Texas Department of Transportation Commission Meeting

Childress Fair Park Auditorium
Childress Fair Park, North Commerce Street
Childress Texas

Thursday, July 29, 2004

COMMISSION MEMBERS:

MR. RIC WILLIAMSON, Chairman
MR. JOHN W. JOHNSON
MR. ROBERT L. NICHOLS
MS. HOPE ANDRADE
MR. TED HOUGHTON, JR.

STAFF:

MR. MICHAEL W. BEHRENS, Executive Director
MR. RICHARD MONROE, General Counsel
MR. ROGER POLSON, Executive Assistant To The Deputy Executive Director

PROCEEDINGS

CHAIRMAN WILLIAMSON: Good morning. It's 9:07 a.m. and I would like to call this historic July meeting of the Texas Transportation Commission to order. It's a great pleasure for the Commission and it's department employees to hold this meeting in Childress, Texas, because it's the first time in the 87 year history of the Department or the Commission, that we've held a commission meeting in Childress and this part of the State.

We have been treated to a royal reception by the Chamber of Commerce, city officials and various county officials from across the upper regions of North Texas and we are deeply appreciative for our treatment. We have been reminded of some interesting things while we have been here. Childress, the city is named for George C. Childress who authored the Texas Declaration of Independence. Let me take a moment to once again publicly compliment the Board of Directors and all the patrons of the museum where we met for the reception yesterday.

If you haven't been to the museum, you should go. Wonderful layout about how this part of the state developed and has really a life-like figure of George C. Childress signing the Texas Declaration of Independence. The region is known for cattle, cotton and some of the best representation to the Texas legislature I've ever seen. Before we proceed any further, let me remind everyone that if you wish to address us, you must complete a card that's available to you in the lobby. If you want to comment on an item that's on our agenda, specifically on our agenda, we ask that you fill out the yellow card.

If you want to comment generally, and just compliment the Department on what a great job it's doing, you can fill out the blue card which will, of course, go into the rotary wheel for the drawing at the end of the meeting. Regardless of which color card you fill out, regardless of what you wish to say, we ask that you limit your remarks to three minutes so we can keep the meeting moving along for everyone.

Now, at this point, we come to one of the most important tasks of the day. A lot of you sitting in the audience participate in public service; school board, city council, church board, legislature. And all of you have experienced that tremendous uncomfortable moment when you're trying to listen to somebody speak and yes, the phone rings.

So let's all take a moment pull out our cell phones, our dew berries or whatever those things are called, our pagers, and let's put them on the silent mode. I will do mine while you do yours. There we go. Now no one will be interrupted. Thank you very much. We have a formal agenda but this Commission is extremely sensitive to the time and the presence of any member of the legislature who chooses to participate in our meetings. And we always stop our agenda at this point and give those members who are present the opportunity to offer whatever remarks they may or may not want to offer at this time.

We have with us, that I'm aware of two members of the legislature -- unless Mr. Chisum slipped in -- Senator Duncan and Representative Hardcastle. And Senator Duncan, as always, sir, please come tell us whatever we need to hear.

SENATOR DUNCAN: Thank you, Mr. Chairman, and members on behalf of the 28th Senatorial District and the folks in Childress and this region, I want to welcome you to Childress, Texas; as you know probably one of the most beautiful and I think relaxing areas in the State of Texas, if not the country.

This is a place that I think is very sophisticated. It's location in this state I think is very forward thinking. And we think so much of it that we're actually on a dual purpose today; meeting with you today as well as getting ready to open a district office for our senate in this area, in Childress, Texas. So we think a lot of the people here.

And I want to thank you for coming here. The Commission has been most responsive to the issues and needs of rural Texas. Each and every one of you I know are committed to doing the Lord's work with regard to highways and transportation in Texas.

I think each and every one of you are appointed by Governor Rick Perry. And I want to say one thing, that Governor Perry does an outstanding job of selecting the best to serve in particular positions. And on this Commission, I want to commend Governor Perry for his appointments of people who have not only dedication but also with a vision for transportation in Texas.

I want to say this as well, I think that this Commission is -- if you ever go to Austin and you go to the meeting there, you'll always see delegation after delegation after delegation. And I've always been impressed by the way the staff and by the way the Commission deals with the citizens of this state and the concerns of each of the regions of this state.

So on behalf of my constituents in this area, I want to thank you for your being here and I want to thank you for your excellent service to the State of Texas.

CHAIRMAN WILLIAMSON: We are appreciative of those remarks. Members?

COMMISSIONER NICHOLS: Can you hear me? Is my mike on? Can you hear me now.

I said this at breakfast and I want to say it again in front of your constituents; how much we appreciate all the hard work and support you've given the Texas Department of Transportation.

There were times in our past where we needed help and you've always been there to support us, and it's not forgotten. And you can count on our support for this community and its members of the district. We appreciate it very much. Thank you.

CHAIRMAN WILLIAMSON: Members? Anything else? Let me just echo, Senator Duncan, what Mr. Nichols said. You know me well. We don't -- for those of you in the audience who are not familiar with the way we shift between relationship with the members of the Legislature. We don't compliment legislators who come in and ask us to help them who or not Board of Transportation friendly. That just doesn't happen.

If someone comes before us with words we respectfully listen and we stay silent. So when we compliment someone, we mean it. And Robert Duncan has been a solid stalwart of transportation in this state throughout his service in the legislature and that is not forgotten.

We appreciate his working with one of the what we think is one of the most important parts of state Government. Thank you a lot.

Mr. Hardcastle. He survived the rainstorm, slightly.

REPRESENTATIVE HARDCASTLE: We can get rain in July in north Texas, we are always happy. As Senator Duncan said and on behalf of Chairman Chisum who had to go on to Ft. Worth this morning and didn't have time to stay.

But Childress is actually in his district but borders all of my district. And as Senator Duncan said we really appreciate from our standpoint how much attention y'all have paid to rural Texas. We appreciate your employees; we appreciate their willingness to work with us and work through the problems with us.

And, of course, as I told you last night, you're in the rest of Texas. But the third of the people that leave Texas for any reason come through this part of the State to get out, which throws it right back in the Commission's lap, because they're leaving on Texas highways.

So we do appreciate you being here; we appreciate your work and we appreciate the fact especially that you as a whole Commission pay attention to rural Texas and don't just fund our urban centers only, and pay attention to the rest of the State. And anything we can do to help you, you know where to find us.

CHAIRMAN WILLIAMSON: Hubert, Mr. Hardcastle, we thank you, also, for your support of transportation necessity to this state. You've been a good voice for us on the outside and we've enjoyed working with you.

REPRESENTATIVE HARDCASTLE: Thank you.

CHAIRMAN WILLIAMSON: It's our custom to open the meeting, after we hear from our local or statewide elected officials, it's our custom to open the meeting with comments from each of the Commission members. And we also customarily start on the far end of the table, with Mr. Houghton. So, Ted, take off.

COMMISSIONER HOUGHTON: It's truly an honor to be here. As I mentioned to a group this morning at breakfast, I spent many, many a summer north and west of here on the Houghton Ranch south of Dalhart, north of Amarillo and worked this area and worked real hard. And that's why I'm not in the ranching business any longer. So --but it was truly an experience.

And when the settlers came to this great state, this is what they saw, and this is why people fell in love with Texas. And this is truly Texas, and in its purest form.

Major metropolitan areas, this is what they saw, this is why they stayed. Last night we had a tremendous event at the District offices; out of the ballpark.

I calculate that, based on the population, I saw about ten percent of your population last night at the district office, which is neat. Because that's how the Titans of this community as you know one another, and you take care of your neighbors, and it was truly a remarkable evening, something I will never forget.

And I reserve my comments regarding Senator Duncan -- he is truly a good friend of mine. I mentioned that we -- I organized a fund-raiser when he ran for the vacated senatorial seat. He used to represent me in El Paso, still wish he did. He is truly a personal friend. And Senator, you can count on me for my support anytime you need it.

Representative Chisum, I look forward to working with in the future. We have a lot of initiatives coming your way this next session. Again, thank you very much for your hospitality.

COMMISSIONER ANDRADE: Good morning. It's great to be in Childress. And may -- I have to tell you this, of all the power point presentations that I've had in my short term, yours has been the best. Thanks very much. Again, thank you so much for last night. You certainly made us feel special.

It's my second time out to this area, and I can tell you that both visits have been greatly, greatly appreciated. I look forward to coming back. And if last night truly was a representation of the population of Childress, I have to tell you that it's a great place to live. Thank you very much.

CHAIRMAN WILLIAMSON: Nick.

COMMISSIONER NICHOLS: We've had a lot of fun. I felt like we have been welcomed. Hospitality has been wonderful.

For those of you who weren't aware, we had a reception yesterday in the museum, with a lot of the chamber and elected officials, you know, county and city -- the mayor, Kevin Stuart from the city, some of the projects, some of the things in the community.

And the dinner with the district employees was outstanding last night. They had a big cook-off. I think it was a county to county competition or something like that and we reaped the benefits of that fine food.

But it's good to be here. I'm very pleased that the Texas Department of Transportation Commission ten years ago decided to take state Government out of Austin, go out into the state, into the different communities with our Commissioner's meeting. Worked great. Gives opportunity for people in the communities to see government at work. Gives you an opportunity, those of you who are interested in transportation, to meet with some of the different officials, from Austin, that you might not otherwise have an opportunity to meet.

And we'll be discussing a very wide range of topics of issues. We will be voting on some of what I think are critical issues. And I'm glad that you're here to be a part of it. Thank you.

COMMISSIONER JOHNSON: Well, good morning again. I just have a brief experience I want to share with you. Last week I was out of the country. In fact, I was in England, and I had some meetings in Windsor, which is south and west of London. And you might be aware that Windsor castle is there. And that's one of the residences of the royal family.

And what I wanted to relate to you was the treatment that I individually and I think I speak collectively for everybody up here and everyone that come from Austin and all corners around the State, the treatment that we have received is probably better than the residents of Windsor castle.

Your experience and hospitality are without peer. And I told Terry in the district office last night, and all the TxDOT family there, in my book, you're No. 1. And that extends to everywhere and Senator Duncan and Representative Hardcastle and Representative Chisum, consistencies; you are No. 1. You're unique and special and I'm most grateful for all the hospitality that has been extended to me personally and I think I speak for everyone here.

CHAIRMAN WILLIAMSON: Hear, hear.

I just echo remarks of my colleagues. Always a happy occasions to leave Austin, Texas and go out where people live and work and pay their taxes. Real people. Normal people. People other than people who live in our temporary offices in Austin, Texas. We have been treated royally and we appreciate the well-known West Texas hospitality. It is time for us to tend to some business.

And, Mr. Keener, I think we may just turn it over to the Childress District Engineer, and tell us about your 253 employees, tell us about your 5413 lane miles in your 13 counties. We want to hear it.

MR. KEENER: Thank you, sir. Mr. Williamson, with your permission, I would like to introduce the mayor of the City of Childress for some brief comments, if that would be all right.

Mayor Pat Steed has been mayor here in Childress for some 20 years and he would like the opportunity to visit with you just a minute.

MAYOR STEED: Brief comment. Mr. Chairman and members of the Commission, TxDOT administration and staff, we welcome you to Childress.

I am Pat Steed Mayor of Childress. On behalf of all of our citizens, we are very pleased you are here in Childress holding this July Commission meeting in our fine community.

I have just a couple of more power point presentations and it's in keeping with yesterday afternoon's power point presentation.

I've asked a couple of individuals from our community, citizens here in Childress, to come up just for a couple brief comments. Rather than hearing from me, I want you to hear from the horse's mouth about Childress and certain interaction with TxDOT's activities.

So with your permission, Mr. Chairman, I would like to ask three individuals from Childress to come up here. First being Weldon Hayes. He is a member of our Airport Advisory Committee, which is very important here in Childress, our airport. Many of you flew in, landing at the airport.

The second is Judge Jay Mayden, who is, I guess the youngest county judge or maybe one of the youngest county judges in the State of Texas.

Both Mr. Hayes and Judge Mayden were raised here in Childress, and have lived here all of their lives.

The third individual is Jim Jennings. Jim is a retiree, Mr. Chairman, from another community, that saw fit to retire here in Childress. He is the chairman of our Keep Childress Beautiful Committee.

If I may, Mr. Chairman, I would like to call those individuals up just for very brief comments.

CHAIRMAN WILLIAMSON: Yes, sir.

MAYOR STEED: Weldon Hayes first.

MR. HAYES: Thank you, Pat.  Good morning to everyone. I apologize. I'm going to have to have a little light so I can see my notes.

(LAUGHTER)

MR. HAYES: My name is Weldon Hayes, and I'm a member of the Childress Airport Advisory Board.

We believe that a well-functioning airport is vital to a community and of course the Childress airport is no exception. In all probability, Childress would not have been awarded a state prison had we not had a good airport.

The Childress airport was constructed in 1942 and 1943, as a Childress Army Air Base, to train navigators and bombardiers for service in World War II. After the war it was turned back over to the City of Childress.

For a town of less than 7,000 population we believe that we have a very active airport. During a typical year we estimate approximately 2,200, 2,500 aircraft operations, that's takeoffs and landings, per year.

These operations represent aircraft from 35 states and 72 Texas towns. We also have had aircraft and pilots from England, Canada, Mexico and Russia. Most of these aircraft are, of course, on cross country flights but many do stop in Childress for business purposes and visit families and to spend the night in our motels, and also to hunt.

We have had hunters fly in from Louisiana, Arkansas, Mississippi, North Carolina and other areas, to hunt locally for deer, quail, dove, turkey and wild hogs.

And we want to say thank you to the TxDOT Aviation Division for the program and support of our Texas airports. In the last several years Childress has made close to $2,000,000 in improvements to our airport through the TxDOT Aviation Capital Improvement Program, which funds 90 percent of major airport improvements, with a participating city providing the other ten percent of funding.

The city has plans to continue in this capital improvement program for the year 2006, 2007, funding cycle. The city has also participated in the Routine Airport Maintenance Program, which is calmed RAMP, R-A-M-P for short.

This program provides each year a 50/50 pay out, 50 percent state funds, 50 percent local funds, for up to $30,000 each for airport improvements.

And to the TxDOT Commissioners, we appreciate you're coming today and may we say a big thank you for your support for your time, for your interest, and efforts in making and keeping the Texas transportation system what it is today, the No. 1 state transportation system in America. Thank you.

CHAIRMAN WILLIAMSON: I don't want to catch you off-guard. I'm curious. If you can't answer the question, maybe someone else can.

Do we know how many direct employees are associated with the prison in this area now? Is it 50 or 75, is it 100?

MR. HAYES: I'm sorry. I do not know.

MAYOR STEED: How many employees?

CHAIRMAN WILLIAMSON: Direct. Not the Chamber of Commerce figures indirectly, but --

MAYOR STEED: For the prison system?

CHAIRMAN WILLIAMSON: For the prison system itself.

MAYOR STEED: Somebody is going to have to help me, but I would say it would be close to 300. Does that sound about right; 350, 300?

CHAIRMAN WILLIAMSON: Would most of those have been native North Texans that were hired on the job, did some of them move --

MAYOR STEED: Very few were imported to this area. Most of these 300, 350, are native to this area. By this area I don't mean necessarily Childress.

CHAIRMAN WILLIAMSON: I understand.

MAYOR STEED: That's the surrounding area for probably 50, 60 mile area. Yes, sir. It's a tremendous economic boost to our area here in Childress.

CHAIRMAN WILLIAMSON: Thank you. Thank you for your remarks.

MAYOR STEED: Judge Jay Mayden. By the way, Judge Mayden is the Childress County Judge. And he looks really young because he is.

JUDGE MAYDEN: First of all, let me thank the Commission for allowing me to give this small presentation.

What I want to discuss today is the walking path that most of you may have seen during the tour through our Fair Park. The path was created with the enhancement fund given us by the State, TxDOT.

The path serves many purposes for our community, but I feel the three main purposes for the path being one, character. It gives our Fair Park character. As you notice, I'm going to be biased here, but we have probably the most beautiful park in the State of Texas. The city employees worked hard creating this environment in the past. It's just enhanced that character of the park.

Second being the path promotes a healthy life style for the citizens of Childress. Many of you know before we -- if y'all are from small towns -- if you didn't have walking paths, you went to the local track and walked.

And if you've ever walked around a track which -- believe it or not looking at me I have walked around a track before -- it gets a little monotonous. You see the same thing going in circles. After four to eight laps you get tired of it and eventually you get tired of doing it and your life style will change where you won't exercise any more. The walking path creates an environment where you see something different almost every time you walk through there, you can go different directions, different areas, go through the park, by our stadium, by our high school.

Also, probably the most important reason or aspect of the path is to promote safety. Texas is known on Friday nights as the football capital of the world. Those of you who have been even to larger events know that a parking lot, after football games, is probably the most dangerous area for a child to be. And no exception here.

When I was little you took your life in your hands going to your mom and dad's car after football games, because you would dart out in the parking lot in front of cars, what have you. This path creates a safe way or safe means for kids to get to where they're going. It also permits a pathway for the children, where kids don't have to be walking on the street to get to where they're going to playgrounds.

So it promotes a safe environment for our community to be able to get to where they need to go, a healthy environment to promote the life style we want, and also gives character to the park.

Also, one more thing, I know each and everyone of you have heard this several times, but it really is an honor for us to have you here. And feel free to come back any time. Thank you for allowing me to speak.

CHAIRMAN WILLIAMSON: Any questions or comments?

Following my same line with the Mayor, on the location of the prison, did TxDOT help do anything on the roads to make that happen.

JUDGE MAYDEN: Yes. But when the prison was created, I was a junior in high school so --

(LAUGHTER)

JUDGE MAYDEN: I remember riding a bike through the park during the time of the promotion of the prison. But I'm sure it did.

CHAIRMAN WILLIAMSON: So you just don't remember?

JUDGE MAYDEN: I don't remember. I'm sure they did, though.

CHAIRMAN WILLIAMSON: Maybe somebody else can. Thank you for your kind remarks. We appreciate it.

MAYOR STEED: I told you he was young. In fact, TxDOT did have a major part of that, all of that project. FM 164, which connects 83 and 287, was improved to pass by the prison facility which is located near the municipal airport. Also the surface separation at the TxDOT facility, that's the route that most prison employees take to work every shift.

It provides safety and enhanced that ability to get to work. So TxDOT played a great role in that, in the location of it.

Thank you, Judge Mayden.

This is Jim Jennings. Jim is not a native of Childress. He has been here a few years. Great guy. Chairman of our Keep Childress Beautiful, which is a very, very active group of people here in Childress. And I would like ask Jim to make a few brief comments.

MR. JENNINGS: Good morning. And welcome to Childress.

Keep Childress Beautiful was formed out of the spirit of we believe Childress is beautiful and we want to keep it that way. My attitude towards Keep Childress beautiful is God made Childress beautiful and we're going to help it stay that way. So we just want to express our appreciation to TxDOT for their continued support of Keep Texas Beautiful, with which we are affiliated. Without your support, the funds would not be available to do what we do.

The community was fortunate to be awarded the 2002-2003 Governor's Achievement Award, in the sum of about $70,000, that we have been able to use here. And if you visit the courthouse you will see our first project on that, where we have added to the beautification of the front of the courthouse, that has also a Veteran's Memorial right on the highway; a focal point of the city.

And we do appreciate the opportunity to use those funds that you have provided to give the tourists that come through here and our locals, an opportunity to see how beautiful Childress can be.

And we just wish now as you're here and have visited this town, that you will take time to see our city from the point of just the common tourist and not as a representative of our TxDOT, or anyone else. Just on your own to see we do have a beautiful city.

And once again, we just thank you for your part and support. And we wish to thank the local TxDOT office for the support they have given us on a continued basis on our projects.

We welcome you and we thank you and we hope that you will continue your support of Keep Texas Beautiful.

CHAIRMAN WILLIAMSON: Questions for the gentleman, anyone?

Thank you, sir.

MAYOR STEED: In conclusion, I hope that I have given you a sense of, between yesterday's power point and today's power point and the reception, and I know you've got a sense from the TxDOT employees, of how proud we are of Childress.

We've got some wonderful, wonderful people here in Childress. And that's why people want to come Childress, that's why they stay in Childress. That's why they retire -- and let me say this, speaking for Childress, yes, but I'm really speaking for rural Texas.

That's why they want to be here. It's not because of anything else but just kind, loving, caring people out here. And we're real proud of Childress and all the citizens and its accomplishments.

We're awfully proud of District 25 because all these people -- I bet 90 percent of these people are home-grown people that are employees out here.

Terry Keener is not a home grown person. He's only been here about 31 years. That tells you a little bit about this area.

So we're proud of it. We appreciate your time this morning. Thank you for giving me a little bit of extra time, Mr. Chairman, this morning, to highlight a few more things.

Thank you for being here, on behalf of the citizens.

Terry, thank you for all the work you and the employees do here. We appreciate you very much. Mr. Chairman, if there's no question I will turn it back over to Mr. Keener.

CHAIRMAN WILLIAMSON: Questions?

COMMISSIONER NICHOLS: It's not a question. I have a comment. And it's not only to the mayor and the City Counsel, but I want to make sure the members of the community -- and you came here from surrounding counties also -- understand how much we appreciate communities and counties that work with us.

And it is so helpful to have the city and the Chamber of Commerce and the county commissioners court to partner with our area office, with our maintenance office and with our district office on projects, because we can't do it without you.

We do go into some communities in the state who are squabbling among themselves; who take an opportunity to try to nip at us; to take advantage of the situation for a different kind of a benefit.

And I know that y'all have helped us in many instances -- we talked about this some yesterday -- in the location of the district office. The community came together, helped us get land, set it all up, stuff like that.

I think the community needs to know that y'all have really done a great job; the city council, chamber, county, the whole bunch. I just wanted to say that.

MAYOR STEED: Thank you for your comments. Any other questions? If not, Terry --

MR. KEENER: Thank you. And I'll begin my presentation now.

On behalf of the Childress District employees, the City of Childress and the 13 counties this district represents and serves, we again want to extend our appreciation to each of you for being here today and providing us the opportunity to host this July, 2004 Commissioner's meeting. Again, welcome to Childress.

In this district we emphasize safety, quality and accountability. This department expects it and the public deserves it. My briefing this morning is intended to provide insight into the 13 counties we serve and how our district operates.

The district is rural, very rural. None of y'all have ever questioned that fact. In fact, it's so rural I would almost submit to you that we need another classification for districts like ours, that being a frontier district.

(LAUGHTER)

MR. KEENER: You need to understand, areawise we are the 9th largest district. Populationwise, we are sitting dead last. We have approximately 41,000 people in this district.

That averages 3.8 people per square mile, compared to the Statewide average of 80 people per square mile. Childress County here is the most populated county. We have approximately 11 people per square mile.

But we have a county south of here, King County that has a total of 333 people in their county, which is less than half a person per square mile. You know, therefore I think in a lot of ways, this area is like the pioneers that settled and moved west back in the 1800s. They carved out their trails as they moved west.

When they started establishing the settlements, they started improving their roads, because they needed better roads to move people and goods. I predict that the population in the metro areas eventually will understand what we have here in these rural areas and they'll start spilling over into these areas.

Congestion will come and also will come the demand for faster and better transportation systems. Progress may be a little slow for awhile. But I think that we have the opportunity now to get what I call a jump-go and maybe we can stay ahead of the congestion that we might be anticipating out in this part of the area.

Overall, the population in this district has declined since the 1990 census. We have declined by about nine percent.

We represent an aging population here. 21 and a half percent of our citizens are 65 years of age or older. That is compared to about ten percent on a statewide basis. This is why the Regional Medical Center here in Childress is so vitally important to all of our citizens here. The next medical facility is over 100 miles from here.

We have an agriculture base, that being cotton, cattle and wheat. The per capita income per person is 15,000, compared to statewide of being around 40,000.

Retail sales in this area is $4,800, compared to a statewide average per capita of $9,400. While we don't enjoy the luxury of a lot of fancy restaurants, shopping malls and other entertainments that are found in the big cities, we do enjoy some of the simple pleasures that are -- that is brought forward with a slower lifestyle.

For example, in my research for this presentation I found out that your average time to work here in Childress is 11 minutes. That kind of surprised me. But as y'all saw yesterday when we brought you out to the district office, it kind of depends on the mode of transportation and the time of day.

You know, I guess if you get caught, like I told you, in the early morning or noon rush minute, that we have at the courthouse, we can relate and realize a little bit more about the congestion that you have in the bigger cities.

Our average temperature in this district is 62 degrees. That's great, isn't it? What you need to realize is to get that average, we have recorded a record low of minus five degrees, in February of 1986. And we have a high recorded temperature of 117 degrees in June of 1994.

You know, when you have those high temperatures the pavement temperature is reaching 150 degrees plus. And I can very well remember that record high that we had.

We had a seal coat contractor that was trying to lay some seal coat out on the roads. It was so hot that we had to literally shut down. The emulsion would not break when it hit the pavement.

Our average rainfall in this area is 22 inches. You just need to be there that day that it all comes down.

(LAUGHTER)

MR. KEENER: The picture you see on the left there, if you don't recognize it, is the underpass on out on US 83, and that's the top of one of our semis that happened to get off in there and stall before they could get it out. Usually we have several snow storms and an occasional ice storm in the winner.

Now, what I would like to do now is go in to some of the district statics. We have 245 permanent FTEs in this district. That's down a little bit from a year ago when we had 253 FTEs.

We have recently just been approved four additional temporary FTEs for a large construction project we have in Knox County.

Typically our employees will wear many hats, which means we staff a little different than a lot of the other districts. Average experience in this district is 11 years. 82 percent of our work force has less than 20 years of service.

By 2008, 16 percent of us will be eligible to retire. Our turnover rate in the last three years has increased from about six percent to ten percent.

We maintain 2,500 miles of road in this district. We have 700 on-system bridges and 200 off-system bridges. Traffic on our highways varies from an average on our lesser traveled roads, of 50 to less, vehicles per day, up to and approaching 14,000 vehicles per day on Interstate 40 and U.S. 287, with 50 percent of that traffic being truck traffic.

Now, I would like to go into a part of my presentation where I address the five major categories of operation within the department, starting with planning.

Ladies and gentlemen, we do not have the congestion that's found in what I would refer as the Golden Triangle, that being the Dallas/Fort Worth, Houston, San Antonio triangle. The Texas Turnpike Authority Division recently performed a toll viability study on two of the projects in this district. Their conclusion, collection of tolls only could not generate enough revenue to pay for the combined operation and maintenance cost over a 40-year period. The negative net revenue indicates that funding projects through bonds may not be possible.

CHAIRMAN WILLIAMSON: May I interrupt?

MR. KEENER: Yes, sir.

CHAIRMAN WILLIAMSON: I want to make two points, that I am aware we have some visitors from other parts of the State. And you just talked about two things that are important to the State, or to the Commission, overall leadership efforts statewide.

First thing, would you flash the picture up of the five principals by which we organize our procedure plan and our business plan. And I'm not sure that every one in the audience understands that we are a goal-driven, planning organization; that all of us throughout the State focuses on those five things.

In fact, do you have the ability to roll that back?

MR. KEENER: Yes, sir.

CHAIRMAN WILLIAMSON: We are all focused on those five components as the underlying or the guiding -- the guidepost for our strategic plan and our budget and our measurement of our success or failure.

And I think we are one of the few state agencies that have fully integrated their strategic plan and their budget and their follow-through into one easy to understand set of guideposts.

Everything we do is focused on building -- planning something, building something, using something, maintaining something, managing something. I appreciate you incorporating that into your presentation.

The second question, or the second point I wanted to allow you to help me make, was the fact we didn't presume that there was any district in the state that should not go through this whole process. Because we have to be very sensitive to our constituency in San Antonio, Austin, Dallas, Fort Worth and Houston, to assure them that we're asking the entire state to go through the process with every one of their projects that might be toll viable; we need to identify if they are or not toll viable.

Because we are one state. We don't treat anyone different, whether it's Beaumont, or Wellington, whether it's Texarkana or Munday. Everyone is treated the same and every problem is solved the same. And you've helped us make the point here that every district went through that process of trying to figure out where it will work.

In some parts of West Texas, as we have discovered, it's just not going to work for awhile. Thank you.

MR. KEENER: Thank you. We feel like at some point there will be some viable toll options that we have, but it will probably be a few years down the road.

Continuing on. Our current emphasis on planning has and probably will continue to be on safety, preservation and restoration of the system. Currently our preventive maintenance plan centers around a seven to eight-year SealCoat cycle. And we overlay approximately 2500 miles of asphalt and concrete pavement per year.

We have made good progress on the restoration of our highways in this district. With Interstate 40 and U.S. 287 being completely rehabilitated in the last few years.

U.S. 83 is -- we're in the process of doing that now and we should complete that very soon.

Mobility and increased capacity projects are generally limited to the highways we have on our trunk system. We have five trunk system routes that go through the Childress District.

U. S. 287 is currently under contract to provide a four-lane, divided facility with grade separation structures at our major intersections.

Our next push will be on a -- to provide a four-lane divided highway on the concurrent routes of U.S. 82, State Highway 114.

To those in the audience who may not know, U.S. 82 starts in New Mexico, goes through Lubbock, Wichita Falls, Sherman, Paris, on to Texarkana.

While State Highway 114 starts in New Mexico goes through Lubbock and terminates somewhere around Dallas.

Improving safety on our project is always a major importance to us. We have a prioritized plan to widen our narrow roadways, those less than 26 feet.

We have a planned upgrade to all the bridge approach rails on our structures in the district. For the last five years, we have had several HES projects to provide culverts widening and safety end treatments. And we plan to continue with this effort.

During our Transportation Planning Process, we always schedule public meetings and solicit the public input. However, attendance at these meetings are often few in numbers. It's hard to determine if that is apathy on the part of the public or whether they trust this district to do the right thing for them. They're satisfied.

The staff and I regularly meet with local officials and civic organizations to get as much input in the planning process as we possibly can. Additionally, I will meet with Senator Duncan and our two state representatives, Rick Hardcastle and Warren Chisum at least annually to discuss the district activities and our direction.

Most of our design work is accomplished with a centralized design team located at our district office. We do use consultants occasionally for our peak workloads. However, the average consultant cost per plan sheet is around $3300. Our inhouse cost per plan sheet is about $2,400. Therefore, when possible we do as much design work in-house as possible.

Our designers have developed several unique designs unique to the State; one being the Super 2 design. This design improves two-lane highways by adding passing lines at predetermined intervals to provide ample passing opportunities.

Since the rural accidents account for a large percentage of the highway fatalities in the U.S., we believe this design helps saves lives.

We are currently trying a new technique to provide a smoother ride on a jointed concrete pavement. You will notice that on 287 as you ride out here.

We are retrofitting our jointed concrete slabs by use of dowel bars to have a better load transfer. And then we're going back again and diamond grinding to provide a smoother riding surface.

We have just completed a project which utilized a construction technique unique to Texas, down south of here, where we rubbilized an old under-laying concrete pavement, an 18-foot in width pavement, one of the old pavements. We rubbilized it, seating it, and then put asphalt concrete pavement overlay on it. We --

CHAIRMAN WILLIAMSON: Time.

MR. KEENER: Yes, sir.

CHAIRMAN WILLIAMSON: Explain what you just said to a normal person.

MR. KEENER: A lot of the highways in the this part of the district started out being an 18 to 20-feet old concrete pavement. As they were widened and rebuilt through the years, the concrete pavement was just covered up with the additional base material and with the surface.

Because of the concrete underlying there it caused a very rough ride and we were continually having to deal with the joints and keeping them sealed up and keeping the pavement in good maintenance.

In order to provide a better ride, we have uncovered, taken the surface off of that old concrete pavement. We have completely broken it up and shattered it, destroyed any bonding or slabbing effect that would move on us. We went over it with a roller and seated it back down where it would not move --

CHAIRMAN WILLIAMSON: You say seated; you mean pressed?

MR. KEENER: Yes, sir.

CHAIRMAN WILLIAMSON: So you ground it up and pressed it?

MR. KEENER: Yes, sir. And then we came back over it with a new surface. And we feel like because of destroying the slabbing effect or the movement of the old concrete pavement that we had underlying there, that it would -- it's going to provide a good foundation and provide a good ride for us, with minimum cost, is what it amounts to. Very economic design technique.

CHAIRMAN WILLIAMSON: What kind of machine do you use to bust that up?

MR. KEENER: It's a resin breaker; looks like a guillotine mounted on the back of a truck. It looks like a guillotine. It's a big heavy weight goes about every foot to 18-inches down the road just breaking that. Just rubbilizes it.

CHAIRMAN WILLIAMSON: You call that your rubbilizer?

MR. KEENER: Excuse me?

CHAIRMAN WILLIAMSON: You call that your rubbilizer?

MR. KEENER: Yes, sir. That's the term we use. It's been used in some of the northern states, Utah and Arkansas. We got some of the information from them.

CHAIRMAN WILLIAMSON: Some kind of machine.

MR. KEENER: The design you see on the screen right now is a design by one of our designers in our local office here. We're quite proud of that.

We also have a unique design planned on the Knox County project that I was referring to just a minute ago.

Mary Lou Ralls and her group is assisting with this endeavor and plans are to use silhouettes of local town's people to make up the stripes in the flag.

CHAIRMAN WILLIAMSON: That's a good idea. That's a great idea.

MR. KEENER: Our thought being providing that we will have less vandalism on our retaining walls and they will help maintain that and have a better reception.

Moving on to the category of "Build It." As you can see by this slide our letting history has varied greatly. In 1994, we let $17,000,000; in 2001, we peaked with $73,000,000. This year our anticipated letting is approximately $56,000,000.

It's often difficult to staff for these types of variations. I told you a little earlier we did things a little different. Here is one of the places we do things a little different.

In 2000 we anticipated the increase in letting in 2001, and to provide optimum use of our resources, we trained 21 maintenance employees to what we call crossover, to help us in the inspection of our construction work.

These employees received training at our district office and were qualified on all the testing procedures that were required for them to do. We still utilize these employees to supplement our work force in our construction area, when that becomes necessary.

Another area where we operate a little different --

CHAIRMAN WILLIAMSON: Terry, when a person gets cross-training like that, are they paid more?

MR. KEENER: We normally try to pay them a little bit more because of the value they provide.

CHAIRMAN WILLIAMSON: That would be a good investment of taxpayer money.

MR. KEENER: Yes, sir. We feel like the knowledge and experience would provide us additional resources and capability. We like to compensate them for it.

CHAIRMAN WILLIAMSON: That's the way it should be.

MR. KEENER: Another area where we operate a little different, for the last six hot mix seasons, we have centralized all our designs and our hot mix testing at the district laboratory. This maximizes the efficiency of our qualified inspectors.

We operate with three area offices. The Childress office is responsible for three counties.

The Wellington area office is 35 miles north of here, and is responsibile for four counties.

The Munday office is 110 miles to the southeast of here and it's responsible for six counties.

I stated earlier that we emphasize quality. In 1997 our seal coat operation was suffering some problems. Therefore, we went back to the basics and we held other first Seal Coat 101 training class. The training targets the issues that would improve quality and was a great success.

In 2000 we implemented a Hot Mix 101 training. Each spring we have our inspectors and invite our contractors to this training. We have had good participation with our contractors in this area and as a result we have seen a significant increase in to the quality of ride and the quality of pavement of our hot mix.

In addition to our highway construction we have several new facilities we are very proud of. We broke ground in 1998 for our new district office. And Commissioner Nichols and Commissioner Johnson, you will remember probably, that we dedicated that in December of 2000.

We have new maintenance facilities in Donley and Wheeler Counties. However, as you can see from the slides, we still have some that I feel like desperately need to be updated.

Brand new rest areas have been constructed in our district; one in Donley County and the other in Hardeman County. We had local participation in determining the theme of the parks.

The railroad theme used in the Donley County rest area was selected from a presentation by a student from Hedley High School.

Unique environmental aspects were also included in this park. We constructed a wetland and a storage tank for use in collecting runoff water for irrigation purposes.

As you can see in this next slide, Mr. Behrens still knows how to drive a railroad spike.

When it comes to aviation matters, we are somewhat limited on our expertise. Therefore, we utilize the agency's aviation division and our neighbor to the south from the Abilene District to assist us with these efforts.

Several of our general aviation airports have taken advantage of the RAMP program.

Additionally Knox City, Wheeler and Shamrock have capital improvement projects scheduled in the near future. Also, those of you who traveled by state plane, I am sure appreciated the fine facility we have here in Childress.

Moving on to our next category of our operation, "Use It." There are less than 40,000 vehicles registered in our district. A lot of the traffic through this district are Texans going skiing or hunting or the snow birds, headed south during the winter time.

And as has been alluded to also in the summer we have travelers from every direction crisscrossing and going through this district.

Permitted loads are a common sight moving through our district, including super heavies and manufactured homes. We recently have completed the rural ITS architecture for this district. We are now looking forward to implementing some of the recommendations, such as the use of dynamic message signs at strategic locations on Interstate 40 and U.S. 287.

This will provide traffic with an opportunity to seek alternative routes should it become necessary to close roads, like during snow or ice storms.

More and more our travelers are using the features in our rest areas, including the kiosks connecting to weather stations via the internet. The public can access the weather channel in the event of inclement weather and, if necessary, be safe in one of the tornado shelters that we have located in the rest areas.

Recently Hardeman and Donley County Safety Rest Areas were selected for a pilot project for the free wireless internet programs. Playgrounds, 24-hour attendants, security cameras, separate truck parking, and directions to local points of interest have made a noticeable increase in the number of travelers stopping for safety breaks at these facilities.

Our Traffic Safety Program is active in all 13 counties. We participate in a car seat check-up event, cooperating with the local hospital to train new parents on the proper use of child safety seats. We partner with the DPS safety education officer at our high schools in conducting programs on the hazards of drinking while under the influence of alcohol -- drinking and driving while under the influence of alcohol.

In the public transportation arena the program for the elderly and disabled averages approximately 10,000 trips per year, serving 191,000 passengers with just under a million miles being logged on 68 vehicles.

We have a new district public transportation coordinator and she has a unique opportunity of getting in on the ground floor of all the changes that are happening in this arena.

Moving now in to the area of "Maintain It." Here again is where we do things a little different in our district to optimize the use of resources. You may have noted on the organizational chart that there is a half an employee showing up in each one of our sections. This is because we have one office manager handling administrative responsibilities for two sections.

This is a challenge our office managers have met and provides us the opportunity to place more employees on the roadways.

Phones at these locations are forwarded via 800 numbers where they are always answered by a person. The public in our small communities always know how to reach the supervisor should it become necessary to get in touch with them. While this may not work in all of the districts in the state, it has worked very well in Childress.

We maintain a minimum staffing level of at least ten FTEs in our section. Half of our sections have 11 or fewer employees. The largest section has 15 FTEs. Counting the supervisor, this figures a ratio of about 38 lane miles per maintenance employee.

There are 500 pieces of major equipment in our fleet, which is valued at just over $5,000,000; 200 pieces of minor equipment, valued at just over $1,000,000. Average age of our equipment is 10 years old.

(LAUGHTER)

MR. KEENER: Which is the third oldest fleet in the state. The reason that we are running this older fleet is two-fold. First, we have some of the best mechanics in this part of the country to keep the equipment up and in good running condition.

Secondly, the boss gets blamed for robbing all the money out of the equipment budget to put on the highways.

Mr. Johnson, we have already achieved the goal established by the Texas Transportation Commission in August of 2001; the one that has 90 percent of our Texas roadways in good or better condition in ten years. The performance measures for the Childress District for 2001 and 2002 was better than 92 percent. My concern is, though, that last year our percentage dropped to just above 90 percent.

Our on-system bridges have an average sufficiency rate of 88 percent, which is above the State-wide average of 86 percent. However, we still have a lot of work to do in the area of our off-system bridges. Our sufficiency rating there is 71 percent compared to 76 percent state-wide average. Far below where we want to be.

I think we have gained ground on this in the last few years, especially due to the equivalent match program that we have with our counties. Our counties have taken advantage of this.

Moving on to the area of operation "Manage It". The 20 administrative employees in our district have been charged with being accountable for the effective use of the tax payers' dollars. I have asked each of our employees to use the Department resources just as if they were coming out of their own pocket.

I have a theory. If you watch your pennies, your dollars have a way of taking care of themselves. And I believe we do a pretty good job in this area. We continually scrub our budget down to maximize the use of every penny that we are allocated.

We don't tie up a lot of money in our inventory. Our warehouse does a tremendous job of managing our turnover rate with our stock. Our current turnover rate is 3.2 times per year, far better then the two and a half times per year that we are setting as our goal.

We manage other inventory for just in time delivery. Our regional warehouse in Post delivers directly to our maintenance sections at least once a week.

Safety. I'm very concerned about the safety. Any fatality is bad. However I certainly don't want to have a fatality with any of our employees, at least while on my watch. In 2001 and 2002 we received the Vehicle Safety Bonus Award of $400,000. We used this bonus money to purchase small loaders for each of our maintenance sections, and truck mounted attenuators. I have set a goal to bring back that safety award to the Childress District. I think we can use the money.

We place great emphasis on our work zone safety. Our effort to reduce the number of work zone accidents includes the use of a District Traffic Safety Team. This group approves all our traffic control plans before they go to contract. This group also makes random road trips to review and provide recommendations for the improvements of the traffic control on our maintenance and construction projects.

Additionally, I've requested this group review all the circumstances involved in any fatality that we have in the Childress District.

In conclusion, we realize the Childress District is but a very small part of the overall department. Our goal is to move people and goods through our district safely and efficiently, preserve our roads and bridges and promote the economic vitality for this area as best we can. We believe that this department expects it and the public deserves it.

Before I turn this back over to questions, I would like to publicly thank everyone that worked so hard in our district to make this and bring this all together. Thanks go to each of you.

Commissioners, administration, again, thank you. We always enjoy your visits.

Commissioner Nichols, next time you come through Childress, even if you have a stuffed baboon sitting shotgun with you, stop by and say, "Hi".

I will now turn this back to questions that you might have. Please be reminded that I'm slightly hard of hearing, so I request that you talk slowly and speak up. Thank you.

CHAIRMAN WILLIAMSON: Okay. Ted.

COMMISSIONER HOUGHTON: You say your population is ten percent over 65, or 20?

MR. KEENER: The population in this district is 21 and a half percent that is 65 years of age and older. Ten percent is the statewide average.

COMMISSIONER HOUGHTON: I was sitting with some fabulous ladies last night at dinner. And they were relating to me the story that in the district that you have three sets of twins being born here in the next number of months. Should bring down that average a little bit.

(LAUGHTER)

MR. KEENER: I expect on that, that was the official census we had in 2000. Since then we may have had a change in that percentage.

COMMISSIONER HOUGHTON: You're doing a fabulous job with the resources that you have. And I commend you that for that, Terry, and your people. Again, as Commissioner Nichols alluded last night, the backbone of this organization are the people.

All the nice updated trucks that you have, current trucks that you have shown in that picture, don't mean a thing unless you have the right folks operating it and running it, the operation. And I commend those folks. Congratulations.

MR. KEENER: Thank you.

COMMISSIONER ANDRADE: Direct point of reference, you certainly know how to use your resources well. I must tell you, of all the districts I've seen, the creativity that you've got here is just great. Thank you so much. I'm looking forward to that mural when we can see it.

You know, I've encouraged the districts to be creative and have some color and be reflective of the community. And evidently in Childress you are doing that. So thank you very much for doing the great job you're doing here.

MR. KEENER: I can't take all the credit for that. The staff helped put some of that together. And they can share the blame for some of it.

COMMISSIONER ANDRADE: I am really looking forward to seeing that.

COMMISSIONER NICHOLS: Thank you very much for an excellent report. That's as good a report as I have seen anywhere in the state. I have a couple of comments and questions.

One of the tours we took yesterday was through the truck and automobile museum in town. When you showed that truck, I thought that was a shot from the museum.

(LAUGHTER)

COMMISSIONER NICHOLS: The -- I had a couple of questions -- on your construction levels --

MR. KEENER: Yes, sir.

COMMISSIONER NICHOLS: You were talking about the spikes, the ups and downs, peaks and valleys. And I know it's difficult to keep your work load steady, as close as you can with the people you've got. And when you hit some of those lulls -- and I was particularly interested in cross-training and stuff you were doing -- but when you hit some of those lulls, as I understand some of your designers and technical people do design work for some of the other districts.

MR. KEENER: Yes, sir.

COMMISSIONER NICHOLS: I remember one time when I was looking at the engineering department, I think they were working design on a project in Laredo, or somewhere.

MR. KEENER: Yes, sir. We have done that and we've done some bridge design in the Dallas district also.

COMMISSIONER NICHOLS: I think that's an excellent utilization of people and good training for people, engineers here, not only to keep them busy, but to learn, interact with some of the other areas of the State, bring ideas back. That's not only to you but the administration, I think that's an excellent program.

You've got good people who want to live here, and it's a shame sometimes when they feel like they have to go somewhere else to have some of those opportunities. And they can do it right here in their backyard.

Other question was on your Super 2 program, on the roadway, your passing lane program, are you funding that by using your district discretionary, money? Because we don't have a statewide program, I don't believe.

MR. KEENER: No. Discretionary.

VOICE: Category 1 funds.

COMMISSIONER NICHOLS: I think that is a very good program and I think very practical program. We have a lot of roadways in other areas of the State that are two-lane, traffic count can't get anywhere near close to high enough to go in to a four-lane. You've still got hills up and down and agricultural related equipment and trucks, trailers, tractors.

And somebody gets behind those things, particularly if you've got a rolling area, you know, the first five minutes they are pretty patient. Ten or 15 minutes of that and they're going to start taking chances, coming around. And the Super 2 program is a good way to give them a chance to get past that so they know the next hill they can get a place to pass.

We might want to look -- I would like to take a look at maybe applying that Super 2 -- because other districts have done some of that -- take some kind of program approach, statewide approach.

MR. KEENER: We have presented that and some other districts have learned about that approach and started using it.

COMMISSIONER NICHOLS: That's a real compliment to you and your staff, that they're doing that. I would like to take a look statewide, maybe a category of one our programs or something.

Anyway, very good presentation. Thank you.

MR. KEENER: Thank you. I appreciate that. I would like to recognize Marty Smith and his group, were the innovators of the Super 2 project. They've done a real good job.

CHAIRMAN JOHNSON: Terry, did I understand from the Mayor you have been here 31 years?

MR. KEENER: Yes, sir. Been here since 1971.

COMMISSIONER JOHNSON: What grade was the Judge in that year?

MR. KEENER: When you come to a place that accepts you, you enjoy the lifestyle and all, you have a tendency to stay. And I certainly have enjoyed that.

COMMISSIONER JOHNSON: What an incredible report. I think I will echo what Robert said. This is as good a report not only in presentation form, as Ric pointed out, but also in content.

Several things sort of jumped off the screen at me and Robert alluded to one. And that is utilization of your resources here. And the most important resource is employees.

The one that jumped off at me was the way you stretched your maintenance budget by having people cover more than one area. And the fact that some people -- I guess the average was 38 miles, lane miles per person, is incredible, when you think about how many lane miles you have in the district and how, you know, large, geographically, this district is.

Secondly, I wanted to laud you on your pavement story. Clearly, that was one of the goals of a group that I put together, to establish meaningful and measurable goals for the department. And it remains one of our priorities, and will forever, I hope. Because a smooth ride is whatever everybody who uses our system wants, and you appear to be well in advance of that. And I know you will stay ahead of the curve, so to speak. And I want to congratulate you on that.

MR. KEENER: We certainly are going to do our best, yes, sir.

COMMISSIONER JOHNSON: Those are the two that happened to jump off the screen at me. And overall that's a terrific report. I salute your leadership and also the work of the 250 FTEs you have in the district. This is, as I mentioned this morning at breakfast, this is a fiber and fabric of Texas right here.

CHAIRMAN WILLIAMSON: Good job. Good presentation. What jumped out at me most of all is what I commented on, and that was the cross-training and then paying people for being more valuable in their cross-training. And I think that's a good idea and one we might want to suggest to the other district engineers, as we look it, if it's not already being looked at.

Great presentation. Once again showed us a great time. We appreciate everything you did laying it out for us and we're proud of the work you and your employees do for the great state, here in Childress.

MR. KEENER: Thank you.

CHAIRMAN WILLIAMSON: For the audience's purposes, we're going to take a ten-minute rest break and allow people who need to leave, the opportunity to leave without disruption.

There will be department business that will affect Childress County, that will be taken up afterwards. And all of you are encouraged to return and learn about how we do business. But you're not expected to. But in ten minutes we will continue our normal monthly meeting.

(RECESS TAKEN)

CHAIRMAN WILLIAMSON: I would like to note for the record, notice of this meeting containing all items on the agenda was filed with the Office of Secretary of State at 1:55 P.M. on July the 21st, 2004.

First item on the agenda is the approval of the minutes of the June Commission meeting. Do I have a motion?

COMMISSIONER JOHNSON: So move?

COMMISSIONER HOUGHTON: Second.

CHAIRMAN WILLIAMSON: Have a motion and second. All those in favor will indicate by saying "aye".

COMMISSIONERS: Aye.

CHAIRMAN WILLIAMSON: All opposed no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

Mike Behrens, I turn the meeting over to you.

MR. BEHRENS: Go to Agenda Item No. 2 which is Public Transportation. Sue Bryant will present two Minute Orders concerning funding for Public Transportation.

MS. BRYANT: Good morning, Commissioners; Mr. Behrens. My name is Susan Bryant, and I am the Director of the Public Transportation Division.

For your consideration this morning, is a Minute Order, which provides funding for Intercity Bus Transportation in Texas. This Minute Order would approve the award of $5,225,364.00 of currently available Federal Section 5311 funds.

By regulation, 15 percent of the 5311 funds are to be set aside to enhance and improve intercity bus service. And once the government certifies the intercity service is adequate in the state. The projects recommended for approval were selected based on responses to requests for proposals issued on February 20th of this year.

32 proposals were received requesting $14,000,000.00, for operating, facilities construction, and renovation, vehicle replacement, planning and marketing. The proposals are based on the technical merits of the projects and the qualifications of the entity and reviewed for relative merits with priority given to operating assistance to avoid closure of existing routes.

18 projects are recommended and are listed in Exhibit A, in alphabetical order by the project sponsor. The well publicized closure of intercity bus routes across the U.S. in the north and northwest, and the closure of a couple of smaller routes in Texas have highlighted the critical needs for this service.

The amount requested for immediate commencement in Category A is the combination of unobligated amounts from previous years and the available appropriations for FY'04. The remaining for Category B would be funded with the expected balance of fiscal year '04 funds, plus 1.37 million of expected fiscal year '05 funds.

I would look to highlight just one project on this list, because it is of particular interest to this area.

This project is for the Texas-New Mexico and Oklahoma Coaches. And it covers seven routes in seven TxDOT districts. These districts are Abilene, Amarillo, Childress, El Paso, Lubbock, Odessa and Wichita Falls. These routes from this project provided the only access to the intercity bus network for 42 communities.

Your consideration and approval of this Minute Order will be appreciated.

CHAIRMAN WILLIAMSON: Members, there are no comments from the public on this particular agenda item. Do you have questions for Ms. Bryant? Comments?

COMMISSIONER JOHNSON: I just have two observations. I guess one is an observation; one is a comment.

First of all, we received a well thought-out well-written document, letter, whatever, from John Wilson, who is in Lubbock. We wish that we could increase funding for everywhere. This is a balancing act. And it's unfortunate some areas are going to get less, some perhaps a little more. But, you know, that's the economic reality of what we've been trying to accomplish.

Two, I just wanted to laud you. I know it's been topsy-turvy few months for you trying to juggle a lot of balls, if you will. And to land where we have an enormous amount of patience and understanding on your behalf and also the people you work with, I wanted to salute you for that.

And Mr. Chairman, that's my comment.

CHAIRMAN WILLIAMSON: Other comments? Motion?

COMMISSIONER NICHOLS: So move.

CHAIRMAN WILLIAMSON: Second?

COMMISSIONER JOHNSON: Second.

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

COMMISSIONERS: Ayes.

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

Sue, before you leave this item. Probably this document has been available to me in the past and I just overlooked it.

In the event it hasn't been available to me in the past, whoever prepared this objective summary, this is an excellent document.

MS. BRYANT: Thank you. I will pass that on to the staff members.

CHAIRMAN WILLIAMSON: It was a good, quick reference document to help me consolidate my thoughts. And I appreciate very much this format.

MS. BRYANT: That was Charlie Sullivan in our office, along with others, and he will be very happy about that.

CHAIRMAN WILLIAMSON: I like that. Normal people can understand things like that.

MS. BRYANT: I could understand it so that's--

CHAIRMAN WILLIAMSON: You describe yourself as normal?

MS. BRYANT: For your consideration this morning, also a Minute Order which provides the formula funding for the small urban and rural transportation systems.

This Minute Order would allocate state funds of $29,741,067. These funds have been allocated according to the formula approved by the Commission on June 24th. According to the formula $9,562,571 have been allocated among 30 present smaller providers and 20,178,496 have been allocated among 39 rural providers.

Due largely to the incorporation of what has been, under a previous formula, set aside for Commission selected project funds, no rural providers will see a reduction of their state funds this coming year. And in fact, then funds increased by a minimum of approximately five percent per provider.

Due to inclusion of the so-called enclave cities, as per legislation, some small urban providers on the other hand, do see a reduction in funds, up to 6.9 percent in some cases. We will work with those providers so that the impact of these reductions will be as slight as possible.

In addition, we are working with the Public Transportation Advisory Committee on further refinements and updates to the funding formula, such that greater emphasis is placed on performance and the focus is more on people than the process.

And I would like to make a quick recognition. The Commission members and those of us who have been blessed with the privilege of being here for the last couple of days, have enjoyed I think very comfortable transportation the last few days.

And he doesn't know I'm going to do this, but I would like to recognize Gerald Payton, who is the transportation director of Panhandle Community Services. And we have been enjoying the vans for a couple of days. If Gerald would wave his hand.

CHAIRMAN WILLIAMSON: Where are you, Gerald? Stand up, Gerald. Take a hand, Gerald.

(APPLAUSE)

MS. BRYANT: We have enjoyed the transportation.

That's the Minute Order. Your consideration and approval of this Minute Order will be appreciated.

CHAIRMAN WILLIAMSON: Members, we do have three witnesses on this item. If it's acceptable, we'll go ahead and take their comments before we discuss this.

Norma Zamora. You've come a long way, madam.

MS. ZAMORA: Good morning, Commissioners. My name is Norma Zamora. I am the director for Brownsville Urban System, the public transportation provider, a department of the City of Brownsville.

First of all, I would like to thank you for allowing this opportunity to speak to you. However, I really must -- I am really concerned and must express my disappointment and frustration as to how the state formula allocation turned out.

All along the entire process developing a formula we have been provided files, tables and drafts, which illustrated the projected transit system's estimate allocations based on the changes that were being considered, of which we used to project our budget for fiscal year '05. We had determined based on the information provided a decrease of approximately $3,000. And we were able to make provisions for that.

However, this week I logged in to your website to find out what the final numbers came out and what was going to be presented to you today. And I find that Brownsville Urban System will stand to lose approximately $45,000; $42,000 more than we expected.

That the total small urban allocation decreased from approximately 10,000,000 to 9.5 million.

That the caps that were to be held constant and at the current levels on the enclave cities are no longer shown. But, instead show all enclave cities realized an increase in state funding.

19 out of the 30 urban areas shown, indicates a decrease in funding. Seven stayed at the estimated projected level, with the four enclave cities realizing an increase in funds.

I don't understand why there is a significant difference from what was being provided as projected estimates, to the final numbers being presented to you today.

Like many areas of Texas, Brownsville experienced a significant population growth in the 1990s. Between 1990 and 2000 the population of the city increased more than 40 percent, to approximately 140,000 people. And the city limits expanded from 37 to 120 square miles; 120 percent increase.

We provide for fixed routes and provide transit service for approximately 1.6 million passengers annually. Brownsville Urban Service has not been able to keep up with this growth, we have been experiencing and continue to experience. This short-fall in funding will further impact our ability to address the needs and demands for transit services in our area.

I am respectfully requesting the information that was used to determine the final allocation being proposed to you today. It will help me to better explain and inform our decrease in funding to our mayor, commissioners, city manager and finance director as we move in to the fiscal year '05 budget.

We will certainly continue to work with your staff in developing a formula for fiscal year '06 that will hopefully have a better outcome for small urban systems. Thank you.

CHAIRMAN WILLIAMSON: Okay. Hang on just a second. Some members might want to ask you a few questions. Before I ask you to do that members, Sue, I'm going to ask you in a moment to come up and just give me a brief explanation in answer to her questions. She deserves an answer from the Commission. Now, members, dialogue, questions comments?

COMMISSIONER NICHOLS: First of all, we are concerned and are certainly very sensitive to what you're saying. We recognize the importance of transit, not only in your area, but other areas of the state. As you are aware there's only so much money to go around, and it's real difficult to make decisions from our standpoint, as to who gets it and who doesn't.

So, the Advisory Committee, which has taken on -- took on a very difficult task of seeing all areas of the state and trying to make recommendations to us. Previously, some of these formulas were locked in by the legislature, state legislature. And the state legislature I think recognized there were some inequities. And they changed it to give us the authority and the direction to try to come up with a way that was more balanced.

Now, I will tell you, in answer to your question, I think, what I have seen, is that we receive a lot of federal money, statewide, particularly small urban money, that came into the state and that was distributed for a number of years to the small urbans that had transit authorities.

All of them did not have transit authorities, so in effect the ones that were operating were getting the, not only the money that they normally would have gotten, on the federal formula, but they were receiving also the money from the small urban areas that had not set up a transit area yet. Recognizing there were people in those communities who had transit needs also.

Over the period -- I know since I've been on the Commission, a number of those small urbans did open up and establish transit systems. And they have -- we started out with basically zero base.

So you have a population, you have a need, but because the existing small urbans had already received their money, they didn't have any money. So all of a sudden you end up with a huge disparity between those who were getting money with needs and those who were getting no money with needs.

And as that developed over a period of several years, that's when we recognized, and I think the legislature recognized, we had to go in there and balance some of that back out. You can't balance it without some going up and some going down. Doesn't take away from your needs, but it does help theirs. And that is the real answer, I believe, to your question, you didn't know what happened.

As far as the timing, you said a report a few months ago was done with some projections and new numbers today. As the Advisory Commission -- Advisory Committee did their work, I think the Department, the division was in good faith, trying to show, to the best of their knowledge, what the impact would be, dollarwise, under each scenario.

And there were some facts that came out late in this, that changed some of those numbers dramatically. Wasn't our fault; wasn't your fault; wasn't their fault. But those were the facts. And based on the criteria that's where the numbers came out. I think they feel just as bad about it as we do. But when you look at those facts, the answer still ended up where it is.

Now, we're not through. We have openly said over the last ten months, that we know there's more to go. We know that as we move in to the next 12 months, we are not through reviewing. But we have a deadline that we had to lock in, so y'all have a budget that you can work with while we're continuing this process.

We're going to be taking on Health and Human Services Transportation. How should that be blended with the local transit provider? Should we have two sets of buses running by each other, down the same streets, going different directions, or can we integrate that? And that's part of what the Advisory Committee, and staff and some outside people are going to be studying.

We will be working real close with you and the other transit providers to try to work through this. So we do feel for you, but we also feel for those communities that were getting very little. So I hope that answers some of your question. If not, we're not through. Hopefully, we'll get this fixed.

MS. ZAMORA: And we will continue to work with TxDOT staff on coordinating efforts with the Human Services money, hopefully be able to realize some funding opportunities there for our system.

CHAIRMAN WILLIAMSON: Other comments from other Commissioners?

Let me just say again, thank you for coming so far. And I'm going to ask Sue to, from the Department's perspective, respond to your question. You deserve an answer to your question.

Let me also suggest that we're aware of a pending toll project that your city and county perhaps will advance in the next few months. And let me ask you to remind the mayor and city manager that the revenues, if the Regional Mobility Authority is created, the revenues from the toll project could be a source of revenue to assist public transit.

It is specifically one of the goals of Governor Perry to create an environment where regions can begin to generate their own transportation money for their own well-defined transportation needs. So let me just encourage you to encourage the mayor and the city manager to support the Commissioners' efforts to form the RMA toll project. Excellent toll project. We've looked at it several times.

MS. ZAMORA: I know there's a need for one.

CHAIRMAN WILLIAMSON: It will be a great thing for the southern tip of our great state.

COMMISSIONER NICHOLS: Mr. Chairman, related to what the Chairman was talking about, the possibility of the toll road. Not only generating funds in the future, through the Mobility Authority, but a lot of people are not aware, that are becoming aware that toll roads create a thing called toll credits.

And the federal government will allow us, through the Commission, to apply those toll credits and it can be used for transits to offset dollar for dollar local managements. So what the county or city or community has to contribute, it would go to those toll roads. We can apply that toll credit increase. You have reduced your match and still use the extra, keep the cash, and it's beneficial in several other directions.

CHAIRMAN WILLIAMSON: I just bring it up because the Commission's sort of way high level goal is to interlock and make inter-dependent the various types of transportation, organizations and facilities, particularly in our urbanized regions, so they become codependent upon each other and not on big daddy in Austin and Uncle Sam in Washington.

We would like our communities to become more and more independent in the generation of their funds and in the disposition of their funds. And we think that particular project, specifically, could help the transit system in your part of the State.

We really appreciate you driving all the way up here. We are aware that the upside of meeting in Pharr and Houston and Childress as we bring our process to the public. The downside is those who would normally drive to the central location of Austin, Texas have to drive further. And we really appreciate you doing that.

MS. ZAMORA: Thank you.

CHAIRMAN WILLIAMSON: Sue, would you give a quick comment to -- Ms. Zamora has been very gracious and professional and deserves a gracious and professional response to that.

MS. BRYANT: Thank you, Mr. Chairman. In addition to Mr. Commissioner's Nichols' comments, which I will not repeat, because he very much has articulated a number of reasons for the changes.

I would like to, if I may, just add one more to that rather long list of having several iterations above estimated dollar amounts for the formula. And in doing that I would like to recognize Richard Monroe and his staff in the office of General Counsel.

Because, as the Commissioners are aware, there have been a number of questions about the so-called enclave cities; are they in; are they out; are they capped; are not capped; at what point are they capped. And a pretty significant reason for the kinds of fluctuations that our staff, the staff back in Austin has been dealing with, is working on that particular issue. It is a significant topic in regards to the formula.

We have gone back with general counsel several times, to the legislation, the law in that regard. And in order to be consistent with the interpretation of the legislation, there have been numerous changes in how much -- whether or not, first of all, and then how much of the formula funding actually must -- needs to go to the enclave cities.

CHAIRMAN WILLIAMSON: So a short answer to her concerns would be at one point there was a set of numbers --

MS. BRYANT: That's correct.

CHAIRMAN WILLIAMSON: -- that presumed a conclusion about the law that we realized might not be accurate. So we asked our legal staff to give us advice on how the law -- now our rules -- but how the law actually read.

MS. BRYANT: Yes, sir.

CHAIRMAN WILLIAMSON: And we concluded that the pool of money available to Brownsville and others under the previously agreed formula by our Advisory Committee, was not as large as we thought. We had to reallocate.

MS. BRYANT: Yes, sir.

CHAIRMAN WILLIAMSON: That was the explanation for her $3,000 loss, and the 42,000.

MS. BRYANT: That's correct, yes, sir.

CHAIRMAN WILLIAMSON: Commissioners, any other dialogue we need to have with Sue on Ms. Zamora?

MS. BRYANT: May I add one more thing? Because she did specifically make a request. And I wanted to comment on that. Because the staff in Austin -- we have already committed to the providers, that pending Commission action today, the details of the formula numbers, the multitudinous spread sheets that we used to reach those final numbers, we have committed to insure those are available almost immediately to everyone.

If the Commission did something different and we needed to go back and make any further changes, then obviously those particular spread sheets would not apply. So we have committed to all the providers that information will be available as soon as there is an approval of the minute orders, if there is approval of the minute orders.

CHAIRMAN WILLIAMSON: Sue, during the next year, will it be possible under the policy and regulations, directions we've taken, for systems such as the Brownsville Urban System to compete more for Health and Human Services transit contracts.

MS. BRYANT: Yes, sir. That's true also. And we have been letting those providers know that we are rebidding those contracts.

And in addition Norma and I actually had a very short conversation, but we are encouraging providers to come to the next Commission meeting so that they can be a part of and listen to the discussion item on alternative public transportation financing.

CHAIRMAN WILLIAMSON: It's just really important. You know, the Governor and the legislature specifically gave us this for the purpose of eliminating duplication. Not to reduce the budget --

MS. BRYANT: Right.

CHAIRMAN WILLIAMSON: -- but to offer a greater degree of service --

MS. BRYANT: Right.

CHAIRMAN WILLIAMSON: -- to all Texans. And it's just important to us --

MS. BRYANT: Right. Not to reduce service but to actually see what we could do.

CHAIRMAN WILLIAMSON: Right. If we could find a way to provide Ms. Zamora another 500,000 a year, if she'll help us on our Health and Human Service contracts, that's the goal.

MS. BRYANT: Right. And she and I talked a little bit about that. But we obviously have a lot more discussion to go on that.

CHAIRMAN WILLIAMSON: John, if you don't object, I will take you next and take Sam last, if that's all right.

MR. WILSON: Thank you, Mr. Chairman. I have provided you with some written comments but I think I would like to diverse from them and not go exactly with them because some of the comments that have already been made.

I would like to emphasize a little more about the enclave cities. Those four cities do not have fixed route systems. Between all four of them they carry less than 200,000 people. They mostly or demand-responsive and which generally are more expensive than fixed route.

I also testified before the legislature at the House Transportation Committee back in the mid-90s and Representative Fred Hill pointedly asked me, "John, it's wrong for us to fund these cities above what we are paying now, because they can join regional transit systems, and we cannot."

And what he was referring to -- he's from Richardson -- and he would like that money, you know, give them some incentive to join their DART, or in Fort Worth, *MetroDart to join. But that's so -- the sole reason for the enclave city being frozen at the current level was because the rural cities and the small urbans cannot get more money. I mean, we are limited. We are not asking for more money today. We are just asking that those enclave cities be frozen.

Your Public Transportation Advisory Committee voted to freeze those cities at the 2004 level. So I mean, I'm agreeing with them. I'm agreeing with what that did.

The other thing that was brought up, the second item that shifted the funds -- and this was all in the last month, by the way. I mean, this is not what we have seen in the past. This is in the last month.

But the other thing, we have traditionally had a 35/65 split, between the small urban and the rural. And I can't see why that would be different today. But yet with the numbers that just came out it split 32/68. In other words that three percent is now $500,000. And spread over 29 cities, that's a lot of money; that's a lots of deficit -- for 30 cities -- to absorb.

And I'm just asking that that split be as it traditionally has been all along. We're not upset with the 65 going to rural and 35 going to the small cities. We'd just like for that to be same, though not get any worse than it already is.

So those are two areas that I am concerned about that. I know that Norma already stated those to you, but those are the two things that I am concerned about.

I gave my testimony. I mean, you have it, and I wrote it in probably a better way than I just got through saying it. But I did want to tell you those are my concerns.

Thank for your time and consideration.

CHAIRMAN WILLIAMSON: We're going to ask Mr. Monroe to come up and talk about the enclave cities in a moment.

Any questions or dialogue any members need to have with Mr. Wilson?

COMMISSIONER NICHOLS: I just want to reiterate my original comment. I mean this is very well thought out and well written. I wish we could act on all these things and had all the resources in the world, but we don't.

MR. WILSON: I understand.

CHAIRMAN WILLIAMSON: And, Sue, you should be getting ready, because I'm going to want a brief response on 32/68 versus 35/65.

Richard, can you visit with us, or are you comfortable talking to us about this enclave city business?

MR. MONROE: I regret to say, Mr. Chairman, I'm not comfortable talking about it at all. Its an arcane, esoteric area of the law. And one of my staff attorneys, Jennifer Saldano has been really working with the Public Transportation Division. In this case I would imagine that Sue is much more expert, much better informed than I am.

CHAIRMAN WILLIAMSON: Thank you, sir. One of the reasons I like you, you get to the point.

MR. MONROE: If I understood the enclave city problem we have, is that even despite the chairman's comments during the legislative session, despite the clear expressed wish of the legislature that non-enclave cities be gently guided toward joining transit systems, Ms. Saldano concluded after looking at the law, the legislature itself didn't allow us to do that. Is that correct? If it's not correct tell me?

MS. BRYANT: I'm going to try to-- I'm not going to be Jennifer and I don't know that particular area of the law as she does.

The enclave cities are capped by legislation. But they're not capped at the FY '04 level. They're capped at the level that was set at the time by the legislation. So therefore, there is a dollar amount spread that has allowed them to, by formula, to see some decrease.

CHAIRMAN WILLIAMSON: In our --

MS. BRYANT: There was a legislative cap.

CHAIRMAN WILLIAMSON: There was no way we could cap them at some previous amount. We had to -- we have to live with what the legislation directs?

MS. BRYANT: We couldn't have capped them at the current amount. We had to cap them, according to the legislation, at the time they were legislatively capped.

CHAIRMAN WILLIAMSON: And we have already begun preparation for the '05 session to address this problem, or to at least to articulate it, so that if it be the wish of the legislature to truly encourage the enclave cities to move on, that's what we will do.

MS. BRYANT: That's my understanding.

CHAIRMAN WILLIAMSON: Now, as to the 65/35, 62/38, I think we know the reason why, but share with the Commission why.

MS. BRYANT: Okay. John is absolutely correct. Historically, traditionally because of the way the formula was constructed earlier, because of the way other legislation was constructed, that percentage was a 65/35 split.

However, because the formula now bases that split on population and land area, it still comes, as he mentioned, close to the 65/35 split. But it is not quite that. It is off by a couple of percentage points.

CHAIRMAN WILLIAMSON: By half a mill.

MS. BRYANT: By a half a million in terms of dollars, that's correct. Because of population -- it's a split of population, 75 percent; and land area, 25 percent, that creates then the total percentage split; not just a dollar amount split. And that created the difference.

COMMISSIONER NICHOLS: Can I make a comment related to that?

CHAIRMAN WILLIAMSON: Please.

COMMISSIONER NICHOLS: In trying to develop a criteria that's fair across the state, I know that we all made comments as Commissioners. I know the Advisory Committee went out and took input from citizens.

And one thing that's very apparent. You can devise by population, but we all recognize that geography is an important part. When you have people closer together, it certainly costs one amount to drive them around.

The Childress District is probably a perfect example of just the extreme opposite. 41,000 people living in 13 counties. It obviously costs more per person to go pick them up and take them to the hospital, the doctor or whatever, take them back. And it does cost more. So there is a geography factor in -- and I think we all recognize that. So that's why that factor is in there. Somehow or another that factor will always have to be in there.

And so we're not through, like I said awhile ago. And we've got another -- hopefully, we can get through all this in another year. But even after that it may take a year or two past that to iron out all the kinks. That's why the geography factor is in there. This is a perfect example of a district where that applies.

CHAIRMAN WILLIAMSON: Other questions or comments?

Thank you, Sue. Thank you, John.

We have our last witness -- what was your name?

MR. RUSSELL: I forget. Ric Williamson.

CHAIRMAN WILLIAMSON: My very, very, very, first chairman in the legislature. The Honorable Sam Russell from Upper East Texas.

MR. RUSSELL: Thank you very much, Mr. Chairman, members of the Commission.

First of all, upfront, I want you to realize that during my tenure in the legislature I never saw a gasoline tax that I did not like.

(LAUGHTER)

MR. RUSSELL: That may have been the last time the gasoline tax was increased.

CHAIRMAN WILLIAMSON: It was.

MR. RUSSELL: Have some matters at hand. I do want to thank you, Mr. Chairman for the warm welcome that you gave Mrs. Edna Johnson, who is the acting director of the Texas Transit Association.

First of all, for the record, my name is Sam Russell and I am general counsel for the Texas Transit Association.

In fact, one of the members transcribed from the Department records the exchange between you and Ms. Johnson. And I've heard members of the association refer to it as a breath of fresh air for the association, and hopefully the dawn of a new relationship between the association and the agency.

Of course, we're not always going to agree, even though I'm sure you and I did every time in the legislation. But as you can see the association has some very passionate members who believe in what they're doing.

I know this has been a fast process since back earlier in the year, of developing of the new formula for rural and small urban providers. We specifically want to thank the Department and the division and PTAC for all the hard work that's gone in to what has come out of all the meetings that have been held this year.

And we certainly appreciate the commitment on your part to continue to work on this process, and define and fine-tune the formula. Because as you can see, there have been some unexpected results that have occurred.

Of course, with having the statute and formula as it was for approximately ten years, it did bring a certain amount of stability and predictability to the industry, to where they could adequately plan and project for their activities in the future. And as Mrs. Bryant indicated -- and we certainly applaud that effort -- as you make your awards and enter in to your contracts with the providers, we would certainly suggest and ask that you make those facts and figures that have gone in to how they arrive at the specific awards, available to the providers so they have some idea and perhaps can plan their activities in the future.

We certainly want to pledge to you to work with you in any way that we can in the future. We have a wealth of knowledge in this industry, from metropolitan agencies to the smallest of the rural providers, that we certainly want to share with you and hope that you take advantage of.

Again, thank for what you've done on this effort.

CHAIRMAN WILLIAMSON: Questions for Mr. Russell or comments to be directed at Mr. Russell?

COMMISSIONER HOUGHTON: I have a question. It would be your recommendation to go back to the legislature to clearly define what they may -- they did not define in the last session as to the enclave city issue?

MR. RUSSELL: As I recall I think the enclave city issue may have been in the statute that also adopted the funding formula back in '95. And quite frankly, I don't know what specifically -- I don't recall what that said in that legislation. But I think it's an issue that needs to be addressed closely. And it may be one that can only be addressed with legislation.

COMMISSIONER HOUGHTON: It may be the difficulty you have in addressing that question as some of those enclaves cities are, who are also some of your members.

MR. RUSSELL: Right.

COMMISSIONER HOUGHTON: I didn't mean to put you on the spot, but at the same time it seems to me this it where this needs to be cleared up.

MR. RUSSELL: Very likely. If the legislature deems it a problem and deems it worthy of one that needs to be fixed, then that's probably where it will probably have to be.

COMMISSIONER NICHOLS: We recognize that's one of the issues. And I think meeting before last we made some comments related to the fact that over the next 12 months, we directed not only on PTAC but our division administration to try to work with those groups. Because it appears to some of us that it would make more sense for enclave cities to join the regional transit system. That will meet a greater need to the public.

However, in the meantime, we recognize there are people in those communities who also need transit, and just because the problem hasn't been worked out doesn't mean that they don't need the same support and help that we are trying to provide all the rest of the state. And I think this, in the meantime, does give them money for transit for those people, for those needs, until we can get it worked out. I'm hoping those communities can work it out. Certainly try to encourage that, I think.

CHAIRMAN WILLIAMSON: Anything else?

MR. RUSSELL: The only other comment I would add is -- I think it's been alluded to this morning about the use of toll credits.

We appreciate the fact that you have put on your agenda for next month a discussion of use of toll credits as an alternative source of financing of public transportation. And I think we'll have some people there to offer some input in regards to that.

CHAIRMAN WILLIAMSON: How long have you been general counsel for TTA?

MR. RUSSELL: Since about the middle of July.

CHAIRMAN WILLIAMSON: They made a hell of a good decision, Sam. I look forward to working with you.

MR. RUSSELL: Thank you.

CHAIRMAN WILLIAMSON: You're a good man.

Sue, anything else? Want to close on your Minute Order?

MS. BRYANT: Yes, sir. And thank you. And I would like to take this opportunity to address some of the concerns, because they are -- those providers are needing some funds, compared to what they received, are legitimately concerned for the customers they are serving.

And neglected earlier to recognize the Rolling Plains also as one of the providers of one of our transportation that we have been using in the last couple of days.

Again, I want to reiterate the commitment that we all have, that we all share, to performance and to relooking at the refinements and the formula so that we can do better, continue to do better.

CHAIRMAN WILLIAMSON: Any other discussion with or questions for Sue Bryant, members, before I consider a motion?

I'll consider a motion?

COMMISSIONER HOUGHTON: So move.

COMMISSIONER ANDRADE: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no.

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Thank you, Sue.

MR. BEHRENS: Mr. Chairman, No. 3. This will be our proposed rules for adoption. First being Agenda Item 3a(1), Environmental Rule, which will be presented by Dianna Noble.

MS. NOBLE: Good morning, Commissioners, Mr. Behrens, Roger.

For the record, my name is Dianna Noble. I'm the Director of Environmental Affairs for TxDOT.

Item 3a(1) proposes the repeal and final change to the proposed new section concerning environmental review and public involvement for transportation projects.

Transportation Code 201.604 requires that the Texas Transportation Committee -- Commission provide by rule for the review of TxDOT Transportation projects. The environmental review and public involvement rules were first adopted in 1995. Section 201.604 also requires that the Commission, after a public hearing, review at least once every five years these rules and make appropriate changes.

Based on those reviews, the rules were amended in 1997, 1998 and 2003. During the Commission public hearing of December 18th, 2003, I described the process the Department would undertake in its most recent examination and review of its environmental review and public involvement rule.

No comments from the public were received at the public hearing nor subsequent to the public hearing on the -- on the existing rules. The examining of the existing rules indicated that revisions were necessary. Revisions were necessary in order to accommodate the new authority given to the department, under House Bill 3588.

The proposed new rules also needed revision in order to clarify environmental review documentation, coordination, public involvement, and notice requirement.

For public transportation and aviation projects, the existing 2.44 and 2.44 -- 2.46 sections were deleted. These projects now would be in proposed Section 2.42 and 2.43.

New section 2.40 describes the purpose of the environmental rules.

New 2.41 describes the definitions of terms used in the rules.

New 2.42 titled federal aid transportation projects, describes environmental review requirements for projects that may utilize federal aid funds, federal transit funds, and require the approval of the federal highway administration, the Federal Aviation Authority or the Federal Transit Administration.

New 2.43, titled nonfederal aid transportation projects, details the environmental documentation, coordination, public involvement, notice and mitigation procedures for transportation projects.

New 2.44 describes the environmental procedure and public involvement the department will follow for gulf intercoastal waterway projects, including the requirement for proposal for beneficial use proposal, early coordination and investigation of proposal alternatives.

Proposed new 2.45 details the department's environmental procedures during emergency circumstances.

New 2.47 titled maintenance programs in action, describes the procedures for environmental review and public involvement of TxDOT maintenance programs.

New 2.48, describes the department's environmental procedures for projects that are located in whole or in part along the Gulf Coast that are within the area of the Texas Coastal Management Program.

New 2.49, titled Rail Transportation Project, describes the department's environmental and public involvement procedures for rail projects.

New 2.50 describes the environmental and public involvement procedures for toll equity or pass- through toll projects.

That completes my presentation. And I will be glad to answer any questions.

CHAIRMAN WILLIAMSON: Members? Questions for, or comments to or dialogue with Dianna?

COMMISSIONER NICHOLS: I have no dialogue or question. My only comment is I think a lot of the ideas you put in there and worked out are very helpful.

CHAIRMAN WILLIAMSON: I echo that. I agree. I think it's a practical approach.

I'm always a little bit disturbed when we're passing rules that have such impact, that have such a change in how we do business, and we don't receive comments from the public.

I'm baffled why there's a bunch of guys sitting in the back, my back right-hand corner waiting for us to announce a decision about a particular kind of contract. And they're the very guys that yell and should be interested in this kind of stuff. It's odd they don't have questions or comments or suggested changes that would make the system better for all of us.

MS. NOBLE: We do intend to hold another public hearing, just in case that --

CHAIRMAN WILLIAMSON: Maybe a few will show up then.

MS. NOBLE: Maybe somebody will show up.

CHAIRMAN WILLIAMSON: I'll entertain a motion.

COMMISSIONER NICHOLS: So move.

COMMISSIONER JOHNSON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

Thank you. Good work on that. In fact, that was excellent work on that.

MR. BEHRENS: Again to item 3a(2), proposed rule for access to public information. Richard.

MR. MONROE: For the record, my name is Richard Monroe. I'm General Counsel for the Department.

Under applicable law, Texas Building and Procurement Commission sets charges for information we supply under the Public Information Act. Some people still call it the Texas Open Records Act.

What we propose by this Minute Order is to revise our charges in line with what the TBPC has promulgated.

And also, something I'd like to bring to your attention. For whatever reason, and I'm not sure I can even take a guess at it, we've been getting a number of repetitious requests; request by the same people for the same information. And under our rules as they exist now, we must refer those requests for my signature, the Director of Public Information, or the district engineer or division director to tell these people under the law, "Look. We're not required to respond to repetitious requests. We've answered your request before."

We decided while we were in these rules, to change that, and to allow the person who actually has access to the records, to so inform the person about this. Hopefully that would speed up the process somewhat.

Those are the changes which will be affected by the proposed rules. Of course, they will be published for public comment. And I would request that you approve the Minute Order.

CHAIRMAN WILLIAMSON: Members, questions of, comments directed to or dialogue with Mr. Monroe?

Consider a motion.

COMMISSIONER HOUGHTON: So move.

COMMISSIONER JOHNSON: Second.

CHAIRMAN WILLIAMSON: I have a motion and second. All in favor signify saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda Item 3a(3)Proposed Rules in our Contract Management area to meet concerns of contractor sanctions. Thomas.

MR. BOHUSLAV: Good Morning, Commissioners. My name is Thomas Bohuslav, Director of Construction Division.

Item 3a(3), a proposed amendment to the Section 9.102 through 9.105; repeal of Section 9.106 through 9.110, and new Section 9.106. These changes do affect our sanction rules.

We propose changes to the rules, to give the executive director the authority to sanction contractors for construction contracts. Currently the executive director has the authority for making contracts only.

In addition, we reorganize the sanction levels to better address contractors with multiple sanctions.

Upon your approval, these rules will be published in the Texas Register for public comment. Ask for your approval.

CHAIRMAN WILLIAMSON: Questions, members inquiries, comments?

COMMISSIONER HOUGHTON: When was the last time a contractor was sanctioned?

MR. BOHUSLAV: We have probably -- we have numerous contractor sanctions in the maintenance area.

COMMISSIONER HOUGHTON: I mean in the construction area.

MR. BOHUSLAV: In the construction area, I'm not aware of any in my time here.

CHAIRMAN WILLIAMSON: We're fixing to.

MR. BOHUSLAV: In construction? I don't --

CHAIRMAN WILLIAMSON: Just wondering if you were paying attention.

Consider a motion?

COMMISSIONER NICHOLS: So move.

COMMISSIONER JOHNSON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Thank you, Tom.

MR. BEHRENS: Agenda 3a(4), right of way, proposed rule for permanent permit for erection of off-premise signs. John.

MR. CAMPBELL: Good morning. My name is John Campbell, Director of the Right of Way Division.

I would like to submit for your consideration this Minute Order which proposes an amendment to 43 Texas Administrative Code Section 21.441, relating to permit criteria for erection of an outdoor advertising sign that is off-premise from the business which it advertises.

This amendment is necessary due to a direct conflict with the Texas Transportation Code Section 394.021. In a rural area the Transportation Code states that to qualify for an outdoor advertising permit, a sign must be within 800 feet of a single recognized commercial or industrial business activity. Current rule in Texas Administrative Code 21.441 be created to state the sign must be located within 800 feet of two adjacent recognized commercial or industrial businesses.

TxDOT has enforced the statutory provision, historically, defining the necessity for a s2ingle business within 800 feet. Therefore, this rule revision will make the rule consistent with the authorizing of the statute.

Staff recommends your approval.

CHAIRMAN WILLIAMSON: Okay. Now John, this is one of the few areas on which the Commissioners have a sharp disagreement, I think, the disagreement is four of them and one of me, but that's the way life is.

I've got to ask the question. Is this going to make it easier to put up billboards or harder.

MR. CAMPBELL: This will make it easier to put up billboards.

CHAIRMAN WILLIAMSON: So this will make it easier for private property owners, taxpayer's who own their land, to do with their land what they wish?

MR. CAMPBELL: Yes, sir.

CHAIRMAN WILLIAMSON: I think it's a good idea, John, but who knows what the Commission will say. I will know that when I hear from my four compatriots.

COMMISSIONER JOHNSON: With that as a precedent, John, how often have we run in to a situation where the -- whether one or two is the controlling factor in the granting of a billboard permit?

MR. CAMPBELL: I would say probably in the majority of the cases. Because when you get outside of the zoned industrial commercial areas, in the rural areas, then it becomes -- the determining factors becomes the proximity to some established going concerns to those activities. So that being the case the criteria can be adjacent -- to have two adjacent activities is a far more pressing standard than that authorized in the statute.

So it doesn't happen every time but because of this inconsistency it's always a point of contention when we're trying to qualify these signs.

COMMISSIONER JOHNSON: You mentioned an inconsistency. We're changing a rule. Could the inconsistency be overcome by changing the code?

MR. CAMPBELL: Yes, it could.

COMMISSIONER JOHNSON: Why have we elected to go to the rule mechanism as opposed to --

MR. CAMPBELL: Well, I believe --

COMMISSIONER JOHNSON: -- going to the code?

MR. CAMPBELL: Well, it was our recognition that the rule was in error and inconsistent, not just with the authorizing statute but with our practices. Our practices have been to go ahead and just require that there be one activity within that determined feet. However --

COMMISSIONER JOHNSON: If that's the case we are in violation -- we're practicing in violation of our own rule. Is that -- are you -- are you telling me that we're doing that sort of thing?

MR. CAMPBELL: Yes. But we are not practicing in violation of the statute.

CHAIRMAN WILLIAMSON: In order to get to the heart of your question, John, in order to change it back the other way we are going to have to have the statute changed, I think that's -- let me rephrase that. You're going to have to get the statute changed, you and Robert.

COMMISSIONER NICHOLS: I thought I had it straight. I just want to clarify it. This rule fits the law?

MR. CAMPBELL: Yes.

COMMISSIONER NICHOLS: Whereas the rule as written previously actually was more restrictive than the law?

MR. CAMPBELL: That's correct.

COMMISSIONER NICHOLS: We didn't actually have the authority to restrict to that point?

MR. CAMPBELL: That's correct.

COMMISSIONER NICHOLS: It's going to be interesting to see the public hearing where somebody could say -- that would want us not to fit the law.

COMMISSIONER HOUGHTON: In other words, we have no choice?

MR. CAMPBELL: That's correct.

(LAUGHTER) (MULTI-INAUDIBLE-VOICE DISCUSSION)

CHAIRMAN WILLIAMSON: Okay. No witnesses, which surprise me, on billboards. Do I have a motion?

COMMISSIONER JOHNSON: I would just request you be present and answer all the comments at any hearing, be aware of the feelings that are out there in this great state on this matter.

CHAIRMAN WILLIAMSON: Oh, me.

COMMISSIONER HOUGHTON: Do you want that as an amendment, John? I will be glad --

CHAIRMAN WILLIAMSON: Motion?

COMMISSIONER NICHOLS: So move.

COMMISSIONER HOUGHTON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: All opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Thank you members. Thank you, John.

MR. BEHRENS: Agenda Item 3b is going to our rules for final adoption, General Rules for Private Involvement in Department Turnpike Projects.

Phil Russell.

MR. PHIL RUSSELL: Morning, Commissioners, Mr. Behrens.

For the record, I'm Phillip Russell and I'm the Director of the Turnpike Division.

Minute order before you proposes the adoption of the amendment to TAC Chapter 27, which describes the requirements for alternate forms of security, provided by a private entity entering into a comprehensive --

CHAIRMAN WILLIAMSON: Whoa, whoa, whoa. We may be going a little fast.

You were just trying to get those guys all excited.

MR. PHIL RUSSELL: The Transportation Code requires the department to obtain from a private entity who is entering into a comprehensive security agreement, performance and payment bond or alternate form of security equal to the cost of constructing and maintaining the project.

The proposed rule prescribes various requirements for alternate forms of security. In addition to performance and payment bonds, such as cashier's check, U.S. bonds and notes, irrevocable letters of credit, on guaranties. These rules were published in the Texas Register on May 14th, and we received no comment.

Staff would recommend approval of this Minute Order.

CHAIRMAN WILLIAMSON: Members, do you have a question for or comment directed to or dialogue with Mr. Russell? We have no witnesses.

I have one question. Give me a normal person's example of an alternative form of security. If you were sitting in Childress, Texas and wanted to respond to a CDA to add two interior truck-only lanes to 287 to provide grade separation and you wanted to do it, maybe finance it yourself. What would be an alternative form of security that you could use?

MR. PHIL RUSSELL: An alternative form of security in that case might be the developer would come in and say my company is going to make good on the promise, one form or fashion. Typically we use performance bonds. Somebody will come in to switch surety; that if for some reason the project goes belly-up, they implode, somebody steps in their shoes develops the project so TxDOT is made whole.

In that case, it's something above and beyond what the normal performance surety bond would require, a company could come in and say I will guaranty it.

CHAIRMAN WILLIAMSON: We would look at their balance sheet, we would look at their income history and we would make a subjective decision.

MR. PHIL RUSSELL: We would, or even perhaps an independent financial group would look at it.

CHAIRMAN WILLIAMSON: We wouldn't be afraid of doing that because we understand we have to take some risks.

MR. PHIL RUSSELL: Absolutely.

CHAIRMAN WILLIAMSON: Let me give you one example, because I know this is going to happen. Somebody walks in, says I want to do this and my guaranty is I own the 1000 acres adjacent to this road. And I will give the State a lien on that thousand acres until I'm done. Would we consider that?

MR. PHIL RUSSELL: Only Richard Monroe would know for sure, but my response would be yes.

CHAIRMAN WILLIAMSON: I mean from a business perspective --

MR. PHIL RUSSELL: From a business perspective, yes.

CHAIRMAN WILLIAMSON: Next question would be from a legal perspective. From a business we wouldn't object to that.

MR. PHIL RUSSELL: Yes, sir. We could do that.

CHAIRMAN WILLIAMSON: We are just looking for security some form or fashion. That answers my question.

Any other questions.

Motion?

COMMISSIONER JOHNSON: So move.

COMMISSIONER HOUGHTON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no.

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda Item 4 under Transportation Planning. Minute order asking you to consider reallocation of some Border Colonia Access Program Funds. Mr. Saenz.

MR. SAENZ: Good morning, Commissioners. Item No. 4, pursuant to Item 43 of the Texas Administrative Code of Section 15.105(9) relating to the Border Colonia Access Program.

The Minute Order before you tenders a proposal for Starr County, which includes reprogramming some of their previously approved Border Colonia Access Program funds for its other eligible Colonia projects.

Minute Order 108813, dated February of 2002, and Minute Order 108846 date March 28, 2002 approved Colonia allocation for Starr County work for several projects.

Four of those projects included Colonia El Castillo$125,921; a Colonia El Socio for $44,491; Colonia Roma Creek, no named street, but they wanted to do it but they didn't have a name for it -- $48,559; Colonia Santa Cruz-2, for *$167,517.

Starr County has determined that it is necessary due to some utility problems and some right of way issues, on these previously projects, that it is necessary to reprogram these funds towards eligible Colonia projects in Colonia Roma Creek --

CHAIRMAN WILLIAMSON: How is your brother?

MR. SAENZ: Fine.

(LAUGHTER)

MR. SAENZ: The county will provide an approved resolution stating that the old project will be submitted under a future program called under their allocation program and not under their competitive basis and in accordance with Texas Administrative Code Section 15.105(9) if the Department will approve the county proposal to reprogram some of these noncompetitive funds to the proposed Colonia projects listed on Exhibit A.

And the staff recommends the approval of this Minute Order.

CHAIRMAN WILLIAMSON: Discussion, dialogue, comments?

COMMISSIONER ANDRADE: So they're going to just put these projects on hold until the next -- and they're going to resubmit?

MR. SAENZ: Yes.

COMMISSIONER ANDRADE: What took so long? Two years to figure out they had these problems.

MR. SAENZ: Of course, this was the first program called. Everyone was learning how to do this type of work so it took time to hire consultants to do the work.

Then as they got in to them they started running into utility problems they could not coordinate. They wanted to know make sure the utilities are in place before they go out there and construct the road and not have to tear up the road later on.

And they also ran into some issues in Starr County with right of way, determining ownership. So they figured with this delay, it's going to be such that they need more time to resolve, so instead of leaving the money sitting there they would like to use it on other projects so they can continue working on Colonia roads and the next program called, which we have already announced, they will come back and get these projects in and there and try to get them reapproved.

COMMISSIONER ANDRADE: And what assurance is there they will get it approved?

MR. SAENZ: Under the program, part of the program is allocated based on a Colonia population, so they get an allocation. These projects will automatically be included in their allocation.

COMMISSIONER ANDRADE: And we think we'll solve those problems -- that they will solve those problems by then?

MR. SAENZ: Yes.

COMMISSIONER ANDRADE: I realize we need time to get it done. My concern is throughout South Texas the money goes there and they are available and yet it's taking so long for these people to get their roads.

I was in San Benito last week and I saw what it means for them to get a paved road. We had a woman that, you know, she used to have to transport her children by tractor, when it rained, she had the inability to call. So it's much needed.

But my concern is that the counties are taking so long, I'm just wondering if there is anything we can do to help them speed that up a little bit.

MR. SAENZ: We have learned several things from this first program. For example, there are some projects still on hold because of utility problems in other parts of the border. So we have learned that they need to address some of those problems, not submit those projects when they are trying to get projects built.

Also work with the Texas Water Development Board, because a lot of this work is being coordinated through them for the utility work, and coming to us for the highway work.

We're trying to get with Water Development Board, just make it one contract so everything gets done at the same time. We'll use some of their money and we use some of the money that's available through here but we get it all done at once.

So we have identified some bad practices in how the counties can better manage their projects. And we're going to be going to them as we roll out the second program, of these are things we think you need to do and we would recommend that you do and we'll be watching you for this, to get them done so we can expedite these projects.

COMMISSIONER ANDRADE: Thank you very much.

CHAIRMAN WILLIAMSON: Any other questions, comments or dialogue?

Do I have a motion?

COMMISSIONER ANDRADE: So move.

COMMISSIONER HOUGHTON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BEHRENS: Now, going to Item 5(a), Proposed Turnpike Project Travis County, referred to as State Highway 45 Southeast.

MR. PHIL RUSSELL: Again, for the record, I am Phillip Russell, Director of the Turnpike Division.

The Minute Order before you relates to the project State Highway 45 Southeast, southeast quadrant of Austin. With the Commissioners indulgence, we have put together a very short power point presentation to walk you through this process. Obviously, I will be happy to address any questions you might have throughout the process and afterward give a recap.

The project itself, of course, for those -- there are probably plenty of folks out here in the room that could do this almost as well as I could.

Of course, this is all State Highway 45 Southeast, Austin. I-35 going straight up and down. The three elements of the Central Texas project that are currently underway State Highway 130, 45 and Loop 1. The process was initiated approximately a year ago, when the Zachry Corporation submitted an unsolicited proposal.

Couple of key dates for your information. Request for competing proposals was issued in September. Four firms submitted and were short-listed in November. We went through that process of the short-listing itself and eventually issued the request for detailed proposal in March.

Four teams were given approximately 65 days to complete the proposal. On June 1st those proposal were due. The District primarily handled the selection procurement process. They worked very, very hard putting together all of the data and the various selection criteria and here we are in July.

The four consortia that proposed, Hill Country Constructors -- I've got the full list -- but quickly, J. D. Abrams, Granite were some of the lead joint venture members on this, Lone Star Constructors, essentially the 130 team intact, led with Fuller, Land Brick and others.

Texas Tollway team, was led by Archer Western and Parks and Transportation group and Zachry Construction Company was obviously led by the Zachry Corporation.

Again, each one of these consortia had many many, many, many engineers and other consultants on their team.

The best value price is the sum of three components; the value of the bid itself, what these consortia said they could do the work for and that essentially sets the bases line. And from that a couple of adjustments were made.

One was based on the schedule; how quickly they could complete the project. And one was based on the technical merits of the proposal itself.

It's probably worth noting that this is a fairly straightforward design/build application of the comprehensive results process. Really the way this is structured it's more of a straightforward design/build. Operation, long-term maintenance or equity involved in this selection.

COMMISSIONER JOHNSON: Phil, you mentioned the word equity.

MR. PHIL RUSSELL: Yes, sir.

COMMISSIONER JOHNSON: Which presents I think an interesting scenario. Let me give you a hypothetical and see if this is, in your judgment, in the realm of possibility.

Let's say one of -- this is a different a project, obviously. But one of the teams, if you will, that decides to put in a proposal, consists of Williamson Construction, et al, and they join up with somebody like the Nichols Investment Bank.

COMMISSIONER NICHOLS: Broke already.

COMMISSIONER JOHNSON: And the gist of their proposal is we will not only build this toll facility, but we will put in equity through the investment bank. And I mean it could be zero or one to 100 percent of equity, I mean, i.e., they can say we'll put up all the money and operate it as a toll facility, or they will put up -- they will build it for X, and we will partner with the State as a 50 percent partner in the ongoing enterprise, the venture of owning and operating this toll facility.

Is a scenario like that possible? I mean, is that within, in your judgment, the realm of the way that one of these proposals could be structured?

MR. PHIL RUSSELL: Absolutely.

COMMISSIONER JOHNSON: I don't know if this is the right time to ask that.

MR. PHIL RUSSELL: This is a fine time. Absolutely, that's within the realm of possibility. One of our other proposals that is ongoing is a 820/83 project up in the Dallas/Ft. Worth area. I think the commissioners did the *varies for that. Very straightforward, the equity will be a key component.

On many of these projects, anyone can come out and design a construction, equity is what we will be interested in leveraging the State's and Federal dollars. Absolutely.

COMMISSIONER HOUGHTON: But this project is a basic vanilla design construction?

MR. PHIL RUSSELL: Yes, sir. It's a little more straightforward design/build type alternative.

COMMISSIONER HOUGHTON: We don't have equity in here?

MR. PHIL RUSSELL: No, sir.

CHAIRMAN WILLIAMSON: Phil, without being critical, I just have to ask the question point-blank, did we instruct the district to ask for equity proposals?

Did we instruct the proposers if any of them offered equity it would be judged, or did we not encourage that?

MR. PHIL RUSSELL: I don't know the absolute answer to that, Mr. Chairman. I don't know that it's in part due to reluctance on the private sector to invest an equity, or perhaps the district selection process is too regimented.

I think in some ways we have to be careful because, again this is a project we had environmental clearance on Point A to Point B; pretty straightforward. If we're not careful, we get into that mindset of let's move, let's move very quickly and perhaps don't always see all the other options out there.

CHAIRMAN WILLIAMSON: We have not only 820/83, but I'm aware, the Department and different districts are developing and will soon go out with solicited proposals.

I hope, Mike, that we're being real clear with Phil and with the district. We can't just keep on the assumption that what Phil is going to give us meets our approval and we approve it. We can't just keep handing out 150, $180 million deals, within the cash flow we have.

At some point we've got to say to our industry partners, and to those that have come through the State in the last year indicating they would like to move to the State, we've got to tell them that equity -- a proposal for equity will be viewed favorably and graded favorably.

Because I've just got to tell you that, you know, somebody has got $200 million deal we need to do and they offer to put in a 100 million for a share of the toll, that means a lot, to this Commissioner. And I think and suspect it means a lot to the district itself. So I wanted to be clear about that.

MR. PHIL RUSSELL: Mr. Chairman, I will make a brief point. I think sometimes the Department has been described as kind of analogous to a battleship trying to turn. It takes it too far to turn and we're essentially trying to do it more like a troll boat.

But I think the message from the Commission and from Mike is very straightforward, not only on the 820/83, which I'm cautiously optimistic we're going to keep some equity in it. But I think on our I-35 Trans-Texas corridor proposal, which is also due in August, I think equity is going to be a major component of the selection process. So I think we are moving that boat very, very rapidly.

CHAIRMAN WILLIAMSON: Well, I know that we have industry partners who some publicly, but mostly privately, tell each of us, "We're not banks. That's not what we want to do. We can't do it. Yada, yada, yada." But it's, you know, it's our job right now to rebuild the infrastructure of the State. And I believe there are people out there, but if given the right signal -- and I know we sometimes are way too subtle from up here; we're not direct enough -- but if given the right signals, understand that equity means a lot to us.

You know, we have forged so many new paths with the public in the last year, we've been crystal clear about our intentions to take LCRA, any number of private construction concerns, Childress County, the Grace & MRA, whoever it is, in as concessionaires and partners.

We can't just keep saying up here; y'all have got to say it down in the trenches and we've got to mean it and we've got to say it: "From now on if you want to do the design/build, that's fine. If you don't have an equity component in your response to us and someone else does, we're going to highly value that equity component," as a way of getting more concrete and steel in the ground faster.

MR. PHIL RUSSELL: Absolutely.

CHAIRMAN WILLIAMSON: Proceed.

MR. PHIL RUSSELL: I will try to take some time on each one of these. I tried to walk through this process. The first column is the actual CDA contract amount from each consortia. Now, one of the requirements that the proposal has put is a maximum cash flow curve. Essentially there's a cash flow need means over the length of the project.

And so to create an accurate balance, here's the present value of that forward, or back, using '04 dollars the three percent per annum, that's represented by the A Column in this case.

CHAIRMAN WILLIAMSON: Go back to that, will you? So the contractor -- the amount we're going to pay out is the middle column?

MR. PHIL RUSSELL: Yes, sir.

CHAIRMAN WILLIAMSON: The amount that you graded everybody by is the right hand column?

MR. PHIL RUSSELL: Yes, sir. That's a fairly straightforward present value calculation based on this contract number. If you all choose to award this contract today, it would be this number, would be this to one of the four.

CHAIRMAN WILLIAMSON: Plus whatever other negatives and positives you're going to present?

MR. PHIL RUSSELL: Yes, sir.

The first adjustment that we would make negative or positive would be a schedule adjustment. And again, this is essentially the ability for each one of these firms, or their best guess how quickly they can deliver the project. The calculation forward is fairly straightforward. The 1100 number is fairly straightforward as well.

The idea, of course, is to have this segment of the project, State Highway 45 Southeast, completed at the same time concurrently as the completion of State Highway 130. That project is scheduled for December of '07.

So the simple math, the district brought it back and it came out to 1100 days. And that essentially set the upper limits for all the four firms.

Two of those firms came in at exactly that amount, 1100 days; two firms actually came in under that amount; the T3 Group and the Zachry Group came in at somewhat less. Zachry has the lowest schedule time with 930 calendar days. And that effectively became the base line. All four consortia--

CHAIRMAN WILLIAMSON: Became the base line because of the fastest?

MR. PHIL RUSSELL: The fastest. That's right. So what we did to normalize it, we compared that to the base line, 930 days, against all four proposals. And, of course, straightforward math of the difference from zero for Zachry and 1670.

Now, to that again to normalize it, again to put it in the dollar amounts so that we can add it to that contract, that TE contract price, we put in an adjustment, a user delay adjustment. The user delay in every person's, real person terms, you might think of it as the value of your time.

If this project is not built or if it's delayed, what would be the value of your time. You're sitting in traffic, or perhaps taking a detour, a longer detour. And the attempt was to quantify that and calculation came out to $15,000 --

CHAIRMAN WILLIAMSON: Well, wait a second. When you say "your time" you mean the persons who live and use the existing road network in southern Travis County now?

MR. PHIL RUSSELL: Yes, sir.

CHAIRMAN WILLIAMSON: So what we did was we said there's a value of $15,000 a day, to the range of consumers --

MR. PHIL RUSSELL: To the community.

CHAIRMAN WILLIAMSON: -- to the community, that is currently congestive, that will be less congestion when this is over?

MR. PHIL RUSSELL: Yes, sir.

CHAIRMAN WILLIAMSON: That's how we're going to associate the dollar value of these contracts?

MR. PHIL RUSSELL: Yes, sir. Based on the traffic that's anticipated to utilize this, and an empirical value of the value of your time.

COMMISSIONER NICHOLS: Before you jump off that, can I make an a comment on that point?

MR. PHIL RUSSELL: Yes, sir.

CHAIRMAN WILLIAMSON: Sure.

COMMISSIONER NICHOLS: In my briefing when I went over there with Phil and some of the administration, the value per day, you know, traveling public and that kind of stuff, is a real value. Lot of this is new and we are continuing to improve the process.

This particular project, it being a toll road, we actually will have toll revenue coming in. So in addition to the value to the public, it is actually a predictable, almost measurable, once it's open it will be very measurable, dollars that we would generate per day.

And I had commented to Phil that what we might do as we move forward on these type projects in the future, as opposed to taking an arbitrary figure to get to the toll road, work possibly with the estimated revenues that we had estimated in our traffic revenue studies. And in this case, that number would be, we think, substantially higher than 15.

MR. PHIL RUSSELL: I think so.

COMMISSIONER NICHOLS: So the actual toll collection might be 20 thousand a day or something.

COMMISSIONER HOUGHTON: But that wasn't factored into the equation in the selection?

MR. PHIL RUSSELL: No, not on this one.

COMMISSIONER HOUGHTON: I mean, when you're talking about -- you're talking about nine months ahead of the highest, you know, to deliver -- I mean, nine months earlier to deliver the product, so there's a value in the nine months based on toll collection. You have nine months of toll collection versus waiting nine months for that, and that was not valued in this.

MR. PHIL RUSSELL: Not in this particular one.

I think, Commissioner Nichols, I think your point is well-taken. There are a couple of ways to skin a cat. On the one hand you can use the toll revenue to project what it might mean, to factor in on the selection of the consortium. The amount of that obviously emphasizes to a greater or lesser degree how important we value earlier construction.

The flip side of that is once you have a consortium on board, you start looking at the bonus quality. And on the 45/Loop 1 project, that's exactly what we did. We utilized some of that toll revenue data and we kind of sweetened the pot. Put that out there and said if y'all can finish by this amount of days, you get this amount of bonus. That's had some really good effect.

So couple of different ways to skin a cat. My recommendation is probably use both of those.

COMMISSIONER NICHOLS: I was just throwing that out.

CHAIRMAN WILLIAMSON: I think you're right, Robert. From a businessman, businessperson's perspective, that's a valid measurement. But if the perspective -- one of the things to make this work, the public has got to know that doing this is resulting in an asset being built faster and we hope cheaper, but faster is the most important thing.

In order for the public to continue to have confidence, and more important the legislature to have confidence in these things, we have to give them descriptions that the normal person can understand.

And I think the normal person understands congestion has got a cost in southern Travis County, northern Tarrant County, eastern Parker County, western Harris County. And that cost is important to us and we are attempting to quantify and use that as a basis for our decisions. I think it's real important to do that.

MR. PHIL RUSSELL: Absolutely.

Okay. The next adjustment is related to the technical elements of the proposal. I failed to mention that early on. But when we receive these proposals, we did it on the 130 process and the district did it on the 45 process.

The proposal is essentially composed of two elements; pricing, contract amount element, and then a technical proposal, that essentially tells us who their team is, how much experience they have, how they intend to prosecute the work, their approach to right of way acquisition, design, and those sort of things.

What we've done, we've separated those. And we know for sure there is no cross-pollination between those two groups, those two committees. We really want the technical guys to look not at cost, but to look at the value of that proposal and how they intend to takea care of work.

And we want the pricing guys to look at just the numbers. And in fact the pricing committee don't even know which proposal belongs to whom. They just simply run the numbers. So --

CHAIRMAN WILLIAMSON: So the basis *ACC45, they see the Bidder A?

MR. PHIL RUSSELL: Yes, sir, exactly.

CHAIRMAN WILLIAMSON: And the pricing group doesn't have any interaction with the technical group?

MR. PHIL RUSSELL: Exactly right. In the case of 130, we absolutely prevented them from coming in to our project office where all the technical evaluation was done. Not that we didn't trust them. We wanted to make sure there was not even an air or perception that they were cross-pollinating.

CHAIRMAN WILLIAMSON: You said how they -- the experience of the people they bring to the table.

MR. PHIL RUSSELL: Yes, sir.

CHAIRMAN WILLIAMSON: What other processes do you use?

MR. PHIL RUSSELL: Well, just their overall approach to the project. This is a project they will be required to do the right of way acquisition, very similar to the 130 process. We wanted to get a sense for how they intend to handle that.

As you know, not only in Southeast Travis County, but much of Travis County and Williamson County, is an environmentally sensitive area, so they were judged on their approach to the environmental process and then some of the more rudimentary design, hydraulic analysis.

There were some discussions for the community out reach program make sure that the citizens of Travis County know what's being developed and why it's being developed. So all those things they were graded on and evaluated on.

CHAIRMAN WILLIAMSON: How much weight did they have in the total?

MR. PHIL RUSSELL: Overall, the value of the proposal originally anticipated to be about 20 percent, that's most it could be, which you will see when I bring up the next slide, because the proposals are so darn close that the value of that has much, much smaller -- probably less than five percent.

When you look at the proposals, the Hill Country group has the best proposal. There really -- all four proposals as you can see, did a very good job in putting together a great team, a qualified team, a very experienced team.

Again, the general process, same or similar type process on scheduling is utilized here. In fact, the highest value, the Hill Country Team at 88.68 essentially set the base line. All four proposals were compared against them, and then it was normalized into dollar figures. And, of course, 88.68 minus 88.68 is zero. And that's the average value on their proposals. Each one of them were also done the same way.

And when you add all of these up A plus B plus C -- and again, this is actual contract price, should you decide to award it, present value forward, and for that price schedule adjustment was made to each proposal and then a proposal adjustment was made to each of the four proposals, to ultimately come in with the best value proposal. And, of course, in this case Zachry Construction Group would represent the apparent best value to the State.

Again, one more time since I know, Mr. Chairman, this is going to be very easily confused. This represents nothing more than just our calculation of -- for selection purposes.

If you choose to award, this would be the amount. In this case, the Zachry Group would be that figure right there.

CHAIRMAN WILLIAMSON: Let me ask you, Phillip, prior to proceeding with the unsolicited CDA, our department no doubt did some internal work to sort through what building this as a normal state project might have cost and how long it might have taken.

I don't want to put on the record what that dollar figure might be, yet. Because I know you've got -- we've got to make a decision; you've got a contract you've got to let.

But I am curious, can the Commission members and the public take comfort that the numbers we're looking at are generally more or less than what we suspected it might cost using the traditional method?

MR. PHIL RUSSELL: Less.

CHAIRMAN WILLIAMSON: So we can take comfort in we believe we are saving the public money?

MR. PHIL RUSSELL: In my judgment, yes, sir.

CHAIRMAN WILLIAMSON: And what about time? Do we believe this will go faster than normal?

MR. PHIL RUSSELL: We think so.

CHAIRMAN WILLIAMSON: So the chief criteria of the Governor, which is do it, get it done faster and cheaper, appear to be being met at this time?

MR. PHIL RUSSELL: Yes, sir,

CHAIRMAN WILLIAMSON: The floor is open.

COMMISSIONER NICHOLS: I just want to make two last comments. First of all, I think y'all did an excellent job in the evaluation process. I think the four different groups that came in and made the proposals did a good job and made serious proposals, which we appreciate.

And last but not least, I want to say a comment about the importance of the project itself. The 130 project or the Central Texas Project, is probably the most significantly large turnpike project we've got going on in the State. I mean, it is huge. That is a critical link that we knew several years ago would have to be done.

We have a bond covenant that it would be done, and by a certain date. And this meets all of that, and fulfills one of the promises that we had made on the bond. And I salute you.

MR. PHIL RUSSELL: Commissioner Nichols, before you do that -- I do appreciate those comments. I should point out the office of the district really did the heavy lifting, Bob Daigh and Tim Weight those guys really handled this procurement. They had a little bit of assistance from my group, from Jack Ingram and Richard Monroe's staff. But they did by far and away the lion's share of the heavy lifting.

COMMISSIONER NICHOLS: This is a whole new area for us. I know we have done it now for several years, but not a lot, but we are getting a little better and a little better. I think the evaluation process is getting better. The industry certainly knows what to expect. We've discussed areas that we think we are going to approve on. I'm not going to go back through those.

CHAIRMAN WILLIAMSON: Other discussions, questions, comments, dialogue, Members? This is a big deal. Be sure you let us know exactly how you feel about it.

COMMISSIONER HOUGHTON: The only question -- and you trumped me there, Mr. Chairman -- is asking what would this have been if you had bid this thing as a regular construction project. And when you talk about 95 percent of its price, you're -- I think we've got a pretty good idea what it may have been.

And I think the future holds, as the Chair has discussed, the equity. What's missing is the equity component in this project, which I think going forward we'll see more of that.

MR. PHIL RUSSELL: Yes, sir. Commissioner Houghton, again, I want to reemphasize that, as the Chairman mentioned, typically, on CDA format we're striving to save time, primarily and hopefully the cost as well. And again in my judgment on this procurement, we are doing both; saving time that is critical to our Central Texas Project --

COMMISSIONER HOUGHTON: It would be nice to see --

MR. PHIL RUSSELL: -- and getting value for the project and --

COMMISSIONER HOUGHTON: Of course, I don't know what the revenue would have been on nine months earlier on the toll project. That would have been nice to see in that calculation.

COMMISSIONER JOHNSON: Well, you also have the liberty -- pardon me, Ted -- and this may sound like heresy, but you can have a free trial offer and let people use it for 30 days or 60 days or 90 days and get used to -- find out how it benefits them without paying for it.

And my guess is in the long-term, after the toll period starts, the traffic will be more than it would have been, just as people learn yes, this is a great route and it's going to do me wonders and I'm willing to pay whatever the -- dollar -- whatever the toll is.

VOICE: Marketing 101, right.

CHAIRMAN WILLIAMSON: Further discussion? Do I have a motion?

COMMISSIONER NICHOLS: So move.

COMMISSIONER ANDRADE: Second.

CHAIRMAN WILLIAMSON: I have a motion, Mr. Nichols, and second Ms. Andrade. All those in favor signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Congratulations. Big deal in the State of Texas. Go for it.

MR. BEHRENS: Agenda 5(b), Travis and Williamson Counties, General Engineering Consultant Quarterly Progress Report on the Central Texas Turnpike Project.

PHIL RUSSELL: Thank you, Mike. This is our latest update, it is for the period March 1st through May 31st --

Mr. Chairman, I think you're correct. These folks in the audience were hanging around for one --

CHAIRMAN WILLIAMSON: I told you. Should have saved it to the very end.

MR. PHIL RUSSELL: This is our ongoing quarterly update for the period March 1st to May 31st. On the traditional side --

CHAIRMAN WILLIAMSON: You'll notice the people from Childress are much more polite. They're still hanging tough.

MR. PHIL RUSSELL: This report is prepared, of course, by our general engineering consultants, which is PBS&J. Their role in this, of course, is as general engineering consultants to give us a neutral assessment of how the project is progressing, not only us, but the assessment to Wall Street, to the investors.

So on the more traditional side 45/Loop 1, which we last visited, the last construction contract has now been let for construction and has begun. All eight contractors -- many of those that were probably just leaving the room -- are really doing a great job taking care of business with the Austin district.

You know, I can't tell you, how proud I am everyday driving through that project, and seeing things that go on and there are a lot of things going on. There are caps and columns. We would love to take y'all or get the district to take y'all out there to the project sometime. They're doing a great job.

The Central Texas area had about 15 or 20 inches of rain in the last part of spring, early summer. And I'm proud to say that they worked through that, the construction industry and the district, and they're really making good progress.

All design is complete. All parts of the right of way are now available for construction. The general engineering consultants tells me that at this snapshot in time we are at least a year ahead of schedule on that project. Again, the original bonding debentures reflected September to December '07 completion for the elements of the 45/Loop 1 project, and we are a good year ahead of that schedule on 45/Loop 1. Lot of things can occur but they're really doing a great job.

On the 130 side, which is our last report. Again, design continues to head towards completion on all parcels. Segments 1, 2 and now 3 are all under construction.

Again, I get the opportunity everyday driving home to windshield inspect the project, and what a great job they are doing.

On the right of way area, certainly in areas involving public donors or half public donors, they continue to make good progress. To date, the district has or LSI has acquired a quarter of all parcels required for State Highway 130 are now available for construction.

Probably another important note, roughly half of those parcels that are going to be needed for 130, have now reached the stage where we are making offers to those landowners. And without going into a lot of details -- John Campbell can do it much better than I -- but there is a lot of work required to get to the point of offering for a piece of property.

So I take a lot of comfort in the fact we are at about 50 percent level of making that offer to the landowners. So I think things will really pick up.

Now, the right of way acquisition process, as I stated before, there have been some additional parcels there, and construction start-up date as I stated before, has been rescheduled for March of '05.

Again, I think LSI is taking some good strides, putting additional resources in that area. And once again our general engineering consultants maintain that all four segments are on schedule for completion by September-December of '07.

On the cost side, you know, they really are doing remarkably well. The first quarterly update I brought to y'all showed the project was approximately 227 million dollars under budget. Primarily due to construction underrun, on the traditional side, is due to the fact a lot of the right of way acquisitions are coming in at a lower value.

From that, we went to 317,000,000 under budget to 366,000,000 under budget, at this quarterly update, we estimate $435,000,000 under the budget for the project. Again, y'all probably get tired of me saying this, but that number will change; the next one may be lower but that number continues to increase.

I will be happy to address any questions.

CHAIRMAN WILLIAMSON: Members, questions, comments, dialogue?

Do I have a motion?

COMMISSIONER NICHOLS: So move.

COMMISSIONER JOHNSON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda Item 6a is our finance section. Item 6(a) will be accepting the Quarterly investment report. Presented by James Bass.

CHAIRMAN WILLIAMSON: James, do you have family in this part of the state?

MR. BASS: I have a brother in Ft. Worth.

CHAIRMAN WILLIAMSON: That's not close enough. The reason I ask, James, is that it is so rare we see you travel with us. We appreciate you coming all the way up here to Childress.

MR. BASS: For the record --

CHAIRMAN WILLIAMSON: Do people in Childress County know you're also known as Fast Jimmy Bass?

MR. BASS: They do now.

For the record, I'm James Bass, Director of Finance at TxDOT. Agenda Item 6a, the last agenda item Phil Russell just submitted to you. This agenda item is quarterly investment report of these proceeds of local contributions of a 2002 project, Central Texas Turnpike System, covers the third quarter of fiscal year 2004, which is March 1st through May 31st.

During this quarter I will point out that our book value of our investments declined by just under $92,000,000 during the third quarter. As we talked before, this is simply the matter of cash in-flows, comprised of receipts, local contributions and interest earned on our investments, compared to the cash out-flow, because of payments to contractors, landowners and bondholders. So as we have discussed before, on our balance sheet, taking an asset of investment and transferring it over into land acquired or construction in process or reducing a liability for the bonds that are outstanding.

Obviously, as construction continues to progress on this project, we would expect the book value to continue to climb each and every quarter, until we reached the conclusion of the project.

Having said that I would recommend your acceptance of the report.

CHAIRMAN WILLIAMSON: Questions, comments, dialogue?

COMMISSIONER HOUGHTON: So move.

COMMISSIONER ANDRADE: Second.

CHAIRMAN WILLIAMSON: I have a motion and second. All in favor of the motion signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BEHRENS: James, go ahead with b and c.

MR. Bass: Agenda Item 6(b) is also associated with the Central Texas Turnpike System, has an update and a readoption of the investment policy and readoption of the investment strategy of the Commission. The Public Fund Investment Act requires the Commission to readopt the investment policy and strategy at least annually.

Modifications of substance to the policy that are being submitted for approval are as follows.

The timing of the compliance audit as managed and controlled by the investment was changed from annual to at least once every two years as is required by state statute. At this time we plan on continuing the annual compliance audit but wanted to make the Commission's policy align better with the state requirement.

In addition to that, the Security Lending program has been added to the authorized investments of the Commission. The ability for the Commission to do this was added by the 78th Legislature. That was not specific only to the Commission but to all state entities. And even though we do not anticipate utilizing this in the near-term we thought it would benefit us to go ahead and align again our investment policy with those authorized investments allowed by the public fund investment act.

The last item I would point out is in the policy, there is a list of qualified financial institutions. That has been amended with some name changes of some of the firms and also the addition of a few firms.

The addition of the firms was based upon the advice of our financial advisors, to insure that if and when we do go out on bids for various investment instruments, that we are assured of getting strong competitive bids in that sector of the market.

And the staff would recommend your approval.

CHAIRMAN WILLIAMSON: Questions, comments dialogue, members?

Motion?

COMMISSIONER HOUGHTON: So move.

COMMISSIONER NICHOLS: Second.

CHAIRMAN WILLIAMSON: Have a motion and a second, all in favor signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BASS: One last thing I will mention on the investment policy, is I expect to be back in the next few months, as we continue to move forward with the development of the Texas Mobility Fund Program and the Fund 6 program, but more specifically the Mobility Fund Program, to amend the policy so we can have one investment policy for all programs of the Commission rather than having separate ones. And so it may -- likely will take a little bit more than we could get done by this time. Requires a readoption.

CHAIRMAN WILLIAMSON: Will you wait until we're traveling again before you come back to see us?

MR. BASS: Of course.

Agenda Item 6(c), requests authorization to extend the bond purchase agreement related to the variable rate revenue bonds for the Central Texas Turnpike project. The bond purchase agreement provides for the bank of Nova Scotia to purchase the variable rate bonds should a market for those bonds not exist.

Staff recommends your approval.

CHAIRMAN WILLIAMSON: They're, in essence the back-up, to backstop the insurance agent --

MR. BASS: Correct. The variable rate that is set every Wednesday. And the holders of those investments, if we did not have this standby bond purchase agreement, could come to the Commission and demand payment of all those, and there's 150 million outstanding, at that time.

CHAIRMAN WILLIAMSON: Bank of Nova Scotia?

MR. BASS: Bank of Nova Scotia, if that were to be the case, they would step in and make that payment to the bond holders and subsequently they would trade that into the market. This would continue the contract we have in place for another year with the Bank of Nova Scotia.

Staff would recommend your approval.

CHAIRMAN WILLIAMSON: Discussion?

COMMISSIONER HOUGHTON: So move.

COMMISSIONER NICHOLS: Second.

CHAIRMAN WILLIAMSON: Have a motion and a second. All in favor of the motion signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BASS: The last item I have here for consideration today is Item 6(d); seeks authorization for the department to begin negotiations with Montgomery County on a pass-through toll agreement.

If negotiations prove to be successful we would then come back to the Commission for final approval.

Montgomery County has submitted a pass-through toll proposal providing for the county to construct, maintain and operate improvements to the following roads, Farm To Market 1485, 1488, 1314 and 3083, as well as direct connectors from State Highway 242 to State Highway 105 and Interstate 45.

In their initial submittal their plan was that for the farm to market roads I mentioned, there would be no other tolling mechanism other than the pass-through or shadow toll. However, on the direct connectors, those actual facilities would have an individual driver toll as well as the pass-through toll associated with that. In their submittal, the county lists the pass-through totaling 68 million to be paid beginning in fiscal year 2007, with a final payment in 2013. However, your approval today would in no way be an agreement to any specific terms but would merely allow the Department to begin serious negotiations with the county to hopefully arrive at mutually beneficial terms that we can then bring back to the Commission for final approval.

Staff would recommend your approval of this Minute Order so we may begin negotiations.

COMMISSIONER HOUGHTON: Is this the first one you've seen?

MR. BASS: This is the first one that's been processed, yes, sir.

COMMISSIONER HOUGHTON: In this form?

MR. BASS: Correct.

CHAIRMAN WILLIAMSON: Amadeo, are you available?

MR. SAENZ: Yes, sir.

CHAIRMAN WILLIAMSON: Would you come up here and make sure everybody understands.

Amadeo, we're taking on three pretty big deals at this Commissioner's meeting. One we just knocked down, State Highway 45 project. This is the second. We need to be sure that we're comfortable in sending our guys forward, members, because this is the first really big shadow toll or pass-through toll agreement that will more than likely be recommended by our staff to accept.

So I want you to go into some detail on this from an engineering perspective. James has helped us with the financing. But from an engineering perspective, go into detail with the Commission, on how this advances projects that we believe are important to the State, faster than they would otherwise be advanced.

MR. SAENZ: Okay. For example the projects that are in Montgomery County are scheduled sometimes between 2009 and 2011. Part of those projects are funded and part of those projects are not funded.

By Montgomery County coming forward, they will now put in the additional money that's needed and build those projects, say in the next year or two. So in essence, since we're accelerating the program; those projects get put in place faster.

Montgomery County pays for that, then based on the traffic that will be using those facilities, then we will reimburse them their money back or a portion of their money back.

We need to sit down now and negotiate the actual agreement as to how much will be reimbursed to the county and at what rate, that we are going to be looking at, traffic.

Another thing we are looking at, especially is how much traffic or how much revenue will those potential toll projects bring in. That may be part of the negotiations.

CHAIRMAN WILLIAMSON: So the project, somewhere in our planning documents that we would eventually, eventually get around to funding and allowing to be built.

MR. SAENZ: That's correct.

CHAIRMAN WILLIAMSON: But Montgomery County has looked at this change in the law and said, "Tell you what, TxDOT. We will come up with the money. This is what the law anticipates, because we want the roads right now. All we want from you is a partnership agreement to reimburse us for that advance".

MR. SAENZ: Right.

CHAIRMAN WILLIAMSON: This will permit us to build these projected, five years faster?

MR. SAENZ: Five to six, sir.

CHAIRMAN WILLIAMSON: So this is precisely what the Governor anticipated when the pass-through toll provision was created.

MR. SAENZ: Exactly.

CHAIRMAN WILLIAMSON: And the reason we really want to emphasize this in Childress, there is no reason why this tool is applicable only to Montgomery County.

MR. SAENZ: Exactly.

CHAIRMAN WILLIAMSON: It's applicable to Knox County -- may not be applicable to King County. That might be a stretch but --

*MR. KEENER: You don't think the loop around Guthrie --

MR. SAENZ: It's applicable to --

CHAIRMAN WILLIAMSON: Unless we can --

MR. SAENZ: Applicable to any county in the State --

CHAIRMAN WILLIAMSON: -- charge for the cows.

MR. SAENZ: It can also be submitted to a developer, where there can be some private equity put in, come in build the project and we could reimburse the private entity. So it gives us a tool with a lot of flexibility to be able to get projects built today and then paid for based on the -- a lot of people that want to take advantage because they think that their project will generate traffic, to take a chance to get that project built, that will generate the traffic that will encourage the economic development. And they will get reimbursed that way.

CHAIRMAN WILLIAMSON: But you're negotiating instructions and the negotiating instructions to Mr. Fast Jimmy Bass are to focus on a per vehicle reimbursement rate. It becomes almost a self-regulation device. In other words, Taylor County is not going to bring us a project that will never pay out, because they would never get their money back.

MR. SAENZ: That's correct.

CHAIRMAN WILLIAMSON: So in theory, all we're going to see at the Commission level, every second time through, is going to be projects that really do make sense.

MR. SAENZ: That's correct.

CHAIRMAN WILLIAMSON: Like I said, members, this is a big deal. This is a first. So please take all the time you need to give guidance to staff about where you want to go with this --

COMMISSIONER NICHOLS: I have a comment. It's going to be real interesting because it is the first one and it's new to us all and as we evolve through it, however it ends up, I'm sure the next time around we will get better at it.

One of the things I did not think about -- I'm trying to make sure -- or even ask if I heard what I thought you might have said -- on all of our new expansions and new locations, you know, we'd ask the district to do a toll liability. I'm talking about the normal toll where you charge so much and on pass-through, you're almost kind of a reversed kind of thing. On these projects while we're doing this evaluation, are we also going to go ahead and run the normal numbers?

MR. SAENZ: Yes, sir. We are going to run total liability on tolls --

COMMISSIONER NICHOLS: So they as well as us could see what it would be if it was a toll road as opposed to a pass-through.

MR. SAENZ: Yes. By taking this project as potential pass-through toll project, and if it's got toll liability, this could be an additional funding for that entity to use.

COMMISSIONER NICHOLS: Just to eliminate the confusion to the audience, you've heard that -- the audience heard the term shadow toll and they've heard the term pass-through toll. And it is one and the same? The name is actually -- used to be shadow toll now it's pass-through toll?

MR. SAENZ: Yes, sir.

COMMISSIONER HOUGHTON: You're going to do a 10-R study on the liability of the project?

MR. SAENZ: Yes, sir.

COMMISSIONER HOUGHTON: Logistically, how do you monitor what goes across that new piece of -- that new asset, that new road?

MR. SAENZ: We have traffic counts, counters. These are existing highways.

COMMISSIONER HOUGHTON: Right.

MR. SAENZ: We have traffic counts on the -- these are existing highways. We have counters on these highways. We do traffic counts, predict future traffic on these highways.

COMMISSIONER HOUGHTON: We are going to get an accurate number as to the pass-through.

MR. SAENZ: Yes, sir. We will have an accurate number -- let's say the project gets built, you will have an accurate number as to how many vehicles are actually using this facility. And that number will then be used to reimburse the entity that we entered into agreement with.

COMMISSIONER HOUGHTON: Other communities have done this across the country. But the question is, what's the duration of the bonds that Montgomery County is going to sell? Are they going to be revenue bonds, GO bonds, 25-year bonds, 15-year bonds, do you know or do we know yet?

MR. SAENZ: I don't have that information. In their proposal, it just says the county was going to issue some--

MR. BASS: GO bonds.

COMMISSIONER HOUGHTON: They're going to be GO bonds?

MR. BASS: Yes, sir.

COMMISSIONER HOUGHTON: So I guess the answer to the question is, not with regard to the private sector but with regard to county and cities, it could be any kind --

MR. SAENZ: It could be any --

COMMISSIONER HOUGHTON: -- we don't really. It's not going to much matter to us -- little bit but -- VOICE: Yeah, I think it is.

CHAIRMAN WILLIAMSON: I guess the truth is, if you are a property rich county, you don't have much debt, your cheapest debt instrument might be borrowing against your tax base.

MR. SAENZ: Right.

COMMISSIONER HOUGHTON: And if your public understands you're going to get reimbursed based on the traffic use --

MR. SAENZ: Correct.

COMMISSIONER HOUGHTON: -- that would be a logical move to make.

MR. SAENZ: Right. We have in our rules a mechanism where we have set a base to the community on the reimbursement that allows some protection through the State and the local entity. So if you look at that, that can be used as kind of a backstop, that the county knows you will get at least this amount of money per year that they can use to back their indebtedness.

COMMISSIONER JOHNSON: The debt spread, great deal for them.

MR. SAENZ: Yes, sir.

COMMISSIONER JOHNSON: I wanted to emphasize something that Robert referred, and that is the first. And we're going to be on a learning curve the way the structure, and we have great flexibility and we're going to learn as we go through. And I think that's extremely important. If we get this exactly right the first time I think we'll all be somewhat surprised.

I want to salute Montgomery County for coming up -- coming forward and being very expeditious in grasping the benefit of this particular tool, and getting their act together and coming forward with it.

I mean, this gets a lot of work done in Montgomery County -- obviously that's a very growing area of the State, as being exceedingly important. And yet, as we pointed out, it speeds up the work from anywhere from five years to who knows under the traditional methods of getting these things done. So I think it's terrific.

I've gone all over the state and talked about these things and how important the Commission feels -- and I hope I'm not speaking on behalf of the Commission in an inaccurate way -- but this can be a very effective tool. And I think it's a terrific day not only for the Commission and the state but Montgomery County. My hat's off to them you I know it will work out.

CHAIRMAN WILLIAMSON: What's this fellow's --

COMMISSIONER JOHNSON: -- and others can learn from them.

CHAIRMAN WILLIAMSON: -- county judge's name?

VOICE: Gary Sadler.

CHAIRMAN WILLIAMSON: He didn't show up? Anybody from Montgomery County show up? Gary Pate.

Gary, I wondered why you were here but you were probably here for several things.

MR. PATE: This is one of them I certainly appreciate talk but I --

CHAIRMAN WILLIAMSON: My lawyer is going -- why don't you come up here. I have a great lawyer and I recognize his eye-brows going up; when you do things right.

Plus it's so rare I get anyone from your profession to come to the microphone.

MR. PATE: I'm happy to be up here. We do appreciate your remarks. Montgomery County is par for the local government to step up and be first. They kind of wanted to see other things happen before we were there first; but somebody has got to be first. And I really think the county is trying to respond to the direction you're setting.

I mean, they understand that they need to look to their own resources, to accelerate these projects. Montgomery County is a very rapidly growing suburban county.

As in all these situations, your system roads are the first corridors that support economic development; first to be over-loaded and so forth, and so these projects are badly needed.

They're competing for funds all over metropolitan Houston. And so the county was happy to support this program, to step up and see if we can accelerate these projects with this tool.

CHAIRMAN WILLIAMSON: I'm like John. I don't want to speak too much for the entire Commission. But I've just got to tell you, we really have a concern about trying to find a way to build where people are going to be and quit building where people already are.

And I view this -- I've spent a lot of time looking at the plan -- and maybe you had a hand in the plan, Gary -- it is a well thought-out plan. It's exactly what we're trying to accomplish.

MR. PATE: We are the consultants who developed the program along with Mike Weaver, the prime strategist, who helped support it.

I want to say that we've had a really positive experience working with staff, Amadeo has been very supportive in moving this program forward.

The funding program, I might touch on that just a minute if you like. What we're trying to accomplish here is put this pass-through program on a programatic basis rather than a project specific basis. Because we want to be able to plan our transportation needs in the long-term and we want to be able to work with Gary Trietsch so he can understand what we are trying to do and we can work together on this and coordinate this. That's one thing.

The other thing is, we want to treat our money, our fund money as a revolving fund. We want to pay these projects, then we want to collect from you, then we want to reinvest them in more system projects --

CHAIRMAN WILLIAMSON: We like that a lot.

MR. PATE: -- And/or toll roads. Now candidly, you know, the threshold feasibility of toll road in Montgomery County is a few years away. But that doesn't mean the get-ready work is not necessary now.

CHAIRMAN WILLIAMSON: Right.

MR. PATE: So we want to take the money we get back from you and we're going to press for as quick a pay back as possible justified by the traffic, so that we can take that money and reinvest it. And we are willing to make a commitment to do that. We're not going to take the money and pay down our bonds. We are going to keep it in projects. That's the whole basis for this project

COMMISSIONER HOUGHTON: I was also noticing, Mr. Chairman, that their long range projects total 878,000,000.

MR. PATE: Yes, sir. If you notice in the proposal -- we only have two lists. One is the list that we're going to try do in this current program.

COMMISSIONER HOUGHTON: Right.

MR. PATE: So the other list, is everything else we need in the county. So here is one county in Texas that needs to do $800 million worth of stuff, long-term, and some of them might be toll candidates and others might not be. We're going to step up and see what we can get done.

I can't stand up here and tell you we're going to do all this 800 million with this technique, but we're going do a significant amount of it.

CHAIRMAN WILLIAMSON: And we're going to try to help you do that.

MR. PATE: We appreciate that.

CHAIRMAN WILLIAMSON: Hats off to that county judge.

MR. PATE: Judge Sadler would say thanks, if he were here. County commissioners --

They're setting their tax rate at commissioners court today, which is the reason that none of them wanted to be up here.

CHAIRMAN WILLIAMSON: We can appreciate that.

Other questions or dialogue?

COMMISSIONER ANDRADE: Mr. Chairman? Amadeo, I would like you to keep us informed as close as possible, because it's something we can share with the rest of the state. I'm excited. I think today has been a great day with the CDA, and this new project. So please keep us informed so that we can --

MR. SAENZ: We will be glad to do that. One of the things I will add, is we received a lot of these new rules. Some were expanded from prior sessions. But one of the things we have noticed is that we need somehow to get the word out.

And we have just developed an RMA guidebook that's just come out of the press. It's on our internet site now. We have it in -- we can send it out. I handed out the first few this last week in Hidalgo County, before we came up here.

CHAIRMAN WILLIAMSON: I have a copy right here.

MR. SAENZ: That's it right there. We're also at this time developing a pass-through toll project process that we want to use, that will guide potential partners through the whole process from what it takes to submit your proposal and how we will handle it. This will be a way we can make it easier. And we will learn as we go from this one.

COMMISSIONER ANDRADE: Do you think Montgomery County will mind or do we have to get permission to talk about them throughout the state?

MR. SAENZ: I don't think they will mind, but we will ask them to make sure?

COMMISSIONER JOHNSON: Mr. Chairman, if there is no other dialogue, I will be pleased to put in the form of a motion the acceptance of this.

CHAIRMAN WILLIAMSON: Mr. Johnson of the Houston/Montgomery County area, makes the motion. Do I have a second?

COMMISSIONER ANDRADE: I second.

CHAIRMAN WILLIAMSON: Ms. Andrade seconds. All in favor of the motion signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. And I want to say again, that's two of -- in my view, three of the most important things we have done in a long time. I'm well pleased. Let's go sell this tool.

MR. BEHRENS: Agenda Item No. 7, right of way area again. And this is to recommend the authorization of advance acquisition of right of way for State Highway 99 in the Houston area; also known as the Grand Parkway.

CHAIRMAN WILLIAMSON: This would be what I consider to be the third most important thing we're going to do today.

MR. CAMPBELL: Good afternoon. For the record, my name is still John Campbell, Director of the Right of Way Division. I would like to present for your consideration Minute Order, Agenda Item No. 7 to authorize the use of option contracts for the potential future purchases of right of way for the State Highway 99/Grand Parkway.

The Minute Order provides the authority for the Houston district engineer to negotiate the execution of option contracts and to stand in front of the options and any related expenses.

The State Highway 99 project was an ideal opportunity to pilot an option contract for the following set of circumstances. Much of the property in the subject area is currently undeveloped ranch and farmland but is scheduled for dense commercial development and residential development.

The timely execution of option contracts to effectively purchase the developmental rights during the interim period scheduled right of way possession time, provides a strategic opportunity to realize the savings of some costs, less complicated negotiations and thereby more efficient acquisition process.

Staff recommends your approval of the Minute Order.

CHAIRMAN WILLIAMSON: Members, this is -- although we spent quite a bit of time a few months ago on options, this is really the first big time application. And this is, of course, a big time project in our state. So if there are any words of wisdom we wish to convey to John or to Mike or to the staff that will be doing this, and on to Gary or to the private sector that may be out there listening, this is a real good time to do it.

COMMISSIONER NICHOLS: Only advice I had, and I will repeat, this is the same advice I gave when we did the proposal on this -- that we seek some outside professional -- there are people in the area of financing, specializing in some of these things, to see we get our valuations straight, of what that option is worth. Other than that --

And then once we get that down with administration, we go and try to do some training in areas that we think we may be repeating, some area that has nothing to do with this one. I think this one is great.

MR. CAMPBELL: If I could just make a reply to that, Commissioner Nichols, we have in place vehicles and the means with which to, as we identify potential specific uses of the options, to hire technical experts to give us that kind of input, on a case by case basis. But we will heed that advice.

COMMISSIONER JOHNSON: John, my impression, this is sort of a template of a project that this method really fits fairly well.

MR. CAMPBELL: Yes, sir.

COMMISSIONER JOHNSON: Hopefully it can be successful because it will accomplish a lot if it is. I think we're somewhat in uncharted waters, about whether or not we're going to be successful. But it's clearly something that needs to be done.

CHAIRMAN WILLIAMSON: Uncharted waters, hell, John. We're in the middle of the Atlantic; we ain't got a gyroscope. The perfect storm.

COMMISSIONER NICHOLS: As a state agency it is unusual or nonexistent, but business does it all the time.

CHAIRMAN WILLIAMSON: Oh, yes. They do it all the time. Great idea.

COMMISSIONER HOUGHTON: I so move.

COMMISSIONER JOHNSON: Second.

CHAIRMAN WILLIAMSON: Before I call for a vote, I want to echo what you've heard before, John. You know, we've got to -- three problems really that we face today.

We're always building where people already are. We're trying to address that.

We're always buying and tearing down buildings instead of buying and preserving corridors.

And we always make people kind of wait to the last minute to figure out what we are doing.

And in my view these options give us the option to quit buying and tearing down buildings and to give people a clear signal about what our intentions are in different areas, without violating the law.

I agree with John. This is a template. This is a big deal. We need to be about doing this, make it work, make it work good. Legislation has given us an awful lot of authority, they've put a lot of trust in us. And this is one of the big ones to show that it was well deserved.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Thank you, John.

MR. BEHRENS: Agenda Item No. 8(a), Award or Reject Highway Improvement Contracts for the month of July. Thomas.

MR. BOHUSLAV: Good afternoon, Commissioners. My name is Thomas Bohuslav, Director of the Construction Division.

Item 8a(1) consideration of award or rejection of highway maintenance contracts let on July 8th and 9th of 2004, engineer's estimated cost of $300,000 or more. 20 projects average of 3.85 bidders per project.

The staff recommends the award of all projects.

CHAIRMAN WILLIAMSON: When are we going to turn this exhibit around and read vertically from top to bottom?

MR. BOHUSLAV: The Exhibit?

CHAIRMAN WILLIAMSON: I just asked.

MR. BOHUSLAV: I didn't know we had been asked to do that but I will do that if --

CHAIRMAN WILLIAMSON: Maybe you haven't.

Members, question of Thomas on this matter?

COMMISSIONER NICHOLS: So move.

COMMISSIONER JOHNSON: Second.

CHAIRMAN WILLIAMSON: I have a motion and second. Those in favor signify by saying aye?

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

MR. BOHUSLAV: Item 8a(2) is the consideration or rejection of highway construction building contracts let on July 8th and 9th, 2004; we had 81 projects, an average of 4.6 bidders per project. We do have an overrun of about ten percent this month.

We have a project we recommend for rejection in Cass County. It is a project 94504 of 25. We had one bidder on the project and it was 60 percent, 62 percent over. We want to go back do some redesign, and try to get more bidders and get more competition for the project.

Staff recommends award of all these projects. Any questions?

COMMISSIONER NICHOLS: I don't have a question. I have a comment. Are you ready for us --

CHAIRMAN WILLIAMSON: You bet. Yes, sir.

COMMISSIONER NICHOLS: Two comments. One is not within the contracts or the recommended rejection but the -- I just wanted to publicly mention that this is probably the second month or third month in a row where we're consistently seeing eight, nine, ten percent costs for actual bids coming in over our original estimates. And the reason is that the raw material cost and the tightening of the market, all these factors coming together.

MR. BOHUSLAV: Steel prices have come up. And the other factor is we will, by September of this coming fall letting, have a new wage rate in our contracts, that has increased wages by some 15 to 20 percent, average, across the board average on a --

COMMISSIONER JOHNSON: How much --

MR. BOHUSLAV: Yes, sir?

COMMISSIONER JOHNSON: Pardon me. I didn't mean to interrupt. The percentage overrun; is that on a dollar basis?

MR. BOHUSLAV: Yes.

COMMISSIONER JOHNSON: So actually, if you remove the one overrun in the Houston District, that's 50,000,000, 55,000,000 overrun.

COMMISSIONER NICHOLS: That's that big overrun in the Houston area where you're from?

COMMISSIONER JOHNSON: That's that Nichols Investments.

(LAUGHTER)

COMMISSIONER JOHNSON: Really, the point I wanted to make which I didn't complete was, whereas we are consistently seeing eight -- seven, eight, nine, ten percent overruns based on our original estimate, two years ago in the middle of the recession, we were seeing consistently minus seven, minus eight, minus ten percent bids coming in based on estimates.

And that's a 20 percent spread; 20 percent spread. Which would make a huge difference in the amount of rehabilitation work and construction. Anyway, it's pretty dramatic.

The second thing was, this is a huge letting this month, 600 million. So when you add to that the maintenance, 17 million and the contract we just issued for the State Highway 45, which is 154 million, we're up around 771 million dollars this month combined--

COMMISSIONER NICHOLS: Committed 58 million to Montgomery County.

COMMISSIONER JOHNSON: Well, keep talking and keep negotiating. Anyway, we're over 770. That is huge. That's a big deal.

MR. BOHUSLAV: When I'm fortunate enough to visit with other states in talking about our lettings and tell them what we let this month, it will drop their jaws.

COMMISSIONER NICHOLS: Great job.

CHAIRMAN WILLIAMSON: It wouldn't drop their jaw much more than I dropped mine when I saw this 50 million dollar difference in Harris County, which I want to talk to you about in a minute.

I've got a couple of concerns, Mike, in a minute. Did I cut off one of my colleagues?

I've got a couple of concerns, Mike. I don't doubt that we need to move forward because the Katy Freeway is important to the state, in fact, it's important to the entire southern region of the United States. We really don't have much choice.

But, I'll tell you, if it's going to be, for the next six months to a year that we're having quite a bit of minimum price, ten percent or more of our estimates, it would probably be a good idea for us to change our scheduling some, where we know about it maybe 60 days ahead of time, as opposed to 15 or 20 days ahead of time. Because one of these days I'm going to feel real uncomfortable about this.

I don't have any doubt that everything is fine, but this sort of took my breath away. And I speak of job No. 3001, Interstate 10 in Harris County.

MR. BOHUSLAV: About the size of overrun?

CHAIRMAN WILLIAMSON: Right. And I would have liked, and I think I need a little bit more time to prepare for this.

MR. BOHUSLAV: Okay. We do review those for some period after they're let, which is the first few weeks of the months, so - but it does take a little time.

CHAIRMAN WILLIAMSON: Yeah, but I'm having to make a decision today, right --

MR. BOHUSLAV: Yes, sir.

CHAIRMAN WILLIAMSON: -- is what I'm telling you.

And when is the quickest it would have been available for me, this information?

MR. BOHUSLAV: I'm trying to remember the letting. Probably within a week.

CHAIRMAN WILLIAMSON: I just need a little bit more time to absorb it and be prepared for it.

MR. BOHUSLAV: That would be the case for the holiday months, Thanksgiving and Christmas because those --we're really tight on those.

CHAIRMAN WILLIAMSON: Like I said I'm not concerned about one or two million, but 50 million dollars, if we -- we need to find a process, let the Commissioners have a little more notice than that.

MR. BOHUSLAV: We will do that. I have been talking to the district about their unit prices they've been using, and what we can do to -- they, of course, have had some other problems with significant overruns recently.

They are going to go back through and evaluate their estimate process, see if they can make adjustments for it. But I think they had or thought they had or but they want to go back and look at it again.

And of course use these prices, these prices here for their future projects in looking how they might do bids. Our highway cost index has risen some recently, and starting to go back up, last month and this month as well. We are starting to see the unit cost prices go up as well.

CHAIRMAN WILLIAMSON: Is this the first time *Valco, Bailey and constructors have teamed up?

MR. BOHUSLAV: I don't know.

MR. BEHRENS: I don't know if it's the first time. It's first time I can recall.

CHAIRMAN WILLIAMSON: It's the first time I remember seeing them.

Okay. Any other discussion, members?

Motion?

COMMISSIONER HOUGHTON: So move.

COMMISSIONER JOHNSON: Second.

CHAIRMAN WILLIAMSON: Have a motion and a second. All in favor signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no.

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries. Thank you, Thomas.

MR. BEHRENS: Minute Order No. 9 Routine Minute Orders. They were posted on our agenda prior to the meeting. If you would like to discuss each of them individually, be glad to do so. Otherwise, I recommend approval.

CHAIRMAN WILLIAMSON: Do we have any testimony to offer on any of these items?

MR. BEHRENS: No, sir.

CHAIRMAN WILLIAMSON: Mike, we're putting you on the spot, I guess by asking where our property is. But I will have to ask you as I always do, to the best of your knowledge are you or any of the staff aware of any conflict of interest or property of Commissioners involved that might be affected by any of these?

MR. BEHRENS: I reviewed all the Minute Orders. I don't think, to my knowledge, affect any of the Commissioners.

CHAIRMAN WILLIAMSON: Any members have any inclusions they wish to offer for the record on this vote?

Okay. In that case, I will entertain a motion.

COMMISSIONER JOHNSON: So move.

COMMISSIONER HOUGHTON: Second.

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

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no.

(NO RESPONSE)

CHAIRMAN WILLIAMSON: Motion carries.

Is there any reason for us to need to consider an Executive Session, Mr. Behrens?

MR. BEHRENS: No, sir.

COMMISSIONER JOHNSON: Mr. Chairman, might I interject here? I know we have some people who have requested to address the Commission. I'm on the last plane back to Lubbock. I don't want any of the speakers to think I'm being rude if all of a sudden they see me disappear, rude or disinterested in what you have to say, but I might have to disappear.

CHAIRMAN WILLIAMSON: I appreciate that.

We are now entering, as John led into, the Open Comment Period of the meeting.

Are there any speakers signed up to comment openly? Yes. We have a newcomer to the world of transportation. Gaynelle, where are you?

MS. RIFFE: Right here. And I pass.

CHAIRMAN WILLIAMSON: No. Don't pass. No. You're one of our strongest partners.

MS. RIFFE: Well, okay. I just want to thank you for the opportunity to welcome the new Commissioners, and see y'all again. And I don't want you to forget the two corridor designations, Spirit 54 and Support the Plains. Thank you very much. You're doing a great job.

CHAIRMAN WILLIAMSON: Listen, we always want to hear from a roadie, always.

MS. RIFFE: And I do want you to know it took four hours from Stratford, four-lane divided highway. I love it.

CHAIRMAN WILLIAMSON: Mr. Martinez.

MR. MARTINEZ: Mr. Chairman, Commissioners, thank you for the opportunity to get up here and speak before you.

My name is Ricky Martinez. I am with the Caprock Telephone Cooperative. Two hours, approximately south-southeast of here. And those Super 2s they talked about, they're really nice. I drove them on the way up here.

Appreciate you being here. What I would like to tell you about is we provide telephone service over a 4800-square mile area, which includes three districts TxDOT has, which is Childress, Lubbock and Abilene.

And one of the comments that I want to make is regarding the update of the Utility Accommodation Rule and Policy that Mr. Campbell spoke on last month. I was fortunate enough to go down to Austin to hear him speak to that.

Let me give you some background really quickly. I was afforded the opportunity to be aware of this happening, 18 to 19 months ago, right when it started. And I have been involved very much from the get-go. I have been down to Austin, met with the staff there in Austin, on one occasion, and been in constant contact over the phone as well via e-mail.

I attended one of the four formal meetings that y'all commended TxDOT for having, which I do as well. I attended the one in San Antonio and was able to speak at that time.

I attended your meeting last month in order to hear Mr. Campbell speak and to hear what y'all had to discuss with him in regards to that.

And I am here today, first of all, to commend TxDOT for affording me the opportunity, as they did all the utilities.

But I have taken it really a step further for our cooperative to be involved, because it's something critical that we feel that we need to stay in touch with, and commend them for giving us that opportunity to be involved from the get-go, treating us with respect and courteousness and professionalism. And that's gone a long way.

Our main concern is this, the P.E. seal requirement. That requirement was in what we believed the last proposed rule, that we saw the draft is definitely of a concern. We are 65 miles from the nearest engineer that we have. We use an engineering firm.

To require a P.E. seal on every one of the TxDOT right of way permits that we have would be fairly expensive.

We provide services just north of Paducah. From Lubbock to Paducah to have a P.E. field staff to be here every day during a construction project that we would have on the right of way, would be fairly expensive.

And I do know I talked to a P.E. coming back from Austin on that last trip when I went to see you last month. And they said they would want to have someone on site, a consultant on site, if a P.E. seal is required during the entire process.

And we do know that TxDOT has to have some P.E.s, or some way to have people accountable for the right of way, for utilities. That is understood. It's not our -- we agree that there has to be a point, location is critical.

What we feel is that if you are going to have a P.E. seal in that right of way accommodation policy, either make it a measure of last resort or afford it as an opportunity that is only used as a measure of accountability for someone that is noncompliant.

Let me go on to say that the Childress District encompasses the largest portion of the counties we provide services in. So, I would primarily have contact with Sandra Hatcher here in Childress. And we have an excellent working relationship with Childress, as well as the Abilene and Lubbock District, and the P.E. seal, we feel in our case, is -- we would not like to see it in there, but if it is in there, please, let's only use it as a measure of last resort.

With that, I want to thank you again for allowing me the opportunity to be up here. And if you have any question --

CHAIRMAN WILLIAMSON: Mr. Nichols?

COMMISSIONER NICHOLS: Yes. First of all, thank you for following the process and reading that and coming here and making your concerns be known. It's real important to us. Because so often people don't do that and it really does help.

Certainly, I'm not going to try to speak for any other Commissioner. But you're dealing with a rule where we're placing the locations of a utility in the right of way?

MR. MARTINEZ: It is my understanding the way I read it with the P.E. seal -- Mr. Campbell is here, I believe --

COMMISSIONER NICHOLS: I'm not talking about the actual P.E. -- the P.E. seal is one issue.

MR. MARTINEZ: Right.

COMMISSIONER NICHOLS: This has to do with the actual location?

MR. MARTINEZ: Correct.

COMMISSIONER NICHOLS: Primarily how do we know where you actually put it to drive back later?

MR. MARTINEZ: Right.

COMMISSIONER NICHOLS: I will tell you personally, I'm not too hot on the P.E. seal on that myself, so I'm not going to be supportive of that particular issue.

But I think somehow we have got to have an -- we have to be able to identify where it went, you know, whether it be by surveyor, whether it be by -- I don't know -- some type of GPS. We're going to have to know where those things are.

MR. MARTINEZ: Agreed. Yes, sir.

COMMISSIONER NICHOLS: In addition to the comments you've made today, of what you don't like, I would recommend that you file, submit in writing, what you would recommend.

MR. MARTINEZ: Yes, sir.

COMMISSIONER NICHOLS: That if we are not going to use P.E. seals, we need to know exactly where it's going to be; this is how you think we should do it.

MR. MARTINEZ: Yes, sir.

COMMISSIONER NICHOLS: You see what I'm saying?

MR. MARTINEZ: Yes, sir.

COMMISSIONER NICHOLS: I think that would be very helpful.

MR. MARTINEZ: I do understand the rule or the accomodation policy is up for adoption before going to the 30-day comment period, at the next meeting coming up, next month, according to the agenda that I've seen thus far.

COMMISSIONER NICHOLS: Our written comment period is not up yet?

VOICE: Hasn't even started yet.

MR. MARTINEZ: It will start, I believe next month. The adoption is on --

COMMISSIONER NICHOLS: Show us what you've done; put it in writing, what you don't like, but also recommend a solution.

MR. MARTINEZ: I will do so.

COMMISSIONER HOUGHTON: I echo Commissioner Nichols' remarks. I'm not hot on the P. E. seals. We found other ways in El Paso County, after talking with the utility, to take care of those sort of things.

CHAIRMAN WILLIAMSON: We can go ahead and take a vote --

Any other question or comments about this, members?

Let me just say this an out of the box Commission, so think out of the box in your proposal. Nichols makes a good point. Tell us what you would like. You might say, look, I had rather reimburse the Department to send out one of their guys and drive a stake, or survey, whatever. We had rather do that. And let the department earn some revenue. We like those kind of things.

MR. MARTINEZ: I will do so. Thank y'all very much.

CHAIRMAN WILLIAMSON: Thank you, Ricky. Good to see you again.

Have you always done it this way, telling us which one you want to hear from first, Mr. Executive Director Behrens?

MR. BEHRENS: Yes, sir.

CHAIRMAN WILLIAMSON: We're going to talk to my cousin, Carl. Carl Williamson, from Tascosa, Texas. Carl, are you here?

MR. CARL WILLIAMSON: Could we speak in order?

CHAIRMAN WILLIAMSON: Mr. Behrens has got control here. He wants to hear from you first.

MR. CARL WILLIAMSON: You want to hear the last comments first?

MR. BEHRENS: They can go out of order.

CHAIRMAN WILLIAMSON: Wait a minute. You set me up for this, now you're backing out.

Are you going to complain about trees?

MR. CARL WILLIAMSON: Yes, sir.

CHAIRMAN WILLIAMSON: We're trying to cut them down. Oh. You want to claim about cutting down trees.

MR. CARL WILLIAMSON: Can we ask Remelee Farrar, from Canadian to speak first?

CHAIRMAN WILLIAMSON: We certainly can. Whichever way you want, Carl. Carl is not my cousin, that we know of.

MS. FARRAR: Just for the record, I don't have any cousins on the Commission.

CHAIRMAN WILLIAMSON: Let me get my file on you; tree problem.

All funning aside. Remelee, is that correct?

MS. FARRAR: It is. Maybe we're not going to set all fun aside though.

Actually, I wanted to have the opportunity to stand up here and talk because I wanted to make sure my blue card got in the drawing ceremony that you were talking about this morning and so I could say all those wonderful thank-yous that we were talking about.

And that really is, I think, why Carl asked if I could go first, so I could give you a little bit of background in case everybody doesn't have a file or hasn't read the file.

First of all, we have enjoyed in Northeastern Texas Panhandle a wonderful working relationship with TxDOT, and particularly in Hemphill County in Canadian where I live. That partnership has allowed us to be through a series of four major enhancement projects that have worked for us in helping us build successfully a way to diversify our economy through tourism as well as meeting the goals of TxDOT and safety.

We now have a wonderful walking bridge, so folks can enjoy nature as well as see how transportation used to work and also we're getting them out of their cars. And we also have the newest one of the 221 grants that was granted that we are working on now, with our main street enhancement as well as our visitor center. And then we are one of the places that now looks like it's the center of the world because of the great Texas wildlife trails map.

And all of that has been a great benefit to us. And also we have a great working relationship with our district office in Amarillo. In fact, our new project that we are developing now, with our visitors center and main street enhancement, our district engineer, Mark Tomlinson, has actually designated alot of his discretionary funds for development along the highway that enhances that.

What has happened to us may not make sense to y'all because this is the furtherest north you've been for a meeting. And when you get north of here, like where we are, what you find out is in the Texas panhandle trees, are sacred, because we don't have very many of them.

And along Highway 60 and 83 we have those very rare panhandle trees, because of the fact that it follows, in large part, either a creek or river, or road running alongside that, you have naturally occurring trees in like the Perryton area.

So if you can kind of think back, the last time I addressed the Commission -- I believe there have been a couple of new members since then -- when I was standing in front of you talking about an enhancement project, Commissioner Johnson kind of looked over his microphone and he said, "Is there anybody left in Canadian, Texas who has not already written me a letter or called me".

And my response -- and I know where we were going -- should have been, "Y'all ain't seen nothing yet". Because that's what happened unfortunately to us and to our district office, when one of our area engineers mentioned at a Lion's Club meeting that we were going to have a new project; that nobody was going to like this, and it was going to happen anyway, and there wasn't anything we could do about it.

Now, that's like four or five fighting sentences among folks in this part of the world. And that that project was that we were to see clear cutting of a of 30 foot zone, of 1185 trees across five counties in the Texas panhandle.

Now, the first two counties we didn't think would care very much because they didn't have any trees anyway. But we figured about 80 percent of the trees were coming from Lipscomb, Hemphill and Roberts Counties, where those trees are part of our heritage and part of our background.

So people responded as you might can imagine, quite passionately. And due to not having been included in any kind of public conversation about that, public comment about that, because it was termed maintenance. And being told that there would be no environmental study, no historical impact considered, no economic impact, because of those things, which hopefully will be addressed in the rule changes that Dianna was talking about this morning, we immediately had an inflammatory situation.

And people were very upset and public meetings were held at which TxDOT was not represented and didn't get to tell their side of the story.

And what this has evolved into is a very damaging position for us as partners. And a damaging position for your agency, because now we are headlines in the Ft. Worth paper, on the Amarillo news station, on the Dallas channels and Houston paper, where people are writing op eds, and we are having editorial comments and we've had literally thousands of letters to the editor written, thousands of people who have signed petitions; posters up all over those counties, as well as 1100 trees with yellow ribbons tied around them, so that everybody'll ask us, what's the deal about those trees.

What we have come to now is we really believe because we are working with our district engineer, Mark Tomlinson, to come up with a compromise, that will allow the public to have some input, that will still meet the safety concerns that Kenneth was originally concerned about when he made his proposal for funding this project through TxDOT, that all of those concerns will be met. We think we can do that working together.

The reason for bringing this to your attention is, No. 1, you have received, most of you, a number of letters, from folks and I admit to have instigated a lot of that, because it was our recourse, was to go to you.

Our concern is it shouldn't have had to come to this level and that even after we work out this compromise, which we do believe we will be able to do, there is no reason to believe that October 2005, we won't be looking at the same thing again. And not only us and our neighbors, but any other community could be looking at we woke up today and they started taking these trees out, without public comment, without environmental study, without historical surveys. Those things are being done now, but they're done because Mark agreed do them.

And we think what we need here is a change in the policy of how these type of maintenance projects are handled so that both at the decision making ability and the responsibility for making that decision doesn't fall on one person.

And quite honestly, if I were that person I wouldn't want to go to our public meetings, either. Nobody wants to go to, you know, a lynch mob, if they're the lynchee.

And so that's what we would like to ask you. We want to know what's going on, we would like to ask your cooperation in a way to make sure this doesn't happen again.

And we'd also like for you to know about the fact that we are working on this compromise and if the compromise doesn't work out, people are going to come back to you again. And you need to be informed about that.

So I thank you for the time you've given me and I know there are some other people that really want to address what they think the real issues here are and why the trees shouldn't come down.

Do y'all have any questions I can answer?

CHAIRMAN WILLIAMSON: Question, discussion by members?

Thank you. Who wants to speak next?

And you would be Loralee?

MS. *MCPHERSON: Kenzie.

Hello. I want to thank y'all for giving me this opportunity to speak.

I am 16 years old. I go to Canadian High School. I'm a junior there. I have lived in Canadian my whole life. I was born there, raised there, went to the Fall Foliage Festivals there, every year. And it's kind of something I was talking to my mom about, there are not many three-year olds that know what foliage is. But in Canadian, by the time you are three, you know what that word is, because that's one of your first words, because that's what Canadian is known for, is our Fall Foliage Festival and all the tourists that come to see our trees. And a lot of visitors -- I've been working at the chamber office this summer, along side my mom and Remelee.

And I see many people come in and just say, wow, your trees are just so beautiful in this area and we don't see that down state. And no, there's not many down state.

And my feelings personally are I'm very attached to the trees. People say, well, you're a tree hugger. Yeah. That's kind of what I am right now, fighting for these trees. But when I started doing the research on the trees, I found that lots of the data and statistics just didn't back up the removal of the trees.

For instance, I calculated of the estimated 1185 trees along 185 mile stretch, if you pick one tree at random, it has a 1.4 percent chance that it has caused a wreck or been related in a wreck in the last ten years. That is of 305 reported accidents in this 185 mile stretch, in ten years; 17 accidents were tree related, which is only six percent of all accidents, that were reported.

However, 191 or 62 percent were TxDOT highway safety device related. So versus the trees, the trees don't really seem like a big thing.

To me it's like the Wizard of Oz when the trees were possessed. Our trees aren't going to jump out at you; they're not going to grab your cars. They're just safe trees.

And a lot of the economy and tourism in our town is what kept Canadian going. After the '80 oil boom in 1982, was it's highest point, when that started falling, all we had was our tourism, which was due to our trees. And if we take away our trees that might hurt our economy a lot and, may do away with Canadian altogether without the trees.

And TxDOT has actually helped us out a lot with funding, for like our Canadian River wagon bridge, which is a big tourist attraction, to view the trees. So it's like giving money for something and then wanting to remove it. To me that's like betting on a race horse and then betting against yourself. It just doesn't add up.

But I just hope that y'all can see the people's feelings and see that the data and statistics of it all just doesn't add up to taking out 1185 trees that people are very attached to. Thank you for your time.

CHAIRMAN WILLIAMSON: Wait. Questions for this young lady? Needs to learn politics early.

Thank you.

Let's see, Jackie. Would that be Kenzie's sister?

MR. McPHERSON: Kenzie's mom. Thank you. Actually, what I would like to do is just tell you a story that relates to this issue. I'm the Director of the Chamber of Commerce.

And yesterday a lady dropped by -- and this happens all the time, and she needed directions. So I gave her the directions and we got to talking and I asked her if she had been by the wagon bridge and if she had seen the trees, told her how pretty they were and everything. And she thanked me and she left.

Well, in the helping put the presentation that you have together yesterday, I drove over by Miami in Roberts County, to take pictures of trees in a rest stop area that was put there during the depression by the Texas Highway Department.

And when I drove up there, this lady was there. Now, the thing about this is this lady had her 91-year old mother with a blanket over her and oxygen on, in the car with her when she came to Canadian. And so I drove up and out got and smiled and just casually said, "Gee, if I had known you were coming here, I would have sent my camera."

She said, "Oh, we did just what you said. We went and looked at the trees at the end of the bridge; looked at the trees towards Lake Marvin along the highway. And you're absolutely right this is beautiful."

And she said we stopped here to look at some more trees and the historical marker. Something that she said her parents started doing with her when she was two years old. Now, keep in mind, she had gotten her mother out of the car, without the oxygen, holding on to her, so that her mother could see the trees and read the historical marker.

And she said, "By the way. What are you doing here"? And I said, "Well, as a matter of fact all the trees that you're talking about are in danger".

I said, "We're trying to keep them from being cut down." She looked at me and stood there a minute -- and in order to leave here with you thinking I am still a lady, I won't tell you what she said. But she wants the trees to stay. Because she said if her mother is still alive and is able, she's coming back to show her those trees in October.

And I just thought that story fit with Kenzie and Remelee. And I just respectfully ask for your help in saving our trees. Thank you.

CHAIRMAN WILLIAMSON: Question or comments of this person?

Thank you very much.

Loralee, Mrs. Philpott.

MS. PHILPOTT: We're very casual up in the northeast part of the panhandle.

I'm Loralee Philpott and I'm from Miami, which is in Roberts County, the only town in Roberts County. And my husband was born in Miami, in Roberts County -- actually he was born in Canadian, and he -- we could not wait all of our married life to return to this area because it is -- it's our roots. It's family. And our children have worked the farm and worked for the local ranchers, and this is where we belong.

So we are very passionate about preserving a way of life that is unique in the panhandle, in a beautiful area. If you had time we would love for you to come north on 83.

So you can imagine how distressed we were to hear the proposal to cut down 1185 trees. As a matter of fact, we are very mystified and we have repeatedly asked for a blue print of exactly which trees these are, because if they know the exact count, I would assume there is some kind of a blue print. You have heard -- several of my comments have already been made.

I respectfully ask you to consider the habitat for over 300 bird species that share our home; the regional organizations, state and federal agencies that have invested millions of dollars and hundreds of hours in protecting this priceless natural asset.

Removing these trees runs counter to our mission to educate our urban visitors about the importance of preserving, conserving and rehabilitating our natural and native environment.

It also contradicts the Federal Highway Administration's exemplary ecosystem initiative and the *NEFA guidelines mandated by Congress.

We respectfully request that more study be done. And indeed, Mark Tomlinson has already said that these will be underway or are already underway.

And you could relieve and alleviate a lot of miscomprehension by having public meetings so that rumors don't fly around; that we have the facts, that we have some input.

And we thank you for listening to us today.

CHAIRMAN WILLIAMSON: Questions to this witness, members?

Thank you, Mrs. Philpott.

Now Mr. Williamson, Carl Williamson.

MR. CARL WILLIAMSON: I have nothing left to say.

Mr. Chairman, Commissioners. My name is Carl Williamson from Roberts County. I moved there recently from the Dallas area. I was a registered professional engineer in the State of Texas in the aerospace industry.

We retired to Roberts County, Miami, for the natural beauty of the caprock canyons and mesas in that area. And it also has many tree-lined highways which are very rare in West Texas.

I was shocked to hear that one of the district engineers with DOT, was going to help us by cutting down hundreds of trees in our county.

I'm also here to represent 263 people that responded to a short editorial I put in the Amarillo paper a month or so ago. They responded by e-mails, mail and telephone calls for a period of about 30 days. And it was 262 to one, against the proposal to cut down trees.

In the last 100 years, the old-timers in our county can remember accidents and deaths from the following causes: Ice, rain, blowing dust, snow storms, chug holes, tractors, culverts bridges, deer, cattle, horses, mules and one guy flipped his pickup dodging a tumble weed. But in that 100 years, no one has ever had an accident or has been no deaths caused by trees.

So I would just like to ask that -- or like to state that it appears somebody is fixing a problem that at least to us does not exist. And we think it's a waste of tax payer's money.

And we'd like to ask y'all to carefully review this issue and use your judgment in preventing what we think is a rather bizarre proposal to cut down trees in the panhandle.

Thank you very much for your time.

CHAIRMAN WILLIAMSON: Questions of this gentleman?

COMMISSIONER JOHNSON: I just have a general observation. One is, I would like to thank all of -- I guess there were five of you -- for making the effort to come here --

A VOICE: Six from Miami and three from --

COMMISSIONER JOHNSON: Okay. And the others that came but did not speak on the issue. My impressions are that you've made some very salient points. And I hope we take a deep and serious look at this proposal and make sure that we are absolutely doing the right thing.

I think that you have provided some information, certainly to me as an individual, that I think is very worthwhile. And I appreciate your being here and --

MR. CARL WILLIAMSON: One additional comment for those who might be interested. The trees in question were primarily planted during the depression years in the 1930's, as WPA and CCC projects.

They were planted in the middle of the bar ditches, which gets them a little close to the road, for a very conspicuous reason; that's the only place they could get enough water to live. So we -- probably less than ten percent of them actually survived.

But we would like to respectfully ask if these trees couldn't be grandfathered from modern regulations.

Thank you.

CHAIRMAN WILLIAMSON: Other comments, members?

Carl, if you would, it's not -- Mr. Johnson is a former chair of the body and taught me well; and that is when someone representing a position such as yours shows up and is compassionate and articulate, he or she deserves to have some idea of where the Commission is headed.

We have some dilemmas that we have to work through. We believe that all of our employees make good decisions based on good engineering practices.

That doesn't mean that every decision our employees make can't be rethought, re-examined and modified.

We wouldn't want to leave you the impression by staying silent that we either agree or disagree with your viewpoint. It's very important in an organization our size, with our responsibility, to continually send the message to our 14,000 employees, we all have a job to do; you need to do your job.

You would think in listening to your words that had you not created the letter writing fire-storm we wouldn't have stopped. Truth is, we have processes all up and down our organization designed to check and check and recheck our decisions.

And we would have been going through the process of looking at this decision, whether the doctor -- Malouf, is that his name?

A VOICE: Malouf Abraham.

CHAIRMAN WILLIAMSON: Whether he had written us one letter or whether we received 5000, we were already in the process of checking.

We have a dilemma with these trees. And I have to be frank with you, you touched on it in your last words.

The trees were planted in the barrow ditch to get the water, at a time when the highway speed was 48 miles an hour and about 100 people a day used the highway. Neither of those sets of facts exist any longer.

Now, you made the comment that we can't find an instance where anyone has died running into a tree. But we have documented that seven out of eight people who died on the entire stretch have died running into a tree.

The young lady made a good argument that our safety signs are the same hazard as a tree. The problem is, we have to put the safety signs up by law. The trees are there by choice.

I say all of that because I want you to leave with two distinct impressions about the Commission. We do listen when the public speaks, and we take a lot of time working with our employees to make the right final decision.

But we follow the law and we do what we think is in the public's best interest. And sometimes that doesn't sit well with people. We understand that. Sometimes it causes tears and it causes grief. We understand that.

But our job is first and foremost to assure the safe use of the state's transportation routes. Having said all that we are, we will and we are looking, and will continue to and will take everybody's comments into consideration.

I suspect in the end the citizens will be comfortable with the resolution of this.

MR. CARL WILLIAMSON: Appreciate that. Thank you.

CHAIRMAN WILLIAMSON: Are there other comments about this or any other matter during the open comment period?

Are there any matters, Mr. Behrens or Mr. Monroe, of which we are aware of, that we should go into executive session about?

MR. BEHRENS: No, sir.

CHAIRMAN WILLIAMSON: That being the case, I will entertain a motion.

COMMISSIONER ANDRADE: So move.

COMMISSIONER NICHOLS: Second.

CHAIRMAN WILLIAMSON: I have a motion and a second. All those in favor of the motion to adjourn signify by saying aye.

COMMISSIONERS: (Ayes)

CHAIRMAN WILLIAMSON: Opposed, no?

(NO RESPONSE)

CHAIRMAN WILLIAMSON: We are adjourned. Please note for the record, Geronimo, please, 1:35 P.M.

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REPORTER'S CERTIFICATE THE STATE OF TEXAS ) I, Cecil Langford, Official Court Reporter in and for the 100th District Court of the State of Texas, do hereby certify that the above and foregoing contains a true and correct transcription of all portions of the proceedings requested in writing, and as edited, WITNESS MY OFFICIAL HAND this the 8th day of September, 2004.

___________________________

Cecil Langford, Texas CSR 1164 Expiration Date: 12-31-2004
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