Texas Department of Transportation Commission Meeting

VIA (Metropolitan Transit Authority) Building
1021 San Pedro Avenue
San Antonio, Texas

Thursday, January 29, 2004

COMMISSION MEMBERS:

CHAIRMAN RIC WILLIAMSON
JOHN W. JOHNSON
ROBERT L. NICHOLS
HOPE ANDRADE
TED HOUGHTON, JR.

 

STAFF:

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

P R O C E E D I N G S

MR. JOHNSON: Good morning, it is 9:34 a.m. and this first meeting of 2004 of the Texas Transportation Commission is called to order.

Welcome. It is a pleasure to be in San Antonio and have you here this morning. As you know, it is our practice to hold some of our monthly meetings outside of Austin at different locations around the state. We certainly benefit from meetings outside of Austin. It acquaints us with the interests, challenges and people of the various regions of this great state. I'm certain by the time our visit is over, we will be better informed about this area, and hopefully our meeting will give you a sense of how we conduct the transportation end of the state's business.

Not only is this meeting the first of the year, but it is also a first for our two new commissioners: Hope Andrade from Bexar County -- who many of you know extremely well -- on my right.

(Applause.)

MR. JOHNSON: And Ted Houghton from El Paso County on my left.

(Applause.)

MR. JOHNSON: Welcome to both of you. We're delighted and applaud the governor's wisdom in his selections.

As many of you know, I've had the privilege of chairing this commission for the past three-plus years, and I would like to thank Governor Perry for his graciousness for allowing me to serve in that capacity. Now it's time to turn the reins over to my colleague and good friend, Ric Williamson.

As you also are aware, we are embarking on some exciting and positive new ventures for Texas, new opportunities to make transportation in Texas not just better but the best, and I am excited and confident in Ric's leadership ability.

Ric, my friend, the gavel is yours.

(Applause.)

MR. WILLIAMSON: Thank you, John. On behalf of Governor Perry and the commission, I welcome you to San Antonio as well. This will be an unusual meeting in that there are some unplanned events. No doubt my great legal advisor, Mr. Monroe, will stop me if I do anything wrong, but I understand it's the chair's prerogative to change the agenda on certain things, and we're going to change it a little bit this morning with your indulgence, commissioners.

We will all have remarks in a moment, but at this time I would like to ask Governor Perry's Transportation Policy Director and about one of the most important advisors the governor has in his shop, Kris Heckmann, to step forward.

For those of you who don't know Kris, Kris is a lawyer; he went to work for Governor Perry at about a 50 percent pay cut several years ago to participate in the building of a new Texas, and Kris, would you proceed?

MR. HECKMANN: Sure. I have a letter from the governor to Mr. Johnny Johnson, and I'm reading it word for word, I'm not making this up.

(General laughter.)

MR. HECKMANN: I'll give it to you afterwards so you can see.

It says: "Dear Johnny, As the gavel is officially passed, I wanted to take a minute to publicly thank you for your five years of service to the State of Texas and especially for your three years of service to me as the chairman of the Transportation Commission.

"It has been a time of tremendous change at TxDOT. Throughout all the exciting innovations, developments and transitions in Texas transportation, your steady hand has guided the agency. Without your efforts, we would simply not have been able to make the progress that we have accomplished within the past three years, and while your accomplishments as chair are many, I have no doubt that among the greatest is putting up with Robert and Ric."

(General laughter.)

MR. HECKMANN: "Your patience is truly of Biblical proportions.

"In all seriousness, guiding an agency such as TxDOT requires a tremendous amount of hard work, and I am so grateful to people like you who selflessly volunteer your time to help the state operate as best as it can. Your leadership gives strong testimony to the kind of service that I truly endeavor to provide.

"Thank you for your service to the people of the State of Texas. Sincerely, Rick Perry."

(Applause.)

MR. WILLIAMSON: For the governor, for the commission, John, we are deeply and forever in your debt for your leadership and we appreciate what you've done.

(Applause.)

MR. WILLIAMSON: Thanks, Kris.

John has served the state well and the governor recognizes his contributions. I think that to put closure on the change of leadership, one needs to remember that we're actually five leaders working towards one common goal. I know this man very well; it's the governor's intention to hand his chairs of all his major commissions and boards around through the years, and I would suspect that in a year or two we will all be sitting in Jacksonville, Texas in a meeting and watching him hand the gavel over to Mr. Nichols next, would be my guess.

The governor has other things that he wishes and hopes John Johnson will help him accomplish over the next few years, and while we've got you for these last eleven months, we're going to use you, John, and then watch and see what you do next. You've done great for the state and I appreciate it very much.

There will be, no question, a distinct drop in how smooth these meetings go because there is no one more smooth and more professional than John Johnson, and I am a start-and-stop kind of guy, so it won't be like it was, but Mary Anne Griss has written a good script, and John's going to sit over here and kick me when I get out of line, and we will attempt to proceed as best we can.

Before we begin the meeting, it is customary to give each commissioner the opportunity to greet and comment to the public, and as John indicated earlier, we are very grateful to be in San Antonio and happy to be here and share in the transportation decisions of this state with people who don't live in Austin, Texas.

At this time I would need to note for the record that the public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 3:52 p.m. on January 21, 2004.

And now can I go to remarks, John?

MR. JOHNSON: You can do whatever you want to do, Mr. Chairman.

MR. WILLIAMSON: I don't know what rotation you used, but maybe we'll reverse it and go younger member first -- or we'll just start it on the viewer's left. At this time, Hope, the floor is yours.

MS. ANDRADE: Good morning, Chairman Williamson, and welcome to San Antonio.

What a great honor it is for me to have my first official commission meeting held in my hometown. Thank you so much for making that possible.

I'm extremely proud to be a San Antonian, and I hope, commissioners and Chairman Williamson, that you will join me when I invite you to join me in touring more of San Antonio. I know you have been great supporters of this wonderful city, and I hope to bring you back. I know that I've told you we've got some great restaurants, and I hope maybe that will also lure you to come back and have some great tortillas here.

It's been a great honor. I've been on the commission now officially for two weeks, unofficially for six weeks, and I've been in a tremendous learning mode. I'm off on a listening tour, as all of you have heard, but I've also had the great honor to get to know these gentlemen, as I mentioned last night, and I'm really looking forward to working with them. They're a great group of people that are committed to leading the state in transportation issues, and I only hope that I can build on what they've done and that we work closely together to make Texas a leader in transportation.

So thank you so much.

MR. WILLIAMSON: Robert?

MR. NICHOLS: Thank you.

It's good to be back in San Antonio. I also want to say that I think in the introduction of Kris Heckmann a while ago, I'm surprised our chair failed to mention one other item, and that's he's getting married on Valentine's Day.

MR. WILLIAMSON: Oh, that's right.

MR. NICHOLS: Transportation in the old days, each mile they used to put a stone up to measure progress, so the term milestone indicated how you progressed as you went down the road, and in this meeting, to me, there are a number of milestones: it's the first meeting of this year 2004; it's the first meeting with our new commissioners -- which we're real excited about; change of the gavel -- although Johnny may not be holding that gavel, he always ran the meeting as a team, and I know Ric has said we're going to keep working as a team and it's worked great so far, we're real excited about the team.

But also in the items in this agenda today is a milestone that I think for people who are not aware of it is extremely important, and that is for many years or decades the department has funded expansion projects in urbanized areas based on formulas, formula-driven, which sometimes the projects went over here and sometimes they went over here, and there's always been this concern -- and Ric was talking about it last night -- of am I getting my fair share, and there's always this concern.

And beginning the process several years ago, we began working toward getting away from that formula to an allocation basis, and in here is one minute order that actually not only formalizes it but locks in the next full year, and it's the first year where the new allocation process begins.

So it's good to be here and thank you for all being here also.

MR. WILLIAMSON: Anything additionally, John?

MR. JOHNSON: I did have a thought. First of all, Kris, thank you so much for being the messenger. I am humbled and will be eternally grateful for the governor's letter. But I did want people to know -- as Ric mentioned, I'm in my fifth year, about to start my sixth year on the commission -- I have had the distinct pleasure and honor of working with three commissioners who have put this state first in every thought that they've had in terms of their work for the Transportation Commission: David Laney and Robert Nichols and Ric Williamson, and what an advantage that has been for me to observe and to learn and to work with people like that. It's just something that you cannot describe in words nor transcribe in a letter or a book or memoirs or whatever, and it's been a huge advantage, and I'm indebted to the three of them. And I look forward to my years of service to the state, to share some times with Hope and Ted because I know that they're Texans to the core, and this commission will only move higher and transportation in Texas will only continue to get better.

MR. WILLIAMSON: Thank you, John.

Ted?

MR. HOUGHTON: I am delighted to be back in San Antonio and it's so outstanding when you get out to see what makes this state so great and the envy of the other states that make up this United States looking to us and seeing what we have in this state, and I'm looking forward to this journey.

I mentioned to the chairman of your Chamber, Michael Novak, there's a saying especially when you're in that position and especially when you're in Johnny Johnson's position, there's a saying, "Eagles do not flock; you have to get them just moving in the same direction." And it's a tribute to his leadership, Johnny, that you have moved this commission to where it is today, and I applaud you for that. And again, I look forward to meeting a whole bunch of folks in this room and around the state of Texas.

MR. WILLIAMSON: Very good.

Let me thank each of you for the remarks, and let me add for the record that before we begin the business portion of our meeting, it's real important, if you intend to speak, to fill out a speaker's card at the registration table out in the lobby. If you're going to comment on an agenda item, you need to fill out the yellow card and you need to identify the agenda item you intend to comment upon; if it's not an agenda item and you're going to speak in the open period, you need to fill out the blue card which is for comments during the open comment period.

Regardless of the color of card you complete, we would ask you to limit your remarks to three minutes unless you are a member of the Texas Legislature, in which case you may speak as long as you wish.

(General laughter.)

MR. WILLIAMSON: We have one other request, as is the norm now in all of these meetings, please take a moment to check your pager or your Doonesbury or whatever they're called, your cell phone, and be sure that you're on the silent mode. There's nothing quite as disruptive as phones and hand-held computers going off when people are trying to make a point. Thank you for that.

There are members of the legislature with us today, and some are going to speak specifically and be part of the San Antonio presentation, so I will reserve introducing those persons until the appropriate time. I know of one member present who I suspect -- because I've been living next to him for 20 years -- doesn't intend to speak but is unfortunately going to have to speak anyway, and that would be a member of the Bexar County delegation that lives to the north and east, Mr. Edmund Kuempel. I know Mr. Kuempel, a man of many words and one of my closest friends is in the audience, so Eddie, will you stand up, and what have you got to share with us today?

MR. KUEMPEL: (Speaking from audience.) Well, first of all, I'd just like to say it's certainly a pleasure to be in San Antonio. And the foresight if we developed a five-lane each way north and south -- it took me 40 minutes to get from Schertz to 1604 this morning, but it was a very interesting trip.

But Commissioner Johnson, if you know him, no words are necessary; if you don't know him, no words can describe him. He's that type of individual that has shown great leadership on the commission, and I know not only personally but from the legislative side of it, we certainly appreciate everything that you've done for the highways in the state of Texas. You're a true, trusted and valued friend like Ric is and has been for a number of years -- I knew him when he had hair. I learned a long time ago that a good politician stands to be seen and speaks to be heard but sits to be appreciated.

(General laughter.)

MR. WILLIAMSON: Is there any other member of the House or Senate present that did not otherwise intend to offer remarks?

(No response.)

MR. WILLIAMSON: Okay, thank you very much for that.

I suppose we need to begin with the approval of the minutes of our December commission meeting. Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All in favor, please signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: Opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

Bear with me while I go through my script. The next item on our agenda is to receive a report from our San Antonio district engineer -- he's kind of young but we think he's up to the job -- David Casteel. David, would you like to take control of the meeting?

MR. CASTEEL: Absolutely, Mr. Chairman. And I'm going to ask one of my friends from the VIA board to welcome you to his building, Tim Tuggey.

MR. TUGGEY: Mr. Chairman, members of the commission. My name is Tim Tuggey; I'm a member of the VIA Metro Transit Board of Trustees, and your host today at today's meeting. We're awfully excited and delighted that you would choose to use our facility. We're very proud of it, our community is very proud of it and excited that you would be here with us today. We're especially tickled to welcome a former member of our board back home, and so we welcome you and are really privileged and honored to be a part of a tangible display of cooperation among the various forms of transportation that our great state enjoys. Thank you for being here.

MR. CASTEEL: Thank you, Mr. Tuggey. And for the record, again my name is David Casteel and I work for you and the people in this room as the district engineer here in San Antonio. And my transportation friends in the San Antonio community have asked me to give a quick report on our district and then allow them some time to discuss a few issues with you.

Our district is 12 counties and is led by an excellent staff, including Julia Brown, our deputy district engineer and my partner, who heads our mobility initiative. I will discuss some of her recent efforts towards the end of my presentation concerning mobility. She will work with the regional mobility authority to help facilitate projects to contract; she's been with TxDOT for 22 years and is a graduate of Churchill High School here in San Antonio.

We're also fortunate to have Pat Irwin in Traffic, a graduate of Sam Houston High School with 30 years at TxDOT; David Kopp in Construction who hails from John Marshall High, 21 years with TxDOT; Cathy Oatman in our Support Operations from La Vernia with 21 years; Clay Smith in our Planning Section from Canyon High School in New Braunfels, 26 years; John Bohuslav who heads our Maintenance Section --

MR. WILLIAMSON: Who?

MR. CASTEEL: John Bohuslav, another Bohuslav, sir.

MR. WILLIAMSON: Where did he come from?

MR. CASTEEL: We've had him hidden in the asphalt piles with the asphalt crew.

(General laughter.

MR. JOHNSON: Did you say that Clay Smith was in high school for 26 years?

MR. CASTEEL: No, sir. I may have, sir.

MR. WILLIAMSON: I'm back on this Bohuslav. How many of those guys have we got working for us?

MR. CASTEEL: And we've got this one working, too, sir.

(General laughter.)

MR. CASTEEL: John actually went to high school in Brownwood but he spent most of his growing up years in Seguin, and he's been with TxDOT for 18 years.

MR. WILLIAMSON: Oh, he's a Brownwood Bohuslav.

MR. CASTEEL: Absolutely. He's a skiing Bohuslav is what he's claiming now.

And Commissioner Andrade, I grew up in North Texas but I got here as soon as I could.

On the Construction side, David Kopp is working with our area engineers and is overseeing 59 current projects in the district, totaling a little over a half a billion dollars, and the majority of these projects are in Bexar County where we're working on a lot of rehabilitation and mobility issues. Some of the more significant projects we have under construction are our interstates, including I-35 where the final four-lane bottleneck in New Braunfels is finally under contract and we'll start work in February, and we're excited about that and I know the citizens of New Braunfels and all those that travel in between here and Austin are as well. The other projects shown here we'll be finishing up soon.

Now we're on to I-10. On I-10 we have just let a contract, a $62 million job on I-10 inside the Loop to widen the section to ten lanes from six lanes and relieve a three-mile bottleneck that has existed for a long time. Construction on that again will start next month.

On I-410, by the end of the year we will finish $61 million in projects between Jackson Keller and US 281, and we'll begin another $36 million in improvements between Blanco and McCullough, adding some lanes and replacing some bridges.

The I-10/410 interchange is well underway. This $130 million interchange is scheduled to be completed in 2006 with some significant milestones being attained this year with important new bridges and direct connectors being completed.

On the Toyota project, we have $36 million going to contract. All these are on time and on schedule; we've already let one of those projects and will be ready for Toyota when it opens.

On Maintenance -- this is a Bohuslav issue -- we're scrubbing our budgets around the district and trying to put more money on the road in materials and in contracts. Bohuslav predicts that much-improved scores will be attained in the Maintenance Assessment Program with this effort, indicating better maintenance of our existing system. We will continue to assess and fund maintenance at the appropriate levels to protect our investments.

Now I'm ready to get on to some of the work that Julia Brown has been working on with our MPO. She's been working hand-in-hand with the MPO in this effort, and together they have provided some good data to report to you today. Looking at the demographic projections in our surrounding counties, we see some substantial growth continuing in several areas, most notably in Comal and Guadalupe counties, and we're still having significant growth continuing in Medina, Atascosa and Wilson counties. Those numbers are pretty impressive and the percentages are incredible. This is on a 2030 demographic time frame.

Because of this projected and continued growth, we have some corridors that will need some mobility addressed soon in our surrounding areas. In particular State Highway 46 between Seguin and Boerne needs more work and some sections being critical now in the New Braunfels area and in the Seguin area, and we're working on these.

Some continued relief of I-35 will be needed with State Highway 130 continuing to Seguin and then on beyond. State Highway 16 heading out towards Bandera is experiencing some continuing congestion and safety concerns with the growth that we have and that is projected. Also, we will be looking at an outer loop that will be needed to address the concerns in the surrounding counties that will include portions of State Highway 46, State Highway 173, State Highway 97 and State Highway 23 in parts.

In Bexar County, the largest increases in employment are expected in areas outside of Loop 1604, especially in the north, the west and near Toyota. Most of the growth in households is projected to continue to occur along and outside of Loop 1604 around the city. Some of this growth is very significant in terms of numbers and percentages, as shown here.

I'd like to now step aside and talk about another issue concerning our planning efforts that we're working on with our fantastic MPO here in San Antonio. We're utilizing the Texas Congestion Index as part of preparing our metropolitan mobility plan. This index has been developed by the Texas Transportation Institute and is computed from the MPO's urban model. It provides a measure of overall congestion on all the arterials and expressways in this metropolitan area. We're also working with the seven other metropolitan areas around the state in applying this index to assess our current and future congestion levels and investment levels needed to reduce them.

The index is a ratio of rush hour travel time to uncongested travel time averaged across the entire arterial and expressway system. An index of one is indicative of no congestion; an index of two is virtual gridlock indicating the potential for significant negative economic impact due to congestion. People stop going to such an area because of the delays they will experience.

The model runs we have so far show that in 1995 the congestion index in San Antonio was 1.14, where it took 14 to 15 percent longer on average across the city to take a peak hour trip than it took to take a non peak hour trip -- again, averaged across the entire system. Of course, some individual corridors were better and some were worse. By 2000 that number jumped to 1.21, a relative increase of 50 percent in congestion.

The red line past 2000 indicates the effect of the projected growth that we've shown on congestion if we were to stop adding mobility to the system. As you can see, that would be gridlock. The blue line indicates what we can achieve in our area by spending our forecasted traditional, allocated, conventional funding from state and federal funds on the worst congested areas. With traditional funds, like Metropolitan Mobility Category 2 funds and District Discretionary Category 11, we would be able to reduce the rate of growth but not to a level that is acceptable.

This means with the traditional funds forecasted, we'll be experiencing increased delay on our ride to and from work in San Antonio. As congestion increases, the reliability of the system decreases, and incidents and crashes have increased impacts and effects on mobility in the area. On average today, for an uncongested 20-minute trip, we probably need to allow ourselves about 30 minutes due to accidents, congestion and incidents. By 2030, under our traditional funding scenario, we'd be looking at having to plan for around 60 minutes for that same trip during the rush hour period. Certainly that kind of forecast is not acceptable; we would like to go back to around our 1995 levels as a goal, around a 1.15 index.

To crush congestion in San Antonio, we have a gap in the funding to get us from the traditional funds to where we want to be. That gap is estimated right now at about $6.6 billion over the next 25 years in Bexar County. Certainly there's some new methods to help us fill that gap, and I think some of my transportation friends from the community will be addressing those following me.

In analyzing this gap, this map shows the corridors that will need capacity improvements by 2030 beyond what the traditional funds will support. The darker the color, the greater the number of equivalent lane miles needed to reduce congestion. This is what is left to do in 2030 if we apply the traditional forecasted funds to the worst congested areas. As you can see, there's a lot of color on this map.

To move from where we can get with traditional funds, 1.9 congestion index, near gridlock, to where we want to be, a 1.15, by the year 2030, we will need to add the equivalent of 2,000 lane miles to our system. Over 500 equivalent lane miles will be needed to be added to our expressway system at a cost estimated at $3.5 billion beyond what we expect to receive. Nearly 1,500 lane mile equivalents will need to be added to the surface arterial system, and that's estimated at a cost of $3.1 billion.

An equivalent lane mile is either: an added lane to an existing road, a new road, reduced demand through transit or car pooling initiatives, or operational improvements to improve flow such as ITS, SEMA coordination or access control. A combination of all these approaches will be needed across our system to reduce congestion and fill that funding gap; however, none of these approaches are cheap.

On the expressway system in the area, several corridors will need significant lane miles added to reach our goal. We're currently analyzing with the MPO appropriate financial plans to do this work, corridor by corridor. We're looking forward to a new partner coming online with the regional mobility authority. The segments that show the most promise of generating some of the needed gap funds through toll collection are shown here. As we add capacity to the roads, we will look very hard at how to toll that added capacity to supplement the traditional funds and help fill that gap.

For example, on Loop 1604 we can add lanes in the existing grassy median and then toll those new lanes.

MR. WILLIAMSON: You mean we're not going to toll the existing lanes?

MR. CASTEEL: I know Judge Wolff is following me, sir. As you stated, I'm young, but I'm not that young.

(General laughter.)

MR. WILLIAMSON: I just couldn't pass it up.

MR. CASTEEL: Other scenarios exist for future work in tolling on Wurzbach Parkway, I-35, and US 281. The example on 281 is from 1604 to the Blanco County line, including the 1604 interchange. Using traditional funds, it will take about 29 years to build out an expressway. Over that time the build out cost would be $1.4 billion. If we were to implement tolls by taking the road we have and moving it out to the sides and then building additional expressway lanes down the middle, we could deliver that project as much as 19 years sooner, and because we don't have the inflation factor for as many years, the overall project cost would be $500 million less.

Our early projections show that tolls could assist with over $300 million in capital costs on this project, resulting in a decrease in the traditional funds needed to around $900 million which could be used to accelerate other projects in the area. Once the debt is paid off, surplus revenues could be seed money to address even more congestion. These are early calculations from the Texas Turnpike Authority and some of our consultants, but the concept is intriguing, and to say the least, sheds some light on what was a gloomy congestion forecast.

With those brief and quick comments -- which I know were very laden with charts, graphs and numbers, I apologize -- I would like to now yield the floor to my new friend, the Aggie mayor of San Antonio, the Honorable Ed Garza. Mayor?

(Applause.)

MAYOR GARZA: From one Aggie to another. We certainly have a great opportunity here in San Antonio, and I was in Austin this past week, and of course you know that Mayor Winn is an Aggie, and I think there's going to be some new opportunity for partnerships between the City of Austin and San Antonio, as we have some great thinkers coming on board. And I know the TTC has many Aggies working for them, so we're in good hands.

I want to give an official welcome to all of you. Certainly witnessing the passing of the gavel between Chairman Johnson to Chairman Williamson, we want to certainly commend you for your leadership and your vision on what you have contributed thus far, and we look forward to a stronger relationship in the future. Commissioner Nichols, your participation in our transportation forum, we want to thank you.

And to our new members, we want to wish them well and let them know if they need to have any of their questions answered on the San Antonio community, we'd be glad to give you some information to help you evolve to your new role as commissioners. And certainly we're proud of Hope, being a San Antonio resident, and we know that not only is she going to be advocating for San Antonio but she really has the best interests of the State of Texas at heart, and I think the entire state should be very proud of the commission that we see here in front of us today.

I also want to commend Mike and his staff because there has been a very visible increase, I think, in the communication and the participation certainly with our responsibility to step up to the plate, and Mike has been a wonderful example of communicating to us what we need to do as a community as well as from the staff side, and I think he and certainly his staff are to be commended.

I'd like to recognize those that will be following me. We have, of course, Judge Wolff, our county judge; Mike Novak representing the business community from the Greater Chamber of Commerce, and he'll be speaking on behalf of several of our chambers here in San Antonio; Sam Dawson who is with the San Antonio Mobility Coalition. And certainly we are excited to have some other of our elected officials here I'd like to recognize and ask to come forward: Representative Ruth Jones McClendon, Representative Mercer -- I know both of them are here, and two of my colleagues on the city council, Councilman Schubert and Councilman Perez, if they'd like to come up as we welcome you here to San Antonio. Representative McClendon?

MS. McCLENDON: Thank you, Mayor Garza, and good morning to the commission. We're just so grateful that you have come to San Antonio, and I can tell you that it's so wonderful, as a representative, to see your work come to fruition in your lifetime. I worked for three different sessions trying to get five members appointed to the TxDOT board, and some of my friends back there are laughing because they were working against me.

(General laughter.)

MS. McCLENDON: But we finally got it done and the most important thing, we're glad to have Ted and Hope onboard; they're going to be wonderful.

Johnny, you have been just great. The leadership that you have given to this commission has been wonderful. The face of the commission has changed under your leadership, and even as we look at the way the funding of the projects are going to be done, all that has changed under your leadership. You have done a wonderful job.

And Ric, congratulations. I came into the legislature as you were leaving going to do other things, but we became friends as we worked on projects. I could always call you when I had something from San Antonio. Robert has always been there. The three of you worked on a project, the Hays Street Bridge here, and we thank you so much. So welcome to San Antonio and we look forward to working with you.

MR. MERCER: I'm Representative Ken Mercer, and I want to welcome you. I'm one of the guys who worked so hard with Ruth to get us five people on there, and I'm very proud of that.

I want to thank -- Hope said I can't call you the old three, so the original three for laying a firm foundation --

MR. WILLIAMSON: You can call them that, it's okay.

MR. MERCER: Okay, I can call Robert old, that's fine -- for laying a firm foundation because as a freshman, one of the four freshman Transportation Committee members, we've had a historic time here in Texas, and what you've left as a foundation for the new board of five is incredible. You know the funding from the Mobility Fund, the amendment we passed this last fall, we're talking over $6 billion of new funding for new transportation projects, and that's just huge and historic for Texas when they're saying that just $1 billion equates to about 50,000 Texas jobs. This is just a great place to be and the right place to be.

Ted, as you said earlier, it's true, we're the envy of every other state right now because of the foundation you've given us, and all of Wall Street is watching Texas right now for what's going to happen and for what our future is. I'm just so proud to be here. Commissioner Williamson, you gave a little prophecy last night and I want to share it with everybody else out here because I believe that prophecy. He talked about Houston and Dallas but he said last night the future economic capital of Texas will be a place called San Antonio, Texas. Thank you.

MR. SCHUBERT: Commissioners, my name is Carroll Schubert. I'm on the city council here in San Antonio and I want to welcome you as well. And I'd like to say to Chairman Williamson I remember when he was in the legislature when we both had hair, so that's been a while.

(General laughter.)

MR. SCHUBERT: You know, you have a difficult job, and I think the dedication and commitment that we've seen from the three commissioners, Chairman Johnson, Commissioner Williamson and Commissioner Nichols, has for us been unprecedented -- and we have two new members, including one from our own city -- but we know that the job you have is difficult and the options that you bring to us and ask us to look at are difficult as well. But I think one of the things -- and Commissioner Houghton said it best -- is we care about transportation here in Texas and in some states they really don't understand why it is so important and why people at every level really do care the way that people in Texas do, and part of that is we live in a big state and that's a big part of the issue, and transportation is a little bit different here than it is in other places, and I know you have traveled all over the world to look at transportation systems in other places.

What I'd like to say on behalf of myself and the constituents that live in my district which is on that 281 corridor that we appreciate what you do and we also understand that we have responsibility as well. We're all in this together, and I think the pledge from the San Antonio community is we're going to do our part as well in working with you to try to get these projects moved forward.

So thanks again for meeting in our city and come back often.

MR. PEREZ: Good morning, Mr. Chairman and members of the commission. My name is Richard Perez and I, too, am a council member here in San Antonio; I represent the southwest side of town.

I'd like to thank you, welcome you of course for coming, and thank you in particular for the wonderful assistance that you all have given us in making Toyota a reality. The additional funds that you have provided to provide the improvements in and around the area leading to Toyota are going to be extremely beneficial, not just now but for years to come, and so I'd like to acknowledge that publicly and ask if there is something that you require from us as a municipality, as a region, we're here to serve you, to provide you with the information that you need to be able to make the best decisions that you can.

So on behalf of my district and the citizens of San Antonio, thank you very much.

MR. WILLIAMSON: We have one question.

MR. PEREZ: Yes, sir?

MR. WILLIAMSON: Who's younger, you or Chip?

MR. PEREZ: Chip is a little bit younger.

MR. WILLIAMSON: Is he a little younger?

MR. PEREZ: Just a little bit.

MR. WILLIAMSON: You all look so young. Of course, my colleague Johnson told me last night it's because we look so old.

(General laughter.)

MR. PEREZ: Thank you.

MR. WILLIAMSON: Thank you.

MAYOR GARZA: I used to be that young when I was on the city council. It's nice not to be asked that question anymore; I'll certainly let the council members speak because I always need their votes on something.

And I do want to recognize David here in the local district office. He has come in blazing and he comes with a can-do attitude -- I mean, it's just obvious -- and anytime I think people think about government entities, either local or state or whatever, people always think of slowing down, but David, again brings that energy and you're well represented here locally with certainly his expertise and vision for the district.

I'm really here very simply to request that you allow San Antonio and our region to be the shining star over the next decade as it relates to transportation. We have learned our lessons in previous years, we have worked with the commission, with staff to figure out what we were doing right and what we were doing wrong, and I think over the last two to three years the partnerships here have really come to life.

And SAMCo, the leadership that Tom brings on the staff side, the partnership between the business community and the city, the county, our public transportation entity, all of these groups have come with one goal in mind, and that is to meet the demands for a growing San Antonio region, and knowing that we have to be bold, we have to be creative, and we have to create these partnerships to make it happen.

What you will be hearing here today demonstrates the ability to not only want to continue to strive but to be the model, and we know that with this commission, your understanding of our community and the leadership and the projects are certainly going to encourage us to become that model for many years to come.

The partnership between SAMCo is, I think, to be commended. We have not only come up with a common vision for what we all need, but the ways that we're going to have to move forward. And I do want to also let you know that it's not just about the transportation initiatives that are the most obvious that we're doing to address our needs. We as a city know that every policy decision has to be integrated into the overall vision of a transportation model in our community, and that means we have to look at ways to balance growth. If we recognize that there is congestion on the north side, how do we provide options for opportunity on the south side. And Toyota, Texas A&M, these are opportunities that are going to help us with some of our other policy initiatives such as balanced growth.

Looking for other ways to fund local street projects, while that's not necessarily something that this commission has oversight, we want you to know that we're looking for non-traditional ways and ways to challenge our community -- yes, even an assessment through neighborhood improvement districts -- to fix local roads so that we have more dollars for the bigger projects in our community and can focus our bond dollars in some of these other areas.

The sales tax opportunity for San Antonio remains real and the transportation component is a very important priority as we continue to have a discussion for 2004 and the utilization of those dollars.

So we are working on many different fronts aside from the initiatives that you will be hearing about shortly in terms of our priority funding, the Texas Mobility Fund, our MPO, the regional mobility authority. Again, we want to be your shining star, the advanced transportation district and the sales tax initiative as well as many other initiatives that we are trying to put on the table, and certainly we want your ideas as we continue to move forward.

So we're here to be a part of the solution; we want to thank you for coming and listening; and I will at least try to commit to you that you won't be here as late as the FCC was last night in our council chambers -- I think they had them there for 5-1/2 hours and they didn't realize that there was so much input from the San Antonio community, but I think that's one thing that we take great pride in is we want to be engaged, we want to be involved, and again, your shining star.

So at this time I'd like to introduce our county judge who will go over some of the specific initiatives that our partnership has been working on.

MR. WILLIAMSON: Mayor, will you return or is this for you?

MAYOR GARZA: That's it. I've got to go over to the council meeting.

MR. WILLIAMSON: Speaking for the governor and the commission, thank you for your cooperation on the Toyota project. We understand that San Antonio, Bexar County, and Central Texas perhaps was the most direct beneficiary, but the governor takes a statewide view of these things. He believes that when a certain tea product moves into Mr. Phillips' district, when Toyota moves into San Antonio, when Mobil Liquified Natural Gas builds a plant in Houston, the whole state benefits, and you were a great example of a good partner, and we appreciate that.

MAYOR GARZA: Well, thank you very much.

MS. ANDRADE: Chairman Williamson, may I address?

MR. WILLIAMSON: Please.

MS. ANDRADE: Mayor, I'd like to thank you for your leadership and I'm certainly proud to be part of a community with such culture and diversity that can work together, and thank you for preparing us for the future.

MAYOR GARZA: Thank you, and good luck.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Hey, 1604.

JUDGE WOLFF: Chairman Williamson, if we decide to toll an existing lane, the citizens of this Bexar County have agreed to raise a considerable amount of money to buy me a one-way ticket to Weatherford. Now, I'm sure I'd grow to love your city, but I'd really rather stay here, so we're trying to figure out a way to do it without doing that.

(General laughter.)

JUDGE WOLFF: Again, Chairman Williamson, we're delighted you're here this morning; and the great leadership that former Chairman Johnson has provided to this great body; and to Commissioner Nichols who has come here numerous times to work with us, and to new member Ted Houghton, the leadership that he will provide to us. And then to the great decisions that Mr. Behrens has made regarding David Casteel -- I mentioned that when we were in Austin -- and I want everybody to know how proud we are here in San Antonio to have him heading up this district. And in particular, to my dear friend Hope Andrade. I had the honor to swear her in earlier this last month and it's really been a privilege to work with her on so many great projects for this city.

For a long time Texas communities have been burdened with the recurring question of how to fund 100 percent of our serious transportation needs with only 30 percent of the required dollars. It doesn't match up and it's never going to match up. Well, San Antonio and Bexar County are done asking that question; we are no longer content to say we have a transportation problem that has no solution. There is a mobility solution for Bexar County but it comes in many pieces.

As we continue to piece together our transportation solution, we want to remind all of you of our four requests pending before the commission for Strategic Priority funding, because San Antonio continues to experience traffic congestion, costing our community $475 million per year in lost time and fuel consumption, a problem we foresee only getting worse. We think it's important to highlight these critical projects and at the same time we want to recognize that the Loop 1604 projects, where viable, may ultimately or partially be funded through toll revenue, but as I mentioned before, even toll revenue is not a stand-alone solution. We still need the opportunities for partnerships provided by toll equities to get projects like these started.

In September 2002, a delegation came before you and presented three requests totaling $100 million; two of these related to 1604 and one for IH 10 East. Traffic on Loop 1604 between IH 10 and US 281 continues to increase as a result of exploding residential and commercial development in the area. To meet this need, we are requesting funds for the construction of additional lanes. On the Loop 1604 interchange the significant residential, commercial, recreational and educational developments in the northwest are placing increased stress on the existing IH 10/Loop 1604 interchange creating another very real safety issue. Soon we will have a $100 million project -- in fact, it's already started, that will be built right close to that corner, a major retail mall. The increased number of motorists using this interchange has exceeded the roadway's intended design life.

We have similar problems at the interchange of US 281 and 1604 which is currently a three-level urban interchange with a number of traffic signals. The result is significant traffic delay, extreme congestion, air quality denigration, and serious safety concerns. We have requested your assistance in construction direct connectors at both of these interchanges.

And there is IH 10 East which is a major east-west commercial truck route for the nation, as well as the link to the critically needed State Highway 130 regional facility. We believe the completion of SH 130 is critical for addressing our mobility and air quality issues for San Antonio, Austin and the entire region. Commercial trucks make up approximately 22 percent of the traffic on this highway. Our pending request would convert the frontage roads to one-way operations in order to improve an extremely unsafe situation.

Our fourth pending request is $10 million with IH 35 and was submitted to the commission for consideration by a letter in September of 2002. IH 35 South from US 290 to Loop 410 poses serious safety and operational concerns. We have requested Strategic Priority funds for operational improvements to alleviate these problems.

These existing requests, whether matched through Strategic Priority funding and/or toll equity are an important piece of our mobility solution and we appreciate your consideration of assisting with these projects.

Another critical piece of our funding puzzle is the Texas Mobility Fund. This fund can help us in two ways: first, in providing a method of financing for the construction, reconstruction, acquisition, and expansion of state highways; and second, money in this fund may be used to provide toll equity grants. The Texas Mobility Fund is an example of the state's new innovative approach to financing transportation. We hope to act as your partner in the funding approach, and where Texas Mobility funds are invested in our community, we plan to make an excellent return on that investment.

The fifth piece of the puzzle is our metropolitan planning organization. The San Antonio-Bexar County MPO has elected to set aside 25 percent of its Surface Transportation Program Metropolitan Mobility funds each year as a revenue stream for leveraging additional state and federal funds. For Fiscal 2006-07 we expect to have $5.8 million from this effort to use toward leveraging state and federal funds. The MPO is also well into the long-range planning endeavor requested by the governor for the state, for the Texas Metropolitan Mobility Plan simultaneously as they prepare for the federally required Metropolitan Transportation Plan.

The MPO has also submitted an important resolution related to the TEA 21 reauthorization that affects San Antonio and other near non-attainment areas. By expanding the criteria for the congestion mitigation air quality eligibility to include early action compact areas, more Texas planning areas would be eligible to seek CMAQ funds to protect their air quality. This is a win for the whole state. We hope that TxDOT and the commission will join in our effort to ensure this change is made in the TEA 21 reauthorization.

The sixth piece in solving this puzzle is the regional mobility authority for Bexar County, something we created together. The commission's passage of our request to be the second RMA in Texas was accepted by our commissioners court on January 14. We hope to have in place a board within the next 30 days. In anticipation of our RMA and with guidelines from your district office and the MPO, we have developed a tentative project list. Initially the RMA will evaluate toll road networks of approximately 50 miles. This network will include new capacity on US 281 from 1604 north to the Comal County line, and new capacity in the northeast corridor on IH 35 from Loop 1604 North to the central business district. The network will also include improvements to the interchanges of 1604 at 281 and Interstate 10 with new direct connector ramps.

Furthermore, we are proposing to collect our toll revenue solely through an electronic collection system. This will allow drivers to maintain a constant speed without slowing down for toll collection.

Obviously, we're excited to have this opportunity to move some of our transportation projects forward, but as you well know, the RMA cannot stand alone. Even as we make this commitment to local funds for our roads through revenue bonds, we need your support in the form of an advanced toll equity for startup and operational costs including advanced project planning. As well, we need toll equity for construction.

The seventh piece of our funding puzzle is the advanced transportation district for the transportation sales tax. The City of San Antonio and Bexar County partnered with VIA Metropolitan Transit Authority to design legislation for an ATD that provides flexibility to build and operate future enhancements to our transportation infrastructure. Because of the one-half cent sales tax that will be available in San Antonio and our suburban cities, we have the ability to collect the transportation sales tax, and we can generate about $17 million for each one-eighth of an increase in our local sales tax rate. We're preparing to ask our voters to support an initiative in the upcoming November election. Once approved, the transportation sales tax will provide revenue to use to construct, maintain and operate our transportation system, including local streets.

Additionally, a portion of this revenue could be used to provide funds to leverage state money. As well, there will be revenue dedicated to VIA to meet their growing demands of our community by expanding the area transit service through increased frequency and rapid transit operations. The distribution of this revenue is demonstrated on the slide: 50 percent to enhance streets and highways, 50 percent to improve transit and reduce congestion, including transit services for the elderly and disabled community.

Another critical piece of our mobility solution involves future county-wide initiatives. We are pro-actively evaluating new and innovative funding mechanisms for our transportation system. We're taking a look at the local sources of transportation funding alternatives including general obligation road bonds and private sector funding participation. Although we are still in the early stages of many of these initiatives, the discussions are happening and we're building the consensus and coalitions necessary to work together as a community to assess and fund our transportation needs.

Now I would like to introduce Mike Novak, who is the chairman of the Greater San Antonio Chamber of Commerce and who will be representing our business community in this important solution.

MR. WILLIAMSON: Judge, is this going to be it for you, or are you going to be back up?

JUDGE WOLFF: I'll be here as long as you need me.

MR. NOVAK: Thank you, Judge.

Mr. Chairman, commissioners, Mr. Behrens. Hope, on a personal note from your hometown, we are so proud of you and congratulations to you again for being part of this body. As I look down on you, I can't help but sort of swell with pride on behalf of our community.

As chairman of the Greater San Antonio Chamber of Commerce, and on behalf of the North San Antonio Chamber, the Hispanic Chamber, and the South San Antonio Chamber, I welcome you and thank you for coming to San Antonio for your January meeting.

We appreciate your efforts in giving us the ability to connect people more efficiently and to sustain job growth for San Antonio's economy, and we commend you for your support in securing Toyota's fifth North American plant here in San Antonio. It goes without saying this facility is a home run for this community and it's going to be a tremendous economic generator just almost immediately.

The Toyota success represents exactly the type of combined effort we mean when we talk about piecing together our transportation mobility solution. To make our road infrastructure meet our population and economic growth patterns, we have to be innovative -- we realize this -- we have to be vigilant in identifying and obtaining and combining our resources.

Recognizing the importance of Toyota's economic impact, the completion of SH 130 -- you're going to hear a lot about SH 130 today -- becomes increasingly more important to our region as well as to the entire state's connectivity. We want you to know that adequate funding and completion of the SH 130 project is an absolute priority for us. Our business community is committed to working with you to find the rest of the funding for Segments 5 and 6 so that SH 130 can be completed as quickly as possible. We believe this alternate roadway between San Antonio and Austin is critical to address improved mobility and air quality for the region as well.

The City of San Antonio, the Alamo Area Council of Governments, VIA Metropolitan Transit Authority, the San Antonio Bexar County MPO and Bexar County continue to classify clean air as a top community priority. The chamber is working with governing bodies of these entities as a constructive participant in the efforts to meet the region’s clean air challenge. We believe the construction of SH 130 is part of the solution to addressing these air quality concerns.

Instead of watching and waiting while hundreds of millions of dollars are drained from our economy due to our growing congestion problem, I am proud to say that our community is taking an aggressive stance, being the second RMA established in Texas and having laid the groundwork for a transportation sales tax referendum. By generating new revenue, we are building our solution, and we seek your support.

Again, I want to thank you for your continued support of our transportation network and your efforts throughout our state of Texas. And following me, Sam Dawson will come forth as chairman of our San Antonio Mobility Coalition. Thank you.

MR. DAWSON: Thank you, Mike. Chairman Williamson, Commissioners, Mr. Behrens, my name is Sam Dawson, chairman of the San Antonio Mobility Coalition. We are a transportation advocacy organization ensuring that we as a community are maintaining a continuous focus on our transportation mobility solutions.

I am proud to say that we really are developing our mobility solution by piecing together various funding sources. Today we have presented a number of entities and initiatives that combined would build, operate, and maintain a transportation system that will keep the San Antonio Metropolitan area moving forward: district discretionary funds, state funds, strategic priority funds, the Texas Mobility Fund, the MPO Federal Metropolitan Mobility Funds, our regional mobility authority, the advanced transportation district or the transportation sales tax and other future focal initiatives.

As we complete the puzzle, you see the variety of funding streams, local, state, federal, and private, that it’s going to take to get us there, but more important, you will see the variety of stakeholders that must join us in our effort: our voters and our residents, the business community, the MPO, VIA, elected officials at every level, Bexar County, San Antonio, our suburban cities, TxDOT and the Texas Transportation Commission, the San Antonio Mobility Coalition and our public and private partners, and our RMA. It's going to take the whole team but together we will create a mobility solution for our community.

Chairman Williamson, Commissioners Johnson and Nichols and Mr. Behrens, in the past you have prodded us, you have poked us, you have challenged us, you've encouraged us, but most importantly you have supported us as we have looked to ways to complete our puzzle. So we stand here today before this new commission, after years of hard work, committed and poised to truly make progress and to really make a difference in our transportation system.

On behalf of all of us here today and on behalf of this community, we thank you for your support, your partnership and for being here today. Thank you.

MR. WILLIAMSON: Who's next, David?

MR. CASTEEL: I gave it to them, boss.

JUDGE WOLFF: Do you have any questions of me?

MR. WILLIAMSON: Well, probably the judge needs to come back up.

MR. CASTEEL: I think we'll bring him back up here.

MR. WILLIAMSON: I think each commissioner probably would have some discussion they want to have with you about the presentation. Let me just say that it was complete -- God, was it complete -- but you made good points and we appreciate the organization, structure, and the clarity of purpose, and it's always good to see you, and we're sorry that the 1604 conversion didn't work out. But you know, as we've said consistently, it's a tool for communities to look at and accept or reject, and yours isn't the first community that looked at and rejected the idea, but it's a tool that communities in the state didn't have three years ago that they have now.

There will be a day when a community in the state will see that the ability to instantly borrow money against the tolling of an existing road will buy them an important transportation infrastructure asset they couldn't have otherwise, and the wisdom of the legislature's and the governor's decision to provide them the tool will be proven. But it's just as good to build new lanes along those existing ones and toll those; that works for us also, I think.

Again, comments or questions for this entire group, starting on the far left.

MS. ANDRADE: Judge, thank you. Certainly you make me proud to be a San Antonian. Certainly it seems like you understand the new tools that have been given to us, and I commend you for that. I commend you for your leadership in bringing people together to work, but I also urge you to keep looking, because there seems to be other opportunities that will enable San Antonio to quickly recoup some funds for the new RMA, so I'll be happy to work with you on anything I can do to help you. But as you can see, you have a great respect among this commission and it's for all your hard work, so thank you very much.

JUDGE WOLFF: We hope to have it up here and going pretty quick; we're getting input about who should be on it.

MR. NICHOLS: I wanted to thank you for the cooperation you have shown the department, and in front of everybody to express how lucky San Antonio is that you are where you are, and the cooperation that the county has with the city. I'm telling you, all of you working together is going to help overcome some obstacles that would not be able to overcome otherwise.

We have situations in other parts of the state -- obviously I'm not going to say where -- where you've got the county and the city in a similar situation and won't even come to the same meetings, literally don't. The people in this room may not realize how lucky they are to have the leadership from the county commissioners court as well as the city council and your cooperation to pull this thing together.

Sometimes government moves very slow, and in the last year or two the changes that have been incorporated have accelerated and caught, I think, many people around the state by surprise, and you have been reacting in a very positive but prudent manner for San Antonio.

We do appreciate your support. We are very anxious for your RMA board to get appointed. I know that once they get to working, then they'll be digging and looking and bringing options, and I think when they did that in the Central Texas RMA, it was almost like an explosion of ideas and enthusiasm of what could be done that they did not see before, so I think you will experience the same thing.

In your presentation you mentioned that you hoped that we would help you with things like toll equity and stuff, and I can assure you that I think it's been the attitude and approach of the commission that yes, we are going to help you as you set the structure together. When I came to your commissioners court that tough day you were having a public hearing -- certainly a lot of interest on the issue -- we realize that once you get going and form your RMA that it's going to take some money to set aside to help be the seed corn for some of the studies and things like that, and I know Governor Perry had requested our commission to set aside some funds just for that seed corn, and I would certainly think this commission would be supportive of that effort for San Antonio.

JUDGE WOLFF: That would be extremely helpful. I believe every project that we're looking at is going to require some toll equity, so it's very critical to us.

MR. NICHOLS: I want to thank you and I want to do it in front of everybody.

MR. WILLIAMSON: John?

MR. JOHNSON: Judge, are you aware of how cold it gets in Weatherford?

JUDGE WOLFF: I hope I don't have to find out.

(General laughter.)

MR. JOHNSON: A general observation, a very impressive and informative display this morning. The creativity in utilizing the puzzle I thought was extraordinary, and all the little side people moving around, and I even think I saw Snoopy in a race car. I want to salute the creativity, but the meat that was presented was extremely informative and it encapsulates in a short period of time what's going on in the San Antonio District and Bexar County in particular.

One of the items which jumped out at me was the November referendum to move up, I assume, to the sales tax cap.

JUDGE WOLFF: Yes, we're in the process now of working with the city and with VIA in structuring that, but as you can well imagine, there are numerous groups out here who want a bite of that pie, and we're trying to make sure we can set aside enough for transportation to deal with that issue -- that's really the major issue I'm concerned about. The others are worthwhile issues but this is the critical one for us.

MR. JOHNSON: I think there's about a half a cent which will yield about $68 million in total additional taxes or revenues, and it's extremely critical. I plea to the people making these considerations, you know, whether this money is used for leverage against state projects or local transportation projects which need additional funding, I think it's extremely important for the community as a whole, and I hope it passes -- I think it needs to pass.

JUDGE WOLFF: Yes, it will be an interesting campaign issue.

MR. JOHNSON: Yes, it will be. We'll be out there fighting for it.

JUDGE WOLFF: We did, I might mention, just pass here recently about $40 million in bonds for the county, and I don't recall how much it was for the city, $115 million, a good portion of that for the streets, but $40 million on the county side just for roads.

MR. JOHNSON: And I think you're going about it the right way of getting the stakeholders together early to work on the distribution, because as you're abundantly aware, when these things happen, everybody wants help -- I mean, everybody needs help, let's be candid with it, but these transportation matters are critical, as we see around this community, to maintain the quality of life, to improve the quality of life, to maintain and improve economic vitality. It's essential that this be successful.

Thank you for the job you do. As we were observing earlier today, Texas is on a roll with events: Houston has the Super Bowl this week, San Antonio has the Final Four; I guess the first week of April or the last week of March, the All Star game returns to Houston; and the Breeders Cup will be in Grand Prairie. So if you're a sports fan, Texas is the place to be, and you've got a world champion here, so it's great working with you.

JUDGE WOLFF: It's what The New York Times had on their front page: Everything is going to Texas.

MR. JOHNSON: They're finally getting smart.

MR. WILLIAMSON: I think there's some that believe we'll have an NBA playoff here.

JUDGE WOLFF: Well, we're feeling pretty good about that.

MR. WILLIAMSON: Could have a National League playoff down in Houston.

JUDGE WOLFF: That's right. You guys have got some horses this year.

MR. WILLIAMSON: Thank you, John.

MR. JOHNSON: Thank you for all you do.

MR. HOUGHTON: I'm absolutely impressed with the team effort, Judge, it's unbelievable -- and the mayor who has left. What impresses me is the public-private that some communities haven't figured out yet. Most people think it should be the public lead the charge, but you've put together a great formula for that public-private partnership, and it looks like to me you're in lock step. I can't imagine what happened behind closed doors to put it there, but I know how those things go, but congratulations. It's a heck of an effort.

JUDGE WOLFF: The San Antonio Mobility Coalition, as you know, is chaired by the private sector, but the city and the county and VIA part of it has really helped pull us together on a lot of the issues here and they're due a lot of the credit for that.

MR. HOUGHTON: If you could bottle this and sell it, you wouldn't need to have that referendum in November.

(General laughter.)

JUDGE WOLFF: I wish we didn't have to, but we're going to have to. Again, thank you very much.

MR. WILLIAMSON: Judge, the governor laid out and the legislature approved a breathtaking transportation program over the last three years. It would be a tremendous error on my part to not recognize that Ruth and Mr. Mercer, Leticia Van de Putte, Roberto Puente -- I could sit and name every member of the delegation -- were all lock-step down the line strong leaders for transportation and the governor's vision, and we don't forget things like that.

JUDGE WOLFF: We've got a great delegation and we're real proud of them.

MR. WILLIAMSON: The delegation down here was wonderful and committed to transportation, and that makes it so much easier to be a good partner.

We thank you for your presentation. As you know, we don't make decisions about these things during the meetings, but we'll retain the information in the memories and they'll become invaluable when we make decisions down the road. Thank you.

David, do you have anything else you need to add?

MR. CASTEEL: No, sir.

MR. WILLIAMSON: I think as is the tradition of the department and the commission, we'll take a very brief -- do we call it break or recess?

MR. NICHOLS: We call it whatever you want to call it.

(General laughter.)

MR. WILLIAMSON: We'll take a very brief recess to allow everybody to clear out if they need to.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We are done with our slight recess and ready to get back into the regular order of business. Mike, I'll turn it over to you to continue with the rest of the agenda items.

MR. BEHRENS: Thank you, Chairman. We'll begin with agenda item 2(a)(1) which is our proposed rules for adoption, the first being a Memorandum of Understanding with the Texas Historical Commission. Ann Irwin will present that.

MS. IRWIN: Good morning Chairman Williamson; good morning commissioners and Mr. Behrens. For the record, my name is Ann Irwin, deputy director of Environmental Affairs.

Item number 2(a)(1) proposes amendments to Section 2.21 relating to purpose and the repeal of Section 2.24 and the simultaneous proposal of new Section 2.24 relating to the Memorandum of Understanding with the Texas Historical Commission. Section 201.607 of the Transportation Code requires the Texas Department of Transportation to adopt a memorandum of understanding with each state agency that has responsibilities for the protection of the natural environment, for the preservation of historic and archaeological resources. Section 201.607 also requires the department to adopt these memoranda and all revisions by rule and to evaluate and revise them every five years. The last amendment to the MOU with the Texas Historical Commission, THC, became effective in 1998.

The provisions of the MOU apply primarily to the PLAN IT, BUILD IT, and MAINTAIN IT TxDOT strategies. The current MOU provides for the identification of environmental impacts, coordination of those projects with the appropriate resource agency, and incorporation of investigations and coordination in the environmental document for the project. Project decisions will be made on a balanced consideration of the need for a safe, efficient, economical and environmentally sound transportation system with input from the public. Adoption of the revised MOU will continue to meet these goals.

In addition, adoption of the revised MOU will streamline the environmental review of TxDOT's projects and the project delivery process by reducing THC review of routine projects, shortening the THC comment time, and allowing THC to focus its resources and provide timely input on projects where significant historical or archaeological sites are likely to be impacted and to large projects such as the Trans-Texas Corridor and I-69.

Specifically, Section 2.21 is amended to update a statutory citation and to update the term "article" to "section."

In proposed Section 2.24, The new MOU:

Subsection (a) states the purpose of the MOU.

Subsection (b) cites the authorities that allow for the drafting of an MOU to increase effective coordination between the agencies.

Subsection (c) provides definitions including a revised definition of the area of potential effects, or APE, which both clarifies what the APE will be for specific project types and reduces the width of the APE for many projects.

Subsection (d) defines the responsibilities of both agencies, including a provision for the department to provide funding to THC to allow THC to implement measures to facilitate early coordination, streamlining and expedited review of TxDOT's transportation projects.

Subsection (e) provides for early coordination between the department and THC and explicitly defines those routine roadway maintenance activities that do not require any coordination with THC. It also specifies both agencies' commitment to identify a broad range of strategies to comply with the Antiquities Code of Texas and how the department will ensure that the public and Indian tribes will be afforded the opportunity for input.

Subsection (f) deals with antiquities permits for archaeological investigations, the procedures the department would use to determine if archaeological sites are present, and to determine the significance when sites are identified. A significant change in the MOU is the provision that eliminates the requirement for individual coordination with the THC for projects where no sites are found or the sites are not significant, unless the THC specifically requests to review a particular project. Projects not subject to individual review will be included in a quarterly report to the THC. For projects that will require individual review and coordination, the THC review time has been shortened to 20 days.

Subsection (g) pertains to coordination procedures for non-archaeological historic properties and identifies the types of projects that will no longer require individual coordination unless specifically requested by the THC.

Subsection (h) specifies how non-archaeological historic properties will be identified and evaluated and establishes the procedures used to identify and evaluate historic bridges.

Subsection (i) specifies how the department will assess and mitigate effects on historic properties. Coordination with the THC will be required when there will be an adverse effect, and the THC review time has been shortened to 20 days.

Subsection (j) specifies the documentation that the department will maintain in its files for each project included in the quarterly report, and the documentation that will be submitted to the THC.

Subsections (k) through (q) require that applicable environmental documents summarize the department's efforts to comply with cultural resource laws, specify how the department will deal with situations where right of entry is denied, specify that the procedures in the MOU may be used instead of the generic requirements of Title 13 TAC Part 2, allow for the THC to audit the department's project files for projects carried out under this MOU, provide for an annual meeting, provide for dispute resolution, and for review and updating of the MOU.

In summary, the proposed new MOU greatly reduces the volume of project submissions to THC and reduces the review time for those projects subject to individual review and coordination; it focuses attention on those projects most likely to have adverse effects upon significant historic and archaeological properties; it allows TxDOT to take internal control over a broad range of routine project reviews, reducing processing time and providing for more timely project delivery; and finally, by allowing TxDOT cultural resources staff to determine when historic and archaeological properties are present, whether the project will impact such properties if they are present, and to handle the coordination of these projects through a quarterly report. This MOU marks a change from a project-specific coordination emphasis to a program-review emphasis, a change that will significantly streamline this part of the environmental process and increase the timeliness of project delivery.

We respectfully request the commission's approval of item 2(a)(1).

MR. WILLIAMSON: Are there questions, members?

MR. JOHNSON: I have one.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Has the THC been part of the discussions and dialogue here.

MS. IRWIN: Yes, sir, absolutely.

MR. JOHNSON: So this is sort of a mutually derived document?

MS. IRWIN: Yes, sir. They will be presenting this same MOU at their commission meeting early in February.

MR. JOHNSON: Thank you.

MS. IRWIN: And the MOU that will be eventually passed, following comment, will be the same MOU, and their staff has been intimately involved with this.

MR. JOHNSON: Are the comment periods parallel?

MS. IRWIN: The THC meets quarterly, so our comment period and their comment period will overlap, and then we will probably come back to you gentlemen and lady with the final version for adoption, a version that will be agreed upon by THC as well, and then it will be presented at their next quarterly meeting.

MR. WILLIAMSON: Other questions?

MR. NICHOLS: Mine is more of a comment and hoping you'll make a statement on the record. I think it's a very good rework of this memorandum of understanding. The key word here is "streamlining." I know that the whole effort is to streamline the process, but still have the safeguards and protections in there, and from everything that I could see in here, there were two basic categories: one where you specified the actual distance on specific type projects that we'd be working inside unless something unusual popped up; and which ones this whole thing would affect. So in your opinion, it will dramatically streamline this process as opposed to the previous agreement?

MS. IRWIN: Yes, sir. I believe you may be referring to the provision for defining the area of potential effects which is the area within which we must look for and identify important historic or archaeological sites. The area of potential effects for archaeological sites has been and still is the right of way and any easements that might be required, but under federal law, the area of potential effects for other kinds of properties, such as historic buildings and so on, is broader than the right of way itself because we have to examine auditory and visual impacts, changes in setting and those sorts of things. In the past, that area of potential effects has been as much as 1,300 feet outside the existing right of way or the proposed right of way for new location projects. This limits that much more dramatically to 300 feet on either side of the right of way line. So yes, that will streamline things.

The other major streamlining thing is that we anticipate and THC staff anticipates that approximately 80 percent of the projects that we deal with and now send over to them for some sort of written concurrence will no longer have to go to them for a written concurrence; they will, instead, go in a quarterly report, and that should significantly streamline the process as well.

MR. NICHOLS: That's the only thing I wanted to bring up.

MR. WILLIAMSON: Are there other questions, members?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. WILLIAMSON: Is there a second?

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MS. IRWIN: Thank you.

MR. BEHRENS: Going to agenda item 2(a)(2), we have proposed rules for Pass-Through Tolls, one of the new tolls that became available with House Bill 3588.

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

This minute order proposes new sections to the Texas Administrative Code related to pass-through tolls. These new sections will implement the authority granted by Article 6 of House Bill 3588 which authorized TxDOT to enter into an agreement with a public or private entity to provide for the payment of pass-through tolls as reimbursement for the construction, maintenance or operation of a tolled or a non-tolled facility on the state highway system.

A pass-through toll is defined as a per vehicle or per vehicle mile fee determined by the number of vehicles using a facility. A pass-through toll will be paid by TxDOT to the developer.

These proposed rules cover: the content of a proposal; the criteria the commission will consider before allowing the executive director to begin negotiations; a process to allow for competing proposals to those received from private entities; criteria for final approval by the commission; the process of payment of the pass-through tolls; instructions for the project development; and operation of the facility.

This minute order will allow publication in the Texas Register for the purpose of receiving public comments and to advertise a public meeting on the subject on February 24 in Austin. Staff would recommend your approval.

MR. WILLIAMSON: I believe we have one person who wished to comment. Is that now or do you want to wait until later?

MR. BEHRENS: Later, I believe.

MR. WILLIAMSON: I think we have a representative of the legislature who has a comment about this.

MR. BEHRENS: Do you want to comment now?

MR. WILLIAMSON: That's acceptable, Mr. Monroe?

MR. MONROE: Yes, sir.

MR. WILLIAMSON: Members, if you would, please reserve questions for Mr. Bass and the rest of the staff about this pretty significant beginning point. And we welcome to the commission meeting a younger member of the legislature who was in his first session one of the most aggressive and articulate advocates of transportation that we had the pleasure of dealing with, Larry Phillips from my part of the state, and it's all yours, sir.

MR. PHILLIPS: Thank you, Mr. Chairman, and it's good to be here in front of this new reconstituted commission. Certainly the two new faces are welcome and certainly the ideas that come behind the faces will be very beneficial for the state, and I think the things that you're talking about today and the future decisions you have to make will be brightened because of the addition of the two to the commission.

And I did fill out a card and maybe you didn't have that up there, so if you need one, I will get that done. Thank you.

I briefly wanted to speak about this particular rule and talk about it particularly but also in generality on all of the tools that were created in 3588. And I think that it's great that we're in San Antonio today for this first commission meeting of this year because I think San Antonio is a perfect example of where so many of these tools can be used when the community comes together, and here we have a county and city and private partnership looking to deal with mobility issues because it is time crushing our future development economically and just our lifestyle, and that's what these tools were created to do is provide a change in people's lives and the quality of their lives.

What I want to speak about is I want to encourage these rules to be adopted -- and of course we'll review them and have comment on them -- but that these tools be considered to be as flexible as possible because that was, I think, the theme that we came to. And I asked Mr. Behrens -- he appeared early this week; we had a hearing in Austin at the Capitol on Monday -- and said, "Are these rules going to be flexible enough to give the commission and the department the flexibility that they need to accomplish our goal which is to get transportation moving in the state and try to deal with the fact that we don't have enough funds coming in currently to accomplish what we need to for not only economic development but lifestyle development?" And I think Mr. Behrens ensured me that he felt like these rules were flexible enough to do that.

So I encourage you from the legislature's point of view, that's what we're asking is that you adopt rules so that you're not hamstrung when projects are brought before you that maybe have not been presented before -- because these are all going to be new projects -- so that ideas can be formulated and that when those ideas start coming around, they will not be hamstrung because of rules that have been set because maybe this is traditionally how we have done this or a traditional way of thinking.

So I encourage you to move forward as soon as possible with the most flexible rules, including, particularly, for the pass-through tolls, allowing RMAs to be involved with pass-through tolls. I encourage you to see that these tools are implemented not only quickly but aggressively.

I wanted to just briefly mention that the legislature and the governor worked real hard, with your assistance as well, to develop the different tools in 3588, including this tool, for several reasons and that's because we want a transportation system that's safe, minimizes congestion, but also provides for economic opportunity, and it's for this very reason that we provided these tools and that the governor and legislature expects TxDOT to do business in a new way, and in a way that will allow us to move forward flexibly -- flexibly and aggressively.

Now, I mention this because in October I had a delegation from my county and we came and presented a project and asked for some traditional funding -- you remember that, those that were here, and those that were not, we'll be back. And that's one of the things, saying this in a backdrop is that we are working with some of these tools and we're eagerly waiting to see these rules as they're promulgated, and also we're going to be coming back with some different options to present to try to accomplish our 289 goal up in North Texas. So I'm asking you that in thinking ahead when we come down, we want to be able to present you a project and be able to present it in such a way that we're not having to go back and take longer time because we don't quite fit into the rules because the rules are drawn so stringently.

I think that's where I want to leave my comments and answer any questions, but just want to say my point on the Transportation Committee in the House of Representatives, we appreciate and applaud your work. We're also anticipating to see House Bill 3588 implemented, because we've written laws, you've helped us do that, and now you're putting in motion, let's get out there. And as I've heard around the United States, Texas is really starting to be in the forefront with some of these ideas, but until we actually have projects on the ground and actually have projects going, we're not going to have the final ability to stand up and say we've really done something, because that's the next step.

MR. WILLIAMSON: So let me see if I understand you. There's a project in your district that might be able to take advantage of pass-through tolls?

MR. PHILLIPS: There's a project in my district that might be able to take advantage of pass-through tolls.

MR. WILLIAMSON: Are you aware -- are other members, other areas of the state looking to the pass-through toll provision as a method of getting projects started?

MR. PHILLIPS: Yes, they are, and quite a bit, and that's the beautiful thing about this is there are some real specific areas where this tool can accomplish some great things for safety reasons and economic reasons, where in the long term we probably wouldn't have it in our plan to build in the next two years but should be built to be helpful, but if we can find the private or local resources to help get the funding there and then have the pass-through funding to come through, and in years to come recoup that, it's going to be amazing what this tool can do for communities across the state.

MR. WILLIAMSON: Members, questions, comments or dialogue with Representative Phillips?

MR. NICHOLS: I want to publicly thank you for all the work you did on the Transportation Committee. Being someone who came in new and then to tackle and be part of that monstrous bill is incredible, and we appreciate the support you had and the work you did on it.

I will say that on this particular minute order on the rules for pass-through, in the latest swing I had the last couple of weeks kind of going around the state doing questions and answers, I had a number of people in communities who expressed an interest in this. Now, their questions were more they think they may have a project, but until we actually get these rules refined and out there so that they can understand how we're going to approach it, I think that's really what they're kind of waiting on next. So the sooner this gets done and we see what kind of comments we get and then get it finalized, the education process will begin.

Thank you for everything you did.

MR. PHILLIPS: Well, thank you, and if I could say we appreciate you going around too. I know Chairman Krusee in the committee hearing -- I don't know if Mike told you -- commented on what a big support it's been to have you traveling around the state. In fact, I think he said he kept running into you all over the state because you've gone on a whirlwind tour. But in doing that, you're allowing these communities to hear about some of these new tools and some of these ideas, and they're going to be beating the door down, I really think they are.

And you spoke of the learning curve I had to face. We've got two commissioners who I know are having the same learning curve that I went through trying to figure out what all these acronyms mean and what all these things mean, and then how to talk about them in a logical way. But thank you for that leadership.

MR. WILLIAMSON: John?

MR. JOHNSON: I'm going to echo a lot of what Robert said, Representative. Thank you for your service to the state and thank you for your work on the Transportation Committee and the resultant House Bill 3588 which does give us a lot of tools. With this particular aspect, in particular, I think your observations are right on; I mean, it's a bull's-eye. If we get so rigid in requirements, we will lose a lot of our ability to use this as a very effective tool. And the conversations I know that I've had with the good people from Grayson County about your project -- which I think is an excellent template, but there are others around the state that I think fit also -- and my impression is, and I think it's an accurate one, is the atmosphere is right, the time is right to let's do some of these things and just see how effective this tool is. Because we believe, as you believe, that it's going to be a tremendously effective tool to get things done that local areas deem to get done and it gives us the ability to leverage the funds that we have, so I think it benefits everyone, and if we get too rigid in its structure, we eliminate a lot of our prospects.

MR. PHILLIPS: Thank you. And I appreciate your service and your chairmanship of this commission. That flexibility is going to be the key, and that's what we're asking, and I think that was a theme that when we met -- and I know Timoteo Garza's father is here and his mother, he serves with us on the commission, and Ken Mercer earlier -- the idea of flexibility is what we talked about in thinking of the new frontier of transportation to take us to really amazing things. I mean, it's limitless as long as we think that way.

MR. WILLIAMSON: Further questions or comments, Hope?

MS. ANDRADE: I'd also like to join in congratulating you and thanking you for the hard work; I would have never imagined that you were new with everything that you've done for us. But I can't agree more with you that we have to remain flexible. We've been given new tools but it's up to us to take advantage of those and explore all opportunities to meet the needs of the state, at the same time safeguarding the interests of the state.

MR. PHILLIPS: Exactly.

MS. ANDRADE: So we commit to that, and thank you so much for your hard work.

MR. PHILLIPS: Thank you.

MR. HOUGHTON: Just my congratulations to you, Representative, and nice getting to know you, and thanks for the information on that learning curve.

MR. PHILLIPS: Thank you. Look forward to spending more time with you.

MR. WILLIAMSON: We appreciate you taking the time to come all the way down from the cooler part of the state and make your presence felt and your position known, and we absorb from a member most seriously. And as they've all said, we also very much appreciate the efforts that you've put forward in the last session; you're really good. We appreciate it.

MR. PHILLIPS: Thank you very much. You all have a great day the rest of the day.

MR. WILLIAMSON: James, would you return to the podium? I think commission members have questions about the proposed rules. I'll certainly have a few, but who's first?

MR. NICHOLS: I was going to move, I'll move that we do it.

MR. WILLIAMSON: No questions or comments? I have a few questions, James. Is there anything in these proposed rules, if adopted, that would prohibit the following transaction: Ben Wier State Bank loans money to Amadeo Saenz Construction Company to --

MR. BASS: Is that while Amadeo is employed by the department or after he is retired?

(General laughter.)

MR. WILLIAMSON:  -- to finance the construction of 289 in Grayson County through a contract between the Grayson County RMA and the department, but Ben Wier State Bank won't advance that money unless the contract between the Grayson County RMA and TxDOT is bindable as debt? Is there anything that's going to prevent that?

MR. BASS: Not to my knowledge.

MR. WILLIAMSON: So Ben Wier State Bank would be able to say here is a contract between a legal entity of the state and a legal entity of the state to make certain payments and I can make a loan based upon that contract?

MR. BASS: That's my understanding.

MR. WILLIAMSON: And did we provide in the proposed rules for knowing who is opposed to these projects as well as who supports these projects?

MR. BASS: Yes, we did. As part of the application process, the developer, whether it be a public or private entity, must not only list the public local support for the project but also the vocal opposition for the project.

MR. WILLIAMSON: So the commission doesn't make a decision about a project and then find out later that there was significant local opposition, we've made provisions for that?

MR. BASS: Correct.

MR. WILLIAMSON: The final question is when we use the term "developer" in the context of this law and these rules, we wouldn't want to confuse Edmund Kuempel that it's a real estate developer. That's the word we've chosen to represent the person or the entity, whether it's Robert Nichols Construction Company or Parker County Commissioners Court or Grayson County RMA, the developer is simply the entity with whom we will be contracting.

MR. BASS: Correct.

MR. WILLIAMSON: And not necessarily a developer in the sense of developing property for profit.

MR. JOHNSON: Are you aware of a pending bank charter?

MR. WILLIAMSON: I'm trying to encourage people to move on, go make money -- except for Amadeo, you need to stay.

MR. SAENZ: I didn't know I had a construction company.

(General laughter.)

MR. WILLIAMSON: Are there any other questions or comments about this proposed rule?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Do I have a second?

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: The motion passes.

MR. BEHRENS: Agenda item 2(a)(3), we have a proposed rule for some changes in our contract management on Chapter 9. Richard?

MR. MONROE: Good morning, commissioners. For the record, my name is Richard Monroe; I'm general counsel for the department, and I'm almost embarrassed after those two long, involved minute orders.

What you will accomplish if you approve the minute order is we will publish a revision for our rule 9.87 in 43 Texas Administrative Code. What this will do it will allow us to raise the amount that we can give in so-called open-ended contracts to certain persons for scientific contracts, real estate appraisal, right of way acquisition, and landscape architectural services. What has been found is that our old limits were getting in the way of efficient prosecution of business, and we believe that by raising the limits to $2 million for a contract to be performed within a single TxDOT district and $5 million for a contract that will cover multiple districts, we can proceed much more efficiently than we can now which often means that we have to stop in the middle of a procedure and go through the legal requirements which the state has set to advertise for a new contractor.

I would recommend that you approve the minute order for publication of the proposed rule in the Texas Register, and of course, we will solicit public comments.

MR. WILLIAMSON: Are there questions, comments or dialogue that needs to be had with Mr. Monroe from the commission members?

MR. JOHNSON: I have one question, Mr. Chairman.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Counselor, I'm not an attorney. Could you help me a little bit with what an indefinite delivery contract is?

MR. MONROE: An indefinite delivery contract would be, for instance, if our Environmental Division needs the services of some sort of scientific person to evaluate environmental conditions or maybe something having to do with an environmental requirement, we could employ a person who could do multiple projects for a certain period of time, and so therefore, the precise nature of the contract would be indefinite, but we could direct that person: Okay, we've got something that needs to be done over here on State Highway X, go do it.

MR. JOHNSON: In a situation like that, I assume the compensation for services is pretty tightly defined?

MR. MONROE: Yes, sir, it will be.

MR. JOHNSON: Good. Thank you.

MR. WILLIAMSON: Other questions or comments from commission members?

(No response.)

MR. WILLIAMSON: Richard, begging your indulgence for a moment, I need to have some dialogue with another member of the audience about generally the rule changes that we're having. Do I need to go ahead and move and pass this and then have that dialogue, or should I have it while this rule is before us?

MR. MONROE: Either way, Mr. Chairman. I'm not going anywhere.

MR. WILLIAMSON: It will just take a moment. Daniel, are you still out there?

MR. MEZZA: Yes, I am.

MR. WILLIAMSON: When I was introduced to you there was a lot of talking, and I want to be sure I heard your last name correctly. It's Mezza?

MR. MEZZA: Yes, correct.

MR. WILLIAMSON: Daniel is part of the outstanding staff of United States Senator John Cornyn and is attending our meeting because Senator Cornyn is becoming increasingly interested in transportation in our state for which we are eternally grateful.

Now, Mr. Behrens, at the podium up here with us reminds me that you're also an Aggie, and of course, speaking for Amadeo and myself and what few other Longhorns there are in this room, we don't really care.

(General laughter.)

MR. MEZZA: And I won't hold it against you either.

MR. WILLIAMSON: But we do care that Senator Cornyn has exhibited such interest in our business, and you asked earlier in our conversation for examples of what we're doing at the state level to modernize, to deregulate, to empower ourselves and our communities, and you've seen today three pretty good examples. We overhauled the Historical Commission relationship that's going to allow us to move much faster, without sacrificing quality, to deal with problems that we find in the design and construction process. You saw us lay out for public comment the proposed shadow toll rules -- I'm sorry -- pass-through toll rules, as far as I know, the first such effort in any state in the union to figure out a different way to finance projects. And you're fixing to hear us, I suspect, approve a different way of contracting with people that we hire to go out ahead of our projects and take care of problems.

All of this is meant to reinforce the message I was delivering to you earlier which is we're doing everything we can locally statewide to generate new sources of revenue and empower ourselves and our communities to move faster on asphalt roads, steel track roads, public transit, and clean air issues. And Coby will provide you the tools we need, but we desperately need the senator, to the extent that he can, to advocate that same deregulation at the federal level because if we don't have cooperation from the Federal Highway Administration, a lot of this timesaving stuff we're doing, we can't get implemented.

MR. MEZZA: Sure. We understand -- well, I don't understand the issue as well as the people in D.C. do; that's why I'm here, to understand a little bit better and that way I can advocate for you guys.

I was telling Coby that one of the things we like to do -- and we've completely changed the way we do business with the senator's office -- is that it's more of a bottom-up approach where he listens to his constituents at the state level instead of hearing from D.C. So he's very open to ideas and we're here to basically help you guys out.

MR. WILLIAMSON: Well, we can't tell you how much we appreciate that.

MR. MEZZA: Well, you know, I think that's the senator's approach. He really wants to have a real feel for Texas and that's the way he can do it. He does it through our regional directors and the state director, and I'm part of this region of San Antonio and El Paso, and I'm honored to have both the new commissioners in my region, so I was very happy for that because now I can advocate for projects in that region.

But saying that, I will get the information and I'm glad you guys invited me and I appreciate that a lot because the senator really does need to know what his constituents are thinking. I mean, it's one thing hearing it from you guys in D.C., it's another thing hearing it from his eyes and ears on the street and saying hey, this is what's going on. So I'm here to make your case to the senator but I definitely need the information.

And as I'm here, I want to also say to Coby and them: give us the solutions. A lot of the times, just being in this business for about a year with the senator and just learning D.C. -- because he hasn't learned it, we're going through the process of being a freshman senator -- but I understood that the simpler you can get the message out and get those details into us, it's easier for us to get it through, because sometimes we don't know what you guys specifically want, so that process helps us a lot.

MR. WILLIAMSON: We'll remember that, we'll keep it simple.

MR. MEZZA: Great. Thank you; I appreciate that. And thank you for your time.

MS. ANDRADE: Chairman, may I say?

MR. WILLIAMSON: Oh, please.

MS. ANDRADE: Daniel, I forgive you for being an Aggie because I have a great working relationship with you. I have to tell you, commissioners and Chairman Williamson, this is a fine young man. I had the privilege of working with him when he worked with Governor Perry and now with Senator Cornyn, but they're extremely, extremely proactive in reaching out to the community and learning about our needs and working to find a solution together. So Daniel, thank you very much for being here today. Give my best to the senator.

MR. MEZZA: I sure will. Thank you all. Any other comments?

MR. WILLIAMSON: Thank you, sir.

MR. MEZZA: Thank you.

MR. WILLIAMSON: Thank you, Richard, for that indulgence. Any other members, comments, questions for Mr. Monroe?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. NICHOLS: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All in favor, please signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. MONROE: Thank you.

MR. BEHRENS: Next we need to adjust the agenda a little bit; we need to take one of the rules which would be 2(b)(1)(B), one of the rules for final adoption which relates to the acquisition of abandoned rail facilities and consider that first before we go to the next rule for proposed adoption.

MR. WILLIAMSON: It sounds like Star Wars: 2(b)(1)(B). Wayne?

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

This minute order adopts new sections 15.150 through 15.153 to be codified under Title 43 TAC, Part 1, concerning the department's acquisition of abandoned rail facilities. Transportation Code 91 authorizes the department to acquire, finance, construct, maintain, and operate a passenger or freight rail facility or system, including the acquisition of abandoned rail lines.

House Bill 2, 78th Legislature, Third Called Session, 2003, directs the Texas Transportation Commission to adopt rules governing the disbursement of funds for acquiring abandoned rail facilities. In establishing this criterion, the commission is required to consider the local and regional economic benefit realized from the disbursement of funds in comparison to the amount of funds disbursed.

A public hearing was held on January 9, 2004. One comment was received and is addressed in Exhibit A to this minute order. No changes were made based on this comment.

The minute order presented for your consideration authorizes the final adoption of the new Sections 15.150 through 15.153. Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, questions or comments? Mr. Nichols?

MR. NICHOLS: I did not have a question; I wanted to make a comment for the public and for the new commissioners because there's a little bit of historical background.

In the abandonment of rail in Texas, in the last two decades the '80s and the '90s, literally Texas has lost 4,000 miles of rail, abandoned, sold for scrap, stripped up, gone, never to be there again. We lost not only the service, the communities lost the service of that, but the valuable transportation corridors that were once there are basically gone forever.

The legislature either two years ago or four years ago -- two years ago, I think -- gave the Department of Transportation for the first time in the state's history the option or the ability in this law to go work with the local rail districts and the counties and the railroads and to actually acquire some of these during the abandonment process before they're scrapped out and sold, because we could buy them for 3 cents on the dollar, 5 cents on the dollar for what the replacement cost would be. You hear about some of these rail things that are going in in some cities that are spending billions and hundreds of millions of dollars, but we can go in for 5 cents on the dollar and acquire some of these if we believe there is viability either for rail service to that community or for future transportation corridor or whatever. They also gave us the authority to lease it back out to short line providers or the county rail fund.

So this particular final adoption, we've got one staring us in the face in Fannin County, about a 30-mile stretch, and the railroad has already filed an abandonment. This is, in effect, the only rail service through Bonham, Texas that connects to other ends, and if it falls to the wayside -- as occurred for 4,000 other miles in the '80s and '90s -- the city of Bonham basically and the other communities will forever lose the economic opportunities that the rail service would provide, regardless of whether it's agricultural commodities or factories, mining, things of that nature, it would be lost forever.

So this is maybe kind of small on the radar screen but it's really pretty critical.

MR. DENNIS: In anticipation of your approval of this, we've already started working with the Fannin County Rail District; we have a public hearing scheduled on February 9, and we hope to evaluate what they have and bring it to you in the very near future.

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

MR. WILLIAMSON: Other questions or comments?

(No response.)

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. BEHRENS: Now we'll go back to the rules for proposed adoption and we'll go to 2(a)(4) which also pertains to rail facilities.

MR. DENNIS: This minute order proposes adoption of amendments to Section 15.150 and 15.151 and new sections 15.154 and 15.155 to be codified under Title 43 TAC, Part 1, concerning the department's acquisition, construction, maintenance and operation of rail facilities.

Transportation Code 91 authorizes the department to acquire, finance, construct, maintain, and operate a passenger or freight rail facility or system, including the acquisition of abandoned rail facilities. Section 91.051 provides that a contract made by the department must be let by a competitive bidding procedure in which the contract is awarded to the lowest responsible bidder that complies with the department requirements.

Section 91.102 authorizes the department to lease all or part of a rail facility or system to a rail operator and to contract with the rail operator for the use or operation of all or part of the rail facility or system.

Section 91.052 authorizes the department to enter into an agreement with a public entity, including a political subdivision of this state, to permit the entity, independently or jointly with the department, to acquire, construct, maintain or operate a rail facility or system.

Rules are necessary to implement the authority granted in Transportation Code Chapter 91. The department has scheduled a public hearing in Austin on March 16, 2004 to receive comments concerning the proposed new rules.

The minute order presented for your consideration authorizes the publication of the proposed rules for adoption in the Texas Register for the purpose of receiving public comments. Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, questions or comments?

(No response.)

MR. WILLIAMSON: Can I have a motion?

MR. JOHNSON: So moved.

MR. WILLIAMSON: Second?

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. BEHRENS: Agenda item 2(a)(5), we have proposed rules on Congestion Mitigation Facilities. Carlos?

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

MR. WILLIAMSON: How are you going to move that podium?

MALE VOICE FROM AUDIENCE: He's got a step.

(General laughter.)

MR. LOPEZ: This one is static; I have no options available to me at this time.

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

The minute order before you proposes preliminary adoption of amended Sections 25.40 through 25.43, and new Sections 25.44 through 25.47 concerning congestion mitigation facilities.

House Bill 1208 of the 78th Legislature expanded and further defined the existing authority of the department in regards to high occupancy vehicle lanes, toll lanes for congestion mitigation purposes and for exclusive lanes. The legislation also allows but does not require the department to authorize the use of HOV lanes by low emission vehicles, regardless of the number of occupants of these vehicles unless this would jeopardize the department's ability to receive or use federal funds.

The legislation expanded the department's authority to create toll lanes on any portion of the state highway system, and these rules reflect this change. House Bill 1208 also allows the department to create and toll an exclusive lane under certain conditions.

We recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments for Carlos, members?

(No response.)

MR. WILLIAMSON: I have one question, Carlos. Does this mean we can now have tolled bicycle lanes?

MR. LOPEZ: You know, it probably could allow that. The way these rules are written, they're so flexible.

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion carries.

MR. LOPEZ: Thank you, commissioners.

MS. ANDRADE: Chairman Williamson, may I add something? Carlos, in my early tenure I can't promise too many things, but one thing I can promise you is there will be no more short jokes.

(General laughter.)

MR. LOPEZ: It's called average height. Thank you, commissioners.

MR. WILLIAMSON: That would be a pretty good story, wouldn't it, tolling bicycle lanes?

MR. BEHRENS: We have two more rules for final adoption. 2(b)(1)(A) is rules pertaining to our Border Colonia Access Program.

MR. DENNIS: Once again for the record, my name is Wayne Dennis.

This minute order adopts amendments to Sections 15.100, 15.101 and 15.105 to be codified under Title 43 TAC, Part 1 concerning the Border Colonia Access Program. The amendments are necessary in order to implement legislative changes made by House Bill 3420, 78th Legislature, Regular Session. Section 15.100 is amended to reflect the codification of legislation creating the program and government code and the termination of an appropriation rider from the previous biennium that imposed conditions on the department's implementation of the program.

Section 15.101 is amended to change the definition of eligible costs and to define rural border county. The definition of eligible costs now includes the purchase of materials or the leasing of any equipment reasonably necessary to accomplish the goal of the project. The definition of rural border county is an eligible county with a population of less than 55,000 as determined by the latest decennial census, and is adjacent to an international border.

Section 15.105 is amended to provide for a 10 percent set-aside of the funding available during each program call to be distributed to the rural border counties. The set-aside is in addition to the $100,000 distributed to each eligible county under Paragraph (1) of this section.

The minute order presented for your consideration authorizes the aforementioned amendments. Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

MR. WILLIAMSON: We have a motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. BEHRENS: Agenda item 2(b)(2) which is a rule for final adoption concerning the Trans-Texas Corridor and how we do our environmental review and public involvement.

MR. RUSSELL: Thank you, Mr. Behrens. Good afternoon, commissioners. For the record, I'm Phillip Russell, director of the Texas Turnpike Authority Division.

House Bill 3588, as you know, added a new Chapter 227 to the Transportation Code. This chapter allows the department to plan and construct a new set of intermodal facilities called the Trans-Texas Corridor. Various sections within Chapter 227 provide that the department shall conduct and approve each environmental evaluation or study, review and get final approval regarding the sufficiency of environmental evaluations conducted for a facility on the Trans-Texas Corridor. Other sections provide that all laws governing the design, construction, maintenance or operation of a highway on the state highway system also apply to the Trans-Texas Corridor.

In essence, these rules before you would provide that the rules that we currently utilize for highway projects on the state highway system will also be utilized for the Trans-Texas Corridor. These rules are necessary, of course, to comply with House Bill 3588.

The proposed rules have been published in the Texas Register. The comment period was open through December 15, and no public comments were received. Staff recommends final adoption of these rules.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Second?

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. JOHNSON: Could I ask, Mr. Russell, what a pivotal state official is? Do you have a definition?

MR. RUSSELL: I don't know, but it must be darn important is the only thing I can figure out, a PSO.

MR. WILLIAMSON: John, you always catch stuff like that.

MR. BEHRENS: Moving on to agenda item number 3 under Transportation Planning we have two minute orders, the first is authorizing the project selection process for our 2005 Statewide Preservation Program and the Statewide Mobility Program, the second being how we distribute federal funds, and Wayne, you will probably get the prize for being up here the most today.

MR. WILLIAMSON: He may be the guy that decides what an indefinite contract delivery is.

MR. DENNIS: Again for the record, my name is Wayne Dennis.

In accordance with Section 201.602 of the Texas Transportation Code, the Texas Transportation Commission conducted a public hearing on November 24, 2003 to receive testimony concerning the highway project selection process and the relative importance of the various criteria on which the commission bases its project selection decisions. In order to more clearly distinguish between preservation and enhancement of the state's transportation system, the Unified Transportation Program encompasses two documents: the Statewide Preservation Program consists of funding strategies used to maintain the existing transportation system; the Statewide Mobility Program focuses on funding strategies used to enhance the transportation system.

Six participants provided oral comments at the public hearing. Written comments were accepted through January 5 but none were received. Exhibit A contains a summary of the comments and responses to the oral comments received as a result of the public hearing.

The minute order before you establishes that the proposed project selection process is consistent with the agency's objectives to provide reliable mobility, improve safety, responsible system preservation, streamline project delivery, and economic vitality. This minute order authorizes the project selection process as shown in Exhibit B for developing the 2005 Statewide Mobility Program and the Statewide Preservation Program under the Unified Transportation Program. We recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments, members?

MR. JOHNSON: I have a question.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Wayne, on the chart that I have it gives basically monetary figures to the SMP and for fiscal years '05 and '06, we're talking about roughly total spending approaching $4 billion, $3.935- and $3.949-. And then in fiscal year '07 and '08 there's a $300- to $400 million decline. What are the assumptions that have been made that create this decline in anticipated receipts?

MR. DENNIS: We have been working very closely with the financial planning group on this and these are based on the projections that we have. I might have to defer to either Mr. Bass or Mr. Saenz if you want to elaborate some more.

MR. BASS: For the record again, I'm James Bass. I believe, as Mr. Dennis said, it's based upon our existing cash forecast of the State Highway Fund which takes into account not only revenues coming into the fund, but the expenditures and the existing bank balance. And right now we have a bank balance that was high in great part due to a change in the method of dealing with the Federal Highway Administration and we were able to receive our reimbursements from FHWA sooner than we otherwise would have. That has, in effect, created a bubble, if you will, over a period of time that we're able to take advantage of that and accelerate some projects, but it is a bubble, meaning we will rise and then return to historic levels at some point.

MR. JOHNSON: So this is basically a timing issue; it's not necessarily a decline of receipts. It's just the way the receipts versus the way we're spending money, the overlay of the time relative of those two.

MR. BASS: Correct.

MR. JOHNSON: Thanks.

MR. WILLIAMSON: Other questions or comments, members?

MR. NICHOLS: Mine is probably more comment. When we opened the meeting this morning, I mentioned something about milestones and I will tell you for the public this particular minute order is a milestone in planning that began several years ago, the whole process.

I know that Chairman Johnson established a statewide group to try to focus on issues. As some of that came together, Governor Perry directed and encouraged us to try to simplify the process, more fairness on some of these project fundings and to get more local input into the project selection process.

Beginning with that and going through several years of task force with metros, urban areas, and many, many groups, we've gone through, taken the 34 categories, brought them down to roughly 12, taken the funding from a formula-driven and brought it into, on the expansion money, a more allocation method, and all this came together over a two-year phase and this is really the final work. This is it, this is complete, so I'm very excited and I think it's really great.

I'm sure that as time moves on we'll want to modify or tweak it a little bit, but the big mountain to cross, crosses today here in San Antonio.

MR. DENNIS: And I think the credit goes to our programming and scheduling section. Max Proctor and his staff have worked long and hard on this and it was a very inclusive effort.

MR. WILLIAMSON: Other questions or comments, members?

MR. HOUGHTON: Just one. What kind of growth factors do you factor in here as to revenues from the Federal Highway Fund as population grows?

MR. DENNIS: We used roughly -- again, we're at the tail-end of TEA 21 right now and are waiting for another federal authorization bill -- we worked in a federal growth factor of 2-1/2 percent just in anticipation of what we're going to get. But when that authorization bill passes, we will make adjustments in the out year and hopefully speed things back up again to take the end of that bubble.

MR. WILLIAMSON: Did you get your question answered?

MR. HOUGHTON: Got it.

MR. WILLIAMSON: Mr. Houghton's question prompts one in my mind. What happens if we get $5 million a month more than we project? Will it be distributed in the allocation on some sort of prorated basis, or will that not be distributed right now?

MR. DENNIS: If we got $5 million more a month than we've projected at this time, when we update the 2006 SMP and SPP, we would bring that back to you as we began that process.

MR. WILLIAMSON: So if Senator Cornyn, Senator Hutchison and House Member Culberson and House Member Delay, and so on and so forth are successful in generating more federal reimbursement for the same state expenditure, the commission will have a chance to decide whether or not it wants to allocate that additional money or leave it out for SP or whatever?

MR. DENNIS: Yes, sir.

MR. WILLIAMSON: That was a good question, Ted; thanks for asking that question.

MR. HOUGHTON: The other question is growth factor in population growth factor, folks that are driving, pumping more gasoline, moving into the state, if we're the second largest state in the union and growing, what kind of growth factors do we have?

MR. DENNIS: Without stepping too much on Mr. Bass's subject, I'll give it a shot.

MR. HOUGHTON: Because the numbers are flat and go down.

MR. DENNIS: Those forecasts have been worked into the financial forecast, and again, I think with vehicles getting better mileage, even though we have more people and more people driving, I think because of the better mileage we're getting in our vehicles, we're getting less revenues and project less revenues because of it.

MR. WILLIAMSON: In fact, why don't you just go ahead, Fast Jimmy, and come on up. Is it not the case that about a year ago you started ringing the bell to get the commissioners' attention about gas tax revenue per mile driven starting to go down?

MR. BASS: Correct, and if I can quote a couple of figures on the growth rate, in the year 2000 the motor fuel tax deposited to the State Highway Fund was about 2-3/4 percent higher than the previous year; in 2002 we saw that same pattern, again about 2-3/4 percent; during 2003 that growth was only one-half of 1 percent. The reasons for that could be varied and many. One, as Wayne said, could be the overall efficiency of the fleet. There's a mix of diesel and gasoline in there, so if the economy is going down, perhaps the receipts from diesel are going down and being offset by gasoline and netting to almost a flat between the two.

A cynic might say that since the legislature changed the point of collection, and that was going to take place on January 1 of 2004, if indeed you had been one of those individuals not paying your full share of state gas tax and you knew the rules were beginning to change, perhaps you might get while the getting is good. Because of that, we are very interested to see the deposit the State Highway Fund will receive in March of this year. The tax law took effect on January 1; through the mechanisms in state law, the State Highway Fund will not see its first deposit under those new laws until March. For the first four months of this fiscal year, we are seeing basically flat revenue compared to the prior year for motor fuels tax. We are hopeful and we expect, with the change in the point of collection, we will see that increase.

MR. HOUGHTON: The federal government has their gauge -- they call it CAFE, is that correct, on their miles per gallon average? Do you watch that?

MR. BASS: We watch that. I can't quote the figures to you like I did on the growth to the state, but we do monitor that.

MR. WILLIAMSON: If collections don't go up, we're all going to go to Jacksonville with Robert.

(General laughter.)

MR. BASS: And we did, as Mr. Williamson was referring to, kind of ringing the bell a year ago, looking at our cash forecast for the State Highway Fund that goes into the UTP and other planning documents. We had been carrying forward that growth trend of motor fuel tax, because of population and because of recent history, continuing to grow at 2-1/2 to 3 percent. We were continuing that growth rate into the future because all population forecasts show that that will continue.

Because of the activity during 2003, we've had to adjust those future forecasts. We're still showing growth but we're showing it at a lower rate than what we had been previously which, of course, then leaves less money to be used to plan for projects.

MR. HOUGHTON: And this is a reflection of that.

MR. BASS: I believe so. That's a reflection of the latest forecast so it would have that adjustment.

MR. HOUGHTON: The bubble you're talking about.

MR. BASS: Correct.

MR. WILLIAMSON: Other questions or comments for Mr. Bass or either of these gentlemen?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes. And hats off, Mike and the entire department; that started with John, it finished off with you, and that was a hell of a lick we just struck. Modern transportation planning, I love it.

MR. DENNIS: Item 3(b), this minute order approves the department's use of a variance from federal aid apportionment formulas when allocating funds to various parts of the state. Texas Transportation Code Section 222.034 requires the commission to distribute federal-aid transportation funds to various parts of the state through the selection of highway projects in a manner that is consistent with federal formulas that determine the amount of federal aid the State of Texas receives.

Your evaluation is required through each annual cycle of the Unified Transportation Program. A distribution under this section does not include deductions made for the State Infrastructure Bank or other federal-aid funds reallocated by the federal government. The commission may vary from the distribution procedures provided it issues a ruling or minute order that identifies that variance and provides particular justification for the variance.

Exhibit A contains an individual evaluation of each federal-aid apportionment program including particular justification for any variance from the federal-aid apportionment formula and the proposed distribution of the transportation funds through the 2005 Unified Transportation Program.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Questions or comments, commissioners?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. DENNIS: Thank you once again.

MR. BEHRENS: Agenda item number 4, under Finance we have two items: the first would be the acceptance of the Quarterly Investment Report, and the second one acceptance of the audit for financial statements of the Central Texas Turnpike System. James?

MR. BASS: Good afternoon. One more time for the record, I'm James Bass, director of the Finance Division. Item 4(a) presents the Quarterly Investment Report for the first quarter of Fiscal Year 2004 covering the period of September 1, 2003 through the end of November.

One thing I would point out, during this period our trustee services had been provided by Bank One. They closed a deal with JP Morgan to take over their corporate trustee services in November, so our trustee is now J.P. Morgan. The same individuals who were providing us service continue to do so, and we see no reason at this time to change that, and apparently that merger and transition went so well, they decided to buy the whole bank.

A few brief highlights from the report. The book value of our investments declined by slightly over $41 million during the first quarter, and again, this is simply the net of the cash inflows comprised of receipts from local governmental entities for right of way and earnings on our investments as opposed to the cash outflows which would be the payments to the contractors and bond holders. As we continue to progress through this construction project, we would expect our book value to decline every quarter as we make those progress payments.

One last item I'll point out is at the end of the quarter we had an unrealized loss on investments of almost $7.7 million, and what this unrealized loss means is that the market value of our investments was $7.7 million less than the book value. Again, this should not be a concern, we don't see it as a concern right now because we plan on holding our investments until maturity, meaning we will receive the book value for those maturities.

Having said all of that, I'd be happy to answer any questions or let you know that staff would recommend your approval of the report.

MR. WILLIAMSON: Commission members, questions and comments, please?

MR. JOHNSON: I have just one observation, and you might not be the right person to ask this question as a result of the observation. Do we feel that we have enough funds to complete the project?

MR. BASS: Yes. There's even a portion in item 4(b) that we can discuss, as you're well aware, the commission has committed to providing $700 million of toll equity to the project. As we stand here today, only one year into the project, it doesn't look like all that $700- would necessarily be available. We also --

MR. JOHNSON: Wouldn't necessarily be necessary?

MR. BASS: Correct. And we're also well aware that there's another three or four years of construction and things could change dramatically over that period. So in that next document it says the commission is still committed to that $700 million but is aware and is also, in effect, making the market aware that given current situations, it doesn't look like all that $700 million would be available, but the commitment is still there if and when it is needed.

MR. WILLIAMSON: Available or necessary?

MR. BASS: Both.

MR. JOHNSON: Well, let's assume for a moment that the entire $700 million is not necessary -- in other words, the project came in under budget and let's say the number is $50 million or $100 million. What flexibility does the commission have with the use of that money?

MR. BASS: In discussion with bond counsel over the past several months, it is my understanding that the commission would then need to pass an additional minute order adjusting that original commitment of $700 million, and then that would free up, if it be $50 million or $100 million, to be used wherever the commission deems appropriate.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Bexar County RMA.

MR. NICHOLS: The money is available.

MR. BASS: Yes. I'm sorry, I may have misspoke.

MR. NICHOLS: We are under bond covenants on our commitment with the big lenders of these bonds, so when we went to New York to do an update, we know from our best estimate at this time we're a quarter of a billion dollars under budget which is fantastic news, but we also recognize we've got several years to go, and we face-to-face assured the big rating agencies, Standard & Poors, all these people, that at this point we recognize that with several more years to go, our commitment is as we coveted in the bonds to do the whole thing. We've got several connector pieces, like the Southeast 45 and the interchange up in the 45 and the west side that had to be funded, we can use that money for that also.

But I think what assurance we gave them was until we actually get there, that we were going to not divert that money for other use until the point at which the project, in effect, is close to being open and final costs and expenditures are in.

MR. BASS: I apologize; I think I misspoke earlier. The money will be available, it may not be necessary, and within our cash flow model, we still have listed within that the $700 million commitment. Even though we're aware that current estimates are that the full amount wouldn't be needed, we're continuing to plug the full $700 million into our cash flow model.

MR. WILLIAMSON: Other questions or comments, members?

(No response.)

MR. WILLIAMSON: May I have a motion and a second?

MR. JOHNSON: Move acceptance.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Acceptance passes.

MR. BASS: Item 4(b), as part of the indenture for the Central Texas Turnpike System, the commission agreed to present audited financial statements and an annual update on financial and operating data to the bond market. This agenda item asks that you accept these items so that we may distribute them to the market. And although the exhibits to this minute order are quite large, I would like to point out that much of the exhibits are items that have already been approved by the commission or have already been distributed to the market.

A few exceptions to that would be the annual audited financial statements for the System, as well as the annual update of financial and operating data for Fiscal Year 2003, and update to the debt service schedules listing actual amounts for Fiscal Year 2003, and a statement of investment and earnings on funds in the Construction Fund during Fiscal Year 2003.

I'd be happy to attempt to answer any questions and would recommend your acceptance and approval of the report.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Second?

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion for acceptance passes.

MR. BEHRENS: Agenda number 5 which would be our contracts for the month of January which would be to propose the award or rejection of our maintenance contracts and our highway building and construction projects. Thomas B.

MR. WILLIAMSON: This would be the younger, bigger brother of the Bohuslav that we laughed at earlier in the day.

MR. BOHUSLAV: Yes, sir.

MR. WILLIAMSON: This is a Brownwood Bohuslav.

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

Item 5(a)(1) is for the consideration of the award or rejection of highway maintenance contracts let on January 8 and 9, 2004 whose estimated cost are $300,000 or more. We had 19 projects, almost 4.7 bidders per project. Staff recommends award of all projects.

MR. WILLIAMSON: Questions, comments, members?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

MR. WILLIAMSON: A motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. BOHUSLAV: Item 5(a)(2) is for consideration of award or rejection of highway construction and building contracts let on January 8 and 9, 2004. We had 88 projects, an average of almost five bidders per project. We did have one project that was a toll project on 45 that came in about 8 percent under.

We have two projects we recommend for rejection. The first one is in Crockett County, Project Number 3015. It's for a visitors center in Ozona. The county has to participate in that project when they have money and they would have to pay for the overrun which is about $115,000; they don't have the funds to do that so we'd like to reject that project and go back and re-scope it, redesign it to see if we can reduce the cost.

The second project recommended for rejection is in Nueces County. It was 40 percent over and we had only two bidders on the project. There were some acceleration requirements in there that we think are a bit stringent and the work areas are real tight, and the contractors commented that they'd like to see us open some areas up so they could move their equipment in and out. We'd like to go back and redesign the project and re-let at a future date and try to garner more competition.

Staff recommends award of all other projects.

MR. WILLIAMSON: Thomas, are there any projects that you know of that would affect property owned by any of the commissioners?

MR. BOHUSLAV: I'm not aware of any, sir.

MR. WILLIAMSON: Questions or comments?

MR. JOHNSON: I have one on the Crockett County Ozona visitors center. Is that an enhancement project? It sure looks like it.

MR. BOHUSLAV: If it shows to be. Yes, sir, it's TE on the end of the project number.

MR. JOHNSON: Okay, thanks.

MR. WILLIAMSON: Other questions or comments from the members?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion approved.

MR. BEHRENS: Agenda items 5(b)(1) and 5(b)(2) concern withdrawal of a bid on a maintenance contract and proposal to accept the second lowest bidder. Amadeo?

MR. SAENZ: Good afternoon, commissioners, Mr. Behrens.

Section 221.0041 of the Texas Transportation Code allows the Texas Transportation Commission under certain conditions to award a maintenance contract of less than $100,000 to the second low bidder when the low bidder does not execute the contract. Under Title 43 of the Texas Administrative Code, our rules allow the commission to accept withdrawal of the lowest bid and award the contract to the second low bidder on the recommendation of the executive director when the executive director determines that the second low bidder is willing to perform the work at the unit bid prices of the lowest bidder, the unit bid prices of the lowest bidder are reasonable, and delaying the award of this contract may result in significantly higher unit bid prices.

Under item 5(b)(1), we had a contractor in the Abilene District, Austimpactors, LLC submitted the low bid on a mowing contract. Unfortunately, he was not able to get bonding, and therefore, we have determined that it meets the criteria and recommend that the contract now be awarded to the second low bidder who has submitted to us in writing that they're willing to do this work at the unit price bid by the low bidder, and we would recommend that this award be done.

MR. WILLIAMSON: Questions or comments, members?

MR. JOHNSON: Just out of curiosity, how many bidders were there?

MR. SAENZ: For this project, sir, I think we had -- I don't have the number of bidders. The difference between the low bid and the second bid was almost $5,000, but the second low bidder agreed to do the work at the original bid price. The original bid price which was the contract that had been previously awarded was about $5,000 over engineer's estimate, but we feel that going back will probably cost us more in the re-advertisement as well as probably the delay of the work will cost us more money to go out there a second time.

MR. NICHOLS: Remind me of the process. The bidder who was the successful original low bidder could not get his bonding.

MR. SAENZ: He could not get his bonding.

MR. NICHOLS: But when he bid on the project, I thought we had to have proof of something when they bid like an earnest money or something like that.

MR. SAENZ: He does submit a bid check and unfortunately he loses that bid check because he did not execute the contract.

MR. NICHOLS: So he did lose a bid check here.

MR. SAENZ: For example, this contract that the estimate was $58,000, I think we required like a $600 bid check, and that bid check remained in the department.

MR. NICHOLS: So is he penalized in any other way? In other words, once he's in a position where he can get bonded, then he can start bidding again, or is he barred for a period of time, or what?

MR. SAENZ: Once he can get bonded again, he's able to bid. Now, if we see a lot of succession, then we can move forward with some kind of a sanction.

MR. NICHOLS: Okay.

MR. WILLIAMSON: Any other questions or comments, members? I have one Amadeo. How frequent is this a problem where we have people who want to work for us and they submit a bid and then find out they can't get bonded.

MR. SAENZ: Not that often. I think what happened here is the contractor submitted -- he was successful more than he thought he was going to be successful, so he exceeded his bonding capacity, but he was able to bond most of the contracts, so he's working on those. Unfortunately, he ran out and could not get bonding on this contract and another one. But it's not that often.

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. SAENZ: For item 5(b)(2), we have the same situation and the same contractor. Austimpactors, LLC submitted the low bid for a mowing contract, also he could not get bonded. We have reviewed the second low bidder, H&A Mowing Company; he has provided in writing that he is wanting to do the contract at the original bid price. We have reviewed and we need to make the same determination that it would be in the best interest to award the contract to the second low bidder. We therefore recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

MR. SAENZ: Thank you, commissioners.

MR. BEHRENS: Commissioners, now we move to the routine minute orders. We're going to take two of them, one being 6(g), we're going to defer 6(g) which is in Brazos County in reference to approval of two railroad spur track crossings. We need to get some more information on that for that particular one, so we'll defer that.

The other routine minute order 6(e)(3), I think Commissioner Houghton wants to abstain on that particular minute order. It deals with the 78.7 acres of surplus right of way that is going to be purchased by the Permanent School Fund. This right of way was purchased in 1986 for the Grand Parkway, State Highway 99, in the Houston District. That particular alignment wasn't used. Another alignment was used, so that property became surplus, and the School Land Board has agreed to pay $1,009,503 for that property and we recommend approval of that minute order.

MR. WILLIAMSON: And which item is that that Mr. Houghton will be abstaining from?

MR. BEHRENS: 6(e)(3).

MR. WILLIAMSON: And Mike, are you going to ask for a motion and a second on all the routine matters at one time?

MR. BEHRENS: I thought we'd just take this one individually and on the remainder we'll just take the one motion.

MR. WILLIAMSON: So the motion will be, if a member other than Mr. Houghton so wishes to offer it, the motion will be approve item 6(a)(1) --

MR. BEHRENS: I think, Mr. Chairman, if we would just have this to approve 6(e)(3).

MR. JOHNSON: And then go back and get the rest of them.

MR. WILLIAMSON: Do I have a motion to approve item 6(e)(3)?

MR. JOHNSON: One question. The appraisal process, are we satisfied that we have an equitable and fair compensation for the property?

MR. BEHRENS: Yes. This was done by an independent appraiser, the normal procedure we use on all of our right of way matters.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: I am searching for a motion on item 6(e)(3).

MR. NICHOLS: So moved.

MR. WILLIAMSON: And a second?

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second to approve item 6(e)(3). All those in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: All abstaining?

MR. HOUGHTON: I abstain.

MR. WILLIAMSON: The motion passes on four ayes, no nays, and one abstention.

Now the motion will be on all other routine minute orders except 6(e)(3). Is that correct?

MR. BEHRENS: Yes. All of those minute orders are as they have been posted on our required agenda.

MR. WILLIAMSON: And 6(g)?

MR. BEHRENS: Except 6(e)(3) and 6(g). Correct.

MR. WILLIAMSON: And we've already been told that as far as we know -- no, I haven't asked that question. I'll ask that question of you, Mike. To your knowledge, do any of these minute orders affect any of the commissioners personally?

MR. BEHRENS: No, sir.

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Second?

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(None opposed.)

MR. WILLIAMSON: Motion passes.

Now, do we want to go into executive session before the open comment period, Mr. Monroe, or after?

MR. BEHRENS: I'd recommend we do open comment.

MR. WILLIAMSON: We're going to do open comment period, and we have at the open comment period Kathleen Trenchard.

MS. TRENCHARD: I had to leave here to go over to sign up to speak at the city council meeting and I had to be there by eleven o'clock; I couldn't believe you are all still here.

My name is Kathleen Trenchard and I am the president of Scenic San Antonio. I would like to congratulate Commissioner Andrade. I've long been a fan of the commissioner, and go girl. I know she'll show you a good time here too.

Although Scenic San Antonio's first priority is to find ways to halt the construction of new billboards and develop strategies that would dismantle the existing eyesores over time, we see this as one piece to be included in the overall goal of making our highways beautiful. Therefore, we applaud TxDOT for holding a public hearing inviting the community to share ideas on how to capture the essence of history and culture and beautify our roadways.

We would also hope to see a transparent public process for accessing TxDOT's Green Ribbon landscaping improvement program. I have encouraging information on what TxDOT is doing in Houston in collaboration with their Chamber of Commerce's Quality of Life Committee and Scenic Houston.

Six months ago I was told by the local TxDOT official in charge of the Green Ribbon Program that Scenic San Antonio would have to get on a list and wait until 2007 in order to use the funds to plant trees along Highway 281. We are confused about why Houston has immediate access to these monies but we don't. We hope this can be sorted out so San Antonio can fully participate in this program. Assuming these monies are available for immediate use in San Antonio, we hope to work with you in developing a priority list of projects that can receive the $1.1 million in state funds. These funds were appropriated in 2001 by the legislature and allocated by the commission for landscaping in San Antonio. We know that the legislature appropriated a similar amount in 2003 but aren't sure whether the commission has allocated those funds yet.

We urge TxDOT to work with the local community and business groups to incorporate our priorities and desires into your plans. And I would like to say that I do have a meeting with David in February, so I'm looking forward to sorting this out with him.

Billboard control and urban highway landscaping are serious economic development concerns. A growing number of bi-partisan legislators consider these to be important emerging issues. Over 20 cities and 200 Adopt-a-Highway groups and the Conference on Urban Counties endorsed or passed resolutions and legislation to prohibit new billboards. By the way, Bexar County and the City of San Antonio were in consensus on this one too; they both passed the resolution supporting the legislation.

So you see there is a growing coalition statewide that believes that roadway landscaping and billboard prohibition can and should be incorporated into our transportation and economic development concerns.

In the next month Scenic San Antonio is partnering with the Crockett Flower and Tree-Planting Project and we saw some beautification projects. We are also collaborating with the Old Spanish Trails Coalition which goes statewide on a large scale plan to plant trees from downtown along North Flores to Fredericksburg Road. And we also hope to participate in a tree-planting modeled after Houston's very successful planting from the airport to their downtown. We would like to do the same along 281 from our airport into downtown.

And I'd just like to say thank you very much for coming and listening today and I hope you come back soon on a prettier day. Thank you very much for your efforts and your support.

MR. WILLIAMSON: Are there questions or comments for this person, members?

MR. JOHNSON: I have a question. Kathleen, how many years have you served in this capacity?

MS. TRENCHARD: Well, ten years ago I was the secretary of Scenic San Antonio, and that lasted for about two years, and we did some wonderful projects, but then we weren't successful in recruiting a new president so we were dead for ten years. So I decided it was time to bring it back and I contacted Scenic Texas and they said, "We definitely want to work with you." So now it's been a year, one year.

MR. JOHNSON: Is there a group here similar to Trees for Houston?

MS. TRENCHARD: Similar. I don't know if they're quite so successful. We've been very bogged down in trying to pass a tree preservation ordinance and you might have heard that the president of Citizens Tree Coalition was sued by a local developer for sending out a message over the internet, something to the effect that they were bulldozing all the trees on a potential Wal-Mart site, and so I think that coalition has been very bogged down in a lawsuit and also in getting that landscape ordinance passed -- which it did. So we are working with Citizens Tree Coalition on some of these projects that I mentioned, and we hope that we will continue that partnership, but I don't think it's nearly as successful as Houston's.

MR. JOHNSON: Well, I don't want to get into the debate on billboards --

MR. WILLIAMSON: Oh, let's do.

MR. JOHNSON: No, let's not.

MS. TRENCHARD: I can tell you it's non-controversial here in San Antonio.

MR. JOHNSON: I do want to say I personally appreciate the efforts that you make to take on the aesthetic aspects of transportation in Texas, and a driving experience. I share the thought that it's extremely important. We somewhat let it ebb and flow, mostly ebbing, in terms of its importance, but I think it is important. Your efforts are appreciated.

MS. TRENCHARD: As long as you're spending so much money on these beautiful roadways, why not preserve them and beautify them. I have one more thing that I'd love to see us buy into as a state, the National Scenic Byway Program, so that way we could get on the map of scenic byways and tourists would see this map and they'd say let's go to Texas, let's see some of these scenic byways in Texas. It would bring money to our state and help beautify the roadways, and it wouldn't cost us a cent.

MR. JOHNSON: One thing the district has done here is what I call embellishments, and a lot of the construction finishes and everything is just not dull concrete colored. There are a lot of what I call embellishments, and I think that enhances the driving experience, and I think if we all work on that aspect of enhancing the driving experience, we can keep it alive.

MR. WILLIAMSON: You're just rubbing salt into the wound.

(General laughter.)

MR. JOHNSON: Thank you.

MS. TRENCHARD: I'm with you on that. I congratulate everybody for their efforts to beautify and please continue your work.

MR. WILLIAMSON: I'm kind of curious. Where do you think Ms. Andrade is on billboards?

MR. JOHNSON: I think she's immediately to my right with Mr. Nichols in between us.

MR. WILLIAMSON: And how was Robert, was he private property or was he tear them down, I can't remember.

MR. NICHOLS: I think that's a legislative policy; we'll do whatever the legislature wants us to do.

MR. JOHNSON: I think there's some middle ground available.

MR. WILLIAMSON: Were there any other questions or comments for Kathleen?

(No response.)

MR. WILLIAMSON: Kathleen, thank you so much; you're very articulate.

MS. TRENCHARD: Thank you.

MR. WILLIAMSON: Manuel Benavides? Welcome, sir.

MR. BENAVIDES: Thank you for the chance to speak. Manuel Benavides of San Antonio.

I'm here to speak on behalf of this commuter rail and I think it's such a wonderful opportunity for the future of the city of San Antonio and the transportation need for this century. We're in a different century; the era of road-building may be over. I'm sorry to say that but I believe it may be true.

The rail lines that brought prosperity 100 years ago, cattle and farmers to market, and then later brought light along that existing right of way may be this century's opportunity to bring prosperity, economic stimulus along these rail lines and the rail stops.

I have a flyer here or a description as to what I'm talking about, if I may?

MR. WILLIAMSON: Sure.

MR. BENAVIDES: I had worked with Bill Walker who is a past planning director from VIA. Of course, San Antonio has all these rail lines and there is no city that has all these rail lines that crisscross the city. I think the issue would be that if there was a time separation agreement worked out with the railroad, with the UP, this could become a reality within ten years. The initiative that has been done that was involved with the planning of this Kelly Parkway, the infrastructure for Kelly USA and the concern about NAFTA and the trucks and so forth. I think that's a very good idea; it may be 20 years out, but this could be within the next ten years if the initiative is on the agenda. The possibility of whether that could be inclusive of the DEIS, I don't think so but why not.

The need for that kind of transportation to bring -- well, I want to be careful as to the words that I say because I spend half my time in Europe, half the time here. I'm a product of this community that my family lived for over three generations, and so I myself am an executive director and also a businessman, and I did some research and I have some statistical data that I think is important as to the economic need for development. Kelly, for military use for 70 years, the Vietnam and Korea, now the initiative as a multimodal distribution facility, and to connect that to the international airport for businesses, a tremendous opportunity.

I think the question will be this way to you: If you were a CEO of a major corporation, would you come to San Antonio if you had more roadways like maybe Austin or Houston? Siemans Transport just finished the job on that seven miles that they had invited me -- I met with them in Paris. They gave me the capital cost on this what you're looking at is $271 million. Now, that does not include the existing right of way with UP.

Now, if UP had an incentive to give us a time separation agreement, that people would ride during the day and cargo at night like in New Jersey on the Camden Trenton line -- which, by the way, I have a copy of that agreement that was worked out with New Jersey Transit and that's 23 miles that has worked well. We're talking about 12 miles here and I think this would be the tail end of the commuter rail between Austin and San Antonio.

One more thing, if I may, there's also a railroad line that goes out to UTSA. It parallels 10; it goes to Ingram and it has suggested that -- that's very interesting because we have organized camps over there, and I guess I forget myself, at 8:00 or five o'clock in the afternoon when I'm getting on that side of town to avoid it.

There's such a tremendous opportunity. This is the only city that does not have this high occupancy transportation that exists in other parts of the world. Siemans Transport would be interested in coming to take a look at it -- I know if this became a reality, they would have to bid on the RFP, but they're just here in Houston now, they're just finishing up.

They invited me to go take a look at that job. Because of this interest here for San Antonio and the importance for this century for the transportation needs and the economic stimulus it would create at each one of those stops, not just in business, new business growth, but also housing in those areas of blight that maybe American city --

Bottom line, where's the money going to come from. I believe that because in Europe this has been commonplace, there may be some private investment. You're looking at public; I don't know if private investment has even been considered. Somebody could put up the money for this thing, it doesn't cost that much, and then when it's finished, give some of it back to the city. Just an idea. I thank you for your time and courtesy. Is there any questions?

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: We actually thank you for your time. You have some very interesting thoughts.

Are there other public comment? None, Mike?

The commission will now recess its regular meeting to go into executive session under the provisions of Section 551.071 of the Texas Government Code in order to confer with legal counsel concerning ongoing litigation.

It is now 12:55 p.m.; we are in recess and we will recess to the door back to the left, please.

(Whereupon, at 12:55 p.m., the meeting was recessed, to resume following executive session.

MR. WILLIAMSON: We're now back in regular session; it is 1:22 p.m., January 29, 2004. Let the record show that no votes were taken or decisions made while the commission was in executive session.

Is there other business or other matters, Mr. Behrens, to come before the commission?

MR. BEHRENS: No, sir.

MR. WILLIAMSON: I will entertain a motion.

MR. JOHNSON: I move we adjourn.

MR. WILLIAMSON: Is there a second?

MR. NICHOLS: Second.

MR. WILLIAMSON: There's a motion and a second to adjourn. All those in favor, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All those opposed?

(None opposed.)

MR. WILLIAMSON: Ayes have it; the motion passed. We are adjourned at 1:23 p.m.

(Whereupon, at 1:23 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission

LOCATION: San Antonio, Texas

DATE: January 29, 2004

I do hereby certify that the foregoing pages, numbers 1 through 143, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Joe Schafer before the Texas Department of Transportation.

2/02/04
(Transcriber) (Date)

On the Record Reporting, Inc.
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