Texas Department of Transportation Workshop Meeting
Ric Williamson Hearing Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483
Wednesday, February 24, 2010
Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
Amadeo Saenz, Executive Director
Steve Simmons, Deputy Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director
MS. DELISI: Good afternoon. It is 2:26 p.m., and I call this 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 4:01 p.m. on February 16, 2010.
Before we begin, please take a moment to place your cell phones in the silent mode.
Today's meeting will involve a series of discussions on various topics currently before the department and the commission. We will accept public comment that is relevant to the posted agenda items but we will not have an open comment period. To comment on one of the posted agenda items, please complete a yellow speaker's card which you can find at the registration table in the lobby. We'll limit each speaker to three minutes.
With that, Amadeo, I will turn the meeting over to you.
MR. SAENZ: Thank you, Madam Chair.
The first item on today's agenda is our regular update from Grant Thornton, updating us on the status of the ongoing organizational and management review. George Ebert, who is director of our Human Resource Division and our liaison with Grant Thornton, will introduce the item.
MR. EBERT: Good afternoon, Madam Chair, commissioners, Mr. Saenz. For the record, I'm George Ebert, TxDOT's director of Human Resources and the department's liaison with Grant Thornton for the management and organizational review. I'm here today to introduce Anna Danneger, the director for state and local government practices at Grant Thornton, who will give you an update on the project.
If you have no questions for me, I'll turn it over to Anna.
MS. DANNEGER: Thank you. Good afternoon, Chair Delisi, commissioners, and Mr. Saenz. For the record, my name is Anna Danneger and today I'm representing Grant Thornton.
I'd like to provide you a brief update on where we are with the management and organizational review. We continue to make progress towards completing our task of making recommendations around TxDOT's organizational structure and staffing; focusing on the management levels of the organization -- that's the administration, the district, division, office and region levels -- making recommendations to further the transparency, accountability and communications of the organization; making recommendations to further efficiency through diagnostic reviews of the following business processes or practices; accounting operations, otherwise known as finance; communications; human resources; information technology as it supports the rest of TxDOT; planning; designing -- that's the design process -- including the coordination between headquarters and the field.
It is not the engineering component of the design process, the build process, construction management process, again, not the engineering component of that process but the management process and contracting, procurement and purchasing.
In addition, we're reviewing TxDOT's use of the DBE/HUB or Disadvantaged Business Enterprises and the Historically Underutilized Businesses programs, and we're completing a compensation study which will look at 38 representative positions within the organization.
As part of our data gathering and analysis efforts in support of these activities, we've been requesting and reviewing government-furnished information, requesting and conducting meetings with individuals and groups of TxDOT personnel and with members of the House and Senate Transportation Committees.
I should mention that of the 16 additional members of the House and Senate Transportation Committees that we were looking to meet with since the December time frame, only nine of those meetings have either taken place or been scheduled. We've had really quite a bit of difficulty in getting many of those meetings calendared. We have reached out numerous times to all of the legislators. Our timeline for completing these interviews was meant to end on Friday of this week at the end of February; however, given the importance of these stakeholders and this study input, we have extended our timeline for conducting these interviews. We will be approaching a timeline when we can't continue to extend that deadline, however.
MR. UNDERWOOD: Anna, may I interrupt you a moment?
MS. DANNEGER: Absolutely.
MR. UNDERWOOD: Have we notified the people, the legislators, that we're trying to meet with that we do have a deadline, or are you just trying to say I'd like to meet with you?
MS. DANNEGER: When we reached out to them in January, we let them know that our deadline was no later than the end of February.
MR. UNDERWOOD: And still had no response then?
MS. DANNEGER: We've had a number of conversations with each of them but we still have seven as yet uncalendared.
MR. UNDERWOOD: Okay. Thank you.
MS. DANNEGER: We've also been requesting and conducting interviews with approximately a dozen HUB and DBE organizations or organizational representatives. Our intent there is to meet with a mix of chambers of commerce, business organizations and small and large businesses. Here again we've had significant difficulty in getting meetings scheduled and conducted. In the last week alone we've had four small businesses cancel meetings with us the day that the meeting was to occur, so again, that was sort of a surprising scheduling issue that we've run into.
On the topic of meetings that we're conducting, in light of the fact that the new Select Committee on Transportation Funding has been appointed, the commission's subcommittee on transparency has asked that we reach out with the nine committee members who are not on the House Transportation Committee to determine if they'd like to provide any input to our study.
We recognize that there's not a direct overlap between the mission of that committee and our study, insomuch as we are not reviewing funding strategies. But given these legislators' new roles, the subcommittee felt that they should be contacted. We've sent messages to all nine of those new committee members requesting meetings to receive their input to our study.
Given the difficulty in scheduling some of our key stakeholder meetings and the plan for the April commission meeting to be held in Beaumont, we've been asked to delay the presentation of our final report and will continue to work with you, the commission, to finalize our timeline and the report's rollout strategy.
MR. HOUGHTON: You didn't want to go to Beaumont?
MS. DANNEGER: I'd be happy to be there, sir. My understanding is there is no way to broadcast the meeting real time from Beaumont.
MR. HOUGHTON: Oh, is that the reason?
MS. DANNEGER: I believe that's the case.
MR. HOUGHTON: Oh, okay, I just wanted to make sure.
MS. DANNEGER: That concludes my remarks.
If there are any questions, I'd be happy to answer them. Thank you.
MS. DELISI: Thanks, Anna.
MR. SAENZ: Thank you, Anna. Thank you, George.
Agenda item number 2, Mary Meyland will present another discussion item dealing with our 2009 results of our performance measures that we want to be able to start rolling out on our internet.
MS. MEYLAND: Good afternoon. My name is Mary Meyland. I'm currently your director of Strategic Policy and Performance Management. And we are here and proud to be returning to you again to debut the agency's draft performance report. This report includes our existing Appropriations Act performance measures and the new HB Conference Committee performance expectations. The performance measures are grouped to support the attainment of our current FY '09 to '13 Strategic Plan goals.
As a reminder, we will be back in front of you next month to finalize the new Strategic Plan goals and performance targets. We do expect this current list of measures that we're going to show to you today to mature through this new process. So just to let you know that the measures you're going to see today, and you have nothing in your book because we're going to show you a demonstration of the actual website, are actually the measures that we are already reporting on as required by the Appropriations Act or those that have been requested through the process of the HB 300 Conference Committee report.
We have chosen to introduce the report to you through our new performance website. Mr. James Pennington, who is here with me today representing TSD, has been the sole architect of this site. I'm going to ask Tonia to go ahead and pass out to you now, so that you can follow us as we go through the actual site itself, the current screen shots of this new website.
Our new TxDOT Tracker Performance report is very similar to the very successful Washington DOT Grade Notebook and they call their performance report a Dashboard, and I just wanted to show you that it looks very similar and you can find this very similar format on the Washington DOT website. Their Dashboard has been successful and it has been deemed one of the reasons they've been able to attain two successful tax increases since 2003 and 2005, so we know it's time-tested and the public has responded very well to their Dashboard.
Our public view of the tracker has been designed to provide the user with an overview of the agency's strategic policies that you'll see highlighted at the top of each one of the goal sets. It will also show you how we measure our performance by defining each one of the measures on this front page, and it also tells you how we are determining our success by showing you last reporting period which is usually an annual assessment. The current reporting period for this report is our FY '09 performance, and our targets.
We are only reporting targets if we actually have one that has been established through our TxDOT administrative process, or even more importantly, the targets that were approved in the Appropriations Act. So those targets are either those that have been through our executive administration or the ones that have been approved in state law, and we've noted that in the comments sheet.
And as you look at this, look at it with the eyes of the public. We've taken the opportunity to kind of vet this through many, and just yesterday we sat with your assistants. We gave them their chance at it and we responded to their comments and they were very good, and we want to make sure this is clean and doesn't cause any more concern or more question than it provides answers to. I did provide them a full book of all the measures and this report page so that you could get your questions and your issues addressed through your assistants, and they'll be glad to get back with us before we get ready to take this public.
So with that introduction made, I did want to mention for our executives -- I've been working with Amadeo and Steve to do a little bit more robust copy of this front page that will provide a little bit more sampling of statistical basis to make our managers a little bit more aware of how the performance is trending, and it's more color-coded.
We have opted to not do this publicly because there is a requirement on the ADA side of public websites that we don't transmit messages through color. So this is the opportunity for us to do something internally which is exactly the same information that we're doing publicly but the internal one gives us a little bit more of a gauge.
So with that being said, I'd like to introduce James and I want to take you across the top. You'll see what we're trying to provide for you is our performance measures in the far left, and you'll see again, those measures are the ones that we've pulled out of the current Appropriations Act and ones that have been chosen by Amadeo, and we've also been able to vet through, off of the HB 300 Sunset law that never passed, performance measures so that we're at least trying to tell the story as it's been requested of us.
We're showing you our previous reporting period, our current reporting period, and we're giving you a little indication of our progress with an arrow. Simple, it's either up/down or it's indifferent because we haven't made any change. You'll notice in some columns they're still blank; those are new measures that we're currently trying to fill in. And there are others where we have N/As. That means there is no target, either in law or at the administrative level currently -- doesn't mean we won't have one, and if there is no target, we decided not to indicate any progress even though intuitively some of the congestion measures that we're using later on in this report will show you that it looks like progress is good. But we're not making that assessment; we're not making those types of inferences in this report. There's no reason to set yourself up as a target if you don't need to.
So with that, I would like for James to show you what he's done. Under each one of these we understand the public is pretty much only going to look at this page, but there are those who would like to see how we actually calculated this and how we've done in the past. So there's a detailed report under each one those measures that are highlighted in the colors, and that report will tell you how we calculate it, what the results mean and what we're doing about it.
Each one of those reports has been created by what we're terming as a measure driver, and those are individuals at the division or office level who are absolutely responsible for the data that is contained within this report. This has been quite a process because we really haven't had this level of accountability underneath all of our performance measures to date, and I will say it's proving some results here.
So James, if you will show them. As you go down each one of these you actually tab on it and it will open up a new window that gives you the actual report which is about 80 pages worth of reports here that the public can see.
MR. PENNINGTON: I'm going to try this. This is a first for me to use a monitor up on a big screen.
The first measure that I clicked on was the construction performance measure. It's a dual measure; you're seeing both on-time/on-budget. We will show a graph here on it to show you how we're doing: items within green are within 10 percent of awarded contract time, over here on budget within 10 percent of contract amount. From this we also have the ability to drill down into the data and actually see the data that makes up the chart out here.
Down below is what Mary was talking about where we identify part of what we talked about was really the public or administration wanting to see the graphs first, read the words second, so every one of these measures has the graph right off the bat up front. Then we go down; you're seeing the purpose of the measures, what data will be measured within each report. Like I said, this is a dual measurement page so we have it split out by on-time/on-budget. As you go through each one of these categories has it broken out. You have the recent performance results and what they mean, and going further, as Mary said, how TxDOT is responding and what our final forecast is.
Mary also mentioned to begin with, and I'll scroll back up, the drivers. On each page up in the upper right-hand corner, you'll see who the result-driver is and who the measure-driver is. Also, you'll see the date when this measure was last updated.
Just to give you a little bit of flavor for the various reports, another report we'll go into, we use bar charts as well. Same concept, you'll always see your charts up at the top. You'll be able to hover over and actually see the values when we're not showing them up at the top. Some of the other measures that we have and that we will be including later on this week, bridge conditions is a good example.
This was a measure that we had spread out from fiscal years 2005 through 2009, so when the public comes in, they're going to see that roll-up, if you will, for bridge conditions, but they'll also be able to select a drop-down list and pick, for example, fiscal year 2007. Again, they can mouse over, point and see the measures for that particular month within that fiscal year.
And with that, I'll turn it back over to Mary, unless you wanted to look at any other measures. Thank you.
MS. MEYLAND: We really appreciate James's effort in this. This is the first time we've ever done anything for a public view; he's done it once before many years ago for an internal management system. Like I said, this is our very debut. You're getting a chance to see it first. The only other people that have had the chance to even look at it are Amadeo and Steve. So we really appreciate any comments/concerns that you may have. Again, we did not select the measures; they are pretty much the ones we're using and the ones that have been requested from across the street.
We are in a position, we believe, within the end of the week, in the next two weeks, to publish the final report which we will call TxDOT Results. It will be an annual report of performance that we do every year. We're a little behind the curve this year because we're getting started; we hope to do this by December of every year or January, at the latest, of every fiscal year, and then we will go live with this as early as the first of March. And with that, questions?
MR. UNDERWOOD: Mary, quick question, please.
MS. MEYLAND: Yes, sir.
MR. UNDERWOOD: You said that you had to use a solid color or one color for the ADA and whatnot. Would it be bad to be able to have it where people could also see the colored version. They could just click on a particular when they first go online, say do you want the ADA version or do you want the colored version?
MS. MEYLAND: That's a possibility, yes, sir. The problem becomes one of inferences. We can do red and green; it's either on-target or off-target. It becomes an issue of being able to define that yellow area which most people use and typically those that have been successful in defining that yellow area uses gauges for each one of their measure points so that you can show where the green and the red is and where the yellow is. I'm not saying it's not possible but we could do that if that's something you would like to see on the public version.
MR. UNDERWOOD: I'm just asking the question and whatnot. Not everybody is going to need to go to the ADA page, yet it would look a little bit jazzier when you have all the multicolor, so to speak.
MS. MEYLAND: It does.
MR. UNDERWOOD: It gets your attention is what I'm getting at.
MS. MEYLAND: It really gets your attention, and I'm afraid to tell you, but most everything is red on our sheet, as you can see.
MR. UNDERWOOD: Right. I wasn't going to bring that up.
MS. MEYLAND: Okay, I just wanted to let you know. But very good comment, thank you.
Any other questions for me?
MR. SAENZ: Thank you, Mary. Thank you, James.
MS. MEYLAND: Appreciate it. Thank you.
MR. SAENZ: You know, commissioners, this is kind of our beginning to be able to track how we're doing. We're using it based on what measures have been in the past through the legislative process. I think as we go through with our new strategic plan and we identify those performance measures and measures that come out of the legislature out of Sunset, we'll be able to really expand on this thing to show the public how TxDOT is really operating. We've got to get those reds to greens also.
The next item, John Barton is going to lead a group of people to lead us in a discussion item dealing with the federal economic stimulus program.
MR. BARTON: Thank you, Mr. Saenz. My name is John Barton, your assistant executive director for Engineering Operations. And Madam Chair and commissioners, this afternoon we have the opportunity to share with you some information about the potential Stimulus II package, if you will.
As you know, we are very near the one-year anniversary, or excuse me, the wrap-up of the first year of the American Recovery and Reinvestment Act, and in the throes of all of this, we are now, as you know, looking at potential action by Congress to provide for a new jobs creation bill which many have referred to as a second economic stimulus package. Myself and Mr. Chase will be available to try to help answer questions after a brief presentation by a couple of gentlemen who have been helping us prepare for the potential for this reality, and we wanted to brief the commission today on what is out there, what might be coming forward for us, and how we're preparing your agency to get ready for this opportunity.
The two gentlemen are Mr. Mario Medina, who is your district engineer in the San Antonio District, and Mr. Randy Redmond, who is your district engineer in the Beaumont District. They, along with your district engineer from Pharr, Mr. Mario Jorge, have been working very hard with our district engineers from across the state and our metropolitan planning organizations to evaluate our potentials for responding to the jobs creation bill and were asked to do so under the leadership of Mr. David Casteel, your assistant executive director for Field Operations.
So at this time, I would like to ask Mr. Medina and Mr. Redmond to give you a briefing on the bills that are out there and our preparations for potential responses for those, and then we'll be happy to answer any questions that you might have.
MR. MEDINA: Commissioners, I appreciate the opportunity to be here. Just for the record, I'm Mario Medina, the San Antonio District engineer, and Randy Redmond is next to me. And thank you, John.
Let me go ahead and start off with the House Bill which is the Jobs for Main Street Act. The House Bill is a financial duplication of the American Recovery and Reinvestment Act. TxDOT's share if it passed or became law would be approximately $2.25 billion in funds. The main difference between ARRA and the Jobs for Main Street Act is in the contractual time frames: the Jobs for Main Street bill requires 50 percent of the funds to be under contract within 90 days; ARRA required that we have obligation within 120 days which is a substantial difference.
If we went ahead and the House bill became law, say in March, we would have to go ahead and move forward with about $1.1 billion between March and May 2010, and have it all under contract by March of 2011. Now, the Senate has recently, this morning actually, passed an amendment to the House bill by Senator Reid. This bill actually is an extension, really pretty much handles an extension of the existing Transportation Act. It's important because it expires next week, so this would take it out to December 31. It does provide funding at pre-rescission levels but it does not provide any economic stimulus funding.
Now, back in December we went ahead and put a team together, Randy Redmond and myself, and started querying the districts for projects that could be available to go to contract within these time frames. The districts provided this under several categories, preservation, mobility, rural mobility which we call Super 2, bridges, safety, and our other category. We have over 2,000 projects submitted and we further, under each category, tried to identify the projects that could be under contract within the first 90 days.
Here's how the 2,000 projects are distributed between the respective categories. Our total estimated cost is over $8.2 billion. We have a very large selection of unfunded projects that we could utilize in developing a second economic stimulus program.
Now, that $8.2 billion, the department can go ahead and have ready to go between now and May 31, about $2.2 billion worth of work. This is almost equal to the total possible funding proposed in the House bill. Over half of these projects will be in pavement preservation. Now, as we go ahead and move forward and have additional time, we would have additional projects shovel-ready.
The following slide kind of illustrates the regional distribution of these projects and where they stand, between the East, North, South and West. And then my next slide here goes ahead and shows the distribution between urban versus rural, and as you can see, about 70 percent of our project funds would be in the urban area; the other 30 would be in the rural.
Now, commissioners, our potential project list can meet early contractual requirements. It can provide a fine geographical distribution and provide an excellent split between our urban and rural areas of the state. Now, these are all important because they are requirements in the proposed House bill.
Now at this point in time I'd like to hand it over to Mr. Redmond to go ahead and discuss the project ranking.
MR. UNDERWOOD: Mario, quick question.
MR. MEDINA: Yes, sir.
MR. UNDERWOOD: Just looking at the pavement preservation, it looks like it's about the same whether it be rural or urban -- isn't that correct? -- on that graph?
MR. MEDINA: Yes, sir.
MR. UNDERWOOD: That's basically because in our rural areas all we really want to do is preserve what we have. Isn't that basically the bottom line?
MR. MEDINA: Well, sir, yes, sir. But in the urban areas we do have to go ahead and take care of our pavement preservation in those areas too.
MR. UNDERWOOD: No, I understand that. I'm just saying that the amounts are about the same if you look at the size of the graphs. They have less, so to speak, to preserve, or whatnot; they have bigger needs than mobility.
MR. MEDINA: I'm sure if we looked at it on the rural side, we would see more of lane miles being done in the rural areas than you would have in the urban.
MR. UNDERWOOD: Right. Thank you.
MR. HOUGHTON: I have a more philosophical question, Coby. What you talked about, Mario, is the Senate approved something today?
MR. MEDINA: Yes, sir.
MR. HOUGHTON: And it does not identify stimulus. There is no stimulus, but it says to pre-rescission. What does that mean?
MR. CHASE: For the record, Coby Chase, TxDOT.
When the Senate received the Main Street bill, they stripped out the stimulus funding and kept in the extension of SAFETEA-LU, and as part of that discussion, the extension of SAFETEA-LU in the Senate version extends the current law through December 31, so we don't have any more, at least through December 31, any more of these short-term extensions. Right now as the money is doled out, or the contract authority, obligation authority, in the short-term extensions it's based on the last year's SAFETEA-LU after they calculated the rescission.
What the Senate version of the bill does says you will distribute funds based on the last year of SAFETEA-LU throughout the year based on funding before the rescission, so actually it's a better thing. It's not in any way related to stimulus any longer. They've stripped out stimulus; they're going to deal with that in a separate piece of legislation.
MR. HOUGHTON: So stimulus is going to be?
MR. CHASE: House version has stimulus in it, Senate version doesn't. It's generally thought, at any rate, that the stimulus stuff will be kept out of this bill and dealt with in separate legislation.
MR. HOUGHTON: So you believe there will be separate legislation talking about stimulus.
MR. CHASE: Yes.
MR. HOUGHTON: And we don't know what that is yet.
MR. CHASE: No. If you remember the drama over the last week or so, Senator Reid has said he's going to satellite out all these different pieces of legislation and treat them separately.
MR. HOUGHTON: So this is like grabbing air is what we're doing here today.
MR. CHASE: Excuse me?
MR. HOUGHTON: This is like grabbing at air.
MR. CHASE: Oh, grabbing at air. I'm sorry. I wasn't sure what I heard there.
MR. CHASE: This is preparation in case they do pass a bill.
MR. HOUGHTON: But we don't know what stimulus could be. It could be $2.5-; it could be $100-; it could be more.
MR. CHASE: It could be less. The original discussion in the Senate was substantially 30 percent less.
MR. HOUGHTON: It could be 90 days; it could be 120 days; it could be anything in the world. Right?
MR. CHASE: Right. But what these gentlemen are doing is preparing for the best case money scenario with the worst case spending it scenario.
MR. HOUGHTON: I understand that, but understand the realities of life that we don't know.
MR. CHASE: Right. They're still figuring out if they want to have a stimulus bill in the Senate. And I believe one will be introduced. I have no fear of that.
MR. HOUGHTON: We don't know when, though.
MR. CHASE: No, sir.
MR. HOUGHTON: Or they may not introduce anything.
MR. CHASE: That's possible, but I believe they will. And they could go back to the House version in conference. I say it seems unlikely; no one seems to think at this point that they will do that. There's a bigger fight brewing right now in this conference. And there are a number of things. Some are House rules about pay/go and things that we, as a DOT, can't do anything about. But you have to read the bill twice to understand what the Senate did in extending SAFETEA-LU. And we're still peeling this apart, but I'm not convinced we know 90 percent of the story.
If you don't mind me talking about this for a second -- if you remember in SAFETEA-LU, when it was in conference and the final bill came out, there was a surprising list of earmarks in that bill. One was the Bridge to Nowhere which doesn't exist any longer.
MR. HOUGHTON: Fun to beat up on.
MR. CHASE: Right, and they called it above the line, and everybody had to pay for everybody else's earmarks. And there were two programs that were heavily earmarked. One was the one that had the Bridge to Nowhere, the programs of national and regional significance, and the National Corridor something-something-something program. You add all that money up. Maybe if you look at it exactly right, Texas saw $8- to $9 million. I don't think we did. But it was, Mr. Saenz, that $50 million I-69 earmark that had to be split among five states?
MR. SAENZ: Yes.
MR. CHASE: All right. So what the Senate version of that bill does, it takes that $950-plus-or-minus million in earmarks and says we're going to take that money and put into the formula program, but your proportion of that is depending on how much you got in earmarks in the first place. So all Texas would see would be between $2- and $8 million. They'd just push it through the formula. California would see $280-some-odd million. So what the Senate did is they took the earmarks in the same proportions, push them through the formula, and the state DOTs get the money that was. We're not any worse off.
MR. HOUGHTON: This is like TIGER grant, isn't it?
MR. CHASE: Hold on. There's a TIGER II to this or III. What Oberstar has done in his version of the bill, he takes that same money -- and remember Texas's exposure on this is looking like about $2- to $8 million, probably closer to $2-, takes it, sends it to US DOT and says basically do another TIGER program.
MR. HOUGHTON: Oh, goodie.
MR. CHASE: Yes, but, I mean, look at the gamble, $2 million, that's budget dust, I mean, at the federal level. And at least with TIGER we got 2.86 percent of the funding and under these other programs we got much less than 1 percent of the funding. So the question becomes do you put your money into a program that US DOT is going to award money through, or do you just let California and Illinois and a handful of other states who got insane amounts of money through earmarking get to go home with their earmarked funds through formula programs. That's the question before us.
And our delegation is asking -- Oberstar is pushing really hard for his version. Those are the only two versions on the planet that are in play. I would suggest that the Oberstar version is better in this case, not that we're big fans of turning over discretionary funds, but I don't know that they're going to -- if they would just pick it up and shove it off through the formulas is what we would really prefer. But barring that reality or that choice, I would go with the Oberstar program, personally, unless I've missed a huge detail in all of this. And so our delegation is calling us a lot, as of last night and this morning, asking our opinion on that. Thank you.
MR. MEDINA: Randy.
MR. REDMOND: Commissioners, for the record, my name is Randy Redmond. I'm the district engineer for the Beaumont District, and I'm looking forward to you coming out to Beaumont in April. Although Grant Thornton doesn't necessarily want to come to Beaumont, I can't understand. We do have internet in Beaumont.
MR. REDMOND: I appreciate you giving us some time today. Mario talked about the vast number of projects, over 2,000, that the districts indicate they could get ready to be possibly candidates for the Economic Stimulus II, or grabbing for air, as Commissioner Houghton put it, if it comes to reality.
I want to visit a little bit about how we could take that mass universe and maybe bring it down to a smaller planet that we could manage, and by doing that, we had looked at our projects and projects were ranked by category, similar to previous evaluations utilized for other funding programs. As an example, on our bridge program, we rate them by structural deficiencies, or worst bridges first. Did something similar here, our pavement preservation we kind of used a Prop 12 analogy like we did with Prop 12, kind of ranking our projects.
Like I said, the ranking structure was similar to what we use in other programs, our MPO partners are very familiar with these ranking programs. They understand them because we have used them for years. So we have continuously kept the MPOs in the loop on some projects we've been selecting or the districts have been selecting for candidate projects; our MPO partners are with us.
As you realize, we have more needed projects that could be ready to let within given time frames and we have funding. As various funding allocations per category are evaluated, we must always consider the following: some regional distribution, making sure we address the economically distressed areas of our state, and make sure we meet that 50 percent contractual requirement as potentially included with the bill. So there are many options for splitting the fund allocations between the various categories and still meeting the respective program requirements. Up here we have included some example scenarios for discussion purposes only. They are just some scenarios; there could be a multitude of different options we could look at.
Scenario A, we're calling it our significant mobility scenario where we're really funding heavy on the mobility side. You can see down there out of the $2.2 billion that Texas can anticipate by the Jobs for Main Street version, if it ever came to reality, TxDOT would get about $1.6-; the MPOs would get about $6.6 billion. So we took the $1.6- and we divided it up, half of it to mobility, half of it to Super 2 type projects, and I mean, $300 million to Super 2, and $500 million to pavement preservation.
Scenario B, it kind of splits it out a little different and spreads it out amongst all the various categories. And Scenario C provides a large allocation to pavement preservation and more flexibility in meeting the early contractual requirements. And that goes back to the projects that we can get ready within the 90-day window. As you remember Mario's earlier chart, it showed of the $2.2 billion we could get ready quick. $1.1 billion of it, approximately, was preservation.
So with that, I'm going to turn it back over to Mario and let him conclude and then we can answer questions.
MR. MEDINA: Let me go ahead and complicate this matter even further. There are other possibilities we could consider or that the commission could consider. One is we could also look at utilizing these funds, should they become available, within existing state-funded projects, either through Fund 6, Texas Mobility Fund, or the Prop 12. We could also go ahead and look at augmenting existing projects under construction, and also, along with that, outsourcing existing planning and design needs, and we could do a combination of all of these to come up with our ultimate Economic Stimulus II program.
And our next step is to continue evaluating our projects based on possible bill language and provide a staff-recommended list for the commission to consider, and bottom line, we want to be prepared to implement a plan based on passage of an economic stimulus bill. So we're trying to be proactive in this matter, and should something come our way, we want to take full advantage of it.
At this point in time I'll turn it over to Mr. Barton.
MR. BARTON: Thank you, Mario and Randy, for your presentation of this information.
Our primary purpose today was to keep you abreast of the dynamic situation we're facing in terms of the jobs creation bill and the potential for something that would be referred to commonly, I'm sure, as a Stimulus II program. We would like to hear any feedback you would like to give us a this particular time and any direction you would like us to take as we continue to stay nimble and ready to respond should something happen quickly.
And as was pointed out in the presentation, if the bill that was originally passed out of the House or something similar to it was to come to fruition, in terms of contracting times, 90 days would require a great deal of effort, some herculean activities, in order to get projects out and underway. And so it's important that we be prepared and that we're moving in a thoughtful way forward to have a well thought-out process that prepares us to be able to respond quickly if need be. So any feedback you'd like to give us now or in the future would be greatly appreciated.
MR. UNDERWOOD: To make sure I understand this, John, this money has to be spent in a timely manner which really doesn't help a lot of our mobility projects because they're long-term projects. Is that correct?
MR. BARTON: It is correct that we would have to have contracts in place quickly under the House version that's already passed, and that would prohibit us from postponing the letting of certain projects, and typically those would be the mobility or larger projects because of the time it takes to get them ready.
MR. UNDERWOOD: Exactly. So those mobility projects we're going to be paying for through Prop 12, Prop 14 or Fund 6 or whatever. Are there any of those projects that are available that we could use the stimulus money on? I'm still confused on that. To be able to push that to get that into that, allowing us to have even more Fund 6, Prop 12, Prop 14 money to be able to use for some other long-term mobility projects and still comply with the federal regulations of getting people to work quicker, of getting more jobs out.
MR. BARTON: Yes, sir, that possibility does exist, and David Casteel has been doing an excellent job of working with the districts and our consultant partners to get a wide variety of projects ready to move to contract quickly. Some of those have been selected for funding under the Texas Mobility Fund, the Proposition 14 and the Proposition 12 bond programs and others, and the potential does exist to move those projects forward quickly regardless of whatever the Stimulus II program may be at some point in time, and then have an opportunity to develop even more substantial projects for the tail end of the program.
MR. UNDERWOOD: But John, you see where I'm coming from is we really have great mobility needs but I'm afraid by this time frame they force us into all we do is basically repair pavement, we re-pave. Isn't that right, Mario? Am I wrong? I mean, that's the quickest way to do it is rush out there and sealcoat something, yet the mobility needs in our urban areas are really stretched. They need help, but they're not a six-month project; it's a six-year project or a three-year project, not a three-month.
MR. BARTON: Yes, sir, and there's two components to it: one is how quickly can we have it under contract; second is how long does it take to build the project?
MR. UNDERWOOD: Right, I understand that.
MR. BARTON: And the bills that have been in place, the Recovery Act and then what was contemplated under the Jobs for Main Street Act did require that all activities on certain projects or all expenses be completed within a relatively short period of time. So those types of constraints would prevent us from funding some of our projects, but I think what we've discovered is there is a very diverse pool of projects that could be ready in a short period of time. Our staffs are working very hard at getting those ready and we'll be prepared to respond in, I think, a very thoughtful and well-planned manner, similar to what we did under the Recovery Act through your leadership.
We've been criticized in some arenas for not having all of those Recovery Act funds under contract sooner. The deadline for doing that is March 1 of this year, but I think, on the other hand, we've been complimented by many, many groups for the foresight to spread those funds out into a variety of contract types and to do some project of much greater, long-term magnitude. So I think we would do something similar in this case.
MR. UNDERWOOD: I would really urge you to go that direction because it's a don't pave my street, build my bridge mentality.
MR. BARTON: Yes, sir, that's good direction and we'll certainly take that into consideration.
MR. HOLMES: John, it looked like we're making pretty good progress on the bridge section mentioned by Commissioner Underwood and in Mario's Scenario B you had $300 million in bridges, and those would be bridges that would be ready to go in the time frame imposed?
MR. MEDINA: Yes, sir, within the time frames proposed. Now, some of those bridges would be going out within the first three months but some of those other bridges would be within that one-year time frame that we're looking at, yes, sir.
MR. HOLMES: And the Super 2s, it seems to me that you have a great benefit from Super 2s in some of these areas, both from a mobility standpoint, marginally, but certainly from a safety standpoint, and I'd like to see you take a really hard look at the Super 2s as well.
MR. UNDERWOOD: Especially in terms of the Ports to Plains, you know.
MR. HOLMES: I was thinking about Laredo to Victoria myself.
MR. BARTON: I do believe that we have a wide range of Super 2s that have been submitted from around the state as potential and would be ready within the time frames that we asked them to consider.
Well, we certainly appreciate your direction and insight today and would welcome any future insight you would like to share with us as we continue to prepare for this particular opportunity. Hopefully it will be more than a grasping at air, but if not, at least we'll be prepared for that, and thank you for the opportunity to share this information with you this afternoon.
MR. SAENZ: Thank you, John. Mario, thank you, Randy.
Agenda item number 4, David Casteel will lead a discussion group dealing with our pavement conditions and a multi-tiered pavement management plan.
MR. CASTEEL: Thank you, Mr. Saenz and commissioners. My name is David Casteel, for the record, and I'm the assistant executive director for District and Field Operations.
Over the course of the past year or two we've come and discussed maintenance with you several times. We had the 2030 Committee come in and give you a report of what their projection of maintenance costs were. We came in last summer with Toribio and discussed maintenance again. And what we'd like to do today is kind of take that discussion a little bit further, give you a report on what we're doing, and update you on some work that we're doing with the Center for Transportation Research at the University of Texas.
To do that we've got three folks with us. We have Mario Jorge who is our district engineer in Pharr. Mario has kind of taken on a leadership role with the district engineers as far as pavement quality. He's visited most of the districts now and got into their business pretty good and helping them straighten out.
Toribio Garza is the head of our Maintenance Division and Toribio is in charge of maintenance of the state and he's doing a great job and I think we'll have a good report for you here. And then Jeff Seiders heads our Materials and Tests Division, and Jeff is kind of more the technical guy working with the University of Texas on this stuff.
And with that, I'll turn it over to Mario Jorge to get started.
MR. JORGE: Thank you, David. Good afternoon, commissioners, Mr. Saenz. For the record, my name is Mario Jorge, I'm the district engineer in Pharr. And as we go through the presentation, we're going to be discussing our pavement scores in relation to what the traveling public would see, and as you see the presentation, you'll see how we're trying to identify acceptable pavement condition levels in terms of the percent good or better, as we've always discussed.
I'd just point out something that you've probably seen before. The picture on your left there is a picture of a good pavement, condition score of 100. It's essentially a new roadway, very few defects, smooth ride, probably in the Pharr District. Joking.
MR. JORGE: But the picture in the center is one that is, unfortunately, much too common nowadays. It's a condition that is worsening, rate of 55 which is poor condition. The wheel paths are starting to rut, as you can see in the picture. There's cracking that's starting to develop, that would lead to base failures. The public will travel through that road and feel a rough ride and they would have to exercise caution with inclement weather. So that right there is a pavement condition that a spot base repair type with preventive maintenance sealcoat overlay can probably hold it together for some time.
The picture on the right is pavement in very poor condition and we do have some of that throughout the state. As you can see the rating of 20, it's severely rutted, additional cracking and base failures. You can see those. This will require a significant effort to maintain it in a safe condition and at this point the only solution would probably be a rehabilitation.
You've seen this slide before. It's a chart developed by the Center for Transportation Research at the University of Texas. It depicts the pavement condition prediction. It is a deterioration model that was developed by CTR through a research project. The deterioration takes into account geographic and climatic zones, the type of highway, type of traffic that's on that highway, the pavement type, concrete versus flexible, and the historical deterioration on a district basis.
That model was also utilized and presented to the 2030 Committee to identify the pavement preservation needs over the next 30 years. This is also a model that is being utilized by our district engineers in order to better plan our maintenance strategies for pavement preservation. The model, in essence, takes a project-specific or a funding level. It predicts what the future improvements will be, it applies a deterioration factor to it, and then it gives you a predicted percent good or better.
Over the past few years we've had a funding decrease in pavement preservation, due largely in part to the federal rescissions that were alluded to earlier, inflation of construction costs, the reduced fuel tax revenues that have been experienced, debt service that has to be taken into account, and again, competition for mobility dollars which is a significant need in our state.
With all that, there were some presentations made to you in the past year, one showing the TRENDS model, how that would predict revenue and how that revenue that would be predicted for pavement preservation over the next 20 years would fall well short of those dollars needed for maintaining our pavements at an 80 percent good or better.
With that observation, our administration has asked the Center for Transportation Research to provide an analysis of the predicted scores with the anticipated dollars for pavement preservation, and what you see there, again, the chart that has been shown to you before, the 90 percent goal of being good or better is really not achievable with the current funding scenario, and you can see the system deterioration is really going to reach some unacceptable levels.
So over the past few months we've tried to do some things to stem the tide a little bit, if you will, of the pavement condition deterioration. One factor that assisted us the past year was additional funds that were available to us on a one-time basis using the Prop 12, Prop 14 and the Recovery Act. There were some set-aside funds on those programs for pavement preservation and those were certainly utilized to great benefit looking at the impacts to pavement conditions in those districts.
In FY '10, just real quick on the funding, if you add the reduced amount of Category 1 funding or pavement preservation funding through Fund 6 and added all these one-time programs, really only matched what we were spending before, so it really wasn't additional money; it allowed us to stay within the current funds that were needed.
Some management practices that we've been implementing in the last year that Mr. Casteel referred to, the peer reviews have been real effective, as a very in-depth review of a district's maintenance program, especially the pavement maintenance program. It has resulted in specific recommendations to those districts. It's also resulted in best practices being shared across the state. We did seven districts last year, planning on doing seven more this year, and it's probably going to be a continuing effort on our part. It's very well received by all.
We've also instituted a four-year pavement management plan. That's a program that has really emphasized the pavement maintenance at the district engineer level. It's allowed us to again be more efficient and highlight where those maintenance funds were going and redirect them, in some cases, to pavement, and it's put us, in maintenance, anyway, in more of a planning mode in lieu of being reactive to problems.
The Pennies to the Pavement approach has been, again, an emphasis on concentrating dollars from the maintenance program into the pavement and it's resulted in some policies dealing with mowing, landscape maintenance, sweeping, litter pickup and trying to be uniform throughout the state. Also, there's been an effort to monitor expenditures in the maintenance budget at the regional level to make sure, again, that we're focusing on our pavements.
And then the last but not least there has been some cost-saving measures that have been identified and developed through the Associated General Contractors that will allow us to have more alternate materials in the bidding process, use of recycled materials and what-have-you. So those are all measures that are working. Instead of the predicted pavement deterioration statewide, this past year we actually increased our pavement conditions by 1 percent; we were actually predicted to go down 1 percent so we actually made a 2 percent impact. But again, I want to caution that it's short term. A lot of it had to do with aggressive preventive maintenance, sealcoats, overlays that simply defer the inevitable.
So that's just what I wanted to point out. I'm going to turn the presentation over to Toribio who will, I think, go through some of the other options we have, and we'll answer questions as you have them. Thank you.
MR. GARZA: Commissioners, good afternoon. Again for the record, my name is Toribio Garza. I'm the director for the Maintenance Division.
What I'd like to move to now is a multi-tiered system goal that, I believe several commission meetings ago, I think Commissioner Houghton brought that up for us to look at. What we've done is we've surveyed the states to see what kind of system they have in place, and it appears that at least 20 of them have multi-tiered system goals in place, and many of them for many years. Some are considering moving in that direction. Very quickly I'll just give you some common aspects that we heard from the states about their systems and how those that have a multi-tiered system in place.
They moved to this type of system to better manage their maintenance and rehabilitation needs because funds are fiscally constrained for many of the same reasons that we're currently experiencing. Without a tiered system, they were doing a worst first approach; the multi-tiered system has helped them better manage their roadways because we all know that different roadways don't all perform the same way. We did find out from some states that some rural areas within some states lost some funding when they went to this multi-tiered system.
Initially some of the thresholds may have been set too high for some of the interstates which might have moved too much money away from the rural, so understanding that setting goals and tracking trends in a system like this is an evolutionary process and adjustments need to be made as you go.
In the area of minimum and maximum goals, a lot of these states have such goals. For example, they may have the interstate at an 85 and 3 and the non-interstates at 80 and 5, the first number being the percentage of good or better goal and the second number being the percentage of poor or very poor goal not to be exceeded. They commented that the lower goal has helped them in many cases focus on these very poor roads, and because of that, it's helped their overall system.
In the area of focus on statewide priorities, we did hear from some states that were saying that they've seen pavement conditions overall in this type of a system improve; however, it took some time for some districts to get connected and to look at the entire state and not just their area.
In the area of public expectation, the public in our case may not necessarily understand what a 90 percent good or better means. In setting goals, some states have kind of gone at it from a different angle. Kansas, for example, has conducted several road rallies where they try and interact with the public a little bit more to get them to understand what they're trying to do. Other states have gone and had public meetings and different types of surveys.
This three-tier system that we've put in place here by no means is a recommendation from staff. It's just an option; it could be set up in any way. But how we set this up is we looked at different factors, we looked at the type of system we have, we looked at the ADT, we looked at truck traffic, we looked at the speeds in our system, and after several runs of all these different variables, we came up with something like this, again, just for discussion.
Tier 1 would be our high traffic major corridors such as our interstates, our US highways. We can see that 24 percent, roughly, of our system currently carries about 70 percent of all truck traffic and carries about 65 percent of all vehicles. The Tier 2 system which would be the intermediate traffic routes including local and state corridors important to the economy. Fifteen percent of our system would fall in this tier, and again, you can see the number of the percentage of vehicles that it carries. One thing to note about these routes is that they're appreciable truck traffic routes that are averaging over 700 trucks per day.
The final tier is our low traffic routes, mainly FM roads, but there are some US and state highways in there, and again, 60 percent of our system would fall in this category, and again, we can see the type of truck and vehicular traffic that it's carrying.
This next slide here is just a graphical representation of what we just looked at. It's kind of hard to see the green in there, the Tier 2, but again, the Tier 2 secondary roads would be the routes that would carry at least 700 trucks per day, Tier 1 being the interstate and major routes that surround the urbanized areas and connect our large urbanized areas, and then we can see Tier 3 which is the vast majority of our state.
One thing to note about the secondary roads, it may be a little bit easier to see in the map you're holding. These secondary routes are tracking the new growth expansion of our state around our metropolitan areas, and what we've found is that a lot of these roads were rural roads and were not necessarily designed for the type of loading, type of traffic that they're seeing, and we've seen it in our peer reviews and we'll see it in the next slide when we looked at the condition of these roads.
So we looked at our current system to look at where we're at and Tier 1 roads, as a whole, rate about 85 percent with very poor being a little less than 3 percent. The first column would represent the percent good or better and the second column would be the very poor condition, below a 35. These numbers, again, are interesting because we can see that we're doing a little bit better job of maintaining the Tier 1 and the Tier 3 roads and we talked a little bit earlier about how the Tier 2 roads are seeing a lot of expansion and a lot of growth, a lot more traffic than they were necessarily designed for, and it kind of makes sense that their overall rating would be a little lower.
MR. UNDERWOOD: Is that because the Tier 2 roads actually were designed as Tier 3?
MR. GARZA: That could be, Commissioner.
MR. UNDERWOOD: I think that's what you're going to find where they were designed as farm-to-market roads where they were designed for a pickup hauling a trailer. Now all of a sudden you've got an 18-wheeler running down there with an 80,000-pound load total.
MR. GARZA: Next we started looking at the other scenarios. We started looking at several different goal scenarios for the three tiers, with the first three up there being goal-based and the last two being fiscally constrained. The goals for the first scenario started out with the current commission goal of having all our roads at 90 percent good or better, and the other ones stepping down, just to establish some cost data points.
So what do all these different scenarios cost? All these costs were normalized to 2008 dollars to keep in line with the 2030 Report, but we can see with the current goal of having all our roads at 90 percent good or better -- we can see Scenario 1 that we're talking about $40 billion over that eleven-year period, and Scenario 2 we can see we're down to about $30 billion, and with Scenario 3 we're close to $20 billion to maintain those roads at those goals, like for Scenario 2 would be 90 percent good or better for Tier 1 and 80 percent for Tier 2 and 70 percent for Tier 3, and so forth.
MR. HOUGHTON: And we have available how much money?
MR. GARZA: There's $14.2- but if it's normalized to 2008 dollars, it's $11.4-.
The last two scenarios 4A and 4B which are fiscally constrained to the current UTP funding amounts, the model results and the final percent of good or better are shown in the next couple of slides. You can see here 4A, what we did here is we borrowed some information from the surveys to pick the distribution of funds for each tier. We used predetermined amounts for each tier close to the inverse of the percent of mileage within that tier. So what we ended up with is for Tier 1 roads we said 55 percent of available funds, and for Tier 2, 25 percent, and then for Tier 3 we'll put 20 percent just to see.
Again, it's a model and we can run several iterations and we can see the results. If this is done, again with this fixed financial constraint funding distribution, the Tier 1 and the Tier 2 roads over this eleven-year period would deteriorate to around 70 percent of their mileage being in good or better condition, while the Tier 3 roads deteriorate to about 28 percent of the mileage being in good or better condition.
And then finally, the Scenario 4B, if we fix the Tier 1 roads to 80 percent and we let some of the available money for the other two tiers, we can see the result where the Tier 1 is maintained at 80 percent good or better, Tier 2 drops down to 50 percent, and then the Tier 3 goes down to 25 percent.
We learned from the surveys and discussions from other states that have moved to this type of system that it is an iterative and interactive process. We can run many different types of scenarios and look at different results for future discussion with the commission.
MR. UNDERWOOD: Basically what you're showing me is that as you take money, you're not allowing that much money for rural Texas. Isn't that correct? That's what I'm seeing.
MR. GARZA: That's correct.
MR. UNDERWOOD: So these people that live in the urban areas when they decide to take off on a weekend and go out in the rural areas, they'd better have a four-wheel vehicle because they're not going to be able to make it down these roads. Just checking.
(General talking and laughter.)
MR. CASTEEL: That was a good report. The guys are looking at it real hard, and of course, Toribio's job is to work with the Center for Transportation Research and develop the model and get it -- well, and then Mario's job is, of course, to work with us and the rest of the district engineers to do better than what the model will predict. And I think so far this year we've done pretty good on that, and I really appreciate the work of these guys.
MR. HOUGHTON: David, what's the pavement scores in the Abilene District?
MR. CASTEEL: The pavement scores in the Abilene District, off the top of my head, I'm going to say close to 90 or 91. Is that about right, Jeff? It's 97 in San Angelo; they were the best.
MR. HOUGHTON: San Angelo is 97? What's the pavement scores in the Houston District?
MR. CASTEEL: Oh, my goodness, a quiz. I'm going to say they're in the 70 percent good or better.
MR. JORGE: Low 70s current.
MR. HOLMES: What about in the Metroplex?
MR. CASTEEL: Dallas is worse and Fort Worth is a little bit better, and Dallas is probably in the 70s.
MR. HOUGHTON: Is that the quality of a district engineer, that one is better than the other?
MR. CASTEEL: Is Bill Hale still here?
MR. JORGE: If I may, Commissioner, when we visited all the three urban and metro districts, if you will, Houston, Dallas and Fort Worth, the common denominator with the three districts is their suburban areas. Those pavements are falling apart.
MR. HOUGHTON: Suburban or urban?
MR. JORGE: Yes, sir, the suburban areas. In other words, the metro area itself where the most of the concrete pavement is in relatively good structural shape; the ride is a little rough but they're in good structural shape. Once you get outside of that, the urban expansion we were referring to in the outlying areas, those are the pavements that are being extremely beat up. They weren't designed to handle that type of load. They're mostly flexible pavements, hot mix type pavements, and we definitely saw those structurally being the worst shape of all. So it's not the metro interstate, like 610, I-45.
MR. CASTEEL: Except in Dallas, they've got some problems on 30 and 35 in Dallas.
MR. MEADOWS: How do you all contemplate or consider the anomalies, the extraordinary circumstances that would be unanticipated, a Barnett Shale where you really do have extraordinary impact on roadway surfaces, roadways carrying far more, both weight and capacity-wise, volume-wise than they were ever anticipated. And I'm sure that occurs time and time again across the state; historically, I know it has, not just in the energy field but logging or whatever it is.
MR. CASTEEL: The way it works now, the formula for next year's distribution, one of the inputs is the condition of the previous year's pavements plus the traffic, so it's traffic and condition of pavement. So as your condition of pavement goes worse and your traffic increases, you'll get a bigger percentage of the small pie the next year, but that's kind of in retrospect.
What we have is we have a well site go in or we have a Barnett Shale or we have just a terrible winter like we're having up in the north part right now. A cold, wet winter following kind of a long drought is a worst case scenario for pavements because the cracks are open and now they're full of ice, so we have those conditions. And what we do right now is we allocate everything and then when we have something exceptional come in like that. It's what we did in Fort Worth last year; we pulled back some from everybody else and said you'll get your part next year, and gave them an advance on future years' dollars.
MR. HOUGHTON: I see where it's going to have to be flexible. I mean, it's going to have to be tremendously flexible when you get the wet in the southeast and you get the dry and the cold. I mean, we were talking about San Angelo, not in relative dollars -- it's not a lot, but those dollars at 94 percent scores and Houston has got a 70 percent score or and the Metroplex has got whatever they have.
MR. CASTEEL: And what the district engineers do is we give them an allocation and they go through this process in their mind already, you know, I'm going to take care of my busiest roads first and then when I have something exceptional come up, I'm going to take care of that the best I can, and then try to hold everything else together with my maintenance forces. So the district engineers are doing this.
If we went to this multi-tiered system, we would give relatively more flexibility to those district engineers within the more Tier 1 roads and less flexibility to those district engineers with more Tier 3 roads. So it's just taking that same piece of pie and cutting it up differently, giving more people some flexibility and some people less flexibility.
MR. MEADOWS: You know, I understand and appreciate there are some things we really don't have an influence on or are able to impact. I mean, obviously, weather conditions, but I may not get my facts right here exactly but that's not going to deter me at all, of course.
MR. MEADOWS: You know, we've had, I wouldn't say a concerted effort at this point, but there's been somewhat of a coordinated effort in North Texas between Texas Department of Public Safety, our agency and some local law enforcement, for example, Johnson County Sheriff's Department, have been following commercial vehicles that are related to Barnett Shale and what they have found over the last couple of years in working those stops is something like 80 percent plus of those vehicles -- it's over 80 percent are overweight, significantly overweight. And the impact of that and those vehicles is extraordinary.
In fact, someone here has actually quantified it to me comparing it to the impact one of those vehicles and the impact that it has compared to these overweight trucks, and it's a factor of 70 or 80 to one. I mean, it's a big number. Again, my facts are not going to be exactly right but they're close.
MR. CASTEEL: It's exponential to the power of 4, I believe, on the weight differentials as you go up.
MR. MEADOWS: Yes, I was going to say that.
MR. MEADOWS: But anyway, I really am concerned. I really mean this. I've gotten a call from a couple of state representative offices with regard to this issue specifically. We're not getting the sort of support from our sister agencies in terms of enforcement, specifically Texas Department of Transportation, I'm convinced of that at this point, and what it is, we're paying for it. We are -- the citizens are paying for it. And I wish there was a way that we could really pursue that. I think that it would have a significant impact here, and when you start talking about the dollars associated with it and the other issues that are related to it, we probably ought to be doing more.
MR. CASTEEL: Yes, sir, I know you're correct. I substituted for Mr. Saenz at the County Judges Association meeting the other day because he was working with you guys on something, I think 161, and when we gave them a talk about where we're at on funding and where we're at on pavements, the most common comment I got back is you guys aren't collecting enough for your overweight truck permits. And I said, Well, all due respect, that's not us. And I forwarded that email to Coby and he's working on it, so I'm sure he'll solve it.
MR. HOUGHTON: For the record, you did mean Texas Department of Public Safety, did you not?
MR. MEADOWS: Yes, I did. Thank you very much.
MR. CASTEEL: It used to be a two-way partnership, TxDOT and the Department of Public Safety. Now it's a three-way partnership with the Department of Motor Vehicles with some of the licensing stuff.
Jeff, did we cut you off or did you need to say anything?
MR. SEIDERS: I think everybody presented well.
MR. CASTEEL: Thank you very much. Mr. Barton always says something nice about me. He sings very well, I've noticed.
MR. SAENZ: David, thank you, and thank you, Mario, Toribio and Jeff. And development of this tool will help our districts really make the best use of their resources, and I think it's also going to allow us to better plan.
MR. SAENZ: Moving on to our last discussion item, commission, is, of course, we've started the implementation of our regional concept the early part of last year, and we've been at it almost a year so we thought we would give you an update as to kind of where we're at and where we're going using the regions to support the districts. So David, if you'll lead that.
MR. CASTEEL: Thank you, again, Mr. Saenz. And for the record again, my name is David Casteel, the assistant executive director for district and field operations.
Our district engineers are in charge of design, operation and maintenance and our regional directors are in charge of supporting our district engineers, and I've got the four regional directors here with us today. And the vision of Mr. Saenz and Mr. Simmons and the direction of the commission in regard to regionalization is what we're here to brief you about today. Our goal is to let you know how we're doing with restructuring and, in particular, regionalization, and we're really kind of excited to report to you today some of the findings that we have.
With us today are the four regional directors. Two of them will be making a formal presentation to you and it should be less than 15 minutes. The other two that won't have an active part in the presentation but are available for questions are: Donna Hill and Donna runs our West Region and she's headquartered in Lubbock, Texas, and her background is in computer sciences and accounting, and she came to us from the San Angelo District; Tim Powers runs our North regional office headquartered in Fort Worth, and Tim came to us from the Dallas District and previously the Abilene District, and prior to that he was a city manager out in West Texas, and prior to that he had a distinguished career in the United States Air Force. Both of these guys have degrees in management, and Donna is finishing up her master's degree and Tim has finished his.
Doing the briefing today are the two next to me, and first Lisa Gregg. Lisa runs our East regional office out of the Houston area, and she's on the third floor of the building. Commissioners, if you're ever over there, you can chat with her. Lisa came to us from an external position. She came fresh to the department into this role and she has vast experience in network engineering, multi-discipline organization management and client delivery in the private sector. She worked for American Airlines and Kellogg Brown & Root, and has her undergraduate in, I believe, mechanical engineering from Prairie View and a graduate degree in public administration from SMU.
Cathy Floyd is our South regional director out of San Antonio. Cathy is a certified public accountant. She has a couple of degrees from University of Texas San Antonio and she came from the San Antonio District, so she didn't actually move and she has been in different jobs there as district chief accountant, auditor, director of administration, things like that, and Cathy was actually doing a lot of regionalization things with the Corpus, Pharr and Laredo Districts before we called it that.
So they've been working with our district engineers real close, come up with some processes and procedures, service level agreements, and I'll turn it over to Lisa and Cathy to give you a short PowerPoint presentation and then take any questions that you might have.
MS. GREGG: Good afternoon, Madam Chair, commissioners. For the record, I'm Lisa Gregg, the East Region director for TxDOT. I liken the role of regional director, or RD, to being a good chef. I consider myself pretty good when it comes to cooking and the key to being an excellent cook is knowing how to execute a recipe. The recipe the RDs were given was the regionalization plan. In other words, you published the recipe and the recipe is good.
But in addition to following the recipe, good chefs know when and where to modify the recipe to enhance the desired results. That's what we've done as regional directors. We've taken the recipe with our division partners and district customers and external entities and we've made adjustments in resource utilization, process improvements and best practice evaluations. All of these implementations have improved daily operations and project delivery support.
Another reason I liken the role of a regional director to being a good chef is because measurements are key to achieving the desired results, and as Mr. Casteel says, what gets measured gets managed. So we measure our processes as we strive to achieve the goal of efficiency, accountability and transparency.
Here's a familiar map which depicts the geographical locations of the four regions and the districts we support. The point in showing this graphic is to show that while regions are identified, districts still exist and we function as a single entity because we work with a single mindset to continuously engage in best practices which enable us to share workloads. In this regard, we are four regions operating as one DOT. In the support and leadership business, we are one.
We evolved this regional concept through the process that has taken over two years and this process is the restructuring process. The restructuring graphic that you see here basically shows from start to commission's approval the plan that we implemented. The need for this plan was identified by internal and external audits and envisioned by Mr. Saenz and Mr. Simmons, led by the district engineers, developed by the interim regional directors and many functional experts. This plan was also endorsed by Deloitte who found the plan directionally sound both in work product and process. Deloitte, who endorsed the plan, was then sharpened by employee review and comment.
In March of 2009, the Transportation Commission passed a minute order which authorized the executive director to organize staff and implement the regionalization plan. The four regional directors were interviewed and hired in June of 2009, and as we were hired, the four of us began to implement the process envisioned by Mr. Saenz.
Our first goal was to identify a 90-day plan which basically outlined our process for standup. The four of us moved swiftly into interviewing and hiring our leadership staff. It consumed a lot of time but it yielded excellent results as we have an outstanding set of assistant regional directors and managers who will help lead us in the development and operation of the regional environment.
One of the critical functions of the 90-day plan was to work with the IT Division to ensure that we identify and implement changes to the existing IT infrastructure to incorporate for the new organization. Another element of this plan was to ensure that statewide we divided the processes between the four regions equally so that we could distribute the workload so that we could complete standard operating procedures and service level agreements.
The regions formally stood up on September 1, 2009, and at that time we transitioned employees who were primarily engaged in regional functions from the district to regions. Important to note, no one employee who converted from district to region lost pay, no one competed for a position to retain employment, and lastly, no one had to move unless they applied for and were selected for a managerial position.
This position and this stance has allowed us to maximize the use of our virtual office concept. We utilized the expertise from the Human Resource Division to help us train our employees and managers how to work successfully in a virtual office environment. This training was coined WAVE, Winning Attitude in a Virtual Environment. While maintaining daily operations, we, the regional staff, took up the task of developing our standard operating procedures and service level agreements. SOPs basically ensure that we know what we're supposed to do in our work functions, while the SLAs are contracts to basically provide our customers with a certain level of service.
As we developed our regionalization plan, we used over 330 employees, both with external and internal partners. We were able to develop what we call basically our operating agreements which are basically 1,600 pages that basically define processes, agreements and expectations. We believe that this process identified how quickly the region was able to establish operational procedures and service level agreements, a starting point for a new organization.
Regionalization activities all focus on obtaining efficiency and cost-containment within our service delivery; additionally, accountability for our employees' understanding their responsibilities and that they'll be held accountable for their delivery, while also demonstrating our ability to be transparent in every aspect of the delivery cycle. This enables us to ensure that we're basically being good stewards of the public funds.
I now yield to Cathy Floyd, South regional director, to further develop these achievements.
MS. FLOYD: Good afternoon, commissioners. For the record, my name is Cathy Floyd and I'm the South Region director.
The key mantra for our support operations or field operations, as you've heard at our previous panel today, is Pennies to the Pavement. And as our district engineer in Childress, Mr. Terry Keener, likes to remind us routinely, if we manage the pennies, the dollars will take care of themselves. We're pleased to report that regionalization has, in fact, resulted in many initiatives with measurable efficiencies and has moved many pennies to the pavement.
Several of the activities which focused on right-sizing our resources were, in fact, already undergoing when regionalization became official. One of those examples was our fleet management. Mr. Dennis Cooley, who is the DE in our Lufkin District, led his peers to perform a review of equipment needs that resulted in a reduction of 991 pieces of equipment statewide and also a future maintenance cost avoidance of over $3.5 million annually.
The regional directors have worked with our districts to utilize a needs-driven zero-based budget for our equipment needs, and resulting in capital outlay savings of over $57 million in the last two years. It is now up to the regional directors to manage those assets in an effective manner to meet our needs with those cuts.
Obviously, one of the major areas that we expected to benefit from in our regionalization efforts was the reduction of employees in the support functions or required in the support functions, and we did, in fact, realize a 30 percent reduction in FTEs. Those reductions were all achieved through normal managed attrition.
And it was through the leadership of Randy Hopmann, our Tyler DE, and Dianna Noble, the Environmental Affairs Division director, that we've seen significant improvements in our environmental review process, and that was through the introduction of regional environmental coordinators. Our regional environmental coordinators review in the region the most common and least risky environmental documents which make up about 90 percent of our workload and has greatly improved our timelines.
Another example are our collections, our claims collections. When motorists damage our system by hitting a guardrail or knocking down signs, the department bills and collects for those damages. Simply by focusing on that activity, we were able to increase our collections significantly.
We have successfully moved Pennies to the Pavement by being more efficient, but we also wanted to make sure that everyone was doing their share of the work. That's where the accountability ingredient comes in. Lonnie Gregorcyk, who is our DE in our Yoakum District, likes to say we need to make sure everyone is the same busy. Indeed, we are able to make sure that everyone is equally busy by evaluating and sharing our workloads across the state. When districts have more work than the staff can effectively handle, we shift that work to others that can handle it; when they need more work, we shift work from others to those who need the work. Administration has given us the clear direction that all districts move forward together, one DOT.
Using workforce metrics developed by teams which were led by our DEs, we were able to balance workload and workforce in a sensible and orderly manner. Lauren Garduno led the development for our construction expectations, Lonnie Gregorcyk led a team that developed our design workload analysis, Walter McCullough led the development of our maintenance staffing needs, and the regionalization effort developed the support function measures for all of our support activities. Ultimately, these items led to our one DOT staffing plan.
In FY '07, we had nearly 12,000 employees in our field operations; today we're just over 10,000 and our analysis from these metrics tell us that we need 9,575 field employees in FY 2012. Our current reductions -- we've already realized a 15 percent -- have avoided $69 million in personnel costs in '09 alone. We used both managed attrition and a hiring chill that was implemented by the administration in 2008 to get to where we are today. That context is the fact that with these reductions the department has still been able to produce all of our Prop 12 and our Recovery Act projects approved by this commission. And how? Because as our graphic demonstrates, we're able to share our work between our districts and between our regions and to keep everyone equally busy which has also effectively increased our production.
A key to making this work is the teamwork and the leadership of the DEs in our monthly regional leadership, or RLT meetings. During these meetings we determine regional priorities, we implement best practices, we improve operations, and we measure and compare our progress. This picture demonstrates the West regional leadership team at work and was courtesy of Commissioner Underwood.
Our final ingredient in our recipe today is transparency. The keys to transparency are knowing what our revenue is, developing a plan with our transportation partners that is constrained by that revenue, communicating the plan and our progress on Project Tracker using our P6 tool, speaking in a manner that the public can easily understand, and finally, delivering on our commitments. We want to prove our savings. We want to report on our progress and determine if we're achieving the outcomes that we desire.
And the results are in. We are thrilled to report that our implementation of Mr. Saenz's vision has saved over $200 million in FY '08 and '09. Those savings allowed us to both keep our word to deliver projects that were promised while our revenues were decreasing and absorb millions in hurricane and winter storm costs without seeking additional state funding. We are now poised to achieve yet another $250 million in savings in the next two years for nearly half a billion dollars saved in total from FY '08 through FY '11. Pennies to the Pavement. As Mr. Keener says, if you take care of the pennies, the dollars, well, in this case, several hundred million dollars will take care of themselves.
It was an honor to be able to make this presentation and I yield to Mr. Casteel for closing comments.
MR. CASTEEL: Do any of the commissioners have any questions for these guys? They're working real hard and it's kind of a culture change for us, but we're being persistent and we're moving forward and working with everybody when they have an issue and trying to work through those issues and doing the best we can, and I think it's working out pretty good.
Questions or comments?
MR. CASTEEL: Mr. Underwood, thank you for your picture. We put it in the presentation.
MR. UNDERWOOD: I saw that.
MR. SAENZ: David, thank you, and regional directors, thank you, and of course the district engineers. It looks like the division and the ideas that we kind of put together are beginning to come together, so thank you.
MR. CASTEEL: Thank you. Good job, guys.
MR. SAENZ: Those are all of the agenda items.
MS. DELISI: That concludes the agenda for today. Is there a motion to adjourn?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Please note for the record that it is 4:01 p.m. and this meeting stands adjourned.
(Whereupon, at 4:01 p.m., the meeting was concluded.)
C E R T I F I C A T E
MEETING OF: Texas Transportation Commission Workshop
LOCATION: Austin, Texas
DATE: February 24, 2010
I do hereby certify that the foregoing pages, numbers 1 through 70 inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Transportation Commission.
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731