PTN staff for making these funds available.

I'd like to remind the commission that these federal funds must be matched by state and local funds. The legislature did not approve any additional state funding for public transportation this session, therefore, the amount of state funding remains at the same level that it has for about the past ten years. The gap between federal funds and state funds for transit continues to grow, placing these federal funds in jeopardy if matching funds cannot be made available. We'd ask the commission to consider the use of transportation development credits for transit operating expenses to help bridge this gap and prevent the loss of federal funds.

TTA would welcome the opportunity to sit down with the department and discuss funding options to support the growing demands of both urban and rural transit in the state. Thank you.

MS. DELISI: Thanks, Ben. If there are no questions, is there a motion?

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Agenda item 4(b) awards $20,459,101 in federal funds under a number of FTA grant programs, $10,370 in state matching funds for Federal Section 5304 State Planning and Research Program, and $875,594 in transportation development credits for selected public transportation projects as shown in Exhibit A.

This award is a result of a first time ever effort by the department to combine multiple programs under a single call for projects designed to promote comprehensive system development proposals, consolidate work and grant application processes in a consistent and predictable manner for grant applicants, and to facilitate and encourage coordination efforts among service providers to make the most of available funding.

The department published a request for proposals on July 11, 2008; proposals were received by December 12, 2008. Throughout this time period, the department provided information on the request for proposals to eligible proposers via a statewide pre-proposal video teleconference in August and eight regional workshops held around the state in October. Proposals were reviewed and scored by April 1 of 2009; a combination of overall and program-specific criteria were used to evaluate each project proposal. A total of 38 project proposals were received, totaling almost $60 million. We have communicated the results of our evaluation and the recommendations you have before you today to each proposer in this process. We recommend your approval of this minute order.

MS. DELISI: Any questions for Eric?

(No response.)

MS. DELISI: Okay, Ben, do you want to come down again?

MR. HERR: Thank you, Madame Chair, commissioners. The Texas Transit Association is in support of this minute order and would recommend the commission approve the funds for this new funding program. TTA welcomes fresh ideas and new opportunities to bring more transit programs and funding to the transit industry in the state. We expect that this award will provide increased access to public transportation for communities and improve transit service for those agencies that have applied to this coordinated call program. We hope that this coordinated call program encourages more cooperation among transit providers and communities without introducing any negative competition.

Eric Gleason, Cheryl Mazur and the PTN staff have worked extremely hard on this coordinated call program initiative and TTA applauds their efforts and commitment to the transit agencies. We hope this program succeeds. Thank you.

MS. DELISI: Thanks, Ben. If there are no other questions, is there a motion?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Agenda item 4(c) awards $6,872,871 of Federal Transit Administration Metropolitan Planning Program funds and $1,374,574 in transportation development credits, as described in Exhibit A. Section 5303 and transportation development credits are allocated using the latest census data so that metropolitan planning organizations receive funds based on the ratio of each MPO's population to the total population of all MPOs. They are used to support a variety of activities, including management and economic feasibility studies, evaluations of previously funded projects, development of transportation plans, TIPs and other related activities preliminary to and in preparation for improvements to public transportation systems, facilities and equipment consistent with the goals of the department. We recommend your approval of this minute order.

MS. DELISI: Questions?

(No response.)

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Agenda item 4(d) awards $5,185,322 of federal funds under the FTA Elderly Individuals and Individuals with Disabilities Program, Section 5310, and $549,180 in transportation development credits for various public transportation capital projects. The amounts in this minute order are consistent with published FTA apportionments for federal fiscal year 2009 and complete the distribution of available fiscal year 2009 funds.

The formula for allocating Section 5310 funds is established in Title 43 of the Texas Administrative Code, Section 31.31. Following a reduction for state administrative expenses, the remaining balance plus unobligated funds from previous projects is allocated to all 25 TxDOT districts for the selection of projects. The districts are responsible for public involvement and completion of a transit-planning process to establish a network of transit services for elderly individuals and individuals with disabilities in their respective areas. Projects are selected based on need for service, available funding, cooperation and coordination with area stakeholders. Projects recommended for funding are listed in Exhibit A.

Over 135 providers operate services for elderly and persons with disabilities in Texas. Last year these services carried over 1.2 million riders and traveled almost 7 million miles. Sixty-seven of these providers are included in this award. We recommend your approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Thank you.

MS. DELISI: Thanks, Eric.

MR. HOUGHTON: Eric, I want to thank you and your staff for all the fine work that you have done.

MR. GLEASON: Thank you, sir, I appreciate that.

MR. HOUGHTON: It's outstanding, and using the development credits, incorporating those into your program.

MR. GLEASON: Well, the development credits are one tool the department and the commission has used to help assist with the issue that Mr. Herr was talking about, that local match for federal funding, so it's been a big benefit, I think, for the community.

MR. HOUGHTON: Thank you.

MR. GLEASON: Thank you.

MR. RUSSELL: Commissioners, agenda item 5 relates to proposed rules for the Crash Records Information System. Carol Rawson will be providing that presentation.

MS. RAWSON: Good morning, commissioners. I'm Carol Rawson, deputy director of the Traffic Operations Division.

The minute order before you proposes an amendment to the department's existing rules for crash records. Law enforcement officers are required under state law to report motor vehicle crashes that result in property damage of $1,000 or more or a serious injury or death of a person to the department. The form an officer uses to make these reports is the Texas Peace Officer's Crash Report, commonly referred to as a CR-3. This amendment will adopt the CR-3 by reference. This will bring our rules into compliance with the Department of Public Safety rule in place when the crash records function was transferred to TxDOT from DPS in October of 2007. The amendment will also remove reference to the Commercial Motor Vehicle Supplement since the information is being merged into the main crash report form. We recommend approval of the minute order.

MS. DELISI: Any questions?

MR. UNDERWOOD: So moved.

MS. DELISI: Can I get a second?

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Okay, commissioners, we transition now to the Mark Tomlinson show. Agenda item 6(a) relates to toll designation on Segment 1 of the North Tarrant Express.

MR. TOMLINSON: Thank you, Mr. Russell, commissioners. My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT.

Item 6(a) authorizes the designation of Segment 1 of the North Tarrant Express project along Interstate 820 from I-35W to State Highway 121/State Highway 183, specifically all the managed lane connections, as a toll project on the state highway system. As you know, it's a two-stage process to designate a road as a toll project. First, the project must receive environmental approval from FHWA. That occurred for this project in December of 2008. Then we need to come to the commission for actually the designation as a toll road. You'll recall, I'm sure, you conditionally awarded the CDA for NTE to the NTE Mobility Partners back in January of 2009.

I should point out that this designation is only for Segment 1. The CDA did propose work in Segment 2 but we don't have environmental clearance there yet, anticipate that this summer, so we'll need to come back to you once we do have that environmental clearance. Staff would recommend your approval.

MR. MEADOWS: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Commissioners, agenda item 6(b) is a related minute order, it's the toll designation for the latest CDA, the DFW Connector. Mark.

MR. TOMLINSON: 6(b) authorizes the designation of the tolled managed lanes of the DFW Connector along State Highway 114 from Business 114 to east of International Parkway, and on State Highway 121 from FM 2499 to State Highway 360, designating the managed lanes as a toll project on the state highway system. Back in March of '09, the commission conditionally awarded the CDA for the DFW Connector to Northgate Constructors, a team led by Kiewit and Zachry.

It's a two-step process again. Environmental approval was received April 23, 2009 from FHWA for this project, and we come today asking your approval to designate it as a toll project. We'd move for your approval.

MS. DELISI: Any questions?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Commissioners, agenda item 6(c) is Mark's annual inspection report for the Central Texas Turnpike Project.

MR. TOMLINSON: The system's bond indenture of trust requires a general engineering consultant to make an inspection of the system at least once in a fiscal year following the substantial completion of the 2002 project and each fiscal year thereafter, really a pretty similar effort to what staff undergoes for the entire state highway system, but this, of course, is specific to the CTTP.

The GEC submits a report to the commission concerning the inspection. It focuses, of course, on the condition of the system and indicates their -- they kind of estimate the maintenance activity that we've undertaken. The inspection was completed for the entire 65-mile length of the CTTP, including Loop 1, State Highway 45 and State Highway 130. The roadway inspection scored a 97 out of 100, indicating the system is in a like new condition and is being maintained proactively. So we would move that you accept the minute order approving this report.

MR. HOUGHTON: I have a question, Mark, but in the cover letter from PBS&J, Steven W. Austin seems to contradict himself in the third paragraph where it says it does reveal a number of elements that are less than fair condition. What is he talking about?

MR. TOMLINSON: Pretty minor items, really. I think delineators was one of those items. There was an issue or two on the buildings that are on the system, but the maintenance contracts that we do have in place, we think can address those relatively minor deficiencies.

MR. HOUGHTON: Is that additional cost to the project?

MR. TOMLINSON: I think it's covered under those, it's just routine work that would be covered under those contracts.

MR. HOLMES: And we've taken steps to correct those?

MR. TOMLINSON: Yes, sir.

MS. DELISI: Any other questions?

(No response.)

MS. DELISI: Can I get a motion?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Commissioners, agenda item 7 relates to regional mobility authorities. Again, Mark Tomlinson will provide the description. The first one, agenda 7(a) relates to authorizing the Alamo Regional Mobility Authority to develop some work projects on US 281. Mark.

MR. TOMLINSON: The project goes from Redland Road to north of Marshall Road. The concept is a super street configuration, it takes the existing roadway, adds some turn lanes, changes the cross traffic movements and adds some signals with a goal of reducing congestion and reducing delay.

Back in March the authority submitted a request to allow these improvements on 281. The RMA, we think, can provide for the expeditious completion of the work. An engineering study was done locally in the San Antonio area that indicated that improvements could be made to decrease delay. The department is working with TTI to confirm those, and once that's done, Mr. Saenz, I expect, would move forward with a project agreement.

MR. HOUGHTON: What's the cost estimate for this project?

MR. TOMLINSON: About $7.8 million.

MR. HOUGHTON: And what is there that allows the RMA or you believe the RMA can move this faster than our regular procurement?

MR. TOMLINSON: Well, they have the ability to go to a design-build contract. I should mention also that that funding comes from three sources primarily: Recovery Act funds that were delegated to the MPO at about $5.7 million; $1.6 million from San Antonio's advance transportation district; and then close to a half million dollars from the City of San Antonio. I think it's the design-build capability that would accelerate those improvements.

MS. DELISI: Are there any other questions?

(No response.)

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Thank you, commissioners. Agenda item 7(b) relates to El Paso and the regional mobility authority projects there. Mark.

MR. TOMLINSON: This project authorizes the RMA to develop and construct direct connectors to the Interstate 10 and Loop 375 interchange in El Paso as a non-tolled project and authorizes the executive director to execute a project development agreement for the RMA for that work.

Back in March the commission authorized the department to commit $75 million in Recovery Act funds for the project, and in April the RMA requested that they be allowed to develop and construct those direct connectors. We would move your approval.

MR. HOUGHTON: And again, do we know why they would be chosen to build this project?

MR. TOMLINSON: Again, the capability of doing design-build on non-tolled projects.

MR. HOUGHTON: As an aside, Madame Chair, is there any initiative in the legislature to allow this department to do design-build?

MS. DELISI: On non-tolled projects, yes. I believe that's currently an issue being negotiated in the Sunset bill.

MR. HOUGHTON: Okay, thanks.

MS. DELISI: If there are no other questions, is there a motion?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Commissioners, agenda item 7(c) is a related minute order, and again it provides the funding for the RMA to move forward with the procurement on that specific project. Mark.

MR. TOMLINSON: In January, again you approved the execution of a project development agreement with the RMA for work on three projects located in the El Paso area, all on Loop 375, and authorized funding in the amount of $2.2 million for that work. In March of '09 the commission authorized the department to commit The $75 million in Recovery Act funds we previously mentioned.

This item authorizes the executive director to execute an amendment to that existing project development agreement to expand its scope of work by adding development of documents necessary for that design-build contract to do that work at I-10 and Loop 375. So the department proposes amending the agreement to allow the RMA to use a portion of that $2.2 million to develop procurement documents for the design-build provider, and staff would recommend your approval.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Thanks, Mark.

Agenda item 7(d) will be presented by Brian Ragland and it relates to a funding request by the Central Texas Regional Mobility Authority.

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

This proposed minute order is related to a request for financial assistance submitted by CTRMA related to 290 East project. The proposed minute order grants final approval in the amount of $90 million related to the direct connectors at 183 and 290 and is funded with federal economic stimulus funds. Staff recommends your approval.

MS. DELISI: At this time then I'd like to call up Kevin Nonmacher. Come on up.

MR. NONMACHER: Thank you very much. I'm a resident of some of the communities out there.

MS. DELISI: Excuse me, sir. Can you say your name for the record, please?

MR. NONMACHER: Oh, I'm sorry. My name is Kevin Nonmacher, I'm a licensed Texas real estate agent, and I've lived out in the area for about two years.

I don't know if this is the appropriate forum, but it seems to me that having a tollway in that area is not really in the best interest of the community out there. For the first part, traffic is not as bad to where it should be recommended. There is maybe one or two bottlenecks if you were to look it. I drive it frequently and I've actually talked to the people who are the City of Austin traffic engineers and they have worked with me in the past to try to synchronize the lights better at Springdale and 290 which is the major bottleneck. When they have worked with me, traffic was cut down to half as much and my wait time was half as much. And it seems to me as though that maybe there are other forces at play because they returned the lights to the previous synchronization.

So in the interest of people's economic welfare in that area and in the interest of using money wisely, it seems to me that it might be better to install overpasses in the couple of places that are necessary and it seems to me that the flyovers that are being recommended for the connection to 183 should be done because the access is very, very bad. And if we do want to treat the citizens in the areas that have been in economically disadvantaged areas fairly, we should treat them fairly and give them access to roads that are affordable because if people are going to be asked to pay tolls in an area where they're already having a tough time, they're not going to use this road that we're building and so why would we spend the time.

That's all I have to say. Do you have any questions for me?

MS. DELISI: Have you shared your concerns with our local MPO?

MR. NONMACHER: This is my first meeting. As I said, I've been in the community for just under two years and so this is my first opportunity where I've had to give my opinions. But like I said, I have talked to the traffic engineers that do the synchronization on the lights here in Austin, and when I spoke to them, they said they don't have a system that -- I guess they have some of their systems where they're on cameras where they can actually remotely view what's happening, and so when I mentioned to them -- it took me three phone calls to get responses because it actually people going out there to view what I was saying.

And when they went out there, the wait time heading in in the morning usually is 1.5 miles and it's almost ten minutes to get through the light, it got cut down to about .7 of a mile and only four minutes. So it seems to me if based on my own -- I've been doing this for this entire year, I've been driving this every day and I saw that it could change and be better, wouldn't it be better to use our resources more wisely and maybe just build an overpass in a couple of important positions and to put the flyovers in so that we could access this 290 and connect it to 183 in the most feasible manner possible.

MS. DELISI: Thank you.

MR. NONMACHER: Thank you.

MS. DELISI: Anyone have any questions of Brian?

(No response.)

MS. DELISI: In that case, is there a motion?

MR. HOUGHTON: So moved.

MS. DELISI: How about a second?

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Commissioners, agenda item 8 relates to our Border Colonia Access Program. Wayne Dennis from Transportation Planning and Programming will be presenting this minute order.

MR. DENNIS: For the record, my name is Wayne Dennis. I'm the deputy director of the Transportation Planning and Programming Division.

In 2001 the legislature established $175 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 order approves the reallocation of funds from the third program call within Starr County. Title 43, TAC Section 15.105 provides that a county may use unexpended funds from a project on any other commission-selected county Colonia project. Starr County has requested approval to transfer a portion of their non-competitive funds to other eligible Colonia projects, as shown in Exhibit A to the minute order. Staff recommends approval of Starr County's request.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Thanks, Wayne.

Agenda item 9, Brian Ragland will be presenting a minute order related to some CONSTRUCT authority on some RTR funds from the State Highway 121 project.

MR. RAGLAND: Thanks. Again, Brian Ragland, director of the Finance Division.

This proposed minute order adds two projects in Rockwall County to be funded and placed in the SH 121 RTR work program and authorizes CONSTRUCT authority. The total for these two projects is $31.94 million. And I would also point out that this is the fifth minute order related to the 121 funds, next month we're going to come to you with a minute order that adds some projects but goes back and revises previously approved projects and gives a snapshot of everything that's been done year to date -- or life to date. Staff recommends your approval on this minute order.

MR. MEADOWS: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Continuing with Brian, he will present agenda item 10 related to final approval on a SIB loan.

MR. RAGLAND: This proposed minute order gives final approval of an application submitted by the Dean Water Supply Corporation. They're requesting $180,000 to pay for utility relocations along Loop 49. Staff recommends your approval.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second? Hold on.

MR. RAGLAND: You're not going to ask me where that is, are you?

(General laughter.)

MR. HOLMES: No.

MR. RAGLAND: Thank you.

MR. HOLMES: But what would be the balance in the SIB after this, do you recall?

MR. RAGLAND: As of the beginning of May, the balance was $66 million, so $65- plus.

MS. DELISI: So if the provision in the Sunset Bill passes, these people are going to be coming back to us for part of their cut of the $25 million, potentially?

MR. RAGLAND: Yes. I'm not aware of the specifics on that, but that's what it opens up to, yes.

MS. DELISI: Okay. How much of the SIB has been tapped for stimulus projects, for relo based on stimulus projects?

MR. RAGLAND: I believe this is the first one.

MS. DELISI: This is the first one? Okay.

MR. HOLMES: Second.

MS. DELISI: All right. So I heard a motion and I had a second, so all in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Again with Brian Ragland, agenda item 11 relates to his update on the implementation of recommendations from the recent state audit report.

MR. RAGLAND: Thank you. Again, this is the update on the State Auditor's Office Cash Financial Forecasting and Fund Allocation audit report that was completed, I think, last July or last August. I'm happy to report that we've now completed 14 out of the 18 recommendations and I've just got a few of those to comment on.

Recommendation number 4(a) was that we modify our reports and coordinate with the LBB to ensure that our reports are meeting Rider Number 20(b) in the current General Appropriations Act, and that particular rider required us to submit a revenue report, a variance report for Fund 6 describing reasons for any fluctuations, and expenditure information at the same level as appropriations. We had prior communication from the Legislative Budget Board that advised us that we should use our cash forecast to address this particular rider, so we have continued to do that. This item is now completed. The September cash forecast was converted to an appropriation level format, and the LBB confirmed that with a slight modification and adding historical data to that back to year 2006 that it would meet their needs, and so that was completed and sent to the LBB in March.

The next item is recommendation number 7 which asked us to develop and implement a process to review manual entries into the cash forecast system which would include testing those inputs for accuracy and reviewing any supporting worksheets to ensure staff followed the policies. This item is also complete. We have a new cash forecast system which has many automated processes that detect and eliminate manual entry errors. The new system eliminated the need to create data files manually outside of the program. We now have the ability to import data files that are automatically created from other systems such as FIM, Site Manager, DCIS and USAS, and again, adjustments to projected expenditures of revenue are now handled by the system instead of manually outside of the system.

MR. HOLMES: Brian, do we have a process to where in the future we go back and test to see if the changes we've made actually accomplish the goals that they were designed to accomplish?

MR. RAGLAND: Are you suggesting if we have a way to go back and test our forecasts?

MR. HOLMES: Well, you've got on this particular one policies and procedures to ensure that staff followed polices and procedures of the accuracy of the inputs. Well, how do you go back to check to see if it actually worked?

MR. RAGLAND: Well, we rely on internal controls to do that and then we also have internal audit that is looking at our systems in place as well. As far as going back and testing it --

MR. HOLMES: Would internal audit go back to review the implementation of the State Auditor's recommendations?

MR. RAGLAND: Yes, they certainly could.

MR. HOLMES: And test those, say yes, the fix was actually effective?

MR. RAGLAND: In fact, I would recommend that in advance of the State Auditor coming back. They're obviously going to come back and follow up on this particular audit report, so I would certainly encourage internal audit to do the same.

The last item I was going to comment on is recommendation number 9 which suggested we complete our annual reconciliations of the cash forecast with the Comptroller's Office cash report in a timely manner and resolve any discrepancies that we identify in doing that. Of course, we agreed with that. That has been completed, the cash forecast data for FY 2008 has been reconciled with the Comptroller's system. And that's all I have on this report. Thanks.

MR. RUSSELL: Thanks, Brian.

Agenda item 12, James Bass will be giving the commission a report on the obligation limit and the May and June lettings.

MR. BASS: Good morning. For the record, I am James Bass, chief financial officer at TxDOT.

This has no action required on your part, it's just a monthly update on the obligation limitation for fiscal year 2009. As you will recall, it's the $2.53 billion. We have been experiencing, as you're well aware, underruns on projects as they've gone to letting, and one of the issues is do we backfill with additional projects above and beyond the original letting schedule for 2009, does that savings go to help pay off some of the $285 million currently outstanding short term cash flow debt, and how do we move forward with that. We've been so far limiting the projects let in 2009 to those that were on the original schedule, and in limited circumstances adding projects to that.

Another concern, as we look forward into 2010 and not having a clear picture on what our funding situation is going to be in 2010, we didn't necessarily want additional projects being added at the end of 2009 just because they're simply ready to go. They may not be the highest priority projects of a particular area, but if we have free dollars, we don't necessarily want to utilize them for the next projects that are ready to go as those may or may not be the highest priority, so we're trying to wait to get a better picture of the funding picture going forward.

Just another thing I've routinely done is update where we're at on our motor fuel tax collections fiscal year to date. I believe last month when we visited we were around 3 percent under, we've since gotten the deposit for this month that actually brought the deficit to a smaller amount and we're currently running about 2-1/2 percent behind where we were twelve months ago, so there was a little bit of an up-tick.

If we look at the calendar year traffic counts, in the urban areas the traffic counts are down about almost 1-1/2 percent, but in the rural areas of the state they're basically flat from where they were twelve months prior. So we have that built into our forecast going forward, we believe that we can still afford to do the $2.53 billion this year in overall obligations, and I'd be happy to answer any questions you might have.

MS. DELISI: No questions?

MR. HOUGHTON: Oh, I have a question.

MR. DELISI: That's what I thought.

MR. HOUGHTON: So if you want to do the $2.5- we have the underruns, that means we have additional projects we can pick.

MR. BASS: Correct.

MR. HOUGHTON: Or the MPOs can pick. So do you have a savings by district?

MR. BASS: I don't have it here, I'm sure we have the detail of what the underruns have been by district, I don't have that with me.

MR. HOUGHTON: Would it be logical to apply that savings back to the district from whence it came?

MR. BASS: Yes. I think our plan, if we don't additional projects to 2009 because of the uncertainty of 2010 --

MR. HOUGHTON: Wait a minute. You're going to have to add projects. If this is current projects that are underrun, then they're going to put this money on new projects and obligate it.

MR. BASS: Correct. But the historic approach has been there's $5 left over, I have a $5 project, let's move it forward. Well, if next year -- and using an extreme example -- if I'm going to have no money next year, I might prefer to have that $5 balance from 2009 carry forward to 2010 because my number one project may not be ready until February or March, and if I know that my choice is either the project that's going to be ready in February or March or the one today, as a region, I might choose my number one priority to be that February or March one and we would be hesitant to let them accelerate the project that's ready to go now without full knowledge of if you do that, when that project gets ready in February or March, there may not be funding available to move it forward. And so we've been hesitant to kind of backfill with additional projects until we had a clearer picture of 2010.

MR. HOLMES: This would be something that you would have greater clarity on on June 2?

MR. BASS: June 2. We have better clarity today and every hour that passes we get better clarity. The Appropriations Bill passed out of the Conference Committee Tuesday morning and was posted online Tuesday afternoon, so we're still within a 48-hour window of looking at an over 900-page bill. Now, of course, our initial focus is on TxDOT's bill pattern which is much smaller than 900 pages, but as you're well aware, the State Highway Fund can be intertwined throughout and sometimes in surprising places and locations within that 900 pages, so we've done our initial review and going through a second one, but we have a general preliminary idea of what that situation looks like just here in the last 48 hours. Thank you.

MR. RUSSELL: Commissioners, agenda item 13 will be presented by Thomas Bohuslav. Thomas will have two minute orders dealing with our construction contracts, and we have one registered speaker.

MR. BOHUSLAV: Good morning, commissioners. My name is Thomas Bohuslav, I'm director of the Construction Division.

Item 13(a)(1) is for consideration of award or rejection of Highway Maintenance and Department Building Construction contracts let on May 7 and 8, 2009. We had 33 projects, an average number of bidders of 5.9 per project, 21 percent under, about $10 million under on the letting. We do have a speaker on this item. We do recommend award of all projects.

MS. DELISI: I'd like to call up John Joe, please.

MR. JOE: Good morning, commissioners. My name is John Joe. I'm here representing Beverly Sue Global Services which is one of the companies that was awarded the low bid on project number 615763001. In the preparation of our bid, we noticed that we did make a bid error in an omission of a material piece of equipment. Once we figured out this mistake that we had made, we notified TxDOT to request withdrawal of our bid based on bid error which, of course, was denied.

In preparation of our bid -- and I brought a little information here -- we did do a site survey just to review the existing contractor to see how he was doing the job, we also called in a firm in Fort Worth that does litter removal, not debris but litter removal, to better understand the business. This is, of course, our initial bid with TxDOT as we're a new contractor with TxDOT and we made an error.

Why we're here today, of course, our desire is to appeal to the commission to consider withdrawal of our bid based on bid error. Since this is our initial bid with TxDOT, initial opportunity, we would want to make sure that the job we did was a good job and met the requirements by the state.

I'll be happy to answer any questions, but that's the extent of my statement.

MR. MEADOWS: Thomas, I have a question. What has historically been the definition of bid error?

MR. BOHUSLAV: We have some criteria that we go through to review these requests. They have to send us a letter within five days of the letting -- and they have done so -- and we review that. One of the criteria is the definition of bid error is a mathematical error, and we do not feel this meets that definition as a mathematical error, therefore, we recommended award.

MS. DELISI: I'm sorry, Thomas. So if we award, what's the next step for the contractor?

MR. BOHUSLAV: Well, they'll have a choice to go ahead and execute the contract; if they fail to execute the contract, then we would take their bid check, the bid check amount being $11,000.

MR. HOUGHTON: And this is their initial bid?

MR. BOHUSLAV: This is their initial bid, based on their statements.

MS. DELISI: Are there any other questions?

MR. HOLMES: What was the error?

MR. BOHUSLAV: Their bid was about $235,000 and their statement is that they failed to include a truck attenuator in each of the line items for the bid and it was about $150,000 difference in what they feel they should have bid. The next bidder on the job was about $313,000 and then the next bidder -- actually, the estimate was about $530-something thousand, I believe -- $535-, yes.

MR. HOLMES: But we don't define it as an error if a material part of the job quote has been left off the bid, it's only if it's added up incorrectly?

MR. BOHUSLAV: If they transpose numbers, the way we have historically interpreted it is if they have transposed numbers, mis-added some numbers, if they forgot to write down thousand when they wrote down their bid prices, something to that effect, that would be the case. There's also a case of the evaluation criteria includes consideration of whether or not they used reasonable care in submitting their bid.

MR. HOUGHTON: $535- was the estimate, $313- was the closest.

MR. BOHUSLAV: The second closest bidder, yes, sir.

MR. HOUGHTON: And what was their bid?

MR. BOHUSLAV: $235-.

MR. HOUGHTON: So greater than half is what we awarded it on, so we felt comfortable by accepting that bid?

MR. BOHUSLAV: In regard to accepting low bids, if the bids were --

MR. HOUGHTON: I mean, I've seen you throw out low bids, they say that's just too low, we don't believe it.

MR. BOHUSLAV: We've not ever thrown out a low bid because it's too low that I know of.

MR. HOUGHTON: Really, none?

MR. BOHUSLAV: I do not recall ever doing that.

MR. HOUGHTON: Okay.

MS. DELISI: Do we have to take an action on this particular one this month, could we defer this a month?

MR. BOHUSLAV: Yes, you can defer it, and it's within the commission's authority to not award and to reject as well.

MS. DELISI: Or defer and come back in a month?

MR. BOHUSLAV: Or defer and come back.

MR. HOUGHTON: On this one.

MS. DELISI: On this one.

MR. HOUGHTON: Or the whole thing?

MR. BOHUSLAV: This one, you can select this one here and defer.

MR. HOUGHTON: I feel lost without my general counsel.

MS. DELISI: I know. I bet there's a lawyer in the room somewhere, though.

MR. HOUGHTON: Where?

MS. DELISI: Right back there.

MR. HOUGHTON: Oh, there you go. I knew they were in the room. So we can, in fact, do that.

MR. BOHUSLAV: You can defer on this one.

MR. HOUGHTON: I'm in a quandary about this. I thought it was pretty cut and clear, but I'm kind of in a quandary, Madame Chair.

MS. DELISI: Well, what we could do is defer for a month.

MR. HOUGHTON: I'd like to defer.

MR. MEADOWS: Is that a motion?

MR. HOUGHTON: Yes.

MS. DELISI: I second the motion.

MS. DELISI: Wait, hold on. Are you going to play lawyer?

MR. BARTON: No, I'm not.

MS. DELISI: We play engineer.

(General laughter.)

MR. BARTON: I was going to say on behalf of the administrative staff, if you're unclear on what your action should be, I would recommend that you do consider deferral because I would prefer you make a decision later after you've been better educated and informed than to make one in haste.

MR. HOUGHTON: Well, am I prejudicing myself, Counsel, if I say certain things here?

MS. PARKER: Angie Parker with the General Counsel's office.

MR. HOUGHTON: You're better looking than Bob Jackson.

MS. PARKER: Thank you.

MR. HOUGHTON: And that's not a sexist thing.

MS. DELISI: Oh, my gosh.

(General laughter.)

MS. PARKER: You may want to defer this so you can obtain some more information between now and the next commission meeting if you'd like to take the opportunity to as staff to provide you with some more documentation that you can review in the meantime.

MS. DELISI: Okay.

MR. HOUGHTON: There's a motion.

MS. DELISI: Well, let's be clear on the motion. Is there a motion to defer this one particular contract award?

MR. HOUGHTON: Yes, Madame Chair.

MS. DELISI: Is that clear enough for the lawyers? Yes? Okay. Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: all in favor of that one particular motion please say aye.

(A chorus of ayes.)

MS. DELISI: That one motion passes. So I guess there has to be a second motion on the award of the other contracts.

MR. HOUGHTON: Move to approve.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes. So staff will work with us to get more information on this one particular bid.

MR. RUSSELL: Absolutely.

MS. DELISI: Do you understand? Basically we're going to defer for a month and we'll make a decision next month once we get more information.

MR. JOE: Thank you.

MS. DELISI: Thanks.

MR. RUSSELL: Okay, commissioners, agenda item 14 are the routine minute orders --

MS. DELISI: No, we've got to do (2).

MR. BOHUSLAV: Hold on just a second.

MR. RUSSELL: Oh, I'm sorry, I thought you already got that. Thomas, I was trying to hurry you along. I'm sorry.

MR. BOHUSLAV: Item 13(a)(2) is for consideration of award or rejection of Highway and Transportation Enhancement Building Construction contracts let on May 7 and 8, 2009. We had 31 projects, we had an average of almost eight bidders per project; the overall underrun was 20 percent, there are projects for about 18 percent under. Staff recommends award of all projects in the exhibit. Any questions?

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BOHUSLAV: Just a note here about Highway Cost Index, we look at estimates and underruns every month. Our Highway Cost Index is down, ever since December we're down about a little over 8 percent, I think, as far as the twelve-month moving average which actually lags with what the trend might be because it's an average of twelve months. The three-month moving average which is a little more current is actually back from September, where our peak was on the three-month moving average, is down almost 25 percent, so we're seeing significant lower prices. And that's different then the underruns, it's an index.

MR. HOLMES: Thomas, the three-month moving average would, in effect, roll back pricing to what: '04, '05?

MR. BOHUSLAV: Well, the three-month moving average is essentially this month, the previous month and the month before.

MR. HOLMES: Yes, right.

MR. BOHUSLAV: So when you take it, you look at three months is what you look at. But we maintain a three-month moving average going back to since we started the Highway Cost Index in the '70s.

MR. HOLMES: But I mean the current three-month moving average, if you look at that as it relates to the Highway Cost Index, at what point in time was the Highway Cost Index not on a three-month moving average but on a twelve-month moving average equal to the same number? Are we in '06 pricing or '05 pricing, where are we on that?

MR. BOHUSLAV: We're not that far back. If we go back to November of 2007, somewhere in that time frame, maybe between there and 2008, not that far away.

MR. HOLMES: And so the inflation that occurred from 2000 to 2007 is still embedded in the numbers that we're seeing today, it's just the most recent runup.

MR. BOHUSLAV: Right. Last year we had a pretty good runup through the summer, our prices really went on up, asphalt, fuel were really high, so we really had another runup then, so we're getting back to prior to that last year.

MR. RUSSELL: Thomas, we had a 62 percent increase in prices, wasn't that the number?

MR. BOHUSLAV: That's kind of the number that we use a lot, between 2000 to 2006 or so, that's a number that we use a lot, yes.

MS. DELISI: Thank you.

MR. RUSSELL: Now, commissioners, agenda item 14, our routine minute orders, donations to the department, eminent domain proceedings, highway designations, load zones and postings, right of way dispositions and donations, speed zones. Are there any specific questions that you all might have?

MS. DELISI: No. In that case, is there a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

(A chorus of ayes.)

MS. DELISI: The motion passes.

This completes all of the items on the posted agenda. Is there a need for an executive session?

MR. RUSSELL: No, ma'am, I'm not aware of that.

MS. DELISI: All right. In that case, we'll enter into the open comment period and we have one person signed up to speak, so at this time I'd like to call Mark Wallace.

MR. WALLACE: Good morning. My name is Mark Wallace. Bear with me; this is a very important issue for me.

I am a professional engineer licensed in the State of Texas, and for ten years, until March of this year, I was a self-employed subcontractor doing bridge inspections for TxDOT. I'm here today to talk about the TxDOT employee ethics policy, specifically that part which states that no TxDOT employee may have a direct or indirect interest in a TxDOT project. I understand the intent of this policy, but I feel that as it relates to me, it is completely unfair.

My wife has almost 21 years of TxDOT service and is four years away from retirement. I, myself, was a TxDOT employee for nine years, almost nine years, and I've been working on bridge inspections for ten. Neither of us knew that this policy existed until my wife attended a training class in March and learned that we might be in violation of this policy. I think that was mentioned in item 2(b) earlier. She had no hesitation in talking to TxDOT's attorneys because she knew we had done nothing wrong and thought that once TxDOT understood our situation, they would come to the same conclusion. Unfortunately, she was mistaken.

We weren't alone in our ignorance of this policy and its implications. More than 200-some-odd TxDOT employees that we know personally and professional from our time in the department knew of my work, knew that Sandra and I were married, and apparently none of them felt that this policy applied to us. This policy has been in place since '98, one version or another, and we've been married since 2005. They knew there was not even the possibility for impropriety in our case. My wife schedules new highway construction projects; I inspect existing bridges. The two have nothing to do with each other. They're miles apart.

For us this policy has really become a bureaucratic nightmare. Since my wife works for TxDOT, I can do no work on TxDOT projects as a sole proprietor, bridge inspection or anything else. I have effectively been run out of business by this policy. This is in spite of the fact that I have absolutely no contractual relationship with TxDOT whatsoever. My wife's position has no possibility of influencing any work I might get. Since I was a sub-provider, or if you prefer the term subcontractor, TxDOT itself has no say in whether I get work, and if I do get any work, no say in what I'm compensated for that work.

In the last three months my financial world has been turned upside down. The business I spent ten years building has been taken away from me. Bridge inspection is what I know. It's what I've been doing for 17 years, and in the inspection world, TxDOT is the only game in town.

I have found employment with another company doing the very exact same work, getting paid out of the exact same pot of money, except my take-home pay has been reduced by about 40 percent, and what's even worse is since my business has no income, I cannot contribute to the retirement accounts I have set up through my business.

The only reason that we're being affected is because my wife was honest and forthright and offered up this information. Others are skirting this policy by keeping their mouths shut because there is no true active investigation into looking for violators of this policy. I believe the Finance Division does a record search for addresses to compare the addresses of prime contractors to TxDOT employees; they don't even look for subcontractor addresses -- which is how we stayed under the radar, I suppose, since we married in 2005 because I work out of home -- addresses are the same.

I would like to see this policy rewritten, not to weaken it but to protect people like my wife and myself. TxDOT's legal resources can be used to evaluate each situation on a case-by-case basis, then make a reasonable, common sense judgment as to whether or not there's the possibility of impropriety as opposed to putting out a blanket statement and ruling out an entire class of people.

Since there never has been, never will be any impropriety on our part or even the appearance of impropriety by any reasonable judgment, I feel that I'm being discriminated against simply for being married to a TxDOT employee. I know this is not your intent, yet you are the only ones who can rectify this situation. I urge you to put yourselves in my position and let fairness override a badly written, unfair policy. Thank you.

MS. DELISI: Thank you, Mr. Wallace.

Is there any other business to come before the commission? There being none, I will entertain a motion to adjourn.

MR. HOLMES: So moved.

MS. DELISI: Is there a second?

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Please note for the record that it is 11:53 a.m. and this meeting stands adjourned.

(Whereupon, at 11:53 a.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission

LOCATION: Austin, Texas

DATE: May 28, 2009

I do hereby certify that the foregoing pages, numbers 1 through 142, 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.

 

 

 

6/01/2009

(Transcriber) (Date)

On the Record Reporting, Inc.

3307 Northland, Suite 315

Austin, Texas 78731