Texas Department of Transportation Commission Meeting

Dewitt C. Greer Building
125 East 11th Street
Austin, Texas

9:00 a.m. Thursday, December 18, 2003

COMMISSION MEMBERS:

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

STAFF:

MIKE W. BEHRENS, Executive Director
RICHARD MONROE, General Counsel
TAMMY STONE, Executive Assistant to the Deputy Executive Director
DEE HERNANDEZ, Chief Minute Clerk

PROCEEDINGS

MR. JOHNSON: Good morning. It's 9:10 a.m. and I would like to call this meeting of the Texas Transportation Commission to order. Welcome; it's indeed a pleasure to have you here this morning.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:19 p.m. on December 10 of this year.

If you see a new face up on the dais, I would like to welcome Hope Andrade from Bexar County from San Antonio who is one of our new commissioners. She has yet to be sworn in, so she will observe the meeting. Hope, it's great to have you here and if you'd like to say something.

MS. ANDRADE: Good morning, and thank you Chairman Johnson. This brings back memories: when I was on the Turnpike Authority, I used to sit on the other side of the table, so it's great to be back and thank you for inviting me to sit up here even though I'm not going to be able to vote today, but I'm excited, I'm committed to serving the State of Texas. I thank the governor for this opportunity, and look forward to working with you all. So thank you very much.

MR. JOHNSON: Thank you.

Now I would like my colleagues, Robert Nichols and Ric Williamson, if they have any comments that they would like to make. Robert?

MR. NICHOLS: Yes. I'd also like to welcome Hope. We're real excited about her appointment and being here; she's got a lot to add. I think I sat on the other end with you on the TTA board.

MS. ANDRADE: Yes, you did.

MR. NICHOLS: And her background in transit in the San Antonio area, her experience building a business the hard way, her involvement in a wide variety of different civic things in the area is going to be a great contribution. Looking forward to working with you.

MS. ANDRADE: Thank you.

MR. NICHOLS: I appreciate everyone coming today. It is the holidays, drive careful, be careful out there.

MR. JOHNSON: Ric?

MR. WILLIAMSON: And I, too, congratulate the newest commission member. I have personal knowledge that the governor interviewed many outstanding individuals to at least voice the aspirations of South Central Texas, the Lower Rio Grande Valley, and the southern Border area. I know that his selection of you, amongst an outstanding cast of applicants, says a whole lot about what you will contribute to the commission. I'm just glad you're here.

MS. ANDRADE: Thank you very much.

MR. JOHNSON: Before we begin with the business portion of our meeting, let me remind everyone that if you wish to address the commission, please complete a speaker's card at the registration table in the lobby. To comment on an agenda item, we would ask that you fill out a yellow card and please identify the agenda item; and if it is not an agenda item, we'll take your comments at 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 card, we ask that you limit your discussion or comments to three minutes. And we would also ask that you place your cell phones and pagers in the silent mode.

One item to note about the agenda, we will proceed with the agenda as stated, but we will defer item 6(c), I believe -- 6(b) to the end of the meeting, and to discuss more about that agenda item, we will retire into executive session, so we will, in the interest of your time, have the entire agenda with the exception of that one agenda item before we go into executive session.

PUBLIC HEARING

ENVIRONMENTAL REVIEW RULES

MR. JOHNSON: We will begin this morning with a public hearing regarding the department's rules governing environmental reviews. Dianna Noble, our director of Environmental Affairs, will present this item. Dianna, welcome.

MS. NOBLE: Thank you. Good morning, Chairman, Mr. Behrens and commissioners. For the record, my name is Dianna Noble and I'm the director of Environmental Affairs of the Texas Department of Transportation.

The purpose of this item is for the Texas Transportation Commission to convene a public hearing for the purposes of receiving public comment on TxDOT's environmental review regulations for transportation projects that are not subject to review under the National Environmental Policy Act.

Transportation Code 201.604 indicates that the commission, by rule, shall provide for the commission's environmental review of the department's transportation projects that are not subject to review under the National Environmental Policy Act.

It further provides: that the department will provide public comment on the department's environmental reviews; that the department evaluate direct and indirect effects of its projects; that it provide for analysis of project alternatives; that it provide a written report that briefly explains the department's decision on a project that specifies the mitigation measures; that it provide for the environmental review of a project and that it must be conducted before the location and the alignment of the project has been adopted; and that the commission shall consider the results of its review; and that the department shall coordinate with the Texas Natural Resource Conservation Commission and the Parks and Wildlife Department when preparing that review; and that at least once during each five-year period, that the commission, after a public hearing, shall review the rules relating to the environmental review and make appropriate changes.

In the next six slides, I will outline the current environmental review policy and environmental review procedures. TxDOT environmental policy is codified in Title 43, Part 1, Chapter 2, Subchapter A. Title 43, Part 1, Chapter 2, Subchapter (2) describes the memorandum of understanding that we have with Texas Parks and Wildlife, the Texas Commission on Environmental Quality, the Texas Historical Commission for the review of transportation projects.

Title 43, Part 1, Chapter 2, Subchapter C describes the environmental review and public involvement procedures.

The current policy indicates that the commission and TxDOT will protect, preserve and when practicable, enhance the environment. The policy further indicates that emphasis will be placed on avoidance, minimization and compensation for adverse environmental impacts while balancing social and environmental concerns with economic growth.

Environmental considerations will be fully integrated into department policies, procedures and decision making, and that the department recognizes the need for effective communication and coordination with the public, environmental and transportation groups, environmental and resource agencies, businesses and communities.

This subchapter contains the three memorandums of understanding between TxDOT, the Texas Parks and Wildlife, the Texas Commission on Environmental Quality, and the Texas Historical Commission, and it provides for the review of transportation projects by these agencies.

The sections under this subchapter prescribe the environmental review and public involvement procedures for all transportation modes for which the department has funding, construction or maintenance responsibilities.

These procedures are intended to ensure adequate consideration of environmental impacts related to the transportation system, and to ensure that environmental impacts are mitigated when feasible.

The next slides highlight items the commission considered in giving direction to staff on assessing the need to revisit TxDOT's environmental policies and environmental review rules. As mentioned previously, Transportation Code 201.604 requires that the commission review the rules related to environmental reviews and make appropriate changes. Transportation Code 201.604 further indicates that the commission have a public hearing as part of its review of the environmental review rules. As a result of recent legislation, there is a need for us to assess the need to update and improve the current environmental policy and environmental review procedures.

In a report spearheaded by Commissioner Johnny Johnson to the citizens of Texas, the agency made a commitment to focus on the five items described on this slide. In addition, the commission further directed TxDOT to define and focus its efforts on carrying out the five items described and to ensure that their elements are overseen as part of the system.

As related to TxDOT's environmental policy and environmental review and public involvement procedures, the environmental policy and environmental rules are focused on the PLAN IT strategy, the BUILD IT strategy, and the MAINTAIN IT strategy.

The following slides further describe items which the commission might consider in giving staff direction as related to reviewing TxDOT's environmental policy and environmental review rules. In addition, as mentioned previously, the commission and TxDOT made a commitment to the citizens of Texas to improve project delivery. As part of that, TxDOT sees as its mission to deliver the transportation program with predictability of cost and schedule without compromising the quality of the environment.

Reviewing the recent legislation and clarifying the environmental policy for the environmental review of transportation projects and related approvals and procedures might be necessary. Reviewing the memorandums of understanding with the Texas Historical Commission, the Texas Commission on Environmental Quality and continue to ensure that we continue to make decisions in a manner that builds trust and mutual respect and that results in environmentally sound projects.

MR. WILLIAMSON: May I interrupt, please?

MS. NOBLE: Yes.

MR. WILLIAMSON: Do you have the ability to reverse slides and go back one? Would pass-through tolls fall into the same area as new tools and authorities, RMAs and comprehensive development agreements?

MS. NOBLE: It would fall under the new authorities, Commissioner. What we are proposing to do is not necessarily include the environmental review procedures for those types of projects within 43 TAC Chapter 2, but to look at where it would be best to incorporate those requirements in order to eliminate duplication because what we're looking for is efficient decision making.

MR. WILLIAMSON: I guess the pass-through toll proposal is almost more a financing tool than it is anything else, so we're going to have our standard process for reviewing environmental from now on.

MS. NOBLE: That is correct.

MR. WILLIAMSON: Okay. Thank you for letting me interrupt you.

MS. NOBLE: And as mentioned previously, reviewing the recent legislation to clarify the environmental review and public involvement procedures of transportation projects and related approvals and procedures.

In addition, as mentioned previously, the commission and TxDOT made a commitment to the citizens of Texas to make transportation decisions in a manner that supports economic vitality. As part of that, TxDOT sees as its mission to deliver the transportation program with predictability of cost and schedule without compromising the quality of the environment.

In sum, based on staff's understanding of commission direction, the review will include an examination of the environmental policy and rules and how they guide TxDOT to address its responsibilities to the public and to practice good citizenship, and to re-examine requirements and expectations of its customers, and including an examination of how key production, delivery and support processes are designed and managed in order to improve them.

Copies of the rules may be obtained by contacting me at the above address and e-mail. Comments may be submitted to me at the above address, and with that, I have concluded my presentation.

MR. JOHNSON: Thank you, Dianna. Has anyone signed up to speak during the public hearing phase of the meeting?

(No response.)

MR. JOHNSON: There are none. Robert or Ric, do you have any comments or questions?

MR. WILLIAMSON: It looks pretty comprehensive. I know we're going to have a multitude of pass-through toll proposals probably in the next 30 days, and I want to be sure we're focused on not holding those up to the extent that we can.

MR. NICHOLS: The only comment I have is I want to compliment Dianna and the Environmental Division. You guys do a great job in a very complicated atmosphere. Federal laws, state laws, the entire changing dynamics of the environmental process and rules is a very difficult process, and somehow or another you were able to go through that, get people involved, do the right things for the right reasons, and anyway, I think it's important to recognize the work that you do.

MS. NOBLE: Thank you, Commissioner. The credit goes to the 25 districts as well as my staff.

MR. JOHNSON: Dianna, I want to echo what Robert said. That's an excellent report and the work that you do in a very complex arena is superb, and I know it's a team effort, but you as the team's leader do a terrific job.

MS. NOBLE: Thank you, Commissioner.

MR. WILLIAMSON: Chairman, before you and Mr. Behrens, through Dianna, I would comment on how nice it is two years later to see that almost everything our staff brings to us now is in the context of the goals, the strategic structure and the tactical structure we laid out two years ago based on your citizens group. Without banging on other state agencies, I think we may be the only state agency that is truly planning and executing according to a strategic plan that's been approved by the department. It's pretty slick to see it.

MS. NOBLE: Staff has heard the direction from Mr. Behrens and the commission; we follow very well.

MR. JOHNSON: Yes, you do. Thank you, Dianna.

MS. NOBLE: Thank you, and I hope you have a very happy holiday.

MR. JOHNSON: And the same to you.

(Whereupon, the public hearing was concluded.)

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

MR. JOHNSON: Next we'll move to the approval of the minutes from our November commission meeting. Any additions, corrections or deletions?

(No response.)

MR. JOHNSON: There are none. I'll entertain a motion.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

Mike, I believe that we'll turn over the rest of the meeting to you. Again, I'll mention that item 6(b) will move to the very end of the meeting, at which time the commission will go into executive session.

MR. BEHRENS: Thank you, Chairman Johnson. We'll go to agenda item number 3 which is our Aviation agenda for the month. Dave Fulton will present our proposed airport projects.

MR. FULTON: Thank you, Mike, commissioners. For the record, my name is David Fulton, director of the Aviation Division.

This minute order contains a request for funding approval for 16 airport improvement projects. The total estimated cost of all requests, as shown on Exhibit A, is approximately $4.1 million: approximately $3.5 million in federal funds, $200,000 in state funds, and $400,000 in local funding.

A public hearing was held on December 1 of this year. No comments were received. We would recommend approval of this minute order.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Is Nichols International Airport on here?

MR. NICHOLS: No, nowhere close.

(General laughter.)

MR. JOHNSON: Is there a motion?

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, David.

MR. BEHRENS: Agenda item number 4 which will be agenda item 4(a), our proposed rules for adoption, the first one being rules concerning management. Richard.

MR. MONROE: Good morning. My name is Richard Monroe; I'm general counsel of the department. I'd particularly like to welcome our new commissioner-to-be soon. A lot of people think of going to the lawyer as going to the dentist when all else fails for a toothache. I hope you won't look upon us that way. We try to practice painless lawyering at my office, but call on us if you ever need us.

If the commission approves this minute order, we will delete a section from our rules which is now unnecessary. It's been there for a long time but it is a potential conflict with statutory provisions and the way the courts have interpreted those provisions about what is necessary for a commission decision. I would urge the commission to adopt the minute order.

MR. JOHNSON: Any 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: Agenda item 4(a)(2) is rules for proposed adoption concerning the selling of bonds for highway improvement projects and also highway safety projects. Carlos.

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

The minute order before you proposes preliminary adoption of Sections 15.170 through 15.174 concerning the issuance of bonds for transportation improvement and safety construction projects on the state highway system. These rules will implement the provision of Article 5 of House Bill 3588 passed during the last session.

Article 5 authorizes the commission to issue up to $3 billion in bonds. At least $600 million of this amount must be used for projects designed to improve safety and none of the proceeds may be used for projects on the Trans-Texas Corridor. The rules also establish the criteria that will be used for project eligibility and selection. We recommend approval of the minute order.

MR. JOHNSON: Any questions?

MR. NICHOLS: I don't know if it's a question or a clarification, and I sent my question really by e-mail -- I think you've already looked at it, or I know some have. It has to do with the $600 million -- or the 20 percent of $3 billion which is $600 million -- for safety projects, and I'd just like to hear some discussion either from you or legal counsel or the executive director on that when you look at the $3 billion as a total, it's understandable what the 20 percent or $600 million is for safety and it's at least that amount. But the question I had was as we work our way into this, we probably would not issue the full $3 billion because it's one a year maximum, so we know it's going to be spread over three years at least, and if we issue $1 billion in one year, are we required to spend 20 percent of that or more on safety projects, or is it only at the completion of the full three, or can you do the safety projects on the front-end?

MR. LOPEZ: Yes, we have options. The way the bill is written, it says $600 million out of $3 billion. The commission can choose to do the $600 million first, can choose to do it at the end, can choose to do it somewhere in the middle, or it could choose to do a percentage of each issuance of bonds. So that is up to the discretion of the commission.

MR. NICHOLS: But the authority is a permissive authority up to $3 billion; we're not even required to do the full $3 billion.

MR. LOPEZ: That is correct.

MR. NICHOLS: So if we only did two of the three, would it be rational to assume that 20 percent of that should be at least on safety projects?

MR. LOPEZ: That would be at the commission's option. The commission could choose to do that at the end.

MR. NICHOLS: If we only did the two and did not do any of that in safety projects, would it be your opinion that we would not have met the intent of the statute?

MR. LOPEZ: We'll have met the letter of the law, whether we've met the intent could probably be a question.

MR. NICHOLS: All right.

MR. BEHRENS: Commissioner, my recommendation would be, because we have a tremendous need for a lot of safety projects, that we would always include -- whether it would be that 20 percent per year if we do a billion dollars per year, we may choose to even do more on the front side because of the need out there.

MR. NICHOLS: I would hope that it would be our intent to work toward the spirit of the intent all the way through as opposed to just the letter, and I think that's what we intend to do, I just wanted to get it out on the record.

MR. NICHOLS: Mr. Chairman, I have no other questions.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: Are we going to instruct our bond counsel to label these "Ogden Bonds" when we sell them?

MR. LOPEZ: I'll leave that up to James Bass.

MR. WILLIAMSON: Well, if James isn't here, pass along to him that thought: James, in honor of the senator, let's call these "Ogden Bonds." I think that would be a good idea.

MR. LOPEZ: Okay.

MR. WILLIAMSON: What meets the qualification of safety, Mr. Behrens?

MR. BEHRENS: Well, of course, when we talk about safety overall, we think every project that we do has an element of safety in it, but we do have a safety program and Carlos can explain how the formula is set up on the current program that we have. And if you would do that, Carlos?

MR. WILLIAMSON: Touch on just a few highlights of it, Carlos.

MR. LOPEZ: Yes, Mike is exactly right: safety is inherent in every project that we do. But we also have the ability to let projects that target specific high accident locations and the things that we do can fix those accidents from happening. And Mike is right, we have a program in place that you all know very well, the HES Program that uses a sort of cost-benefit type of formula that looks at the kind of accidents that occur, the cost of the improvement, and what the reduction in those accidents might be, and we basically rank them and draw a line when the money runs out in any given year, but it truly is a cost-benefit formula and we try to get the highest accident locations done first.

MR. WILLIAMSON: No matter what part of the state it occurs in?

MR. LOPEZ: No matter what part of the state. In fact, in the HES Program, many rural parts of the state have benefitted greatly, so it's not just an urban type of issue.

MR. WILLIAMSON: Can you give me one example of a construction project that would follow from a decision that this is an unsafe situation?

MR. LOPEZ: For example, let's say we had an interstate highway in a rural area; it wasn't scheduled any time soon to expand to a six-lane facility. We can do what Richard Skolpik has done in the Waco District is put a concrete traffic barrier up against the inside left shoulder, if that stretch of highway happened to have a high incidence of head-on collisions and by doing that one improvement, we will have eliminated a head-on problem.

MR. WILLIAMSON: As you're aware, we get an awful lot of requests for those dividers.

MR. LOPEZ: That's exactly right.

MR. WILLIAMSON: And that does fall into this category.

MR. LOPEZ: Perfect for that.

MR. WILLIAMSON: So we'll have "Ogden Bonds" and "Ogden Barriers."

(General laughter.)

MR. LOPEZ: And "Ogden Safety Projects."

MR. WILLIAMSON: And "Ogden Safety Projects."

MR. LOPEZ: That's right.

MR. JOHNSON: Carlos, that dialogue triggered one thing in my mind. Besides the question, for an example of a hazard elimination situation that would qualify -- I assume all of them would fall under the "Ogden Bonds" -- but these barrier separated medians, in the Dallas District we have installed where it is not a concrete barrier but instead a wire-type retaining device that seems to have worked in other areas. Are we continuing to look for areas where that particular methodology of preventing head-ons will work and install those as opposed to the concrete barriers?

MR. LOPEZ: Yes. In fact, recently Amadeo asked us to go to the districts and try to locate highways that may have incidents of head-on crashes. We do have a list that we can work down from, and then each individual project we'll engineer separately and see if the wire rope answer is the best answer there, or if a CBP might be the best answer, but we do have those options available to us.

MR. JOHNSON: And then what's an example of an HES project that would be high priority in terms of the "Ogden Bonds"?

MR. LOPEZ: Probably the CBP projects, concrete barrier projects would be a high priority, grade separation projects. We do get some of those in the HES that unfortunately we're not able to fund many of those because they're high dollar and the program is not super large, but those grade out very well, especially if they've had high accident locations.

MR. JOHNSON: Thank you. Any other 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. LOPEZ: Thank you, commissioners.

MR. JOHNSON: Thanks, Carlos.

MR. BEHRENS: Agenda item 4(a)(3) which are proposed rules for right of way concerning utility adjustments and their relocation or removal. John.

MR. CAMPBELL: Good morning. For the record, my name is John Campbell, director of the Right of Way Division.

I'd like to present for your consideration this minute order, item 4(a)(3) which proposes adoption of new Section 21.22 of Chapter 43 of the Texas Administrative Code concerning agreements for utility adjustment, relocation or removal. This new section is necessary to comply with Senate Bill 487 from the 78th Legislature Regular Session which added new Transportation Code Section 203.0935 requiring utility companies which own a facility that is in conflict with proposed improvements to the state highway system to execute an agreement to relocate that facility in a timely manner. If the utility does not sign the agreement, TxDOT may then relocate the facility at the utility's expense.

New Section 21.22 is proposed to implement the provisions of Section 203.0935 and to enumerate the documents to be exchanged between the utility and the Texas Department of Transportation in order to provide both parties with sufficient information to enter into an agreement. Staff recommends your approval.

MR. JOHNSON: Questions?

MR. NICHOLS: I didn't really -- I had a comment, probably a question too, and I had sent that by e-mail. In the exceptions -- in other words, if they don't move it or form a written agreement within a certain period of time, then we trigger this other thing with certain exceptions, and one of those exceptions being unless they are negotiating in good faith?

MR. CAMPBELL: Yes.

MR. NICHOLS: And my question -- and I think it was a legal question -- is that actual wording in the statute?

MR. CAMPBELL: Yes, I believe it is.

MR. NICHOLS: That answers that. I think it will remain to be seen who gets to decide what negotiating in good faith is.

MR. CAMPBELL: Yes.

MR. NICHOLS: That's the way lawsuits come up, and I was hoping we would be able to avoid that, and I think most reasonable people would know what that is. I just had cause for concern, but if it's in the statute, that's it.

MR. WILLIAMSON: I'm going to have a question not specific to this, so I'm standing by.

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. WILLIAMSON: John, what progress are we making on developing ideas to implement the advance purchasing of right of way?

MR. CAMPBELL: We're making quite a bit of headway. In fact, we've put together some informal guidelines in order to give ourselves direction on how we would utilize options to purchase, and we're right now in discussions with a couple of districts on appropriate opportunities to pilot these procedures.

MR. WILLIAMSON: I know all of us have ten times more work than we can get to, and I understand that, but the legislature and the governor gave us unbelievable responsibility this last year, and they gave us that responsibility -- I like to characterize it this way: they decided to take a chance -- and the payoff is that projects move faster, they become more locally controlled, and they become more visionary about where the state's problems are going to be ten years from now and not today, and the option of the advance purchase of right of way is one of those tools.

And I just want to encourage you, and encourage you, Mr. Behrens, for us to develop those rules as quickly as possible. Right of way is never as cheap as it was five minutes ago, and it's going to be more expensive six minutes from now, and to the extent that it's more expensive, it's less asphalt, less concrete and less buses we can put on the ground to move people around.

MR. CAMPBELL: Yes, sir, we totally agree and we're very enthusiastic about the new opportunities we've been given, and are moving quite aggressively forward to try some of those out.

MR. WILLIAMSON: Thank you. Thank you, Mr. Chairman.

MR. JOHNSON: John, are you mad at the commission?

MR. CAMPBELL: No, sir.

MR. JOHNSON: Is it my imagination, but it's been a while since we visited with you.

MR. CAMPBELL: Yes, it has. We have such a good set of rules in place, we haven't had the occasion.

(General laughter.)

MR. CAMPBELL: Incidentally, for your information, the Senate Bill 487 which you just passed action on, was sponsored by Senator Ogden, so we also have "Ogden Utility Agreements" now.

MR. WILLIAMSON: That Ogden boy and that Krusee boy, they did a lot, didn't they.

MR. CAMPBELL: Yes, they did.

MR. WILLIAMSON: We've got to figure out something to call Krusee. Oh, I know, it's the "Krusee Toll Bond."

(General laughter.)

MR. JOHNSON: Thank you, John.

MR. CAMPBELL: Thank you.

MR. WILLIAMSON: I'll get a phone call about that.

MR. BEHRENS: Item 4(a)(4), this is concerning Toll Projects and discussing interoperability involved with the toll projects.

MR. RUSSELL: Thanks, Mike. Good morning.

This minute order proposes adoption of amendments to Section 27.51, Section 27.53 and Section 27.54 concerning financial assistance to toll facilities. Certain governmental entities in the State of Texas that operate toll facilities, including NTTA and the Harris County Toll Authority, have electronic toll collection systems. The department, as you know, is also in the process of implementing such a system on the turnpike projects in Central Texas.

With the impetus of the department financing and development tools provided in House Bill 3588, the department and regional mobility authorities will contribute to the expansion of the network of toll facilities in the state. The anticipated expansion of toll facilities in the state will increase the need for user interoperability between the electronic toll collection systems of the various governmental entities. Interoperability will provide a seamless access across the state network of toll facilities regardless of the facility owner, adding value and convenience to the toll road patrons.

The commission previously has provided guidance that the department's transponder technology should provide interoperability, and as well as for the other entities that they operate their toll roads in the same manner. The proposed amendments are intended to facilitate interoperability and to clarify the intent of these rules.

The amendments to Section 27.51 add definitions for interoperability and transponders; amendments to Section 27.53 require requests for financial assistance to include a description of the extent to which the requester's toll collection system or their plan for their system will provide interoperability; amendments to Section 27.54 provide that prior to granting preliminary approval of an eligible project and a request for financial assistance for that project, the commission will consider the extent to which the requester's toll collection system provides interoperability.

The amendments also clarify that the social, economic and environmental impact studies for the project and the related public involvement activities must be completed in the manner prescribed by the department's environmental rules. This minute proposes these rules for adoption and authorizes their publication in the Register for the purposes of receiving public comments.

I'll be happy to answer any general questions you have. I also have David Powell from my section that is the electronic toll collection guru.

MR. JOHNSON: We have someone who has requested to speak on this agenda item, and we'll do that first and then we'll address questions to you or to David.

Rick Owens from Cedar Creek, Texas, has asked to speak on this.

MR. OWENS: Section 5(a) actually.

MR. JOHNSON: All right. Thank you, Mr. Owens.

MR. WILLIAMSON: Do you want to comment on 4(a)?

MR. OWENS: No.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: You came all the way here from Cedar Creek, you ought to take a shot when you can.

(General laughter.)

MR. NICHOLS: I've got a question or comment. My comment is with regards to what I am anticipating will come -- this is a proposed rule -- from some of the existing toll authorities, and that has to do with we're saying we're not going to lend financial assistance unless these toll authorities are interoperable with our system, and at the same time, we haven't built our system so it's not up and running so there's no way for them to know if it's truly interoperable with ours which would put them in kind of a great difficulty making comments.

The only point I wanted to make sure is on the record is that the criteria that we have relates to those two systems, both Harris County and the North Texas Turnpike Authority. As we understand it, those systems have been interoperable, those two, as of October and that one of the criteria of ours is to be interoperable with those. So even though it may not be up and running, so they won't know, we're not going to pay for it until it does. That's it.

MR. JOHNSON: Ric?

MR. WILLIAMSON: Phil, a couple of questions and perhaps comments laced in between the questions. I guess the first question is our two magnificent partners in Dallas and Houston are now interoperable.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: What physically has to take place in my car in order for me to enjoy the benefits of interoperability between Dallas and Houston, North Texas and Harris County?

MR. RUSSELL: I think the easy answer is probably nothing else. I would anticipate --

MR. WILLIAMSON: So I just drive through and they automatically know my car and they send me a toll?

MR. RUSSELL: You need to make sure you're in the right lane.

MR. JOHNSON: I think you need a toll tag.

MR. WILLIAMSON: So I do need a toll tag.

MR. RUSSELL: I'm sorry. I thought you had a toll tag. Maybe you shouldn't just drive through.

MR. JOHNSON: Ric will just say, Hi, I'm Ric, and just go right on through.

MR. RUSSELL: That would probably work in some areas, perhaps not on the other toll road there.

MR. WILLIAMSON: So how do you get a toll tag?

MR. RUSSELL: If you don't have a toll tag yet, then the first thing you need to do -- and I'm assuming you would approach Dallas since that's closer proximity; they have a website, they have toll tag stores, they have a number of possibilities -- you would enter into an agreement with those folks, put a deposit -- I don't know if Jerry Hebert is here but I believe it's about a $40 deposit -- and they'd give you a toll tag.

MR. WILLIAMSON: What does a toll tag look like? We're going to use the Socratic method this morning. What does a toll tag look like?

MR. RUSSELL: I like that. The toll tag -- and I don't have one with me, David Powell might.

MR. WILLIAMSON: We're going to do that because we have people in the audience that have suddenly decided toll roads might be a good thing and we want to be sure they understand how toll roads in the 21st century operate.

MR. RUSSELL: The toll tag that's currently being utilized in Dallas and Houston, slightly different mechanism, but essentially it's a tag of about 3 by 4 inches wide, a quarter inch thick; you would put it on the windshield of your vehicle.

MR. WILLIAMSON: On the inside of your vehicle?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Does it stick like the inspection tag?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: It doesn't hang on the mirror like the pussycat, it sticks under the mirror on the window. Right?

MR. RUSSELL: I think that's right, yes, sir, it sticks on the windshield. An important point, Commissioner Williamson, obviously, might hear different discussions in the masses on the radio about my experience in Illinois or my experience here or there is these huge backups at barrier toll plazas. Dallas and Houston, I think, are really doing an outstanding job that if you have that toll tag --

MR. WILLIAMSON: And they have those backups because they're running toll systems developed in the 19th century as opposed to the 21st century which is what we're focused on.

MR. RUSSELL: Exactly. In Dallas and Houston --

MR. WILLIAMSON: Is there anything electronic inside these tags right now, or does it just respond to the transponder?

MR. RUSSELL: Dallas -- and again, I'm probably embarrassing David Powell for my rudimentary discussion, but Dallas has a passive tag which it responds essentially to a signal from the overhead gantry. Houston's tag is active, it's battery-operated where it projects a signal and gets a response. So slightly different technologies, but again, they've been able to work out interoperability.

MR. WILLIAMSON: And they've been able to work it out so that poor little me, living in Weatherford, if I want an interoperable toll tag, I don't have to get a box and set it on the dash of my car to go through Harris County Toll Authority. Is that correct?

MR. RUSSELL: Just a toll tag is all you would need.

MR. WILLIAMSON: Now let me ask you something, Phil. Is it possible under our rules for us to suggest to North Texas and Harris County that we want a toll system that would allow, for example -- I'm not suggesting this, I'm just saying for example -- we would allow Bexar County to distribute toll tags once a year to its citizens and give them a certain amount of toll charge automatically as opposed to them having to pay their deposit? Is that possible?

MR. RUSSELL: I think it's possible. It will be in that discussion of those business rules that we’ll be sitting down with Harris County and Dallas and Bexar County will as well, but it is possible.

MR. WILLIAMSON: So it would be possible for Bexar County -- which apparently there are some people in Bexar County that are uncomfortable about tolls, unlike those of us in North Texas who have lived with them forever, and Harris County -- it would be possible to help people of low income with their tolls if they choose the toll road as opposed to the tax road, not the freeway because there isn't anything free, is there, Phil?

MR. RUSSELL: No, sir, there isn't.

MR. WILLIAMSON: Everything costs money; it's either general taxes or it's toll taxes.

MR. RUSSELL: That is correct.

MR. WILLIAMSON: So we can suggest to Dallas and Houston that we might want a system that allows us a lot more flexibility than the toll roads of the 20th century or the toll booths of the 20th century would allow.

MR. RUSSELL: That is correct.

MR. WILLIAMSON: So it's almost like you never knew the toll booth was there.

MR. RUSSELL: You're exactly right; unimpeded flow.

MR. WILLIAMSON: Other than that you have the choice as a consumer to pay more to take a different route or to continue to pay your general taxes and take the tax route.

MR. RUSSELL: You will always have that option.

MR. WILLIAMSON: There's really two options, isn't it, Phillip?

MR. RUSSELL: Exactly.

MR. WILLIAMSON: You can pay general taxes and build highways or you pay user fees and build highways, but one or the other, somebody has got to pay for the highway because as we all know, Phil, there is no?

MR. RUSSELL: Free roads.

MR. WILLIAMSON: Road fairy, right; no free roads. Thank you, Phillip.

MR. RUSSELL: Thank you, Commissioner.

MR. JOHNSON: Phillip you might take the illustration that you've given one step farther and briefly talk about what the Texas Turnpike Authority is doing in terms of the technology and the interoperability between the two systems that are up and running now. And then you might suggest to Ric that he could chum up to Robert Nichols who has one of the first two small transponders, I believe, that will be operable on the Texas Turnpike Authority.

MR. WILLIAMSON: But I can't do that until we swear in Ms. Andrade.

MR. JOHNSON: That's correct.

MR. WILLIAMSON: Or the Austin American Statesman will write an article about us not doing things right.

MR. JOHNSON: You might just talk in general terms on what path we're going down with TTA in this regard.

MR. RUSSELL: We are having, Chairman Johnson, some outstanding discussions between Dallas, Houston and the department. You are correct, Dallas and Houston have really done a great job of working out some of those business rules about how we read other people's toll tags, how we exchange information and that sort of thing. We've been involved very closely in those discussions.

We are putting together an interoperability plan -- we anticipate it will be ready the first part of the spring -- which will be kind of a 30,000-foot view of how we anticipate interoperability to be functioning on the Central Texas project and as how we relate to Houston and Dallas. By the summer we'll get into some of the specifications as far as the electronics and the signals and that sort of thing.

So we've had some great discussions, we're essentially on the same wavelength as the Dallas and Houston technology. We think that's probably the best technology that is functioning right now, so we'll be in good shape. We've had some great discussions with the CTRMA, we've had some preliminary discussions with Bexar County, so all of those are on our first phase of discussions.

The second stage we'll be visiting with some of the international bridges. That will be a little bit more of a challenge; there's a little more of a scatter shot, I believe, of technology, and once we take care of the first phase, the Dallas, Houston, CTRMA and Bexar County RMA, then we'll delve into some of the international bridge crossings and try to get a handle on their technology and see what interoperability opportunities we have there. That obviously will be a critical component on the Trans-Texas Corridor to ensure that seamless transaction.

MR. JOHNSON: Thank you.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Phillip, thank you very much.

MR. BEHRENS: Moving on to item 4(b), we have our rules for final adoption. 4(b)(1) will be the final adoption of a rule on Management. Richard.

MR. MONROE: Again for the record, my name is Richard Monroe, general counsel for the department.

These rules are before you now for final adoption. If you approve the minute order, these rules will be published as final rules of the department in the Texas Register. They had previously been published in the Register for public comment, no public comment was received.

The reason for these changes, as explained at an earlier commission meeting, is certain statutes changed, adding to the powers of the chair of the commission -- of course, this is in connection with expanding the commission to five members -- and to make explicit what in some cases might have been an implied power of the chair. I would recommend approval of the minute order.

MR. JOHNSON: Any questions, 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. MONROE: Thank you.

MR. JOHNSON: Thanks, Richard.

MR. BEHRENS: Agenda item 4(b)(2) is the final adoption of Finance rules concerning financial advisors and service providers. James.

MR. BASS: Good morning. For the record, I'm James Bass, director of the Finance Division.

Item 4(b)(2) adopts new sections of Title 43 of the Texas Administrative Code relating to ethics requirements for financial advisors and service providers doing business with the commission and/or the department. These rules comply with Senate Bill 1059 from the 78th Regular Legislative Session.

In September you approved draft rules for publication in the Texas Register and one comment was received. That one comment dealt with the requirement of the executive director to sign a waiver to allow the department to invest funds in an investment product offered by the financial advisor doing business with the department, and the suggestion was that rather than the executive director signing a waiver, perhaps something easier to manage would simply be to have the financial advisors disclose to the department that they offer these services if they were selected.

We considered that suggestion but we feel that the originally proposed language better serves the department and the public, and the language before you remains unchanged from that which was published in the Texas Register, and staff would recommend these rules for final adoption.

MR. JOHNSON: Questions or comments?

MR. WILLIAMSON: I have a question.

MR. JOHNSON: Ric.

MR. WILLIAMSON: Do we have financial advisors now, Fast Jimmy Bass?

MR. BASS: We currently have a financial advisor which deals only with the bond issuance of toll road bonds. I believe those are "Krusee Toll Road Bonds."

MR. WILLIAMSON: Absolutely, "Krusee Bonds" and "Ogden Bonds." And is that financial advisor an individual or a company?

MR. BASS: It is a company.

MR. WILLIAMSON: What's the name of that company?

MR. BASS: RBC Dain Rauscher.

MR. WILLIAMSON: And so they give us advice on toll deals.

MR. BASS: And in addition to that, they give us advice on how to invest the bond proceeds. As you're aware, when we receive the bond proceeds, those are spent over time, so in the interim we invest those bond proceeds. The financial advisor offers advice on what they think would be appropriate securities or investment products for the department to put those into.

MR. WILLIAMSON: And do we currently have service providers who provide financial services? This is for financial advisors or service providers who provide financial services.

MR. BASS: I do not believe so. The closest thing might be the trustee bank, Bank One, under the indenture associated with the Central Texas Turnpike Project.

MR. WILLIAMSON: And other than RBC, whoever those people are, we don't have any other financial advisors?

MR. BASS: No, but in the near future we will be going out with a request for proposal, I believe, rather than a request for qualification, looking for a financial advisor to deal not only with project revenue bonds, toll roads, but to also look at "Ogden Bonds," Texas mobility bonds, pass-through tolls, short-term borrowing, many of the new authorities that we received.

MR. WILLIAMSON: And so these rules would apply to anyone we hire that falls into the categories you just outlined?

MR. BASS: Correct.

MR. WILLIAMSON: I mean, this is real important.

MR. BASS: Correct.

MR. WILLIAMSON: Mr. Johnson runs a bank and I think Mr. Nichols owns ten, so I'm not telling them anything they don't know, but it's real important for the public to know drop-dead certain that the relationships between our financial advisors and our decisions on when to incur debt and how, everything is clean and straight ahead. We don't want there to be any doubt about that at all.

MR. BASS: That's one of the reasons why, in reviewing the comment, we felt like it was safer and in better interest of the department and the public to keep that waiver in place simply because there are so many investment products out there, the possibility that a single investment product offered only by our financial advisor that it is going to be so much better than anything else out there that we could get, I think is highly unlikely.

MR. WILLIAMSON: Mr. Behrens, you're going to hear this a lot over the next few months. The legislature and the governor decided to take a chance because our transportation needs are so immense, and we just can't blow it even once. We've got to be aggressive with the use of these tools, but we've got to be so clean and straight ahead that there's no hint that we're doing anything improper or even dumb. Know what I'm saying? So let's be wise in who we pick and what kind of barriers we keep between those people and the investment decisions. Thank you, Mr. Chairman.

MR. JOHNSON: James, a question. You brought up the idea that we are in the process of going out for an RFP for a financial advisor. Do you envision that we will have one financial advisor to cover the waterfront, if you will, these many varied products and tools that we have, or that we would have a financial advisor for each category or maybe a couple of categories?

MR. BASS: Right now what we envision is having a single provider so the left hand will always know what the right hand is doing, so to speak. Our programs are so broad and complex, rather than segregating those, we felt the best approach was to have one who would be able to comment on what impact one program might have to another and help us develop all of those programs in the most efficient manner.

MR. JOHNSON: Do you see an instance where a financial advisor and a service provider on one or more of these methods might be one and the same?

MR. BASS: I would doubt that.

MR. WILLIAMSON: You kind of struck to what I'm concerned about.

MR. JOHNSON: Absolutely.

MR. WILLIAMSON: It's real important. We don't ever want for anyone in the business to think or for the newspapers to write a story on we're borrowing money and the same guy that helped us borrow the money is also investing the money.

MR. BASS: And it hasn't been published yet, but I can tell you in the draft RFP for the financial advisor firm it puts them on notice that they would not -- there are some firms who provide financial advisory services and also serve as an investment banker or underwriter, as you're aware.

MR. JOHNSON: Represent the underwriting group.

MR. BASS: In our RFP for financial advisor services, we put them on notice that if you are a financial advisor, you will not be able to be involved in the selling of our debt to the market because that could, obviously, be a conflict of interest and we want our financial advisor looking out only for the best interests of the department.

MR. JOHNSON: Good. Thank you. Is there a motion?

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, James.

MR. BEHRENS: We have agenda item 4(b)(3) which is Contract Management and this deals with awarding highway improvement projects and purchase of services. Joe.

MR. WILLIAMSON: A new target.

MR. GRAFF: Good morning, commissioners. I'm Joe Graff, the deputy director of the Maintenance Division.

The minute order before you concerns final adoption of rules for two statutes that were passed in the last legislative session. Amendments to Section 9.18 revises the performance bonding requirements on certain asset management-type contracts to an annual two-year bond instead of bonding the total amount of the contract. New Section 9.21 allows the department to use the purchase of service process for activities on the right of way up to $15,000.

The proposed rules were approved by the commission on September 25 of this year, no comments have been received, and the Maintenance Division recommends approval.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Oh, yes.

MR. JOHNSON: I figured you might have something for Joe.

MR. WILLIAMSON: New face, we've got to ask him something. I'm just trying to figure out what the question is.

(General laughter.)

MR. WILLIAMSON: Well, tell me, are we going to save money under this deal?

MR. GRAFF: Absolutely.

MR. WILLIAMSON: Are we going to be able to do things faster and cheaper?

MR. GRAFF: Absolutely. Especially the purchase of service process will allow us to very quickly acquire the services of a provider to perform a small contract on a right of way where now we have the use the highway improvement statutes, go through the advertising requirements, quite frequently about a three-month process. With the purchase of service process, we'll be able to call a provider to get out there to do a $2,000 job or something like that, where it might have taken $2,000 worth of work to prepare the proposal to let the $2,000 contract.

MR. WILLIAMSON: To your knowledge, is this much different from the authority the legislature gives cities and counties?

MR. GRAFF: No. It should be about the same.

MR. JOHNSON: Joe, do we do more contracts less than $15,000 or do we do more contracts that are greater than $15,000?

MR. GRAFF: Most of our contracts now, routine maintenance contracts probably average around $100,000. And this would really provide an opportunity for small businesses and probably save us a lot of money in the long run.

MR. NICHOLS: That's pretty close to the comment I was going to make in that what this really does is before, because the process was more burdensome, we almost had to lump these things into much larger contracts for efficiency purposes which kept a lot of small contractors out of the loop. Big contractors begin as small contractors, and to help the industry, this gives small businesses an opportunity to get a start, get going. Is that correct?

MR. GRAFF: Absolutely.

MR. WILLIAMSON: So not only will it benefit small businesses generically, but in specific this could be a major step for benefitting minority-owned businesses.

MR. GRAFF: Minority-owned businesses, any of the small businesses it will certainly help develop that industry and help them evolve into larger contractors.

MR. WILLIAMSON: That's wonderful.

MR. NICHOLS: Since you brought up small contractors and minority businesses, Mike, our executive director, I think you were showing me some percentages. Do you want to share with the group some of our most recent percentages?

MR. BEHRENS: When we look at our DBE performance for Fiscal Year 2003, our goal was about 11 percent; we awarded 15.4 percent to DBEs in '03, the largest ever for the department.

MR. JOHNSON: Is that dollar volume?

MR. BEHRENS: Yes.

MR. JOHNSON: Excellent.

MR. WILLIAMSON: That's wonderful.

MR. BEHRENS: We now have I think it's about -- I'm trying to remember the number -- we have a large amount of DBE prime contracts, in other words, where they were the prime bidder, the general contractor and not being subs, so we're moving in the right direction. The last quarter of '03 we had 17 percent of our contract went to DBE work.

MR. NICHOLS: And this is a step that not only encourages and helps that, but it does it more efficiently for the department and the state.

Are you ready for a motion?

MR. JOHNSON: Yes, sir.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Joe, thank you.

MR. GRAFF: Thank you.

MR. BEHRENS: Agenda item 4(b)(4), we have two rules under Traffic Operations for final adoption: one concerning the Logo Sign Program, and the other one the restrictions on use of highway lanes.

MR. LOPEZ: Good morning, again, commissioners. For the record, my name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you proposes final adoption of revisions to Section 25.406 concerning the Logo Sign Program. This change modifies the criteria for restaurants to participate in the program as laid out in House Bill 1831. A restaurant would now only have to be open ten hours a day, six days a week, and serve two meals a day in order to participate in the program. A restaurant would no longer need to seek a variance to operate for this number of hours. We believe this should streamline the application process for program participants and decrease the number of variances the department has to process.

This revision was published in the October 10 edition of the Texas Register and no comments were received. We recommend approval of the minute order.

MR. JOHNSON: Any questions, comments?

MR. NICHOLS: So moved. Oh, did he have a question?

MR. BEHRENS: Just let it lay.

MR. WILLIAMSON: No. I'm following Mr. Behrens' advice, I'm letting it lay.

(General laughter.)

MR. JOHNSON: Talking about radio stations? I'll second the motion.

MR. WILLIAMSON: Did he move?

MR. JOHNSON: Yes, he did.

MR. WILLIAMSON: I'll second.

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

(A chorus of ayes.)

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

MR. LOPEZ: The next minute order proposes final adoption to revisions of Section 25.601 through 25.603 and new Section 25.604 concerning lane restrictions on the state highway system. These sections implement House Bill 1208 and Senate Bill 514 of the last session.

The revisions to the existing sections allow counties to propose lane restrictions by class of vehicle on the state system as authorized under Senate Bill 514. Municipalities have had this authority since 1997; TxDOT must approve these types of restrictions before they become effective.

New Section 25.604 allows TxDOT to initiate a lane restriction as allowed under House Bill 1208. The new section establishes the criteria the department will follow when creating a new restriction and the coordination that will occur with local governments.

The department conducted a public hearing on these rules on October 21. We didn't get any comments at the hearing but we did get two written comments, one supporting the rules and one opposed to the rules. We provided a response to these comments in the adoption preamble. We recommend approval of the minute order.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Who opposed?

MR. LOPEZ: We had one independent trucker write in a letter saying that he thought that keeping trucks to only one lane would be bad for business. Well, he misunderstood and what we're saying is they typically will not be able to use only one lane of a freeway and can use the rest of them. So he thought trucks were going to be single file in one lane on any given freeway, so it was kind of a misunderstanding on his part.

MR. WILLIAMSON: And who was the one party that wrote in support of it?

MR. LOPEZ: Actually we had a letter signed by six different individuals from the Metroplex area saying this is a neat thing to do.

MR. WILLIAMSON: So generally speaking, urban leadership appears to support this?

MR. LOPEZ: We're having a great response on this on lane restrictions. We've done it in Houston, San Antonio is looking at it, Austin is looking at it from Georgetown to Buda. With the accident reductions we saw in Houston, we think this could improve safety and mobility at the same time.

MR. WILLIAMSON: Would capital expense to implement some of this stuff fall under the "Ogden Bond" category?

MR. LOPEZ: No. This is typically something we would do within our regular funding.

MR. WILLIAMSON: Thank you, Chairman.

MR. JOHNSON: Is there a motion?

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. LOPEZ: Thank you, commissioners.

MR. JOHNSON: Thanks, Carlos.

MR. BEHRENS: We'll go on to agenda item 5(a) where we're looking at establishing guidelines for evaluating mobility projects on our state system for development to turnpike projects. Amadeo.

MR. SAENZ: Thank you, Mr. Behrens. Good morning, commissioners. For the record, I'm Amadeo Saenz, assistant executive director for Engineering Operations.

Item 5(a), commissioners, before you is a minute order that describes the necessity for toll roads and the implementation as part of the state highway system. Transportation is essential to the state's economy, it is what keeps Texans moving, but right now a serious transportation threat that is facing many parts of the state is the continuing travel delay due to congested highways.

From 1990 to 2000, traffic congestion has cost Texans $45.6 billion in terms of wasted time and fuel. In the same decade, the number of registered vehicles increased by 23 percent and the vehicle miles traveled increased by 41 percent, while only 3 percent more lane miles were added to the state highway system. The increased traffic demand requires TxDOT to spend approximately half of its total budget on preserving the existing highway system, leaving less for the needed expansion projects.

Texas is the second most populous state in the nation and the population projections indicate a continuing increase. In 2000 the state's population was 20.9 million and it is projected to be 29.6 million in 2025. What this proves is that the transportation system is under strain. The State of Texas is nearing a crisis because we can no longer keep pace with the demand. Instead of doing business in the same old way, relying on the pay-as-you-go basis, we recommend implementing new financial options approved by the legislature.

Tolling can help us turn the corner on congestion by delivering much needed highway improvement projects sooner and stretching limited state highway dollars further so that transportation needs can be met. Tolls can help bridge the gap between transportation needs and resources. In exchange for the cost, toll roads offer motorists a time savings, predictable arrival time, and an alternative to sitting idle in traffic-clogged highways.

Tolling is not for every road. However, projects that expand the system should be thoroughly evaluated as toll projects. In other words, all controlled access mobility projects should be considered as potential toll projects that will undergo a toll feasibility study and public input before the decisions are made.

The minute order before you directs the department to establish and implement guidelines for evaluating mobility projects on the state highway system for development as toll roads. These guidelines are as follows:

One, controlled access mobility projects in any phase of development or construction must be evaluated for tolling; this includes new location facilities and increased capacity projects such as adding additional lanes or constructing new main lanes on existing facilities.

The review and evaluation of projects for tolling shall be performed in accordance with the applicable statutes and rules, including evaluating the conversion of a non-tolled highway in accordance to the toll conversion rules.

Three, the revenue generated by toll projects that is not needed for debt service, operation or maintenance of the toll road should remain in the local area in which the project is located so that other transportation facilities may be constructed.

Staff recommends approval of this minute order.

MR. JOHNSON: Rick Owens of Cedar Creek has asked to speak on this item. Mr. Owens, welcome.

MR. OWENS: Glad to be here. Thanks for the opportunity to address this issue.

My interest is speaking out in favor of funding our roads with increasing the gas tax as opposed to converting additional tax-built roads to toll roads. The toll road conversion would amount to double taxation and could lead to additional expenses for having to establish toll booths and slow down traffic to stop and pay tolls -- though the automated system would take care of that. But the overhead of collecting tolls as opposed to using the existing system, I would just speak in favor of increasing gasoline taxes as opposed to converting existing roads to toll roads.

MR. JOHNSON: Thank you. One thing that I hope you're alert to is that the gasoline tax is a pretty inefficient way of funding our roads, and the reason is for every dollar that we collect, about 60 cents gets back into transportation, both at the federal level and also at the state level. By Constitution, 25 percent goes to education -- which is a wonderful way to support education -- but there are other diversions after the gasoline tax is collected, and at the federal level we lose a portion, 20 percent to transit projects, and then we in Texas are a donor state and we send a dollar to Washington and we get somewhere between 86 and 88 cents back. So if you go through the mathematics of that, it becomes a pretty inefficient way of generating the money that we need.

Tolling, on the other hand, if you take out administration and collection fees -- and one of the parts of our preamble here is that the money that is positively cash-flowed after debt service and maintenance stays in the area -- it means about 98 percent of the money gets back into the system. So just from a pure efficiency standpoint, that's one of the reasons that we are headed down the path. The other one, I believe, is that to do projects more quickly -- and oftentimes it will be the difference of a decade -- by going the leverage way through bonding.

And then I'll also throw this open to Robert or Ric if they have any observations on your comments. But I just wanted you to be aware that there are a lot of moving parts, if you will, to this equation and we're trying to consider them all.

MR. OWENS: I had one other question. If a tax-built road was converted to a tollway, would there be at some point in the future, or in the case of any new road built as a toll road, is there some point in the future when that toll road will have funded its construction and then be converted to a non-toll road, or is this a perpetual tax authority as we've seen in the East Coast where they may have a bridge or a turnpike and so on that's been built with tolls but they've long since paid off that road and I believe in many instances exceed the maintenance expenses and use that just as a continuing source of revenue? So they're charging the users of that facility in excess of the cost of building and maintaining that facility.

MR. JOHNSON: That's an excellent question. I think as Amadeo Saenz pointed out in his presentation, there's considerable strain, financially, on our system. We're spending more than half of our budget just trying to keep our system up to date and maintained in the condition that the users of the system want a smooth ride, so our maintenance costs, as a percentage of our total budget, continue to rise. And for that reason, this is one person and I don't speak on behalf of all the commission -- I think that you will see that we will continue to operate these as toll facilities, and please be reminded that we view these as an investment of an area of the state, and by the guidelines we're obligated to keep the positive money that's generated, even after the bonds might mature and be completely paid off, that they will be reinvested in that area. So there is a return to those users that have paid the toll in that there will be other mobility projects in their area which should facilitate their travel and aid in commerce.

And I've done all the talking here so I would throw it open to Robert and Ric. Ric, I know you have something.

MR. WILLIAMSON: I'll yield to Robert.

MR. NICHOLS: Let me just address that specific question, the question of when the bond is paid off, do the toll booths come down. I remember during the legislative session where this entire issue was debated quite extensively by the committees both in the House and in the Senate. Many of them asked me the very same question, so it's on record, my response, and my response was that regardless of whatever decision we make -- I mean, half the committee may say I think when the bond is paid off, it ought to come down, and the other half of the committee might say -- we're talking about elected officials -- I think we need the option of keeping them open, and my response was that regardless of what decision this commission might make or the legislature across the street might make this year or next year, 30 or 40 years from now when those bonds are paid off, it will be a totally different elected body and appointed body, it may even be different agencies, that whatever decision they make will be the final decision, it won't be up to us.

Our responsibility at this point in time is to take what is greatly and desperately needed, building this system the best way we can to provide economic opportunity, safety for the public and get these people home, get them to work, get them to school, with the only resources that we have available to us. That's our responsibility, and then the elected officials will make that decision at some point.

The nice thing about establishing regional mobility authorities -- which you have in this area -- is that the projects that they develop inside their regional mobility authority will be decisions that are made locally. If it is a toll project by the regional mobility authority, then it will be their decision; it won't be ours, it will be theirs. If it is a state project like 130, then it will be whoever is sitting here or whatever the elected body across the street says. But without that tool, I do know that these projects could not be built, many of these projects.

And I drove out that way last night and took off on 35 at five o'clock just to go out 183 where the new construction was and then out on 620, and I will tell you it took me one hour. It's not just 183, all those roads are plugged up. We have got to do something. And what has occurred in the past is that the general public does not support general tax increases, neither does the governor nor the legislature, but at the same time the need is so great that something has to be done, and the most reasonable thing is a user fee on new capacity if we can build them quicker. The existing roads that are out there that people are driving on, the action that we're talking about today will affect new capacity, new locations primarily.

MR. OWENS: I had one additional concern. When considering what existing roads to convert to toll roads, that the commission consider whether there are in place alternatives or whether you'd be holding a gun to people's heads saying if you want to get from Point A to Point B, you have to use the toll road. So consider that, please, when you make rules establishing what roads could be converted into toll roads.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: Yes. First of all, I want to thank you. Your testimony, the words you used -- words mean something, and the words you used are accurate and rational. You never said freeway because there are no free roads; there are either tax roads or toll roads, there are no free roads. There weren't any free roads 50 years ago, there won't be any 50 years from now.

I hope you'll stay through the balance of the commission's questioning of its own staff because you're going to hear some information that I think is important to helping you and the other citizens of the state make a decision about the wisdom of this approach, but let me just leave you with a couple of comments. We don't disagree with you about forcing you to pay a toll. Nothing in our rules suggest, no one in the legislature has suggested, and I can assure you Governor Perry has not suggested that we make people use toll roads. The governor's specific instruction in the statute and to the commission is where tax road or open road alternatives exist, we will not force anyone to use a toll road as their only means of moving from Point A to Point B. That's the first point I want to make.

The second point I want to leave you with is we are all creatures of the political process. We're appointed by a governor elected by the people, and a Senate confirms us, also elected by the people. We are always going to be responsive to the political process. If enough mayors and county judges, large enough number of mayors and county judges, if a large enough number of senators and House members, and an activist governor -- as Governor Perry is -- feel we're going in the wrong direction, they're going to tell us that and we're going to respond. We do not take lightly comments from Senator Barrientos, from Senator Ogden, from Mr. Krusee, and certainly from Mr. Perry. We are creatures of the political process

So I don't want you to leave this room thinking that what you had to say didn't matter and that we don't listen to those folks, because we do. But you're going to hear some pretty interesting information in the next few minutes that might, might give you an opportunity to rethink your position.

MR. OWENS: I am in favor of accelerated development of the needed road structures to improve our infrastructure and economy, so whatever is the most efficient way to do that would be acceptable, would be good. Thank you.

MR. JOHNSON: Thank you, Mr. Owens.

MR. WILLIAMSON: Well, well, speak of one of the greatest guys I've ever met.

MR. JOHNSON: Also wanting to speak on this agenda item is Senator Barrientos. Senator, welcome. We're delighted that you've come a great distance to be with us.

SENATOR BARRIENTOS: May it please the commission. Commissioner Williamson, you have great eyesight.

MR. WILLIAMSON: I didn't know you were back there, I swear.

SENATOR BARRIENTOS: I don't know if we've been hunting together, but you have great eyesight and insight.

Let me say you have so many people that want to speak, I want to keep mine to a minimum, two minutes, hopefully.

As has been mentioned, I am sure, House Bill 3588 was for the acceleration of the infrastructure, the speeding up of construction financing, et cetera, et cetera, et cetera. The bill was about yea thick, complicated and legalese beyond my dreams.

Just two quick questions here to consider. Could the department elect to toll any of the projects, for example, mentioned in the American Statesman, that would be to increase capacity on, for example, parts of 183 without any more local input than one public meeting held by TxDOT? What is the answer to that?

MR. NICHOLS: Are you talking about putting tolls on existing lanes?

SENATOR BARRIENTOS: Correct, without any more local input than one public meeting held by TxDOT.

MR. NICHOLS: Do you want to get our legal counsel up here? My understanding is we do have to have approval by the county commissioners court. Is that correct? Yes, before we would do that, we would not convert an existing lane unless we have a supporting resolution from the county in which that project exists, and that's in the statute.

SENATOR BARRIENTOS: All right. Would a local RMA have to agree with the department's decision? You just said that the commissioners court would have to.

MR. NICHOLS: Okay, there's four different categories: you have a regional mobility authority like you have in Central Texas; you have a turnpike authority like you have in Houston or North Texas; you have a toll project by the Texas Turnpike Authority, that's us; and then the fourth one is a county toll authority. It's my understanding that obviously on the county authority, if they want to do it, they're going to have their own support to do it. On the other two, the TTA or the regional, before we would ever even get into converting any existing lane, the county on those three would obviously have to support it before it takes that step. And on like the Central Texas or any regional mobility authority, the governor himself or herself at the time would have to approve it.

You cannot do any project -- obviously it would have to connect with our system which we would have to approve, and it would also have to go through an environmental process which includes a public hearing. So you've got checks and balances in the statutes and in the rules.

SENATOR BARRIENTOS: That's the main question that I'm after, checks and balances. To clarify even a little bit more, what about work that has not yet been completed, almost completed, like for example, US 183 in southwestern Williamson County?

MR. NICHOLS: The action today is the establishment of guidelines for evaluating this very thing, at what stage should we or shouldn't we, what financials are involved and all those kind of things. So the minute order today -- which was posted on the agenda that way -- is to authorize the establishment of guidelines for evaluating mobility projects for development as turnpikes. That is the action today. So that is the question: at what point in the process is it too late?

MR. WILLIAMSON: In other words, we're not making that decision today, Senator. We're putting it to the public and now we want -- and as you know, I live with our former colleague Cliff Johnson to this day, and we got up this morning to have coffee, and he said, are you guys fixing to pass some kind of rule to let you put up toll roads everywhere? And I said, no, we are starting the public process that will incite senators and House members and public citizens -- like the fellow from Cedar Creek -- and the newspapers and the transportation community and the constructors all across this state to have a dialogue that might last 30 days, it might last 60 days, it might last 90 days, about the best way for us to collectively as a team, one Texas, figure out how to solve this problem. This is just the beginning point today.

Senator, you know you've been a great friend of transportation and one of the requirements you and, as I recollect, Senator Lindsey from Harris County made of us when the legislation was being passed is that any excess revenue from these new toll lanes or new toll roads remain in your districts where your taxpayers paid the tolls to expand their transportation facilities, including -- and in fact, I think this was your wording -- including public transit and rail. And one of the things that hasn't gotten a lot of attention from our buddies to my right and your left, is the fact that we're laying the groundwork for cash flow to provide for Clean Air initiatives and for the expansion of public transit systems across the state. That's part of what we're doing here. It may take us a few years but we're certainly further along than we were a year ago.

SENATOR BARRIENTOS: To conclude then, what you said I think is the bottom line: checks and balances.

MR. NICHOLS: Yes, sir, they're there.

SENATOR BARRIENTOS: I'm already getting phone calls, as you can imagine, as other senators are. We're talking about rules being developed, a dialogue, as you said, Commissioner Williamson, and as the public expects of us -- as you well remember -- we are supposed to stay ahead of the game. So I thought I'd come in here and wish you a very Merry Christmas and ask you to be cautious and listen to the public and always have input and have those checks and balances: commissioners court, elected body, sounds good. So we will be back with some other input. Thank you, and I will depart now.

MR. NICHOLS: Senator, I think the reason you're getting those phone calls is if you read the news media, what was on the radio, what was in the newspaper, obviously there were some statements made -- and I listened to the radio this morning myself and heard them making statements that are just totally incorrect and pretty exaggerated.

SENATOR BARRIENTOS: Talk shows tend to do that.

MR. NICHOLS: They get pretty exaggerated, and everybody who listened to the radio this morning got the impression that we were fixing to take an action that turns these things into toll roads, or we're going to give Mike Behrens the authority to just turn them into toll roads and never vote on it and have no public hearings and all that -- which would get people pretty excited, and obviously that's what they did, and I think that was the intent is to create excitement. I can assure you --

MR. JOHNSON: Not by us.

MR. NICHOLS: Not by us. We like excitement but not that type. The process you established is just as you said, there are checks and balances in the statutes and I can assure you that we're going to ensure that this is a public process and we are not going to try to -- regardless of the technicalities, we're not going to try to violate the spirit of that either. We will take steps all the way through this thing, and that's one of the things that we're doing today so this can become an easier process for people to understand is at what point would we consider one, under what point would the financials be, all this. So we're going to be directing -- assuming we approve this which I think -- to do that.

MR. WILLIAMSON: This is not going to work unless everybody has a sense of ownership. We've got two choices: we can raise taxes or we can build things with user fees, and those are the two great philosophical divides of our country. Unless everybody feels good about this process, it's not going to work, and it's got to get started.

SENATOR BARRIENTOS: Three things: Godspeed; my good friend the mayor of Laredo is here, treat her nice; and happy holidays. Thank you.

MR. WILLIAMSON: Happy holidays, Senator.

MR. JOHNSON: One thing I wanted to point out in response to what the senator brought forth, and Amadeo Saenz mentioned it in his preamble, and that is public input, and this commission and this agency takes that responsibility very highly, and so there will always be public input, especially in these issues that affect each and every one of us. I cannot say that in strong enough terms: we take that responsibility very, very highly.

Any other questions or comments?

MR. WILLIAMSON: Oh, yes. Let me go for a while. I need you, Amadeo, and I need Jimmy Bass. This is for the man from Cedar Creek. If the legislature were to raise the gasoline tax a nickel, how much money in the first year after full implementation would be made available to us for transportation construction? It's real important, Rick. One nickel.

MR. BASS: Good morning. Again for the record, I'm James Bass, the director of the Finance Division of TxDOT. In our latest projections, if the gas tax were to increase by a nickel, it would generate for the state roughly $700 million. As was mentioned earlier, one quarter of that would go to fund education. That would then leave around $520 million for deposit to the State Highway Fund. All of that $520- does not go solely to TxDOT, there are other purposes throughout the state, the Department of Public Safety being one of the primary users of that fund.

But out of that $520-, if we take a positive approach and say we were to get all of that, currently 50 percent of what's in our budget and what TxDOT does each year, roughly 10 percent, goes to just maintaining and preserving the existing system. There's administration, there's design, right of way, everything else, and if you look at --

MR. WILLIAMSON: Okay, stop. So being very aggressive, $520 million would be available to us; historical averages are $260 million has to go to maintaining the existing system; $260 million would be available for construction. But let's just say we're doing real good on our maintenance program, and let's just assume for the purpose of the discussion I want to have for Rick from Cedar Creek and our friends to my right and your left, $520 million becomes available to us. Now, what's the gasoline tax in Texas now, the state tax?

MR. BASS: Twenty cents a gallon for gasoline and diesel.

MR. WILLIAMSON: So we're speaking of a 25 percent increase in a general tax to get us $520 million in the first full year of implementation. Correct?

MR. BASS: Correct.

MR. WILLIAMSON: Now, don't leave, kind of hang tight.

Amadeo, we're in the process of building State Highway 130 or a portion of State Highway 130, I believe from just south of Georgetown to just north of Lockhart or just east of Lockhart?

MR. SAENZ: Right about there, right around the airport.

MR. WILLIAMSON: And about how many miles is that, not lane miles, geographic, normal-person miles? Do you need to lower the thing after Carlos was here?

MR. SAENZ: No, sir. I think I need to raise it.

(General laughter.)

MR. SAENZ: I think we're looking at about 40 miles.

MR. WILLIAMSON: Forty miles. Are you familiar with the interchange on basically the northeast corner of the city of Dallas called the High Five?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: How much is that interchange going to cost?

MR. SAENZ: That interchange cost about $250 million.

MR. WILLIAMSON: $250 million for the interchange.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now back to State Highway 130, when we're finished building State Highway 130, about how much would it have cost?

MR. SAENZ: That whole system of State Highway 130 and 45 and 1 is going to cost about $3 billion.

MR. WILLIAMSON: $3 billion?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now, pay attention. How many years is it going to take us to build and open 130?

MR. SAENZ: 130 will be open by 2007, the end of 2007.

MR. WILLIAMSON: So that was a six-year project?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So about $500 million a year.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Stay real close please. James, I've got a bad memory; I'm getting old, just coming off the flu. Now, what did you tell me that a nickel would give us a year?

MR. BASS: For the State Highway Fund, roughly $520 million a year.

MR. WILLIAMSON: So we could raise taxes a nickel and we would have enough money to build State Highway 130 over the next six years, and we wouldn't have any of that additional nickel to be used anywhere.

MR. BASS: And one other point. In the traditional method over the six-year period, you would be assuming that there was no inflation cost for construction.

MR. WILLIAMSON: So we'd have to raise the gasoline tax on a citizen in Texarkana, and a citizen in Amarillo, and a citizen in Plano, and a citizen in east Houston, and a citizen in Brownsville, and a citizen in Laredo in order to provide funding for the next six years to build State Highway 130. Well, I guess if we're going to build 183, then we've got to raise taxes a little bit more, so I guess we could raise taxes a dime and that would get us a billion. Right?

MR. BASS: Correct.

MR. WILLIAMSON: Now, are there studies to indicate that at what point the general taxation diminishes in terms of people crossing the state to buy gasoline or using less gasoline?

MR. BASS: There are studies on that and more rather than just looking at the tax, it's the overall cost, and it's actually fairly elastic -- I believe I'm using that correctly -- as we saw during this last summer when gasoline prices were $1.50 or $1.55, none of that increase was due to a federal or state increase, but we did see, for a while, revenue come in at the same point. Here recently, we've actually seen our gas tax receipts level off in the state even though population, vehicle miles traveled and everything else continue to go up, primarily due, I'm assuming, to the fuel efficiency of the fleet that's out there.

MR. WILLIAMSON: So at 10 cents we'd generate in the first full year a billion, so now we can build five exchanges a year and we can build State Highway 130, and the citizens in Richardson will get to pay another dime, and the citizens in Weatherford get to pay another dime, and eventually we'll get around to them.

But let me ask you something. How much capacity did we lose from 1989, the height of our last economic weakness, through 2003 by not increasing our gasoline tax? How much construction capacity did we not build during that time period?

MR. SAENZ: Right now we're only able, as far as we look at the capacity projects, we're able to do about 35 to 36 percent of the projects that are identified as needs, so we can do one-third of our projects.

MR. WILLIAMSON: So if I take that two-thirds and apply it to our annual budget, could I infer that we lost about $3 billion times 13, about $39 billion in construction capacity?

MR. SAENZ: That's correct.

MR. WILLIAMSON: Do you have an opinion of how much the legislature would have to be persuaded to raise the gas tax in order to make up that $39 billion?

MR. SAENZ: I think looking at the numbers that you mentioned, we would have to raise the gasoline tax about 30 cents to 40 cents.

MR. WILLIAMSON: So we'd get to go from 20 cents to about 50 cents, and would that put us pretty close to the highest gasoline tax in the nation?

MR. SAENZ: I believe so.

MR. WILLIAMSON: Maybe by a factor of two. Okay, I think I've had enough of that. Thanks.

So the point, Rick, is maybe we should have been raising the gasoline tax the last 15 years but we didn't, and now we've doubled our population and we're increasing faster, and you almost can't raise the gasoline tax fast enough to do any good before you're having to build the next project. The only rational way that, it appears to me, the legislature and the governor can approach is to say that existing open lanes, tax roads, tax lanes, will be maintained for those of us who pay taxes, and new capacity will be built quickly with debt incurred by the commitment of toll collections.

And so those of us who choose to pay the tolls will travel a different lane than those of us who choose to pay -- let me just rephrase -- those of us who choose to pay the taxes and the tolls will travel a different lane than those of us who choose to pay the taxes. But the truth is -- and the governor realized this long ago -- for whatever reason there is not enough tax capacity left right now to do what we need to do in this state to remain competitive and open and welcoming to the estimated 6 million new Texans that will arrive in the next 15 years.

The fact of the matter is there is no road fairy, money doesn't fall from the sky, these things cost something, it's a matter of figuring out how you're going to pay for them. Thank you.

MR. JOHNSON: Robert.

MR. NICHOLS: I kind of tried to take this and break it in two pieces and go a little bit different direction, and it's beyond really what's in this minute order but it relates to what the general concern is by a number of people in the audience, and that is when you're talking about toll roads in Texas, I think of it in two totally different groups. One is if you're going to have tolls on new locations or new expanded capacity only, only tolling that new capacity. And the second piece has to do with converting existing lanes.

As you heard Senator Barrientos talking a while ago, if you're talking about converting existing lanes, we're talking about a whole different level of scrutiny and processes which it must go through. The legislature not only put those checks and balances in there, but they also said that you can only do that if you're going to expand capacity or extend that road. So it takes a totally different level of scrutiny.

The primary thing we're dealing with -- although that will be considered at some point -- has to do with new capacity and new locations which are desperately needed not only in this area of the state but in many other areas of the state, and the legislature not only gave that authority but it went out to the general population two years ago in a constitutional amendment to give us the authority to take state money and help build these toll roads using state money, and then the legislature obviously continued to expand that, so that's certainly nothing that's new.

This particular minute order, this minute order we're voting on, all it does -- because I know there's concern out there that we're going to take an action that's going to turn everything into a toll road and give our executive director -- this is what I heard on the radio -- the authority just to make them a toll road at his will. All this minute order does is it directs the executive director to establish and implement guidelines for evaluating mobility projects as toll roads, and then it breaks down into several different categories.

So we're asking him, we want to evaluate these things and we're asking him to establish guidelines of how we're going to evaluate that. The actual vote would come from us after public hearings and an environmental process. So I think that was one of the main things to point out.

I also feel that I've got to make another comment, and I always have a general rule of never arguing with people who buy ink by the barrel, but when our agency is accused, in effect, of illegal acts -- and I'm directing this really more to the Austin Statesman -- when you make a claim that we're doing things in secret, in effect that's saying we're doing something illegal, and we're not, I take great concern for responsible reporting. This department takes great pride in going out to the public, involving the public, having public hearings, doing everything in the open -- that's part of what we're doing today and it's what we will continue doing in the future.

It did, in the headlines even, say that we had secret stuff, and I know personally, I had conversations with some of the reporters with the Statesman concerning the very issue of whether or not a working document -- which is recommendations which are constantly changing -- from the staff coming to us should be turned over to the newspaper for them to review before our staff has even completed their recommendation. In my explanation, not only do we have the legal background of it truly is a document in progress, a work in progress which we're not required to because it's not final until we vote on it, but it is constantly changing also. And I had explained that if they turned it in a week ago, for instance, and it changes -- which these things are in constant motion; you have to be on your toes to keep up with them -- then, in effect, then they would say if it changed that you deceived us because what you said was the recommendation didn't turn out to be the recommendation, and so on.

MR. WILLIAMSON: No, not those guys.

MR. NICHOLS: Well, anyway. I do take offense when we're accused of doing something illegal.

MR. WILLIAMSON: They're all fair in Dallas, Robert.

MR. NICHOLS: And anyway, I am greatly offended by that. I don't expect an apology in the paper or a retraction, but if there was one in there, it would be welcome. That's it.

MR. JOHNSON: Thank you, Robert.

MR. WILLIAMSON: Thank you, Robert.

MR. JOHNSON: Any other questions or comments? If none, we'll entertain a motion for approval.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Amadeo and James, thank you very much.

MR. WILLIAMSON: Wait a minute. Where did Rick go? Now, I might not have changed your mind, but do you see the dilemma we have to face? It's not just a matter of raising taxes, and it's not at our pay grade to recommend that to the governor or legislature anyway. But the point is the problem has gotten too far for it to be a simple "let's raise the gas tax." It's a little bit more complicated than that. We could raise the gas tax a lot and in ten years we'd be caught up and we'd have a lot of cash and we'd have all these projects built, I suppose.

But you asked the question -- I meant to work this into my dialogue -- will you take those tolls off when the road is paid for? Let me turn the question around to you. How long have you been in our state?

MR. OWENS: Six years.

MR. WILLIAMSON: I can tell you in this room there are people who have been in this state 60-70 years. If anyone knows when a gasoline tax has been lowered, raise your hand. You mean the taxes never go away? I'm shocked. Thank you.

MR. JOHNSON: Thank you.

MR. BEHRENS: We'll go to agenda item 5(b) and 5(c), they'll be presented together.

MR. RANDALL: Good morning, commissioners. My name is Jim Randall, director of the Transportation Planning and Programming Division. As Mr. Behrens said, I'd like to present items 5(b) and 5(c) together for your consideration.

Transportation Code Section 201.612 requires commission approval of an international bridge over the Rio Grande. The department received Webb County's international bridge application on September 17, 2003, and in accordance with Title 43 TAC, Section 15.74, conducted a public hearing on October 20, 2003, to receive public comments on the project. The department also received the City of Laredo's international bridge application on September 22, 2003, and conducted a public hearing on October 29, 2003.

The department submitted both applications to all entities required under the international bridge rules and requested their review and comments on each application. Title 43 TAC, Section 15.76 provides that the commission consider commitments from the appropriate jurisdictions of the United Mexican States to provide adequate roadway connections to the proposed bridge and the consistency of the construction of the bridge with the regional transportation plan developed by the metropolitan planning organization having jurisdiction over the project. This section also provides that the commission consider the views and comments of the entities to which the applications are required to be sent, including any entity which may significantly be affected by the project.

Staff has analyzed the information provided in the applications and information subsequently received during the public comment period, as outlined in Section 15.76, and has considered commitments by the Mexican authorities and the views and comments of other entities, including Webb County and the City of Laredo, each having submitted a competing international bridge application.

After reviewing both international bridge applications and all comments provided, staff recommends that commission approval of either application is not in the interest of the public and the state's transportation system for the following reasons:

Number one, there is no written commitment from the appropriate jurisdictions of the United Mexican States to provide adequate roadway connections to either of the proposed bridges. Neither the City of Laredo nor Webb County provided any documentation demonstrating Mexico's commitment to construct a connection to Mexico 85 which is a primary approach roadway to either bridge. Webb County indicated they could not secure a written commitment from Mexico for construction of the bridge segment on the Mexican side of the Rio Grande. The City of Nuevo Laredo indicated their willingness to work with either the county or the city but does not provide a firm commitment to either.

Number two, while a fifth international bridge is contained in the metropolitan transportation plan, indicating a need for a bridge, the plan does not indicate whether the county or the city, which have submitted competing applications, would construct and own the bridge. Accordingly, there's not sufficient information to indicate either bridge is consistent with the regional transportation plan developed by the metropolitan planning organizations having jurisdiction over the project.

Number three, there's a lack of public support for constructing either of the proposed bridges. With respect to state highway projects, the commission and the department will not pursue projects without adequate local support, whether because of lack of required financial participation by local government entities, or because there's no local support of an alternate facility, such as two competing applications. When the involved local entities are not supportive of a single project, this indicates a greater probability that a proposed project will be challenged and that construction of the project and the resulting positive effect on the economy and the free flow of trade is speculative. The probability of a legal challenge is particularly great in the case of the county's application. This is due to the city's indication that the county has no legal authority to construct a bridge located within jurisdictional limits of the city.

Based on the findings and conclusions presented, staff recommends disapproval of both applications as outlined in minute orders presented to you under items 5(b) and 5(c) of the agenda.

MR. JOHNSON: We have two people who have requested to speak on this particular agenda item. Judith Gutierrez, commissioner from Webb County. Commissioner, thank you for making the long trip up here.

MS. GUTIERREZ: Well, thank you. I'm very, very happy to be here. For the record, my name is Judith Gutierrez and I am a Webb County commissioner, and on behalf of Louis Bruni, Webb County judge, and the Webb County Commissioners Court, I appreciate the opportunity to offer some brief comments as you consider both the city's and the county's applications to construct a new international bridge.

In November of 2000, the Webb County Commissioners Court voted to pursue a presidential permit for the construction of a new bridge. We awarded the contract to Dannenbaum Engineering and assembled a team of engineers and consultants on both sides of the border to work with our county administrator Carlos Villarreal, and county engineer Tomas Rodriguez, whose combined 50 years of experience with the City of Laredo included leadership roles in past bridge projects. The result is a thorough and professionally prepared application by Webb County which is before you today.

While I am sure you are familiar with every detail of the voluminous application, I do want to take a moment to highlight some key advantages with our proposed bridge plan.

First, our proposal enjoys significant cost advantages. These cost savings are not just associated with one or two pieces of the bridge, but with every aspect of it. For example, the cost for environmental mitigation at the Webb County site is less than one-sixth of the mitigation cost at the city's site, and that's according to the city's own application. And the costs associated with the construction of the project on the U.S. side, including the establishment of water and sewer lines, connecting the bridge to existing roads, and the actual bridge construction itself, those costs are less than half of the costs projected in the city's application.

Likewise, on the Mexico side, the bridge construction at the county's site would cost less than half of what the city's site would require. The Mexican government would also find that the county's location would require millions less for site improvements and roadways to connect the bridge to Mexico's Highway 85.

These cost benefits are possible because of the logistical advantages associated with Webb County's site. The bridge would be located at the narrowest point in the river for many miles, a site that was chosen generations ago for a ferry crossing, and thus, this site requires a much shorter bridge span. The county's bridge would be 1,140 feet in length, while the city's would be as much as 2,600 feet in length, though the actual length is somewhat unclear in the city's application.

I would also remind you that our bridge site is at the location recommended by the metropolitan planning organization which is comprised of Webb County, the City of Laredo, and TxDOT and has the most direct connectivity to the new outer loop on the U.S. side and a proposed loop on the Mexico side.

Webb County believes that given the increasingly tight budget on the local, state and federal levels here in the United States, a situation that is mirrored in Mexico according to news reports this week, it would be prudent to approve the application that offers significant cost savings.

However, we find ourselves in an unusual situation so the decision is not so cut and dry. Although there is almost no disagreement in our community about the need for a new bridge, given projected traffic growth and Nuevo Laredo's plans to create a tourist destination, there is unfortunately disagreement about exactly who will build that bridge. In spite of the county's continued requests over the past three years to create a partnership with the city, those invitations have been rejected, so we find ourselves here today with two applications for you to consider.

Webb County continues to believe that a unified effort by the county and the City of Laredo is the best route to take. It would enable us to take the best of both applications and share our respective strengths while providing both short and long-term benefits to the taxpayers we jointly serve. It would not require you, the Texas Transportation Commission, to try to choose sides or else delay a much needed project. It is our continued hope that we can reach some type of agreement to end the competition and work together for the good of our nation, our state and our community and our friends across the border.

I'd like to thank the commission for all the work that they do on behalf of all Texans, and I would also like to thank you this morning for affording me the opportunity to make my brief statement.

MR. JOHNSON: Commissioner, thank you again for, one, bringing that statement this great distance. We appreciate very sincerely the county's offer of a cooperative venture, and would hope that the three reasons stated by James Randall in the presentation of why these permit applications were declined at this time or rejected at this time, that you pay very close attention to those. And not to reiterate them, but there seems to be no agreement from Mexico as of yet -- at least a written one -- as to what connections from their side are going to be, and the metropolitan transportation plan does not cover which entity would or should construct and own the bridge, and as of yet, we have not discerned that there's a great deal of public support for the fifth bridge.

MS. GUTIERREZ: Well, I would like to take exception with that statement because I know that there is a lot of public support for the bridge, at least the way we feel in Webb County and the city, so I would like to state that for the record.

MR. JOHNSON: Thank you.

MS. GUTIERREZ: Thank you very much, and I would like to thank you for this great lesson in highway construction and toll roads. I think all of us in the counties will benefit from all of this, so it was nice to be sitting here and listening to all of the statements that were made by all of you.

MR. WILLIAMSON: Well, sometimes if you relied strictly on the written word and what you see sometimes on the telly, you get the impression that we're approaching these decisions lightly and without regard to how the public thinks about it, and nothing could be further from the truth. I mean, the great philosophical divide of this country is general taxation versus user taxation, and this is the path the governor and the legislature have taken to solve a problem, which is transportation infrastructure.

MS. GUTIERREZ: Every single county and municipality in the state of Texas knows the problems that you all are discussing here this morning, and so I think that as we work together with the commission and with the counties, we will be able to do a lot of good work.

MR. NICHOLS: I know you were here on the bridge -- which we'll get into that -- but you did bring up the second thing on toll roads. While you're here, I'd like to ask you a question. Has the county court had any discussions or consideration of possibly forming a regional mobility authority?

MS. GUTIERREZ: Yes, we have, as a matter of fact.

MR. VILLARREAL: Yes, commissioners, for the record, Carlos Villarreal, county administrator.

We have started the process, the commissioners court has passed the necessary resolution so that we can start forming a Webb County regional mobility authority, and we are in the process of working -- we have been working very closely with Mr. Amadeo Saenz to be able to get that off and get it done.

MR. NICHOLS: So you're in the process, you haven't actually approved an application yet.

MR. VILLARREAL: No. We're in the process of finalizing the application for submittal to TxDOT at this point.

MR. NICHOLS: Oh, okay, you've gone a long way.

MR. VILLARREAL: The commissioners court has already taken the necessary action, yes, sir.

MR. NICHOLS: At some point when you have discussions or hearings, if you need someone from our staff or if you'd like one of the commissioners -- I can't volunteer the other commissioners, I'd be willing to go, but I'm sure some of the others would be willing to go also -- to come down there and answer questions, we're very supportive.

MR. VILLARREAL: Thank you very much; we appreciate that.

MR. WILLIAMSON: We encourage that.

MR. VILLARREAL: Commissioners, we're also working on a big rail project that we've been working hand-in-hand with TxDOT. I don't know if you recently heard, there was a derailment close to Laredo and it caused a lot of panic amongst the people. We're trying to work on working in conjunction with this regional mobility authority and working with ultimately bypassing and using a new bridge crossing, a rail crossing at the Colombia Bridge, and hopefully taking the right of way of the Camino Colombia and using it to take some of the rail traffic out of the inner city, and we have been working very close with your staff, with Amadeo Saenz and Phil Russell in trying to get that accomplished.

MR. WILLIAMSON: I always take great pleasure when I hear something like that and reminding whomever has to suffer through my words of the governor's vision two years ago and pointing out that increasingly derailment of hazardous materials of urban areas would be a problem in our state if we didn't move in the direction we're moving.

MR. VILLARREAL: That is correct, Commissioner. I think we realized that if that derailment had happened inside Laredo, it would have killed a lot of folks there, so that's why it's important that we be visionary and we look to the future to be able to construct projects for the safety of the public that we represent.

MR. JOHNSON: Thank you very much. Also wanting to speak on this agenda item is Stephen Gibson from Webb County. Mr. Gibson, welcome.

MR. GIBSON: Thank you very much, commissioners. For the record, I'm Stephen Gibson; I'm a consultant to Webb County. I'm also a retired senior foreign service officer and my last assignment for the Department of State was as coordinator for U.S.-Mexico Border Affairs. In that position I handled permits and licenses for new bridges and border crossings on behalf of the U.S. Government. Since retiring, I have been a consultant in that field and I have successfully concluded permitting for four border crossings, including two projects in Texas: the extension of the Starr Camargo Bridge, and the replacement of the bridge at Progreso.

I want to share with you my experiences in dealing with Mexico on these projects because of everything I did in the State Department and since retiring I've coordinated with Mexico. They have a process that is similar to ours but is not a duplication of ours when it comes to getting authority, and literally speaking, unless an element of the Mexican Government has taken the lead in a border project -- and they don't very often -- at this point they are not in a position to make a commitment on precise financing or roadway construction simply because no one in Mexico knows who the sponsor will be. Will it be the federal government? Perhaps. Will the state government get a concession? Perhaps. Will that concession then be shared with the private sector? Perhaps. Will it go to a municipality? Perhaps. And until you have a firm sponsor in Mexico, somebody to take the lead, it's really not realistic to expect very, very specific commitments to a project.

It is realistic to expect a general Mexican commitment to a project, and I was in Mexico City earlier this week and Tuesday I had meetings with Foreign Relations, Communications and Transportation in CABIN -- which is the Mexican equivalent of the GSA -- all of those agencies fully support a new bridge in the Laredo-Webb County area. There is no opposition in Mexico at the federal level to this project.

Similarly, my contacts with the U.S. Federal Government indicates to me that there is no opposition at the federal level to this project. Quite the contrary, there is support. There is belief that we need a fifth bridge in that area.

I share those experiences with you in the hopes that they may be useful. If you have any questions, I'd be happy to try and answer them.

MR. NICHOLS: You were expressing what you felt was the opinion or support of the Mexican Federal Government to build the bridge, and the same thing for the United States Federal Government. Is it your opinion that both the Mexican Government and the Federal Government of the United States would support building two different roads to two different bridges?

MR. GIBSON: No.

MR. NICHOLS: Okay, thanks.

MR. GIBSON: Thank you.

MR. JOHNSON: Thank you. We have this agenda item before the commission.

MR. WILLIAMSON: Is there one or two items before us, Chairman?

MR. JOHNSON: The recommendation is to reject both applications. Is that correct?

MR. RANDALL: Yes, sir.

MR. JOHNSON: Is there a motion to that effect?

MR. NICHOLS: Are we going to vote on (b) without hearing (c)?

MR. WILLIAMSON: I would appreciate hearing from Mr. Monroe.

MR. BEHRENS: Let's get the general counsel to make sure we have proper procedure.

MR. MONROE: Actually, there are two minute orders now before the commission, and I think it would be appropriate to vote on them separately, one rejecting the application from Webb County and one rejecting the application from the City of Laredo.

MR. NICHOLS: So moved.

MR. JOHNSON: On 5(b)?

MR. NICHOLS: On 5(b).

MR. WILLIAMSON: Second on 5(b).

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries. And now 5(c).

MR. NICHOLS: Do we have any cards on 5(c)?

MR. JOHNSON: No.

MR. NICHOLS: For basically the same reasons, I move we reject 5(c).

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Motion carries. James, thank you.

MR. RANDALL: Thank you, sir.

MR. BEHRENS: Agenda item number 6 concerning Turnpike and Toll Facilities, 6(a) would be to accept the General Engineering Consultant Quarterly Progress Report for the Central Texas Turnpike Project. Phil.

MR. RUSSELL: Thank you, Mike, commissioners. For the record again, my name is Phillip Russell, director of the Texas Turnpike Authority Division.

Item 6(a) seeks your acceptance of the General Engineering Consultant Quarterly Progress Report for the Central Texas Turnpike Project. The commission, as you know, has issued turnpike revenue bonds and other obligations to finance a portion of the cost of the Central Texas Turnpike Project, otherwise known as the 2002 Project, and has entered into an Indenture of Trust. In accordance with the Indenture of Trust, the commission is required, at least on a quarterly basis during the construction phase of the project, to cause the general engineering consultant, the GEC, to prepare a progress report.

Section 406 of the indenture requires copies of the quarterly report to be filed with the commission, the U.S. Department of Transportation, and the trustee, and to be made available by the trustee to the owners of this obligation. A quarterly progress report for the period ending November 2003 has been prepared by the GEC PBS&J in accordance with Section 406. Acceptance of the GEC's quarterly progress report is necessary to evidence compliance with the requirements of Section 406 of the Indenture of Trust.

I'll just take a couple of moments and give you a few of the highlights of the report. The project is still on schedule to open on or before December of '07. The estimated completion cost in the GEC report is continuing to come in under our original estimate. As you all know, a team from the department went this month, actually, to New York and gave an update presentation to the rating agencies, and as Commissioner Nichols knows, at the time we were using the update that was up through August 31 and the point that we made that we were about $250 million under our budget.

It's great to know that now with this report -- which picks up September 1 through the end of November -- that underrun of sorts is now up to in excess of $300 million. A lot of that is underruns on these construction projects; a lot of it, quite frankly, is the right of way acquisition process. Those costs are coming in a little lower than we all had anticipated, so that's certainly good news.

As I think I always have and everyone else, we always caution that this is simply a snapshot in time and it is very early in the project, a year into the project essentially, and that these numbers no doubt will change over the intervening four or five years, both positive and negative, but at this point it's a very good snapshot.

Let me just very quickly and very briefly go through a few of the critical points that you all should probably be aware of and take note. The 45 and Loop 1 project design is complete on all sections. As far as the right of way, as I've said, that acquisition process is essentially complete. There is one parcel left to be acquired and it will be acquired this month. And again, those costs have come in substantially lower than what we'd anticipated.

Just a very brief comment on some of the construction projects. Section 1 and 2 which are the Loop 1 portions, those contracts have been under way since the summer. Earth work activities are going on very well and the contract is on schedule.

Section 3 which is the big interchange at Loop 1 and 45 -- that's a Zachry-Gilbert construction contract as well -- that contract has been ongoing for almost a year now, since this February. Major portions of that interchange are now complete and that contract is ahead of schedule.

Section 4 which is the Archer-Western piece, essentially in between the Loop 1 and the 35 portions and it's on State Highway 45, that contract began this summer as well, it's well under way and they're on schedule.

Sections 5 and 6 are the two components of State Highway 45 that are between I-35 and 130. I think our last quarterly update, our schedule at the time was that the Section 5 project would be let to construction in March. The Austin District has been doing a fine job and they've been able to accelerate that now up to a January anticipated letting, so again, that's good news. Section 6, likewise is being accelerated up from our previous report of April to March.

Section 7, a Granite Construction contract with J.D. Abrams, that was let to construction in November. And Section 8, which is essentially there at 183 and 620, that project was let in September, and again, it came in about $9 million under our engineer's estimate, and that construction has already started this month, so really good news on that front.

On the 130 side of it, again, we have in excess of 400 parcels to acquire on the 130 project. As always -- we've talked about it -- there's a lot of work that has to be done before we can actually begin to acquire parcels, a lot of appraisal work that has to be done, review of those appraisals, negotiation. But now I think the hard work that the group is doing is really starting to bear fruit, and we have 79 parcels now that offers have been made on, we've actually got possession of 12 parcels, so good news.

Design ranges on the four segments of 130, the design is ranging from about 40 to about 65 percent complete, so I think we're making good headway in that area as well. And of course, as you all know, we had a groundbreaking in October, it was a great event, and construction has started out there on the Segment 1 piece. No construction has begun on Sections 2, 3 and 4 as of yet.

I'd be happy to answer any questions that you might have.

MR. JOHNSON: Any questions?

MR. NICHOLS: I knew that it appeared a month ago that the construction estimate versus actual construction prices that we were going to be $250 million under budget. Of course, we realize we still have four more years to go, and things can happen that are unexpected -- that's why we have contingencies -- but I had not heard the newer number on the right of ways, that it was lower than expected by maybe $50 million or so. Just for the record, I'd like you to state that although it looks like the number is coming in lower than the estimate, the values that we are paying are fair market values by appraisal.

MR. RUSSELL: That's a great point, Commissioner, and you're exactly right. That is the agreed-upon value.

MR. NICHOLS: So we didn't estimate a value for the land and we're paying less than that.

MR. RUSSELL: No, sir.

MR. NICHOLS: It's just that we did not have the benefit of the appraisals at the time.

MR. RUSSELL: Thanks for bringing that up; that's exactly right.

MR. WILLIAMSON: On that same line -- and this is, I think, for the benefit of our friends from San Antonio who are here today, as well as my good buddy Gordon Dickson from North Texas -- is it not the case, Phil, that the use of toll debt and toll revenue to finance large construction projects in effect puts us in a position of turning a 10-year or 12-year project into a 6-year project because we don't have to wait for the gasoline taxes to flow on schedule?

MR. RUSSELL: You're exactly right, commissioner.

MR. WILLIAMSON: And in doing that, not only do we deliver the lane that's desperately needed in San Antonio or Bexar County faster -- or in our case, Gordon, Tarrant County faster -- but as it also turns out, we'll probably deliver it cheaper than we would have over a 10- or 12-year period.

MR. RUSSELL: If you count the cost of inflation and everything else, you're exactly right.

MR. WILLIAMSON: So one could argue that the fiscally responsible and conservative option is that option which gets the project built quicker as opposed to longer.

MR. RUSSELL: You're exactly right.

MR. WILLIAMSON: And can we unilaterally borrow against state gas tax money other than the Ogden Bond?

MR. RUSSELL: The question is can we borrow against --

MR. WILLIAMSON: Can we float a bond debt against our general gasoline taxation other than allowed under the Ogden Bond?

MR. RUSSELL: And other than the Mobility Fund?

MR. WILLIAMSON: Mobility Fund.

MR. RUSSELL: We certainly could through the Mobility Fund.

MR. WILLIAMSON: Thank you.

MR. RUSSELL: Commissioner, one other point, since I think this is probably germane to what we were talking about, on 130 we were asked originally to come up with an assessment of how long it would take to construct that project using traditional funding patterns in the Austin area, and certainly everybody has their own way to come up with those numbers, but at the time we calculated, it would be somewhere on the magnitude of 25 to 30 years if we were going to wait for that money on a pay-as-you-go basis. And so by moving forward very quickly and very smartly, we were able to deliver it by 2007, so it's a considerable savings, not just ten years, it's probably on the order of about 20 years or more.

MR. WILLIAMSON: And the same argument could be true whether it's Bexar County, Tarrant County, Dallas County, Harris County, it doesn't matter -- even Parker County, things generally can move faster when you're borrowing all the money and writing all the contracts to get the complete project done right now as opposed to over a period of time.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: You kind of got to the answer before I did, and that was the length of time that we originally estimated was a lot more than 15 years, and the amount of money the State ended up allocating to this project is one-fifth of the full amount. Our one-fifth is about $700 million which we're going to be putting in over a 5-year period of time. Had we done it in a conventional, non-tolled fashion, we would have to pay five times that amount, so it would have taken instead of five years, 25 years just on some raw math, without taking into account inflation. If we'd added inflation, then it would have run that number out much larger and much longer than that. And because most of this is new location, most of the segments by themselves would not have made sense and would not have carried much traffic. So I don't know if you would have ever incrementally -- in fact, you would have probably never built the project.

MR. RUSSELL: Commissioner, you're exactly right. And the example you've given many times is buying a house for $100,000, do you buy it now, borrow on it, or do you wait 30 years and save up that money, and guess what, in 30 years it's not a $100,000 house anymore, it's $300- or $400,000.

MR. JOHNSON: Let's go back and visit our ability to issue bonds in the Mobility Fund, because I believe I misunderstood something there. We cannot issue bonds under the Mobility Fund without a dedicated source of repayment.

MR. RUSSELL: That's correct.

MR. JOHNSON: And that is not the gasoline tax.

MR. RUSSELL: No. Those are those other funds that are being put into the Mobility Fund.

MR. JOHNSON: Right. The Ogden Bonds, we can issue bonds.

MR. RUSSELL: That is correct.

MR. JOHNSON: With the gasoline tax being the source of repayment.

MR. RUSSELL: That is correct.

MR. JOHNSON: Thank you for clarifying that.

MR. RUSSELL: Thank you.

MR. JOHNSON: Any other questions of this agenda item?

MR. NICHOLS: I move we accept the report.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

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

MR. BEHRENS: As was mentioned earlier, we're going to defer agenda item 6(b) until after the executive session, so we'll move to agenda item number 7, Regional Mobility Authorities. This will be to consider authorization of Bexar County to create a regional mobility authority.

MR. RUSSELL: Thank you, Mike. Item number 7 does relate to the Bexar County creation of a regional mobility authority, obviously for the purpose of constructing, maintaining or operating transportation projects in the area.

On September 3 of 2003, Bexar County filed a petition with the commission for authorization to form an RMA. The petition identifies a potential toll road network as the initial project for development of the RMA. The network includes new and added capacity improvements on portions of Loop 1604 and US 281, including: Loop 1604 from FM 471 to I-35 North; on US 281 from Loop 1604 to the Comal County line; Northeast I-35 corridor from Loop 1604 to the central business district; and improvement of operations at a couple of interchanges, 1604 and I-10 and 1604 and US 281.

Now, on October 28 of this year, the department conducted a public hearing pursuant to the RMA rules to receive public comments on the proposed RMA formation. Notice of the public hearing was published in the Texas Register and a newspaper of general circulation in Bexar County. And as we always do, we also, besides taking those oral comments during the public hearing, we also had a time or a process to receive written comments.

And I guess if I was asked to characterize the nature of those comments, during the public hearing the vast majority of those comments were in support of forming the Bexar County RMA, most of those letters that I've received subsequent to that, probably the majority of those have been against forming the RMA, but we also have received resolutions in support of forming the RMA from the San Antonio Mobility Coalition, the City of San Antonio, and from the MPO in the area.

By the petition, the initial board of directors would be composed of seven members, six appointed by the Bexar County Commissioners Court, and of course the seventh person would be the chair and would be appointed by the governor.

If you approve this minute order, it would authorize the formation of the RMA; it would order that the area encompassed by the RMA would consist of the entire geographic area of Bexar County; it would define the initial project network to be analyzed and to be developed; and it would authorize the initial board composition of seven members, six of which would be appointed by the Bexar County Commissioners Court.

And I believe perhaps we have some comments as well, but I would be happy to address any questions you might have, either now or after those comments.

MR. JOHNSON: I had one question before we get into the comments -- we have three speakers. The question is this: is there a general theme on the letters and in the speakers who appeared at the open sessions as to why they were not in favor of the formation of a regional mobility authority for Bexar County?

MR. RUSSELL: Chairman, I have personally read through all those letters, and I think there are a couple of those themes, and the reality is there's been a lot of discussion about it this morning. There's been some notion about riding on turnpikes primarily in the Northeast and not understanding why I would pay a toll and then have to wait in line to pay a toll on a barrier toll plaza, and again, as I think has been discussed, the idea with electronic toll collection is that there would be an unimpeded flow and that you really would have a realization of time savings.

The other major theme is kind of the notion that it's a freeway, not a tax-supported roadway and the double-taxation issues. I think there was a general sense -- it's hard to characterize it, but a general sense that money was available, money should be available and why don't we just simply go out there and use gas tax money to build these roads in lieu of a toll road. So I think a lot of the good discussion that's gone back and forth between James Bass and Amadeo and the commission would do a lot towards helping explain that process.

MR. JOHNSON: Thank you. Robert, did you have anything before?

MR. NICHOLS: No, I'll just wait.

MR. JOHNSON: Tom Turk, who is the Transportation Committee chairman for the San Antonio Greater Chamber of Commerce; and then Sam Dawson who represents SAMCo; and then Judge Wolff. We'll go in that order, if that's all right, unless you gentlemen have a different order you'd prefer. Tom, welcome; we're delighted that you're here.

MR. TURK: Thank you. For the record, my name is Tom Turk. I'm currently chairman of the Ad Hoc Transportation Committee for the San Antonio Greater Chamber of Commerce.

I'm here on behalf of the 2,000 members representing 400,000 employees in San Antonio to encourage your approval of the RMA for Bexar County. We need the RMA to provide the greater San Antonio area with the ability to accelerate badly needed projects, reducing congestion and negative impacts to local businesses, and jobs.

Vehicle miles traveled daily in San Antonio will increase by 60 percent between now and the year 2025. We need to meet the infrastructure demands of our growing population and address our community's $3.8 billion funding shortfall. The residents of San Antonio join other Texans in thanking the governor and the Texas legislature for providing the legislation, and the commission for making it possible to authorize the creation of the RMA to help some of the dilemmas faced by San Antonio and other Texas cities.

The Bexar County RMA will enhance our community's economic development efforts and help San Antonio improve air quality standards without raising taxes for local transportation funding. We anticipate that the Bexar County RMA will work with our local elected officials and organizations, including the MPO and the Chamber, to prioritize funding for mobility projects that will optimize our community's development and quality of life for our citizens.

We look forward to working with you and our new district engineer, David Casteel, and his fine staff to develop and sustain Bexar County's mobility needs.

Kenny Wilson, our current chairman, regrets that he was unable to be here today, but he joins me in thanking you for this opportunity to speak before you, and I want to thank each and every one of you for your service to the state. We know that you put in a lot of personal time on behalf of Texans, and we thank you. And I conclude by wishing you a happy holiday.

MR. JOHNSON: Thank you. Any questions of Tom?

MR. NICHOLS: I'll wait till they're all done to say something.

MR. JOHNSON: Sam Dawson, who chairs or is president of the San Antonio Mobility Coalition.

MR. DAWSON: Yes, sir. Chairman Johnson, members of the commission, Ms. Hope Andrade, good to see you, and Mr. Behrens. My name is Sam Dawson; I am chairman of the San Antonio Mobility Coalition. We are a public-private transportation advocacy organization representing the citizens of San Antonio and Bexar County on transportation-related issues. It is our sole purpose to make sure that we as a community are maintaining a continuous focus on transportation and mobility solutions.

On June 16, 2003, our organization passed a resolution supporting the formation of an RMA. Since that time we have submitted said resolution to the public at the TxDOT public hearing that was held in San Antonio, led by Mr. Russell.

We recognize that as a community we must pursue, look for, evaluate and identify every means possible to fund our transportation system, and we believe, especially after today, the establishment of a regional mobility authority will provide an excellent opportunity for providing those additional funds. We also recognize that the formation of a regional mobility authority will allow us to leverage additional state and federal funds, it will allow us to maintain local control over the revenues raised from toll operations, and it will also provide a means to raise additional revenue to accelerate the construction of badly needed highway and added capacity projects.

The establishment of a regional mobility authority is just one of many steps that we must take in our community for our transportation future. Today we encourage the commission to support Bexar County by authorizing the formation of an RMA. Thank you for your time.

MR. JOHNSON: Thank you. Judge Wolff.

MR. WILLIAMSON: I thought Nelson was smart enough not to be the last one.

(General laughter.)

JUDGE WOLFF: Chairman Johnson, thank you for allowing us to present this today, and Commissioner Williamson and Commissioner Nichols. And to our new, very proud from San Antonio, our Hope Andrade coming onto the board -- we're very excited about that.

You know, I've always liked toll roads. I think after today I like them a lot more than I thought I did.

(General laughter.)

JUDGE WOLFF: I have to support and will continue to be in support of them.

We had a hearing and Commissioner Nichols came down and sat through our whole commissioners court meeting, and really most of the controversy there revolved around tolling existing lanes but we did pass it on a five to nothing vote, and we think it's critical to the development of our transportation system in San Antonio.

We will make sure that in appointing the six people that we're responsible for that we do consult with the other political subdivisions, that we do get a good geographical balance to that. We obviously are going to need some toll equity, if you look at some of these potential projects -- and I think some of them have got some real viability. There's going to be a need for toll equity and we'll be coming to you on that once we identify what projects will work and the studies that are necessary. We will need help on the studies.

Bexar County will staff the RMA. At some point it may be necessary to do some additional funding for administrative expenses. We did that with the rail authority when we were working with the Toyota effort.

We hope that you approve this today where we can move forward in the January time frame, hopefully by early February, and have our appointees appointed. We'll have good public input, we'll allow people to apply, and we will try our best to get a good six citizens of Bexar County that will serve on this.

We also think that if you look ahead to the area that we have, we're tied to other major counties, in particular Comal County, where there's some possibilities for extension beyond, and I would think at some point you'd want to maybe broaden the scope of this that takes in some of the other counties other than Bexar County.

We've got a good working relationship with the local office. I want to congratulate Michael Behrens on appointing David Casteel. He got in there very quickly and has made the rounds around the community and has made a very, very positive impact just in the very short period of time that he's been there.

We look forward, assuming this passes today, to work with you to get a project up and going as quickly as possible and to make this thing work for Bexar County and the surrounding area. Thank you.

MR. JOHNSON: Great. Did you have any questions?

MR. NICHOLS: I'm thrilled you're here, I'm thrilled all of you are, and we are so excited that you applied for a regional mobility authority. And I think you're going to be even more amazed at the enthusiasm that you get in your county when you appoint your directors and they begin having meetings and they start seeing all the possibilities that are out there, because that's exactly what happened in the Austin, Travis County, Williamson County, Central Texas. They are so excited and enthusiasm breeds more enthusiasm.

I know, also, that you're going to need some study money, and the commission has set aside funds openly for that purpose, and so as we get more into that, you're going to see that we hopefully can be helpful in that area. We certainly recognize that toll projects, there's basically none in the state that can 100 percent stand on themselves, and the gap we refer to as toll equity is crucial, and with that authority we've certainly openly stated that we're going to be in there trying to help regional mobility authorities be successful on those type projects when those projects are good for the community and the state and so on.

And I'll bet you're going to have a commissioner there looking over your shoulder a lot.

JUDGE WOLFF: We look forward to it; I think it's going to be a great partnership.

MR. NICHOLS: And I appreciate the courtesies that you extended to me when I was at your hearing. It certainly looked like it might be an exciting one.

JUDGE WOLFF: You sat through that whole meeting with us.

(General laughter.)

MR. NICHOLS: That's really all I wanted to say.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: Just a few things. I didn't want to give the wrong impression, Judge. In fashioning public policy, I think it's important to use the right words and I think it's important to be candid and to center the conversation where it needs to be centered.

When I started my service in the legislature in 1985, I made some great friends in the San Antonio-Bexar County delegation, not the least of which is Judge Orlando Garcia, and the judge continuously made the point to me that people in San Antonio, generally, have felt for years that they didn't receive their fair share of gasoline tax allocation, and he made that point to then House Member Perry, who became Agriculture Commissioner Perry, who became Lieutenant Governor Perry, who became Governor Perry, and he never forgot that argument from an important part of our state.

The dilemma that the commission did face and the dilemma the governor and the legislature did face is how do you on the one hand have a general taxation system that collects gasoline taxes from every point of the state and pools it and then distributes it according to demonstrated need, from the State's perspective, how do you do that at any one time having one part of the state feel as though they're not getting their fair share. And the truth is there is no way to use the general taxation scheme and make everybody feel like they're getting their fair share.

If we were to take highway construction projects and rank them on an objective criteria statewide, without regard to where the governor is from, where the commissioners are from, who's got the most power, where the most current lawsuit is, whatever, then what would probably happen in our state is we would probably be spending all of our money in Houston, Texas, right now.

JUDGE WOLFF: Yes, that's probably true.

MR. WILLIAMSON: So how do you get to a point where people in San Antonio feel fairly treated while maintaining a general state system to support your transportation infrastructure? And I think the governor hit upon the perfect balance to get there, and that is to say to Bexar County and to Travis County and to other counties that will soon follow: If you choose to create your own framework and collect tolls from your citizens, partnered with state gas tax money to build your transportation assets, you are in effect laying the groundwork to keep your fair share at home and invest in your own infrastructure. And I can't think of a more wise and judicious way to lay the groundwork for the future.

It is difficult for the commission, day-in and day-out, to have to listen to those in some of our communities be critical of the toll mechanism as if there were that road fairy out there handing the money out, because it doesn't exist. We could raise the gasoline tax a nickel tomorrow and it wouldn't help San Antonio a bit; we could raise it a dime and it wouldn't help Fort Worth a bit; we could get to 15 cents and it would start helping a little bit; we could get to 30 cents and it would help a lot, but there isn't anybody going to vote for a 30-cent increase in the gasoline tax. They would all be sent home and replaced.

So I want to echo what my good friend and colleague Mr. Nichols said: We are so glad you're here, we are so proud of this most important part of our state, and we are ready to help in the most aggressive way we can, we're ready to help you build your system. And just go home and tell people the alternative is the tax and the tax ain't working. If we were going to raise the gas tax, we should have done it ten years ago. We didn't and that's the way life is, and we need to get on down the road.

JUDGE WOLFF: Well, the really good thing about it is: if you use it, you pay; you don't have to pay if you don't use it; it does leverage tax dollars; it does get the project done quicker and save money. Whether we had a five-cent raise in the tax, you'd still need to do this. So I am a proponent of this, I think it's good, and as you know, we passed our resolution for new capacity, new lanes, new interchanges. One other one that we didn't mention that we really need to be looking at is IH-10 and 1604 interchange because a big mall is fixing to go in out there at USAA's property, so I think we've got some really viable projects that could work and we could get up and get going and show that this works.

And part of the opposition was existing, and once we said we didn't want to do existing, then that went away. The other opposition is they still think in terms of the northeast where you stop at a toll booth and you go through this putting in your quarters, and I think we need better communication, both at our level and at the department's level, of saying it's a different world now, you don't have to go through that sort of technology that was when they were first implemented.

MR. WILLIAMSON: No. And I know you were listening when we had an earlier colloquy on the possibilities of using electronic technology, but we're trying to tell our staff, privately and publicly at every turn, that we want a system that is easy. I would like nothing better than for the state to send me my vehicle registration every year and give me an option: do you want to buy $100 worth of tolls for 60 bucks, add $60 to your check; do you want to buy $500 worth of tolls for $300 right now? And get to a point where citizens, where county government could pass a property tax increase of 2 cents and tell their citizens: In exchange for this we're going to send you $500 worth of toll credits. You could do that if you wanted to.

JUDGE WOLFF: I understand.

MR. WILLIAMSON: To get to the point because technology allows that, there's a way. In fact, if Nichols would just share with you what he shared with us, there's a way you can embed it in that --

JUDGE WOLFF: Into your renewal?

MR. WILLIAMSON: Yes, you can embed all that stuff in a little circuit board.

JUDGE WOLFF: Yes, he was showing me.

MR. WILLIAMSON: Slap that thing on the windshield and roll.

But I'm proud of you and I'm proud of your court. Everybody knows I love San Antonio and we can't wait to help you out.

JUDGE WOLFF: We'll get it going. Thank you very much.

MR. JOHNSON: Speaking of being aggressive, I noticed that you've also signed up to speak on 8(a) which is the SIB loan. Would you want to do that now or wait for that agenda item?

JUDGE WOLFF: I can just say thank you. Let me tell you, you were really critical on bringing the Toyota project to San Antonio when you approved the funding -- the loan we're talking about today is on one of our projects, but when you provided the funding for what you did, and there's some $20 million or so that we're chipping in -- I'll just tell you very quickly, David Casteel and them are moving very quickly on Watson Road. They're already up and going and letting the contract, and that will get the immediate entry into the plant.

Just this week we're at the point where we've got our design finished for Applewhite Road and for Zarzamora, and we expect to let those contracts sometime in February. So things are moving along well and you've actually done better than we've done, you're faster.

MR. JOHNSON: Well, thank you. It's great to see David here and it's nice to hear that he has hit the road running, literally.

JUDGE WOLFF: He has, let me tell you, he has.

MR. JOHNSON: I think you have a real gem.

JUDGE WOLFF: We do.

MR. JOHNSON: He did confide to me the other day that he's still looking for the ferry system.

JUDGE WOLFF: It's hard to find it.

(General laughter.)

MR. JOHNSON: He's going to miss being in charge of one of our ferry boat operations.

JUDGE WOLFF: Thank you very much.

MR. JOHNSON: Thank you, Judge. 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.

(Applause.)

MR. WILLIAMSON: That's great.

MR. BEHRENS: Agenda item number 8, our State Infrastructure Bank applications for loans. We have two: one for Bexar County and one also for the City of Easton. James.

MR. BASS: Good morning. Once again, I'm James Bass, director of Finance for TxDOT.

Item 8(a) is the previously mentioned loan of up to $9.1 million to Bexar County to partially fund reconstruction costs of Zarzamora Road from Interstate 410 to Applewhite Road, and Applewhite Road from Zarzamora to Watson Road.

I would like to just bring to your attention that these roads currently are not on the state highway system but they are eligible for federal aid funding and therefore, are eligible for assistance from the State Infrastructure Bank.

Interest would accrue from the date funds are transferred from the SIB at a rate of 4.3 percent, with payments being made over a period of 15 years, the first two years of which would be interest only. Staff would recommend your approval.

MR. JOHNSON: Any 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. BASS: Item 8(b) seeks approval of a $120,000 loan to the City of Easton to fund relocation of utilities required by the reconstruction of Farm to Market 349 from a two-lane roadway to a four-lane divided facility.

The item I'd point out on this one is that since it is considered a small loan, a loan of less than $250,000, this is the one and only time this loan will come before the commission.

Interest would accrue from the date funds are transferred from the SIB at a rate of 4 percent, with payments being made over a period of 15 years, and staff would recommend your approval.

MR. JOHNSON: Any questions, comments?

MR. NICHOLS: That interest rate is cheaper than the one we just approved for San Antonio?

MR. BASS: Correct. San Antonio is rated by Fitch Rating Company Double A Plus.

MR. NICHOLS: It's not the length. So moved.

MR. WILLIAMSON: Second.

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

(A chorus of ayes.)

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

MR. BEHRENS: Agenda item number 9, we have our contracts for the month of December, both our Maintenance Contracts and our Highway and Building Construction Contracts. Thomas.

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

Item 9(a) is for the consideration of the award or rejection of Highway Maintenance Contracts let on December 4 and 5, 2003, whose engineer's cost were estimated to be at $300,000 or more. We had eight projects; we recommend all projects in the attachments be awarded.

MR. JOHNSON: Any 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. BOHUSLAV: Item 9(b) is for consideration of award or rejection of Highway Construction and Building Contracts let on December 4 and 5, 2003. We had 69 projects; we recommend all projects be awarded.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Thomas, do any of these projects affect the commissioners' land individually that you know of?

MR. BOHUSLAV: I don't actually know of any that do.

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, Thomas.

MR. BEHRENS: We'll go to agenda item number 10, our Routine Minute Orders. We do have some speakers that would like to address Minute Order 10(f)(1) which is asking for authorization to construct an at-grade railroad crossing and to install the appropriate safety control devices. This is to be funded 100 percent by the Southwest Gulf Railroad Company. This proposed railroad track would cross FM 2676 in Medina County. And Mr. Chairman, I'll give you these two folks that wish to speak.

MR. JOHNSON: Robert Fitzgerald from Hondo, Texas.

MR. FITZGERALD: My name is Robert Fitzgerald. I'd like to give you these handouts so you can kind of follow my remarks, if you don't mind.

Gentleman, thank you very much, and lady. I'm sorry, I didn't know that there would be a lady on the commission. I appreciate very much your allowing me to address our concerns concerning this grade-level crossing on Farm to Market 2676 by the Southwest Gulf Railroad.

Through the Freedom of Information Act, we have been able to obtain from the Surface Transportation Board information and a map concerning this crossing. We believe that crossing this farm to market road with a grade-level crossing will prove to be a disaster. It will surely result in deaths, unnecessary delays for commuters, school buses, fire and police protection, as well as emergency services, not to mention the delays caused by gravel trucks going to and from the proposed quarry that this railroad will serve.

To acquaint you with the situation, Farm to Market 2676 is a main artery from this area in Medina County to San Antonio. Several new and planned subdivisions are located in this rapidly growing area that would use this intersection with County Road 353. Also, according to Vulcan's calculations -- which is the parent company for the Southwest Gulf Railroad -- 15 percent of the crushed limestone mined there would be hauled by trucks and these trucks would have to use the same intersection and railroad crossing. This would mean, according to Vulcan's calculations, that approximately 125 trucks would be making round trips daily and would have to compete with the existing traffic there, plus having to compete with the train traffic at that grade-level crossing.

This traffic nightmare is compounded by the addition of Vulcan's estimated 125 employees that would make daily round trips to and from work, and hauling of the fuel and supplies to the quarry. It is our understanding that 2676 is not built to withstand the constant traffic from trucks weighing some 70,000 pounds, and County Road 353 is only a gravel road, so that any type of repairs or construction there would also add to that congestion.

I'd like to bring to your attention, on the enclosure, that in February of 2000 in a meeting with the Texas Department of Transportation in Hondo, Vulcan official, Tom Ransdell, president, agreed that a grade separation needed to be constructed where the spur crosses 2676, and that they understood at that time that they would pay for that cost. In addition, about the same time Vulcan informed the Medina County Commissioners Court that grade separations on vital county roads would also be built.

Vulcan's president, Tom Ransdell, and Darrell Brownlow were making presentations at that time to the local public and promised that there would be no waiting on trains -- which logically speaking, would indicate that there would be separation of the rail and highway traffic. Now we're hearing that Vulcan is seeking permission for a railroad crossing at grade-level at all points.

I'd like to say at this time that we also have a letter that will be read by another member from our organization from our county judge.

If there are any comments or questions that I can address, I'd be glad to do so now, or perhaps after his remarks would be more appropriate.

MR. NICHOLS: Yes. Personally I'm going to wait until everyone talks.

MR. JOHNSON: The next person who has asked to speak is Joe Balzen, also from Hondo.

MR. BALZEN: I'm Joe Balzen and I'd like to read this letter from our county judge, Mr. Jim Barden, and it's dated the 17th of December 2003 to the Texas Department of Transportation.

"Sirs: This relates to the proposed grade-level crossing on Farm to Market 2676 in Medina County by Southwest Gulf Railroad.

Farm to Market 2676 has too often been described as an out-of-the-way country road with little in the way of traffic. In fact, Farm to Market 2676 is one of the best farm to market roads in the state. It is a major artery in what is becoming one of the fast-growing areas of our state. While Farm to Market 2676 has not reached a level of congestion that requires a grade separation to ease the threat of traffic jams, its need for a grade separation is primarily a safety concern.

"Traffic in the area of the proposed crossing is moving at a relatively high speed because there is no reason to stop or slow down for a few miles in either direction. To suddenly come upon a grade crossing in an east-west stretch of fast-moving highway is a highly dangerous situation, regardless of the warnings and cross-arms.

"The owners of the proposed railroad acknowledged the need for a grade separation crossing at this location in early discussions with the local Texas Department of Transportation engineer and some community leaders and elected officials. If they are now proposing otherwise, it is essential to understand what has changed. It is certainly not the amount of traffic which has continued to increase, or the projected use of the railroad crossing which has not changed.

"I urge your serious consideration and on-site study of the location by your engineers familiar with the area. I believe a grade separation crossing at this location is a must for the best interests of the citizens of Medina County and the traveling public.

"Thank you for the opportunity to express my views." And it's signed: "Sincerely, Jim Barden."

And I would like to personally state that if they're going to check the traffic there, they should check about several weeks before, during and after hunting season, especially during the holidays, because it increases -- just personal observation, it does increase considerably.

MR. JOHNSON: Any questions of Mr. Balzen or Mr. Fitzgerald? And Mike, I think we'll ask you for what's going on.

MR. BEHRENS: I'd like to get Carlos to come up here. Carlos, can you tell us what has occurred from when Vulcan was originally talking about their willingness to do a grade separation to what their proposal is today?

MR. LOPEZ: Well, my understanding of the project -- of course, our interest is the safety of the traveling public whenever it crosses our roadway -- right now the information that has been given to me, there's about 530 to 800 cars a day on this FM road within the limits in this general area, and that four trains are projected per day to use the spur track. Those type of volumes and train traffic is far below what I think would be in most normal grade separations. In fact, I can name a number of crossings here locally where the train traffic is much higher and the ADT is much higher, where all we have is lights and gates at those particular crossings.

My understanding is that Vulcan has committed to buying the necessary right of way to do a grade separation in the future when it is warranted, and when that grade separation is needed, that they will also pay 100 percent of those costs. So my understanding is that at least the district is comfortable with this recommendation and we are also.

MR. NICHOLS: Thank you. Can I ask a question?

MR. JOHNSON: Of Carlos or the speakers?

MR. NICHOLS: The speakers. On this project, is your biggest objection the quarry going in there and them building this, or is your objection having a railroad crossing, or is it this particular location, or if they moved the crossing further down? I mean, I'm trying to make sure I understand. If they found the right place to cross, are you supportive of the project, or you just don't want the project out there?

MR. FITZGERALD: Sir, where they want to cross is actually a T intersection with County Road 353. We think it's a very dangerous intersection there. A train would be coming downhill from the proposed quarry site, it would be approximately a mile and a half from where this intersection would be on 2676, maybe a little bit further than that. There's going to be 100 cars on this train, there will be four of them a day; that means there's going to be 800 cars going back and forth a day at their peak operation, according to their own figures.

MR. NICHOLS: The 800 every day, that would be four times a day.

MR. FITZGERALD: I'm sorry. There would 100 cars four times a day, but you've got to go to and from, you see.

MR. NICHOLS: Four trains a day is four trains a day.

MR. JOHNSON: I think what he's saying is four go from the quarry to wherever the focal site is, and then those go back.

MR. NICHOLS: Is it four a day or is it eight a day?

MR. LOPEZ: It's my understanding that a train would cross that crossing four times a day.

MR. NICHOLS: That's two trips a day, coming and going.

MR. FITZGERALD: And the Surface Transportation Board is saying it's eight, so we have a disagreement there. But the grade-level crossing there, again, as far as delays are concerned, perhaps it wouldn't be very long, but the train is coming downhill -- you know trains can't stop for cars, cars have to stop for trains, that's obvious.

MR. NICHOLS: But I'm trying to make sure I understand what your greatest objection is. Is it the quarry or is it the location of that crossing? In other words, if you put the crossing in a little different place, would you be satisfied, or are you saying you shouldn't have a crossing over the rail, or are you saying that when they build the crossing it needs to be a grade separation as opposed to an at-grade?

MR. FITZGERALD: If they use that location, sir, in our opinion -- and again, we're the inhabitants rather than the engineers -- we think the only safe thing would be a grade separation. And when Vulcan sold this idea, so to speak, to our people and the county, made talks to the local chamber of commerce and so forth, they said they would use grade separations.

MR. JOHNSON: Well, what has happened between that point and where we are today?

MR. FITZGERALD: We received the Surface Transportation Board report that now they want to use grade-level crossings, sir. What has changed? We don't know.

MR. JOHNSON: You mentioned in what you said that Vulcan had agreed when warranted and needed. Now, who makes that determination?

MR. FITZGERALD: Well, I guess when somebody gets killed.

MR. JOHNSON: Well, I was asking Mr. Lopez.

MR. FITZGERALD: I'm sorry. But I mean, that would be one of the things. We've already had fatalities on that very road; back in 1999 a family of four people weren't killed by a train, they were killed by a gravel truck, the West family, father, mother, two children. So we have fresh in our minds what traffic in that area can do.

MR. LOPEZ: Chairman, I don't have the grade separation warrants in front of me, that's in the Bridge Division, but we can get that for you to give the commission an idea of what kind of traffic is usually involved before a grade separation is built.

MR. JOHNSON: Well, I mean, do we make the decision that we're going to require a grade separation there and then Vulcan is going to pay for it?

MR. LOPEZ: In this particular analysis, yes, we would make a recommendation to what type of device would be needed at the particular crossing.

MR. JOHNSON: My concern is what sort of commitment do we have from Vulcan. I mean, there's already apparently been a misunderstanding by the community as to what their intentions were; I don't want another misunderstanding to compound this.

MR. WILLIAMSON: Is the quarry already in operation?

MR. FITZGERALD: No, sir, it's not. The railroad is not in operation, nor is the quarry.

MR. WILLIAMSON: Is the opening of the quarry dependent upon this railroad?

MR. FITZGERALD: According to Vulcan officials, it is, yes.

MR. WILLIAMSON: And will the quarry lay entirely within your county?

MR. FITZGERALD: Oh, yes. Approximately 2-1/2 miles southwest of Medina Lake Dam.

MR. WILLIAMSON: So the ad valorem tax base increase will be reflected at the county and the school district level.

MR. FITZGERALD: I'm sorry, sir?

MR. WILLIAMSON: The increase in value in property for that quarry will be reflected in your tax collections in the out years.

MR. FITZGERALD: I'm not prepared to discuss that, but we've been looking in the tax records to see what quarries pay as far as taxes are concerned.

MR. WILLIAMSON: Well, I'm not trying to be a shield for Vulcan, but you must be prepared to pay for it because in one of these letters you say you're afraid your taxes are going -- the memo from Carl whoever to Clay Smith: "200 area residents met last Thursday and they were concerned about their property values." Were you one of those 200 residents? I think you were.

MR. FITZGERALD: I was the president of that organization, yes, sir.

MR. WILLIAMSON: So all I'm trying to say is: "The Medina County Environmental Action League, 200 area residents met to discuss their concerns, and they were concerned about noise, dust, contamination of water supply, and reduction of property values." I'm just simply asking you is it not the case that when the quarry goes into operation the property tax base will increase?

MR. FITZGERALD: No, sir, it's not. We have already done calculations what the residential decline will be in real estate values. You were mentioning earlier on did anybody ever see gasoline taxes go down. Our taxes probably won't go down when the quarry goes there, although we may ask for that, but we feel that the failure to develop new real estate -- as a matter of fact, there's a subdivision that I'm well aware of now, 54 lots with five acres each, that would make excellent home sites for people, executive types, so to speak, at the Toyota plant -- which is not going to be too far away from us -- this would not be developed because the railroad would be running right through it.

MR. WILLIAMSON: Okay.

MR. NICHOLS: Carlos, let me ask a question. I guess I'm a little confused on the train. Are the tracks already there?

MR. FITZGERALD: Oh, no, sir. This is a proposed railroad and a proposed quarry.

MR. NICHOLS: I'm asking Carlos right now.

MR. FITZGERALD: I'm sorry.

MR. NICHOLS: Is it a spur off of a main line?

MR. LOPEZ: Yes, it's a spur off a UP from a trestle.

MR. NICHOLS: So UP is, in effect, building a spur -- you're saying no?

MR. LOPEZ: Southwest Gulf Railroad Company will build a spur track from the Vulcan plant to tie into the UP line.

MR. NICHOLS: A short-line operator then, I guess.

MR. LOPEZ: Yes.

MR. NICHOLS: Just for the purpose of hauling.

MR. LOPEZ: Yes.

MR. NICHOLS: So the only thing they're going to be hauling is the quarry material.

MR. LOPEZ: That is correct.

MR. NICHOLS: And the quarry people are willing to pay for the crossing.

MR. LOPEZ: Yes.

MR. NICHOLS: Now, what other type of traffic are we expecting? Is this a crossing to come out of the quarry to get back on the main road?

MR. LOPEZ: That is correct.

MR. NICHOLS: So we have no other outside private transportation going into the quarry crossing that railroad crossing?

MR. LOPEZ: No. It's strictly a train serving the needs of that quarry.

MR. NICHOLS: So to the general population driving on the regular roadway, we're not putting them across this crossing; this crossing is strictly for the quarry.

MR. LOPEZ: Well, in order to get to the main UP line, it crosses our FM road, and what we're making a determination is what kind of devices are needed at that FM road once the spur --

MR. NICHOLS: Okay, the railroad spur is going to cross it.

MR. LOPEZ: The new spur, that's right, when it's built will cross the roadway.

MR. NICHOLS: Okay.

MR. LOPEZ: And based on the traffic that's out there today, the number of trains.

MR. NICHOLS: Obviously there's not that much data in here related to that.

MR. BEHRENS: I'd recommend we defer this and get some more information together.

MR. NICHOLS: Right.

MR. JOHNSON: In my mind, Mike, one of the critical elements of this is the commitment from Vulcan to provide the grade change, elevation change for the crossing when warranted and needed -- that's a pretty open and vague statement since it is for safety's sake.

MR. BEHRENS: I think we should get further information from Vulcan.

MR. JOHNSON: Yes.

MR. FITZGERALD: May I make a couple of other comments, sir, that may clear up some of the questions you had? We've been battling this, so to speak, for four years when we first found out about it, and no good deed goes unpunished so I was elected president of this organization, and we had many, many meetings with Vulcan, open meetings, and as I say, that's when all of the original things -- just as Mr. Friesenhahn from the TxDOT Hondo office, we gave you the reference there that they had met with him about this, that they would be doing grade separation crossings, not only at FM 2676 but other, shall I say -- our main road going into Castroville is 4516 and they said they would put a grade separation there. There are also flood plains involved in this. Corps of Engineers is involved, Surface Transportation is involved, FEMA is involved, of course Fish and Wildlife have been involved, Texas Commission on Environmental Quality will be involved, but that's for air quality and water quality and so forth.

When we found out that Vulcan was going to try and build this railroad, we formed a covenant with 56 landowners that composed 9,650 acres of land that simply said in a covenant that we would not allow a railroad or other conveyor belt system to cross our land. The result of that is that Vulcan wants to become -- has created a railroad company to try and become a common carrier that would then have eminent domain powers that would override our covenant.

MR. WILLIAMSON: You can just stop while you're ahead, and I'll tell you why I'm saying this.

MR. FITZGERALD: All right, sir.

MR. WILLIAMSON: I'm really sympathetic to your concerns, and Executive Director Behrens is correct, we need to gather more information, but this commission, as long as I've been on it, has studiously avoided making decisions that get in the middle of competing economic concerns. We don't want our actions or inactions to be a part of whether or not you win or Vulcan wins a battle that doesn't really affect our mission, and our mission is the safety of the traveling public.

So up until about three minutes ago you had persuaded all three of us that this was a safety matter, and now you're venturing into the area of competing economic interests, and just trying to be a friend but in a straightforward way saying to you that you need to not say anything else and let us look into these facts because I don't know that we want to be in a position of between you and Vulcan. You're a taxpayer of the state and a citizen of the state and we respect you, and Vulcan is a corporate member of the state and they pay taxes and they hire people. It's not our job to be in between you two and to be used to prevent this thing from happening. Do you see what I'm saying?

MR. FITZGERALD: Sir, as you'll note, thank you very much for your information, but our address here -- shall I say in writing -- is safety issues.

MR. WILLIAMSON: That's what we're concerned about.

MR. FITZGERALD: And that's what we're primarily concerned with here with you all. Thank you very much, and Merry Christmas.

MR. JOHNSON: So we'll defer this issue. Mr. Balzen?

MR. BALZEN: I'd just like to ask one question. They say they have two trains, round trip, and if they have a grade crossing -- which they want to have a grade crossing -- what's to stop them from next year, following year, having three trains, ten trains?

MR. WILLIAMSON: Wouldn't know.

MR. BALZEN: It's like tax, you know, always going up but never coming down.

MR. JOHNSON: That goes back to this issue that I brought up of when warranted and needed. I mean, who makes that assertion, and then do we get into an argument with Vulcan as to whose judgment that is and when their responsibility starts. You need to have those things understood at the beginning and not as of midcourse.

MR. WILLIAMSON: You've won this fight, we need to stop.

MR. BALZEN: Thank you for your time.

MR. BEHRENS: We have the remaining Routine Minute Orders under agenda item number 10, as posted on our agenda. Unless you want to discuss any other, we'd recommend approval of the remaining minute orders, minus agenda item 10(f)(1).

MR. WILLIAMSON: As long as we're sure none of this affects us.

MR. JOHNSON: Did you have anything, Robert?

MR. NICHOLS: No, I'm fine.

MR. JOHNSON: Ric, you had nothing?

MR. NICHOLS: So we're going to approve the balance of these with the exception of that one.

MR. WILLIAMSON: Are we going to approve this one where Mike Behrens gets a $6,000 a month raise? What's this? It's Christmastime -- no, it's the holiday season. I forgot.

(General laughter.)

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: I'd recommend that we go into executive session.

MR. JOHNSON: Is there anyone set up to speak in open comment period?

MR. BEHRENS: We have one.

MR. NICHOLS: Are you going to go ahead and take it now?

MR. JOHNSON: Yes. I hope I don't butcher your name -- Jim Von Wolske.

MR. VON WOLSKE: Correct. I'm the only one here that's not dressed up because I'm the only one here that doesn't have anything to ask of you. I notice everybody comes in asking something and they leave. I'm a retired engineer, I live in Austin, much to do about this toll road stuff on the radio this morning, but I'm here to point out what's working and what's not working with TxDOT.

I've been to a lot of hearings on the 130, all three sections or all four sections, and like the MoPac hearing, I was the only person, only two people out of 400 that showed up that said, look you're going to have to widen the road. I don't use MoPac, I don't use I-35, so take this as very unbiased, but what's working about TxDOT and what's not working about TxDOT. I made the comment that every road you build is too narrow, too crooked and too late.

(General laughter.)

MR. VON WOLSKE: And I told that to one of your hearing representatives -- no, I told it to Gonzalo Barrientos and he didn't even laugh. So anyway -- I think it was him -- but on the 130 I said whatever happened to the straight line theory of road building, and this was off the record, and he said we want to build them straight but we're getting coerced by the local politicians. So you're basically talking about gerrymandering of the political boundaries where you're getting gerrymandered on the roads too.

Now, I have a friend from England and he said the only good roads in all of England are the ones built by the Romans 2,000 years ago and they're the straight roads. So I really had to bite my lip when these guys from San Antonio are asking for funds when they're the ones that caused the debacle on the 281/410 interchange, and that was a terrible bottleneck and I rarely go there.

So anyway, the big salient question I have is under what rule of law or reason do you allow the toll road authority to commandeer 183 South going out of Austin for the 130 right of way? That keeps people from Bastrop from coming in; they have to pay to go to work; that's the only good road in the whole Travis County, it's straight, it's wide. On the 130 you're buying up 400 feet of right of way; I don't think that's wide enough, it's not visionary enough. In fact, is there any road you can even think of that has too much right of way or is too wide? Certainly not true. Maybe because you have to look at the expansion of these things, how the governor is talking about shared corridors. I don't agree with the shared corridor philosophy in that -- I'm an engineer -- every time a train goes down MoPac -- which is all railroad, by the way, and that's why it's straight -- every time a train comes down there everybody rubbernecks and slows down, it's just a natural reaction that will happen on that highway too.

What's working about the Houston toll roads? They're wide, they're straight, and they're timely. What's not working about the Austin roads? Too narrow, too crooked, too late. Southwest Parkway is a joke; 360 looks like the stop sign salesman laid that out; South MoPac wanders around all over the place. I know it's funny. I don't even drive on them. Okay?

(General laughter.)

MR. WILLIAMSON: You're funny, the roads are not funny.

MR. VON WOLSKE: I know. You can go to beat heck and then all of a sudden -- like this --

So anyway, I was at a city council meeting on an environmental issue. I rarely go to those, I just don't, but I think somebody has to come here and talk for the 200,000 people that take I-35 and the 200,000 that take MoPac, someone that has no big axe to grind but as citizen's input. But anyway, at the council meeting I told the mayor that the three biggest issues facing Austin is roads, roads and roads, and now serendipity, this thing shows up.

So I'm urging TxDOT to not get pushed around by the local authorities. You know what it takes to build a good road and I'm just so happy that you told this man here that we were not going to get in these commercial battles here, that your vision is to build a long-range, visionary, strategic system and not let it get meandered around.

On 35, you know, we didn't ask for NAFTA. Now NAFTA is here and the City of Austin is under the hammer on the EPA mandates. I'd like to know why TxDOT doesn't take 290 off from I-35 and move it over to 183 and relieve at least some of that traffic. Why don't you close down some of the get-on ramps on I-35 from 290 and going north. Every little whiney merchant is going, I will lose my business. Well, we don't owe him a business, we owe safe roads. I mean, this is the biggest, richest state in the country and we've got Mickey Mouse roads because someone is pushing you around.

MR. JOHNSON: Any questions or comments?

MR. VON WOLSKE: I want to say one more thing. Excuse me. Can I say -- because I'm speaking for all these people.

(General laughter.)

MR. JOHNSON: Three minutes for all the people?

MR. VON WOLSKE: Yes, each one. That's 600,000 minutes I get today.

I was in Florida; they have the Sunshine Parkway there and I was coming up from central Florida heading north, and that thing runs parallel to the big interstate, less than a quarter mile away. So I'm paying the toll and driving along, and it's a beautiful road but there's something wrong there because there's an awful lot more people on the freeway than there is on the Sunshine Tollway. Now, you say why would that be? Well, their services on the island-type thing so many people don't like that. You feel like you're being coerced into buying your gasoline and stuff. I mean, that's just a little sidebar issue, but something is wrong with their system, it's failed down there, too, to take the traffic off from the interstate system.

And when you build 130, no one in their right mind, no trucker is going to pay a toll to go from way down there to way up there, hauling mangoes from Mexico and heading for Minnesota. Why should he pay a toll and get there later and it costs money to take 130. So 130 is going to be straightened out, widened, and fewer get-ons and get-offs because it really has to take the traffic off I-35.

MR. NICHOLS: Let me tackle a couple of those. I'm almost afraid to make a comment.

MR. VON WOLSKE: Hey, I won't hurt you at all.

MR. WILLIAMSON: This is Robert Nichols; he founded the state's largest stop sign business.

(General laughter.)

MR. VON WOLSKE: But I mean, listen, I'm only saying what everybody else says.

MR. NICHOLS: I'm not going to try to address everything that you brought up, but I will address a couple of them, because you made the comment and I think it's worth responding to.

First of all, on the trucks, the time, you're saying nobody is going to be willing to pay. I'm telling you as 35 gets more and more plugged -- I mean, it's pretty bad right now, but look at it 15 years from now when you have 50 percent more traffic on it, and the truck time is money and the trucker is going to have a choice of spending two hours bumper to bumper with his truck running, or he can pay a buck or two bucks or whatever it is and get on down the road.

Now, on why some of these highways are wiggling instead of running just straight, back in the '40s and '50s when the state built highways, the process was much more simple. They'd say we're going from here to there and pretty much just go out there, acquire it, take it, survey it, build it and lay it out. These things belong to everybody, not just everybody that agrees with you but everybody, and over a period of time they realized, are we going to knock down a church, for instance, to keep it straight, or if we back up a little can we have a little wiggle and avoid an aquifer -- aquifers are pretty important -- and as you evolve all these kinds of things, what we try to do to meet federal requirements and state requirements -- these are things that are evolved over a long period of time by all the people -- is to try to build the best transportation system you can and accommodate all those kind of things.

So it's not a matter of just making a decision -- to heck with you, we're going to make it straight -- this belongs to everybody. I will tell you that -- and I hope you feel comfortable -- we've enjoyed having you here; this has been fun because you're saying what a lot of people do think.

MR. VON WOLSKE: A lot of people -- excuse me, what were you saying?

MR. NICHOLS: You are saying what a number of people do say.

MR. JOHNSON: And a lot of his points are well taken.

MR. NICHOLS: Yes, and points are well taken, and I appreciate you coming here to say them, and I hope that you feel welcome to be here any time.

MR. VON WOLSKE: Well, let me respond to that -- go ahead, complete the statement -- but I want to respond to that about the church and stuff, that's transitory. Now, remember the Romans, you go squawk to Caesar about your church or your pig farm. Okay, off with your head. Next one?

(General laughter.)

MR. VON WOLSKE: So the thing is, let's suppose that the people who laid out this city here, well, Austin ended at 51st Street. Even the new subdivisions really should be laid out in more of a grid system, but it's just meandering.

New York City, for all its deficiencies, it's just a madhouse, insanity, that used to be sort of a little hodgepodge of roads, and they said, no, we're going to make a democratic approach here, a long-term, basically forever strategic decision and lay out a grid system here. And that's what makes the Houston system move. When you hit those beltways, you head north for a while, then you head east, and then you roll back south.

So I think that too much weight is being put on certain factors. Like you can do a computer program where you evaluate certain -- basically you do a matrix and you do a weighted evaluation of what's the best way. How many tons of rock do I have to move, how many properties do I have to buy, et cetera, how many salamanders am I displacing and how many trees greater than 12 inches in diameter? There's too much weight being put on those and not enough weight put on the straight line trajectory.

In Canada -- Canada was the king of meandering roads, and they recently said, no, we're going to build straight roads because there's too much gasoline wasted on the crooked roads.

MR. JOHNSON: Jim, your point is very well taken, but if we did not make the considerations that we do, we would be in the courthouse doing nothing, and that's the choice. This has been an evolution of the method of the way we have to conduct our business.

MR. NICHOLS: Put together a committee and run for office and go out there and fix it.

MR. JOHNSON: The first time your mango guy gets up to Minnesota and all those mangoes are spoiled because he was sitting in traffic in Austin, Texas, on I-35, he's going to take the toll road to circumvent that.

MR. VON WOLSKE: Well, that's because you let him, though, and the point is that no one shows up for the meetings and no one who sits in traffic burning gasoline, idling, idling, idling could ever sue you, they can't sue you. What's the charge?

MR. JOHNSON: Well, thank you for being here.

MR. VON WOLSKE: Thanks for your time.

MR. JOHNSON: You have some excellent points.

MR. WILLIAMSON: Good job.

MR. VON WOLSKE: Thank you. I'll be back.

MR. JOHNSON: We will now recess for an executive session, as provided for by Section 551.071 of the Texas Government Code, to deliberate on the value of real property. It is now 12:34 p.m. and we stand in recess.

I'm going to guess that most of you will not be here when we reconvene, so my first thing to ask of you is to drive safely, and my second thing to ask --

MR. WILLIAMSON: Wait, Chairman.

Sir, I'm just curious, where did you go to college?

MR. VON WOLSKE: Fargo -- no, I'm just kidding -- Wisconsin. I have a master's degree from the University of Wisconsin.

MR. WILLIAMSON: We were all up here visiting and Mike was sure you had gotten your degree at the University of Texas at Austin, and I was sure you had gotten your degree at Texas A&M, and we were just trying to clarify.

MR. VON WOLSKE: I worked for UT for 20 years but I never got involved in that football feud or anything.

MR. WILLIAMSON: We were just kind of curious.

MR. JOHNSON: The second thing I would ask of you is to have the happiest of holiday seasons. And the third thing, in light of the season, go home and hug all your loved ones, and because it's such a special time of the year, give them an extra hug.

MR. WILLIAMSON: Absolutely.

MR. JOHNSON: Thank you.

(Whereupon, at 12:34 p.m., the meeting was recessed, to reconvene following executive session.)

MR. JOHNSON: The meeting of the Texas Transportation Commission is reconvened. I will note for the record that it is 1:14 p.m. The commission has concluded its executive session during which no decisions were made or votes taken on any matter.

Mike.

MR. BEHRENS: We're on agenda item 6(b), Webb County, to consider TxDOT's participation in the foreclosure sale of the Camino Colombia toll road, and Amadeo will present that.

MR. SAENZ: Good afternoon, commissioners. For the record, Amadeo Saenz, assistant executive director for Engineering Operations.

The minute order before you authorizes the executive director or his designee to participate in the foreclosure sale of the Camino Colombia Toll Road. Transportation Code Chapter 361 authorizes the Texas Department of Transportation to acquire a turnpike to be part of the state highway system and authorizes the Texas Transportation Commission to provide for expenditure of money for acquisition of a turnpike.

In Webb County, Camino Colombia, Inc., a private corporation chartered under the laws of the State of Texas, constructed and is operating a private toll road from the Colombia Solidarity Bridge to Interstate 35. As a result of Camino Colombia, Inc.'s default under their financing agreement for Camino Colombia Toll Road, a nonjudicial foreclosure sale for Camino Colombia Toll Road and other trust property, as defined in the Deed of Trust for the benefit of the holders of the obligations issued to finance the project, will take place in Webb County on January 6.

We've determined that Camino Colombia Toll Road, if it was acquired, would facilitate and be an important part and a benefit to the state and also the traveling public, and recommend approval of 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. Is there any other business to come before the commission this day?

MR. NICHOLS: I move we adjourn.

MR. WILLIAMSON: I second.

MR. JOHNSON: There being none, there's a motion and a second to adjourn. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: For the record, please note that it is 1:16 p.m. Merry Christmas and happy holidays to all.

(Whereupon, at 1:16 p.m., the meeting was concluded.)

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