Texas Department of Transportation Commission Meeting

Commission Room
Dewitt C. Greer Building
125 East 11th Street
Austin, Texas 78701-2483

9:00 a.m. Thursday, June 27, 2002

COMMISSION MEMBERS:

JOHN W. JOHNSON, Chairman
ROBERT L. NICHOLS
RIC WILLIAMSON

STAFF:

MICHAEL W. BEHRENS, Executive Director
RICHARD MONROE, General Counsel
HELEN HAVELKA, Executive Assistant to the Deputy Executive Director

PROCEEDINGS

MR. JOHNSON: Good morning. It is 9:15 a.m. and I would like to call this meeting of the Texas Transportation Commission to order. Welcome to our June meeting; it's a pleasure to have you here today.

Please note for the record that public notice of this meeting, containing all items of the agenda, was filed with the Office of the Secretary of State at 8:07 a.m. on June 19, 2002.

I traditionally ask my fellow commissioners if they have any comments that they would like to make at this time, so Robert?

MR. NICHOLS: Sure. First of all, I'd like to welcome everybody here and we very much appreciate the time and trouble you've taken to be here to listen to some of the exciting things we're going to be talking about today and to make presentations from your communities as well. We know these presentations which will come a little bit in the early end of this are very important to your communities and we hope that you feel welcome and comfortable. We look forward to your comments, and with that, I'll just pass it on.

MR. JOHNSON: Ric?

MR. WILLIAMSON: I echo Mr. Nichols comments completely, and I would go out of the way, Mr. Chairman -- as I'm sure we will again later in the day -- to acknowledge once again to Mr. Nichols how much I appreciate all of the time that you spent in the last month on State Highway 130 and the bond and indenture process. The chairman and I, I think, are deeply grateful for all the time you spent working on that, we appreciate it very much.

MR. NICHOLS: Thank you.

MR. JOHNSON: Well said.

We're going to go a little bit out of our posted agenda order because we believe that there's an item of great statewide significance on the agenda and we wanted to present that first. I hope our delegations will bear with us. After we've had item 7(a) dealing with the Trans Texas Corridor which will be presented by Steve Simmons, we will have a brief recess so that our first delegation can get set up and the first delegation, I believe, is from Center; and then we have the fine people from Temple will be delegation two, and after each delegation we'll have a brief recess so those that need to get back home can do so; and then our third delegation from Anderson County will get set up; and then after that we'll have a brief recess and then go into the normal portion of our meeting.

So I hope that everybody understands the change in the agenda order and will bear with us, but we feel that this is an extremely important part of the agenda and has extreme statewide significance, so we're going to start with item 7(a) dealing with the Trans Texas Corridor, and for that Steve Simmons, if you would come forward. Thank you.

MR. SIMMONS: Good morning, commissioners, Mr. Behrens. For the record, my name is Steve Simmons and I'm the deputy executive director of the department.

Texas has long been seen as the crossroads of North America and this has never been more accurate than now as trade between North and South America continues to grow. Most goods and commodities coming into the United States from Mexico or further south cross the Texas border and move north, sometimes all the way to Canada. The reverse is true of exports; in fact, 79 percent of all U.S. to Mexico trade passes through Texas ports of entry. Under NAFTA, this international traffic will only increase. A large percentage of the nation's cross-continent traffic also passes through Texas interacting with the transportation needs of the 21 million residents of Texas.

Texas is at a crossroads. Earlier this year, Governor Perry announced his vision to improve transportation by combining highways, rail and utilities into a corridor across Texas. At that time Governor Perry instructed TxDOT to report on what needed to be done to construct the Trans Texas Corridor. Our charge was to identify action items, public involvement opportunities, environmental studies, financing options, public-private partnerships, and an implementation strategy. I'm here today to present the study and the resulting action plan.

The Trans Texas Corridor is the largest engineering project ever proposed for Texas; it is a world-class concept. This is not the first time Texas has started with a vision and transformed it into a useful reality. Our capital is a monument of state-of-the-art 19th century engineering and innovative financing; the state traded 3 million acres of land to pay for the building. However, the best example of turning a vision into reality is our interstate highway system. First envisioned in 1939, work was expedited after World War II because of its importance to national defense. Within three years the routes had been selected. A Texan, the late Frank Turner, played a key role in the planning process and is considered the father of the interstate highway system.

Construction began after President Eisenhower signed a law creating the National Highway Fund. Within 14 years Texas had completed 3,234 miles of network of utility, multi-lane highways connecting our major cities. The similarity between Texas' portion of the interstate system and the Trans Texas Corridor ends there. The interstate system was nationwide, primarily funded with federal dollars, and while other states are looking to the future, no other state has proposed such an ambitious and visionary project as the Trans Texas Corridor.

The Trans Texas Corridor sounds futuristic, and it is, yet the proposed interstate highway system seemed ahead of its time many years ago and now it's hard to imagine life without these roadways. Like the interstate system, this new vision is achievable. In 2001 legislators and voters approved new financial tools to help Texas meet its transportation needs. The Texas Mobility Fund, along with legislation enabling regional mobility authorities and toll equity, will help TxDOT fund improvements to the existing transportation system. Additionally, these tools can help pay for the Trans Texas Corridor.

In studying ways to implement this corridor, TxDOT established seven committees to review, plan and recommend strategies. At your request, the best and brightest served on these committees which included our division directors and district engineers. This was a statewide effort with staff from 16 of our 25 districts working on this report.

These seven committees and the appointed chairs were: Finance, James Bass -- and if they are here, I'd ask that they stand -- Design, Ken Bohuslav; Right of Way, John Campbell; Environmental, Dianna Noble; Rail and Utilities, Wayne Dennis; Toll, Phil Russell; Logical Routes, Jim Randall. In addition, two offices acting in an advisory role are the Legislative Affairs Office headed by Coby Chase, and the Public Information Office headed by Randall Dillard.

Our transportation partners at the Texas Railroad Commission, Texas Parks and Wildlife, General Land Office, Texas School Land Board, Federal Highway Administration, Environmental Protection Agency, and the U.S. Fish and Wildlife Agency provided input by attending all the committee meetings. We also asked the three major railroad companies, Union Pacific, Burlington Northern-Santa Fe, and Kansas City Southern for their input in developing the rail portion of the report.

A website was developed to provide information on the progress of the Trans Texas Corridor proposal. This website included schematics, a conceptual map and a list of all contacts between TxDOT and any company or organization that could offer expertise or benefit from the development of this project. The corridor plan garnered attention from representatives in Texas, across the United States and internationally in countries such as Italy, England, and Canada.

We believe the design outlined today improves on the preliminary concept released in January by providing a more efficient and safe corridor design. To refresh your memory and to put the new vision into better context, I'll briefly explain the original corridor design concept.

Six railroad tracks will be the center element of the corridor with a three-lane roadway on either side of the rail. Utility areas would have run on both sides of the roadway making up the outer component of the corridor. The new design provides separate lanes for cars and trucks, four conventional commuter and freight rail, two separate tracks for high-speed passenger rail, and combines utility zones into one area. The benefits of this design include greater safety, easier maintenance, and phased development.

The Trans Texas Corridor report includes recommendations on these issues and an action plan. Let me take a few minutes to go into detail about the report.

Some identified benefits of the corridor include: the faster and safer movement of people and goods; reduction of traffic congestion on our existing roadways; removal of hazardous material routes from our populated areas; improvement of air quality; a safer, more reliable utility transmission system; creation of new markets and jobs; and increased importance of existing communities.

Providing separate highway lanes for trucks and passenger vehicles will: increase safety by improving visibility and reducing stress and fatigue for drivers of both types of vehicles; it will reduce congestion by allowing both types of vehicles to move at their most efficient speed; it will enhance cost effectiveness by minimizing the amount of heavy duty pavement required to provide lanes strong enough for truck traffic; and it will improve air quality by allowing traffic to keep moving.

Successful planning and development of the corridor should include extensive public involvement opportunities so any needed changes can be identified through a more detailed project-specific process of public involvement. Public involvement will allow the public to comment early and often on proposed routes by holding numerous public meetings across the state. They will ensure stakeholders, such as utilities, railroads, metropolitan planning organizations have an opportunity to offer input and comment and they will establish a central place to obtain information. It will maintain a website and produce a newsletter.

The first priority segments were identified using the following considerations: congestion in metropolitan areas; existing hazardous material routes; corridors most likely to generate toll revenue; and those corridors that would provide opportunities for economic development. Using these factors, the first four priority segment corridors we believe should be built parallel I-35/I-37 and the proposed I-69 from Denison to the Rio Grande Valley; I-69 from Laredo to Houston to Texarkana; I-45 from Dallas-Fort Worth area to Houston; and I-10 from El Paso to Orange.

While these four corridors are financially feasible, we recognize the need for additional corridors to complete an efficient transportation system. Building corridors parallel to these highways could allow TxDOT to consider modifications to more than $2 billion in planned statewide mobility projects since it may decrease the amount of right of way necessary or allow us to delay some projects.

Designing the corridor to connect to major cities without going directly through them will: help reduce urban congestion by pulling long-distance vehicles away from the local urban traffic; it will remove the majority of hazardous materials traveling through downtown centers on both rail and road, and it will improve air quality by removing long-distance vehicles from urban traffic.

Connections between the corridor and nearby cities can be accomplished by using the existing highway system. It can be developed by developing interconnections with additional modes of transportation and allowing privately funded franchises or public-private partnerships to provide transportation services.

The report placed a large emphasis on property rights by handling all transactions as a high priority process, by approaching all negotiations with good faith and conducting a single transaction with each property owner, and it is proposed to preserve the corridor for future generations by acquiring property for all components as soon as possible.

In developing the corridor, an extensive environmental review will be conducted to determine ways to avoid and minimize adverse environmental impacts and identify a large scale ecosystem approach to mitigation to compensate for unavoidable impacts.

The 4,000-mile corridor would cost, in our estimate, $31.4 million per centerline mile which does not include right of way and miscellaneous costs, for a total of $125.5 billion. Factoring in right of way at $11.7 billion to $38 billion, and miscellaneous costs, the estimated total cost for the Trans Texas Corridor would range from $145.2 billion to $183.5.

Constructing different aspects of the corridor in phases will allow us to build the heavy-duty truck lanes first and let both passenger vehicles and trucks share them. As traffic volumes increase and additional capacity is needed, separate, less expensive passenger lanes could be added. This could be accomplished without disrupting the existing traffic. It will also allow us to construct freight and/or commuter rail lines first along segments most needed for traffic relief, it will develop high-speed passenger rail to connect the largest population areas as the need grows for travel alternatives, and a delay installing utilities in certain zones until needs occur and are identified.

Toll segments of the corridor could be developed through low-bid contracts for turnpike improvements coordinated by TxDOT, by regional mobility authority initiated low-bid contracts, exclusive development agreements with private sector developers, or a regional toll authority.

In closing, TxDOT has developed an action plan. This portion of the report includes a time line for action starting this August and running through December 2003. This action plan consolidates ideas from other sections of the report and outlines specific TxDOT, congressional and legislative actions needed to make the Trans Texas Corridor a reality. This action plan recommends an extensive public involvement process to allow the public and stakeholders to take part in critical corridor decisions. The Trans Texas Corridor represents the future of transportation in Texas. It will move people and goods faster and safer and will help generate toll revenue needed to expand the state's transportation system.

Building the Trans Texas Corridor will be a monumental job but Texas has a history of accomplishing great things, especially when it comes to transportation. I recommend the Texas Transportation Commission accept the final report and approve the action plan to develop the Trans Texas Corridor.

MR. JOHNSON: Are you available for questions?

MR. SIMMONS: Yes, sir.

MR. JOHNSON: Steve, that's an excellent report. My impression is that the vision that has been presented by Governor Perry, you alluded to the establishment of the interstate highway system, and my impression at least, is this is the most significant thing since the interstate highway system in terms of surface transportation for this state. And I also want to salute you and your team for being so responsive. I know the Governor requested a quick turnaround on the study and recommendations and I think you've done an exemplary job in leading the team in providing that.

I think Ric asked about questions, and Robert and Ric, if you have any questions, observations, please feel free to make those.

MR. WILLIAMSON: If the Chair will so allow, I'll start with a few and then rest for a moment because I know Mr. Nichols has some questions as well. I want to add to the Chairman's remarks, Steve, with my compliments to the staff, to the stakeholders that participated with us in developing the report. I'm particularly grateful to the urban stakeholders who were caught off guard originally by the Governor's proposal but then quickly adjusted and came to the table and helped us develop a plan that would work.

The Governor did ask us to move quickly and as I have a personal relationship with the Governor, I can speak with him in this regard. Once the Governor decided that this is where we needed to head, he wanted to remove it from the political flow of the state, he wanted it to become policy as opposed to politics, and that was one of the reasons he asked us to move so fast, and we've done an admirable job, Mike Behrens, of putting together a project that will work for the state for the next 50 years and I'm appreciative.

There have been in the last four or five months several logical and important questions put to all of us. I think we've all tried to answer them consistently but this is the appropriate forum to deal with some of the most important. One question we're consistently asked by property owners is how will we get a fair value for our land for such a large piece of land, and if we are separated, if I'm a large ranch in South Texas and the corridor divides my ranch in half, what assurance do I have that I can get back and forth between the two pieces after the corridor is built?

I want to first clarify in the report a paragraph I read so that the public clearly understands that we propose a totally new way of approaching right of way in the state. The report recommends, if I understand it correctly, that Mr. Campbell and the right of way legal team of TxDOT will be authorized to negotiate with any landowner a royalty interest in the corridor as opposed to a flat-out condemnation. Is that correct?

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

MR. WILLIAMSON: So landowners in Texas for the first time with regard to the corridor, not with regard to our state system, will be offered the option to own a piece of the traffic or utilities or activity that goes across that land forever, if they choose that over a cash payment.

MR. SIMMONS: Yes, sir, it's one of several options that the property owners will have in regards to the ownership or use of their property.

MR. WILLIAMSON: I think that's a remarkable recommendation and it's entirely consistent with the Governor's viewpoint, and I want you to know that this commissioner fully endorses that as a modern approach to acquiring right of way.

The second question I wanted to direct to you and then I want to think for a moment is this business of dividing people's land. Is it not the case in our plan that we automatically anticipate that where we sever people's property, we will provide in every case access back and forth?

MR. SIMMONS: Without a doubt, yes, sir.

MR. WILLIAMSON: I want to think for a second. Mr. Nichols?

MR. NICHOLS: Mine are more comments than they are questions.

MR. SIMMONS: Thank you.

(General laughter.)

MR. NICHOLS: The staff has done an outstanding job and the administration in putting this together in a timely, well thought out manner, and my compliments to all of you, first of all.

Since this proposal was made by the Governor, I've had a lot of opportunities to go through the state and talk to people and I've had a lot of questions, but I will say that since I have been on the commission the last five years, this is the most exciting long-term opportunity for the state. The only thing in our state's history that is comparable to this was the interstate program which was conceived of over half a century ago. As great as that was and as much benefit as the state has received from that, commerce, connectivity and those types of things, it is rapidly approaching capacity.

Anyone who travels on the interstates, particularly that go through the urbanized areas of the state and many of our long distance routes, know that it's getting plugged, it's full of trucks -- you don't need a report to tell you that -- and many of our opportunities to expand that system are in conflict with developments that have occurred adjacent to them. In other words, we don't have room. So therefore, to increase the capacity, we have to destroy, in effect, many businesses and developments that are along that route, replace existing -- in other words, destroy overpasses, existing roadways, to move them out to create room for new roadways and so on is such a disruptive process, extremely expensive real estate, and the opportunity to move over to the side in most of these cases and start anew with a new vision I think is going to be tremendous opportunities.

When the interstate was conceived of, it did not conceive of the opportunities of the other forms of transportation for which we have: rail, utilities, and things of those nature. While truck traffic and cars have been on the interstate basically a long distance conceived of nonstop, if you could imagine, for those of you who are here, if the truck traffic and cars still had to travel on the old US highway system that went to every town, hit every red light and every stoplight, we would be incredibly plugged, but the freight train system of our nation is still on those old routes. The old routes developed, the roads went adjacent to them, and our rail system which is still very vital to our state goes through every single town, every one of those crossings, every one of those barriers that goes up and down, and for the opportunity for them to move to a corridor that is open and free and make long distance hauls is incredible. It lends the opportunity also for passenger freight and stuff like that.

But I've also heard, as I've moved around the state, some concern about the property that may be taken or acquired, but independently as each of the electric companies, oil companies, gas companies, telecommunications, as they develop their own easements throughout the state for pipelines and things of that nature, each company individually is forced to go out and deal with thousands of property owners and cross the neighborhoods and backyards and pastures all over this state. It's an incredible crisscross network.

By having a corridor that allows for a piece just for utilities, then these networks and independent companies will be able to come together and work toward these corridors and make long distance transport of all this information and other assets that need to be moved in a much more efficient manner with much less disruption to the environment and much more efficiently for all of the citizens involved.

Anyway, those are the comments, I really didn't have any questions, but I will tell you it is very exciting and obviously we're very supportive of it.

MR. SIMMONS: Thank you, Commissioner.

MR. JOHNSON: Ric?

MR. WILLIAMSON: Yes, I have a few, and perhaps the questions are really more in the nature of comments to be sure that I understand and that the multitude of stakeholders in the audience today understand. One question that's been brought up repeatedly by senators and House members, to what extent will the revenue that TxDOT has to invest in the corridor stop or slow down our known existing plans for the state highway system. And so I would just ask you by way of confirmation, right now it appears to us that we can approach this holding intact all of our known UTP plans for every city and county, for every community in the state, the corridor will not disrupt any known approved project. Is that correct?

MR. SIMMONS: That is correct.

MR. WILLIAMSON: And where it will displace or complement a future project that's not yet approved, we will have enough extensive public involvement that any fears that Senator Staples, for example, might have about the corridor as it moves through East Texas replacing perhaps a renovation that he hopes to have in his district, we'll be able to match those together where the community will feel like in the end they have a better product than they would have had had the corridor not come through.

MR. SIMMONS: I think that's the best way to put it, that it's going to supplement the existing system and provide for an upgrade in those certain areas.

MR. WILLIAMSON: And so while we anticipate that private sector partners out there in the world who we don't know specifically who they are but we know generally would be interested in these projects, we can anticipate that they will be making proposals fairly quickly. The truth is this is a 50-year plan with an emphasis on the first ten years to get moving and to focus on the primary corridors as quickly as possible to relieve congestion and move hazardous material out of our current urbanized areas.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: Now a couple more questions in that regard, Steve. I want to use as an example one of the existing private toll roads in our state. The Camino Colombia west of Laredo has been the subject of some discussion by this department over the last year or so with regard to its viability and whether or not it has value to us. We've not, that I know of, Chairman, done anything official, written a report, done an investigation, but we know the toll road is there and we know it might be available to us. Is there anything in the proposal that would prevent us -- that being TxDOT -- from deciding that a high speed toll corridor from the Camino directly to the Port of Corpus Christi and on to the Port of Houston would be a good thing, is there anything that would prevent us from pursuing that ourselves?

MR. SIMMONS: None that I'm aware of, sir.

MR. WILLIAMSON: So we are in position with the current law to either accept a proposal from private sector participants or from Webb County and Laredo and Corpus Christi and Nueces County and Harris County and the Harris County Toll Authority, we could accept a proposal from them to connect to the Camino or buy the Camino and take that toll road to Corpus Christi and Houston immediately?

MR. SIMMONS: As I think the report is going to say, we're open for business and we'll accept any idea that comes forward to us.

MR. WILLIAMSON: So that the public is aware, we anticipate that the private sector will start this ball, but the truth is where our staff identifies high revenue corridors that would help the state and generate toll revenue immediately, we could move on those corridors ourselves.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: Now, with regard to the private sector, and specifically with regard to the primary routes, I think it's important, again for Senator Staples and Senator Duncan, for Senator Shapleigh, for Senator Ogden and those who represent parts of the state not on the primary routes, to understand that our thought process is this system will be laid down to generate revenue forever with the thought in mind that we cannot reach the less-developed parts of the state until we have the revenue to pay for those corridors, but the reality is we don't have the revenue in the current system to build to those parts of the state now and we see no opportunity to ever have the revenue to build industrial and utility corridors to every corner of the state in the existing scenario.

So our belief is the tolled system, concentrating on the four primary routes first, is the beginning of generating the cash flow quicker and for sure to build into my old hometown in Abilene and Nacogdoches and Amarillo and Lubbock and Midland and San Angelo and Del Rio and all of the other great communities in the state that are also open for business. This is our belief that this is the best and fastest way to get there.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: And it's not because we favor Dallas and Houston and San Antonio over any other part of the state, the truth is there are more people driving those routes so the opportunity to generate revenue to pay for the rest of the system is the greatest there.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: My last question would be this business of dealing with the private sector is always sensitive. We've just finished our sort of first experience with the public-private partnership, although the winners of the State Highway 130 contract are not going to own any of that toll, it was our first experience with a sort of turnkey approach to construction, and we learned during that process that we really can get a road built faster if we do it this way.

We've also learned something else in this process that I suspect we'll talk about later on in the meeting, Mr. Nichols, and that is we've learned what the true cost of building and maintaining a road in Texas is today, and we know that because we know what it's going to take per toll to pay for that road, and I think it probably was eye-opening for some people this morning to pick up their Austin American Statesman and realize it's going to cost six bucks to go from Georgetown to Seguin. But the reality -- and I'm asking this in the form of a question -- the reality is if the state were a tolled system, that's what we would all be paying to get on pieces of 35- and 40- and 50-mile roads because that is what it costs to build and maintain roads in Texas today.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: Well, I think all of the most important questions to me are answered, Mr. Chairman, and I'm standing by until you're ready for something.

MR. JOHNSON: The primary corridors that you mentioned which would be developed first touch, I believe, at least 80 to 90 percent of the state's population. Most of that population dwell in our great urban areas and our wonderful cities. How can the residents of those communities -- what is the concept of dealing with the development of the corridors? I mean, the benefits are clear and you mentioned those: mobility will be improved, the environment will be improved, the movement of hazardous materials will become a great deal safer and will improve, so the benefits are clear. But how do the residents of our cities, what is the concept that they will be looking for towards the development of the corridors and how will it affect the people who live in the great cities of this state?

MR. SIMMONS: We definitely think it's going to be an improvement because of the items you specifically mentioned: the safety, the air quality, the quality of living. There will be multi-modal centers built outside that will connect the Trans Texas Corridor to the inner cities and be able to get the freight and goods back into the city. The access points along the corridor will be very limited so that we prevent the urban sprawl that comes with that type of development. But I think the safety and the air quality and the lifestyle improvements that will come about from the Trans Texas Corridor will benefit these cities immensely and allow them to grow and prosper on their own.

MR. JOHNSON: Great. Robert, did you have anything else?

MR. NICHOLS: No.

MR. JOHNSON: Ric?

MR. WILLIAMSON: Mr. Chairman, I commend the commission, the staff and the participants, and I so move we adopt.

MR. NICHOLS: I second.

MR. JOHNSON: All in favor of the motion, please signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Steve, thank you for a well-done presentation.

MR. SIMMONS: Thank you, commissioners.

(Applause.)

MR. SIMMONS: I might add that there are summaries of the report, the overview, the executive summary and the action plan will be available at our public information office today and the whole report will be placed on the website this afternoon, so that will be available.

I also want to recognize two individuals that helped tremendously to put this report together and that's Mike Cox -- is he still here? Mike joined the department late December, came on board and immediately got enrolled to help put this report together, and he's still here. And then Buddy Allison who also helped put it together, and Buddy is here also.

So I want to thank those two individuals specifically.

MR. JOHNSON: Mike?

MR. BEHRENS: Mr. Chairman, if I could, I just want to publicly thank Steve for all his work and efforts on this project. He was the leader of all those committees he spoke of and he's done a yeoman's job.

MR. SIMMONS: Thank you.

MR. WILLIAMSON: Good job.

MR. JOHNSON: We will take a brief recess so that our good friends from Center and Shelby County can get set up, and we will reconvene shortly with the first of our delegations. Thank you.

CITY OF CENTER AND SHELBY COUNTY

(Sen. Todd Staples, Mayor John Dean Windham, Rep. Wayne Christian)

MR. JOHNSON: I would like to thank everyone for their indulgence in terms of presenting, as I mentioned, what obviously has great statewide ramifications and the sacrifice of your time and inconvenience to those of you who are pressed for time, but we really believe what we've adopted today has great significance statewide and hopefully you learned more about it if you weren't already an expert on the Trans Texas Corridor.

Our first item on the agenda is to welcome the good people from Center, Texas, and Shelby County, our first delegation. We're delighted that you're here. I understand that Mayor Windham is going to lead the delegation, but before we do that, I know Senator Todd Staples has a meeting to get to, and so Senator Staples, if you would come forward and address the commission, we'd be delighted.

SEN. STAPLES: Thank you very much, Chairman Johnson. It's great to be here with you today, Commissioner Nichols, Commissioner Williamson, Director Behrens. It's kind of a historic day for us to be here to be able to witness the laying out of this corridor, and I compliment you and TxDOT and Governor Perry for your vision, and it's exciting for my part of Texas and our delegations, both the Center and Shelby County and the Anderson County delegation, to be part of it.

And Commissioner Williamson, we understand that it is going to take some priority funding to get some of this up and running and we understand that it has to be a win-win solution for all of Texas, and I think I can speak for my district and say we are fully supportive of the commission's efforts and Governor Perry's efforts to build the future, and that's what you're doing today and we look forward to partnering with you in getting that done.

I've been doing my best to stay out of Austin and in East Texas and that's where I've seen most of you lately is in East Texas, and I want to say thank you for getting out into the state, visiting with the communities, talking about their priorities because it does mean a lot to us. I've been staying out because all my friends tell me we're going to need an extra suitcase this next session, we'll be here longer than the 140 days, and so I'm not looking very forward to that, but we will deal with that when we do get there.

We're excited about the upcoming session and the partnership that we're going to have with TxDOT, the initiative, the vision that you're bringing, and I'm excited about the future of Texas and I appreciate what you're doing.

It is an honor to be here today to represent two East Texas communities, despite of what the circuit court in California says, we still consider it God's country in East Texas.

(General laughter and applause.)

SEN. STAPLES: I imagine it will be that way for a number of years and we invite all of Texas out there.

They're going to present you with some really good facts and reasons and statistics and rationale why you should support their projects today, and I think they're very solution-oriented in what they'll be bringing to you. One thing that they won't be sharing with you and won't be duplicating, since September 11 I've noticed, we've all noticed, a tremendous slowdown in travel across the nation. I've got several friends in the real estate business -- I try to practice in that every once in a while to supplement my high-paying state job -- the brokers that I've been involved with have noticed an up-tick in sales of rural land tracts, lakes, recreational properties, and most of them have a consensus that that's where a big emphasis is going to be rather than traveling across the nation to a resort spot or traveling out of our country, there's going to be a great deal of interest and involvement.

And when you look at East Texas and the projects that will be before you today, you'll be serving not only the people of East Texas but the people of Houston and the Dallas-Fort Worth area and all across the state as they take advantage of the beautiful natural resources.

The first group before you today is the City of Center and Shelby County with a loop extension project. This is something that's about a ten-year planning process that they've been asking the department to be able to participate in. The City of Center, I want to tell you, and Shelby County understand partnerships; they understand cooperation. They have worked with this agency on a number of projects. You've been very supportive on roads to their schools. This community understands what it means to invest back in your community, they have one of the best scholarship programs that is funded locally for their kids that I've seen. They understand how important that is.

They also understand how important transportation is and implementing this next phase of the loop is vitally important. There are numerous businesses that will benefit the citizens because that traffic congestion will be able to be solved if this loop extension is approved, and they're not coming up here empty-handed, they're coming up here with money on the table of their money because they understand the value of stretching state dollars.

I would ask your favorable consideration because, you know, in East Texas we like to argue about a lot of things but this is one instance where government, private businesses, the schools and community groups are all in agreement on and I think you'll find that a very worthwhile project.

The Anderson County request is to complete Highway 155. You've probably driven on that. It's great four-lane in a lot of areas and then it bottlenecks to a two-lane. This will complete that four-lane connection, that interconnectivity that is the theme word that you use, and you'll be glad to know that the right of way has been acquired for about 20 years, so this is a project that's ripe, and costwise it is something that's very good, and lastly, it will benefit the entire region. You'll have Smith County folks talking about this Anderson County project today; it truly is a regional project and I would ask that you give favorable consideration to Shelby County and the City of Center and Anderson County's requests today.

Thank you for all you do to make Texas a better place.

MR. JOHNSON: Thank you, Senator.

(Applause.)

MR. JOHNSON: I'm going to jump ship very briefly. Representative Mike Krusee has an appointment and asked if he could briefly say something, then we'll ask Mayor Windham to lead the delegation.

MR. KRUSEE: Thank you. I've asked the chairman for just a brief opportunity to talk about the RMA rules that are on your agenda today. I've spoken with Judge Doerffler and Judge Biscoe and they've both asked me to convey their gratitude to the commission for the cooperative way in which you've worked with us and the product that we've come up with in the RMA rules.

Williamson and Travis are about as different as two counties you can find right next to each other: one is completely Republican, the other is completely Democrat; in ethnicity, in gender, in every way possible. But what you've seen over the last few months is those two counties come together and work in a cooperative way that they have never worked together in history. They had their first ever joint commissioners court meeting at the Capitol between the two courts, and that's all made possible by this RMA law, and more to the point, it's made possible by you three commissioners and by the TxDOT staff, Mike, and I want to thank you for the way that you've worked on this.

I urge you to adopt the rules that are in front of you today and we will endeavor to be the first ones to put an application on your desk. Thank you.

MR. WILLIAMSON: We appreciate that and appreciate your comments. That's very kind of you.

MR. JOHNSON: Mayor Windham. We're delighted that you're here, welcome.

MAYOR WINDHAM: Thank you, sir. Good morning Chairman Johnson, and Commissioners Nichols and Williamson, and Executive Director Behrens. We appreciate you giving us some of your valuable time to express to you our deep desire to complete a project that's really been going on for a little over 20 years actually.

I'd also like to express my appreciation for our district engineer, Mr. Dennis Cooley, for coming down today.

Dennis, I appreciate your presence here very much.

My name is John Windham, I'm the mayor of Center, and I represent the city and the county in this request. I did want to introduce some folks here just for a minute, won't take long -- I know the clock is running here, isn't it.

Senator Staples you've already seen and visited with; he's here supporting our project. We certainly appreciate his presence. Representative Wayne Christian who I will call on in just a second. Mr. Chris Heckmann with the Governor's Office is here with us; we appreciate his presence very much. And County Judge "Doc" Watson from Shelby County is here. Thank you for coming.

At this point I'd like to call on Representative Christian just to introduce our request.

MR. CHRISTIAN: Thank you, Mayor Windham. It is an honor to be here. Commissioners, I do appreciate the opportunity to be here. Let me clarify one thing. Senator Staples was mentioning that the Senate is suggesting that they're going to be here for a longer time; in the House we run every other year, as Commissioner Williamson is aware. Before election time, I want to assure the voters that we in the House intend to save money, do things diligently, and be through and efficient with a dollar and be out on time. Okay? And the Senate can stay however long they want to, it's fine.

(General laughter.)

MR. CHRISTIAN: We'll work on it. But anyhow, it's good to be here this morning. Appreciate you gentlemen tremendously for your work, and Chairman Johnson, I appreciate you for coming to our area, considering the ideas we have; especially Robert Nichols who has been a great friend to all of us in East Texas. I can remember the time I went to Commissioner Nichols' office and requested some help on county bridges and before long he came back with a plan that I could never have dreamed of but it was nice to have some of the folks from TxDOT come and say, your plan for the bridges was great. And I said, Hey, when you tell it to Robert Nichols, your plan becomes something you never dreamed of here. And he's done a great job for us.

And Commissioner Williamson, of course, served with him in the Texas House, back when I first joined in my freshman year -- I'll be very quick about this -- some of the folks were telling us about the memories they had when they served with Lyndon Johnson and back those years, some of the things that happened, and of course I can say one of my memories of my freshman year was the bet we'd take each day: Could Ric Williamson go out to Katz's at night and two o'clock in the morning and eat the full breakfast like he did every morning out there, and he did win every time, he could do that. So it was a great time and some great gentlemen that you have been to work with and we appreciate you.

Center, Texas, when you look at it, many times people think we're just a small little town, about 5,000 folks in the population, but I think we'll make clear this morning that's not really what's represented in service to the community that Center represents. Center represents an area; the reason it's called Center, it's the center of the county and a lot of people wonder what it is. Our local radio station says the center of the country, of God's universe, the center of the world, but it's the center of the county which services a large population of people, a lot of different independent farmers, loggers, timber growers, different interests we have in a large area.

The area that we're talking about extending the loop and completing it to the different areas services basically our major industry. Two major industries in our area are timber and poultry, and understand this is the area that we're trying to service now that needs the help in rural Texas.

Commissioner Williamson expressed his regrets that the State of Texas will never be able financially to adequately fund transportation to the rural small areas. I want to say that this morning we bring to you, Commissioner Williamson, an opportunity to relieve your conscience and you can help us in rural Texas with this project and go home a happier man.

(General laughter.)

MR. CHRISTIAN: It is something that we need. Understand Center, just to make you reflect, Nacogdoches which is in my district also, is a busy booming little town that we all recognize as doing great things and you've been very good to us in our projects there in Nacogdoches. I want to bring you a fact that you might not be aware of: The timber industry in Nacogdoches and Shelby County are exactly the same in the millions of dollars serviced and transported each year. Also, another fact that you may not consider is the poultry industry, we actually have slightly higher numbers of chickens produced out of Shelby County than Nacogdoches County, 21 million per year is represented there, and we actually exceed Nacogdoches County in that production.

Therefore, I think you're going to find we actually have good statistics behind us, that it's not servicing just a little town of 4- or 5,000, it's an industry and an economy that justifies your consideration for this project and the completion of this loop, and as they'll explain to you today why it directly affects any expansion projects we might be considering from our major industry. In other words, if we don't find things more convenient for Tyson to be able to access its facility and other businesses there in that part of town, future expansion -- which is very possible and very much desired in our rural East Texas area -- may not occur.

I'll give you an example. There was a facility that was nearly $800 million in size that was proposed for East Texas but because it could not meet the state requirements, and we fought with the different environmental groups and the different agencies, that facility is now located in West Virginia. We have an $800 million facility that we lost because we as a state would not step in and give it the support that it needed. I don't want to see that continue in rural Texas.

You're aware and you've been great friends to us in rural Texas. This is a project that will influence the ability of rural Texans in my particular area to continue to have their jobs and to expand their business. if we don't have this, we will not be on the front burner for continued expansion in the industry that provides the income for our families. So I would appreciate your consideration this morning as it's presented, hope that you will take the time to consider it, but most of all, what we're after is your approval and we would appreciate that approval on this project that I believe you'll find is very justified in our community.

Thank you very much and I hope you'll give us your first consideration.

(Applause.)

MAYOR WINDHAM: I do want to express our appreciation to you and to Senator Staples for your support on this project.

Gentlemen, we're seeking $10 million of Strategic Priority Funding for right of way construction for the remaining portion of our Loop 500 around the city of Center. If it's not available, we would request that consideration be given to move this project to Priority II status for the project, allowing for the acquisition of right of way.

This map shows you the city of Center and the surrounding area and the area in green that's highlighted is the proposed extension of Loop 500. A later map in my presentation will show you the industries put on top of that so you can see what we're talking about.

And this project has been ongoing for over 20 years. The initial project was approved and built in the 1980s, funding for the second leg was never approved. In fact, here a minute ago former Senator Bill Haley was our senator at the time that we got the first two legs built on this loop, so he was here this morning, still interested in this project to date, and we appreciate him coming in.

MR. WILLIAMSON: He was an okay senator but he was a great House member.

(General laughter.)

MR. WILLIAMSON: He was responsible for the modern education code, Mr. Nichols, Mr. Haley was, almost by himself.

MR. NICHOLS: He was my state senator.

MR. WILLIAMSON: As a House member he was a wonderful, wonderful leader in education.

MAYOR WINDHAM: Thank you, sir.

The planning process for this leg of the loop has been going on for over ten years now. This project is now, with the exception of land acquisition, ready to build. All the environmental stuff has been done and we have a lot of support for this loop. We have major issues to consider but of course safety is one of the biggest issues of all and it is of great concern with us. I'll show you later some of our accident rates around the city which exceed even urban rates for miles traveled because of the congestion and traffic and everything we have.

Efficient transportation, industrial demands, and escalating cost of the project continue to rise each year.

We have a lot of folks here representing the city and the county; we have the City of Center -- if you would stand up as I call out your name -- the City of Center, the county, economic development committee, we have an economic development board, the chamber of commerce, and business and industry. I don't have a head count but for Shelby County we did pretty good, I think. Thank all of you for coming. We do have support; we've worked on this for quite a while.

Let's talk about safety if we can for just a minute. We of course have great concerns for our citizens and traffic safety. The completion of our Loop 500 would allow for the routing of hazardous materials and heavy industrial traffic around high density and pedestrian areas. A lot of people still walk in our country towns, particularly the downtown square. Center is like a wagon wheel, we're the center part, every part comes to that square in Center in the county, so until we had those first two sections of Loop 500 built, the traffic would pile up on the weekends maybe a mile off the square trying to get into town because of all the tremendous truck traffic we have in that little town.

Our school system projects that over 200 students per day will be transported on this new section rather than through the congested downtown area. 200 kids a day, right now they're being carried down the same routes that all this other stuff is.

If you'll look at the Loop 500 accident data, you'll see that the fatalities and accidents per million vehicle miles were high along these routes. Inside this proposed loop there were six fatalities alone, mostly on 96 in town.

Efficiency. Our various local industries project mileage savings if we complete this route. This mileage savings can be estimated from 5 to 15 miles if this section were built. Tyson's big plant in Center is located in the southern part of town and they have to go about 5 to 7 miles out of the way to go north because they can't come through the square anymore. This route would also assist in industrial, hazardous, and through traffic, avoiding Highway 96 through town, and Highway 96 is a built-up area with four controlled intersections -- that's where a lot of the deaths have occurred at those intersections.

The next chart shows how 96 and Highway 7 average accident rates, both inside the proposed loop, compared to state averages for accidents per million. These are compared to both rural and urban areas and you can see both highways are well above the average accident rate, Highway 96 being the red line and Highway 7 being the purple line. So our average accident per mile is much, much higher than urban averages because of all the congestion. We expect that the diversion of traffic, particularly industrial vehicles, will help reduce these rates.

Our average daily trip projections are increasing. The 2006 estimates have been increased within the last year about 14 percent from 5,600 to 6,400 daily trips in Center. This traffic will only increase as Interstate 69 is built somewhere down the road; it's supposed to come through our area. Highway 96 continues to get more and more traffic all the time, and if it could be diverted this route, it would help a lot.

Another bottleneck, if you will, Highway 87 doesn't just serve Center and Shelby County, 87 goes all the way to the coast, and people that live in San Augustine, Sabine and the other counties down below us, if they want to go to Louisiana, to north Louisiana, like Shreveport, they've got to come up 87 because Toledo Bend has them locked unless they go all the way down to Milam and turn and go across the bridge and go to Manning. So we have a lot of folks, coming right up 87, have to come right into town and meet 7.

The next chart will show you the industry that's being served and this is not all of our industry but this is industry that would be affected directly by this loop, it would help us. It's very heavy truck traffic, and we ship internationally from a lot of these plants, Hallmark, General Shelters, Armstrong, Tyson Foods all ship all over the country and so does C&R Refrigeration.

The next chart will show you the proposed extension again and highlighted in yellow are the various industries and how they're strategically located. 2, 3, 4 and 5 have to come to town to get out, and these specific businesses account for over 2,200 employees, so we've got a lot of folks.

The industry usage of this loop extension can be seen by locally generated traffic of over 275 large trucks per day right now going on, and the funny thing is part of it has to go down a farm road to -- well, I'll get that in just a minute. The timber industry, as was mentioned earlier, estimates 31,000 trucks a year generate traffic within Shelby County, 31,000 loads a year within the county. Now, these traffic counts don't include all the commercial traffic or transport of goods for retail distribution like furniture stores and hardware stores, that doesn't include that count, that 275 is just these industries we're talking about right here.

Truck traffic is estimated by TxDOT for this loop to be about 22 percent of the total traffic. Like I say, most of this traffic is traveling extra miles per trip, they're traveling through the downtown area or 96, use city streets to access the highways. Now, here's that example. One of the major routes four of these industries have to use to go north is to come up a farm road into town one block from the square, make a 90 degree turn on a city street that's not that big, travel down this little city street and hit an intersection of Highway 7 which goes in about six different directions and try to get back on 7, then go down to the intersection of 96 where the major intersection is and try to weave back into that traffic where you have Wal-Mart, H.E.B., Eckerd Drug, Best Western, McDonald's, and they have to come through that big section with all those trucks. This would eliminate that. There's been a lot of accidents right there.

Local participation is already pledged here. We've got the county and the commissioners court has already voted to do their share on the right of way; our economic development board has pledged -- this was several years ago, even before Mr. Cooley came on -- pledged $200,000 for TxDOT to use any way they wanted to use it, not to acquire right of way, just to help pay for the project. We also have the possibility of a Federal Demonstration project that Congressman Sandlin -- I visited with him in his office in Washington, D.C., a few weeks ago when I was up there on an I-69 meeting -- saw you in the airport, if you remember that, I was flying back to Houston on Continental -- but Congressman Sandlin said there was money available for these types of projects, and since he's on the Highway Transportation Committee for the federal government, I think we feel encouraged about if we get this approved maybe getting some help from them to lighten the load for TxDOT too. He said something like maybe even $2 million -- that would sure be nice. Don't write that down but we think that might happen.

Construction cost for this project is going to be about $13-1/2 million, and really everything is ready to go once it's approved because it's ready to go to buy the right of way, all the work has been done for this. In 1993 when all the work had been done this project was going to cost $10 million, today is $13-1/2; that's a 30 percent increase over the past ten years, basically a 3 percent annual increase on the cost of building this last section of our loop. So it's costing to not do it.

Gentlemen, we really, really need this project for safety, for industry, economic development -- so many things. We're bottlenecked out there. The Tyson plant involves 1,200 people and when you run that many trucks a day out of their plant and have to go around, and they really are good about taking the long way around but it does cost them a lot of extra money.

I'm actually going to give you some time back after Wayne did all that talking. As an elected official, I realize you have difficult funding decisions to make, you don't have the money, but we're begging for it anyhow. We would like to thank you for your consideration and give this project your real deep thought. We appreciate very much the time. Any questions?

MR. JOHNSON: Robert?

MR. NICHOLS: Yes, sir, I had a couple of questions and then I guess a couple of comments also. Is all of this inside the city limits?

MAYOR WINDHAM: None of it's inside the city limits.

MR. NICHOLS: But it's inside the ETJ? How much of it is inside your extra-territorial?

MAYOR WINDHAM: Just right outside the city limits; it's all within that area you're talking about.

MR. NICHOLS: So I think your extra-territorial jurisdiction goes out one mile?

MAYOR WINDHAM: One mile, yes, sir. That would be most of it, not all of it; most of it would be in that area.

MR. NICHOLS: Now, the county commissioners court, is it represented here today?

MAYOR WINDHAM: Yes, sir, the county judge is here, Judge Watson.

MR. NICHOLS: Judge. Okay, I saw you a while ago. When I was there and we talked about this and laid it out, one of the things that -- there were two things that were impressed upon me that I remember real clearly, and that was that most of the industry there is trying to take trucks north to get to 59 and hit the big arteries and spread out, but to do that, they're having to go back into town, go around that area, and then cut through, so we're generating all that.

MAYOR WINDHAM: Right.

MR. NICHOLS: Plus any of the businesses that are south of you coming through or trying to get to 59 are getting the same thing and the accident rates are high. As you know, or may not know, we do have a shortage of funds and we're only able to fund about a third of the really good projects in the state. Our federal appropriations, in effect, is being cut; the numbers aren't finished yet and we're still trying to be optimistic, but it appears that they're going to be cut about $300 million per year beginning almost immediately, and over a ten-year planning process, that's a $3 billion cut, that's a lot of projects that are going to have to come off the list. And we historically have asked communities to step up with a vested interest, and I was looking at the vesting, what I would refer to as the local contributions, and I realize, as I understand it, your economic development corporation has pledged $200,000 toward this.

MAYOR WINDHAM: Yes, sir.

MR. NICHOLS: The county is pledging 10 percent of the right of way, is that $100,000?

MAYOR WINDHAM: $75,000 I think is the estimate. $750,000 required to acquire the right of way?

MR. NICHOLS: My notes say a million.

MAYOR WINDHAM: Mine says 750- but you could be right.

JUDGE WATSON: Commissioners, the county is ready to pledge anything to get this through.

MR. NICHOLS: Well, it could get pretty high.

(General laughter.)

JUDGE WATSON: We're talking within 10 percent range.

MR. NICHOLS: Okay. The 10 percent on the right of way, if I'm not mistaken -- and I'll ask the executive director -- in this type of roadway, that is the normal layout for the county's portion.

MR. BEHRENS: Yes.

MR. NICHOLS: That is appreciated but that is a normal course of what's laid out for a county's share of that thing. The city itself does not have any vested extra cash in this thing other than the economic development. I guess what I'm saying is we have a lot of cities and communities and counties in the state that are really stepping up quite a bit to the plate, and I realize Shelby County and Center are not a wealthy area of the state and I recognize that, but we would encourage you or at least I would encourage you, the city and the county to get back -- I'm not talking about today, but get together and see what you might really could step up with some more funds on.

The legislature gave us a tool called the State Infrastructure Bank. I know when I was mayor of a small town, kicking in money in one year just devastated our budget, but if we had an opportunity to spread that out, the legislature gave us the State Infrastructure Bank as a tool just for these situations where we could loan the city or we could loan the county money that you could pay back over time when it actually happens which would be even further out. And take a look at those tools and if they could be utilized, see if there's additional stepping up to the plate that you might consider, and I would encourage you to do that real quick.

MAYOR WINDHAM: Okay, sir. Commissioner, is there a number?

MR. NICHOLS: I don't think it would be appropriate for me to say that but your district engineer, Mr. Cooley, probably has access to what other communities in East Texas have done and maybe other areas of the state, just so that you can get a feel. But when we're asking other communities to step up, many do, it becomes very difficult for us with such a very tight constrained budget to not do the ones where they stepped up a lot higher, so I just want to make sure that you're aware of that. And I think this is a good forum while you've got so many people from your community here because it does not only affect the county and the city but also really a bigger area because of that flow.

With that, I'd just say I appreciate all of you for being here and for such a nice presentation.

MAYOR WINDHAM: Thank you for inviting us.

MR. JOHNSON: Ric, did you have anything?

I had one question, Mr. Mayor, and you mentioned Highway 87 and people traveling eastbound to go to Louisiana on 87.

MAYOR WINDHAM: They're actually coming north on 87 from San Augustine and Sabine County down there if they're going to Shreveport.

MR. JOHNSON: My question is why would anybody want to go to Louisiana.

(General laughter.)

MAYOR WINDHAM: Well, they have those things over there called boats that people go to, and if you go onto those boats, you won't see anything but Texas plates everywhere you are.

MR. WILLIAMSON: Oh, that's those boats of ill repute we hear about.

MAYOR WINDHAM: Exactly. I've been told that, yes, sir; I assume that's correct.

MR. WILLIAMSON: Mr. Chairman, you gave me the chance to ask and I was mulling Shelby County and I forgot, I don't want to pass up the opportunity to thank Senator Staples and Representative Christian for both being warriors for the state transportation infrastructure. They both defend the department and help the department, and we don't say thank you to those who don't deserve it when they come through here, but to those that do, we do, and Mr. Christian and Mr. Staples have both been very strong supporters of the state's transportation program.

MAYOR WINDHAM: We'll get our heads back together, Commissioner.

MR. CHRISTIAN: I just wanted to mention one comment on what Commissioner Nichols said, and I agree that when we look at other communities they're able to step forward. One thing that is not really considered is we understand that there is a large influx of minority population into our state that are not able at this time to contribute. Our schools in Shelby County, Texas, especially Center, Texas, is no longer a majority campus of any one race. We have a low income part of the state. We understand in the colonias area that we have to do additional funding even though there may be larger dollars somewhere else that are brought forward.

One statistic that came forward this year I think many are not aware of, the fastest-growing population area for the Hispanic population in the state of Texas, the fastest growing Hispanic population in the past decade after the census was Shelby County, Texas. We have a large number of people that we are accommodating quite well and we welcome and we're educating in the school system, we're accommodating in an area that's already a poor economic area.

So again, as the county seat of Center, I want to remind you -- I'm sure as a former mayor, Mr. Nichols, you understand -- not only are these jobs, the 2,000 that are accommodated there in Center, Texas, from Tenaha, Timpson, Joaquin -- Tenaha, Timpson, Bobo and Blair is the old saying --all these little towns that aren't able really to directly put their dollars in. So I'd appreciate, while we will do -- and you'll find we will get together, this city has always been generous to contribute -- you might kind of give us somewhat of a legitimate weight to the fact that we are the fastest-growing population that we are having to support in that particular area and accommodate them as best we can.

So when we kick in, please consider that as part of the package there, that it's not a rich area when we do come back with a figure that I'm sure we'll be able to help as much as we can and you might kind of consider that when you do that consideration. Thank you very much.

MR. JOHNSON: Thank you.

MAYOR WINDHAM: Thank you, sir.

MR. JOHNSON: Does the delegation have anything else?

MAYOR WINDHAM: Do you want to say something? We've still got five minutes.

MR. JOHNSON: Well, I think we stopped the clock.

MAYOR WINDHAM: Oh, they did. Thank you very much.

MR. JOHNSON: As you're aware, we don't make decisions like this on the spot, but that was an excellent presentation.

We're going to take a very brief recess so the Center-Shelby County folks can get back and Mr. Cooley can get back to lead that fine Lufkin District, and the Temple people will move forward.

(Whereupon, a brief recess was taken.)

CITY OF TEMPLE

(Mayor William Jones III, Drayton McLane, Sen. Troy Fraser, Mark Watson)

MR. JOHNSON: We appreciate your indulgence and the fine people from Temple and Central Texas have made their way down Interstate 35, we're glad that you're here. I understand that there was no traffic and that you don't expect any traffic on the return trip.

(General laughter.)

MR. JOHNSON: I understand that Mayor Jones from the City of Temple is going to lead the delegation, so we're delighted that you're here and welcome.

MAYOR JONES: Thank you. Good morning. Chairman Johnson, Commissioner Williamson, Commissioner Nichols, Mr. Behrens, it's a pleasure to be here today. Thank you very much for the opportunity to make this presentation before the Texas Transportation Commission.

As we begin, let me make an introduction, if I might, of our delegation. We're absolutely pleased and proud to have to have Senator Troy Fraser with us today, our state senator. Senator Fraser, thank you for being here. We also have our County Judge John Burrows here and Commissioner Leroy Schiller is here with us from Bell County today. Thank you to both of them for being here. Our Temple City Council is here with us today, Mayor Pro Tem Sally Myers -- if you'll please stand as I call your names and we'll have our delegation presented. Council Members Tony Jeter and Patsy Luna are here with us today, and Council Member Martha Tyrock sends her regrets for not being able to be here, she's on a special mission to get prayer for us with the Pope -- she's in Italy with her family today, so we've gone for a little higher assistance, but we appreciate this opportunity.

Also we have our City Manager Mark Watson who will also present with me today. Former Mayor Keifer Marshall has graced us today; we really appreciate Keifer being here. Thank you, sir. And Temple and Texas businessman Drayton McLane is here with us today; he will also be a presenter. Thank you, Drayton

We have representatives from throughout all parts of our city, Temple Chamber of Commerce, Temple Economic Development Corporation, the Tax Increment Financing Reinvestment Zone Number 1, and the Temple Business League are all with us here today. Would the Temple delegation please stand? Thank you very much, thank you all for being here today.

Also we're very pleased to have Richard Skopik, district engineer from Waco, here with us today. Thank you, Richard, for being here. And from the Belton area engineering office, we have Jim Cowan and Ali Bashi who have provided just tremendous support to Temple through the years, but specifically on this project have done a lot of work for us and we truly appreciate everything they do.

I'm going to just present a little overview for you to begin with. Over the years, of course, we've worked very closely with the Texas Department of Transportation, specifically through their Waco office and on the Loop 363 project. This has actually been underway since the mid-'80s and the current section has been open since 1988 which basically is a two-lane road which will essentially be one of the frontage roads, the north and west frontage road of the whole Northwest Loop project.

The elements of this project are the four lanes with a depressed median, the continuous frontage roads eventually, a very, very important grade separation across the main line of the Burlington Northern-Santa Fe Railroad, and a relocation of a spur eventually in this project. The interchange at State Highway 36 and Industrial Boulevard will be very important pieces that keep traffic flowing through this Northwest Industrial Park for us, and then a redo of our interchange at FM 2305.

Loop 363 is an extremely vital link through Temple, connecting all facets of the Temple economy together: industry, business, medicine, agriculture, the military, and our educational institutions. Northwest Loop runs right through the middle of our Northwest Industrial Park which is the initial part and a part of our Tax Increment Financing Reinvestment Zone Number 1.

The Northwest Industrial Park is the home to over 70 manufacturing and distribution facilities and they use that Northwest Loop 363 every day to move their products in and out of our industrial park, as well as being the access for the workers to and from the jobs.

The next photograph shows the city of Temple limits bordered in red; the entire Loop 363 infrastructure is in the light blue ring around the center of our city, and in the northwest upper left-hand corner is the Northwest Loop 363 section which, again, is right through the middle of our Northwest Industrial Park and our reinvestment zone.

Again, we're very proud to have Senator Troy Fraser here today and his district assistant for our area, Jay Brown, is with us; Representative Dianne Delisi could not be with us today but Chris Augustine is here from her office, and we appreciate she and Jay both being here with us in support today.

We've garnered tremendous support from our entire region. Of course, the county represented here today by the judge and Commissioner Schiller. City of Belton, City of Killeen, Copperas Cove, Rogers and Troy have all given us resolutions of support, and KTUTS, the Killeen-Temple Urban Transportation Study has also been in support, and Sally Myers our mayor pro-tem is actually the chair of that group.

Other organizations and entities within our community: Temple Independent School District, Temple College have endorsed this project with the support of resolutions, as have the chamber of commerce, the TEDC and our Temple Business League.

Many companies reside in Temple, world headquarters of Wilsonart International; also our largest employer, Scott & White Hospital; the McLane Group; Materials Transportation Company; Panel Specialists; PDI, a division of McLane; Temple Bottling Company; and Cloud Construction all have expressed support for this project.

A little bit closer view of the loops, both the Northwest and the South Loop show the location of those major businesses of ours, all having access and needing this loop infrastructure to move through and around our community.

It's my great pleasure at this time to ask Temple businessman Drayton McLane to come forward and tell us a little bit about the business community of Temple and the importance of this project for the business community.

MR. McLANE: Thank you, and it's an honor to be here. Chairman Johnson, Commissioner Nichols, Commissioner Williamson, Mr. Behrens, thank you for allowing us to make this presentation. My responsibility is to identify from a business standpoint and from our citizens in the area why this loop is needed.

I was involved in 1966 in moving a family business from Cameron to Temple and it was one of the first that moved in the industrial park, and it has grown dramatically since then. And you can see from some of our data that we're presenting to you today that this would certainly address several issues and problems that we have: the congestion, the amount of traffic we have, and in particular, the last point there is that the loop now crosses the Burlington-Santa Fe track there and because of the trains coming through and the amount of traffic, particularly truck traffic, that this is a great problem that we experience.

There are a number of companies in our industrial park but some of the key ones: Wal-Mart has the grocery distribution system for all of their supercenters throughout the state of Texas and New Mexico; Wilsonart, the largest manufacturer of laminated plastics in the United States is located there; McLane Southwest which is involved in grocery distribution to supermarkets, convenience stores and fast-food restaurants are there; Performance Food Group that's in the food service distribution business; and Doane Product is a very valuable member and they make dog food and pet food of various kinds in that area.

The real issue is that there are over 10,000 people who work in the industrial park each day now and there are 62 locations, 46 companies. Three of the companies have over 400 employees and six of the companies have over 800 employees and these are continuing to grow quite rapidly. If we'll look at some of the things that are prepared there, we're everywhere from furniture manufacturing -- shipping and distribution is really the heart of it, but manufacturing of laminated plastics and many other commodities are made there.

Some of the additional ones that have just been added in the last two years is a computer call center and then also a communications call center that has several hundred employees and these continue to develop, and then a beverage bottling and distribution system.

The slide here shows the entrance of the Temple industrial park when I moved there in 1966 but it really has shifted west and where the loop is located, because of the loop, business has certainly moved in that direction. We can show several of the plants that are located in that area and we have several additional ones that are, we think, headed in the direction of Temple and what we're trying to accomplish.

It's been a magnificent area for particularly distribution because of the center location, located on Interstate 35, Highway 36, you can go every direction and particularly it's about in the middle -- it's one of the reasons we located there -- between servicing Dallas, Houston, San Antonio. And we feel that it's going to continue to grow and the congestion is going to be pretty severe as we go through this.

It's my pleasure now to introduce our Senator Troy Fraser who has visited and certainly worked and seen the conditions that are there and the congestion that is there, and it's my privilege to introduce him at this time.

(Applause.)

SEN. FRASER: Thank you, Drayton. Chairman. Good to see you today, commissioners, good to be here. Actually, it's always great to follow Drayton. For years I kept telling George W. about my background as a relief pitcher and offering my services to the Rangers and he never took me up, and now I've started beating on Drayton, and even though I'm 52 I probably still have a couple of good years left.

(General laughter.)

SEN. FRASER: It's good to be with you today and as you know, we're coming back again on this Northwest Loop and since we were here before, I think we've made a lot of progress. I appreciate Ric and Robert, I know you have both been out there, have seen it; Johnnie, I know you're very aware of looking at this project. This is not only an important project for this community but from the state of Texas perspective.

If you would allow me, I'm going to take my state senator for District 24 hat off and put on my chairman of economic development hat and go back and talk about the first part of the meeting, the presentation we saw today. I can't tell you how excited I am about a project of looking forward of where Texas is going to go, putting together a transportation system statewide, especially because the area I represent is bordered by 35 on one side, I-10 on the bottom and I-20 on the top, so there's a lot of what we're looking at in the state will be impacted.

But even more important than that, it's always been kind of my project to try and figure out a way to get the trucks and the cars traveling somehow to move the product north to south, east to west. Long-term, I love the concept of the rail lines, being able to piggyback a truck on the rail lines, and of all the things we're looking at, I think that's probably one of the great things that will happen. But until we do that, we're going to have to figure out a way to have the trucks and the cars survive on the systems that we have, and I've got a great concern about the next 10 to 15, 20 years. As we're completing 35, we've got congestion now, and as you know, I've been told repeatedly the toughest thing we're going to have on 35 in doing that system are the three bridges in Temple. I mean, that's where the bottleneck is going to be, and we all know that even if we're wonderful above and below, if we have a bottleneck, it's going to bottleneck both directions and that's going to hurt the system.

Long term or the next 6, 8, 10 years as we're completing this, I think the thing that we're talking about today, I hesitate to continue using the word "reliever route" because I don't think that's what we envision this as, but as someone that ran hundreds of trucks, truck drivers are going to find the point of least resistance; they'll figure it out. As things congest as we're repairing those bridges in the center of town, they're going to look for another place to go. The route that's there now, we have 10,000 employees out there that are having to get to work, you have 1,350 trucks per day using that two-lane strip right now -- that's 400,000 trucks today, it's increasing every day, and that's before we have the chance of trucks off the highway being dumped onto that. We've got the four lanes completed down below; logic tells me that if we complete that other two-lane section up on the top and get four lanes around there, that that's going to be a great addition to moving traffic north and south as we try to complete this other goal.

I'm really encouraged by the thing that the community has done. I continue to tell them that if you're going to come with a project, you're going to have to dip into your pockets and make sure you're doing your part. As other presentations you're going to see today, we don't have to ask for right of way, they've already bought that; we don't have to ask for environmental, it's already been done; all we've got to do is come in and lay the pavement for this strip of road.

It's going to cost about $24 million; the community has already put in $5 million; I think you're going to hear in a minute that they're going to kick in additional dollars where the total cost of this project, they're going to come in with about a third of the money to do this, and that money that that community is spending not only benefits Bell County and Temple but I would suggest it greatly helps the economic status of the state of Texas because it's going to give us the ability to move products north and south as we're doing this very valuable expansion on the highway.

Thank you for being here today. I congratulate you on the project you laid out this morning; it's a good one. And I thank the Governor for having the foresight to bring this forward, but I know this has been the work of TxDOT and you will be the one to have to implement it, and we thank you for the hard work.

Please look hard at this project we're suggesting today. I think it's a good bang for the buck for the State of Texas. Thank you.

(Applause.)

MR. NICHOLS: I really just had a comment. While you're here I just wanted to thank you for all the help you have given the Department of Transportation over the years. I know in the five years I've been on the commission, any time I ever called, asked, you've always taken the time to work with us on our problems or our legislation stuff. I just want to make sure your constituents know how much we appreciate that.

SEN. FRASER: Well, and this is a dual deal. I have commented to several people this morning that all three of you, I feel like I've got a wonderful relationship with, and if you come to me and tell me something, I know you're doing it for the good of Texas. We've got some good long-range challenges that obviously are going to take money to do but if Texas is going to continue to be a leader, we've got to address them. I thank you for your commitment to what you do but my door is always open to listen when you have things for me.

MR. JOHNSON: Thank you.

MR. WATSON: Mr. Chairman, commissioners, thank you very much. It's good to be back today; we promised we would come back and it's certainly been a fast year but a busy one.

I want to just remind you and tie you to the past and some of the history on this project. As you'll recall, in 1994 we went to the commission and requested support of this project; we were back in 2001 for Priority II-funding authorization for the loop. After that delegation appearance, we've been working with our superb district engineer Richard Skopik and we have come to you with a phased project proposal to begin to make this project a reality. That original $35.2 million project was what we were looking at; we recognize times are tight and so forth, and we have brought forward a Phase I.

To describe Phase 1 we're looking at constructing the future northbound frontage roads between I-35 North and State Highway 53 and 36, with the existing roadway constructed by the city which will serve as a southbound frontage road -- the roads in the middle will follow at a later date; constructing an improved interchange at the intersection of Northwest Loop 363 and State Highway 36. Then we move to Phase II which is to improve the interchanges at Farm to Market Road 2305 and also redesigned ramps and frontage road improvements at SH-53 and 56.

Phase III will be many years ahead when there's plenty of money to build road projects in the state of Texas and we will look forward to that day when a four-lane main roadway will be constructed with grade separations at Industrial Boulevard, at Lucius McCelvey Drive, and the railroad crossings we'll conduct redesigned ramps.

I want to focus real quickly on the map behind you there to give you an idea of the reinvestment zone. This is where the activity and action is occurring in the city of Temple at this time. That represents roughly 29 percent of the entire square mile area of the city of Temple and all of those areas are involving growth at the present time.

As we turn to the next item, the Northwest Industrial Park is part of that zone and it's approximately $201 million in taxable value, but if you look at the next chart, you will see when that growth has substantially occurred. We're finding a need to expand our businesses, expand our factories, and all of this has occurred $131 million in expansion in the last several years.

Looking at the yellow line representing that loop, it goes right through the heart of the industrial areas that are serving the community and representing anything from liquid nails to distribution and grocery distribution and onward and upward.

A financial summary of the reinvestment zone, we have to date spent $12.6 million in land acquisition, new streets, utility lines, but in the next four to five year through Fiscal Year 2005, we have very aggressive plans to invest $26.1 million in additional improvements to the infrastructure in that area.

I want to focus on something that's happened in the last month through a linkage and partnership with TxDOT and that's our aviation activities. We're looking at building a $2-1/2 million hangar to accommodate the American Missile Command, AMCOM, refurbishing military helicopters. We now have 130 helicopters out at Draughn Miller Airport and creating quite a number of new jobs within our community just in the last six months, and it looks like it's going to continue to expand, and all of those helicopters are being restored there.

This is important to us and we appreciate your time. I'll turn it back to Mayor Jones.

MR. WILLIAMSON: Wait a minute. Nice try.

(General laughter.)

MR. WILLIAMSON: Mr. Chairman, are you aware that there is a serious and fatal flaw in this proposal?

MR. JOHNSON: I was not aware of that.

MR. WILLIAMSON: But let me illuminate the serious and fatal flaw.

MR. JOHNSON: Please do.

MR. WILLIAMSON: It appears that one of the very greatest restaurants between San Antonio and Dallas is now located in old downtown Temple, and I don't see any improvement off of 35 to get me over to Mr. Cheeves' Restaurant with any of the quickness that a commissioner deserves. I want to know why we're not taking care of downtown Temple.

(General laughter.)

MR. WATSON: Oh, believe me, we are. We could always handle a little bit more.

MR. WILLIAMSON: I don't know him personally and I'm not kin to him, Mr. Nichols, but you need to stop in that restaurant. Three or four months it's been open, or five? It is a great place to dine and spend an hour and a half with your wife just visiting; it's a diamond just sitting there in the middle of Temple and it's great.

MR. WATSON: Would love to have you up and let us know.

(Applause.)

MAYOR JONES: Thank you for pointing out that flaw and we'd certainly look forward to the opportunity of correcting that at your earliest convenience, gentlemen.

(General laughter.)

MAYOR JONES: Well, we've heard Drayton talk about the economic development and the importance of that industrial park to the City of Temple, and Mr. Watson has of course told you how we've broken that project down now into more bite-size pieces, into three phases for us to be able to develop that and get the important pieces started and then we can finish it out as we can over the years.

The first phase that we're asking for the Priority I funding right now, right of way acquisitions require about another million dollars to finish up little bits and pieces that have been added now as the district engineers have finished the design on that and indicated some different areas that need to be picked up, little slivers and pieces here and there.

Utility relocation, engineering design, and then of course the construction bring the project from here forward to be about $19.8 million. Our previous investment in this project is $5 million which includes the engineering design, the acquisition of the right of way, the vast majority of the rights of way that exist today for that, and the construction, and then the opening of that loop in 1988.

Phase II would be almost $9 million which would primarily be the interchange redesigns at State Highway 36 and FM 2305 which join the South Loop starting to head south towards I-35 again on the south side of Temple and connect it with the Northwest Loop.

And then the final phase, Phase III, just under $24 million would be basically doing the main lanes and the grade separations that would be required at BN-SF and Lucius McCelvey and Industrial Boulevard as designed by the Waco District.

What we're asking you to consider here today, gentlemen, is to authorize Strategic Priority I funding for Phase I of our Northwest Loop expansion between I-35 and State Highway 36 and also to grant Strategic Priority II funding authorization for Phase II which is to develop those interchanges at Highway 367 and FM 2305, both very important to keep this project moving on into the years in the future.

To help expedite this and get this added to the Unified Transportation Plan, we are bringing to you today $3.3 million, $1 million more in right of way acquisition and $2.3 million in cash to be able to chip in and help get this thing moving. The breakdown for that is on the next slide and shows that a couple million dollars for construction, the right of way and utility relocation. And in our final slide we show the total Phase I development cost including the frontage road that exists already that this project is just under $25 million. We've already put forth and we built the lanes that exist there today for $5 million, did the right of way acquisition which is virtually all in place for the entire project. We are today bringing to you a check for $3.3 million, leaving $16-1/2 million that's required to finish this phase. I understand that about $7 million of that is available from other sources as identified by the Waco District Office and thus requiring actually about $9.5 million in Texas Department of Transportation funds.

MR. NICHOLS: Can we cash that check?

MR. JOHNSON: Right into Fund 6.

MAYOR JONES: Please note on there that it's valid for 90 days.

(General laughter and applause.)

MAYOR JONES: We want to thank you very, very much for the opportunity to make this presentation today. The city of Temple is a vibrant community in Central Texas and we think for the entire state of Texas. We're at the pivot point on I-35; we're not here to beat that one up today, you guys know what I-35 is and how it lies in the whole strategic scheme of traffic moving through Temple, and the Northwest Loop is really the piece that we're interested in and it will have an impact as time goes on. And we thank you very much for this opportunity today.

MR. JOHNSON: Mayor Jones, thank you.

Questions?

MR. WILLIAMSON: I have one.

MR. JOHNSON: Ric.

MR. WILLIAMSON: I've been on the commission about 15 months and this is at least the second time I've seen a presentation from Temple and maybe the third time. Just out of curiosity, a community your size and with strong businesses and influential people statewide, it seems to me that you should have some sort of permanent presence or representation here in Austin. Have you ever considered like maybe hiring someone to represent your interests?

MAYOR JONES: Well, sir, I'm very glad you mentioned that fact, and if we could find somebody as good and competent as Mr. Cliff Johnson to represent the City of Temple, Texas -- is Cliff here?

MR. WILLIAMSON: Oh, he's here. Can we get him to stand up.

MAYOR JONES: He's hiding back there. Cliff Johnson are you back there?

MR. WILLIAMSON: We're probably not going to let you go until Cliff Johnson -- I want to see what competence looks like. Oh, the Cliff Johnson from Palestine?

MAYOR JONES: The one and only.

MR. WILLIAMSON: Is that the guy you have here?

MAYOR JONES: We're considering that highly.

MR. WILLIAMSON: Will miracles never cease.

MAYOR JONES: And he's been a tremendous asset for us, I assure you, and you're probably very, very well aware of that.

MR. WILLIAMSON: I never stop hearing about it.

(General laughter.)

MAYOR JONES: I understand.

MR. WILLIAMSON: I have a serious question unless Mr. Nichols wants to ask.

MR. NICHOLS: I had a couple of questions and a comment.

MR. WILLIAMSON: Go ahead; you probably have the same thing on your mind I have on mine.

MR. NICHOLS: We'll find out. First of all, I want to compliment you on an excellent presentation, very good. Also, in the community's stepping up to the plate in local contributions, a lot of people ask for things and it's easy to ask for something but when the community has united to the point that they reach in their own pocket and step forward, it's a very meaningful vested interest in the project, and we appreciate how hard that is to do and appreciate your stepping up to that.

I think my question probably is going to be going to the district engineer Mr. Skopik. On the Priority I when we use Strategic Priority money, we want to make sure that it can get to a letting, I think, within 36 months or something of that nature. Are we in a position, at the district level this project has advanced forward enough that you could go to construction in that kind of time period?

MR. SKOPIK: Yes, sir, within the next three years, absolutely. Right now, of course, the only authority that I've got is the old LRP or planning authority and really we're going back and completing, I guess refreshing the environmental documents and reworking the schematic to bring everything up to speed from what was originally done, so we're getting to a point that we're going to need some elevated authority, at least to the design mode.

MR. NICHOLS: We've got Phase I, Phase II, like particularly on Phase I.

MR. SKOPIK: Phase I, yes, sir.

MR. NICHOLS: But that is advanced enough but is it already in Priority II?

MR. SKOPIK: No, sir.

MR. NICHOLS: But the right of way basically has been done, environmental work and all those things?

MR. SKOPIK: It was done previously when the city was authorized back in 1987 by the commission then to develop the project really completely on their own, and then we would take it onto the system.

MR. NICHOLS: This is really kind of unusual.

MR. SKOPIK: It's very unusual. In fact, I had to go back and do a lot of research and reading and all the minute orders and try to really understand and talk to all the city leadership that had some recollection of how it all happened.

MR. NICHOLS: I'm sure you've communicated all your findings to our TP&P group?

MR. SKOPIK: Yes.

MR. NICHOLS: Usually if something moves from LRP to Priority I, they like to see it staged, but this is a situation where you've got an unusual circumstance that it has been acquired and all that, so I assume the utility protection has been in there since the right of way was acquired a long time ago.

MR. SKOPIK: That's correct.

MR. NICHOLS: Okay, that answered my question.

MR. WILLIAMSON: Well, then this question is probably legitimately addressed to the mayor.

MR. JOHNSON: Richard, don't go far.

MR. WILLIAMSON: Mayor, in the past couple of months we have heard -- and before I forget about it, as you heard me earlier with Senator Staples and Mr. Christian, I have the same comments about Senator Fraser and Ms. Delisi, they are also both warriors for the transportation world and we appreciate deeply their commitment to our department and a better Texas.

MAYOR JONES: We're very fortunate to be represented by the both of them.

MR. WILLIAMSON: Not all members of the legislature, most of whom with whom I served, understand the long-term social significance of a good transportation infrastructure. It's more than business, it's lifestyle and so forth, but in the last few months we've had a pretty strong push from the United States military and the Copperas Cove area to do something about their particularly downtown area but the route from Copperas Cove over to Interstate 35. We've had some discussion about a loop around the east side of Temple or the southeast side; there are several big projects beginning to need attention in this area, as should always be the case when population is growing and business is expanding.

You saw the corridor laid out today and you heard a very real world discussion of the financial dilemma the state faces in taking its transportation system to the next level considering the population explosion and the air quality issues we have in the state. There are perhaps only one or two in this state better examples of a multi-county regional mobility authority other than the four counties around Temple, maybe two, maybe just one. You are primed for the Texas Department of Transportation to be your partner in building a series of regional toll roads that would allow you to retain the tolls in your community and continue to expand your road system over the next 50 years.

Now, I don't want your delegation to think that I'm speaking certainly for the other two or that I'm opposed to rational consideration of your request, I don't want you to think that, but it's sort of my role to point out to every delegation that comes through that has the apparent prerequisites for a strong RMA to say to you: You might can help yourself and we might can help you faster and quicker and certainly better for the long haul when Fort Hood has 2 million soldiers and when Temple is 500,000 people and when it's the third-largest population center in the state -- as it certainly will be, Mr. McLane -- it might be better for you to be thinking a little bit beyond just this project and I think we intend to be very aggressive in helping communities that make that decision over the next six months because there is no way for us to fund everyone's request for the next 20 years.

The tax revenue we have available to us, Senator, doesn't allow us to do that and we're not asking for more, we are just observing it's just not possible, and yet these are the things that need to be done for the state to address its air quality issues, to address its population explosion, to address its quality of life. So for whatever it's worth, I sure think a high speed rolling rail from Lampasas across to Temple and around both sides of Temple and the Belton area, I think there's some remarkable things. I'm looking at this railroad and thinking that a regional mobility authority could help the BN-SF move some of its tracks out of the city of Temple and away from disruption to the public, but you've got to establish and get those tolls coming in first.

MAYOR JONES: Well, it's encouraging to hear that people outside of our region really recognize what a great place it is and how dynamic our region can be.

MR. WILLIAMSON: Plus think of all the money you could make when we shut down 35 for two years to rebuild it and they would have to go through your toll road. You could pay off most of your debt just in that two-year period.

(General laughter.)

MR. WILLIAMSON: Thank you for your presentation.

MAYOR JONES: Thank you, Commissioner.

MR. JOHNSON: Mayor, a couple of questions and maybe Richard can shed some light and help me. Loop 363 in its current form, is any of it developed to finished condition on the east side or anywhere in terms of having main lanes and frontage road?

MR. SKOPIK: The southwest quadrant essentially from the South Loop interchange with I-35 and then if you move in an easterly direction towards -- if you'll look at your map -- towards State Highway 95 and then where 36 and 190 go to Cameron to the south, that segment, although we have it in the UTP for improvements, upgrades, it is a four-lane freeway for the most part. It's not up to current standards, it does have some at-grade crossovers in a few locations, but there is a frontage road system, we've made some spot improvements with the assistance of the city and other partnerships, developers, particularly to make improvements, ramp improvements. But to answer your question, that is the one portion that's essentially operating as a freeway.

MR. JOHNSON: And the rest of the East Loop 363 is not in anywhere near that form?

MR. SKOPIK: On the east side from essentially State Highway 36/190 and on around east and north to I-35 on the north, that's all a two-lane facility; there is right of way there for a four-lane-type facility; I'm not sure what that footprint actually would fit now, it probably would not be quite enough, but there is additional width there beyond just the two-lane.

I will say too, Mr. Johnson, if you'll refocus back to the South Loop interchange with I-35, from there going west and then as you move north -- which is part of this Phase II request that's before you today -- that section also is basically a four-lane divided freeway with somewhat of a frontage road system, and much of that frontage road system on that section, if I recall -- it's been before my time -- was constructed all by the City of Temple.

SEN. FRASER: If I can jump in. We have a two-lane now with a four-lane continuing, you add another two-lane and that will give you four lanes from 35 to 35, so the commitment they're asking for today is just that two-lane which would give a full four-lane loop.

MR. JOHNSON: Thank you. The other question I had, I believe previously there's been some money dedicated to a grade change over the main rail.

MR. SKOPIK: That's right, the BN-SF Railroad.

MR. JOHNSON: What is the status of that project?

MR. SKOPIK: Well, that project, as we're developing or redeveloping the schematic for this whole program before you, that is all being done simultaneously. In other words, we are planning and moving forward -- we will move forward with the railroad grade separation project in some form or capacity if something is not able to happen on this request, but we are moving --

MR. JOHNSON: It would be a good partnering project for the Phase I component of this.

MR. SKOPIK: Absolutely. Basically we could marry the funds together, bridge funds for safety purposes that were identified. That's a high volume crossing, both rail and the truck movements that are at-grade, as well as vehicular traffic, and that's why it ranked very high statewide and is in the position that it's in. It's ready for the construct mode; I have full authority to move forward with that aspect.

MR. JOHNSON: Now, there are two other rail lines, one coming from the southeast and another coming from the southwest; it looks like they merge and become the main line for the BN-SF.

MR. SKOPIK: Yes, sir.

MR. JOHNSON: Are those problem areas also with traffic flow?

MR. SKOPIK: Where you see all those railroads coming together, that's in the downtown Temple --

MR. JOHNSON: I'm talking about where they intersect 363, where they cross 363.

MR. SKOPIK: On the north?

MR. JOHNSON: No, on the southwest and southeast.

MR. SKOPIK: Okay, yes.

MR. JOHNSON: They're coming from the southeast, intersect the southeast portion of 363 and the other one comes from the southwest.

MR. SKOPIK: Yes. We actually have some similar funds in terms of grade separation. There's an existing grade separation on the southwest side where the rail crosses the southwest portion of the loop near Temple College; it's a very narrow-type grade separation, it was built back in the early '50s, late '40s, and that is actually scheduled for replacement and we're working it in with the proposed improvements that we have authorization onto work on that southwest loop to improve the existing freeway.

MR. JOHNSON: Great.

MR. SKOPIK: I might just add that rail line that we're talking about on this northwest quadrant that's before you today, that's also the Amtrak line -- assuming Amtrak is still running today -- but it goes north to McGregor and on to Fort Worth.

MR. JOHNSON: Thank you, Richard.

Anything else, Ric or Robert? Mr. Mayor, anything else?

MAYOR JONES: Well, sir, I'd like to very quickly call your office and arrange for you to get to Temple and be able for yourself to see what we're talking about, get you dinner up at Cheeves, so you too can extol the virtues of our downtown redevelopment and also that great restaurant we now have in Temple at Cheeves.

And Commissioner Nichols, we'd love to have you back in Temple, and I know Ms. Tyrock would love to have you.

MR. NICHOLS: Can we hang onto that check?

MAYOR JONES: Yes, sir, go right ahead, absolutely. Also, you'll find in front of you, and I see Chairman Johnson found his and put it on, and we appreciate that -- each of you have a "Team Temple" button right next to your name plaque there, and we absolutely consider you partners and part of "Team Temple" and very vital to us in the future as we go forward.

Let me just thank our delegation for being here today, for taking the time from their busy, busy schedules. Senator, thank you for being here. Mr. McLane, we certainly appreciate your time and glad to have you part of our presentation today. To our county judge and Commissioner Schiller for being here and all of these delegates and our city council, of course. Thank you very much for this opportunity, gentlemen.

MR. JOHNSON: You know, for the record, I was in Temple. Your legendary predecessor hosted a function at the Rail Museum and Center on STEP projects, Senator Fraser was there and Representative Delisi, and I was also in Temple when the Governor came for the roll out of the Trans Texas Corridor. So I'm not a stranger, I probably am not familiar enough so I appreciate the invitation and look forward to accepting it.

MAYOR JONES: We'll call your office.

MR. JOHNSON: I did want to make note that you are following a legend in mayor circles, and it's great to see the former mayor here. I know he's never been to Austin before, so he had a tough time finding his way down here.

(General laughter.)

MAYOR JONES: Big shoes, big chair to fill, great man, and a real honor to know him and consider him a friend for the 20-plus years that I've been in Temple.

MR. JOHNSON: Well, as my colleagues said, an excellent presentation, a lot of meat, if you will, for us to consider. As you're also aware, we don't make instant decisions on these matters, but we look forward to working with you.

MAYOR JONES: Let me just say thanks to Tom Martin who had a tremendous amount to do -- he's our public works director -- in helping with the presentation. Thank you for those comments.

MR. JOHNSON: We will take a brief recess so our I-35 travelers can beat the traffic.

(Whereupon, a brief recess was taken.)

ANDERSON COUNTY

(Judge Carey McKinney, Judge Larry Craig, Mike Dennis, Judge Bascom Bentley III)

MR. JOHNSON: We appreciate everyone's patience, especially our good friends from East Texas. The Smith County judge I know is going to lead the delegation and we have the fine county judge from Anderson County is going to start off. Is that correct? Okay, great.

JUDGE McKINNEY: Chairman Johnson, Commissioner Nichols, Commissioner Williamson, and Executive Director Behrens. I'd just like to thank you for the opportunity to come before the commission again to speak to you about a project that's very important to the citizens of Anderson County and the East Texas region, and that's the widening of 155. We've got three to make the presentation, I know it's late in the day, and so at this time what I'd like to do, I'd like to introduce everybody that's here. We have a lot of great citizens from Anderson County and council members, PEDC, chambers of commerce from Lake Palestine and the Palestine Chamber of Commerce, but I'd just like to get the entire delegation to stand at this time. Thank you.

MR. JOHNSON: Anybody left at home?

(General laughter.)

JUDGE McKINNEY: Some of my counterparts on the commissioners court: Commissioner Rodney A. Howard, Sr., Precinct 2; and Commissioner Tim Milliken, Precinct 3.

At this time I'll introduce the Honorable Larry Craig from Smith County to start the presentation.

MR. JOHNSON: Judge McKinney, thank you.

JUDGE CRAIG: Mr. Chairman, commissioners, executive director. It's always a pleasure for me to be before this honorable commission. I was here last month from Smith County and Tyler on our Loop 49. Just as important to our region, though, is the project that's presented to you today from Anderson County. The Smith County Commissioners Court is very supportive of Anderson County in this project and the Highway 155 delegation who has traveled that two-lane ribbon of that road is all so supportive of this.

As you're aware, there's a ten-mile section that has two lanes and no shoulders. This section provides access to many of the corridors in our region. Wal-Mart has over 164 trucks a day that travel that ten-mile portion and it's not uncommon for those drivers to come in and report just very near misses in accidents, that's reported daily. Also, you're aware that the Texas Department of Criminal Justice unit there has buses that travel daily back and forth to the other prison units; they have prison vans that are taking prisoners back and forth to court cases. This could be a very, very disastrous thing if one of those buses or one of those vans happened to have an accident and was loaded with the criminals in that area.

We want you to carefully consider this as it is important to the corridor. Smith County has always been very supportive of the trunk system, of all the progress that this commission has made and your predecessors has made. As most of us, I have traveled throughout our great nation and I think our State of Texas is to be commended for the roads and highways that we have and that's due to your work and all the work of your predecessors.

I know, as being county judge in government on the local level, there's never enough money to take care of the needs, but we come before you today asking you to very carefully consider this, the importance of this small ten-mile road there without any shoulders, without any passing. We have a very impatient traveling public and some of those travelers, as you know, will not even keep up with the posted speed zones, so this creates a bottleneck and it causes quite a hazard.

It's a pleasure for me to be here, I thank you for the opportunity, and thank Anderson County for asking me to be here in their support because we do support that in Smith County; it's very, very important to us.

Now it's my pleasure to introduce to you Mr. Mike Dennis. Mike is senior vice president of the First State Bank of Frankston and is also president of the Lake Palestine Area Chamber of Commerce. Mike.

MR. DENNIS: Thank you, Judge Craig. I heard your remark a while ago about they had a lot of meat in their presentation, so let me tell you that I'm going to be the cornbread and turnip greens.

(General laughter.)

MR. DENNIS: Mr. Chairman, commissioners and staff. My name is Mike Dennis, I'm here today representing the Lake Palestine Chamber of Commerce. I was asked to speak for Jeff Austin; he couldn't be here today, he had some prior commitments; he asked me to express his regret. He also wanted me to greet each of you for him and for your excellent work on this commission.

I'm also speaking to you as a concerned citizen who travels this road, this ribbon of road between Frankston and Palestine, really more often than I care to. It's not a real safe stretch of road for a banker or even an attorney or a commissioner or our concerned citizens. As you're aware, our entire region of East Texas is growing rapidly. We're very blessed with abundant natural resources, we have lots of water supply, natural gas, lignite, oil, timber, and plenty of beauty and marvelous healthcare facilities. Added to that, on Highway 155 is also a top 50s golf course created by Justin Leonard. You can easily see how this will overwhelm that small two-lane ribbon of road we have.

We're grateful to Judge N.R. Link and Jackson Hanks, two Texas road hands who have helped push the Highway 155 project for many years. And to show you how Frankston is committed to the regional concept of this highway construction improvement, Frankston several years ago passed a one-and-one-half-cent sales tax and this was to be done to acquire the right of way and for utility relocation, and we're right in the middle of that right now -- there's a big mess out in front of the bank.

Ladies and gentlemen, at five o'clock on any given day the intersection of State Highway 155 and US Highway 175 there's a great congestion of traffic; it goes back almost half a mile, sometimes to a mile. We know that when our construction project is completed there in Frankston that that will certainly help relieve the congestion there at 155 and 175. Unfortunately about two-tenths a mile south of the intersection, the drivers are not going to be really happy, they're going to get right back into that ribbon. Road rage will be inevitable -- as a matter of fact, it's already there. I for one do not get on Highway 155 going home and I live north of the intersection.

Frankston Independent School buses run up and down this stretch of road daily. We preach patience is a virtue but it isn't widely taught on a narrow two-lane highway with sod shoulders. Would you want your loved ones to be transported by ambulance to have to be stuck behind oilfield service vehicles or a timber vehicle, logging truck? These are facts of life on this road.

In conclusion, I enter my plea, I urge your favorable consideration of our request. I thank you for attentiveness and concern.

At this time it is my rare privilege -- and it is rare, I don't ever get to introduce Judge Bentley -- to introduce Honorable Bascom W. Bentley to you. Judge Bentley is the presiding district judge of the 369th District Court and is from Palestine, Texas, and he asked for me to also add "and also a righteous man".

(General laughter and applause.)

MR. WILLIAMSON: Now, wait a minute. Who did he say you are?

JUDGE BENTLEY: Well, I'm not bearing gifts, I can tell you that.

MR. WILLIAMSON: What did you say your name was?

JUDGE BENTLEY: I'm not allowed to use my real name, so I'd like to talk anonymously. Bascom Bentley.

MR. WILLIAMSON: Bascom Bentley.

JUDGE BENTLEY: Yes, sir, I'm the one that snored and kept you up all night and 15 years later you're still mad at me.

MR. WILLIAMSON: Fifteen years ago, six degrees below zero in an unheated hunting camp with Cliff Johnson, the governor of Texas, his father, and seven other assorted and sundry outlaws; hunted all day long, Mr. Nichols, didn't even have energy to eat dinner, just fell on the floor, and could not sleep for 12 hours because one Bascom Bentley from East Texas was in the bunk next to me. I've been waiting 15 years for this.

JUDGE BENTLEY: I guess not only here goes 155 but my career as well. I did offer to hold your hand.

(General laughter.)

MR. WILLIAMSON: Now, if this was a serious deal -- where's Cliff, I don't see him on the agenda.

JUDGE BENTLEY: He's probably in the boys' restroom, I don't know.

MR. WILLIAMSON: Well, where's Dr. McFarland? I mean, he has an interest in the area north of Palestine.

JUDGE BENTLEY: Well, Dr. McFarland I'm sure is busy ministering to the poor and the sick this morning and picking up checks from Medicare at the post office.

MR. WILLIAMSON: Well, where's Elton Bomer?

JUDGE BENTLEY: Well, that's my point. Elton was supposed to do this and he didn't; Cliff was supposed to do it and lied and said he couldn't be here; so you know how desperate Anderson County is when they've got me up here to speak on their behalf. And it warms my heart, all of a sudden I really do feel a lot of love in this room and I don't know when I've had more fun. It also warms my heart knowing that I'm between you and lunch. I'm kind of like Liz Taylor's eighth husband: I know what to do; I just don't know if I can make it interesting. If I'm going to go down, I'm going to go down kicking.

(General laughter.)

MR. WILLIAMSON: It's good to see you again, Judge.

JUDGE BENTLEY: Let's do this again sometime. I know how Christ felt before the Pharisees.

Gentlemen, I do appreciate your time. We've got everything in Palestine now from cable TV to fax machines, and we're about to get the internet, they tell me, and I'll be able to cultivate more dirty pictures, but we don't have a four-lane corridor out of Anderson County.

And I think Mr. Nichols used to be a county commissioner out of Jacksonville who used to tell me that everybody in Palestine and Jacksonville don't think they've lived unless they're going to get to die in Tyler, Texas. You want to see people from Palestine and Jacksonville, you go to Tyler, and 155 is that corridor. You're running along on a four-lane highway and all of a sudden you come to this what they call a road: no shoulder, nowhere to pass. It's like hunting rabbits with a dead dog, you're just not going anywhere, it's not going to work. It's dangerous and we need some help.

Am I wasting your time? Should I just shut up and sit down?

(General laughter.)

JUDGE BENTLEY: I would appreciate anything that you can for Palestine, Anderson County, the citizens of East Texas with this 155 project, and have you got any more free stuff besides those maps that I can have? And other than that, gentlemen, unless there's some questions -- which I'm afraid there may be -- I will sit down and shut up and thank you for your time. I think you have all the facts and figures and everything, and I'm certainly not one to enlighten you further on the desperate need for this. I thank you, Commissioner Williamson, particularly you.

MR. JOHNSON: Any questions?

MR. NICHOLS: Well, I had a comment but I had brought pictures of my last hunting trip with him, but I wasn't going to be what you had so I'm just not going to show them to the group.

JUDGE BENTLEY: I remind commissioner Williamson and Commissioner Nichols that I also took pictures of our hunting trips. You can write the check this afternoon; we're in no hurry.

(General laughter.)

JUDGE BENTLEY: Anyway, I hate to see my career go down like this, but thank you very much. Any questions? Thank you very much.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: No.

(Applause.)

MR. JOHNSON: Is Mary Owen here? You perhaps can answer this. There's a ten-mile segment of 155 that is two-lane, no shoulder?

MS. OWEN: That's correct.

MR. JOHNSON: Is the rest of it improved?

MS. OWEN: Four-lane divided.

MR. JOHNSON: So this is sort of right in the middle: There's improvements both sides, improved highway, and then there's this ten-mile segment.

MS. OWEN: That's correct. And we have the right of way through this ten-mile section for the four-lane divided, we just lack the funds. We've been doing piecemeal, trying to get through Frankston now -- they were talking about the construction; that was a district-funded project -- to continue the widening through that suburb and rural-type area, and we have no other commitment other than what we're trying to do with district discretionary funds.

MR. WILLIAMSON: Is there a historical reason why it was never widened? Was there a landowner against it, was there a community?

MS. OWEN: No, sir. We have all the right of way necessary; it's the most expensive piece outside of the urban area to construct because of the geometry and also we've got two major water crossings that will require quite a few bridges, so very costly.

MR. JOHNSON: I think we've taken a three-mile sort of bite first or that's to be considered. The other ten miles, can it be done in more digestible bites?

MS. OWEN: Certainly. We have a three-mile section just north of the widened section, just north of Palestine that we can do, and then we get into some bridges and some significant cuts, but we can break it down into at least three projects.

MR. NICHOLS: I was going to ask you about that. They refer to this as a fiscally restrained alternative, but like a three-mile segment versus a five-mile, instead of three segments, if you broke it into two projects, two five-miles versus three three-miles, and my question related to that is are these logical segments? In other words, do the three miles or the five miles actually connect an additional artery or does it hit a big river or bridge, or is it just dollars of construction?

MS. OWEN: No. Matter of fact, that three-mile section gets you logical terminus and then we get into structures and other problems that cause the price to increase quite significantly, but we can make it into two projects, we have looked at that. One is a little bit more expensive than the other because of the bridges; the bridges are going to be our biggest problem environmentally. We crossed those bridges years ago and we'll have to redo that again.

MR. NICHOLS: The old environmental studies that had been done have to be redone, or can they be updated?

MS. OWEN: Updated, correct.

MR. NICHOLS: None of these segments that we're discussing are in Priority II, they're all in LRP?

MS. OWEN: That's correct.

MR. NICHOLS: So the next logical step would be to try to take a segment, whether it's a three-mile, five-mile or the whole piece, and move it into Priority II so that you can have the funds to do just that.

MS. OWEN: With that in mind, we took our district discretionary funds and put a portion of it in Develop so that we could get a consultant on board to do the very thing. We've got a consultant on board ready to do the schematic preparations for us so we can do the plans.

MR. NICHOLS: So you've already got funding from your discretionary.

MS. OWEN: Correct.

MR. NICHOLS: And so you are doing some of that?

MS. OWEN: That's correct.

MR. NICHOLS: When will you have it to the point -- okay. But the next logical phase is get in Priority II?

MS. OWEN: Well, we're ready for funding; right now we're in the final phases of preparation of plans, and all we have to do is go back and revise.

MR. NICHOLS: Okay, so you're close enough on the other obstacles, since you own the right of way, that you can just update the environmental, you'll be far enough along on the plans so that you could jump from LRP to Priority I?

MS. OWEN: Well, we're actually in the Develop category now in the UTP with our district discretionary so that we can continue, hoping that if we didn't get consideration with Strategic Priority funding that we've find another way to fund a piece or portion of it out of our district discretionary funding.

MR. NICHOLS: Most of this is kind of bottom land. Right?

MS. OWEN: Yes, sir.

MR. NICHOLS: So you've got vegetation and stuff kind of coming in there too?

MS. OWEN: Very narrow, lots of trucks.

MR. JOHNSON: I didn't realize this at the time but I drove that road coming up to the Gene Adams dinner.

MS. OWEN: That's right.

MR. JOHNSON: Is there a way that the existing feature might add shoulders and alleviate some of this concern, or is that not a plausible solution?

MS. OWEN: Certainly. We've added three-foot shoulders with our own maintenance monies just to provide protection for our edges; that's certainly something we can look at, as well as just a passing lane here or there to eliminate the backlog of traffic and the road rage that was referred to earlier because of the trucks.

MR. JOHNSON: If we went the digestible bite scenario and the first piece is three miles, that starts at the southern end which is at Pert. Is that correct?

MS. OWEN: Correct.

MR. JOHNSON: And then works three miles north?

MS. OWEN: That's correct.

MR. JOHNSON: Are there any bridges, these major bridges?

MS. OWEN: No, sir.

MR. JOHNSON: So that's the least expensive.

MS. OWEN: Exactly.

MR. JOHNSON: And then the remaining seven miles has the expensive portions to it.

MS. OWEN: Two bridges, yes, sir.

MR. WILLIAMSON: Mr. Johnson, who for some reason refuses to come testify and would probably be the guy that would push it over the edge, tells me that the population is increasing in this part of the state.

MR. JOHNSON: You need to identify which Mr. Johnson.

MR. WILLIAMSON: Excuse me. Mr. Cliff Johnson, not Mr. John Johnson, but Mr. Cliff Johnson who refuses to help his community out by showing his face and offer himself up for pillorying like the Judge did. But he tells me the population is increasing in this part of the state. Is that correct?

MS. OWEN: Yes, sir, it certainly is.

MR. WILLIAMSON: And why is that?

MS. OWEN: The attractiveness of our natural resources, quite frankly, is bringing industry in here and just the general economics of trying to do business and the availability of land.

MR. WILLIAMSON: So inexpensive and available land, I guess obviously an abundance of water -- even in these drought years there's still water enough for East Texas?

MS. OWEN: Yes, sir, and quality of life.

MR. WILLIAMSON: Mr. Johnson says a lot of this population is coming from the Dallas-Fort Worth area and some are even commuting back.

MS. OWEN: Yes, sir.

MR. WILLIAMSON: I'm just trying to get a handle on what's created the traffic. I understand a two-lane road by definition would be a bottleneck.

MS. OWEN: If I may, the major emphasis, it's a trucking route for two major distribution centers and it's the quickest and most efficient and most restful way from Austin or Central Texas up to the Northeast Texas area off 35.

MR. JOHNSON: Mr. Nichols has informed me that the reason there's so much traffic in Frankston is that everybody is either trying to get to or out of Jacksonville.

(General laughter.)

MR. NICHOLS: Get out of, is that what you said?

MR. JOHNSON: I said get to or get out of, whatever their choice might be.

MR. NICHOLS: I didn't have nay more questions for you, Mary. Thank you very much.

MR. JOHNSON: Thank you, Mary.

MR. NICHOLS: Judge, you got yourself and two other members of your court, or three?

JUDGE McKINNEY: Yes, sir, two commissioners.

MR. NICHOLS: So you have a quorum here.

JUDGE McKINNEY: Yes, sir.

MR. NICHOLS: Is this a posted meeting?

JUDGE McKINNEY: No. I think you just asked me a bad question, Mr. Nichols. We did post it last time --

MR. NICHOLS: No, I'm kidding. We could vouch that you have not been making decisions here.

JUDGE McKINNEY: Wasn't there some legislation to allow us to do that last time?

MR. NICHOLS: It failed. They get nervous when two of us go to meetings together. Basically the only comment is I appreciate very much because a lot of you have taken a big chunk of your day, possibly two days to come down and express the needs of the area. We very much appreciate it.

MR. JOHNSON: Absolutely.

MR. WILLIAMSON: Yes.

MR. JOHNSON: Appreciate the presentation, very illuminating. My personal philosophy is we need to finish corridors and when there's a ten-mile segment of an important corridor that is not compliant or consistent with what's on the northern end and the southern end and it's important to the area, it's something that ought to deserve high consideration. So we appreciate your bringing this information and making the presentation today.

MR. WILLIAMSON: Where will 69 be in relation to this, Chair, do we know?

MR. NICHOLS: Way to the east.

MR. WILLIAMSON: So Interstate 69 or our corridor, wherever it ends up being, won't offer much relief here?

MR. JOHNSON: Probably not.

MR. NICHOLS: No, but the route does go up and connect to several of the trunk system routes and it also goes up to I-20 and it is one of the primary arteries coming out of the community.

MR. WILLIAMSON: Judge, have you got anything, or any of the counties got anything around to trade the commission, any railroad right of way or something you've acquired over time that you don't really think you're going to need?

JUDGE CRAIG: We've got an old hospital.

(General laughter.)

MR. JOHNSON: We are appreciative of you and all the good folks from Anderson County for being here. We're going to take a slight recess so you can get back to East Texas, the good Judge Bentley can get back to his courtroom. It's been a wonderful day and we're thankful that you came this way. We'll take a slight recess and then reconvene.

(Whereupon, a brief recess was taken.)

P R O C E E D I N G S (R E S U M E D)

MR. JOHNSON: We will reconvene the meeting. Before we begin the business portion, I would like to remind you that if anyone would like to address the commission, you should fill out a card at the registration table in the lobby. To comment on an agenda item, would ask that you fill out a yellow card and identify the agenda item; if it is not an agenda item, we will take your comments during the open comment period at the end of the meeting, and for that we would ask that you fill out a blue card. Regardless of the color of the card, we would ask that you limit your comments to three minutes. We would also ask -- in fact, I'll make a note that these chairs are electronically rigged that if a pager, cell phone, or beeper goes off, you'll go up and hit the ceiling, much as a fighter pilot would be ejected from his aircraft.

(General laughter.)

MR. JOHNSON: So in order for that not to happen, we would ask that you turn those electronic instruments off.

We will begin the meeting with the approval of minutes of our May commission meeting. Is there a motion to that effect?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thank you.

Mike, we'll turn the agenda over to you.

MR. BEHRENS: Thank you, Mr. Chairman. We'll go to item 3 and I would like Thomas Doebner to come forward, please. Thomas has chosen to depart our TxDOT family but I know he will always be with us in spirit, and with that, I would like to read this resolution which says:

"Whereas, Thomas H. Doebner, Jr., began his career with the Texas Highway Department on January 27, 1969 as a plotter operator in the Automation Division, and who after a short stint away from the department, returned as a night shift supervisor of computer operations;

"And whereas, Mr. Doebner, while working for the department, earned a bachelor's degree in business administration from the University of Texas at Austin in 1978;

"And whereas, Mr. Doebner worked for division directors Hubert A. Henry, Alfred R. Costello, Frank J. Smith, and James M. Bass;

"And whereas, during his illustrious career, Mr. Doebner has held various positions within the Division of Automation and the Finance Division;

"And whereas, Mr. Doebner was instrumental in developing the Financial Information Management System, the Cash Forecasting System, the Budget Monitoring System, and the State Infrastructure Bank;

"And whereas, Mr. Doebner currently serves as the director of the Funds Management Section of the Finance Division;

"And whereas, on June 30, 2002, Mr. Doebner will complete more than 31 years of service to this state and has announced his intention to retire on that date.

"Now, therefore be it resolved that the Texas Transportation Commission recognizes and thanks Thomas H. Doebner for his professional career achievements and loyal service on behalf of the State of Texas and its citizens."

Signed this 27th day of June 2002 by Chairman Johnson, Commissioner Robert Nichols and Commissioner Ric Williamson.

Thomas, we really appreciate all the service that you've done for the department and for the State of Texas. I know I've learned an awful lot being associated with you in the short time I've been here, learned a lot about finance and how that part of the operations work, and I appreciate that very much.

With that I think we'll come down and have some pictures made.

(Pause for photos.)

MR. DOEBNER: Thank you very much. I can honestly say that I have thoroughly enjoyed working with each of you three commissioners and several other commissioners, and I have enjoyed all 31 years that I've been here. Thank you.

MR. JOHNSON: Thank you.

MR. BEHRENS: We'll then go to item 4, Aviation, Dave Fulton will talk about his upcoming improvement projects.

MR. FULTON: Thanks, Mike. For the record, my name is David Fulton; I'm the director of the TxDOT Aviation Division.

This minute order contains a request for grant funding approval for 12 airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $8.8 million, approximately $5.5 million federal, $2.1 million state, and $1.1 million in local funding. A public hearing was held on June 10 of this year, no comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: I have a question of David.

MR. JOHNSON: Yes, sir.

MR. WILLIAMSON: Do we often have situations where we award grants for study or types of information gathering and the local community for whatever reason can't or doesn't use the grant? Does that happen?

MR. FULTON: It does happen, it's very rare; it's usually for a construction project where the community thinks they can come up with their 10 percent match. If you'd permit me, last session a rider was attached to our appropriations bill that would have created a loan program and that would benefit these communities greatly, they could spread their costs over a term of years, but it did not pass. It does come up but it's fairly rare that a community has to decline a grant, yes, sir.

MR. WILLIAMSON: Do we have any pending that we know are going to be declined?

MR. FULTON: I'm not aware of any.

MR. WILLIAMSON: You're aware we have some interest from across the street in the Central Texas Airport?

MR. FULTON: Yes, sir.

MR. WILLIAMSON: Is there anything the commission can be thinking about to address that interest?

MR. FULTON: I can provide some information. Last Thursday we were informed by the FAA that funds would be forthcoming to begin the planning study for that project; that's been the holdup to date. We would like to have something of substance reported out prior to January of next year, if at all possible.

MR. WILLIAMSON: And the reason I raise this question, Dave, is because I was aware that you were working hard on it and I wanted to tell you that I personally appreciated the interest you took in trying to address this one.

MR. FULTON: Well, thank you. We think it's very important, as important as anything we've worked on in the ten years I've been here.

MR. WILLIAMSON: I think particularly with the corridor now being announced and we anticipate that certainly one of the first few proposals will be north-south near this area, we think there will be a lot of interest in a Central Texas airport, and I appreciate you taking a personal interest in it.

MR. FULTON: Well, thank you, sir.

MR. NICHOLS: I wasn't interrupting?

MR. WILLIAMSON: No.

MR. NICHOLS: Kind of along the line of questioning, when the State Infrastructure Bank was created by the legislature, our ability to do that which has worked great for cities and counties and things like that, a combination of state and federal, airport improvements are also a combination of state and federal and almost always are a combination of cities and counties, but as I understand it, we cannot use our State Infrastructure Bank money for loans on airports. Is that correct?

MR. FULTON: I asked James Bass that question about a year ago and he said that it was not eligible for loans.

MR. NICHOLS: Yes, and when we work through legislators who are interested in helping, I don't know from a state standpoint if anything could be done about it, but these are just as important transportation infrastructure projects as any others.

MR. FULTON: Absolutely.

MR. NICHOLS: And we're dealing with the same counties and cities and state and federal. There may be a problem about constitutionally dedicated road funds or something which may be a problem, but anyway, I think it's important that we have a vehicle to help of the same nature for airports that we do for roadways also.

MR. FULTON: Thank you. Not only for matching federal or state projects, many projects are not eligible for federal or state funding, that if loan funds could be obtained, many communities would undertake projects they're unable to do so now.

MR. NICHOLS: I move we adopt.

MR. WILLIAMSON: I second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thanks, Dave.

MR. BEHRENS: Moving on to item 5, Margot Massey will present the Public Transportation item.

MS. MASSEY: My name is Margot Massey; I'm director of Public Transportation. Looking at this minute order, we left off a critical clause, that whereas today is my birthday and my needs are simple --

(General laughter.)

MS. MASSEY: If you would approve the recommended item before you, the dollar value notwithstanding, these are important projects in that we're establishing partnerships with centers for independent living in two locations, in Tyler and El Paso, to help a segment of our population become more independent and make use of transit resources, so these are very significant moves forward for those two areas which we hope will then be models for other parts of the state. So we recommend your approval.

MR. JOHNSON: First of all, happy birthday.

MS. MASSEY: Thank you, sir.

MR. JOHNSON: Any questions or comments?

MR. NICHOLS: I guess maybe something between a question and a comment. You and I have had conversations, I know, related to -- it seems like every month we have some type of minute order related to transit funding, and I know you've got several different combinations of funds from different programs related to it, but it so much makes more sense to me if we can take and look at the whole annual allocation of all these programs and all these centers, and I know there are instances where you can't get them all at one time, but rather than coming in and hitting this one and then next month making an adjustment here and next month funding this and then next month funding that, I get a much better feel for the overall program if we can look at it in its total and how it all fits together.

I would really encourage administration -- I know I've made comments related to this numerous times, and I can assure you I will continue to make comments related to this in the future, but I think it is absolutely important that we take all these program dollars and look at them as a package as opposed to pieces individually each month.

MS. MASSEY: We are working and I've certainly heard your comments and I know the administration has as well, we're working toward presenting information to you at the August commission meeting -- that's our target date; we'll have to see how that works out -- presenting that kind of information to you with some specific recommendations on an issue that's uppermost in our minds at the moment, but I recognize your comment.

MR. NICHOLS: For instance, we're looking at transportation needs, there are a lot of transportation needs all around the state, so I'm making a decision here based on these two, but I'm not looking at the needs of the others who may or may not have a greater need for these funds. It's not programmed that way and it's essential that it be done that way. So anyway, I will mention it again.

MS. MASSEY: Yes, sir.

MR. WILLIAMSON: I want to be sure I read the e-mail. Frequently state agencies go out and do things that appear to be good for people and then a month later we get a letter from Senator Shapleigh or Senator Staples or Lieutenant Governor Ratliff saying, Why are you doing this in my community? We're not going to run into that here?

MS. MASSEY: No, sir.

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thank you, Margot.

MR. BEHRENS: In item 6 we'll go to our rules and the first ones being our rules for proposed adoption, and we have 6(a)(1), one Ken Bohuslav will have the other Jim Randall will have.

MR. K. BOHUSLAV: For the record, my name is Ken Bohuslav and I'm the director of the Design Division.

The minute order we have for your consideration proposes amendments to Sections 15.51, 15.52 and 15.55 of Chapter 15, Federal, State and Local Participation. The proposed amendments to Section 15.51 provides modification to the definitions of highway improvement projects, on-state highway system safety program, and right of way costs to better correlate with language used in the rest of Chapter 15 and to comply with legislation and current department accounting practices. The term "Statewide Mobility Corridor" was also added to allow for the commission's designation of projects that serve multi-regions of the state or the entire state.

Proposed amendments to Section 15.52, specifically paragraph (8), provides clarification on local government's responsibilities when requesting management of a department-funded project.

And finally, proposed amendments to Section 15.55 would modify Appendix A, Participation Ratios, to allow for 100 percent state funding on certain state highway system safety projects and would add a new category designated "Statewide Mobility Corridors." The new category is added to specify funding requirements for corridors designated by the commission that provide for or substantially affect multi-regional needs. Since these corridors benefit the state of Texas, local funding would not be required.

Staff recommends your approval of these amendments for publication in the Texas Register.

MR. JOHNSON: Questions?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: 6(a)(1)(b) will be presented by Jim Randall on Border Colonias.

MR. RANDALL: Good afternoon, commissioners. I'm Jim Randall, director of the Transportation Planning and Programming Division.

The minute order we bring before you today proposes amendments to Sections 15.103 to 15.105 to be codified under Title 43, Texas Administrative Code, Part 1, concerning the Border Colonia Access Program. Senate Bill 1296 requires the Texas Public Finance Authority to issue general obligation bonds and notes in an aggregate amount not to exceed $175 million, and as directed by the department, distribute the proceeds to counties as financial assistance for Colonia access roadway projects.

The commission previously adopted Sections 15.100 to 15.106 to set forth procedures by which an eligible county may apply for assistance and to establish criteria for selecting projects. The first program call was issued for county funding applications and the commission approved $50 million in funding. This experience resulted in the need to amend the program's application procedures, the criteria considered by the commission in selecting projects, and the distribution and use of program funds.

Amending the existing program rules will make the application process and funding approval process more efficient and will ensure that projects approved for funding will serve the greatest number of Colonia residents possible. This will also ensure that at least a minimum amount of funding is provided for necessary projects in the eligible county.

The minute order presented for your consideration authorizes publication of the proposed amendments to Sections 15.103 to 15.105 in the Texas Register for the purpose of receiving public comments. With your approval of this minute order, a public hearing on the proposed amendments will be held in Austin on July 23, 2002. Staff recommends approval of this minute order.

MR. JOHNSON: Questions?

MR. NICHOLS: I had a couple of questions. As I understand it now, there's going to be a public hearing?

MR. RANDALL: Yes, sir.

MR. NICHOLS: And I'm looking in my minute order and it says July 23. Is that adequate? I know technically it may meet the definition of adequate notice for a public hearing; do you think it's reasonable that by the time we advertise, notify everybody, and them schedule, that that's adequate time for them to come here?

MR. RANDALL: If not, I'll check with OGC and this is the time to amend that date because it hasn't been published yet in the Texas Register?

MR. NICHOLS: Sometimes meeting a technical definition of adequate and meeting a practical, because you've got July 4th holidays in there too.

MR. RANDALL: Okay, sir.

MR. NICHOLS: I would just like you to look at that.

MR. RANDALL: We'll check into that.

MR. NICHOLS: And also, since this is a public hearing that affects only border counties, would it not make more sense to have it closer to the Border as opposed to here?

MR. RANDALL: Yes, sir, we discussed that. I guess our issue is that do we have it in Del Rio and then the folks from El Paso, what kind of travel arrangements can they make to Del Rio; if we had it in El Paso, from the lower Rio Grande Valley. We still feel that Austin is still a central location with adequate transportation facilities to get here. But we're willing to look at another location.

MR. NICHOLS: Even though we're not close to the Border, it might be possible that from airplanes and things like that, it might be easier for them to get here, that's true, I think that's fine, but as long as we have adequate notice, plenty of time for everybody to get here and a way to get here that's reasonable, that's fine with me.

MR. RANDALL: Okay, sir.

MR. NICHOLS: Other than that, I didn't really have any questions.

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. You might look at San Antonio.

MR. RANDALL: Okay, sir.

MR. JOHNSON: I think obviously the drive from Laredo is, I think, manageable, and Southwest goes from the Valley to San Antonio, I believe -- it might not -- and it might go from El Paso. Just a thought.

MR. RANDALL: Okay, sir, we'll look into it.

MR. NICHOLS: Did we leave you adequate flexibility on where that public hearing is when we approved this?

MR. RANDALL: Yes, sir. The notice has not been published in the Texas Register, we're just proposing it, so we'll go back.

MR. NICHOLS: The minute order that we just approved does not state where that hearing is, then?

MR. RANDALL: No, sir.

MR. NICHOLS: Okay.

MR. JOHNSON: Thank you, Jim.

MR. BEHRENS: Item 6(2)(a) and (b), we have Vehicle Titles and Registration rules. Jerry.

MR. DIKE: Thank you. Commissioners, my name is Jerry Dike, director of Vehicle Titles and Registration Division.

The first minute order proposes the adoption of new 17.11 and that concerns an electronic lien title, commonly known as ELT, program. House Bill 1535 required the department to develop and implement an ELT program that allows the electronic exchange of lien and title information from participating lienholders, and this program will allow those participating lienholders to assign or discharge or cancel their security interest in motor vehicle titles electronically.

The second minute order proposes the adoption of amendments to Rules 17.61 and 17.62 concerning record keeping requirements for salvage vehicle dealers. The law enforcement officials who enforce the rules regulating salvage vehicle dealers requested that our rules be amended to provide for easier access to salvage vehicle dealer records.

Staff recommends adoption of these minute orders.

MR. WILLIAMSON: I have several questions, Mr. Chairman.

MR. JOHNSON: Questions.

MR. NICHOLS: I had some but I sent mine by e-mail and I understand most have been addressed.

MR. DIKE: Yes, sir, they've been addressed.

MR. NICHOLS: Do the change from "will" to "may"?

MR. DIKE: The statute was specific as to what we were going to do, and then if we get any comments from our public comment period, we would address those before we bring these back in probably August or September.

MR. NICHOLS: Okay.

MR. JOHNSON: Ric?

MR. NICHOLS: Was that a motion?

MR. JOHNSON: No. I think Ric had a question or two.

MR. WILLIAMSON: This is probably tangential and not direct. I've been approached over the last six months by several people who have concerns about salvage titles and being properly marked such that they are not attractive to car thieves to purchase at auction. I'm told there was a bill passed by the legislature, vetoed by the governor, addressing this matter, vetoed for reasons unconnected to the marking of the title. I'm also told that it might be possible for us to adopt by rule most of the intent of that bill. I don't want to put you on the spot here but I want to put it on the record and get it clear with you, if it be the case that we can do anything to stop the purchase of title of destroyed vehicles by automobile thieves, we would be derelict in our duty to not do that.

MR. DIKE: Okay.

MR. WILLIAMSON: No matter who complains about it, and I don't know who is going to complain about it, but if it is the case that people are going to these auctions and buying a totally destroyed vehicle and getting a title that is stamped anything other than "destroyed vehicle" or whatever, and if it be the case that we can by rule address that, then it doesn't matter to me if it's the Texas Automobile Dealers or whoever it is, we ought to develop that rule, and I hope that you will get with Mr. Monroe and see if that can be done.

MR. DIKE: We appreciate very much hearing those remarks and we will pursue that to see what we can do.

MR. WILLIAMSON: And if they complain, just tell them to go talk to Chairman Johnson.

MR. DIKE: Yes, sir, thank you.

MR. JOHNSON: That's Cliff Johnson.

(General laughter.)

MR. WILLIAMSON: You understand what I'm saying?

MR. JOHNSON: Absolutely.

MR. WILLIAMSON: If we can prevent that, we should, no matter who's offended, it doesn't matter. And with that, I so move.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thanks, Jerry.

MR. BEHRENS: 6(a)(3) proposed rules for the Motor Carrier Division, Joe Barnard.

MR. BARNARD: Commissioners, for the record, my name is Joe Barnard; I'm the manager of Compliance and Enforcement within the Motor Carrier Division, and I'm standing in for Lawrance Smith who cannot be with us today.

Before you, you have a minute order that proposes the adoption of amendments to Title 43, Chapter 18, subchapters A, B, F and G. The proposed rules are a result of Senate Bill 700 relating to the suspension of motor carrier registration for failure to comply with court orders under the Family Code and House Bill 2243 relating to vehicle storage facilities. Both of these bills were passed by the 77th Legislature.

Additionally, the proposed amendments include changes to clarify and improve current division processes and procedures to make them more efficient and to ultimately improve customer service. At this time staff is submitting the minute order for your consideration, and the staff recommends approval.

MR. JOHNSON: Questions, comments?

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Now we go to item 6(b), our rules for final adoption, the first being on environmental policy, and Ken Bohuslav.

MR. K. BOHUSLAV: Again for the record, my name is Ken Bohuslav and I'm the director of the Design Division.

The minute order we have for your consideration today proposes final adoption of amendments to Sections 2.62 and 2.65 which will allow private businesses and civic organizations to participate in the cost, material and labor of landscaping projects directly with the department. The proposed rules were approved by the commission at the March 2002 meeting and were published April 12, 2002 in the Texas Register. The department received four written comments, all of which were in support of the amendments. Staff recommends your approval.

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Item 6(b)(2) rules for Title VI compliance in our contract management area, Bob Jackson.

MR. WILLIAMSON: I thought he was bringing up the salvage dealer material already.

MR. JACKSON: We'll get back with you real soon but not that soon.

Bob Jackson, deputy general counsel. This minute order adopts amendments to Section 9.4, Civil Rights Title VI compliance. The amendments clarify the department's role in ensuring compliance with Title VI of the Civil Rights Act. No public comments were received; we recommend approval of the minute order.

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Item 6(b)(2) and this will be amendments for improvements in our highway contracts. Thomas.

MR. T. BOHUSLAV: Good afternoon, commissioners. My name is Thomas Bohuslav; I'm the director of the Construction Division.

Item 6(a)(2)(b) is for amendments to Sections 9.10, 9.11, 9.13, 9.14, and 9.16 through 9.18 related to highway improvement contracts. These are for final adoption. These rules address consideration for proposals with contractor bid errors; these rules will allow you to consider contractors' bids when they submit bids with errors in them for rejection or award. In addition, we did receive comments from actually the OGC on the rules and made a minor change incorporating their comments, changing a word: "the" to "a" -- it sounded better, I think.

We also should have provided you with a minor change we need to make to Section 9.17(e) and I'll read that new wording for that section. It's page 20. It may have been handed to you. Yes, that's it right there. The new wording to replace the old wording is: "When additional information is required to make a final decision, the commission may defer the award or rejection of the contract until the next regularly scheduled commission meeting, and then award of the deferred contract will be with the concurrence of the apparent low bidder." There was some confusion in the wording previously that it sounded as if we needed to get the contractor's concurrence to reject the job and we didn't want that, we just wanted the concurrence on award in case they decided they didn't want the job at a later date.

Do you have any questions?

MR. NICHOLS: Apparent low bidder before the error or after the error?

MR. T. BOHUSLAV: That is the apparent low bidder straightforward with the error submitted, and it's not necessarily related to just errors, it can be for any reason for deferment.

MR. NICHOLS: I don't have any more questions but I do have a comment. Since I've been on the commission, I've seen several situations where obviously somebody really did screw up and it was unfortunate that we did not have this in there, but I also know that as we go in and we try to weed out these situations where somebody made an honest mistake because we're not trying to harm them, but it also puts the other people who did everything right in a situation that is not really fair either.

It was always explained to me that it opens up the possibility that we need to all be watching out for where somebody figures out how to use this apparent error for collusion. In the past when we've got into these situations, the department has always taken the position of being brutally consistent, painfully consistent in many cases. It's unfortunate that some people got hurt, but the system as a whole has been beyond reproach; it's been recognized nationally. We spend billions of dollars and people are quite proud to know that this money is spent with nothing funny going on.

And I just want to make sure that we all continue to watch because as these errors pop up and we have to make those decisions to weed them out, we don't want to begin opening up that door, and if that door begins to open up, I would certainly hope that the staff, the commission at the time, or whoever, goes back to review this again. So it's just kind of a warning comment.

MR. WILLIAMSON: And those are good comments, and I appreciate you making me sensitive of that. I do think that cultures and economies change and just look at the changes that we approved today. I mean, we're going to be probably contracting for billions and billions of dollars of design and construction and management over the next 50 years that are going to be in a form that's unlike anything we've ever done before, and in order to get efficiency and effectiveness in changing cultures, that's what you have to do. So I want to say I applaud this move. I think it's the right move. I share Mr. Nichols' concern and I'm even more sensitized to keeping our eyes open, and I think we ought to say to the executive director and staff the minute you smell something funny, you need to say so, no matter who it is, it doesn't matter to us, I don't think. Don't be afraid to point out and say this doesn't look right.

MR. T. BOHUSLAV: Just to add a comment, in our sanction rules -- today I'll get into it later -- we do address when contractors do this repeatedly, if they do it more than twice in a certain time period, then we can sanction that contractor; if they do it on a job, they're not allowed to rebid that job again if it goes back for reletting an individual project.

MR. NICHOLS: With that, I so move.

MR. WILLIAMSON: And I second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thanks, Thomas.

MR. BEHRENS: Item 6(b)(2)(c), Phil Russell will present toll road projects and how the contract claims will be handled.

MR. RUSSELL: Good afternoon, commissioners, Mike and Helen. For the record, my name is Phillip Russell, director of the Texas Turnpike Authority Division.

The department's claims resolution process is found under Section 201 of the Transportation Code. The language for this code specifically applies to TxDOT aviation projects and to nontolled highway projects but it does not apply to TxDOT turnpike projects. Turnpike projects are covered under the more general Government Code Section 2260. With the dissolution of the TTA board, we find that it is time to update our claims resolution process.

The minute order before you would provide for the next Section 9.120 and this section would provide for consistency with Section 2260 but it would also allow us to take advantage of the very tried and true TxDOT claims resolution process. I'd be happy to address any questions that you might have.

MR. JOHNSON: Questions?

MR. NICHOLS: So moved.

MR. JOHNSON: Second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thanks, Phil.

MR. BEHRENS: We'll get Thomas back up here for 6(b)(3).

MR. T. BOHUSLAV: My name is Thomas Bohuslav; I'm director of the Construction Division.

Item 6(b)(3) is the repeal of Sections 9.6 through 9.8 and repeal of 29.21 through 29.26 and new Sections 9.100 through 9.110 concerning contractor sanctions. These are for final adoption.

These rules have combined construction contract rules for sanctions of contractors with maintenance contract rules for the same. The commission will have the discretionary authority to debar, suspend contractors and reduce bidding capacity; prime contractors, subcontractors and suppliers; will have the authority to sanction contractors for conviction of bidding crimes; conviction of an offense indicating lack of moral or ethical integrity if the offense reflects on the business practice of the contractor.

If they're disqualified by another state or a federal agency, they can be sanctioned by you as well. If they fail to notify you of a debarment by those entities, then they can be sanctioned as well. If they fail to execute a contract and the bid check is not honored, it can be sanctioned by you; for performance defaults you can sanction them; when they cause a case where we reject all bids due to a bid error twice in a three-year period, you can sanction them for that reason. And then I believe that's all I have on those.

The contractor will have the opportunity to appeal those sanctions as well and they'll be suspended from bidding until the appeal process is resolved.

The executive director will exercise all powers conferred to the commission for maintenance contracts.

These rules were published in the Texas Register and no comments were received. Do you have any questions?

MR. NICHOLS: So moved.

MR. JOHNSON: Second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thank you, Thomas.

MR. BEHRENS: Item 6(b)(4) will be presented by Carlos Lopez and it pertains to the Safe Routes to Schools and those final rules for adoption.

MR. LOPEZ: Good afternoon, commissioners. My name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you proposes final adoption of rules establishing the Safe Routes to School Program. House Bill 2204 of the last legislative session required TxDOT to develop this program. House Bill 2204 allows but does not require the use of Federal Hazard Elimination Program funds for Safe Routes projects. During development of the program, the department determined that it would be extremely difficult for Safe Routes projects to effectively compete for these funds; for this reason, the proposed rules allow the program to use Statewide Transportation Enhancement funds for this program.

The proposed revisions to existing Sections 25.500 through 25.503 make minor modifications and remove references to the Hazard Elimination Program. New Section 25.504 outlines how the department will evaluate project applications.

TxDOT held a public hearing on these rules on April 30 and accepted written comments until May 31. We also met with stakeholders to discuss a variety of issues related to this program on May 23.

In this rulemaking action we addressed the public comments. We are proposing to adopt these rules with three modifications. We propose to have a limitation on department cost participation per project -- in other words, we could put a cap on project size. Interested members of the public will be able to provide input to the commission on project selection through the Bicycle Advisory Committee. We have eliminated the portions of Sections 25.502 that limited an application covering various types of improvements for multiple school sites over a large geographic area; the restrictions are no longer necessary with the inclusion of the project cap rule.

I also want to acknowledge the efforts of the Texas Bicycle Coalition since we first proposed these rules. Since that time they've provided a lot of good comments at the public hearing and at the stakeholders meeting that we had. They also have helped us in reviewing our application manual and in getting the word out about the program. Just earlier this week they were a part of our Traffic Operations conference in Dallas and addressed a joint session of district safety specialists and traffic engineers to outline how the program would work.

We recommend approval of this minute order.

MR. JOHNSON: We have two people who have signed up to speak on this issue. Gayle Cummins, the executive director of the Texas Bicycle Coalition.

MS. CUMMINS: Good afternoon, commissioners. Thank you very much. My name is Gayle Cummins; I'm the executive director of the Texas Bicycle Coalition, and what a relief to finally see final adoption on this minute order. We've been working for the past year very hard with the TxDOT staff and we do really appreciate all the time and effort, and as Mr. Lopez mentioned, we made a lot of progress since even the hearing on April 30.

When I came here before the hearing, one of my major concerns was about the public involvement process, and since that time we've had a public hearing, we've had a stakeholders meeting, we even had a pre-stakeholders meeting, we worked to develop a joint presentation that was just given up in Dallas, and I was going over just briefly some of the history of Safe Routes to School and mentioned that in England they call the same program "One False Move and You're Dead." So I promised Carlos we would not come here today asking to change the name of the program; we thought it was a little too drastic.

We're working to develop the materials for both of our websites and how we're going to promote this once the call for projects goes out.

Our concerns were addressed, they were resolved, we know now how the projects will be selected in addition with the Bicycle Advisory Committee as part of that selection process, the projects that will be eligible and about limiting the size of the project. So I really do wish to thank Mr. Lopez and his staff for all that they've done by listening to our concerns.

The rules that are written are very flexible and I think that's going to be good for all of us. I have read the draft of the guidelines and the application, and as I spoke with Carlos ahead of time, one of the issues we may want to re-examine is about that cap amount on the size of the projects. Right now it's at $500,000. With $3 million to go around this state and to make it equitable and fair, I would recommend and suggest that we look at reducing the size of that cap, the reason being in California they had $20 million on their first call for projects and then $23 million with a $500,000 cap. It would be like a piece of pie and you cut it into eight sections; they had eight times the funding with a $500,000 cap. I want to make sure that big and small projects are all considered and that might be one thing that we do look at.

Our goal at the Texas Bicycle Coalition, we want to make this one of the best programs that TxDOT has their name on. Thank you.

MR. JOHNSON: Gayle, thank you for taking the time and being here, and especially appreciate your comments relative to the process, although processes are never perfect, I think your words have indicated that ours is improving and that is a goal that we have, and I appreciate your mentioning that.

MS. CUMMINS: Thank you.

MR. JOHNSON: The other person who has requested to speak on this issue is Preston Tyree who is the education director of the Texas Bicycle Coalition.

MR. TYREE: Thank you. Commissioner Williamson started these reminiscences, and I don't know if you remember but we went to Vanderbilt together and I didn't realize I was going to end up with the same kind of haircut that you have.

MR. JOHNSON: Maybe that's because we're so highly educated.

MR. TYREE: That must be what it is.

MR. NICHOLS: What's wrong with his haircut?

(General laughter.)

MR. TYREE: I didn't say anything was wrong with it.

Today has been an interesting session. We've been here since this morning when you took on the Trans Texas Corridor and you're looking at a 50-year plan with $150 billion to $180 billion and now we're talking about a right-now project with $3 million, but you know, we can have a huge impact in the state of Texas with this project, Safe Routes to School.

I was talking to one of the superintendents of schools who was here for the Anderson County presentation and we started talking to him about the Safe Routes to School. He's got a small school district; he's only got one high school in his district and he's got an elementary school there in the Neches Independent School District, and he's already coming up with projects where he can apply for this money. He said, Oh, I can use this, I can use that, I can do that. I said, Pick the one that you really want and how much would it cost? He said, You know, for $45,000 we could really make a difference in the county; the county judge has got the money we could do for the match.

Those are the kind of projects we're going to be looking at in this and that's one of the issues that we're going to have to go forward through and that's why we like these rules being as flexible as they are so we can write the evaluation process so that $45,000 projects will show up and look like good projects and we can recommend them to you for adoption.

Gayle spoke briefly about the change and the way the process is working, and Commissioner Johnson, you mentioned that that's one of the things that we're trying to do. Something really happened at the last session. I stood up and said, Hey, you know these projects aren't applicable to transportation enhancement funds. And so we raised the issue, and that afternoon TxDOT staff went to the Federal Highway Commission and within a day we had a letter, an e-mail back from the Federal Highway Administration saying, you know, in Texas under the Safe Routes program, those projects are all possible to do.

So the way that the staff went at it and the way the staff made it happen, you really ought to be proud of them, they got it done. And we're being known on a national level, we're only the second state to take this kind of project on and the nation is watching. You are doing a great job. Thanks.

MR. JOHNSON: Thank you for those kind comments, and we are proud of our staff, especially when they're responsive, which they have a consistent record in being responsive.

MR. NICHOLS: I had a comment.

MR. JOHNSON: Yes, sir.

MR. NICHOLS: I wanted to thank the Bicycle Coalition; I was going to wait till both of you finished speaking. You obviously had worked on this prior to the last session, maybe even the session before last, trying to identify a need and a program and a funding source, and your persistence has paid off. My hat's off to you. I'm glad we were able to work this thing in such a way that it's beneficial for everybody and the process did work.

And also, on this $3 million program, you have an opportunity in the committee process to actually make recommendations on projects. On that $500,000 cap, talking to Gayle, I guess, it still allows six, you wouldn't obviously fund just six big projects like that and forget all the rest, but sometimes you can have a project that might be one big one that you would not want to pass up, and by putting a cap a little bit higher, in that evaluation process you can still weed things out, at least keep people from coming -- we see a lot of million, million and a half, two and a half, three- projects that probably would have fit this and that kind of weeds them out into the more localized things.

I would also encourage you to, as a Bicycle Coalition -- and I know you watched the transportation enhancement process off to the side, and I want to tell you because of the work that you did in the interest of our legislators to this program, even though it was not a formalized item, the Safe Routes to School in the transportation enhancement program, it impacted some of my decisions and the weighing how I looked at some of those programs. I had not really thought about it that way, and it opened up a window that not only do you have a dedicated program here but you have opportunities to benefit very closely related things in that other, so I would encourage you to keep an eye and watch the other program too. Anyway, hat's off. With that, I so move.

MR. WILLIAMSON: Second.

MR. JOHNSON: Before we vote, Carlos, I think you deserve a tip of the hat for a job well done.

(Applause.)

MR. LOPEZ: Commissioners, it's the folks that work in Traffic Ops that made it all happen. Thank you for those comments.

MR. JOHNSON: Well, thank you so much. There's a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. WILLIAMSON: Mr. Chairman, if it's possible, I wish to instruct Helen to show me voting aye on the previous two motions.

MR. JOHNSON: Very well.

MR. BEHRENS: We'll go to item 6(b)(5), (6) and (7) which will be presented by Phil Russell.

MR. NICHOLS: Before he starts, can I make some comments, because we've got a whole series of actions.

MR. JOHNSON: Very well.

MR. NICHOLS: It looks like a pretty good list and it's pretty heavy too.

I wanted to basically report back to the commission and the administration that we, as a body -- there's a lot of people in this room that were in New York for a number of days -- that you would have been very proud of the work that the staff did, the TTA group, our Finance group, Becky, Dain Rauscher -- and they're not going to let you up here?

But anyway, the entire team that was put together to represent this agency for this set of turnpikes did, I think, a marvelous job. They were very professional, they knew their stuff, they had their resources, obviously all the pieces came together, they were prepared to answer any question that came up and they were a lot of very good questions by some very professional people on the other side. They had managed the time and put together some of the largest, I guess you call them, financial insurers and the rating agencies back to back, line them up.

New York and the financial part of our nation is watching Texas very carefully to see how we approach this first step which I think is a model not only for a turnpike system but the first incremental step on the Trans Texas Corridor which could piggyback and become a model. I think they were very impressed, I was, and I wanted to compliment all of you in front of everybody, and you would have really been proud. They represented Texas and this department in an outstanding professional manner.

MR. WILLIAMSON: I think I'm probably proud just because you say I'm proud. And I say that by way of saying, Mr. Nichols, I would like to take a moment again to state for the record how much I personally appreciate your personal commitment to this project because I think we all know that whether 130 stays by itself or gets extended or becomes part of the corridor literally, this is the first step in the beginning of a new era in how we new-construct transportation systems in the state.

You know, our choices are pretty clear: We can wait for that 15 or 20 or 30-cent gas tax increase, or we can strike another path. And I think all three of us have concluded that that 20-cent gas tax increase isn't coming and we can't just sit around and wait.

You have led us through the first step, and while I accept what you say about the staff as true, I want to also make it clear to everyone in the room that I think your leadership in this matter was critical and I personally appreciate it and I know the people in the transportation world appreciate it.

MR. JOHNSON: Hear, hear.

MR. NICHOLS: A side note, it was interesting while everybody was so focused in what they were working on, we were in the southern tip of the financial district of Manhattan and working in and out of all these tall buildings, and just about every time I looked out the window, we were looking at "Ground Zero" which is a very harsh reminder of the world that we're living in.

MR. RUSSELL: For the record, again my name is Phillip Russell, director of the Texas Turnpike Authority Division. And I'd like to say from our standpoint, Mr. Nichols, we really appreciate the hard work and your diligence in bringing us to this point. We did drag you around quite a bit between insurers and rating agencies, back to back to back, and we really appreciate all the hard work.

MR. NICHOLS: Left me one time.

MR. RUSSELL: Well, that was just a little accident.

MR. NICHOLS: Went off and forgot me.

MR. WILLIAMSON: Now, that's a trick, to walk off and forget you.

(General laughter.)

MR. RUSSELL: The only time it was a little iffy was last night at LaGuardia when we weren't sure if we were going to be able to get out or not, and I was glad that the clouds parted and we were able to get back in time. But we certainly appreciate the hard work, Mr. Nichols.

The minute order under agenda item 6(b)(5) is the final adoption of the rules relating to the regional mobility authorities. As you know, these rules were proposed earlier this year in January; we held a public hearing in February here in the Greer Building; we did receive quite a few comments, both at the hearing and later as far as written and oral comments; we met with individuals and I think we've done a pretty good job of addressing all those comments. Bob Jackson and his guys did a remarkable job of trying to coalesce all those comments and put them back into these rules.

The rules I think now reflect really the spirit of partnership that we have all endeavored for, both in the formation of RMAs as well as the development of those projects. I'd be happy to address any comments you might have on them.

MR. JOHNSON: Comments, Ric?

MR. WILLIAMSON: I'll go first and let Robert finish.

MR. NICHOLS: I was just going to so move.

MR. WILLIAMSON: Phillip, today the commission took an important step. The corridor itself is the framework but within that framework for it to exist, we have to be an apostle, as I said yesterday, of the notion that highly urbanized regions that aren't already a turnpike authority needs to move towards mobility authorities.

I know that Mike is very focused on the district engineers out in the country promoting these concepts, and I appreciate that, but the district engineers will be greatly assisted if we in the department, in particular in the Turnpike Division, are apostles for forming regional mobility authorities. We know from the comments of Representative Krusee earlier in the day and from his letter we have that Williamson and Travis County will be moving with lightning speed to adopt; we have reason to believe that Bexar County and perhaps associated counties are also moving quickly; we think Nueces and Webb County is probably in the early formation stages.

There are going to be a lot of communities in this state take advantage of our offer to partner and allow people to keep their own tax money, and that whole pattern of RMAs is part of this maze of the Trans Texas Corridor. My hat's off to Mr. Jackson, Mr. Ingram and the others, my hat's off to you, but it's still back on a little bit saying the easy part really is over now, we have got to go out into the state and hold people's hands and give them the tools they need and guide them through this as fast as we can. Every day 31,000 new Texans arrive; every day businesses want to move here and can't because the transportation system isn't what they need. We need to be cognizant of that and move fast.

MR. RUSSELL: We'll do it.

MR. WILLIAMSON: And I second.

MR. JOHNSON: There is a motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Phil, same observation. Your responsiveness and work with the parties that will be affected by this, especially the Travis and Williamson County group, we were probably at the fore in terms of working the rules and trying to find something that was flexible for them, manageable for all. I want to salute you because as Representative Krusee said earlier, it looks like the final product is something that is extremely workable and I think that's a desired result and it reflects not only on the product but how we got there, and the process is important sometimes.

MR. NICHOLS: We've also got some work to do with our legislative leaders to clean up some clarity on some issues related to RMAs issuing bonds and things of that nature. Anyway, it's going to be very important. So we're working, I think, under the assumption that those corrections and clarifications will occur this session; we just need to make sure.

MR. RUSSELL: Yes, sir.

MR. BEHRENS: Phil, before you go on, just for the audience, the RMA rules will be posted on our website shortly after the meeting, so they'll be available to view; we should also have copies next door in our public information office.

MR. RUSSELL: Did you guys vote?

MR. NICHOLS: We did.

MR. WILLIAMSON: We did, we voted.

MR. RUSSELL: I was already focused on my next agenda item. I'm sorry.

Agenda item 6(b)(6) -- I can read it now, I found my glasses -- provides for the final adoption --

MR. WILLIAMSON: You didn't catch that vote?

MR. RUSSELL: No, sir.

MR. WILLIAMSON: It was a double-barreled motion: We voted and transferred you to Presidio to build the RMA out there.

(General laughter.)

MR. RUSSELL: I'd like to go out there during the fall hunting season, perhaps, but not in June, July or August.

6(b)(6) is the final adoption of the repeal of Section 53.1 through 53.12 and Sections 53.50 through 53.54 concerning turnpike project improvement contracts, disputes and disbarment. Particularly, this minute order will provide for the repeal of Section 53.1 dealing with construction letting processes, 53.5 contract claims, 53.51 EEO, 53.52 debarment and suspension. All of these provisions are no longer needed either through the dissolution of the old TTA board or through redundancy in that existing TxDOT procedures and rules will take care of our business.

We would be happy to address any comments you might have and I'd recommend approval of this minute order.

MR. JOHNSON: Questions?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. RUSSELL: Agenda item 6(b)(7) dealing with EDA rule revisions. This would be the final adoption of the repeal of Chapter 54 and the simultaneous adoption of Section 27.1 through 27.5 concerning the policy rules and procedures for private involvement in department turnpike projects. We received one comment on these rules and it has been addressed in the preamble.

If I could take you through three or four of the elements that by approving this minute order you would effect those changes. Number one, it does recognize the abolishment of the old TTA board; it removes the requirement for financial feasibility certificate. This was an element that was in those old rules, we found it quite unworkable and really redundant; we have other methods of analyzing the individual developer's financial feasibility. It also would remove the current advertisement period as the rules currently are stated for 45 days. Essentially this was a 45-day period where we would advertise in the Texas Register and allow competition for any other competing consortiums. By adopting these rules, you would in effect provide much more flexibility for the department so that that advertisement period could be extended depending on the complexity and the magnitude of the project.

It also would provide for, as Commissioner Nichols is so fond of saying, a bifurcated environmental process, and under this process it would allow the developers essentially to propose under two different alternatives. Number one, the department could provide the environmental documentation, environmental clearance and the EDA consortium would step in at that point. This is very similar to what has occurred on the State Highway 130 project: We handled the environmental work and the consortium steps in at that point.

The other process, the other side of it would allow for a consortium to propose and it would include the environmental elements of their rural project. There are a couple of caveats of course. Under that process the environmental consultant could not have any sort of financial gain in the overall outcome of the environmental process. To say it another way, they couldn't be a member of the overall consortium; they could be a sub-consultant but they couldn't have a conflict or interest or financial gain from that process.

The other thing is general counsel is working very closely with the Federal Highway Administration in trying to coordinate this process, so I want to make sure I'm very clear with you all that from a statewide viewpoint, this would provide the ability to include the environmental elements in the overall EDA process but on the federal side we still have a little bit more work to do to coordinate all that. And in fact, I think Mr. Simmons, when he provided the Trans Texas Corridor action plan this morning, if memory serves me, that was one of the action points that we still need to do a little more work on the federal side to work this process out.

I'd be happy to address any comments you might have.

MR. WILLIAMSON: I have some.

MR. NICHOLS: I have no questions.

MR. WILLIAMSON: Phil, I want to clarify and make crystal clear because I know we have some members of the free press here, this is a real important process, this is actually the linchpin of the exclusive development agreement, and the rules that we're repealing and the new rules we're adopting more clearly define how the commission and its employees will react to private sector proposals. I wish you would go back and highlight the points that you did in your first message and stop and really highlight on the fact and do it this way: Give us a for example and kind of walk us through without going into too much detail but walk us through a for example.

MR. RUSSELL: Okay. Starting with the financial feasibility certificate?

MR. WILLIAMSON: Yes, but quickly because Robert has got a plane issue.

MR. NICHOLS: I will make some comments since I know where you're going.

MR. RUSSELL: Under current rules there is a requirement for a financial feasibility certificate where a consortium would essentially have to write us documentation --

MR. WILLIAMSON: And we're using the word "consortium" to mean one or more private sector individuals and/or public sector partners, or Texas Toll Authority, Texas A&M University, any collection of those types of people, anyone other than the State of Texas.

MR. RUSSELL: That's correct. A financial feasibility certificate was required to bring in an independent accounting auditing firm to essentially look at their books, make sure they had the balance sheet to be able to handle a project of this magnitude. We had difficulties getting those folks on board, and frankly, through the EDA process itself we found better ways to get into those consortiums to make sure they had the experience and the horsepower to take care of a project of that magnitude. So again, we feel like that's no longer necessary, just simply a better way to do business

The 45-day period, again under the current process, if we receive an unsolicited proposal, staff reviews it to ascertain whether this is a proposal that the department should be or would be interested in.

MR. WILLIAMSON: No matter who the consortium is.

MR. RUSSELL: That's correct.

MR. WILLIAMSON: In other words, the staff would say are we interested at all, is it in the state's interest to have a high speed rail and road corridor from north of Laredo to Corpus Christi; that would be the first decision point.

MR. RUSSELL: That's correct.

MR. WILLIAMSON: No matter who proposed it, first of all, is the idea worthy of consideration?

MR. RUSSELL: And if the staff reviews it and ascertains that it is worthy of consideration, we would obviously bring it back up to the commission, the commission would approve it. Under existing rules, that would trigger an advertisement period in the Texas Register of 45 days. I think there has been concern that although 45 days might be okay for a very small project, obviously as the complexity and the magnitude of these projects grows, it would probably need more time than that for competing proposers to jump in and say yes, I'm interested in it too; I'd like to submit a proposal as well.

Again, small projects 45 days might be okay, but a project of a billion or $2 billion simply would not give a consortium sufficient time to find out about the project and propose.

MR. WILLIAMSON: Competing consortium you mean.

MR. RUSSELL: That's right.

MR. WILLIAMSON: So again, in our scenario they come in, they bring this idea to staff, staff says it makes sense, we recommend to the commission that they consider this. By accepting your recommendation, we're then publishing to the world this proposal and these proposers and now anybody that wishes to offer a competing proposal that accomplishes the same result, the door is open, bring us your proposal.

MR. RUSSELL: That's right.

MR. WILLIAMSON: And I used this example earlier in the day, Chairman, after having thought about it, so if someone brings this proposal in from west or north of Laredo to Corpus Christi to Houston, and you decide at staff level that this is worthy of commission consideration, you bring it to us, at that point the Sierra Club and the Environmental Defense Fund could make a proposal to the State of Texas as to how to alternately move this same number of people and the same amount of freight as partners with the State of Texas.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: And that's significant that we changed our rules in a way that says if you really believe you have a better, cleaner, more efficient way to do this, bring it to us and we'll consider it.

MR. RUSSELL: Under the existing rules, they would be mandated to 45 days would be all the time they would have to put together an alternative proposal.

MR. WILLIAMSON: So we're giving the Port of Houston and the Houston Chronicle and the Environmental Defense Fund and every imaginable individual or corporate citizen of Texas the opportunity to propose an alternative.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: Let me kind of throw something out because it is directly related to that. The current rules offer that same opportunity. One of the problems, you know, we've gone from a TTA board to a TTA division through us, but when the original rules were put together for unsolicited proposals, the discussions -- I mean, you throw it out, you advertise, you give other people the opportunity to propose, but then in the rules the question that we had to concern ourselves with was what time period do we put, so on one hand you want to give an adequate time period so that everybody has time to get organized, get the word out, put a deal together, study the facts and come in, and to do that you need a long period of time. But it also can be, on a good deal, the opportunity can disappear sometimes, especially if it's small. There are some unusual circumstances that have disappeared.

So on the other hand, to move things in a rapid fashion, you want to shorten the period of time, and so evolving through that, we put a 45-day period on there, so that's how that original -- I say we, it was the TTA board -- but it became very evident that when somebody put together a very complicated deal -- which we did have one put together like a billion-dollar deal that somebody had spent many, many months working on, it got thrown in, advertised, but there was only a 45-day window in which to respond and no flexibility whatsoever with the TTA board knowing it was a complicated deal had to open it up because that's the way the rule was. And because of that, a lot of people or big firms on a billion-dollar project weren't going to have the opportunity to come in and make a proposal. So even though technically they did have the opportunity, from a practical standpoint they didn't.

We all recognize we want people to come in with a proposal, we don't want to lose that magic window of opportunity that nobody can really lock in because everyone is individual, but we also want to throw it out to be fair to all parties in the state, so what this rule does -- which I think is great -- is instead of being rigid like most rules are, it adds the flexibility for us to adjust, depending on the actual proposal.

MR. WILLIAMSON: I agree with you, I think it's a great approach.

MR. NICHOLS: It's an evolution to the process which I think is great.

MR. RUSSELL: And we did struggle a little bit. At one time we thought about putting in plateaus if it's this magnitude of project, it's this many days, and really that would diminish the flexibility of the commission. The money itself might not define the length of time required, it might be the complexity of the project. So this really does allow us to sit down, try to come up with an idea, and Commissioner Nichols is exactly right, there's going to be a sweet spot on what is too many days and what is an insufficient amount of days. So we're going to have to work very diligently to find out what the sweet spot is when we make, I would assume, our initial recommendation to you guys of moving forward with a project with the recommended publication date.

MR. WILLIAMSON: And Mike, I suppose that that was one of the reasons staff felt fairly insistent on identifying the primary corridors because when you did that you in effect told the world this is where we expect people to propose first so if you think that you're going to want to propose here, you better start getting your business together.

MR. BEHRENS: Yes, to give them an opportunity to focus on those first because if we were developing say the normal way we've developed projects, we'd still be looking at those areas of the state because of population and needs.

MR. WILLIAMSON: Good. Now we've just got to talk Mr. McLane into making that proposal.

MR. RUSSELL: The last element, of course, is the revision or change in the environmental process. Under the existing EDA rules, explaining how the environmental process would be handled is either silent or ambiguous, I guess, at best. Under these rules it's very clear of how we would receive proposals and the ability of a consortium to include an environmental consultant within the overall team. It also is very, very clear that the NEPA process is sacrosanct; we have to ensure that we select the right corridor for the right reasons and that there can be no financial interest involved in that selection process. So this ensures that an environmental consultant, although they could be a consultant, a mere consultant to that overall consortium, they couldn't have an ownership level in the overall consortium; they couldn't have anything that would be perceived as a conflict of interest.

MR. JOHNSON: Any other questions or comments?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Thank you, Phil. We'll go to item 7(b); we covered, as everyone knows, item 7(a) earlier in the meeting. Jim Randall will present this minute order.

MR. RANDALL: Item 7(b). I'm Jim Randall, director of Transportation Planning and Programming Division.

The Texas Department of Transportation annually submits projects to the Federal Highway Administration to receive federal discretionary funding. Local governments can also submit projects to the FHWA for funding consideration. This minute order authorizes approximately $915,000 in federal discretionary funds for projects selected by the FHWA.

Section 1221 of the Transportation Equity Act for the 21st Century, TEA-21, established that Transportation and Community and Systems Preservation pilot program. The TCSP pilot program provides for planning and implementation grants and for technical assistance and research to investigate and address the relationship between transportation, community and system preservation and private-sector-based initiatives.

Exhibit A identifies two projects in the El Paso and Pharr Districts to receive federal funding as part of this program. In order to be eligible to receive these federal funds, the department is required to obligate the funds with the FHWA by September 30, 2002. Staff recommends approval of this minute order.

MR. JOHNSON: Questions?

MR. WILLIAMSON: So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Item 8, Traffic Operations, Carlos will present the 2003 Highway Safety Plan.

MR. LOPEZ: Good afternoon, commissioners. For the record, I'm Carlos Lopes, director for the Traffic Operations Division.

The minute order before you approves the Fiscal Year 2003 Highway Safety Plan. This plan attempts to reduce the number and severity of traffic crashes by funding various enforcement, training and education efforts. The Highway Safety Plan contains a total budget of approximately $52 million and will fund about 322 traffic safety projects. These projects cover various program areas such as: occupant protection, police traffic services and speed control, DWI and DUI countermeasures, traffic records, and roadway safety. We recommend approval of this minute order.

MR. NICHOLS: Crash safety program, that incident record thing, that's not in here, is it?

MR. LOPEZ: Yes, it is.

MR. NICHOLS: How much funding is in there on that?

MR. LOPEZ: We have about $1.4 million set aside in this program for that.

MR. NICHOLS: We need to spend some time on that. I would just like to be updated.

MR. LOPEZ: We'll be coming to you in August to give you a briefing.

MR. JOHNSON: Any other questions?

MR. WILLIAMSON: Carlos, without a doubt some of our legislative allies are going to focus on the drop from $75 million to $52 million. Have we done a real good job? We know who they are: Mr. Ogden, Ms. Nelson -- there are certain senators and House members that are particularly focused on safety. Have we done a pretty good job of communicating to them ahead of time what's going on here so that they don't erroneously overreact?

MR. LOPEZ: I feel like we have. I mean, the reason that happened is because two very good laws were passed -- Open Container Repeat Offender Laws -- and allowed that money to stay in our mobility-type categories. So yes, I think they're well aware of why that occurred.

MR. WILLIAMSON: Again, you're aware that under the revised, hopefully soon-to-be-adopted new Strategic Plan the commission offered to the Legislative Budget Board, safety takes a prominent role. Is this adequate to begin to ramp towards that as part of our strategic plan or benchmark measures, whichever we want to call it?

MR. LOPEZ: I think what's really good about this program and the funding level we have is that it addresses the driver behavior side of the whole equation, and we do a real good job on our roads on engineering them well, but we still have too many crashes occurring because people don't buckle up, they drink and drive, and do things that just make the driving environment more hazardous. This program helps to try to mitigate that.

MR. WILLIAMSON: Thank you. So moved.

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thank you, Carlos.

MR. BEHRENS: Item 9, James Bass will present a State Infrastructure Bank loan for the City of Comanche.

MR. BASS: Good afternoon. I'm James Bass, director of Finance. This is just a little financial commitment appetizer for you before Phil Russell gets up here.

MR. WILLIAMSON: James, have we got any money in the bank?

MR. BASS: Yes, sir, as a matter of fact we have $287.7 million today.

MR. WILLIAMSON: My goodness.

MR. BASS: And the project for State Highway 130 received $90 million yesterday from Travis County and it expects to receive $45 million from Williamson within the -- not yourself, the county.

(General laughter.)

MR. BASS: Although they would accept any donations if you're offering -- within the next week.

MR. JOHNSON: Is the figure that you mentioned inclusive of Williamson County?

MR. BASS: No. That was as of -- it was Travis County, the $90 million; the $287- was as of 5:00 p.m. yesterday. Since we received the check and it was deposited after 2:00 p.m., the Comptroller's Office was unable to dedicate that to the balance of the Highway Fund, so as we sit here, it's $90 million higher than what I told you.

MR. WILLIAMSON: Oh, my.

MR. BASS: But that $90 million, not to give you a false impression, is dedicated only to be used for State Highway 130, so it's in there only for a temporary basis until a trustee is established and committed and then the funds will be moved to the trustee.

Agenda item 9 seeks your preliminary approval of a SIB loan to the City of Comanche in the amount of $400,000 to fund utility adjustments in connection with the rehabilitation of US 67 from State Highway 36 North to State Highway 36 South. Staff would recommend your approval so that we can begin negotiations with the city.

MR. NICHOLS: So moved.

MR. WILLIAMSON: So moved.

MR. JOHNSON: Which one?

MR. WILLIAMSON: I withdraw my so moved.

MR. JOHNSON: Second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Agenda item 10(a), (b) and (c), we'll go to Phil which will pertain to State Highway 130.

MR. RUSSELL: Again for the record, my name is Phillip Russell, director of the Texas Turnpike Authority Division. They told me out in the hallway that I now have the record for the heaviest minute order on record; I'm not sure if that's the case or not but it's probably close.

The minute order before you under agenda item 10(a) would approve the financial plan for the Central Texas Turnpike Project, specifically what we call the 2002 Project composed of the top 50 miles of State Highway 130, State Highway 45 North, and Loop 1. Specifically, let me go into some of the components. It's obviously a complex document; let me try to take you through the pieces of it.

By approving this minute order, you would approve the trust indenture and the supplemental trust indentures. The overall indenture is a not-to-exceed amount of $1.3 billion and that's the fixed rate bonds; supplement 1 would be the TIFIA subordinated lien, $916,760,000; supplement 2 would be a not-to-exceed amount of $200 million in variable rate debt; the third one would be the developer note not to exceed $10 million; the fourth is the BAN deal, the Bond Anticipation Notes, not to exceed $900 million.

In that indenture you would also find the TTA representative as it currently is: it's the executive director or the deputy executive director or the assistant executive director. You would approve the selection of the trustee; you would approve the preliminary official statement; you would approve the master secured loan agreement for the TIFIA loan and it would authorize the executive director to deliver these indentures and the TIFIA loan agreement, to execute and deliver; and other ancillary issues that may arise.

I think again it is important to mention, as Commissioner Nichols did, that this is a very good financial plan; it took a lot of hard work of the overall financial team composed of both TxDOT employees as well as private sector friends; it has been a long time in coming and we're very proud of getting to this point.

Let's see, anything else. Oh, it is probably worth noting, as well, that the Bond Review Board this week approved this as well -- that was one of those necessary milestones to be achieved. Over the last week or two we've made our formal presentations to them, and they have now formally identified or approved the project.

I would be happy to address any question you might have. I also have Rick Porter, our bond counsel from McCall, Parkhurst, and Dain Rauscher with Becky Heflin and Lisa Dresner are both here as well.

MR. WILLIAMSON: I'm going to have some. I know that you're going to tell us about this so let me go ahead and ask my questions.

MR. NICHOLS: Yes, I wasn't really going to try to tell you about it, go ahead.

MR. WILLIAMSON: Basically two, Phil, and if I misunderstand something, tell me that I did and tell me that I'm in error; I'm not ashamed of that; that's okay.

The American Statesman had a story today about this and there was a sentence that caught my eye that said it will cost $6 per trip and someday will be free. Now, have we represented to anyone that when State Highway 130 is paid off the toll will go away?

MR. RUSSELL: That's a great question, commissioner. The simple answer, at least within my understanding, is no, we have not. Statutorily -- and I may need some help from general counsel, but I think statutorily once and if the debt is ever paid off then it would become a free road; in actuality we'll have several options at that time 40 years from now: to extend the system, to reduce tolls, we have several different options there.

MR. WILLIAMSON: Well, I think it's real important because I know that House and Senate members in Harris County catch a lot of flak over this; I think they assume the same thing, that if their first bond ever got paid off, it would become a free system but that they never intended to pay off the first bond, they intended instead to use the cash flow to continue improving the system, but they have citizens all over Harris County who constantly complain about it's supposed to be a free road and it's not. And it's real important, as we enter this new era of financing and building highways, railroads and bicycle paths that we don't mislead the public.

I started to call Kelly this morning and say wait a minute, we need to correct that, and I thought better of it because I might not be knowing what I was talking about. But we need to be real careful everybody understands, at least from my perspective, we doubt that this will ever stop, that eventually we'll have to extend 130 or it will become part of the Trans Texas Corridor or it will become part of the Central Texas RMA and the cash flow from that will be used to build light rail and commuter rail and expand highways and improve frontage roads and build bike trails and whatever else.

MR. RUSSELL: I think without a doubt, commissioner, we've always tried to be very up front and suggest that it probably never will be -- those tolls will never be removed. The example we've always provided is the Dallas-Fort Worth Turnpike, the road that had those tolls removed 25 years ago and really it's been a double whammy: the department now gets to maintain that road and incur those costs, but probably equally important is we did kind of a back-of-an-envelope analysis here a couple of years ago and it suggested that if the tolls had remained on that roadway, we would have had in the area of $800 million to be utilized for other transportation projects in the Dallas-Fort Worth area. So I think the folks in the Dallas-Fort Worth area that were involved at that time will suggest to you as well that those tolls probably shouldn't have been removed, and I don't think there's ever any intention in Dallas or Houston to remove those.

MR. WILLIAMSON: John, am I out of school in raising this? I do think it's important that we not let any -- I tell you what I think about, John, chairman, I think about that very first Houston Chronicle article where we allowed the Chronicle to say that the Houston District had been shortchanged for decades and didn't, Randall Dillard, right then call them and say that's wrong, correct that, and now it's part of the Houston area millage lie and it's not true. I mean, they weren't shortchanged for decades but we didn't move quickly to address that and I don't want that to happen with State Highway 130 and the Trans Texas Corridor.

MR. JOHNSON: I think it's important that we're financing a system here and we should not confuse a part of that system with the entire system and the development and expansion of the system is important to the community, it's important to the area, and the only way it's going to be expanded is by the utilization of future debt and the cash flows generated from the system, and we start looking at particular portions of the system and assume that something is going to be paid off, that's going to be a free road is an incorrect assumption because this is just the beginning.

MR. NICHOLS: Mr. Chairman, could I make a comment?

MR. JOHNSON: Yes, sir.

MR. NICHOLS: Related to that subject, I remember during the last two sessions, legislators, particularly when I was in committee environment, would ask me that question: At the end of the bond period are the booths coming down or are they staying up? And because there was always disagreement on that panel, I gave them my feeling and that was that will be a legislative decision at that point in time, and regardless of what decision we might make or what the legislature may make today, the future legislature could make a different decision in the future, that our most important responsibility today was to get the project on the ground and get people moving safely and efficiently and put the next generation in a position where they have that option, and I think that in all these documents we have done that.

MR. JACKSON: What Phil said was correct, that under state law if the debt is ever paid, the road becomes free unless the commission decides to keep the toll on for purposes of maintenance; however, you have the ability to continue to add to the system which is what Dallas has done and which is what Harris County has done.

MR. WILLIAMSON: Thank you. And the other question, Chair, I'm so grateful for the work staff has done and Mr. Nichols has done, I don't want to in any way indicate that I'm complaining, but some financial institutions have indicated that they were stable and should have been given an opportunity to participate in this package, and as far as I know haven't been given that opportunity. I don't interfere with this process at all, but I hope we remember in all of government in the United States of America, the only public-private partnerships that work are those that include everybody.

If you don't give Mr. Zachry and Mr. Granite and Mr. Hunter and Mr. Pitcock an equal shot at the road, pretty soon one of them is going to raise a lot of cane. They don't mind losing; they just want an equal shot. If you don't give Mr. Morgan and Mr. Salomon and Mr. Bowman and Mr. Merrill an equal shot at managing the sale of the documents and participating in the risk and the profits, they're going to start screaming. We need to be very cautious to not cut anybody out for any reason other than professionalism. In other words, they just couldn't offer what somebody else could. Because I myself don't want to get those phone calls or letters; I'm sure Mr. Johnson and Mr. Nichols don't either.

MR. RUSSELL: We have gone through a very transparent process, actually, in the selection of our overall syndicate. I'd be happy to sit down with any of those folks and discuss it. You know, it's like anything in life: There are always winners and there are losers, and if you're not successful on a proposal, then you're unhappy. It's unfortunate.

MR. WILLIAMSON: Well, nobody understands winning and losing more than I do, I appreciate that. What I don't want is six winners and one getting cut out just because they got cut out. That's what I'm trying to get to, Phil.

MR. RUSSELL: Right, I understand.

MR. WILLIAMSON: I don't want discrimination against anybody.

MR. RUSSELL: Understand.

MR. WILLIAMSON: The more Texans that are in this trap, the better. This is one state, one people; we need to all be in this barrel together.

MR. RUSSELL: I agree.

MR. WILLIAMSON: Thank you, sir.

MR. JOHNSON: Any other questions, comments?

MR. WILLIAMSON: Come build me a toll road in Weatherford; I'm ready to pay my tolls.

(General laughter.)

MR. NICHOLS: Are you ready for a motion?

MR. JOHNSON: Yes, I am.

MR. NICHOLS: I so move.

MR. WILLIAMSON: Second.

MR. JOHNSON: There's a motion and second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. RUSSELL: Agenda item 10(b), this minute order, if approved, would approve the Traffic and Revenue Report and the General Engineering Consultant Report, both of which are extremely important as we market and issue these bonds. Let me take you through a couple of those elements.

Again, it approves the Traffic and Revenue Report and it approves the General Engineering Consultant Report. That's a document that is prepared by a neutral third-party consultant, Post Buckley Sheen Jernigan is our general engineering consultant and their work on the GEC report has been admirable.

The third thing it would do is authorize the use of these reports in the marketing and sale of the bonds; and lastly, it would approve the schedule of the toll rates, the schedule of the toll increases, and the toll collection schedule.

Commissioner Williamson, this is kind of what you teed up a moment ago. It's extremely important that everybody, the public, everybody involved understands these and there certainly has been some discussion -- in the elevator this morning, actually, as I was coming up.

If I could, let me go through and again make sure that there's no misunderstandings. Our toll collection schedule, as it's currently envisioned, would provide for three toll increases over the next 40 years. I think was we talk to most folks and we talked to individuals in New York, we feel like that's a fairly modest increase. A lot of areas have a lot more aggressive tolling structure than we have.

I think as it's currently envisioned the toll would be 75 cents on 45 and Loop 1 per barrier toll plaza and there's three barrier plazas on those projects; and on State Highway 130 it would be $1.50 per barrier toll plaza and there are four barrier toll plazas.

As you said, Commissioner Williamson, if you go all the way from Georgetown to south of Bergstrom all the way to 183, that's a $6 toll at max. Taking off my engineer hat for a moment, as the traveling public, if I'm driving down from my house north of Georgetown coming here to the Greer Building, I'm going to pay $2.70 because I'll come down, take the 290 exit, come on in to 35 that way with my toll tag and my ETC discount.

So again, I just kind of wanted to touch base. I think that's the mind-set a lot of folks have, it's a question I'm asked most often: If I'm coming from Round Rock or Georgetown, what's it going to cost me to get downtown? In my case which is probably the most extreme case because I live on the northern edges of 130, it would be $2.70 as it's currently envisioned in this toll structure.

MR. WILLIAMSON: The only guy that's paying six bucks is the guy, for example, going from Dallas to San Antonio.

MR. RUSSELL: The guy that's paying six bucks is a guy that gets on north of Georgetown and goes all the way down to 183 about ten miles south of Bergstrom and has no toll tag, manual collection and is dropping the quarters and the dollar bills in there; that would be his ultimate toll.

MR. WILLIAMSON: While I'm thinking about this, the toll tag that we'll develop would be everywhere?

MR. JOHNSON: It would be compatible with Harris County Toll Road Authority and the North Texas Toll Road?

MR. WILLIAMSON: Phil, I'm serious about this. Whoever does that, you lay back the first 100 toll tags and do not issue them -- serious, I want the first 100, don't go out there and sell them.

MR. NICHOLS: Do what?

MR. WILLIAMSON: The first 100 toll tags don't go out to the market because I want to buy one of them and I know some other people who want to buy them.

MR. NICHOLS: So you want Toll Tag Number 1?

MR. WILLIAMSON: No, I don't but I know a guy that does.

MR. NICHOLS: I'd kind of like one too but I don't know if I'm going to make the top 100 or not.

MR. WILLIAMSON: Oh, yes, you'll be two -- the Chairman will be two, you'll be three and I'll be four.

MR. RUSSELL: Trust me, you will make the top 100.

MR. WILLIAMSON: But I know a guy that wants to be the first one to buy it.

MR. RUSSELL: I've got to be real honest, I did promise that to Kirby Pickett a couple of years ago, but we'll be happy to settle that at a later date. I feel like I have to follow through on my word but we'll let Kirby and your friend sort it out.

MR. NICHOLS: Related to the fee, like the $6 that hit the paper, or something like that, I think it's kind of interesting to point out that as we went through these models -- which really were quite thick -- that's not at today's rate, in effect. And I don't want to sound complicated, but if you follow the tolls, for instance at the North Toll Authority, incrementally over time it started out as a real low amount and then like eight or ten years later they bumped it up some, and then eight or ten or 15 years later they bumped it some more. They kind of try to move with the Consumer Price Index, although not precisely, but relatively they followed that, but because you're dealing with a quarter, you can't do it in fractional cents so you have to go in increments of a coin.

So tracking in time with that and comparing with the Harris County and the North Texas toll rates, the model that was laid out, as you follow in time where those are going to be, this will open up sometime 2007, I think -- that's calendar year, not fiscal year -- and the toll rate that's set in these documents is for that time, so in other words, not today's.

MR. WILLIAMSON: By 2007 there will be people willing to pay $60 to go around downtown Austin.

MR. RUSSELL: Commissioner Nichols, I think you're exactly right. Number one is the time value of money difference today versus 2007 or '08. When you look at that analysis, then our toll structure is very similar to what Dallas is. But the other thing -- and Kelly mentioned this as well -- we have gone across and compared the toll rates across the country and really there's two groups of those folks: There's the guys that have the very mature systems, Pennsylvania Turnpike, the Ohio Turnpike, Florida, those systems have been in place 40 or 50 years, they have a very low toll structure. If we had tolled I-35 40 years ago, you don't need as much money to pay for the operation and maintenance and extension of the system.

The other half of that, the folks that are starting up toll roads or fairly new toll roads, and frankly, we're on the lower end of that toll structure. If you look at some of the ones in California, they get as high as 40 or 50 cents a mile.

MR. RUSSELL: Is this about 12 cents a mile?

MR. RUSSELL: Yes, sir, it's about 12 cents over all three elements. Probably a lot of the newer toll roads we compared were 16, 17, 18 cents, so I feel very comfortable with the toll structure.

MR. JOHNSON: Quick update on compatibility with Harris County toll tags and the North Texas Tollway toll tags?

MR. RUSSELL: Yes, sir. We continue to discuss those issues with both of those groups. We're getting ready to execute our contract with our toll integrator. The toll integrator is going to be the one that designs the software and make sure that the architecture and the integration works appropriately. When we get those guys on board, that's when we're going to be able to shift in high gear to ensure that all of this is interoperable. It's of critical importance, obviously.

MR. JOHNSON: Are HCTRA and NTTA on board with doing this and does each agency have a representative that are communicating to make this happen?

MR. RUSSELL: Yes, sir. Each entity has a representative that is communicating and I think they will be all on board. We've made very clear comments that we expect interoperability, and of course the RMA rules also require that as one of the elements that you guys look at when you approve the RMA.

MR. NICHOLS: I got the impression, because I went to one of those meetings where all the turnpike things get together, and there basically was a commitment from Harris County and the North Texas that they're all in agreement that the system needs to have interoperability; the only disagreement was Harris County thought Dallas ought to change theirs to this and that.

MR. WILLIAMSON: And vice versa.

MR. NICHOLS: Yes, and vice versa. But I think in reality we know that every eight years the technology and computers and programming changes so much that there will be an adequate opportunity in the update of technology to lock in, and that's the point at which it will happen.

MR. WILLIAMSON: That would be important, I would think.

MR. JOHNSON: Any other questions or comments? Is there a motion to approve this minute order?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. RUSSELL: The last minute order that I'll bring to you today -- and I promise -- is under agenda item 10(c). This minute order, if approved, would approve individual financial and related commitments for the Central Texas project, and if I could, I'll try to go through those very rapidly.

There are essentially five elements that you would be approving. Number one is to authorize $700 million in state and federal mobility funds for the construction of the 2002 project and those could be drawn down as early as September of '03 and ending in August of '08.

The second issue would be to provide for any sort of construction overruns, and actually two and three -- three is provide for any right of way overruns. When we developed our project, we came up with, I think, very, very careful and accurate estimates. We've had internally a program engineer to validate those estimates and I spoke a moment ago about PBSJ who is our general engineering consultant, and again that's an official document that will be sent out as part of the bond sale. All three of these analyses have verified both our construction estimate and our right of way estimate, and like anything, it could change, right of way especially here in the Central Texas area. So what we've tried to do to cushion that -- we think we have very good estimates but we've also provided contingencies within our financial plan.

On both State Highway 130 and on 45 and the Loop 1 projects, we have provided 10 percent right of way overruns, just a little buffer in our overall financial plan. And as far as construction overruns, we've budgeted an additional 5 percent on 130 -- because that is an EDA and we feel like we'll be able to control many of those potential cost overruns, and we've included 10 percent for construction overruns should they occur on 45 and Loop 1. So again, I think we've very closely and thoroughly analyzed this and we've even budgeted some additional funds within our financial plan.

By approving this you would essentially backstop the project to handle any construction or right of way overruns to the extent they exceed these estimates, and again, it's the same sort of analysis that we have on any other project on the state highway system.

The fourth element would provide for the backstop on operation and maintenance and major maintenance on the 2002 project. The fifth element would be to ensure the timely completion of three critically important projects: the US 183A, US 183 interchange and the State Highway 45 South connector.

MR. WILLIAMSON: South?

MR. RUSSELL: Southeast. And again, let me make sure I'm clear, all we're talking about is the seven miles east that would connect up 130 and 183 to 35. The 183A project, we're ensuring that would be completed, could be by us but we're hoping by regional mobility authority.

MR. WILLIAMSON: Let's talk about that for a moment, if we can, Mr. Chairman.

MR. JOHNSON: Yes, sir.

MR. WILLIAMSON: We're all aware that several months ago a consortium of private sector individuals and companies sent an unsolicited EDA to the department concerning State Highway 45 South. My recollection is it was from 130 to 35 and possibly on over towards MoPac but not right to MoPac.

MR. RUSSELL: That's correct.

MR. WILLIAMSON: And for whatever reason, the department staff negotiated in good faith with the proposers and it just wasn't possible to work it out in a way that the proposers felt comfortable and we felt comfortable -- which is the way the process should work -- and we've sent a letter terminating those negotiations. Is that correct?

MR. RUSSELL: That's correct.

MR. WILLIAMSON: One of those consortium members, I'm given to understand, owns from a prior piece of legislation beyond our control the franchise right to build that piece of road if he so chooses -- I'm told. Are you familiar with that?

MR. RUSSELL: Yes.

MR. WILLIAMSON: Is there anything in here we're doing that would prevent that company or that person from reaching an alliance with the Central Texas RMA and proposing to us to use the franchise and then extend on around the west side of Austin and add that to their RMA? Would we be prevented from allowing that to happen by our agreement to these things?

MR. RUSSELL: Absolutely not.

MR. WILLIAMSON: Just as long as it's there providing cars and trucks get on to 130, that's all we care about.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: We could build it ourselves if we wanted to, we could give it to the Austin District, we could give it to another proposer, we could let this franchisee do what he says he has the right to do, we could let the RMA do it, doesn't matter, just as long as we let it happen.

MR. RUSSELL: Yes, sir, that is correct. Let me make sure again I'm clear. We have or we're in the process of selecting an environmental consultant to begin the work on the seven miles to the east, we're launching it, frankly we can't wait any longer, we're moving out very rapidly, but nothing would preclude the district, us, a future EDA or whatever or stepping out and taking care of that piece to the east.

MR. WILLIAMSON: Well, it's kind of important to me, Phil, because we're limited on our EDAs.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: And if I understand the law, Mr. Nichols, this particular individual or company owns a franchise to build a road similar to State Highway 45 on State Highway 45, and if they chose to build it with their own money, we couldn't stop it, but it also wouldn't charge off against one of our EDAs, and I just want to be sure that as long as this is connected to 130 and accomplishes the goals that we're agreeing to, that if they move forward with that, that's okay -- not okay with us but complies with our obligations here.

MR. NICHOLS: That is my understanding, and I've spoken with that firm myself, and anyway, they also own a franchise for 130, and as everyone knows it's badly needed, if they want to go build it. But in this document, as I understand it, and I just want clarification for the record, what we are committing to is that one way or the other this connector will be built in a timely fashion and connect 35 to 130. That's the most important thing and not only the 45 but also the 183 and these other pieces.

And in the documents, as far as the programming for revenues and the volumes for the demographics and stuff were programmed with the understanding that they would be tolled, it doesn't mean they have to be tolled because the dollars from those was not part of this package. But if it's tolled and people think that slows down the traffic, well then that lower number was used in a conservative fashion so that if these are built -- and as I sat before them myself, many of the insurance companies and the rating agencies told them, it was my understanding, that we're clearly trying to say we think these will be tolled, the 45 connector and the 183 project on the northwest, and that we are encouraging the local counties to consider the creation of a regional mobility authority and explained that to them.

MR. WILLIAMSON: So in that case we wouldn't care if the franchise was part of it and the CenTex RMA was the rest.

MR. NICHOLS: However they work it out, yes. But noting this does not bind us into financing it ourselves but only confirming the timely -- that it is a commitment that we are saying that one way or the other this thing is going to be completed.

MR. RUSSELL: Commissioner Nichols, I think our view has always been that the 183A project, as well as any piece of 45 on the west side of 35 would be a great RMA project if they so desired, but nothing in this would preclude them from building the east piece as well if they so desire; we're simply saying we need to move forward on the east piece.

MR. NICHOLS: I just want it on the record from the comment that these -- our intent, one way or the other, they probably will be tolled because it doesn't really say that here.

MR. RUSSELL: You're exactly right.

MR. JOHNSON: Bob, did you have an observation?

MR. JACKSON: Just to clarify a couple of points about the private toll roads. In '91 about ten private groups incorporated under a now repealed statute that allows them to build a private toll road; it is not a franchise, anyone else can build a road over that route, they have no special right to it. The big advantage is that they have the right of condemnation; they have ability to build a private toll road and nobody else can do that in the State of Texas.

Another important point is they have to get your approval under the private toll road statute. If their road is going to connect to the state highway system -- which it would in any circumstance -- they have to come here first. Also, under toll equity recently passed, if we do get involved with such a circumstance and a private toll corporation does build a road, it is a private road and we cannot grant them money, we can only loan them money.

MR. WILLIAMSON: Thank you for offering all three of those observations.

Thank you for allowing the dialogue, Chairman. I think it's important to communicate to the Austin-Round Rock area that we are laying the groundwork for you to deal with State Highway 45 South, State Highway 45 West around the lake, 620, the mall, MoPac, all of it, we're laying the groundwork for your community to take that responsibility and deal with it.

MR. JOHNSON: Any other questions or observations?

MR. NICHOLS: Are you ready for a motion?

MR. JOHNSON: Yes, sir.

MR. NICHOLS: I so move.

MR. WILLIAMSON: I second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Thank you, Phil.

(Applause.)

MR. BEHRENS: We'll go to agenda item 11, our recommended contracts for award.

MR. WILLIAMSON: Poor Thomas, all of this glitter and glitz and big stuff, and then Thomas has to follow this.

MR. T. BOHUSLAV: It seems very mundane compared to what you've been through but it is important. My name is Thomas Bohuslav, I'm director of the Construction Division. Item 11(1) is for consideration of award or rejection of highway maintenance contracts let on June 4 and 5, 2002, and the engineers' estimated costs are $300,000 or more. We had 19 projects averaging 3.58 bidders per project.

We have one project we'd recommend for rejection and that's a project in the Abilene District, Taylor County and it's actually all the way through the Abilene District in IH-20. It's a comprehensive maintenance contract; all the maintenance work on IH-20 would be included on that contract. It's 55 percent over and three bidders. The district wants to go back and re-look at that contract and see if they can address some issues. Contractors were really high on a few items; maybe there was some confusion in regard to the requirements of the contract, they want to see if they can redesign the contract such that they get better prices on it.

Staff recommends award of all projects with the exception noted.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: I'm just looking this over. So moved.

MR. JOHNSON: Second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. T. BOHUSLAV: Item 11(2) is for consideration of award or rejection of highway construction contracts let on June 4 and 5, 2002. We had 70 projects and an average number of bidders of 4.77.

We have a project there we'd like to recommend for rejection that's in Marion County. Actually we have an error in the unit quantity shown in the plans and the proposal; there was a difference between asphalt either bid by the ton or by the gallon and caused errors in the contractors' bids; we'd like to go back and fix that problem and re-let it.

MR. WILLIAMSON: Are you recommending this under the recently adopted new rules to deal with this kind of thing?

MR. T. BOHUSLAV: No, sir, this is a different issue, this is our error, not the contractor's error.

MR. WILLIAMSON: So moved.

MR. JOHNSON: Second. All in favor, signify by saying aye.

MR. JOHNSON: Motion carries.

MR. BEHRENS: Item 12 are our routine minute orders. These are listed as appears on our posted agenda. We could address any of those individually but if you don't wish that, we could recommend approval for all the routine minute orders.

MR. JOHNSON: I have one question on the Houston County, the sale of a surplus roadside park. Is the city or county purchasing that and do we know the intended use?

MR. BEHRENS: That's going to be purchased by an abutting landowner.

MR. JOHNSON: Okay.

MR. WILLIAMSON: Mike, just by way of clarifying the record, do any of these transactions we would approve en masse to your knowledge directly affect any of the commissioners personally?

MR. BEHRENS: No, sir.

MR. WILLIAMSON: It's getting so large, it's awfully hard for me to read through and be sure and protect myself. Then I so move, Mr. Chairman.

MR. JOHNSON: I will second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: And that concludes any business we have, Mr. Chairman.

MR. JOHNSON: Any other items to come before the commission or anyone requesting to speak at open comment?

MR. WILLIAMSON: Robert, did you have to send Carlos this memo saying you were glad more 75-mile-an-hour speed zones were being approved?

MR. NICHOLS: Did I send that?

MR. WILLIAMSON: I'm over here trying to slow them down and you're over on that side trying to speed them up, and John just wants to get them back to 70 in Harris County.

MR. JOHNSON: We'll accept 65.

MR. NICHOLS: They sent a study that I read that said that most of the accidents occur less than 70 miles an hour. Isn't that right?

(General laughter.)

MR. JOHNSON: I will entertain a motion to adjourn.

MR. WILLIAMSON: So moved.

MR. JOHNSON: Is there a second?

MR. NICHOLS: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

Please note for the record at 2:48 p.m. the meeting was adjourned.

(Whereupon, at 2:48 p.m., the meeting was concluded.)

MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: June 27, 2002

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

                                     07/10/02
(Transcriber) (Date)
On the Record Reporting, Inc.
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Austin, Texas 78731