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Texas Department of Transportation Commission Meeting

Modern Art Museum of Fort Worth
3200 Darnell Street
Fort Worth, Texas

Thursday, October 29, 2009


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


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


MS. DELISI: Good morning. It is 9:02 a.m. and I call the regular October 2009 meeting of the Texas Transportation Commission to order. Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:33 p.m. on October 21, 2009.

Before we begin today' s meeting, please take a moment to set your pagers and cell phones on the silent mode, please.

It has been our practice to take commission meetings on the road out of Austin three or four times a year. It gives us a chance to see firsthand how our local partners are addressing their transportation challenges. Likewise, I hope it provides you some insight on how we conduct our business at TxDOT.

I'd like to start off by thanking the people of Fort Worth and Tarrant County who have really gone out of their way to make us welcome, including our own Commissioner Meadows. All of your efforts have helped make our visit very memorable. And of course, I'd like to thank the TxDOT employees who have been working to make our visit productive. We've had a great visit and we look forward to an informative and productive meeting today.

We're streaming this meeting live, so I also welcome our visitors via the worldwide web. An archive of the web cast will be available on our website within the next 24 hours.

Now, as is our custom, we'll open with comments from my fellow commissioners, beginning with the hometown commissioner, Bill Meadows.

MR. MEADOWS: Well, thank you very much, Madame Chair. It is such a pleasure, it is an honor for us in Fort Worth to have all of you here, all of you here in what we consider to be just a fabulous community, but an example of that would be the facility we're in today. It is an absolutely fabulous facility, world class, and I know that the museum staff and board are thrilled to have us here and to host us.

I just would like to take a moment to, as the chair has noted, we have such a wonderful effective, efficient staff in our district office here, who hosted us at a dinner last night, an employee dinner, and every one of us stood up in front of the employees and acknowledged the good work that they do, often unrecognized and unappreciated, and I think we just need to do that again publicly because these men and women do perform in an exemplary fashion for all of us, and they are often unappreciated and it's not recognized what it is that they do for us.

So I just wanted to acknowledge Maribel Chavez, who is our district engineer, for all of her good work, for her creativity last night that made us all into something perhaps we weren't or aspired to be -- I'm not sure which. Anyway, in addition to that -- I will certainly leave somebody out, so in advance, I apologize -- but over the course of these two days so many different organizations have come forward and the hospitality that they have shown us is really appreciated.

Fort Worth and Western Railroad, Burlington Northern Santa Fe, TRTC, the Fort Worth Chamber has been stalwart and strong and organized events for us all; I-35 Coalition was present yesterday in big numbers; the T. I could go on, and again, I'm sure I've left someone out but all of these organizations have come together to really demonstrate what sort of partnership that we do have in this community, and I do appreciate my colleague, Commissioner Holmes, pointing that out on a regular basis. We do work together, we have our differences but we do work together to meet the challenges that we do have.

You know, being here for the commission is such an opportunity for us as a community to showcase the community that we are so proud of, but it also is a good time and an opportunity for us to discuss the challenges that we have in terms of providing the transportation infrastructure that our citizens need, and we appreciate the commission listening.

With that, I would again say just welcome and thank you all very much for being here.

MR. UNDERWOOD: Thank you, Bill, and I'll reinforce what Bill says, I want to associate myself with my fellow commissioner's comments to the hospitality of Fort Worth and also to the hard work of our staff, and they are very creative, and we really enjoyed last night, and I want to thank them. In fact, one of the young ladies took a picture and we e-mailed it to my daughter last night and I received a text from her. I don't know if you know what LOL means, but it means laughed out loud, and so she really enjoyed it. It was very creative and we appreciate all the work, Maribel. Thank you, I really enjoyed it.

And I can see why Bill is the way he is. He's so animated and I can see why with everybody we've met so far in Fort Worth. Their can-do mentality, we like being around that. But thank you very much for your hospitality. And just for the record, my mike is live so you all be prepared, I can't turn it off. Thank you.

(General laughter.)

MR. HOLMES: That's such a scary thought, too.

I certainly agree with my fellow commissioners'comments. Maribel, thank you for last night and all of your team for making it such an enjoyable evening, and thanks for the train ride and hospitality and reception yesterday. What a fantastic facility this is -- in fact, this entire museum district. I'm kind of struck by the diversity in this area: we go from the stockyards yesterday afternoon to this incredible modern art museum. It's a great testament to the philanthropy in this region, to the political leadership, to the business leadership. You're doing a wonderful job.

It's always interesting for the commission to travel around the state and see how other people do things, and we learn something every time that we travel. We appreciate your allowing us to come into your home, we look forward to hearing from you in just a few minutes. Thank you.

MR. HOUGHTON: Well, good morning to you all, and again, it's going to be repetitive as to what my colleagues have said prior to my remarks, but again, thank you, Maribel, and your staff. It was a fabulous evening last night, a lot of fun, light-hearted, I wish you could have been there. And again, our employees are number one and it just shows. We had a great time, the railroad, the train trip, the whole works, so this has just been a great opportunity to see this magnificent state. And there's so many communities around here, that's why people are voting with their feet and moving to this part of the world and getting out of other places that are less fortunate than we are.

But again, thank you to our staff and to all the people, the mayor and the chamber of commerce. Again, I'll miss some folks but it was a great day yesterday and hopefully today will even be better. Thank you very much.

MS. DELISI: Let me remind everyone that if you wish to address the commission meeting, please complete a speaker's card at the registration table in the lobby. If you want to comment on an agenda item, please fill out a yellow card and identify the agenda item. If it's not an agenda item, 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 card, we do ask that you try and limit your comments to three minutes.

As is custom for our out-of-town commission meetings, we always give local city and county officials a chance to let us know about what's important, the important transportation projects going on within their community. So to begin that presentation, I'd like to start by calling up our Fort Worth District Engineer Maribel Chavez.

MS. CHAVEZ: Good morning, Commissioners, and thank you very much and welcome to Fort Worth, to the western side of the Metroplex, the best side of the Metroplex. And I came this close to wearing the T-shirt that I wore for you last night but I thought maybe not, maybe not.

For those of you that have ever been to the very, very good restaurant, the Railhead, you've seen the staff there sport a very appropriate slogan on the back of their T-shirts. For those of you on the correct side of the Metroplex, if you've never been there, what it says is Life is too short to live in Dallas. So I hope never to be sent to the Dallas District. I think I just did that to myself, I will never go to the Dallas District.

(General laughter.)

MS. CHAVEZ: Okay, let me introduce our Fort Worth City Councilman Jungus Jordan who will give us the official welcome to Fort Worth, and then he will begin also with some of the remarks talking to the theme that we very much practice in North Texas, particularly on the western side of the Metroplex, and that is partnerships, regional partnerships. So, Councilman Jordan.

MR. JORDAN: Thank you, Maribel. Spelling out that Fort Worth is the greatest city in the world, I don't have to do that now since you've already spelled that out.

Chair Delisi and members of the Texas Transportation Commission, welcome to Fort Worth. Thank you for taking the time to visit our community and listen to our needs. We want you to fully enjoy yourselves while you're here -- sounding from last night, it sounds like you are having a good time -- but we also want you to understand why transportation is such a front and center issue and priority for us here in Fort Worth, Tarrant County and the rest of the North Texas region. Transportation is the engine that drives our economy, it is integral to our history, it is a catalyst for our current success, and it's very much our vision of the future. We're passionate about the issue of mobility because it's the lifeblood of our region.

I want to thank our good friend, Bill Meadows, and the entire commission for your continued support. We have some big goals here in North Texas, to be sure, but they are not unrealistic goals. Fort Worth is a major contributor to the Texas economy, it's a major part of the Texas future.

It's no stretch to say that Fort Worth's success, thanks to DFW Airport, Alliance Airport, our diverse corporate portfolio that includes the likes of American Airlines, Lockheed Martin, Burlington Northern Santa Fe, just to name a few -- and oh, by the way, the guy, Mr. Barnett Shale, has played a huge role in helping Texas weather the current economic crisis. With that in mind, the City of Fort Worth and the North Texas Region look forward to continuing our partnership with TxDOT and the commission.

Next I want to thank Maribel Chavez for her leadership here in North Texas. She's a remarkable asset and we are proud to have her in our corner. She's a valuable partner in our efforts to keep our region moving.

As you know, mobility, or the lack thereof, is a regional problem. It's not something that concerns itself with borders or politics. Mobility, and it's inseparable partner, air quality, continue to put heavy downward pressure on our local economy. It's something we must not ignore. Fortunately, here in North Texas we have not swept the issue under the rug. We continue vigorously to fight the downward pressure through local, regional and statewide partnerships.

Our work in support of the Texas Local Option Transportation Act is certainly one example, and although this bill fell short this last legislative session, it wasn't for the soundness of the concept or our trying and in the commitment. The efforts on the TLOTA bill showed that we in North Texas have common challenges that can be solved collectively, and we are united in finding those solutions. Fort Worth was a leader in the TLOTA effort and we will be a leader as we work through a statewide process to bring the legislation back to Austin.

We have invested our local resources in key projects and are willing to supplement funds to solve our local mobility woes, but we're counting on your support in this process. We need the additional tools to make our vision for the future a reality. We've also built strong partnerships to find solutions to I-35, Southwest Parkway and Tower 55. I think we all know how critical these challenges have become. Now our charge is to get the ball across the goal line. Our citizens need and deserve to see results, they need your commitment.

With respect to Southwest Parkway and the Chisholm Trail -- by the way, we consider it one road -- we are united with Johnson County in the need for that road to be a reliever for the I-35. The project on the north end of the project has been made with the UP railroad agreement and we appreciate your backing that support. Again, Southwest Parkway and Chisholm Trail are one road that only works if we build the entire project.

We also need help with I-35. It's a critical nightmare or day-mare, depending on what time you drive it, and no one can argue how bad I-35 has become. We think it starts in Austin and comes north, but the first $2 billion phase of the NTE, the North Tarrant Express, as Chair Delisi mentioned, and the DFW Connector, we appreciate your support in that regard. But funding of the I-35W-820 interchange is now critical to preventing the monumental project from further bottlenecking on I-35 West. We carry 120,000 vehicles a day through that intersection.

Another standing challenge is Tower 55 which holds major implications for our environment and our economy. Waiting trains burn roughly a thousand gallons of diesel per day at this intersection. Freight usage levels leave little or no capacity for commuter rail and we need commuter rail to help relieve our traffic congestion. We're hopeful that TIGER of the American Recovery Act funds can jumpstart this critical project with a fix that ranges in cost from $70 million to $8 billion. It will take a collective partnership to make these improvements a reality.

The at-grade improvements must be made as soon as possible.

These are all mammoth issues, they are costly and complicated. No agency or organization can face these weighty challenges alone. I know I'm preaching to the choir and we thank you for our continued leadership on this front.

The City of Fort Worth stands committed to improving mobility and reducing air pollution. This is a cause to find more efficient and eco-friendly modes of transportation, a cause to proactive build the city that supports intermodal transportation hubs and transit-oriented development, a cause that will eventually link light rail and commuter rail with statewide and national high speed rail. This is our fight, this is our fight and we stand with you.

Fort Worth has been and always will be a transportation city. We're home to DFW Airport, the Alliance Inland Port, American Airlines, Burlington Northern, and the list goes on. From the very beginning, transportation has been part of our city's history, and transportation is very much our future. In fact, our very way of life is counting on our ability to meet our mobility challenges. Our children and our children's children are counting on us, and if we are going to make any headway in preserving our unique quality of life, passenger rail service must be in the equation, not as the end-all and be-all, but as a complement to our roads and highways. Rails must be the future people-mover of North Texas.

If we fail, traffic will worsen, pollutants will continue to poison our air and businesses will pull up their stakes, fold their tents and head to greener pastures, taking jobs with them, and when those jobs leave, so do residents. It's a slippery slope and the State of Texas cannot afford such a scenario.

The creation of the TxDOT Rail Division is a very positive step in our favor. This division will play an essential role in our efforts to find more convenient alternative modes of transportation. We commit ourselves to working closely with this new arm of TxDOT.

As we move forward, depending on the situation, TxDOT will lead at all times, and there will certainly be times when Fort Worth or other cities take the reins, but whatever the case, Fort Worth will not back down, we will not step aside, stick our head in the sand while our robust economy sits in the crosshair. The future prosperity of our region requires us to take action. We need to find solutions, to be problem-solvers, and we look to work with you to help find the answers to these tough issues.

Thank you and welcome to Fort Worth, if we can offer anything. If you walk down the street in Fort Worth and somebody doesn't say hello to you, they're from Dallas.

(General laughter.)

MR. UNDERWOOD: Councilman, thank you very much for your service to your community. It's unsung and we really appreciate all you do. Also tell Mayor Moncrief we appreciated yesterday and breakfast this morning too. Thank you.

MR. JORDAN: Thank you.

MS. CHAVEZ: Thank you, Councilman Jordan. And again, Commission, Director Saenz, welcome to Fort Worth, particularly to the Fort Worth District. On behalf of the district employees, we very much appreciate you joining us last night and hope that you'll enjoy the rest of your stay.

Again, the theme of our presentation is partnerships, and in particular, local partnerships and those partnerships that we've developed with our partners at the counties, at the cities, and so we have prepared a short video highlighting and providing examples of those regional partnerships and those that we continue to foster, so if you would draw your attention, and Commissioners, I believe it will be displayed on this monitor as well.

(Whereupon, the video was shown; applause.)

MS. CHAVEZ: Thank you very much and I'm really honored to have with us three of our partners, our county officials: we have with us representing Tarrant County, Commissioner Gary Fickes; we also have with us representing Parker County, Judge Mark Riley; and we also have with us from Johnson County, Judge Roger Harmon. And I'd like to call on them to talk to you a little bit about the partnerships that we've developed and some of the challenges that we're facing. Commissioner Fickes.

MR. FICKES: Thank you very much, Commissioner Delisi and commission members. On behalf of the Tarrant County Commissioners Court, I want to welcome you to Fort Worth and to Tarrant County. Judge Whitley, unfortunately, couldn't be with us today because he heard we only had three to five minutes to talk. He's out of town today, so unfortunately, he's not here.

But over the past three years, North Texas leaders have worked alongside TxDOT to identify transportation solutions for highway projects that are unfunded by tax dollars. Because of the comprehensive development agreement process, the CDAs, 2009 is truly an historic year in North Texas. We have three public-private partnerships worth $7 billion that are going to contract here in North Texas with much needed highway improvements that will begin on the DFW Connector project, the North Tarrant Express, and also the LBJ project. We've taken $1 billion of gas tax funding and we've been able to leverage that with $7 billion for these projects. North Texas appreciate TxDOT's partnership to make these projects a reality.

The DFW Connector -- which is at the north end of DFW Airport which is in Precinct 3, the area that I represent -- has started the right of way and the utilities are now underway, the construction should start in early 2010. That's a project that many of us in this area have worked on since the mid > 90s. I have been before you many times and many other commissioners talking about that project, so we're thrilled that we're ready to go on that one.

The North Tarrant Expressway is another project that's in Precinct 3 that encompasses a number of cities, it's a major east-west thoroughfare, and it too, being a $2 billion project, is about to start construction. The environmental clearance is expected this fall, along with the financial close of the CDA. Utilities and right of way will start right after the first of the year. So we're very excited about these two projects.

Again, the DFW Connector and the North Tarrant Express are two of our region's highest priority projects. But there are so many other transportation needs in our area, and these challenges are being met by others, these projects that are not funded by gas tax are being met by others who have stepped up to the plate. In 2006, Tarrant County voters passed $200 million worth of program for road bonds to work toward projects in our area. By working with TxDOT, our local cities and federal funding, we're going to be able to take that $200 million and leverage it to over $700 million for local projects. This has made it possible for us to greatly improve mobility and safety in our area. This program includes 16 on-system projects and 56 local thoroughfare projects.

Other important projects in Tarrant County include the I-35 West that was spoken of earlier. We support the North Tarrant Express public-private partnership and we anxiously await that team's plan for I-35 West which is expected by the end of 2010. Our safety and future economy depend on the expansion of this corridor. It was built in 1966 -- many of people in this room might not have been born in 1966; I was -- but the current facility cannot handle today's traffic demands, much less handle the traffic projections of the future.

Looking to the southwest part of the county in Fort Worth, we are committed to the Southwest Parkway project. This partnership between the city, county, state government is a high priority corridor for the North Central Texas Council of Governments metropolitan mobility plan. It will address air quality conformity issues and relieve congestion on I-35. At nearly $2 billion, we strongly support the NTTA and TxDOT moving forward quickly to determine how the entire 27-mile State Highway 121 corridor in Tarrant and Johnson counties will be developed and built.

Well, we've talked about some great projects today, but probably more importantly, we' ve talked about some great partnerships that we' ve worked together on, but maintaining the highway system is also equally important. We've been blessed in Tarrant County and the surrounding counties with something called the Barnett Shale, but this blessing comes with a challenge to preserve our system. Each single well that's drilled will require between 1,000 and 1,500 loaded trucks. These heavy trucks result in significant road damage and safety issues. We, together, must work toward our partnership to meet this challenge to maintain it.

In closing, I also urge you to begin a conversation of the allocation of Prop 12 funds. This is a very important issue on how this is done for our region. I want to thank you for your time, but more importantly, I want to thank all of you for the vision you have for Texas. And at this time, I would like to introduce Judge Harmon from Johnson County. Judge.


JUDGE HARMON: Thank you, Commissioner. It' s my honor to be with you today. Before I came, I searched the internet out to find out how much you make as commissioners, and I found out real quickly that what you do, you certainly do not do it for the income. So I was trying to find out how dedicated you were and I found out real quickly that it' s not money that makes you move, it's the leadership that you provide, and thank you for that.

I do have with me some people from Cleburne and Johnson County, our mayor of Cleburne, I believe our State Representative Rob Orr is here today, and the chamber of commerce brought a large group also today. So we come with a lot of support, and I just want to thank you for the opportunity to address you.

We have difficult decisions to make and they' re best resolved by good people engaging in a partnership to discover new methods by which we can find solutions to the transportation needs of our area. I was reminded just yesterday, as we were riding the train, the importance of being unified in our efforts to work together and solve the common goals that we all have.

I'd like to address two very important issues with you today. The first is in regards to the gas industry that has been so active in our county. The increased truck traffic has reminded me of the importance of preserving our existing transportation needs. Johnson County is a prime example of an economy dependent on reliable roads. Although the Barnett Shale has had an impact on most of North Texas, Johnson County has been the hotbed of this region. Over 3,400 wells were permitted since 2005, and an estimated 10,000 wells could be drilled over the next five to seven years.

After four years of intense drilling, the farm to market roads and the county roads have buckled from all the pressure. The state responded in 2009 by dedicating millions of extensive rehabilitation projects for FM roads and by dedicating additional work crews to meet the critical needs. The county responded with additional funding and partnered with TxDOT and DPS in constructing weigh stations. We also approved four new what we call CV, commercial vehicle inspection officers to help TxDOT inspect these trucks for safety violations and for overweight issues.

In 2007, Tarrant County matched Johnson County with nearly 1,500 annual permits and then exceeded their output in 2008. In the coming years, Tarrant County can expect the same sudden impact experienced here in Johnson County. I just want to thank you for keeping the maintenance and safety of our transportation systems as the state' s top priority. Texas, and specifically the Metroplex area, has suffered less than the rest of the country from the recession thanks to the Barnett Shale. Help us to be ready for the next surge in this economy that this state depends upon.

The second very important issue I wanted to address today is there's no greater highway project for Johnson County than the Chisholm Trail Parkway. It' s been 40 years in the planning, and I think if most of you would research back, it's been on the drawing board for a long time. I counted the red lights going home yesterday after we had our train ride and I had previously said there was 31, well, it' s 35 red lights now that I have to go through to get home, and I think you can kind of get a vision of that.

Daily commuters travel local and state roads to get to and from Fort Worth when I-35 is shut down due to wrecks or impacted by lane closures for maintenance. There is no direct method or alternative route from Johnson County to Tarrant County. The new SH 121 and Chisholm Trail Road would save time, money and lives and open the door for even greater growth in Johnson County and the southwest Metroplex. The initial phase of improvements for the future SH 121 and US 167 and Nolan River Road, as it was shown on the screen a while ago, will be letting, hopefully, November 5 -- I believe is the time for it.

And we certainly appreciate North Central Texas Council of Governments and TxDOT's commitment with $10 million of ARRA funds and $10 million of Proposition funds to start this important project. But this is only a start, and Johnson County will not accept anything less than the momentum continuing and partnership with TxDOT and NTTA. The design is complete and most of the right of way is acquired on the Chisholm Trail. Next is the real agreement by all the parties to fund this project and to construct it. We anxiously await this and look forward to working with you to bring State Highway 121 and the Chisholm Trail project to reality.

Thank you for hearing me today. I' d like to introduce to you Judge Mark Riley and his presentation. Thank you.


JUDGE RILEY: Thank you, Judge.

Madame Chair, Commissioners, thank you for being here and thank you for this opportunity. Commissioner Meadows, I want to thank you not only for your service here but for your community service to this city and this region for many years, and we all appreciate that very much. Maribel, thank you for giving us this opportunity.

Partnership is key in succeeding in any goals that you have, we all know that. The partnership with Parker County and the one that we' re talking about today actually began in 2005. TxDOT commissioned a study for a western loop just west of Weatherford. After that was completed, then it became the issue of who's going to pay and how we're going to pay. In a county of 120,000 -- not quite that much back then -- money is difficult to raise.

As time progressed, the determination was made that the county would pursue that goal. But how do you get buy-in?

I'll take you back to > 07 and through working with TxDOT and working with Michael Morris and the RTC, the RTC actually said we' ll advance you $200,000 to start your process. We went out for requests for qualifications from engineering firms in March of > 08 -- which is just a little over a year ago -- and we employed Freese and Nichols. And that dang commissioners court, when I looked them in the eye and said in August we' re calling a bond election for November, I' m not sure they were real happy at that moment they had that bid. That was a short time frame.

They did their job, the $200,000 investment from RTC paid off, we had a bond election for $80 million one year ago and it cost our local taxpayers 5 cents, it passed 60-40. That tells you the significance of transportation in a community such as ours. We were able to leverage that $80 million with an additional $13 million from the region. That helped sell that bond issue, that partnership, and everywhere I went, every meeting we held, we talked about the partnership that we had not only with TxDOT but in the region, and that speaks to why we've been successful to that point.

To this date, we have four projects underway, 39 percent of the money that we have on the table is for on-system projects. Our voters said we still need to take care of it, we want you to continue to seek opportunities for the state and the feds to have money to do what needs to be done. TxDOT has been a very important player for us, we wouldn' t be where we are today without that.

The key projects, the Western Loop, Weatherford, right of way purchases will soon start. We are on a fast track, we want all of our bond money of 39 projects completed in five or six years. The right of way that will be purchased for the Western Loop, again, through knowing the vision that TxDOT has, we're going to secure 200 feet of right of way, we're not going to do just enough to put a two-lane road down and get it done. And we have a partnership with every city in the county, school districts sat at the table, and that is why we were able to accomplish what we have.

We appreciate what you do and we look forward to further partnerships in our region. The one thing that I challenge all of us to do, it's one thing to come to the table with money and we're fortunate that we have that money to come with, but we all should be looking for efficient ways to improve the process. We get bogged down in process, and process is important, but it does me no good to go to Austin or to Washington and say I have $80 million when I'm told a process will take three years. And so I think we all face that challenge: we focus on money but we need to look for efficient ways to improve the process.

Again, thank you very much. I want to thank Congresswoman Kay Granger who has been extremely helpful to us, our State Representative Phil King, and also Maribel Chavez, Michael Morris, Council of Governments and all the RTC for including us in the regional partnership. Thank you very much.


MS. CHAVEZ: Commissioners, as you can see, our local officials are very aggressive in utilizing every tool possible to try and make improvements to the transportation system, and in fact, as we speak, we also have Hood County who is pursuing some pass-through financing and may also be looking -- in all probability will be looking at a transportation bond election as well. And so we very much appreciate the leadership in Hood County. I would particularly like to call out Commissioners Berry and Heathington and Mayor David Southern in Hood County who are aggressively progressing transportation improvements.

We very much recognize and acknowledge the need for partnerships and we know that we have got to work with our local officials to help them so they can help us make these improvements. And with that, again, welcome to the western side of the Metroplex, to Fort Worth in particular, and we hope you enjoy your stay. Thank you.


MR. MEADOWS: Madame Chair, I would take just a moment to say a couple of things about the four individuals that just appeared before us because I think they really do -- having had the opportunity to work with every one of these individuals, have met with them on individual projects as well as a scope of regional projects -- they exemplify the sort of spirit that characterizes this region. But what is interesting and important to note is every one of their entities, as they' ve come to us, they've come to us with the right spirit and attitude but they' ve also come to us as partners with money, and I think that is the way we' re going to meet these challenges.

And I just want every one of you all to know, Jungus and Gary, Judge Riley and Judge Harmon, we' ve all spent a lot of time together, but I think it' s for the good and I think we're making progress, and we appreciate the partnership that you do exemplify. Thanks.

MS. DELISI: Thank you for the presentation.

Before we move on to the rest of the agenda, I' d like at this time to go ahead and call up Representative Rob Orr who is who signed up to testify on some things, but we' ll bring you to the front of the line, sir.

MR. ORR: Good morning. How are you? Even though I was not on the agenda, I think it was important for me to be here today. Chairman Delisi, I appreciate you having this meeting here in Fort Worth and the Metroplex. And Bill Meadows, I want to thank you for your leadership and for all you've done. We all met just a couple of weeks ago talking about the 121 project and getting all of the parties together, and so I thought it was important for me to be here because I don' t think you'll ever see a more dedicated group of folks, from the city to the county to the state level, that we're all on the same page on this 121 Chisholm Trail project.

With Maribel Chavez and your leadership, thank you so much, we work very well together. And Judge Harmon, I know with you being on the RTC and being on the executive committee, along with Commissioner Matthews, on the TRNC, it's very important. We have every one of our officials and I know, just like Judge Harmon said, we have a lot of people from Johnson County. If you' d raise your hand where everybody would know where you' re at. We are committed to making this happen.

When I was elected, I was in the real estate business and I know you all had different jobs as well, and transportation always has been one of the number one key elements of making economic development the key to this area. Just like Judge Harmon said, this project has been on the books for 40 years, and I want to thank you for what you' ve gotten done. The interchange at I-30, starting on the 67 project, the money, the $95 million that was put in for the Davis Railyard, there' s more been done on this 121 project in the last two years than probably in the last 40 years.

But we want to keep moving forward, and I want you to know my commitment from the state level, with Proposition 12, to me this is a great opportunity to be able to use some of that money to be able to leverage, we have a shortfall, and talking about the partnerships and working together to make this happen. So I wanted to come by today and thank you for coming to the Metroplex and again echo all of my partners here that not only from the city and the county but as well as the state, we are committed to make transportation important for this region. Thank you very much.


MS. DELISI: The first item on today' s agenda is approval of the minutes of last month' s meetings on September 23 and 24. Members, draft minutes are 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. With that, Amadeo, I will turn over the rest of the meeting to you.

MR. SAENZ: Thank you, Madame Chair. First of all, Maribel, thank you and the staff from Fort Worth for last night and for all the great work that you are doing, and I think we can see from the presentations from our local partners that you are doing a great job. Thank you, we really appreciate it.

We will start today, Madame Chair, with a report from Grant Thornton who will give us an update on our ongoing management and organizational review. Steve Simmons will lead that presentation.

MR. SIMMONS: Good morning, Madame Chair, Commissioners, Mr. Saenz. For the record, my name is Steve Simmons, deputy executive director of the Texas Department of Transportation.

Item 2(a) is a report on the status of the independent management and organizational review of the department by Grant Thornton. Susan Pentecost usually gives that presentation but she couldn' t make it and we have Anna Danegger here to make the presentation for Grant Thornton.

MS. DANEGGER: Thank you. Good morning, Chair Delisi, Commissioners and Mr. Saenz. For the record, I' m Anna Danegger representing Grant Thornton.

In light of the continuing discussion about the scope of the organizational and management review and the appropriate timing of the report out of our recommendations, we were asked to provide an update reaffirming our assessment scope, reviewing additional topics that various stakeholders have requested be included in the scope, and explaining the status of those requests and the expected identification of other topics throughout the course of our study.

To talk about the assessment scope, our scope includes:

Reviewing and making recommendations regarding TxDOT' s organizational structure and staffing, focusing on the management levels to include the administration, the divisions, the offices, the regions and the districts;

Making recommendations to further the transparency, accountability and communications within the organization;

And reviewing processes and making recommendations to further efficiency which we're addressing through a diagnostic review of an agreed-upon set of business processes, including accounting operations, communications, human resources, information technology as it supports the department, planning, design and build.

At the commission' s request, development of implementation plans for our recommendations were delayed until after the commission reviews and makes decisions regarding recommendations and which will be implemented.

We have received from various external stakeholders requests for a number of additional topics that they believe need to be addressed. Those include:

A compensation study which was requested by one of the commission members -- that is currently not in the scope of our analysis;

A review of financing mechanisms or innovative financing strategies and the quality of application of those mechanisms that was requested by a legislator -- it's, again, not currently in the scope of our analysis; we' re looking at efficiency and appropriateness of accounting operations but not of innovative financing strategies at this stage;

Engineering effectiveness and practices, including the appropriate cost of a bridge construction process -- again, that' s not currently in the scope of our analysis -- that was requested by a House Transportation Committee member; we' re performing a management and organizational review rather than an engineering review;

Procurement and contracting, that was a House Transportation Committee request and a topic that came up in our conversations with legislators -- again, that's currently not in the scope of our analysis;

A full assessment of potential cost savings across TxDOT, that was, again, a House Transportation Committee member request, it' s not currently in our scope; while we anticipate that TxDOT cost savings as a result of our recommended changes, it is also possible that recommendations could require up-front investments or that financial requests would remain the same but that efficiency and performance would improve as a result of our analysis; a more appropriate place to assess actual cost implications of the recommendations would be as part of the implementation planning.

In addition there are other topics that may merit consideration that are not part of our current scope. Examples of those include: asset management other than roads and transportation infrastructure; full business process analyses across selected parts of the organization to map current processes and to re-engineer processes for greater efficient, improved customer service and so on; and activity-based costing to assess TxDOT' s costs and opportunities to realize savings and to assist TxDOT in its prioritization.

In keeping with the direction provided by TxDOT prior to our award, we'll identify additional topics or areas that we recommend be considered for further study or followup and we'll provide those to you in ongoing updates. Those followup activities will be done at your request or not, and may be part of this contract or through other means done either by Grant Thornton or another entity.

That concludes my update.

MS. DELISI: Thank you.

MR. SAENZ: Thank you, Anna.

Agenda item number 2(b) is a report from our I-35 Advisory Committee, and Mark Tomlinson will lead the presentation. The I-35 Advisory Committee is proposing that you do a bottom-up or grassroots campaign to solicit input and support for the development of improvements along 35. Mark.

MR. TOMLINSON: Good morning, Madame Chair, Commissioners, Mr. Saenz. My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT, and it's my honor today to re-introduce to you Mr. Tim Brown. Tim began his lifetime appointment as chair -- it seems like a lifetime, maybe -- of the I-35 Corridor Advisory Committee in March of 2008. He led his committee through the development of the 2008 citizens report on the current and future needs of the I-35 Corridor. Tim is a Bell County commissioner and TxDOT Roadhand, and he and his committee have spent countless hours in meetings or on conference calls, so we would like to thank him and the many members of his committee that are here today for that dedication and their time.

Since last summer, Tim and his committee have been working on a plan to implement a citizens' directed effort to identify mobility needs, better engage the public and develop solutions based on citizen participation and input. So with that, I would like to introduce to you Mr. Tim Brown.

MR. BROWN: Good morning, Madame Chair, members of the commission and Mr. Saenz. I want to add my voice of gratitude to those who have already spoken, to the hosts for this meeting. It' s a nice break in the routine to meet in this beautiful city and this beautiful facility. I always enjoy going to Austin and the Greer Building is kind of the shrine of transportation in Texas, but it' s nice to be somewhere else.

(General laughter.)

MR. BROWN: Before I move on, I do want to reiterate there are a few members of my committee who are here with me. Mr. Tom Crampits who is from the other side of the Metroplex, Peter Lakody from Coppell, Donna Parker, Chris Stewart and Lana Wolfe -- will you please wave or stand, folks? I appreciate the chance to give them credit. These people have been very diligent in giving their time in this ongoing effort. As Mark said, it seems to be kind of a permanent effort, it's been going for several years now.

You have a report in your packet. I just want to offer a couple of background comments and then I' ll leave it to you to set it up more carefully. In some ways, it seems that we' ve sort of come full circle, having invested years in an effort to try to develop ideas to meet the challenge related to major corridor improvements along Interstate 35. As you know, earlier this month we closed one chapter by adopting the no action alternative on the TTC-35, but that leaves us with the what now challenge before us.

The thing that we' ve learned, I think, more than anything else from that whole TTC experience was that we need to pay more attention to the folks on the ground, number one, and number two, the complexities of figuring out what to do with a major corridor that represents a wide variety of different regions, different urban areas, agricultural interests and so forth, complexities are such that simple solutions just don't suffice. And so we' re recommending that we kind of go back to the grassroots and do something a little bit different.

The framework is already put in place, segment committees have been appointed, as you' re aware, and the proposal is to use those segment committees to gather as much public input through a wide range of different vehicles to try to look at local transportation needs and then assimilate those into a corridor plan that we can bring forward to you for recommended action.

It's a very aggressive plan in the sense that we have a fairly short time line mapped out to get this done. We'd like to have a final report in front of you by next August. Bear in mind, these area volunteers who are dedicating their time, many are not professionals in the transportation field, so there are certain challenges there that we have to recognize.

We're requesting that TxDOT continue to act as the sponsor and facilitator in this process, and we anticipate that there will be some resources necessary to facilitate public meetings and that sort of thing. I don' t have an estimate at this time on what those resources will be; the staff will be working on those kinds of proposals as we get into the next step of mapping this thing out. But that's essentially where we hope to go over the course of the next year.

I think that aggressive action is called for, as speakers from this local area, everyone mentioned the challenges associated with I-35 is certainly a major factor here in this region, but the needs along Interstate 35, as we all know, are very severe, from one end of the corridor to the next, and it is, without question, one of the most important trade and transportation corridors, certainly in Central Texas, but in fact, throughout the entire mid continent of the United States.

So with that, I would welcome any questions and look forward to this ongoing relationship over the course of the next year. Thank you.

MR. MEADOWS: Tim, let me maybe ask you one question and a couple of comments. Number one, I think we all are so appreciative of the organization coming back together to re-examine, to redefine, perhaps, this planning effort, in recognition of the critical importance of it. You' ve said it, I think we all know it, arguably, it' s the single most important travel corridor in the State of Texas. It serves our citizens, it serves commerce and industry, it is absolutely critical, and the fact that we closed a chapter does not negate the fact that it is a critical problem and growing worse every day.

I mean, we have got to face this fact, and I think it is only through the effort that you all are marshaling at this point are we really going to be successful because what you' ve described to me really is a let's go back -- I mean, we talk about grassroots, we' re talking about foundational, you're talking about going back to the citizenry along the corridor and let' s seek the input, let's get the input and rethink the process, let's design a plan that really does address the need that we do have and do so in an inclusive fashion, and that's what I hear you all saying.

MR. BROWN: You' re absolutely right.

MR. MEADOWS: So I applaud you all for your efforts, I know how much time people have already put into this, they are volunteers, and it's important for you to know and for everybody involved at the corridor and segment committee levels that we recognize the importance of the work, we' re appreciative of it, and we really look forward to an August report. Thank you very much.

MR. BROWN: Thank you.

MR. HOUGHTON: Thank you for your service and the committee members that are here and those that are not. We talk about a labor of love, and I appreciate it very much.

MR. BROWN: Thank you.

MR. SAENZ: Thank you, Commissioner Brown.

Commission, moving on to agenda item number 3, some discussion items. Agenda item 3(a), John Barton will lead us through a discussion on some alternate delivery potential processes that we have been looking at as we move forward based on what has happened this last legislative session to our CDA process. So John, I' ll turn it over to you.

MR. BARTON: Thank you. Good morning, Madame Chair, Commissioners, Director Saenz. For the record, my name is John Barton and I have the pleasure of working for you as the assistant executive director for Engineering Operations. This morning I will be sharing with you a brief bit of information about alternative project delivery methods and options that are available to us.

As you know, the 2009 legislative session did not renew the department's ability or authority to enter into comprehensive development agreements and there are still alternative options available to us that would help the department and our partners in delivering much needed projects around the state. So today we' ve prepared a brief summary of the range of delivery options that we believe could be considered by the commission and our partners in the future as we facilitate the timely execution and delivery of highway projects around our state.

There are nine options that are reflected in the table that I just handed out to you. I think it may have been in your handout but I wanted to make sure that it was available to you today as we went through these, and as I go through these, there are just a few things I wanted to point out.

The department would be able to enter into one of three types of project agreements: a comprehensive development agreement with private entities, a pass-through toll financing agreement with a public entity, or toll project agreements with a public entity. The advantages and disadvantages and examples of these are going to be discussed in just a minute in these options that I've laid out, including our traditional design-bid-build process that uses public funding for the support of projects. We've also tried to capture some of the advantages and disadvantages of each and give you some examples of those as we go through this review of information, including, again, the traditional design-bid-build process.

Of the nine options listed, five of those are currently authorized, five of those are currently authorized by state statute -- I think that's important to keep in mind as I share this information with you. Three of the options, the comprehensive development agreement with the private sector financing component are currently not authorized because of the 2009 legislature' s decision not to extend the department' s comprehensive development agreement authority beyond August 31 of 2009, so we' ve passed that date. As you know, current statutory authority for CDAs with private financing exist only for a few selected projects and all the department' s comprehensive development agreement authority for publicly and privately financed projects, including those exceptions, expires on August 31 of 2011.

One of the options that' s referred to as a design-build CDA using private funding is authorized by state statute until August 31 of 2011, at which time it will also expire if the 2011 legislature chooses not to renew the department' s authority to enter into such contracts.

And as I go through the table -- which I' m about to do -- and briefly describe each of these options, whether statutory authority currently exists or not, some of the advantages and disadvantages of each option will be described, and I would like to ask you to keep in mind a couple of things. All five of the alternative delivery options that are currently available to the department would require some level of public financing that could include up-front costs to develop and build the facility, future payments to a private entity or a public agency, and/or future guarantees in making up a gap in toll revenues collected on a project.

And finally, before I enter into the discussion of the table, private financing remains available to us in the national marketplace, we believe. The TIFIA program, however, could be constrained if Congress is not able to or chooses not to increase the available funding for that program in the future, and the TIFIA program is, quite frequently, one of those things that the private sector developers turn to when they' re developing their project financial plans.

So that's just a backdrop of the information that I wanted to share with you and now direct your attention to the table that' s in front of you. I believe that staff is available, Mark Tomlinson, as well as Director Saenz and Deputy Director Simmons, to help us answer any questions that you might have about it. But I think that it' s important to characterize this as just some options that are available to us, but to put it into context as I go through this, these are the types of options that might be available to us to deliver a lot of projects around the state.

One specific example that you might keep in mind as we talk about these, just to frame it for you, would be Interstate 35 East here in the great Metroplex area that goes north of the Metroplex into the growing areas north of the Dallas-Fort Worth Metroplex, and that' s a project that is obviously much needed and one that might be characterized as fitting into one of these options as we move forward into the future.

The first is, again, the traditional design-bid-build process using public funding. That's the type of project that we have traditionally developed and delivered across the state through the program. We currently obviously have statutory authority to do that, and it is a proven method for us, it' s worked well for us in the past. Our contracting and consulting industry is very familiar with that, so it is a good basis for a lot of our projects and those are some of the advantages.

The disadvantage is that it' s a sequential process so it takes time to get the projects developed and then delivered. You have to do your environmental, then your design, then your construction, so there's not an opportunity to develop the project in a more non-sequential fashion. It does require a lot of department resources to do this, this is typically what we do with our own employees in-house, and of course, we retain all the risk in doing that, so there's very little risk being borne by our transportation partners that are our contractors and consultants doing the work, and there' s very little incentive for innovation in the delivery of the project by the contractors, they're just building what we put on the paper for them to build.

And then, I guess, a few comments from staff as we look at that is we have a limited source of funding available to us, it' s what we have in our traditional fuel taxes and registration fees, and you know, and we'll hear more today about the limitations that we have on that, and that we can leverage those funds to do bigger and greater projects traditionally through the use of our design-bid-build process. So that's the first option.

The second that' s laid out on the sheet that's in front of you is a design-build CDA using public funding. This is the type of CDA that many of us are familiar with. The funds that are made available to the project come from public sources and you award the project to a design-build developer through a best value selection process that' s based on performance-based specifications. Our authority to enter into these contracts, as noted earlier, expires on August 31, 2011.

A couple of examples of the projects that have been developed in the state so far using that are Segments 1 through 4 of State Highway 130 around the Austin area, and then here in the Metroplex the Dallas-Fort Worth Connector, the DFW Connector. This is a type of delivery system that works well for rather large and complex projects, it helps us in scheduling a contract to get it in a quicker time frame because your design and construction activities overlap one another and are happening, quite frankly, simultaneously, and it does shift the risks that are associated with that to the developer rather than to the owner, or the state in this case.

One of the disadvantages -- if you would like to characterize it that way -- is it's a relatively new process for Texas. A lot of our public partners and transportation professionals aren't familiar with that, specifically our contractors and consultants, so we have a little bit of a lack of experience in this particular delivery model in the transportation industry here in Texas.

We are limited in the use of this type of project to tolling projects only, so for us to be able to do it, the projects have to have a toll element associated with them. And again, because the funding is coming from the public sector, there's a limited amount of funding available for these types of projects.

The third on the first page there is the concession CDA, and again, I think this is one the commission is familiar with, but these are longer term contracts, typically 30 to 50 years, that provide for not only the design and construction of a project by the developer but also the financing and the operation most often. It does transfer and assign all the risks to the developer in doing this and at the end of the process when the project is handed back over to the state, there's a remaining life of about 10 to 50 years, depending on how you structure your deal with the developer, so you have an asset that carries on after the developer' s time of owning and operating it expires, if you will.

Again, some examples that we have here are State Highway 130, Segments 5 and 6 south of the Austin area down towards San Antonio, the North Tarrant Express which has already been talked about here in the Fort Worth area, and then the LBJ Freeway managed lanes project that is currently being developed over in the other side of the Metroplex. And I won' t characterize which one is right or wrong, good or bad, but there are two sides to the Metroplex, we clearly understand that.

We, with very few exceptions, do not have the authority to enter into these types of contracts at this point in time. There are some exceptions that were specifically delineated in law and we continue to move forward with those.

Again, as I said, the advantages are that it shifts the responsibility for the construction, design and operation and the traffic risk of those to the developer. It allows us to be able to use these types of contracts when there's limited public sector funding available to move forward with the project. Clearly, it incentivizes the developers to be very innovative in the way they deliver the project and maximize the value of those to their stockholders and to their best interest. And it's a way to accelerate the delivery of a project they' re able to work on these things, again, simultaneously rather than sequentially.

Some disadvantages, if you will, because of the actions of the legislature, it's clear to us that there's some concern by the public and the legislature in how these deals are being structured and they're wanting to look at that and evaluate that with us as we move forward, so we now don' t have the authority to move forward with these except in limited cases, and it does leverage future toll revenues for the construction of a project, so you' re taking the future revenues that might be available through some partnership with the state and assigning those over to the delivery of the project.

Moving on to the second page, the next two options are the design-build-finance-operate model of a CDA. Again, I won' t go through the conditions of a CDA but would just point out that the owner in this case would make annual payments to the developer once the road is open to traffic. This is referred to as availability payments, and it brings in future public sources of funding for a project that could be through traditional revenue streams or through toll revenues, and the traffic and revenue risk is then, therefore, retained by the public sector or the owner rather than the private entity developing the project.

We don't have currently statutory authority to move forward with this type of project, but some examples that are out there that you might want to look for in trying to evaluate the value of this are the I-95 project in Florida, and then, of course, DART is considering this for their Cotton Belt commuter rail system, and then abroad there's been extensive use of this in the United Kingdom, and they' ve been able to use this to develop and implement many successful projects.

It does work well, as noted, for complex projects, like most CDAs do, it allows you to move forward with a schedule acceleration when that's important to you. The design contractor and operator are incentivized, again, to bring in innovations, and again, the construction and maintenance risk is borne with them rather than the owner who is retaining the traffic and revenue risk. So that' s kind of the design-build-finance-operate CDA.

The next one is kind of a newer version of something that we've thought of and that' s a public sector pass-through financing agreement. We' ll hear more about pass-through toll or financed projects in a few minutes under another item, but you've heard a little bit about that today from the presentations from our local elected partners and leaders.

This is a situation where the public sector would enter into a pass-through finance agreement with another public sector and it would allow us to enter into agreements with cities, counties, toll authorities, regional mobility authorities to perform the financing, the design and construction of a facility. That's typically what we are already doing. It allows them then to sometimes operate the facility if it's a tolled facility, and then we, in turn, as the owners would make annual payments back to those entities based on the traffic that' s using it once the system is open to traffic.

We have the authority to do this, obviously we' ve done it with our partners here, and we' re going to be talking about additional projects that we might be doing this on in the future. It does help us to accelerate the implementation of these projects because others are bringing their resources to bear in getting the projects delivered today, and then the public, or in this case, TxDOT, is paying for it over time. And it also allows these local entities to be in control of the development of the project so our resources, our engineers and others are pulled out of the process while the locals deliver it and implement it.

The limitations are that we don' t have a lot of money available to us, it' s all going to come from our normal revenue stream, and so there' s limited funding available, and while it' s available to us, we're just deferring our costs into the future. Also, one of the concerns is that under the current rules we're only able to pay back the construction costs and so the costs for financing and designing and purchasing the right of way for these types of projects is borne by the developer or the implementer, and in some cases, if it' s a toll road, you would be leveraging future toll revenues against the payback stream as well.

Moving on to the third page, a new twist on the pass-through toll financing is one that we' ve had limited experience with but has been successful for us and that' s the private sector pass-through finance agreement. This is a pass-through toll agreement or financing agreement with the private sector where they develop and implement the project. Again, it could include operations if it' s a tolled facility and we would be making payments to them into the future. The award of this would be based on a best value analysis and so that' s an important part of this particular delivery method.

We do have the authority to do this under current law and some examples that we've done that on are specifically the Spur 601 pass-through toll finance project in El Paso which is currently partially completed and the remainder is still under construction. That project and this tool would allow us to advance the delivery of projects because, again, we get someone else out there in front of it, and then we make our payments to them over time based on the traffic that' s available to them.

There, again, is limited funding for this and the current rules we have in place, as I' ve already mentioned just a minute ago, are a little bit of a disincentive for the developers because we can only reimburse the construction costs now under our current rules, and so that's one of the issues that we would have to take into consideration.

Moving on to the next one is a private sector pass-through finance agreement that would require rule revision in order to allow us to do this, but it is something that we think is something the commission may want to consider. If the rules were revised under this particular model, a private sector pass-through finance agreement could be entered into through a competitively procured process. The private sector, again, would develop and implement the project and could operate it if it was a toll road. We, as the owner, would be making future payments on an annual basis once the road is open to traffic, and we would have to award these agreements based on a best value selection process.

We think we have the statutory authority to do this but it would require rule revisions. Again, it helps us to develop and implement projects quicker. We haven't done this before so I don't have any examples of projects that I could share with you where we' ve done this.

The concerns would be whether or not the legislature and the public would perceive this as something that they' ve been comfortable with and have endorsed, and it would require rule revisions in order to allow us to solicit a procurement and then to select a developer to do that and to make payments to the developer to finance the project as well because our current pass-through rules, as I mentioned, only allow us to cover construction costs. For this to work, we' d have to be able to cover financing costs as well. And then, of course, we would have to be comfortable with leveraging the future toll revenues off of a project that we might share in to pay for the project and the costs associated with it. So this is kind of a nuance that we' ve suggested might be something that could be considered but we currently don' t have the authority to do it without rule revisions.

The next one, and turning to the last two on the fourth page, are a toll project agreement with a city, county or other toll entity or local governmental entity. These would be projects that are toll projects where we just enter into a project agreement with the local entities. We have done this on many of the projects that we' ve developed in the past here with NTTA in the Metroplex, HCTRA in the Greater Houston area, and with our regional mobility authorities in other areas of the state.

This allows those entities to perform the traditional functions that the department would do, but they would also not only design and construct them but they would finance them as well. There are certain local entities that may have design-build or design-build-operate authorities that would tie into this, and again, it would allow us to accelerate the delivery of a project but we have limited capacity in order to be able to do this because of the financial resources that both parties might have to bring to bear.

We do have the statutory authority for it and I wanted to point out that certain local entities fall under differing statutes, so there' s additional research that might be necessary in order to make sure that any entity that would approach us with this type of delivery model in mind has the legal authority to do that and that we could work out the arrangement with them through the agreement.

And then lastly is a concession with availability payments, and this is simply a concession CDA, as I' ve already discussed, that would allow us to move forward with this, but the traffic risk is clearly still assigned to the department or the owner, and the condition of the facility, once it's built and the way it performs would be something that would have to be defined within the terms of the contract in order for us to make payments to them based on the availability of that facility for the public to use it as a corridor and a place to drive on.

The statutory authority does not exist for us to enter into this type of project at this point in time. An example of a place where it' s been implemented is the Florida I-95 Express project, as well. And again, the advantages are it shifts the responsibility and risks associated with the design and construction of a facility over to the developer, it uses some up-front funding mechanism that's available to them in order to develop it. The developer is incentivized, again, to be very innovative in the way they deliver and structure the deal, and then the state sets the toll rates that are associated with the project once it' s open to traffic.

The disadvantage is that it would require us to make sure that the legislature and the public supports this type of agreement and seek the appropriate legislation to do so. There are some appropriations risk with this because if the revenues are not sufficient to cover your availability payments, then the state would have to bear the difference in the cost in order to make those availability payments to the developer.

It's currently limited in its testing or experience in the United States and so there are some concerns about whether or not the enforce-ability of future payments would be an issue for the department, and because of that traffic and revenue risk that's associated with this, we would have to be prepared to serve as a backstop, if you will, in case the revenues were not sufficient from the toll road in order to pay those availability payments.

So I think what we wanted to do today was just briefly share this information with you to kind of describe what we believe are the tools available to us in developing and implementing projects with our partners from around the state. We certainly have a lot of interest, not only here in the Greater Metroplex area, but other parts of the state, in continuing to develop these large and important projects, and there' s been questions about what we could and could not do, and so we wanted to just have an open discussion with the commission about that and what we can do, what we might could do, and just open up the discussion of where the commission would like the department and our staff to move in evaluating further options for these types of projects for you.

So, Director Saenz, that concludes my remarks and I' ll be happy to try to engage in any discussion or questions that the commission might have.

MR. HOUGHTON: John, thanks for the report. Bottom of page 1, third option, what projects are available for that -- specifically available for that concession CDA for us?

MR. BARTON: For TxDOT, Director Saenz may be best prepared.

MR. SAENZ: Those projects that specifically we could do a CDA on, say, State Highway 161, but there were specific requirements that we had to go through as part of Senate Bill 792. We could also do a CDA for Loop 9 in this region; we could do a CDA for the Grand Parkway. All of those would still have to go through another requirement of primacy that' s part of 792 where we have to work with the local tolling entity, whether it' s the NTTA here or the county toll road authorities in the Houston area, for them to determine whether they want to build the project first.

MR. HOUGHTON: My next question is in this area -- let' s just stick to this area since we're here -- what primacy on what projects does NTTA have currently?

MR. SAENZ: Right now NTTA has taken primacy on the 161 project, they took a conditional primacy based on a final determination of financing. We are working with them and have a letter to them on the Loop 9 to, in essence, do a waiver.

MR. HOUGHTON: But they get first opportunity.

MR. SAENZ: But they will have first opportunity.

MR. HOUGHTON: What else?

MR. SAENZ: 161, Loop 9.

MR. HOUGHTON: The Trinity Parkway would be theirs as well?

MR. SAENZ: The Trinity Parkway is their project. The Southwest Parkway, the 121 project, the north piece of Southwest Parkway, Chisholm Trail, is an NTTA project. The Chisholm Trail portion of it would have to go through the market valuation primacy.

MR. HOUGHTON: But they have first opportunity.

MR. SAENZ: But they have first opportunity.

MR. HOUGHTON: And we have no authority.

MR. SAENZ: We have no authority to do a CDA on that one.

MR. HOUGHTON: On either one.

MR. SAENZ: On either one of those two.

MR. HOUGHTON: Okay, so we' ve got one, two, three, four.

MR. SAENZ: That is it.

MR. HOUGHTON: I thought there was other projects, 376, aren't there some other projects? Michael Morris, do you know?

MR. SAENZ: 360 and 170 would be projects that cannot be developed through a CDA.

MR. HOUGHTON: They cannot.

MR. BARTON: That' s correct, they cannot.

MR. SAENZ: But they still are subject to primacy.

MR. BARTON: That' s correct. The other projects specifically, Commissioner, are the I-69 project located south of Refugio County that we have CDA authority on, some Grayson County area projects.

MR. HOUGHTON: I' m just doing it for the people in the room to understand.

MR. BARTON: We' ve covered the basis of what's available for those in the room.

MR. HOUGHTON: NTTA has primacy on 360?

MR. BARTON: 360 and 170.

MR. HOUGHTON: Well, I know it' s not a CDA, my point is there's a lot on their plate.

MR. BARTON: Yes, sir.

MR. HOUGHTON: A lot on their plate to finance.

MR. BARTON: There' s no question about that.

MR. SAENZ: We also, Commissioner, have been working with NTTA on several of the managed lane projects in the Dallas portion of this area, the 35 East, 183 and the I-30. Those are managed lane projects, we have gone through the market valuation and the waiver of primacy, they have turned them over to us, but because we did not get the CDA authority to continue, we can't move forward on those projects, and that's the reason we were looking at some of the alternate delivery methods that could be available for these projects.

MS. DELISI: Didn' t we hear from you at a previous meeting that we' ve been asked specifically to figure out a way to do I-35 East?

MR. BARTON: We have, and must of this information was developed in response to brainstorming on what types of options would be available for a project like I-35E. Again, because of the limitations, we don' t have the authority to move forward with a CDA on I-35E, we felt like we needed to evaluate these other options, and that' s one of the reasons that this is an important issue, not just for that project.

MR. HOUGHTON: Does NTTA have authority on 35E?

MR. BARTON: Yes, sir.

MR. HOUGHTON: They do?

MR. BARTON: They could develop it as a CDA; we could not.

MR. HOUGHTON: So they do have 35E.

MR. BARTON: Yes, sir.

MR. HOLMES: John, on page 3, the modified private sector pass-through, when you talk about a rule change, those are rules that have been set by the commission, as opposed to the legislature.

MR. BARTON: That' s correct. Statutorily, as we understand it, there' s no limitation to prevent this, but our current rules that the commission has adopted would not allow us to move forward with this type of approach on a pass-through toll project.

MR. HOLMES: It would seem to make sense that we would explore that rule change.

MR. BARTON: Okay, yes, sir.

MR. SAENZ: Mr. Holmes, one of the things -- and you bring up a very good point on that modified -- when you look at that process that we're talking about changing rules to make it a solicit process where we would go out there and solicit a procurement with the private sector, it begins to look and feel very much as a concession type CDA, so I think that' s something from a perspective we need to really look at to see what kind of support, if any, there is to doing a CDA when the legislature chose not to give us that authority this past session.

MR. HOLMES: Well, I' m not suggesting that we violate the rules that the legislature has set, but I am suggesting that we look at our rules and we look at how this would comply with existing law to see what opportunities there might be.

MR. SAENZ: Yes, sir.

MR. BARTON: If there are no other questions, I believe that concludes our remarks in this particular discussion item, and we' ll take the direction from Commissioner Holmes to look at what rule revisions would be necessary and allow the commission to evaluate Director Saenz' s comments and whether or not this is an area that the department and the others would like for us to move forward in.

MR. SAENZ: If you would continue, John, with item number 3(b).

MR. BARTON: Yes. Item 3(b) is a discussion of our 25-year projection of available funding for the development of the department' s program as well as the Statewide Transportation Improvement Program and our Unified Transportation Program, and we have a power point presentation we' ll refer your attention to, and again, I think it' s available on the screen in front of you and to the audience on the screen overhead. And our chief financial officer, Mr. James Bass, will begin the presentation, I'll follow up, and then Michael Morris with the metropolitan planning organization here in the North Central Texas area will be helping us in presenting some perspectives from the local metropolitan planning organization.

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

The discussion today is on the UTP funding levels, or my portion of the discussion today, and so we are not asking you to select and identify funding levels for the different categories in the UTP today, we hope to do that in November, so we wanted to start the discussion with you today, provide some background material to you, see what additional information you might need or questions you may have in order to be prepared to do that at the November meeting.

So I figured the first thing to do, as we look forward, is to, of course, look back, and 18 months ago we visited with you for the 2009 to 2019 UTP, and after looking through the projected revenues and projected expenditures out of the State Highway Fund, we believe that the fund would be able to support somewhere around $28.2 billion in letting over that eleven-year period.

Some of the major assumptions were no new debt, and that was no additional Prop 14 debt, so there was no additional debt service for that reason. That obviously has changed in the last 18 months. One thing that has remained constant in the last 18 months is declining revenue from Congress due to the spend-down of the Federal Highway Trust Fund, and as we sit here today, there is no normally six-year transportation bill. We' re living in continuing resolutions 30 days at a time, so as we look forward, we' re continuing to have to guess what Congress may or may not do on that front. And again, on the UTP, it really just focuses on that letting amount and the contractor payments, not the when I say $28.2 billion.

Some of the major assumptions that led us to that -- again, this is from last year -- were the revenues over that eleven-year period that were forecast by the department as well as the expenses, and again, revenue minus the expenses for other functions of the department and other agencies of the state that operate out of the highway fund led us to that $28.2 billion amount of letting.

So as we move forward, we kind of update those forecasts, and starting with the revenue forecast, 18 months later, what does that revenue forecast look like, and 18 months ago we were projecting a total of $78.16 billion. That has been revised -- and you can see that there in the current column -- into some broad categories. Eighteen months ago we were projecting that state motor fuel tax would grow at a rate of 1-1/2 percent per year, and I think there might have been some discussion that was a conservative estimate because the past and recent experience had been higher than 1-1/2 percent.

Of course, then 2009 hit where we had a year of actuals that was just over 2 percent less than the prior year and that has forced us to change that forecast going forward. We now are forecasting that 2010 will be one-half of a percent higher than 2009 and then each year would merely grow at one percent at that point. Again, it' s a forecast and that may turn out to be overly optimistic or perhaps pessimistic. That equates to just over $2 billion less in projected revenue.

State registration was a small adjustment in the growth factor, bringing it down to 4-1/2 percent growth projected per year, that' s a quarter billion. The state motor fuel tax, we' re receiving less money than we had originally projected because obviously we were projecting fewer gallons to be sold. Well, if fewer gallons are sold in the State of Texas, then there's fewer federal tax gas dollars that goes up to D.C. and is returned back to the state as well.

On the other federal line item -- that' s basically Federal Aviation, Federal Transit, National Highway Traffic Safety -- it's roughly flat. We' ve actually seen a little bit of a growth. Other state which is a variety, a number of revenue sources, again is roughly flat, but all in all, we see a revenue forecast of almost $4 billion less from 2009 to > 19 than what we were projecting 18 months ago.

If we then turn to the expenditure side -- and again keeping the 2009 to > 19 time frame -- the first item we have on there is TxDOT Operations -- that would be administration, travel information, and all the things that TxDOT does, as well as the utilization of state highway funds by other agencies, and we see that that, primarily because of what we would term a reduction in diversions in this last legislative session which is DPS and other agencies utilizing less dollars out of the State Highway Fund than they had previously, we continued that, we adjusted our forecast going forward such that the estimate is that that will take $4.6 billion less than what we thought a year and a half ago.

Engineering and right of way are basically the same little bumps there. The toll equity, the big jump there on toll equity in the current forecast is associated with three of the projects we' ve heard of today, the three CDAs in the Dallas-Fort Worth Metroplex and the state subsidy that's required for those. It's still delivering projects, it's just delivering them outside of the, quote-unquote, letting process.

We are now on course to issue all $6 billion of Proposition 14 debt. Proposition 14 debt is backed by the State Highway Fund so the debt service is paid by future gas tax collections -- that' s why it shows up here -- and so now that the plan is to issue all $6 billion rather than $3.1-, there's going to be additional debt service during this time period.

In addition, pass-through tolls increased, the expectation of repayments on pass-through tolls. There' s been a rider in the Appropriations Bill for 2010 and 2011 requiring the commission to enter into a certain amount of pass-through tolls, and so that has shown up there. The last two lines, the maintenance and contracted routine maintenance, in efforts to continue to maintain, hopefully, the existing system at acceptable levels, there's been an increase in those two line items as well.

What we see, though, is when it all blends in, there' s not a large difference on the expenditures. What we have is reductions to other agencies is somewhat offset by an increase in additional debt service in Prop 14, but unfortunately, that leaves us with our reduced revenue projections. So just to bring those together: revenue $3.93 billion less, expenses $.21 additional -- which means we have less cash for other purposes -- so just over $4 billion less for 2009 to > 19 to make contractor payments during that time period.

One of the things, that' s the amount of cash that's available for contractor payments. Some of that cash that' s used for contractor payments in 2009 was for projects that were actually let in 2008 and 2007, so we have to go through a conversion, if you will, to take that available cash into an amount of letting that it will, and you can see there that it's roughly $5 billion less, almost $6 billion less than it was 18 months ago for those revenue and expenditure reasons.

MR. HOUGHTON: James, can you stop for a minute?

MR. BASS: Yes.

MR. HOUGHTON: When you are looking at the cost to doing business, the cost to build, where is your benchmark set? We' ve been talking about this basis, we' re showing costs are coming in under our estimates, we' re showing -- I don't want to call it a surplus but there's balances, positive balances at the end of the year. So looking out, what' s your basis, where's the benchmark?

MR. BASS: On this one, on the cash forecast basis, the $22.26 billion is the dollar amount of letting that it will support. Now, whether that is 10,000 projects or 8,000 projects or 7,000 projects, that' s what the inflation projection will determine, but what the cash forecast says is this is the amount, that happens throughout the planning process, and I believe currently what we do for planning purposes is we take the current year estimate and then inflate it by 4 percent per year; if the project is four years away, we would inflate it at 4 percent per year for four years to get an estimate of what the cost is going to be four years from now. But here this is the amount of money we're going to have and it will deliver whatever it will deliver at that time, whatever the prices allow us.

MR. HOLMES: James, most of the numbers that I' ve looked at suggest that receipts from motor fuel tax will not only not be slightly positive -- which you've forecast, right, you said one percent a year or so?

MR. BASS: Correct.

MR. HOLMES: But most of them seem to be relatively negative -- in fact, pretty significantly negative due to improved mileage per gallon.

MR. BASS: Right, and some of that, as I said, the half percent in 2010 and the one percent may be overly optimistic. In some circles, fuel efficiency is going to have a great impact and is going to reduce the amount of the gallons of gasoline. What' s been interesting and I guess what leads us to the half percent and the one percent growth is that over the last 18 months the decline that we' ve seen in actual receipts has been driven more so by diesel than by gasoline, and so diesel, the theory is, is much more related to the overall economy and then it's on the gasoline side where you see the effects of consumer behavior, if you will, on buying a more fuel efficient vehicle.

We have seen that drop, some of that was due to $4/gallon gasoline and then I've seen different reports on the Cash for Clunkers that while a lot of the new vehicles that were purchased were not necessarily what you would call fuel efficient, they were slightly more modern SUVs. So I guess in our hope we' re thinking that any fuel efficiency on the gasoline side will be offset by continued growth in the population in the State of Texas so that would somewhat remain flat.

MR. HOUGHTON: But we haven' t seen that, or we haven't experienced that.

MR. BASS: Clearly, and so then the growth would clearly be driven from the economy and the diesel side of the equation.

MR. HOLMES: And the assumption then is that there will not be improvements in mileage in the diesel side of the equation, or diesel is not going to be more fuel efficient in the future.

MR. BASS: Right, but then the diesel with the freight with the increased population, there will be more delivery of goods that will need to be taking place to serve the increased population of the state.

MR. HOLMES: And all of that may end up being the case, but it seems to me that even a one percent growth is optimistic.

MR. BASS: And we can certainly look at that and visit with others. One of the challenges we visit with the Comptroller' s Office and others who do revenue forecasts, generally speaking, the Comptroller's Office only looks out at a biennial basis, the current budget for the state, we' re looking well past that for ours, but we will certainly revisit with people and potentially adjust that growth factor. Again, it' s hopefully an educated guess, but at the end of the day, it is a guess as to what's going to happen in the future.

MR. HOLMES: It is a guess, right.

MR. HOUGHTON: James, what is our authority for debt financing, general?

MR. BASS: General? There is a statutory cap of no more than $6 billion to be issued that would be backed by and paid for by revenues out of the State Highway Fund, so Proposition 14 is $6 billion. We' ve issued $3.1 billion to date, the commission has selected something more than that on project-specific identifications, and we' re just waiting for the cash flow to dictate to us to go issue more.

MR. HOUGHTON: That' s our general authority.

MR. BASS: For the State Highway Fund. There' s $5 billion of Proposition 12 that is paid back by -- since it' s general obligation bonds of the state, it would be paid back by the General Revenue Fund of the state. The legislature gave direction through a rider for the commission to award $1.85 billion this biennium, another $1 billion to go into the State Infrastructure Bank, and so there' s an opportunity for another $2 billion to be utilized in the future. So the commission has the authority up to $5 billion, but currently the legislature has restricted that, I would say, to no more than $3- before the end of 2011.

MR. UNDERWOOD: James, before everybody gets real excited about all the billions of dollars, how much are you going to set aside to pay the note? I just want to make sure they understand they keep hearing billions of dollars to spend on construction, we have to set aside so much of it just to pay the note back.

MR. BASS: Right, and that' s one of the benefits of the $5 billion of Proposition 12 is that those debt service payments over time are paid back by the General Revenue of the state, and so for that debt service on the $5 billion, it keeps the transportation program unaffected going forward and it truly gives a $5 billion boost to it.

Proposition 14 which is paid back by the State Highway Fund, what it does, in my opinion, is it allows projects to be delivered sooner -- which is obviously a very good thing -- but in the future you' re making those debt service payments so you don' t necessarily deliver any additional projects, you just deliver them sooner.

MR. HOUGHTON: You' re shaving off inflation.

MR. BASS: They have to be paid back, correct.

MR. HOUGHTON: Do you know of any other states that leverage their state highway fund?

MR. BASS: Yes, a number of them do. I don' t know the caps. In addition to the statutory cap of no more than more than $6 billion, there's another restriction that the commission could issue no more than Proposition 14 debt that would cause debt service to be greater than 10 percent of the revenue to the Highway Fund, but that particular restriction doesn' t come into play because the $6 billion cap is well below -- the $6 billion cap probably puts us in the neighborhood of 6 or 7 percent.

MR. HOUGHTON: What would our authority be under the 10 percent rule?

MR. BASS: Well, I think it would get us close to two things: it would change it to no more than $6 billion issued ever, to no more than $8- to $9 billion outstanding at any point in time. And so right now it' s not a revolving $6 billion, it's an issue $6 billion and you're done. If that went away, it would change to an amount outstanding at any point in time, so it would be able to kind of keep rolling along.

MR. UNDERWOOD: But you' re basing that off the fact that the gas tax is going to either stabilize or increase by one percent. Right?

MR. BASS: Correct.

MR. UNDERWOOD: Now, if it stabilizes or goes down, $6 billion doesn't look that good to me.

MR. BASS: Correct. Then we would have already issued the $6 billion, so what we would do is we would then still be on the hook, so to speak, to pay the debt service on that $6 billion but that would leave less money in the future to deliver new projects at that point in time. Agin, those projects would have been delivered sooner but it' s going to leave you less to address the issues of that day when we reach that point.

MR. UNDERWOOD: My suggestion is then to actually start taking money out of maintenance because you' re going to have to fund it somehow. I mean, these people are out here saying okay pay me, and the gas tax money is not showing up, so we' re going to have to rob Peter to pay Paul.

MR. BASS: And I think all that' s foreshadowing one of the future slides.

MR. UNDERWOOD: Sounds like my marriage, but okay.

(General laughter.)

MR. HOUGHTON: So what you' re saying, James, if we had the 10 percent, not the hard cap -- if instead of the hard cap we had the 10 percent, you' re talking about $8- to $9 billion of debt that you could carry?

MR. BASS: Obviously depending upon interest rates and everything else, but in the neighborhood of $8- to $9 billion.

MR. HOUGHTON: So about $2- to $3- more billion.

MR. BASS: Right.

MR. HOLMES: Clearly, borrowing future gas tax money is not the way out of this problem, so maybe we go another couple of billion, but we've got, I don' t know, in this region alone, what, $30-, $40 billion of needs, and then you have that in other parts of the state as well.

MR. BASS: Just to briefly touch upon one other major borrowing program of the department, of course is the Texas Mobility Fund, and unlike Prop 15 and unlike Prop 12 that both have specified dollar caps on them currently, the only cap on the Mobility Fund is the estimated revenue and/or the revenue streams that are dedicated to it, and so currently, given the estimates from the Comptroller which controls how much we can issue, it has supported in the past about $6.4 billion of projects, including right of way and engineering expenses as well.

Now, what will happen, hopefully, over time -- it can go out 30 year debt on the Texas Mobility Fund, every time we cross from August 31 to September 1, there's a new year 30 that's within the grasp of the Mobility Fund -- hopefully what will happen is over time the revenue estimates will increase from the Comptroller's Office because the economy of the state will continue to be strong and actuals will come in higher, and/or additional revenues will be dedicated to the Mobility Fund, that will create additional capacity from the Mobility Fund.

And again, the revenues that are paying back the Mobility Fund previously did not support transportation, so the example kind of was it's like Mom and Dad paying for your car loan rather than you having to pay for it yourself. So that would be a beneficial thing to the department and to transportation throughout the state of the Mobility Fund were able to grow.

MR. HOLMES: Just a couple of additional points, and the Mobility Fund is a little bit like the Motor Fuel Fund in the sense that it' s not indexed to inflation, it's simply indexed to growth.

MR. BASS: Correct.

MR. HOLMES: And your what I consider to be slightly optimistic projections, are dependent on growth in motor fuel tax from diesel, and in that happy occurrence, you also have very significant increases in maintenance costs because the real maintenance costs are occasioned by the very vehicles that burn the diesel. And so if you' re going to project increased diesel fuel tax, you' re going to have increased maintenance costs as well.

MR. UNDERWOOD: James, quick question too. Do you feel comfortable that we have a stable form of funding for all that we' re trying to do?

MR. BASS: No -- in one word, no.

(General laughter.)

MR. BASS: We talked about the uncertainty on the federal side over the last 18 months. I believe Congress has had to move over $15 billion from the general fund at the national level to support and be able to make payments out of the Federal Highway Trust Fund.

MR. UNDERWOOD: I' m just look at the gas tax, it declines, it stabilizes and now it drops down. We' ve seen rescission from the federal government -- which I understand, they have to do their job too -- but I'm just saying that if you're a businessman and if you're in the construction business or road construction, this is a very vague business to be in, I think -- that's the wrong adjective.

MR. BASS: The primary revenue stream being based upon the number of gallons used is not a comforting solution.

MR. UNDERWOOD: It sure is hard to go to the bank with that.

MR. BASS: And no one ever thought, I' d imagine, back in the early 1900s when they decided to tax fuel -- the purpose was to tax people's use of the system and the only way that they could do that then was indirectly through the purchase of fuel. And it worked very well for a very long time because if you and I both drove 12,000 miles a year, we probably used probably close to the same number of gallons.

MR. UNDERWOOD: Yes, we all drove Model A's then, and guess what, we have newer vehicles.

MR. BASS: And that is no longer the case, even close in some circumstances. And so I think that' s why you hear, see and read a lot about what they call a vehicle miles traveled tax or a mileage based, so if I drive 24,000 miles and you only drive 12-, then I use twice as much capacity, so perhaps I should pay twice as much for using the system as you do, and a mileage based system would deliver that.

MR. UNDERWOOD: My point is we don' t have a stable form of funding.

MR. BASS: Correct.

MR. UNDERWOOD: We have great needs and we have people in this business that it's feast or famine if you're on the construction business, and I don't think that' s conducive to a good climate in Texas.

MR. BASS: Right, and it makes it difficult for long-term planning, as you see here.

MR. UNDERWOOD: Right. How can you make a capital investment in equipment to be able to do a better job or faster job of construction on highways when you can' t go to the banker because you can't show him how you're going to pay for it.

MR. BASS: And I know you, as commissioners, know this, but a lot of people don't understand when the department issues an award, say a $30 million construction project, on day one we do not have that $30 million of cash sitting and tied to that project. We have gone through our forecast and we' ve assumed that that $30 million project is going to pay out over the next 36 months and that the revenue from gas tax, registration fees and others is going to be sufficient to make each and every one of those 36 monthly payments. So when we see an unexpected drop in revenue, it creates -- havoc might be a little strong of a word -- but it forces quick response to those circumstances.

MR. UNDERWOOD: So that' s the reaction of going and borrowing money.

MR. BASS: Correct, on the short-term borrowing program.

MR. UNDERWOOD: So we don' t write a hot check to the people that are doing the hard work.

MR. BASS: Right, and that' s been a very valuable tool for the department that we only got back in 2001 to allow us to manage that cash flow for those unexpected.

MR. UNDERWOOD: But I just want to warn us that we don' t want to be using that credit card very often.

MR. BASS: We' re about $285- this morning -- and that would be million.

MR. UNDERWOOD: I know, I understand. Thanks.

MR. BASS: And so that' s a drop of almost $6 billion. Some of that was just change in delivery. If you look back, that $28.18- in April of 2008 included under the letting caption, if you will, some of the money that we' re now dedicating through pass-throughs and CDAs, so it' s really just a different description. Rather than those projects being moved forward under letting, they were moved forward under a different mechanism, and so that's why I' m changing the $24.7- that's project supported there.

So all of my discussion to date has been kind of the baseline of 2009 to > 19 that we talked about 18 months ago and how that' s changed. So looking forward, what we' re really trying to get to is an allocation for the period of 2010 to 2020. So we went through the allocation, updated the baseline to $22-1/4 billion, we then back out what was actually used for 2009 and then added to it the forecast for 2020 and we get to just over $23 billion in letting supported through the UTP programs.

This is a good opportunity to highlight some of the debt programs and other things we just spoke about that allow us to deliver additional projects, and historically, those don' t always flow through the UTP. Oftentimes, these alternative funding or delivery mechanisms are project-specific, whereas, the UTP is more of an allocation-formula-based to different areas of the state, so the UTP letting support is just about $23 billion.

There's a remaining charge for the Dallas-Fort Worth CDAs in > 10 and > 11 of another billion dollars, additional pass-through agreements to be entered into in > 10 and > 11 of half a billion, federal stimulus has already been selected but they haven' t been let or awarded yet -- including 2010. And we see 121 payments for projects in the Dallas District, payments received from Highway 130 and then Proposition 14 and Prop 12, you see we get to add another $7 billion worth of letting through these alternative mechanisms of funding additional projects in the state. In all of that, to focus through the UTP process and categories and allocations, there is $23 billion to fit into the various categories.

And if we look at the scenario C -- which is what was decided in April of 2008 for each of the twelve categories -- you can see that many of them have remained the same and that' s because they are at their minimum required levels. Category 5 and 6 remain the same because 2009 dropped off and 2020 got added, but at the same minimum levels. Category 7 STP, Surface Transportation Program, increased. We' re not sure that the previous estimate truly captured all of the funding that would go through that program through that category.

The miscellaneous category increased because the department, in cooperation with the Parks and Wildlife Department, does work on park roads. The last legislative session, that increased from $5 million to $10 million per year. And then one of the federal programs, the CBI, Corridor and Border Infrastructure Program, we expect that to increase.

Strategic priority in Category 12, you see that that decreased, and primarily in that category there was about $450 million in that category that was dedicated for the delivery of the CDA projects here in Dallas-Fort Worth, so since that has been utilized in 2009, obviously it' s not available for 2010 going forward. And so after we' ve met kind of the minimum amounts required, that leaves just under $11-1/2 billion for maintenance and the three mobility categories. Well, that is $5-1/2 billion less for those same categories as there was 18 months ago.

And so in November, hopefully, if we' ve provided the commission with all the information you need in order to make that decision, we'll be coming back to you and asking for you to allocate that $23 billion under that column that now reads possible 2010 to 2020. Again, we believe that 5 through 12 we' ve kind of set at the minimum amount required, so the commission, if they want to put in more money in any of those categories, they certainly could. We' re not sure the commission has the flexibility or the discretion to lower those categories because many of them are federal programs and do come with minimum amounts.

And so the question will then be how to spread too little money towards too many needs. And that will primarily boil down to, Commissioner Underwood, as you described earlier, Category 1, maintenance, and then the mobility needs in Categories 2, 3 and 4.

MR. UNDERWOOD: My fear, James, is when you start talking about pulling from maintenance. They' re not going to pull maintenance money out of the major metropolitan areas because they've been taking their maintenance money a lot of times and building stuff with it, so it' s going to come from the rural areas. Am I wrong in that?

MR. BASS: I wouldn' t be able to say yes or no to that, but be quite honest. It would not surprise me one way or the other.

MR. UNDERWOOD: Because it' s going to come from the people that have done the best job of maintenance, they' re going to have the higher scores, so they' ll actually be the ones that will be penalized for having good scores, because that's where the money will come from.

MR. BASS: When it gets allocated, it will be based upon -- heavily based upon those scores.

MR. UNDERWOOD: Thank you.

MR. BASS: And this is the end of my prepared presentation. I know Mr. Barton and others are going to continue on this topic. What I've heard from Commissioner Holmes is he would like us to revisit the motor fuels tax projections of that half-percent and one percent, that that may be a little on the optimistic or aggressive side. I will certainly go back and do that. If we do lower that, we may come back -- well, if we do lower that, we' ll come back to you with a number less than $23 billion in November.

If you have any additional things you' d like us to look at or provide you with, if you know that now, we' d certainly take it; if not, in the next few days, next coming week, certainly let us know and we'll provide you the information you need to get you to a place that you' re going to be comfortable making this tough decision.

At this point, I' ll tag Mr. Barton and let him take over. Thank you.

MR. BARTON: I' ll be happy to relinquish the microphone to Mr. Meadows, if he would like.

Well, James, since you' ve done such a great job of entertaining and bringing my part in this to the floor today, like Commissioner Holmes would normally say, it' s difficult James as it's difficult to follow Commissioner Underwood, but I have a little bit of additional information to share with you about our transportation planning process as it relates to the information that Mr. Bass just shared with you, and then, as I said, Mr. Michael Morris will follow up with local metropolitan planning organization's planning and perspective.

Because of the need that we have to plan for the future and the federal laws that face us, it' s important that we take what we know in terms of financial realities and then forecast those into the future so that we can develop transportation plans to meet the many pressing needs of the communities that we are here to serve. And the basic flow of our planning process is captured on this particular screen and it's predicated on many different financial forecasts. The most reliable is our General Appropriations Bill that we get out of the legislature every two years; we know that those funding resources will be made available to us and we build our letting schedules around those.

On top of that -- and I' m speaking from the bottom of this screen rather than the top -- we have to develop what's referred to as our Statewide Transportation Improvement Program which is a culmination of the local transportation improvement programs, and those are for four-year periods of time and are required by federal law.

The Unified Transportation Program that Mr. Bass was just speaking of is very important for us because it allows us to begin the planning process, the environmental review, the acquisition of right of way for projects to be ready to move forward into a more definitive and reliable projection of funds in a four-year program or a one-year letting schedule. And then on top of that -- which really drives the entire system -- is a long-range planning process that by federal law and state law we' re required to conduct.

To speak briefly on the long-range transportation plan, it is required by federal law. Under 23 U.S.C., the department and our metropolitan planning organizations are responsible for coming up with financially constrained plans based on reasonable assumptions of future revenues. As I said before, that 20-plus-year forecast is based primarily on those different forecasts that we've already talked about: the Appropriations Act, our chief financial officer' s forecast that's adopted by the commission through the UTP, and then a longer range forecast that our Transportation Planning and Programming staff, as well as our metropolitan planning organization staffs work together to try to develop.

And SAFETEA-LU does require, as I said, that state and local entities work together to come up with common assumptions for the development of these forecasts. It's also important to note that the Sunset Commission, as they considered the department's activities last session, was anticipating writing this into state law as well.

As a component of all this planning process, we do have to also prepare the Texas Transportation Plan, and it' s currently being developed. A lot of effort will be going into this over the next several months, and it will help us to develop a forecast or a vision of what the future of transportation might be here in the State of Texas, matching up our goals and strategies with projects that we want to implement to accomplish those things. And like an MTP, it covers a list of ideas, projects and programs, but it's for the entire State of Texas, so it, in essence, is a collection of all the metropolitan transportation plans that all of our MPOs put together from around the state, as well as including projects and programs for the rural areas of our state.

The metropolitan transportation plans that our metropolitan planning organizations are required to prepare is also required by federal law and it is based on a forecast of reasonable financial resources that can be assumed to be available or reasonably predicted to be available through the life of their 20-plus year planning horizon, and it' s important that we have an agreement, if you will, on what these common assumptions would be, how we'll develop these forecasts today, because many of our metropolitan planning organizations are in the midst of preparing the next update of their metropolitan transportation plans and we need to make sure we' re all on the same page as we move forward in light of these financial realities that Mr. Bass just shared with you and what we believe the future might hold.

The Unified Transportation Program, I won' t go into it at all -- James, I think did a very good job of explaining it -- but just to point out it is based on our chief financial officer' s forecast and it does establish the level of funding we anticipate for the various programs throughout the state in the categories of funding that are available to us and it's used to help develop those shorter four-year programs and our one-year letting schedule.

The transportation improvement programs, both at the local level and state level, again are a four-year plan that' s required by law. We are in the midst of preparing an update to that that will be done later this year. All of the metropolitan planning organizations, along with our rural areas, will have to come up with the plan for the next four years, and it's based on our Appropriations Act as well as the short term forecast that is available from our chief financial officer to cover the four-year window of time that it' s expected to address.

And it's critically important that we move forward with that and that' s why coming back to you in November with a request to approve the Unified Transportation Plan is paramount because without that, we can' t develop these plans that are necessary to move forward.

So a little bit of what we wanted to talk about today was what are we going to use for those assumptions in forecasting the longer range, and some of the questions you asked James were addressed by this group, but we put together a task force or work group to look at this to help us identify what we think are reasonable assumptions about the future of transportation, fuel efficiency, population growth and those things in order to develop the forecasts.

The work group members are shown on this screen, I won' t list them all, but we have a couple of them here today with us. Roy Gilyard is here from the El Paso Metropolitan Planning Organization. We certainly appreciate his strong partnership and participation with us on many, many important issues. Of course, Michael Morris will be speaking in a minute. Dan Kessler, who is a staff member of the North Central Texas Council of Governments planning organization staff is also the president of the Texas MPO Association, and so as a member of TEMPO and their leader, he participated in it.

Of course, we brought in academia to help us on the analytical side of things and to help us to analyze some of our things, and we brought in our own staff. And I would like to point out Jessica Castiglione in the San Antonio District has been an integral part of this modeling process and does just a fantastic job and should really be commended for the fine work that she's done. She, Brian Barth and the TTI staff and our MPO partners all worked together to come up with a forecasting tool that you've heard about before, it's the TRENDS model, it' s a very effective tool to evaluate alternative future scenarios that might become a reality and to help us do a better planning process.

So the goal of this work group was to look at that tool and to come up with a common assumption that we could ask all of our MPOs to use in their planning process and that we, along with them, could endorse to the Federal Highway Administration as the common assumptions used for the baseline forecast for planning in the State of Texas. And the two issues that we evaluated were: what will our population growth be and what is our fuel efficiency going to look like.

When you look at population growth, the State Data Center does a very good job of forecasting future possibilities. The value of that is that it's a reliable source that is commonly used by the legislature and other governmental entities. We' ve certainly had more robust modeling efforts that the metropolitan planning organizations have and can do to evaluate population growth within their own regions, but we actually baselined their forecasting against the State Data Center's, and in doing so, the group believes that using the 0.5 growth scenario which is kind of the, I guess, recommended forecast by the State Data Center on our reasonable assumption of future growth in the State of Texas on the long term was the common assumption that we landed on.

Then we looked at fuel efficiency, and one of the values of this TRENDS model is it does have a very robust fuel efficiency analysis tool in it, and we relied on Cambridge Systematics and then developed it even further with the Texas Transportation Institute to understand what the fuel efficiency in Texas might look like into the future, and Commissioner Holmes mentioned that under James's discussion a few minutes ago, and the reliability of this information is obviously paramount and will have to be updated on a consistent basis to be an effective tool.

But right now it looks like there' s a reasonable chance, over a 60 percent chance that in the year 2030 fuel efficiency on the fleet average -- which is cars, trucks, 18-wheelers, everything combined -- will be about 34 miles per gallon. So there' s a high confidence level that that might be the future reality and the group looked at that and agreed that that would be a reasonable assumption to use in our forecasting analysis.

So when you put those together, this is something you' ve already seen before, but assuming the different variables in terms of population growth and the different variables in terms of fuel efficiency, the group kind of honed in on the lower population growth scenario and the medium fuel efficiency scenario which would yield about $144 billion in revenues from our state and federal motor fuels taxes and our registration fees, and that would be the baseline we would use beyond the chief financial officer' s forecast to develop future anticipated revenue streams.

When you average that out, it' s not a lot of money, and again, that baseline assumption assumes that there would be no revenue enhancements, no increases in the fuel taxes, no increases in the registration fees, that there wouldn' t be any indexing of fuel taxes or VMT type tax -- and that' s something that Mr. Morris will talk about in just a minute -- but for the baseline, assuming that there's no changes in the way revenues are generated for the use of transportation at the state or federal level, that equates to about $6-1/2 billion per year over the life of this forecast, again, and it would be added on to, not replace the chief financial officer's forecast in the first eleven years.

But that would support, as Mr. Bass has already talked about, about 2.2 to $2.4 billion per year annual letting program which is dismally lower than any of us would like to predict the future holding for us, but the baseline reality is that's what it would be.

So I think that what we wanted to do today was discuss this with you to seek your direction and input on whether or not this is an appropriate level for baseline analysis and if these assumptions on population growth and fuel efficiency changes are reasonable for all of us within your transportation planning profession to use as we develop these models, but before we open that dialogue, Mr. Morris has some information he would like to share with you about how planning organizations and the department itself has to build upon that baseline to develop future scenarios of potential realities in order to an adequate planning process. So I' ll turn the mike over to him.

MR. MORRIS: Chair Delisi, Commissioners, Mr. Saenz, for the record, Michael Morris, director of transportation.

John has done a good job of inviting MPOs from across the state to work out how are the transportation plans in the future going to be put together. We're all in agreement the population assumption he laid out matches very closely to what the metropolitan planning organizations -- at least that we surveyed -- are using. The work that Dan Kessler and Brian Barth did on the fuel efficiency, that particular medium assumption we think is the way to go.

I'd like to change the focus and really the mood of the room from this pessimistic short term programming which needs to have that particular slant to it -- to really where I think the future is going to go for the purposes of planning.

What we need to make sure, in my opinion, is we have a pipeline of projects that are ready to go if and when things change -- and I suggest things are going to change -- and if we don' t develop a reasonable set of financial forecasts, we very quickly could get into the problem that other states did where you don' t have projects ready to go when the financial climate changes. So we' re looking for a win-win situation, that you keep the status quo, James' s view of the short term, but I suggest to you that if you don' t have a more optimistic view over time, you' re going to do an injustice of not having projects ready to go because it takes 10 or 15 years to get these projects cleared because the mood will change. It is not always going to be this pessimistic, it is always dark before the morning dawn, and I think it's 6:30 in the morning, and I mean, we're almost there, and I'd like to lay out some of those particular assumptions for you.

From a programming standpoint, the status quo assumptions are clear so there's no misconception of what can be done in the short term, and in fact, the clearer it is is the way you're going to get regions like Dallas-Fort Worth to do what they did, bringing $7 billion worth of revenue and have Congress and the legislature eventually see opportunities for change. And we have laid out what are the transparent programming items, and Commissioner Underwood, you always talk about this transparency, we' re trying to lay out all of these documents lined up in a very transparent future.

The suggestion is that we need an enhanced revenue stream over time or basically you don' t have any planning in the state at all, and I' m going to lay out a status quo scenario that' s so detrimental that clearly some changes are going to occur. Now, sitting here today and given what you've experienced in the last year, you may think that day will never happen, but I suggest to you it will.

We think you should work with the MPOs in creating four futures. We think you should say okay, let' s assume this short term situation exists into the future, we add in this deterioration of revenues due to these fuel efficiency changes, no real revenue increases, and ask the metropolitan regions -- I don' t think you can ask all the MPOs to do it because you' d actually have to draw up four different plans, but we' ve talked to Alan Clark in Houston and I think that at least your large MPOs could give you four futures. One is the status quo, one is based on increases in only state and congressional revenues, one has the addition of what sweat equity can occur within the local regions, the two of those added together would be the financial constraint requirement that we have to use as metropolitan planning organizations and put our plan together, and we still like your Texas Metropolitan Mobility Plan where we show you the needs-based solution.

This status quo situation is going to be very difficult to comprehend and I'll share a few assumptions with you, but I really think there are some opportunities to keep this pipeline proceeding.

I've been brainstorming on if, in fact, there was no additional revenue for capacity improvements. Basically, as Commissioner Underwood described, you' re in the maintenance business. We've done a simulation in Dallas-Fort Worth, peak period travel times in Dallas-Fort Worth would increase 180 percent. I can' t even comprehend what 180 percent would be, kind of leave on Monday and get there on Tuesday, I think.

(General laughter.)

MR. MORRIS: I actually think the mobility in the Dallas-Fort Worths and the Houstons and the Austins and the San Antonios and the El Pasos, that level of congestion would be so slow that the region would never get to the demographic control totals it' s currently planning for. People would wake up and say you' ve got to be kidding me, we're not going to move to Texas in those particular regions. It' s not even a sustainable level of service to assume people will continue to grow in our regions, and I think by asking us to do this type of run, it' s a great way to communicate to our legislature that without transportation investment, you're kidding yourself thinking the growth of the state will continue.

I actually think it' s so low, working with our two district engineers and looking at bridge conditions in the future, we wouldn't even have enough money to replace the current bridges and some of these bridges are on our interstate highways and I don' t think we could maintain all the highway lanes, so you actually would have a system where you would start taking transportation out over time because you couldn't even maintain major reconstruction projects on bridges not just in San Antonio, Austin, Dallas, Fort Worth, El Paso and Houston, but you couldn' t sustain the system. And I think you should request us to do this analysis of Mr. Bass's future if it were to be extended over a long period of time.

As I told you, I think we' re at 6:30 in the morning, dawn is not far away, we were brainstorming on what would be in a mobility package, and I think there are four, and remember, we' re not saying this would happen tomorrow or two years from now, but over the next 30 years there are going to be improvements in this revenue picture.

The first one would be continue to eliminate diversions from Fund 6 more than obviously what was accomplished in the last session. You may not eliminate them all but at some point TERP has to go away, at some point DPS has to go away, the future will be brighter than it is today.

At least permit us to increase the gasoline tax at historical rates. I know you haven't seen anything recently on your terms as commissioners, but the state and federal gasoline tax over the last 25 years has increased about a penny a year. There will be an increase in the gasoline tax at some point in the future in Washington and in Austin, and we think it clearly will occur in the next 25 years.

(General laughter.)

MR. MORRIS: The other thing that I think is important and this state has somewhat of an antiquated vehicle registration process -- if you ever do your federal income taxes correctly, you know you can' t use our vehicle registration fee on your federal income tax -- but if this state moved forward on a value-based vehicle registration fee, you could, in theory, reduce the cost to the lower income persons, permitting the gasoline tax increases to be less regressive by trading it off with a lower vehicle registration fee, and those of us that are blessed to be able to afford more expensive cars eventually get additional revenues out of the particular system and move us to how other states have done their vehicle registration fees.

And then I think this state has to have a serious conversation -- I've talked to Senator Carona -- instead of indexing the fuel tax with the cost of construction index, index the fuel rate with the change in the fuel efficiency. The beauty of that is in the near term it has very gradual impacts and over time it makes the adjustments more graphically. It's basically telling the users buy more fuel efficient cars, we encourage you to do so, the amount of money you have to spend on gasoline goes down but the amount of money you're giving us in transportation will stay the same.

And basically indexing the fuel tax to the fuel efficiency is a poor man's VMT tax because at two cents or whatever the current rate would get you, it would be able to be maintained into the particular future. I think a mobility package something like that should be the MPO negotiated package recommendation to the state as we take that as the first component of our future transportation plans.

I think the message, even with those four elements, isn't going to be significant enough, as it hasn't been in Dallas-Fort Worth for some time, and there's plenty of tools people can bring in the region as you' ve heard demonstrated earlier from our elected officials. Toll roads, managed lanes, public-private partnerships, huge amounts of local bond programs, often which are put on your system, local option elections that you heard from Jungus Jordan previously, and then the great success of sub-allocated TxDOT funding that has been able to leverage huge amounts of transportation funds, have it be Category 2 or Prop 12 or Prop 14 or whatever the future may be.

So the suggestion is continue to drive home what James is doing in the short term with regard to the reality of programming in the next zero to seven years, but as the system plans are being done, have consistent assumptions across the state -- which you don' t have now -- and those consistent assumptions have three components: tell us the future of what it would be like if the status quo assumption were to continue, what is the realism in each of our communities to develop a package of mobility improvements that becomes the backbone across the whole state which serves as a background to create a pipeline of projects for the future, and then give the local areas the capability of putting sweat equity to add to the statewide initiative.

I'll stop there, I'll stay and answer questions in a moment, and we're almost done with our presentation.

MR. UNDERWOOD: Michael, a quick question. Indexing the fuel tax relative to the fuel tax relative to the vehicles, you' re saying to index it so that basically if you don' t buy a fuel efficient car, it's going to cost you more to operate it. Is that correct?

MR. MORRIS: That' s correct.

MR. UNDERWOOD: Over time.

MR. MORRIS: That' s right, and you would offset that, Commissioner, with a change in the value-based vehicle registration fee where you say okay --

MR. UNDERWOOD: If you have a 20-year-old vehicle, you' re not going to pay as much to register it as you would be if you bought a very expensive vehicle.

MR. MORRIS: Yes, sir. And it would follow that blue line, the increase in the fuel tax would follow the blue line.

MR. UNDERWOOD: Right. Have you thought about it being a regional concept? When I say regional -- because the air quality issues are in the major metropolitan areas, yet you don' t have that problem say out in Slayton, Texas.

MR. MORRIS: That' s exactly why Councilman Jordan described a local option election.

MR. UNDERWOOD: Right, I understand that, but index fuel taxes all over the state, the way I understood that.

MR. MORRIS: Yes, that' s right.

MR. UNDERWOOD: Now I' m talking about regionally instead of all over the state.

MR. MORRIS: Within a region we could increase the vehicle registration fee a little bit higher than the rest of the state does. I think we should have a conversation, at least in our regions, adding a sales tax to the fuel tax. There's other options with regard to half a dozen strategies, all the way from property tax to additional vehicle registration fees, also substitution on the excise tax used when you buy a car. I think, Commissioner, there is an equity responsibility that the urban regions have to do more which is why the proposal is to do both the baseline statewide and a local option that could add additional things in it.


MR. MORRIS: You' ve got Lubbock who is doing something with their power plant, energy thing, it doesn't have to be a one size fits all, but create an incentive that the sweat equity of each region can bring in a lot of imagination to the table.

MR. UNDERWOOD: Thank you.

MR. HOLMES: Michael, before you sit down, I appreciate the optimism that we're at 6:30 in the morning -- I'm not sure how long that day really is -- and I tend to agree that over the next 25 years there will be some form of increased funding for transportation, but my sense is it' s really not just convincing the elected officials, it' s convincing the public because the elected officials really reflect the public opinion, and until the public is supportive of increasing funding, I don' t see really how it happens.

And let me just give you one example. We had a Supreme Court ruling that our school finance system was unconstitutional and it required three special sessions to provide a solution to that. We don' t have a constitutional question here, and so I don' t see that we will have that as a motivating force to change the way we fund. That motivating force is going to be for the public to be educated, and I think they need to be educated based on what we have legally -- what the state is legally entitled to spend on transportation, and so those are John' s numbers, we forecast what we can legally spend. And until we display that in a manner that the public really understands it, the legislature, it doesn' t make sense for them to vote to support it.

MR. MORRIS: Well, two things come to mind, Commissioner. I think it's a very good question. First of all, I think a lot in the planning/engineering phase have done a bad job with regard to laying out the future of transportation for the legislators -- I'm going to get back to the public. We should be able to show a legislator -- in fact, our next plan, we hope with some endorsement here, we' ll have four scenarios and we're going to show each legislative district the future of their district under each of those four scenarios so they can see visually. Because right now they have a future transportation plan and they come into the room thinking no matter what they do that transportation plan is going to be built.

Before you every month are legislators who come to you supporting metropolitan transportation plans. Regardless of what decision they make, their expectation to you is all those projects are going to be built. We owe it to provide reality that there' s different financial futures and there are consequences to it.

With regard to our region -- and I think Judge Riley talked about it -- what harder sell is it for these local elected officials to tell the communities of North Texas to use property tax to fund on-system transportation improvements -- property tax. Just think about it for a minute. In our region we use it so often, but Denton County, Collin County, Dallas, I bet there's been a billion dollars worth of revenues raised in the last five years on the back of the property tax. I don't know what the VMT is in our region from tourists and trucks traveling through and people traveling through, 10, 20, 30 percent, people coming to big entertainment stuff. They get the benefit of this transportation system on the back of the homeowners that are in a particular region.

I will bet there hasn' t been a failed bond election that I can think of in the last five years on transportation in this region, and the reason is we have a bottom-up grassroots communication to the public with regard to this particular need and have for 15 years. I don't know where the rest of the state is, I don't work in the rest of the state. The key is the communication with the public and honesty with the public. We've sold this public toll roads, we've sold this public dynamically priced managed lanes, the local elected officials have sold them bond program projects to fund you on-system improvements. They get it, they understand the consequences.

I think as part of this system the message has to go out that we want more people to communicate the honesty of where this financial crisis is, and I think with that you' re at 6:30 in the morning with regard to these particular changes. We' re hearing conversations around the state that we didn' t hear a year ago with regard to that. You' ve got a federal process that couldn' t be more darker right now, but I think with 18 months it' s going to be a clearer future than what you have now. It takes communication with our legislators and congressional people with regard to the seriousness of this -- which isn't your problem, that's our problems to communicate different visions -- and you should hold all of us accountable for having a grassroots bottom-up communication with the citizens of each of our regions with regard to the severity of this particular problem.

MR. HOLMES: I think you' ve done the best job of any region in the state at convincing the citizens in this region of the importance of funding transportation, but it' s a big state, and that message has got to go around, it' s really got to go statewide.

MR. MORRIS: Later on your agenda -- I' m making a joke, Commissioner -- we' re expanding our boundary.

MR. HOLMES: It needs to be a little broader, Michael, keep going.

MR. MORRIS: But we' re not going too far away from home.

(General laughter.)

MR. MEADOWS: Michael, I just want to add on to what you said because I think there are a couple of really important points that you brought up about messaging, and the reason that Judge Riley and the residents of Parker County were successful in advancing that proposition -- obviously the judge's leadership -- but beyond that, the citizens had the opportunity to see exactly what they were going to get, and local communities, time and time again, when communicated with clearly about what would result from an action -- I' m talking about school districts, local government, municipal government with bond programs -- time and time again the elected officials go to a citizenry and they communicate very specifically and very clearly what would be included in it, what would result from them taking the action, and taxing themselves to do so, and those, when the need was communicated clearly, were successful.

One of the challenges that we have is that if you think about the material that has been presented here today, from James Bass to John Barton to yourself, you're talking about numbers that for most of us are challenging enough to comprehend. You start trying to communicate a 2030 Committee report and think that the citizenry is going to understand and appreciate that, you' re wrong. The only way you're going to be successful and the only way we' re going to be successful is to begin to communicate very clearly what the result of this would be, and you did that at the local option discussion.

I mean, I'm not advocating what sounds a lot like earmarking which none of us think is a good idea, but the fact is we just have to be much more clear or we' re not going to be successful, we are just not going to be successful. I' m not saying that long term plans and communicating big numbers and the big deltas that, in fact, are out there -- that is important for all of us, I understand -- but when you start talking about communicating effectively to the citizenry which would result in us having the resources we need to meet the challenges we're going to have, you' re going to have to rethink the way that you package and rethink the way that you message.

MR. MORRIS: Supporting your point, Commissioner Meadows, to build 121 as a toll road instead of a gas tax roadway, until we produced the map of $3.3 billion worth of projects that you can get, you can get either this road as a gas tax or you can get this map of $3 billion projects, once the citizens saw the map, because they travel on all those roads and they' re not going to be built otherwise.

The picture, Mr. Meadows, that you describe is instead of doing it in numbers and graphs -- and I don' t know why it's not on your other graph -- is you create four pictures for the public: if what Mr. Bass is facing is the future, this is what you're going to get, you're going to get a region that isn't able to grow, you' re going to get employees that are going to leave, you' re going to get bridges that are going to be shut down.

Let's create another picture. If we develop an integrated mobility package that includes regressiveness of the vehicle registration fee and gasoline revenues, here is the future of the transportation, this is what we can build, here' s a picture of it in your neighborhood, in your city. So you go and you say look, you do a little more sweat equity, do a little bit more out of the box stuff, look at the picture you can get. Now, what do you want and how do you pay for it, you've got to take all these numbers and produce those pictures, and our proposal for you today is permit at least the large regions who can develop four plans, produce those four plans, then we get into that discussion, and therefore, you' re at 6:30 in the morning instead of midnight wondering where we' re going to head.

MR. BARTON: Thank you, Michael.

Really the last thing to share was that we do need to be moving forward. I think that the information that was provided to you was very important today, James did a great job talking about the UTP and we' ll be bringing that back for your consideration, we' ve got the Proposition 12 item which is next on the agenda and how we move forward with that. We do need to update our two-year letting schedules, we' ve got that on the agenda as well, and we need to get next year' s out and for the public to consume and digest quickly and we are working on that. And then we need to let our metropolitan planning organizations work on their long range plans and their four-year plans while the department works on our four-year plan and our long range plan.

And so I think the information you' ve had today has been very helpful and I appreciate the comments and questions you've asked. I believe we have a clear insight in the direction you'd like for us to head, and you can expect that in the next month or two you' ll be getting more information from us for action in regard to the Unified Transportation Program and our future transportation plans. So I' ll be happy to answer any questions, but I think you' ve probably heard all that you can hear from me from the other speakers as you' ve questioned them today.

MR. SAENZ: Thank you, John.

Commissioners, moving on to item 3(c), we have a discussion on the Proposition 12 Bond Program and the process that has been used to get us where we're at so far.

MR. BARTON: And I have a power point presentation I' ll share on that as well.

Again for the record, my name is John Barton and I know that time is of the essence so I' ll be brief this morning to talk to you about Proposition 12, and clearly in light of all these financial realities we' ve just been talking about, this is some good news to bring some much needed funding for transportation projects to our state.

I'll walk you through a brief history of the proposition program itself, the authority that's been provided to us by the legislators and citizens of Texas and then discuss the process that the department has undertaken since discussing this issue with you last month in partnership with our transportation professionals across the state, and then lay out for you a staff recommendation of how to move forward with the development of this program.

There's some information being handed out to you and much of the information that I' ll be sharing with you is in that little booklet as well as the slides that will be on the screen in front of you.

As you know, the voters approved this and the legislature authorized it to allow the issuance of up to $5 billion worth of bond proceeds known as Proposition 12. The 81st Legislature then, in turn, authorized us to obligate up to $2 billion for non-tolled projects and $1 billion for the State Infrastructure Bank. Mr. Bass will be talking to you about the State Infrastructure Bank portion of this program at future meetings and so we won't be discussing that today. What we'll be focusing on is the $2 billion which is $1 billion of authorization for up to $2 billion worth of projects for non-tolled projects from the non State Infrastructure Bank portion.

The language in the bill I think is important to know because it does provide a clear perspective on what we were directed to do by the legislature, there's been some discussion about that, so for the record, I kind of wanted to read this verbatim to you, and this is an excerpt directly from House Bill 1 related to Proposition 12. And it says: The amounts from Proposition 12 general obligation bond proceeds in strategy B.1.2 New Construction Contracts, shall be used to make progress payments of a maximum of $1.85 billion in new multi-year construction contract obligations for non-tolled highway projects.

So that's the math that gets you there. There was $1 billion of bond proceeds authorized, they've asked us to move forward with $1.85 billion worth of contracts to use those $1 billion worth of proceeds in the next two years, this year and next, and of course, the remaining $150 million was set aside for right of way and engineering activities.

The process that we utilized in coming before you today was listening to what you had to tell us. There were two goals that we felt like were critically important: one, we wanted to tie the use of these funds to individual projects so that, as we just had a discussion about, it would be very transparent to the voters and the state elected officials which projects were being funded from the Proposition 12 Bond Program; and then to utilize the same collaborative process that we did in the American Recovery and Reinvestment Act to work with our transportation partners to identify the priorities and the selection criteria for projects.

And so doing that, we used an approach where we worked with our district engineers, our transportation planning partners to identify those six guiding principles I shared with you last month as well as the focus points that we felt like as a group we could recommend to the commission are the most important issues that we should be addressing through this program in the State of Texas.

Building upon that, we asked our district engineers and our transportation planning partners at the MPOs to identify projects that would qualify under those guiding principles and those focus areas and I want to share with you that they've identified over 850 projects that they believe qualify for this particular type of program with a construction value of over $8.9 billion. So again, we have great needs in this state and limited resources by which to address them.

So understanding the intent of the legislature that we just talked about and the selection objectives of our transportation partners at the MPOs. We also focused on the top 100 congested sections of roadway in Texas, as was asked of us to do through Rider 56 to our Appropriations Act, and in doing so, looked at the total universe of possible projects that would meet the criteria to move forward under this $1 billion bond program and to have a billion dollars worth of contract payments made by September of 2011. Doing that, we evaluated all the projects that have been identified against those criteria and categorizing them in the different types of projects to make a recommendation for your consideration as we move forward with this program.

Knowing that there are unlimited opportunities in terms of how you might evaluate and distribute this funding, we felt like it was important to focus on those key areas our transportation professionals and partners identified for us in moving forward with a discussion of this issue. These were three significant areas, corridors of state significance, and we evaluated projects that fell within that category of work based on the traffic density on the roadways associated with them as well as the crash rates so that we were addressing not only connectivity but congestion and safety.

We looked at our rehabilitation and safety projects and evaluated them on how well they would improve the pavements and bridges that they were associated with, as well as the safety of the roadways that they aligned upon. And then finally, for mobility projects, we evaluated those based upon the amount of congestion that they would reduce, the hours of congestion that they would save drivers, and correlated that to how they related to the top 100 most congested segments of roadway in Texas.

In doing so, we evaluated all the projects and have come up, based on that criteria and at your request, a list of projects that we feel like most appropriately address these particular categories and in a way that takes the best projects and moves them forward for the benefit of the state.

This recommendation is just one of many that could be considered and it would include 77 projects with a value of about $1.17 billion on corridors of state significance -- and I' ll talk in more detail about each of these in a minute -- about $324 million for safety and rehabilitation projects, about $574 million for congestion relieving mobility projects in our metropolitan areas, and then we felt like it was important, based on conversations we' ve had with our transportation professionals and our review of the candidate projects to set aside some additional funding for engineering services to develop future projects to be ready for the next round of Proposition 12 or some other revenue source if it becomes available to address congestion in the State of Texas.

We recognize that there' s a significant amount of money being invested here, slightly more than the $2 billion if you add those all up, but we felt like that with the uncertainty of construction prices that we've seen recently and knowing that there's a lot of variations in how this money could be distributed ultimately, based on your decision next month, that we needed to provide kind of a more robust alternative or recommendation for your consideration. And we also wanted to make sure that our contracting partners/consultants knew what we were doing because this is the allocation of funding for contractor payments, consultant services and right of way activities, and so we wanted to make sure we were very clear about that.

We also believe that if necessary you could start churning back on those rehabilitation and safety projects to move forward with corridors of significance and mobility issues if the funding limitations started to impose themselves as we saw projects become reality.

Over $4 billion worth of projects were identified that fall within the corridors of state significance by our district engineers and our metropolitan planning organizations, as well as our transportation partners also. Some of these projects we withdrew from consideration in developing this recommendation because we didn't feel they would be able to move forward within the timing required by the act itself in order to be under contract and making contractor payments in the next two years. We then evaluated the remaining projects based on, again, traffic density and the crash rates along those corridors. And after evaluating those projects, we believe that it's appropriate to recommend a funding level of approximately $1.17 billion for the construction of these projects.

They specifically are projects located on the I-35 corridor in Bell, Hill and McLennan counties through Central Texas, connecting the metropolitan area of our state here in the Dallas-Fort Worth region to the metropolitan area of our state in the Austin-San Antonio area, as well as the Lower Valley, the Laredo area. And in looking at that, we also identified a project on Loop 375 in El Paso that we felt like was important because it provides us a better access to Fort Bliss, a growing military presence in our state which is important for our state' s economy as well as our national security, and provides an emergency access to that facility that currently doesn't exist if there's an incident along Interstate 10 through the heart of the El Paso community.

This slide right here would demonstrate why we felt like the I-35 was a corridor of state significance that deserved a great deal of attention, specifically between Salado and Hillsboro where I-35E and W split just north of Waco. When you compare the crash rates as seen on this slide with other rural interstates here in the State of Texas, you' ll see in that second column of data that this corridor has over twice as many crashes per hundred miles of roadway as the next highest comparable roadway here in the State of Texas, and when you take the three-year average crashes for fatalities and incapacitating crashes -- which are injury-related crashes primarily -- which is the last column, you' ll see that there are much more crashes on this particular section of Interstate 35 than other comparable rural interstates here in Texas.

Knowing that and moving forward, when you look at the recommendation, in 2006 to 2008, there were 109 crashes that occurred where people were either injured or killed on this particular section of roadway. In a three-year period of time, there were over 3,073 crashes in this particular section of roadway from Salado to north of Hillsboro which amounts to about a thousand crashes per year, and if you do a little bit more math, that gets you to about 2.8 crashes per day.

And just to make it personal, I, along with Mr. Casteel, had an opportunity to travel to Waco and then to Fort Worth this week on Monday morning. We left Austin at nine o' clock and between the time we left Austin to the time we arrived at Fort Worth later that evening, we experienced multiple crashes -- one that we were caught in closed the entire interstate for a period of time -- and I received three e-mails from our staff in the various districts that day telling us that different sections of Interstate 35 between Austin and the Metroplex were closed because of crashes.

So it's something that happens every day and it' s real, and a lot of us probably know individuals who have either been injured, lost their lives, or most certainly have been stuck in traffic on Interstate 35 because of the crash rate that we experience on this section of roadway. So understanding that, we believe, as your staff and as representatives for the benefits of Texans, that it's time to stop talking about doing something about Interstate 35 and take advantage of this opportunity to make real improvements to this very important section of our state's interstate system.

The corridors of state significance also, when you look at them, there's about 114,000 average vehicles per day traveling along this particular section of I-35 in the Greater Waco area, and about 27 percent of that is truck traffic. If you do the math, that means that over 41 million vehicles travel through Waco any given year, and that's about 11 million trucks, so there's a lot of commerce and commuting traffic that uses this particular corridor.

Many of us have known Interstate 35 by various names throughout the life of the programs that we' ve had available to us. It's known as Main Street Texas because of its importance as a NAFTA corridor and connecting the heart of our communities in Texas with one another, so that' s probably a pretty popular name for it. When you do the math, there' s about 9.4 million Texans that actually live in counties that are touched by I-35 -- that's about 40 percent of our state's population. Others refer to it as the World's Longest Parking Lot. I think I've seen some billboards to that effect along the corridor, specifically in the Austin and Dallas-Fort Worth areas. And then sadly to say, worst of all, it also has the notorious reputation of being this state' s most dangerous section of interstate.

So we're recommending that you take advantage of this particular and unique opportunity to provide Texans, through the use of their Proposition 12 Bond proceeds, an opportunity to widen and improve the safety of this transportation backbone for our state, and finally, to make some significant gains to improving it to the six lanes of freeway or interstate roadway main lanes that we' ve committed to building between San Antonio and the Hillsboro Y for the citizens of this state.

If this recommendation is ultimately something that you approve after considering it and taking comments and suggestions from others from around the state, I want to be clear, we still will need to make some improvements in the Temple community because this particular proposal doesn' t address that, and in the Waco community where we still have some work to do to identify exactly what needs to be done to get the engineering completed and to complete the environmental work that' s necessary for those sections of roadway.

Specifically, as I said, if you do approve this proposal, this would add the third lane in each direction on Interstate 35 as we reconstruct it completely from Austin to the Hillsboro Y. It will redo all the ramp configurations that are kind of difficult and a little bit cumbersome along that particular section of interstate, and again, most importantly, it will help us address the safety issues, while, again -- I want to make sure we point out -- will not widen the roadway in Temple or reconstruct the section in Waco. And hopefully we'll be able to fund those two remaining sections of roadway on Interstate 35 in the not too distant future through additional Prop 12 Bond proceeds or some other funding source. So that's the recommendation on the corridors of state significance.

When we looked at mobility, as you know, this is a key goal of the Department of Transportation and our Mobility Program is focused on reducing those roadways which have the most congestion on them, and this particular recommendation is crafted around that. We began our evaluation, again, by looking at those top 100 sections of most congested roadways in Texas, an exercise we started through Rider 56 of our Appropriations Act, and one of the main focal points of House Bill 1, as we looked at that related to Proposition 12, is that projects funded under this program could not be tolled projects. So any project that would address those congestion issues that were toll road or toll related obviously could not be funded under this particular program.

We looked at a little over $3.3 billion worth of projects that were submitted from around the state, ranked them according to the criteria that we discussed earlier, that number of hours of congestion they would relieve. We removed from consideration, as we thought about it, those projects that were not in a current metropolitan transportation plan, because quite frankly, if the MPOs don't have them in their plans and they haven't been working on them, they won't be able to move forward within the life of this particular bond program as directed by the legislature over the next two years.

We also then took out any toll road projects or toll-related projects because we wanted to be very clear we weren' t spending this money on toll roads or toll-associated roadways. And then we evaluated the remaining projects to determine which ones of those could be done in the time frame required by this bill, and from that entire process, we identified only six that were associated with those top 100 sections of most congested roadway.

Specifically, the loop in Harris County, Loop 610 from I-10 to I-45; also Interstate 10 in Bexar County from Loop 410 to Loop 1604; FM 3029 in Tarrant County, Interstate 410 or the loop in Bexar County again from I-10 back to 281; Interstate 45 in Harris County south of the I-610 Loop; and then I-45 in Harris County from Beltway 8 down to FM 528 which is moving south towards Galveston.

And so in looking at those particular sections of most congested roadways in Texas and projects that could affect congestion relief on them, our recommendation was crafted around that kind of philosophy and we looked at projects either specifically on those segments or that were nearby that could address those congestion-related issues for the improvement of congestion in the State of Texas.

Specifically we' re looking at approximately $574 million worth of projects, and unfortunately, when you started going down the list at that level of funding, you could only do about three projects. One of those is on Interstate 45 in Houston, it' s that section I mentioned from about Beltway 8 south to FM 2351 which is making continued improvements along Interstate 45 to widen it and add an HOV lane in the middle, not a toll lane, not a managed lane, but an HOV lane in the middle which is a continuation of the section north of there.

Another project was the interchange of Loop 610 and US 290 on the northwest side of downtown Houston, a notorious bottleneck within our system and this project would do some improvements to reconstruct that interchange and provide a direct connect access from 290 all the way over to Interstate 10 so those weaving movements that people currently have to make to get from 290 to Interstate 10 would be eliminated and certainly provide some tremendous congestion improvements.

And these two projects alone, if constructed and ultimately selected by the commission, would save drivers in this particular area over 72 million hours of delay annually. That' s just a tremendous annual improvement in terms of congestion relief.

The third project that we believe is appropriate to look at, as you look at those top projects is, is one in the San Antonio area on Wurzbach Parkway. This is a project that' s been looked at for many years in the San Antonio area and it would allow us to address congestion problems that are associated with several of the top 100 sections of the most congested roadways in the San Antonio area, specifically the 1604 Loop and the 410 Loop, and how those are bracketed around the US 281 corridor.

This is a roadway that if it was approved and connected would complete a major arterial and it' s the center part of the northern reaches of the San Antonio area, and provide an alternative route for traffic on Interstate 35 to travel through that area if 410 or 1604 were congested, and vice versa, if 281 and 1604 or Loop 410 were experiencing congestion problems, there would be another arterial roadway to serve that growing part of this major metropolitan area.

Moving on to rehabilitation and safety improvements, pavement qualities, as we've talked about and as you have expressed great concern in the state over the past four years, have continued to decline due to the limited funding that we have available to address these needs. This particular chart shows you that if we do nothing, we'll see the red line trend into the future -- which is obviously something that I' m sure the commission would not endorse or support in putting zero funding into the major maintenance construction activities for the state -- if we continue to fund at the levels that we believe are appropriate -- and that is the blue line you'll see there -- then over the next several years you'll see a continued decline in the quality of our pavements.

What it shows you is that by the year 2030 our pavements would be 80 percent good or better or less, down from its current level of 85.9, and of course, if we did nothing, then they would drop significantly below that.

So in knowing this, we looked at projects that we felt like would improve the safety of our system and reconstruct some of our worst roadways so that they would have a renewed life and would serve us many years into the future. We've looked at more than 400 projects that total just over $1.6 billion that were submitted from around the state and we evaluated each of those projects in terms of their effectiveness in improving that pavement quality, rebuilding those roadways, improving the safety of the traffic and helping the regions affected by them continue to see economic growth and improved safety.

We also, because of the nature of a bonding program, were very focused on making sure that any project that we identified and brought forward for your recommendation would provide a pavement life of greater than ten years, most of them providing at least 20 years of pavement life. Because of taxing laws, we need to make sure that we are doing reconstruction and rebuilding activities, not just maintenance activities.

We're recommending about 67 projects from around the state, again they total about $325 million worth of improvements, and when done, they would improve over 300 centerline miles of many of our worst roads in the State of Texas in terms of pavement condition and safety, and they encompass work in a wide variety of areas of the state affecting 13 districts and 35 different counties. And these are the projects that district engineers felt like were most important to them in their region to address these needs in order to improve safety and to maintain the safety and viability of our network.

Finally -- as I was concluding my presentation and be open for any questions that you might have for me -- as I mentioned earlier, when we began this evaluation process to prepare for you what we believe might be one scenario for your consideration -- among, obviously, unlimited numbers of scenarios -- we did notice that many of the projects that we felt like our metropolitan planning organizations would like to develop and implement, if given the opportunity, were not ready and would not be able to move forward to construction within this two-year window of time because we haven' t had sufficient planning support in terms of consultant engineering services and right of way activities to be able to get those projects ready to go.

So after looking at the top 100 most congested sections of roadway in Texas, looking at the alternatives that our own staff and metropolitan organizations have for addressing those congestion issues, and where those projects stood in terms of readiness, we felt like it would be appropriate to recommend to the commission that you consider asking the Legislative Budget Board to allow us to use an additional $150 million of this Proposition 12 Bond proceeds to hire consultants to perform design work, right of way activities and environmental services to get these projects environmentally cleared and designed and in a position to move forward when and if the next round of additional funding becomes available to us.

And if you would allow us to do that ultimately as you make this decision, then staff would begin working with our metropolitan planning organizations to identify their projects and alternatives to address these top 100 most congested sections of roadway in Texas and get those projects ready to go over the next two- to three-year period of time so at that time they would be able to move forward to right of way acquisition and construction activities.

MS. DELISI: [Indiscernible.]

MR. BARTON: The way that the appropriation was given to us in the bill, it specified how much money went to construction contracts, how much went to right of way and how much went to engineering, and we' re asking for an additional $150 million on top of that, and what it would do would be reducing the amount for construction to be put into engineering for future projects.


MR. BARTON: So in conclusion, we believe that it' s important for us to move forward with a well thought-out plan that' s included the thoughts and ideas of all of us and those that are affected by this. To start that dialogue, staff is making a recommendation for digestion, criticism, support, or whatever other term you might want to use, depending upon your position. It would include seven corridor projects, as I lined out before, three mobility projects, and 67 rehabilitation and safety improvement projects, as well as that additional engineering support for the top group of the projects to address some of the top 100 most congested sections of roadway in Texas.

So at this time, I' ll conclude my remarks, we look forward to hearing any comments the commission would like to share with us, and we are certainly willing to work with you and anyone you would direct us to in preparation for a minute order to bring before you in November or at your earliest convenience or direction to get moving forward on these projects because time is of the essence, and if we are going to spend $1 billion on construction contracts in the next 20 months, we need to get started.

MR. HOLMES: John, just as a comment, I think it' s imperative that we have money for engineering for projects that might be available for the next round of Prop 12, so I think that' s a good idea.

MR. BARTON: Thank you.

MR. HOLMES: Part of the problem with some of the congestion projects is that they're simply not ready.

MR. BARTON: That' s correct. Many of the projects that we would have like to have included -- and there's an unlimited number of ways to slice this pie and make decisions, but if you spend 100 percent of it on congestion relief, much like if you spent 100 percent of it on corridor improvements, quite frankly, it would be difficult for us to have enough projects ready to consume those dollars in that time period and have contractor payments. And as we've already talked about today, there are many contractors here today, others listening, I' m sure, via the internet, but they're ready to go to work and we have the capacity to do that, we just have to have the projects ready to go.

MR. HOUGHTON: Again, John, my comment is tremendous job vetting these things and scrubbing them down, and a good job to you and the staff for getting the work done.

MR. BARTON: Well, I appreciate that comment, Commissioner Houghton, and just to be clear, David Casteel and our district staffs and our metropolitan planning organizations have worked tremendous hours, as well as our division staff at Traffic and Design and others to do this. And to be honest with you, they were working with me to help make sure I didn' t stumble over what I was going to share with you, late into the night and early into these morning hours, because I'm a little slow and it takes me a while to get some of these things. So they are very hardworking men and women that have done a great job.

MS. DELISI: So just so it' s clear for the viewing public, this is a recommendation, next month the intention is for us to vote on a final list?

MR. BARTON: That would be staff' s recommendation is that you provide us direction today so we can prepare for you a formal action for next month which is just a few weeks away. Obviously, this is a huge decision and we know the magnitude of it and the gravity of it, so we're not trying to force the issue or rush it, but again, time is ticking and we have very few months left in which to put these projects underway and commit these dollars to construction payments and right of way purchases. And I can assure you, the contractors and consultants of our state are eager to know which projects we' re going to do so they can get ready to start doing them for us. So we' re not asking for action today, we're just asking for your direction on action next month.

MR. HOLMES: To be clear, John, these have to be under contract by what date under Prop 12?

MR. BARTON: Well, for Proposition 12, House Bill 1 was written, they've authorized us to issue contracts for up to $1.85 billion worth of construction contracts, and to make $1 billion worth of contractor payments. So in order to sequence the work the way that we need to -- and based on this recommendation, we did do kind of a cash flow analysis -- we would be able to spend the $1 billion that they' ve asked us to actually spend by September of 2011 or close to that -- and so the timing is we have to have these contracts out and underway, turning dirt and making contractor payments quickly enough to allow us to consume, through contractor payments, $1.85 billion.

To answer your question specifically, in order to do that, the last projects we believe that we could actually take bids on and have contractor payments effectively in place working on in that time frame would be July 2011.

MR. HOLMES: Which means we need to move.

MR. BARTON: But most of them need to be done quicker than that, we need to start taking bids as early as February or March of 2010 and not take bids any later than July 2011, and spread most of the work to the front-end of that, not the tail-end of it.

MR. MEADOWS: Good, bring it on.

MR. BARTON: If there aren' t any other comments, I think I'm going to sit down for a while if that' s all right with you.

MR. SAENZ: Thank you, John. Good work by you and the staff.

Moving on to agenda item number 4 deals with Aviation. Jay Joseph will present two minute orders. The first minute order deals with our federal and state grant program funding.

MR. JOSEPH: Madame Chair, Commissioners, Director Saenz, good afternoon. The Aviation Division has two minute orders we' d like to present. The first minute order pertains to a request for grant funding for approval for 15 airport improvement projects. Total estimated cost for all the requests, as shown in Exhibit A: approximately $11.5 million which $6.1 million is federal, $3.9 million state, and $1.5 million local. The preponderance of these capital improvements are pavement, fueling aprons, hangar and engineering design.

A public hearing was held on June 18 of 2009, no comments were received, and we recommend approval of this minute order.

MS. DELISI: Is there a motion?

MR. UNDERWOOD: Jay, I' m glad to see that you spruced up since I saw you early this morning.

MR. JOSEPH: Yes, sir.

MS. DELISI: How about a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Agenda item 4(b) is a minute order also presented by Jay on the appointment of four members to the Aviation Advisory Committee. Jay.

MR. JOSEPH: Yes, sir. Again, these are appointments to the Texas Aviation Advisory Committee and this minute order is to appoint one new member, Mr. Michael Collier of Lakeway, and reappointment of three current members, Mr. Gordon Richardson of Caldwell, Mr. Greg Jones of The Woodlands, and Mr. Joe Crawford of Abilene. These are for three-year terms for the Aviation Advisory Committee, all nominees meet the statutory requirements for service on the committee, and we recommend approval of this minute order.

MR. UNDERWOOD: And they' ve all agreed to serve. Correct?

MR. JOSEPH: Yes, sir.

MS. DELISI: Motion?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Jay. Good job, Jay, smooth as flying.

Agenda item number 5, Commission, deals with our proposed administrative rules and rules under final adoption we have rules under Chapter 17 dealing with Specialty Plates, and Steve Simmons will present that minute order.

MR. SIMMONS: Good afternoon, Commission. Once again, I' m Steve Simmons, deputy executive director of TxDOT.

I know you wanted another bite at Rebecca Davio but she's back in town, so I' m presenting this minute order on the special license plate marketing vendor.

The fees proposed are for one-, five- and ten-year plates ranging from $55 to $795. There are five categories of plates available. Background which is: $55 for one year with a number assigned by the department; there's a custom plate for $85 for one year with limited personalization which is a three-number, three-character vendor designed plate; or $85 for one year with a personalized with up to six characters on a white plate; premium plate is $95 for one year with a personalization of up to seven characters, first character beginning with a T for Texas; a luxury plate is $195 for one year with personalization up to six characters; and the Freedom plate which is $395 for one year with personalization up to seven characters.

There has been no public comment on the proposed rules and the special plates will be transferred to the new DMV in just a few days. We recommend your approval of these rules.

MR. MEADOWS: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Steve.

Agenda item 5(a)(2) deals with final adoption of reporting by investigating officers. Carol Rawson will present.

MS. RAWSON: Good afternoon. I' m Carol Rawson, interim director of the Traffic Operations Division.

The minute order before you proposes final adoption of an amendment to the department's existing rules for crash records. Law enforcement officers are required under state law to report to TxDOT motor vehicle crashes that result in property damage of $1,000 or more or a serious injury or death of a person. The form an officer uses to make these reports is the Texas Peace Officer' s Crash Report, commonly referred to as the CR3. This amendment adopts the CR3 by reference. This will bring our rules into compliance with the Texas Department of Public Safety rule in place when the crash records function transferred to TxDOT from DPS in October of 2007.

The proposed amendment was published in the June 12 edition of the Texas Register and a public hearing was held in Austin on August 4. In the notice published in the Texas Register on June 12, the department announced its intention to remove the driver' s phone number from the form. We also received approximately 220 written and oral comments related to the removal of the driver' s phone number from the form, both for and against. Those comments are summarized in the adoption of the preamble.

After further consideration, the Department of Public Safety has advised the department that they concur with the removal of the phone number from the form. Since the department does not have a business need for the driver's phone number and the Texas Department of Insurance has advised us that they recommend removal of the phone number, the version of the form proposed for adoption does not include the driver's phone numbers.

We recommend approval of this minute order.

MR. HOUGHTON: So moved.

MS. DELISI: Hold on. Mark Hanna.

MR. HANNA: Madame Chair, Commissioners, I' ll make my remarks real quick. Mark Hanna with the Insurance Council of Texas and the Texas Committee on Insurance Fraud.

I want to commend the recommendation by your staff and the support from the Texas Department of Public Safety and the concern that you showed at your last meeting in Austin on the solicitation of crash victims. Telemarketers are not small mom-and-pop businesses suffering from our tough economic times, solicitation of crash victims has been a scam that' s been allowed to grow and fester. Soliciting people who have already received treatment or who have never required medical treatment has simply been an unwanted and unneeded expense eventually paid for by every Texan who drives a vehicle.

This one topic may be the only issue that the insurance industry, the Texas Chiropractic Association and the Texas trial lawyers have ever agreed upon. This is not the way to do business in the State of Texas, you can advertise, you can have such a good practice that word of mouth puts clients through your door, but leave the crash reports alone and leave the crash victims alone. Telemarketing is not about the health and welfare of crash victims, it never has been, it' s about making money and a lot of money has been made.

I'd like to show you an ad that is going around San Antonio: If you want to solicit crash victims, this is how you do it. With your help and ads like this and recruiting solicitors will come to a halt. Commissioners, you' re taking a huge step in the fight against insurance fraud. Thank you.

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.

MR. SAENZ: Thank you, Carol.

Agenda item 5(a)(3) deals with Chapter 30, Aviation, and the repeal of a section of rules due to some legislation passed.

MR. JOSEPH: This particular item was previously addressed in July and it's the final minute order for final adoption of rules to appeal TxDOT' s authority to regulate intrastate scheduled air carriers. Prior to 1978, the Civil Aeronautics Board was vested with the authority for regulation of intrastate scheduled air carriers. Authority to regulate intrastate carriers is delegated to the respective states. Upon passage of the Airline Deregulation Act in 1978, the CAB was established and the airlines were economically deregulated, thereby gaining the right to establish routes and set prices as they so chose. The act also preempted the states from exercising regulatory authority over intrastate carriers.

Article 46(c)(6) Vernon' s Texas Civil Statutes previously granted authority to the department to regulate air carriers. This is SB 334, the 81st Legislature repealed this article, making the department rules to regulate air carriers obsolete. We recommend approval of this minute order.

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.

MR. SAENZ: Thank you, Jay.

Agenda item 5(b) deals with proposed adoption of rules. 5(b)(1) deals with some rules in Chapter 11, Design, to be presented by John Barton.

MR. BARTON: Yes, and for the record, my name is John Barton, assistant executive director for Engineering Operations. I have a presentation I'll share with you briefly. And also, for the record, you were entirely too nice to Jay Joseph in his first appearance before the commission.

MS. DELISI: John, he' s flying us home.

MR. BARTON: That' s true.

MS. DELISI: It' s called self-interest.

(General laughter.)

MR. BARTON: Today before us is consideration of proposed rules for the implementation of Senate Bill 1609. Senate Bill 1609 would amend Transportation Code 203.031 -- or does -- and it requires the department's commission to adopt rules for the management of access to and from our controlled access highways. These rules would have to include a process or procedure for appealing denial of access at any specific location. The denial, as written by law, would be sent in writing to the applicant and would include the reasons for denying the request. Then the applicant, within 30 days -- and it would include this notice in the information we sent them -- would have the opportunity to appeal to the Design Division which would then have 90 days to make a determination of whether or not to uphold the denial or to grant approval.

An applicant can then elevate a denial from the Design Division to the executive director within 30 days which would have 90 days then to resolve the issue. The final appeal, assuming that the executive director withholds the approval, would allow the applicant to appeal to a three-member board of variance which would be appointed by the executive director. These three people would be from the department and would not be at a level below division director, office director or district engineer, and they would evaluate the request to determine whether or not an approval or denial was appropriate based on that appeal.

And I'm sorry, I didn't click through this, so that was everything I just said in bullet point.

MR. HOUGHTON: You talk faster than that monitor.

MR. BARTON: Well, I' m slower than the technology because I didn' t push the button.

Also in the law, it provided that undeveloped property that is properly platted and recorded in a county clerk' s office can adhere to the access standards that are in place at the time. There' s been some concern that property that was platted and five years later we' re in there making improvements, we deny access based on the current rules at that time, so this would allow for that grandfathering, if you will, of access standards when property is platted. Of course, the development would have to be done within five years or that approval would fall away, and it also would be hinged upon the fact that the design of the highway is not materially changed or that the access wouldn't impose an undue traffic burden or safety concern for the particular roadway.

Also, when a highway construction project -- this is kind of a big deal -- permanently alters a permitted access, the department will now be required to provide written notification to the property owner and assurances that that access will be reestablished on the final design in a safe and proficient manner that allows for mobility and smooth operations.

Variances to the guidelines are twofold: one, the property owner has the responsibility to demonstrate that they have their need for access at this particular location based on a loss of reasonable access or if it provides an undue hardship on the business located on the property or some unusual condition would prohibit the placement of the access at some other location; and then finally, once the property owner has satisfied the preceding requirements and the department grants a variance -- we must grant a variance unless it's shown that the safety of the roadway or the design and the construction, operation and maintenance of our facility would be negatively affected or the state' s ability to receive federal funding is adversely affected by the location of the particular access point.

There was another concern raised by constituents during the legislative process that was incorporated in this law and that is that when a business is remodeled or rebuilt on an existing property, oftentimes their access permit request would be altered. This law now provides that they will not be required to get a new permit nor adhere to a more stringent access standard unless this new facility, new structure on their property significantly affects the traffic patterns in the area to the extent that the existing access connection is a safety threat to the traveling public. And this finding by a district must be, again, in writing and include the reasons for the finding if they're going to deny a request based on that particular clause.

So in conclusion, we are by law, under Senate Bill 1609, now required to develop these rules. These proposed amendments providing for the repeal of existing language and new sections are necessary in order for us to comply with the provisions of Senate Bill 1609 and to clearly state in language in our rules to the process that would be used by those asking for access to move forward with.

A public hearing, if you allow us to move forward, will be conducted on December 2, 2009 to receive comments on these rules, and this concludes my comments on them and we ask for your approval to move forward with these proposed rule revisions.

MS. DELISI: Any questions? Is there a motion?

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, John.

Agenda item 5(b)(2) deals with proposed rules concerning advisory committees presented by Mark Tomlinson.

MR. TOMLINSON: My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT.

This minute order proposes the adoption of amendments to Section 15.9 concerning corridor advisory committees and a new Section 15.10 concerning corridor segment advisory committees. We' re not trying to fire Tim Brown and his group or anything, but those original advisory and segment committees were established in relation to Trans-Texas Corridor rules and legislation, and these rule changes keep the membership of those committees intact, their role in corridor planning intact, but remove the connection to the Trans-Texas Corridor. They also extend the Sunset date for these committees from 2009 to December 31, 2011.

Staff recommends your acceptance of the minute order.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Mark.

Agenda item 5(b)(3) deals with the use of state property, Chapter 22, Carol Rawson will present the minute order.

MS. RAWSON: I' m Carol Rawson, interim director of the Traffic Operations Division.

The minute order proposes amendments to Sections 22.11 and 22.17 concerning memorial markers for peace officers on state highway right of way. The proposed amendments implement the provisions of Senate Bill 2028 as enacted by the 81st Legislature. Currently the department has a program that allows placement of memorial markers for Department of Public Safety troopers. Senate Bill 2028 expanded this program for all peace officers killed in the line of duty. The memorials themselves are privately funded.

We recommend approval of this minute order.

MS. DELISI: Is there a motion?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Carol will also present agenda item 5(b)(4) that deals with Chapter 25, also dealing with memorial markers.

MS. RAWSON: This minute order proposes an amendment to the existing Memorial Sign Program rules. The Memorial Sign Program allows the friends or families of those killed by impaired drivers to request that a sign be placed in their memory on the state highway system. Senate Bill 521 allows a memorial sign to include the name of more than one victim as long as the total length of the name does not exceed the one line of text. The proposed amendments implement this legislation.

We recommend approval of this minute order.

MS. DELISI: Is there a motion?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Carol

Agenda item number 6, Commission, deals with the American Recovery and Reinvestment Act, the ARRA, or economic stimulus program, and John will present a minute order on some amendments.

MR. BARTON: Thank you, Director Saenz. Again for the record, John Barton, assistant executive director for Engineering Operations.

This is my monthly report to you on our efforts to implement the American Recovery and Reinvestment Act in Texas under the Transportation Program.

Just a brief review of where we stand today, this first slide shows you that we have obligated about $1.4 billion of the $2.25 billion committed to the state for highway and bridge programs. We have contracts awarded about $1 billion -- you' ll be awarding some additional contracts, hopefully, today later in this commission meeting. To date through September 30 of 2009, we' ve made contractor payments of just at $109 million, we have 279 contracts executed, 45 of which have been completed.

And the good news for citizens here in Texas, not only are they getting great transportation assets improved or built, but we have also been able to create, according to the contractors that reported on these projects, as of September 30, 5,221 employment opportunities, and the way the federal government is doing the math, they equate that to 1,785 full-time positions. So it's been a tremendous benefit so far and we continue to implement it, I think, very effectively.

On the transit side, you will see that we have an obligation of $50.5 million -- that's our total programming amount that they' ve authorized us with. Grants have been issued on all of that amount of money which means that we have 100 percent of the contracts or grants underway. To date, we have made payments of $2 million, approximately, on 68 grants. None of those grants have actually been completed, and in terms of transit, they report their job creations in number of hours worked, and to date, that' s been 12,187 hours worked as of September 30.

The aviation program is also seeing great success. We have been allocated and obligated the full amount of our obligation, $17.5 million. To date, we've paid contractors performing those services for us a little over a million dollars on six different contracts from around the state, none of which have been completed yet, and as of September 30, we've created 131 employment opportunities through these contracts.

Just to give you a status report on where we stand in terms of the large mobility projects, those are the ones that are a little more difficult to get obligated and underway, of the 28 projects you' ve approved, these are the remaining ones that have not been approved. There are actually eight projects -- I referred to as nine on this slide -- and there' s been a recent update to one of those that I' ll mention briefly.

But as you can see, the I-35 project in Waco is still progressing well and we expect to obligate it later this year or early next year. The project on 281 and 1604, the interchange in San Antonio, is progressing well, the Alamo RMA is doing that for us. A project to improve 1604 in front of Randolph Air Force Base is also moving forward well and we expect to obligate it later this year. The loop project, as I refer to it, State Highway 550 in Cameron County that the Cameron County RMA is developing in partnership with our local district, is moving forward as well and I expect it to be obligated before the end of this year without any troubles.

The South Orient Railroad projects are moving forward well, we have a little bit of an environmental issue to resolve there but expect to be able to do that quickly and move forward with that bridge replacement project at the Ballinger Bridge, as we refer to it. And then the Interstate 10 project in El Paso, referred to as the Americas Project, is moving forward well. You took action last month to help facilitate that, we' re working with the El Paso District and the RMA there to fully develop and implement that project, and I don't expect to see any problems on it. And then the last one on the list is the Interstate 10 project in Beaumont and it is also progressing well and I expect for its obligation to occur without issue.

Which leaves the one project on State Highway 99 in Harris County, and as you know, the Harris County Commissioners Court took action regarding this project earlier this week and we are evaluating alternatives to move forward on that, and I' d be happy to answer questions if you have them at this time, but it appears that we will be taking action to replace this project with other projects in the Houston District under the Recovery Act to take its place in the fact that the Harris County Commissioners Court has taken action to not move forward with this project and requested us to move our funding from the Recovery Act from it to other projects in Harris County.

And we'll take the minute orders you approved in July of 2009, a couple of months ago, you gave us a prioritized list of projects to replace any project that was on this list that should run into problems, so we' ll just move forward with those projects as you already have given us the authority to do.

The time line -- I' ll try to share this with you as we continue to move forward -- we do have to have all of our obligations committed by March 1 of 2010 which means, basically, we have to have any STIP revisions, any planning revisions made in the November time frame. Our Transportation Planning and Programming staff are working with our metropolitan planning organizations and districts to make those changes if any are necessary, and if a decision has to be made like the one I just mentioned on State Highway 99, the drop-dead date for doing that -- if you want to use those terms -- in my vocabulary is January 1, 2010. So other than the State Highway 99 project in Harris County, I don' t expect to see issues with the remaining projects.

And so that brings us to the action item for today. We have continued to see underruns on projects that we' ve taken bids on, freeing up money, if you will, to move forward with other projects around the state. This is a list of additional preservation projects we would recommend your approval of to implement under the Recovery Act for the dollar amounts shown in the middle column. As you' ll see, the projects are divided up by district and by region.

This is a joint effort of the districts within each region, and I want to pause and point out the success of the partnerships within our districts within the regions. Rather than taking the small amounts of remaining funding that the districts had, more or less, obligated or committed to them as they developed their projects and implemented them, they' ve reached across district boundaries, working with one another to develop and identify larger projects that would have more meaningful impacts on the state' s transportation system. And so they' ve pooled their resources, if you will, under the Recovery Act from the remaining underrun amounts and ask that you approve this list of projects so that they are able to make some dramatic improvements to the transportation systems within their regions of the state.

And I applaud Mr. Casteel and his leadership of making that happen and the district engineers and their staffs for their willingness to look at the greater picture of what's best for Texas rather than taking a selfish perspective of keeping every penny perhaps within their county.

So this is a recommendation of additional projects that we would make to you to fund under the Recovery Act' s preservation program, and I would recommend your approval of the minute order in front of you to do so.

MS. DELISI: Any questions? How about a motion?

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, John.

Agenda item number 7, Commissioners, deals with a project in Cameron County where you authorized Cameron County RMA to do work on the state highway system.

MR. TOMLINSON: Again, Mark Tomlinson, director of the Turnpike Authority Division.

This minute order authorizes the executive director to negotiate and enter into a project development agreement with the Cameron County RMA that provides improvements to a project that Mr. Barton just mentioned, State Highway 550 there in the Lower Rio Grande Valley which has been a project that has been under development by the district and the RMA for some time. A portion of the project is actually under construction now and the commission previously awarded some Recovery Act funding -- in early 2010 is when they hope to take bids on that project. Back in September of > 09, the RMA and TxDOT agreed to waive market valuation on the project.

Staff would recommend your approval of the minute order.

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Agenda item number 7(b) deals with the continued scheduled transfer of portions of State Highway 121 to the NTTA.

MR. TOMLINSON: This minute order authorizes the removal from the state highway system and transfer to the North Texas Tollway Authority of Segment 3 of State Highway 121, the mainlanes and associated right of way from the east side of Hillcrest Road to the west side of the Watters Road overpass in Collin County. As Mr. Saenz mentioned, you have previously transferred Segments 1 and 2 in previous commission actions.

The department conducted public hearings on the transfer on September 30, 2009 in Plano, they received no written or oral comments. Staff would recommend your approval of the minute order.

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Mark.

Agenda item 7(c) deals with a minute order where we clarify the relationship and the process used with the RTC on the State Highway 121 monies.

MR. BASS: Thank you. Again for the record, I' m James Bass, chief financial officer at TxDOT.

As Mr. Saenz said, this minute order would clarify that commission concurrence in projects selected by the Regional Transportation Council that are to be financed with either surplus toll revenue or money received under a comprehensive development agreement payment shall be limited to ensuring that the funds are allocated to projects that are authorized under state law.

Staff recommends your approval and I' d be happy to answer any questions you may have on the matter.

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, James.

Agenda item number 8 deals with our Pass-Through Toll Program and John Barton will present a minute order that changes the previous minute order that was approved.

MR. BARTON: Yes. Again, for the record, John Barton, assistant executive director for Engineering Operations.

First let me begin by thanking you for the opportunity to negotiate on your behalf the Pass-Through Toll funded projects that you approved to move forward to negotiations last month. I enjoyed the opportunity to work with those communities and their leaders in order to make this an effective program for the State of Texas.

Just a real quick review. Under this program call, we had 31 applicants that we received applications. The program was established at $274 million of total value in repayments for these projects. Last month you approved us to negotiate with ten communities for ten projects and bring those back for you today. The minute order before you would authorize Director Saenz or his designee to enter into formal agreements with these communities for the negotiated projects.

Four of the projects were also selected as alternatives because we wanted to be prepared in case any of the top ten projects were not able to be successfully negotiated by October 23 of this month. I'm here to share with you that we were able to reach successful negotiations on seven projects. The exceptions were the project that was submitted by the Sulphur River RMA, also one by the City of Bulverde, and the third was a project by the City of Pearland. Each of those entities did not have the financial resources available to them to move forward with the project at this time after they did some additional evaluation with their financial advisors regarding this particular matter.

Of the remaining seven, we were able to successfully negotiate the terms and conditions conceptually of the pass-through toll agreements. They're shown on this particular slide for your information. The pass-through toll rates, as you see, range from a low amount of 3 cents per vehicle mile traveled to a high of approximately 25 cents per vehicle mile traveled. You' ll note the one for the City of Austin is a project on Loop 290 and it is going to be based on the number of vehicles that use that interchange -- that' s the interchange of US 290 and MoPac, and rather than vehicle miles traveled, it would be based on number of vehicles, so that' s a little bit different notation.

The sum of those projects falls short of the $274 million, it actually, I think, totals just under $200 million, and therefore, we will be moving forward to negotiations on the four other projects that were identified in last month's minute order. We have not done that yet, I wanted to make sure that you had this information and took action on the minute order before you.

The minute order before you would allow, again, Mr. Saenz or his designee to move forward into formal negotiations and execution of agreements based on these terms and conditions for these particular projects with these entities.

These are the four remaining alternate projects, as I' ve shared with you. I will be moving forward with negotiations on these projects with these four entities, and if we' re successful in doing so and the agreed-upon amount is close to those shown under the request, you will note that we will be below the $274 million level that was established as a cap for this particular Pass-Through Toll Program.

So staff recommends your approval of the minute order and I'll be happy to answer any questions that you might have at this time.

MS. DELISI: Any questions?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

Agenda items number 9 and number 10, Commissioners, we' re going to defer them, we're still working with the City of El Paso and the RMA on those two items so we' ll defer them and bring them to you next month.

Agenda item number 11, Wayne Dennis, will present a minute order on an item for El Paso County to conduct a comprehensive transportation study.

MR. DENNIS: Good afternoon, Commissioners. My name is Wayne Dennis, I'm the deputy director of the Transportation Planning and Programming Division.

The minute order in item 11(a) before you grants approval for the development of a comprehensive transportation study and plan for the El Paso region that will improve international and regional mobility, including the analysis of the various international bridges and ports of entry, existing and proposed state highways and other roadways, toll facilities, transit and rail services.

Transportation Code Sections 201.103 and 201.6011 authorize the department to plan and make policies for the location, construction and maintenance of a comprehensive system of state highways and public roads, including coordination with appropriate entities to develop and integrate international trade corridor plans involving border ports of entry, highways and railroads.

The department, the City of El Paso and the Camino Real Regional Mobility Authority, in coordination with the El Paso MPO developed the 2008 comprehensive mobility plan that provides for the funding and development of multiple transportation system improvements within the region.

The parties involved in the plan recognize the need to develop a comprehensive transportation study for the integration of all transportation modes in the El Paso region. The purpose of the study is to review all existing ports in the region, analyze how the ports currently function in relationship to the existing infrastructure and the regional transportation and analyze how all the components can be integrated into a comprehensive manner.

Overall, the goal is to develop a transportation plan that will drive economic development for the region by improving trans-border mobility and to guide not only the management and operations of the existing port infrastructure but also development of new facilities. The study and proposed plan will be multimodal with a focus on highways, turnpike projects, toll bridges, transit, and freight and passenger air.

Staff recommends approval of this minute order.

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Wayne will continue and also present item 11(b) concerning the Economically Disadvantaged County Program.

MR. DENNIS: This minute order certifies the counties eligible to participate in the Economically Disadvantaged Counties Program for fiscal year 2010 as shown in Exhibit A to the minute order. Transportation Code Section 222.053 directs the commission when evaluating a proposal for a highway improvement project in a political subdivision that consists of all or a portion of economically disadvantaged county to adjust the minimum local matching funds requirement after evaluating the political subdivision' s effort and ability to meet the requirement.

In addition, the commission is also required to annually certify a county as economically disadvantaged as soon as possible after the comptroller reports on the economic indicators specified by law. The comptroller has provided the necessary data to determine the eligible projects for the 2010 program. The counties' efforts and their ability to provide a local match have been considered in determining the adjustment for each county.

Staff recommends the list of counties shown in Exhibit A for certification under fiscal year 2010 for the Economically Disadvantaged Counties Program and the establishment of their local match requirements.

MS. DELISI: Any questions.

MR. HOUGHTON: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Wayne will now present agenda item 11(c) dealing with a revision to the North Central Texas Council of Governments metropolitan area boundary, mentioned by Michael Morris earlier today.

MR. DENNIS: This minute order approves revisions to the North Central Texas Council of Governments metropolitan area boundary. Pursuant to Title 43 TAC, Section 15.3, revisions to the MPO planning area boundary must be approved by the governor or the governor' s designee. On October 4, 2005, Governor Perry delegated authority to the commission to approve metropolitan area boundary changes.

In accordance with federal regulations, a metropolitan planning area boundary shall, as a minimum, cover the urbanized areas and the contiguous geographic areas likely to become urbanized within the 20-year forecast period covered by the metropolitan transportation plan.

On October 8, 2009, the NCTCOG approved the adjusted metropolitan area boundary based on the technical evaluation process that supported the expansion of the metropolitan planning area to include four counties in North Central Texas. Staff has reviewed and concurs with the proposed boundary changes and recommends approval of this minute order.

MS. DELISI: Is there a motion?

MR. MEADOWS: Move approval.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Agenda item 11(d), James Bass will present our 12-month letting schedule for highway and maintenance projects.

MR. BASS: Thank you. Item 11(d) is, as Mr. Saenz said, the letting schedule for fiscal year 2010 and I would highlight that it includes all projects to go through the department' s letting process, both on and off of the state highway system, as well as projects that may be let by local governments that happen to be on the state highway system.

There's a summary before you that shows the letting amounts by district by method of financing for those projects, and then as well, behind that there' s a summary that's sorted by month and shows the letting amounts by funding source.

I'd be happy to answer any questions you may have. If there are none, staff would recommend your approval.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, James.

Agenda item number 12, Commission, deals with proposed lane use restriction for trucks in Dallas and Kaufman and Tarrant Counties.

MS. RAWSON: Once again, I' m Carol Rawson, interim director of the Traffic Operations Division.

This minute order allows for a left lane restriction for trucks on designated sections of Interstate 20 in Dallas, Kaufman and Tarrant Counties, Interstate 30 and Interstate 810 in Tarrant County, and Interstate 45 in Dallas and Ellis Counties. These restrictions would prohibit trucks from operating in the far left lane for sections of these highways in the four counties. Trucks would still be allowed to use the left lane to pass other vehicles and exit the highway.

The department, working with the North Texas Council of Governments has conducted traffic studies and determined that these restrictions would be beneficial. We have also worked extensively with the local jurisdictions in the development of the proposed restrictions. These types of lane restrictions improve safety by increasing the number of vehicles traveling at the same speed and decreasing lane changes and other types of passing maneuvers.

The department published a notice requesting public comment in the July 24, 2009 edition of the Texas Register and also held three local public hearings on August 10, August 11 and 12, 2009. We recommend approval of this minute order

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Carol.

Agenda item number 13, James will present our Obligation Limit Report.

MR. BASS: Thank you. Again for the record, James Bass, chief financial officer.

This item is a report and there' s no action required by the commission, it' s our monthly report on the status of the obligation limit. For the month of October, actual contracts let totaled almost $214 million, of which $98.5 million of those obligated the state obligation limit, the remainder were let and funded by other revenue sources.

This brings the year-to-date total, including change orders, to just under $177 million, and on the report, subsequent to your approval of the 12-month schedule, we' ll be able to fill in the remaining schedule for fiscal year 2010 on the attachment to the report. And I'd be happy to answer questions that you may have.

MS. DELISI: Any questions?

(No response.)

MR. SAENZ: Thank you, James.

Agenda item number 14, Commission, will be presented by Steve Simmons, deals with the award or rejection of Highway Improvement Contracts, the first item is on Highway Maintenance and Department Building Contracts.

MR. SIMMONS: For the record again, I' m Steve Simmons, deputy executive director.

Item 14(a)(1) is for the consideration of the award or rejection of Highway Maintenance and Department Building Construction contracts let on October 21 of this year. We had 16 projects; the average number of bidders for the maintenance projects was 5.19; we had a 12.13 percent underrun on maintenance projects this month. Staff recommends award of all maintenance and building projects.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Agenda item 14(a)(2) deals with the award or rejection of Highway and Transportation Enhancement Building Construction contracts.

MR. SIMMONS: Item 14(a)(2) is for the consideration of award or rejection of Highway and Transportation Enhancement and Building Construction contracts let on October 20 and 21. We had 73 projects; an average of 8.1 bidders per project; and an underrun of 11.22 percent. We had an alleged bid error on project 2301 which is the I-35/71 interchange project. The error was received late Tuesday which was within the time frame allowed by our rules. The error is on a large complex interchange project and we are recommending deferring this project until November to allow adequate time to analyze the alleged error.

And so staff would recommend award of all construction except for that one particular project.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Agenda item number 15, Commission, deals with our Routine Minute Orders. Staff would be happy to discuss any of the items, but the staff would recommend approval of all of them.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

That concludes all the items on today' s regular agenda. There's no need for an executive session. At this point we' ll move to the open comment period. Is there anyone signed up?

MR. SAENZ: No cards.

MS. DELISI: Okay. Is there any other business to come before the commission?

(No response.)

MS. DELISI: There being none, I will entertain a motion to adjourn.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes. Please note for the record that it is 12:55 p.m., and this meeting stands adjourned.

(Whereupon, at 12:55 p.m., the meeting was concluded.)


MEETING OF: Texas Transportation Commission Workshop

LOCATION: Austin, Texas

DATE: October 29, 2009

I do hereby certify that the foregoing pages, numbers 1 through 181, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.





(Transcriber) (Date)

On the Record Reporting

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Austin, Texas 78731

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