Texas Department of Transportation Commission Meeting

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

Thursday, September 30, 2004

COMMISSION MEMBERS:

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

STAFF:

MICHAEL W. BEHRENS, P.E., Executive Director
STEVE SIMMONS, Deputy Executive Director
RICHARD MONROE, General Counsel
ROGER POLSON, Executive Assistant to the Deputy Executive Director
DEE HERNANDEZ, Chief Minute Clerk

PROCEEDINGS

MR. WILLIAMSON: For the record, it is 9:13 a.m. and I would like to call the September meeting of the Texas Transportation Commission to order. It is a pleasure to have you all here this morning, particularly those of you who have traveled from the far ends of our great state to attend the meeting; we appreciate the fact that you've taken time out of your day to be with us.

Please note for the record that public notice of this meeting, containing all the items on the agenda, was filed with the Office of Secretary of State at 3:05 p.m. on September 22, 2004.

Before we begin today's meeting, would you please indulge the commission by stopping and taking a moment -- as I am going to do -- to locate your cell phone, your pager, your PDA, your Dewberry, whatever it is you have, and put it on the silent or vibrate mode so we won't be disrupted in our meeting. Thank you.

Normally our custom is to open the meeting with comments from each commission member, and we'll do that in a moment, but I need to announce ahead of time, Commission Member Andrade needs to leave rather early today to tend to personal family medical business -- and we all will have your husband in our thoughts and prayers, Hope -- and so what I'm going to do is allow the commission to make their opening remarks and them I'm going to ask Commissioner Andrade to specifically ask questions or raise issues on today's agenda that are of personal concern to her. And Mr. Monroe, I think, is in the audience and will make sure we don't do anything wrong. This will allow the commissioner to address her concerns before she has to leave, and then we'll proceed in the regular order of business.

So having said that, as is our custom, we will begin with Commissioner Houghton from the far reaches of far West Texas to the far reaches of this podium.

MR. HOUGHTON: Far, far West Texas; we keep getting farther, but we're coming closer because of our vote a week or so ago.

Good morning. I'm glad to be here and especially with a couple of items on the agenda. We've got some folks here from the Capitol Area Regional Transportation Planning Organization and they've got some interesting things that will help mobility in the area; and secondly, the folks from Cameron County, this is going to be an exciting day regarding their RMA, their regional mobility authority.

I'm looking forward to this day, and Hope, the best to your family.

MS. ANDRADE: Thank you.

Good morning. It's great to be back in Austin. I'm glad to report that I-35 did not have major congestion problems this morning; it only took me 45 minutes to get here.

I'd like to welcome everybody in the audience and thank all of my fellow commissioners for their thoughts and prayers for my husband today, and I'll remind you that I will be leaving shortly to accompany my husband. Thank you very much.

MR. JOHNSON: Good morning. I think what I'm going to do is echo the remarks of my fellow commissioners. It's great to see the CARTPO people here for the second time, I guess, in a pretty short period of time, and I want to congratulate you in advance on your organization. I think what you've been able to accomplish is a symbol or a model for other regions of the state to come together and put their individual agendas aside and come up with consensual priorities.

To the rest of you, I think we have a very interesting agenda, a very full agenda, and we're glad that you're here.

MR. NICHOLS: Welcome; I hope you feel welcome. We very much appreciate you being here; we look forward to your thoughts and ideas and comments, and we appreciate the time and your participation in our activities.

With that, also when you leave, be sure to drive carefully on your way home. Thank you.

MR. WILLIAMSON: Thank you, members.

Let me remind everyone if you wish to address the commission at today's meeting, I need for you to complete a speaker's card -- it's available to you in the lobby. If you're going to comment on an agenda item, please fill out a yellow card like the one that's in my right hand and identify the agenda item of which you wish to speak.

If it's not an agenda item, we'll take your comments during the open comment period, and I need for you to fill out the blue card if you intend to make a comment in the open comment period. Regardless of the color of the card or your comments, we do the best we can to limit our speakers to three minutes and we ask that you try to do that -- other than elected officials -- in order that everyone can be heard and everyone can be paid attention to.

One additional housekeeping note, if it appears to me that today's commission meeting will extend beyond four hours in length, I will take a recess before one o'clock, when appropriate in the noon hour, to allow all of us to get a bite of lunch and grab a cup of coffee and rest and collect our thoughts.

The first item on the agenda for today is the approval of the minutes of the August commission. Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Do I have a second?

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

CAPITOL AREA REGIONAL TRANSPORTATION PLANNING ORGANIZATION - BASTROP AND LEE COUNTIES

(Mayor Ray Sanders, Rep. Robby Cook, Patty Guerra for Senator Steven Ogden, Alderman Bill Hamilton, Maurice Pitts, Mayor Eric Carlson, Don Loucks, Mayor Tom Scott)

MR. WILLIAMSON: We are entertaining one delegation this month, the Capitol Area Regional Transportation Planning Organization. We welcome each of you this morning, and I'll introduce at this time the mayor of the City of Lockhart, the Honorable Ray Sanders, to lead off and introduce the other speakers. Mayor, the floor is yours.

MAYOR SANDERS: Thank you very much, commissioners, and certainly Chairman Williamson and Director Behrens. This is one of the highlights of our year, it really is; we've looked forward to being here and we thank you for giving us this opportunity because I know that you have tough decisions to make and we thank you for what you do and what you do for the citizens of Texas.

I am Mayor Ray Sanders, mayor of the City of Lockhart; I am also the chairman of the Capitol Area Regional Transportation Planning Organization. We're here today to ask for your consideration for funds to complete some transportation projects that we feel are very, very important to Central Texas.

Last year we made our first presentation in April and we presented three top projects and you selected the top one and did fund that, and we're extremely grateful, and that was for a divided highway between Giddings and the Lee County line on 290.

And Commissioner Andrade, my wife went through that yesterday and she's going home today, so our prayers are with you.

Since there are two members of the commission that are new, I just want to briefly talk about CARTPO just a little bit. Back when the federal government passed the Texas Equity Act 21, TEA-21, they were very concerned about input from the rural areas as far as transportation planning, so a lot of your councils of government formed RPOs, or rural planning organizations. At CAPCO here in Central Texas, we felt that that wasn't sufficient, that really what we needed to have was more of a regional input that considered both the urban and rural areas as to what are our most important projects.

And so as a result, CARTPO represents ten counties with Llano on the west to Fayette County on the east, to Williamson County on the north and Caldwell County in the south, with approximately 1.4 million people. These are the counties of: Bastrop, Blanco, Burnet, Caldwell, Fayette, Hays, Lee, Llano, Travis and Williamson. CARTPO exists to serve as the catalyst for transportation planning and project implementation that anticipates and meets the regional infrastructure requirements.

In addition to the county judges and several city mayors and council members, the county commissioners that attend CARTPO meetings, we have a number of organizations that come to the meetings not only to hear and be advised but also to act as advisors to us. The significant ones that I can name right off are: the Austin San Antonio Corridor Council, the Capital Area Metropolitan Planning Organization, Austin Area Research Organization, the Texas Transportation Institute, the Capital Area Rural Transportation System, and a number of university representatives also come to our meetings. They're open to anybody and everybody that wants to come to learn more about transportation issues. In working with all of these people today, we've tried to build an extensive consensus over what we feel are the most necessary projects in the Central Texas region.

At this time I'd like to recognize some of the state legislators that have supported our proposals today: Senator Ken Armbrister, Senator Gonzalo Barrientos, Senator Steven Ogden, Representative Robby Cook, Representative Dan Gaddis, Representative Mike Krusee, and Representative Patrick Rose. They either are present or have staff here or have sent letters of support that you have with you.

I'm not sure if some of them have to leave. Would it be all right for them to address the commission?

MR. WILLIAMSON: Yes, sir, and Mayor, I've learned to wear my glasses all the time because I misread the clock, so what I'm going to ask you to do is are you about to yield the floor or do you have additional remarks?

MAYOR SANDERS: I do have additional remarks.

MR. WILLIAMSON: If you don't mind, go ahead and close your remarks, and then I need to step back and allow Commissioner Andrade to address a few matters that need to be addressed.

MAYOR SANDERS: Okay. You all have the notebooks before you and you will see that they contain a lot of the letters and endorsements and so forth for the particular projects.

I'd be remiss if I didn't at this time compliment TxDOT. Without TxDOT, we would not be here, we would not exist as an organization. And I want to say specifically for Bob Daigh and our district engineer and his staff, Joe Holland, Ed Collins, that come to every one of our meetings, they assist us on information. What was an adversarial role just a few years ago has now become a true partnership, and if it wasn't for them, we would not be able to make these presentations, and I can't say enough for them.

Just briefly, what you'll see this morning is first we'll have Alderman Hamilton from Rollingwood who will describe how the procedure went on formulating these presentations and selecting these projects; then we'll have Mayor Eric Carlson from Elgin and Commissioner Maurice Pitts from Lee County that will present the 290 project; and then Commissioner Don Loucks and Mayor Tom Scott from Bastrop that will present the 71 project. And now I will yield to Alderman Hamilton.

MR. WILLIAMSON: And please accept my apologies; I'll try to start wearing my glasses more frequently.

MAYOR SANDERS: And I'll be back at the end.

MR. WILLIAMSON: And likewise, Commissioner Andrade.

MS. ANDRADE: Thank you, Mr. Chairman.

My concerns are on the agenda item number 2. I'd like to acknowledge that I have met with the CARTPO Delegation, and once again, I'd like to congratulate you on working together. I was very impressed when you met with me and everyone in the room seemed to work well together and you were able to set your priorities and bring them to us, so thank you very much, and I shared with you my concerns and my thoughts and my advice on continuing to work with Bob Daigh and seeing if we can come up with some other possible solutions. So thank you very much.

Discussion item number 5, Mr. Chairman, I've discussed with the Legislative Affairs Office and I'm comfortable that I think they understand my thoughts on this, so I'm fine with that.

Number 11, Cameron County on their Regional Mobility Authority application, I'd like to congratulate them and thank them for going through the process and being patient and working diligently with the staff, and of course, I completely support this.

So those are my only concerns on the agenda.

MR. WILLIAMSON: Mike, are you aware of any staff issues that should be brought to our attention before Hope leaves, anything that she should be aware of that might come up later on in the day that would perhaps catch her off guard?

MR. BEHRENS: I don't think so, Mr. Chairman. Hopefully Commissioner Andrade went through the briefing items that we put before you and has discussed with staff any concerns she's had.

MS. ANDRADE: Mr. Chairman, on item number 7 which is a discussion item on the 2005 Statewide Mobility Program, since it is a discussion, I might ask my assistant to make sure that I get another briefing on this.

MR. WILLIAMSON: Yes, ma'am. We might all get another briefing on this one.

MS. ANDRADE: Thank you very much for your consideration.

MR. WILLIAMSON: Is there anything any member believes should be brought to Commissioner Andrade's attention before she leaves?

(No response.)

MR. WILLIAMSON: Godspeed, Hope. We'll be thinking of your husband.

Thank you, Mayor, for allowing us to do that.

MAYOR SANDERS: I'm reminded -- I am remiss -- there is something that I forgot to do at the beginning, but I understand why we did that, and again, our prayers are with you and your husband.

I would like, if I could, ask all the elected officials of CARTPO to please stand. And now if all of the delegation that supports CARTPO would please stand. Thank you very much.

Thank you, and now I'll turn this over to Alderman Hamilton from Rollingwood who will present the selection process. Robby has got to leave? Okay. Would you like to hear from the state representative?

MR. WILLIAMSON: I can assure you, any time a member of the legislature wants to be heard, we're listening.

MAYOR SANDERS: I just thought that might be your call, sir.

(General Laughter.)

MR. COOK: Thank you very much, commissioners. Chairman Williamson, it's good to see you. I'm trying to get a haircut just like you; you've been my mentor for a long time since we served together, and I'm working on it; it's getting there.

I want to thank you for your services to the State of Texas, I truly do. You ladies and gentlemen are dealing with some very, very tough issues, transportation and mobility, and where it's going to lead us in the future, and I appreciate your service.

I'm not going to take very long. I'm here for item number 2 on the agenda which is certainly CARTPO. I want to echo your statements, Mr. Johnson, that this organization is truly a model for regional planning, cooperation, communication. And Mr. Daigh, they've all been very, very fun to work with, great to work with as far as the legislative perspective. And it's certainly no secret to anyone that the projects in Bastrop and Lee Counties, Highway 290 and 71, the problems and the issues that those folks are having there. They have set up a great organization, they've had numerous meetings. I've been to some of the meetings in the very beginning of the process on how they're trying to deal with their transportation problems, the safety issues, the congestion that they're dealing with, and certainly if we don't do something sooner than later, it's going to only continue to get worse.

They are a model, I take my hat off to the organization they have, the cooperative efforts. I hope that other areas of the state will look at what they're doing and will recognize their efforts and copy them in the future. So I'm here to show my very, very strong support for both of these projects and I hope that you will share in my view that these projects do need to go forward and to help those folks out, not only in that region but I also have a lot of legislative friends of mine that drive back and forth from that area of the state, Houston-Harris County and I could probably get a little petition together of all the legislators, especially when it's on Texas weekend. They ask me quite often when are you going to do something on 71 and 290. There's a lot of support out there other than me just standing up here and talking to you.

So thank you very much. Once again, appreciate your service and always my office is open to you guys any time.

MR. WILLIAMSON: Commission members for Representative Cook? Please, Mr. Nichols.

MR. NICHOLS: I just wanted to, while you're here, say how much I have appreciated working with you on transportation over the years.

MR. COOK: Yes, sir.

MR. NICHOLS: I particularly want to say it in front of some of the people from your district that you've always taken the time whenever we've needed help to help support transportation, you've always been supportive of the transportation in the state, statewide, in your area, and for that you're very much appreciated.

MR. COOK: Well, thank you very much, and I also share that view with you, and I want to thank Commissioner Johnson for taking the time to come down to the district here a few months back also. Thank you.

MR. WILLIAMSON: Commission members? I echo Mr. Nichols' comments. Robby, even though some individual issues we disagree on, you're a strong supporter of transportation and we appreciate it.

MR. COOK: And that's just a part of communication.

MR. WILLIAMSON: Yes.

MR. COOK: Thanks, Ric. Good to see you guys.

MR. WILLIAMSON: Back to you, Mayor.

MAYOR SANDERS: I think we have a representative from Senator Ogden's office.

MS. GUERRA: Good morning. I'm Patty Guerra with Senator Ogden's office, and I have a letter of support from the senator that I would like to read.

"Dear Chairman Williamson:

"I have received numerous calls and letters of concern regarding the dangers of traveling on Highway 290 East between Giddings and Elgin. This roadway carries approximately 1,500 vehicles per day, of which 15 to 20 percent is truck traffic. Between 1999 and 2001, there were 202 accidents on this section of highway, resulting in 12 deaths. This is a dangerous roadway in desperate need of improvements.

"This is the last section of Highway 290 that is not widened between Austin and Houston. Forty percent of the necessary right of way is already owned by the Texas Department of Transportation; the project will require a minimum displacement of businesses and/or residents. This venture has the support of Lee County and Travis County officials.

"The Capitol Area Regional Transportation Planning Organization has designated this highway project as one of the top two priority projects for the ten-county region. I strongly support the widening and dividing of Highway 290 from Giddings to Elgin and request expedited funding for the construction of this critical safety project.

"Sincerely, Steven Ogden."

MR. WILLIAMSON: Commission members?

(No response.)

MR. WILLIAMSON: We hope you'll extend to the senator our howdy and our thanks for his support of transportation.

MS. GUERRA: I will. Thank you very much.

MR. HAMILTON: Thank you, Mayor Sanders, for that introduction, and thank you, commissioners. And Mr. Chairman, good to see you again; it's been a while. Thank you very much.

MR. WILLIAMSON: It's good to see you. It's been a while, and you're always welcome here and I think you realize that.

MR. HAMILTON: Yes, sir. Thank you. And we look forward to coming back, but we've got work to do before we do that today.

And Commissioner Andrade, we thank you for spending a few moments of your time with us today.

I am Bill Hamilton and I'm an alderman from the City of Rollingwood which is a small town here in Travis County just west of Zilker Park and MoPac on the south side of Town Lake.

I've been participating in CARTPO now for several years and I serve, as Mayor Sanders mentioned, chair of the Planning and Project Development Committee of CARTPO, and over the past couple of years we've spent a lot of time and energy trying to identify ways to address many of the critical roadway needs in this ten-county area. And while working in conjunction with the TxDOT district office, it's become crystal clear to all of us that TxDOT has a funding shortage, no question about it, and there are many important projects in our region that unless they're funded in the short term, there's an indefinite period in which they will ever be funded.

This is certainly a grim prospect for our rapidly growing area of ten counties, as you see. It's a growing region which is already inundated with traffic congestion and unsafe roadways. So rather than waiting for the traditional funding process to make projects move up the line, we decided to pursue a request of you from the Discretionary Strategic Funding. So in the spring of 2004, CARTPO members participated in a four-month long -- that was this last spring -- a four-month long process to identify and select the region's top priority projects.

A formal letter was sent to each county judge in the ten counties inviting them to work with their mayors, county commissioners, other local elected officials in those areas to develop and prioritize the county's top three most important projects that were not on TxDOT's construction and development schedule as of that time. We got 14 projects from the ten counties and from that area, and the Project Evaluation Committee from CARTPO began to consider those.

The Project Evaluation Committee was formed with up to three members again from each of the ten counties recommended by the county judge in each of those counties. Each of those projects was evaluated based on need criteria, and we consulted many times with Bob Daigh and his staff on the best way to evaluate projects from your perspective, from his perspective, and certainly from our perspective.

And up there you see the six criteria that each project was evaluated on: local support and public participation; economic development impacts; ease of implementation -- in other words, is the project pretty close to being ready to go; what regional impacts are there that are favorable from our standpoint; what safety considerations are there that can be addressed favorably; and certainly, each time we looked at a project, we wanted to know the best and most current data about its current traffic volumes and its projected traffic volumes.

I should say that of those six criteria, there were three that we gave extra consideration to -- in other words, we factor them up because of the criticality we believe and we think you believe are to a successful highway project, those being: local support, regional impacts, and safety considerations. And we think as you look at our projects today, you'll see that we addressed those six criteria with those particular three being given extra weight.

On June 25, 2004, the CARTPO committee unanimously approved US Highway 290 from Elgin to Giddings and State Highway 71 through Bastrop as our top two projects in 2004 to be presented to you today. And I should say that September 30, 2004 has been on our calendars for quite some time, so we're very excited about being here today.

Both of these projects have important implications for safety, economic development, and most importantly, regional mobility and connectivity in this region. Commissioner Pitts from Lee County, Mayor Carlson from Elgin, Commissioner Loucks from Bastrop, and Mayor Scott from Bastrop will all present more details in a moment about these projects, and as you hear those comments from these elected officials, I urge you to not only consider the local and regional benefits of these projects, but the advantages these projects gain to the overall statewide system, and I know you do that because I've seen you do that before.

Finally, before I turn the mike over to them, I want to make a couple of final comments. Another benefit, we believe, of this whole process has not been just the revelation of these projects but the identification and the proving of a good process where there's a spirit of cooperation and regionalism that's fostered by many elected officials across the ten-county area.

And finally, you might ask why would a Rollingwood alderman get involved in a project like this. We're a small city, 1,400 residents, about ten miles of residential city streets, one mile of state highway; that being Ranch to Market Road 2244, or Bee Cave Road. We're very happy, by the way, of the recent improvements on that. Well, our residents don't drive around the city streets of Rollingwood or Bee Cave Road all day long; they're out on these areas, so if I'm being responsive to my constituents, I'm out looking for opportunities to address issues that they address both within and outside of the traditional boundaries of my small city.

Well, that's my two final comments to you. At this point I'd like to recognize Commissioner Maurice Pitts from Lee County to begin the presentation on Highway 290. Thank you very much.

MR. NICHOLS: Thank you.

MR. PITTS: Good morning, Mr. Chairman, commission members, Director Behrens. My name is Maurice Pitts and I am and have been a county commissioner for the past 12 years in Lee County which is on the eastern edge of the CARTPO region. I have lived in Lee County all my life and enjoyed its friendly people and somewhat slower pace of life. Unfortunately, every day we see an increase in traffic and more serious and deadly accidents on our roadways.

Today, along with Mayor Carlson, we are asking that you approve funding for the 22-mile section of US 290 from east of Elgin to just west of the Giddings city limits. As you may realize, this roadway was originally built as a two-lane undivided highway with shoulders until the early '70s when it was converted to a four-lane undivided roadway. This is the last stretch of US 290 between Austin and Houston that is still an undivided highway. We would like the commission to close the gap and finish the job by improving all of US 290 into a four-lane divided highway.

This highway serves as a major route between Austin and Houston as well as between the Austin-Bryan-College Station area. Improvements would ease necessary trucking between these cities and increase travel safety for commuters and students. This highway is on the State Trunk System as well as on the National Highway System. Since the deregulation of the trucking industry, truck traffic has more than doubled on this roadway.

This four-lane undivided highway was not designed to handle the amounts and types of through traffic that it now carries on a regular basis, not to mention the growing number of people living in the area are a constant in-and-out flow of traffic to businesses located along this roadway. The 2003 daily traffic count is as high as 20,000 vehicles per day, and are projected to exceed 32,000 in 2023. Truck traffic represents approximately 15 to 20 percent of the trips. We feel that it must be upgraded to at least minimum safety levels for all travelers.

Today we are asking that you please help us complete this project on this major intrastate corridor. As I stated earlier, it's the last section of undivided US 290 between Austin and Houston, and this project is currently listed as a planned project in the Unified Transportation Program.

Thank you for your time and consideration. I would now like to introduce Elgin Mayor Eric Carlson who will present additional information on the US 290 project since it stretches from east of Elgin in Bastrop County to west of Giddings in Lee County.

MAYOR CARLSON: Thank you, Maurice.

Good morning. I wish to thank the commissioners for allowing us to speak with you today. My name is Eric Carlson and I've been the mayor of Elgin since 1994. During the last ten years we've experienced a great deal of growth in Bastrop County. We feel a great deal of the pressure up in Elgin; we're at the junction of 290 and 95 and we're feeling the pressure of this growth.

As Commissioner Pitts mentioned, Highway 290 is a major link connecting the Austin area with the Greater Houston area and the Southeast Texas area. In addition to auto traffic, it handles a lot of truck traffic; a lot of the truck drivers coming south on I-35 opt to take 95 instead of going through Austin on I-35; they come to Elgin, the junction there, and thereafter go on 290 towards Houston.

290 also intersects Highway 21 in Paige, and as a result of that, we are the major traffic area for the flow of students between Texas A&M and the University of Texas, and of course, that's their primary route of traveling between those two institutions.

The Texas Legislature in 1995 designated 290 from Austin to Paige and Highway 21 from Paige to College Station as the Presidential Corridor, connecting the two presidential libraries in College Station and Austin. This has been a real economic asset in promoting tourism in the Central Texas area.

Unfortunately, this critical roadway which is currently a four-lane undivided highway has exceeded its design capacity and can no longer move traffic safely and efficiently. Head-on collisions and serious accidents happen much too often. During the heavy traffic load periods, drivers are afraid for making a left turn from the inside lane, fearing that they're going to be rear-ended and hit the oncoming traffic. The latest statistics -- and they're recorded also in the senator's letter -- for a three-year period indicates there have been more than 200 accidents with 12 fatal accidents on this highway. And I think many experts say that the most dangerous highway we can have is the undivided four-lane highway without shoulders. That's what we have on Highway 290.

In the CARTPO handbook that we distributed to you, you will find a citizen petition organized and submitted by Shirley Garvel, who is a concerned traveler on Highway 290. The petition contains over 740 signatures; the petition supports the widening of US 290 into a four-lane divided highway from east of Elgin to west of Giddings. And we have with us today Shirley. Shirley, stand up. She got all of those signatures and did all those petitions. Thank you for your hard work, Shirley.

TxDOT has drafted and presented the environmental assessment for this project; public hearings have been held for the Bastrop County section of this highway; 40 percent of the necessary right of way is owned by TxDOT; and the displacement of businesses and/or residences will be minimal. To the extent appropriate, local governments will participate in utility relocation and right of way acquisition.

We ask for your help with this very vital project. We thank you for your time, and at this time I'd like to introduce Bastrop County Commissioner Don Loucks who will talk about our other regional project, and that's Highway 71 through Bastrop. Don?

MR. LOUCKS: Thank you, Mayor Carlson.

Good morning, Mr. Chairman, commissioners. Thank you for giving us the opportunity to be with you today. My name is Don Loucks; I've been a county commissioner in Bastrop for the past three years, nine months and 30 days.

Improvements to State Highway 71 through Bastrop would increase accessibility and general travel safety between Austin, Houston, San Antonio, Bryan-College Station, and Temple. The project would also enhance access to the Austin Bergstrom International Airport which is a critical component of the region's intermodal transportation system and growing industrial base.

The Bastrop Industrial Park and the majority of Bastrop businesses are located on State Highway 71. Through traffic contends with local access traffic all through the city. The proposed project would help unclog this corridor and promote economic mobility along the corridor. The project is on the National Highway System, the Texas Trunk System, and significantly, is a hurricane evacuation route.

The Capital Area Planning Council has projected the county's population to increase from the 2000 census count of almost 60,000 to about 120,000 in 2015. Right now we are expecting an additional 13,000 homes over the next ten years, mostly in the area immediately west of Bastrop which is in my precinct, Precinct 3. Today, 53 percent of the county's population commutes to Austin on a daily basis, and we expect this pattern to continue into the future.

This project is currently listed as a PLAN project in the UTP. The county has indicated that to the extent appropriate, it will participate in the utilities relocation and right of way acquisition. Most of the project will fit on existing right of way. TxDOT has already programmed other components, such as bridge rehabilitation, that have facilitated this project.

Again, we thank you for your consideration of this much needed project. I would now like to introduce Bastrop Mayor Tom Scott who will present additional information on the State Highway 71 project through Bastrop. Mayor Scott?

MR. WILLIAMSON: Members, please say howdy to a long, long, long time friend of the Chair. How far do we go back: '85-86?

MAYOR SCOTT: Quite a few years. How are your softball-playing daughters these days?

MR. WILLIAMSON: One is married; two of them are out of law school, one is fixing to be out of law school; life is great.

MAYOR SCOTT: Well, I have an eight-year-old grandson now.

MR. WILLIAMSON: Well, it's good to see you. You've given many years of your life to the state of Texas, and I'm appreciative of your efforts.

MAYOR SCOTT: Thank you.

Good morning. My name is Tom Scott; I'm a long-time resident of the City of Bastrop and I've been the mayor there for six years now. During this time I've watched our city and our county grow and grow significantly.

Bastrop County is the eighth-fastest-growing county in Texas and 30th in the United States. We have an extensive extraterritorial jurisdiction and right now we have over 32,000 new platted lots that are in one stage or another of our planning process. There's now a 500-room Hyatt Destination Resort under construction in our ETJ. Simon Development Corporation, the nation's largest mall-builder, has acreage under option right now and they're doing their due diligence on a one million square foot campus-style shopping center.

Traveling to Austin on a fairly regular basis, I can assure you that I've developed a personal perspective of the impact all this growth has had along State Highway 71. I'm sure as we have discussed with some of you before this meeting, that if you've traveled on 71 on any weekend or holiday or at any point in time, particularly when the University of Texas or Texas A&M University are playing a home game, you know exactly the kind of traffic that I'm talking about. There's serious congestion on this stretch of this highway, though, every day. 2003 traffic counts, daily traffic counts range from 33,000 to 60,000 vehicles per day, and are projected to exceed 68,000 in 20 years.

Despite all this growth, however, Bastrop is still largely a rural community. Within our corporate limits, we only have 6,500 residents, but we have 7,800 kids attending our public schools; every day 2,200 kids come into Bastrop to attend our 5A high school. So we are a small community and a large rural distributed population.

Highway 71 is very important to us. We're most appreciative for the portion of the project that's currently underway, and we desire to continue to improve State Highway 71 and are now interested in completing this almost five-mile stretch of state highway, most of it through our city. Safety and mobility are critical to sustaining our quality of life and our economic vitality.

Now I'm going to give the microphone back to Lockhart Mayor Ray Sanders. Thank you.

MAYOR SANDERS: As you can see, even though these two projects are both located in the east borderline of the ten-county region, they have widespread support. In your packet there are letters from three senators, four House representatives, 25 local governments, and 12 organizations, ranging from the highest levels of the legislature to a grassroots petition. Copies of the letters and the citizen petition are included in your agenda packet as well as the notebooks we distributed today.

The Central Texas region has come together in a single organization, CARTPO, to speak with a united voice on our regional priorities. Today we are asking you to close the gap on 290 with funding of $55 million to upgrade this 22-mile segment of US 290 from Elgin to Giddings to a four-lane divided highway.

It is the last section of undivided US 290 between Austin and Houston. We're also asking that you unclog the corridor by funding the $50 million State Highway 71 project that would upgrade the five-mile segment of State Highway 71 through the city of Bastrop to a four-lane divided freeway with frontage roads. State Highway 71 is a major route to both Austin-Houston travelers and Austin-College Station travelers.

The county judges, commissioners, mayors, state legislators, civic organizations, citizens along the routes, and members of CARTPO ask that these projects be given serious consideration in light of their importance for safety, economic impact, and regional connectivity.

At this time, we would certainly welcome any questions from the commission.

By the way, my dog Lucky has come back -- if you remember Lucky.

MR. WILLIAMSON: I remember Lucky.

MAYOR SANDERS: He's missing half of one ear but he's still around.

MR. WILLIAMSON: Good presentation, Mayor, from yourself and all your participants.

Commission members?

MR. JOHNSON: Let me preface what I'm going to say. It's extremely rare, I believe, that someone would make a comment after a presentation like this like the one that I'm about to make. I travel both of these corridors often, to and from Austin and to and from other parts of the state, and in my mind I don't think there are two what I would call rural segments that need to be done that impact more people than these two. They impact not only the local people, but as the presenters have mentioned, the people traveling to Austin from the east and southeast and people traveling to Bryan-College Station and other points east from the west and southwest, and it's a huge number of through travelers, but it also has great impact on the local communities.

My sense is -- one of the premises that we're hopefully on the line to adopting -- to finish what we start, and in both of these corridors we have made significant starts, currently under construction on 290 east of Giddings to the Fayette County line, we've commenced that project, and likewise in the city of Bastrop on Highway 71 we've commenced the project there, and I would hope that we would finish what we started.

You've also mentioned the impact of safety or the importance of safety. Ten or twelve years ago -- and I apologize for not remembering specifically -- our company lost an employee on 290 in Lee County in a horrific traffic accident, so I'm painfully familiar with the safety implications, especially on that one stretch.

As I mentioned to you yesterday, with the tools that House Bill 3588 have provided the commission and communities to come together and figure out ways to get things done -- and I think we have a prime example later in the agenda of the City of Kyle, I believe we'll approve a State Infrastructure Bank loan to Kyle to make some improvements, and it's a hybrid situation where I think they're going to come later and we'll do a pass-through tolling agreement to let them complete a very important project that's meaningful to the residents of Kyle -- and I think we have enough tools whereby what you've been able to accomplish at CARTPO in getting the consensus of ten counties to come together and identify these projects and the impact that these projects have on this entire state, that we now have the tools that we ought to figure out a hybrid way to get these things done.

I say this couched with the knowledge that it's exceedingly rare that delegations leave here with a commitment and we're not going to break that tradition today, but I just think common sense -- I don't think we're going to break that tradition today, Mr. Chairman -- I just think there's a way that we ought to figure out to get these done because of the impact it has on so many Texans in so many different ways.

MR. WILLIAMSON: Mr. Houghton.

MR. HOUGHTON: Well, Commissioner Johnson, you stole my thunder. I was talking to the delegation yesterday about all the new available tools and I asked who your financial adviser was, I do believe, and I think there's great opportunity here to get these projects done. I've been on those two roads many a time because I have two children who have graduated from A&M and three there, so I've been through those corridors and they do need our attention.

So with that, I will stand to help any way I can on identifying the tools.

MR. NICHOLS: Thank you for being here and everybody from your group and delegation that has been here. You have come a long way in three years, done an outstanding job.

As you had said, and I think at least a team of your group took the time -- I think it's important for all of your people to know -- to visit one-on-one with most of the commission members yesterday and go over in detail a lot of the proposal and the rationale and things like that, so we appreciate that.

Number two, we asked you to work with a regional approach and you've done that. We asked you to, as a region collectively, have the official bodies, the counties, city governments come together and try to prioritize projects in your region, and you've done that. We asked you to work with our TxDOT people in your geographic area, and I've got confirmation not only from you but from our people that you have done that. You have pretty much done everything that we have asked you to do, and have been very consistent about it.

And it was Shirley -- was your name -- who did all these petitions? Shirley, thank you for all your work; you obviously have a passion with this.

So it sounds like we've got some work to do to try to figure out a way somehow to make progress on these projects. Both of these projects currently on the books are only in what we call the PLAN mode; they can study them, they can do a number of things. And as I also understand on the 290 project, 40 percent of the right of way is probably already there?

MAYOR SANDERS: Owned by TxDOT, yes.

MR. NICHOLS: Right. The next step would normally be a DEVELOP step where we could in turn then, if we could work out the funding, to acquire right of way, do the engineering, and begin the process of moving forward on a project.

I'm not sure if I'm going to ask Amadeo or Mike, but I'll let them decide which one will answer, because I've got a couple of questions.

Commissioner Johnson was referring to some of the tools the legislature gave us. I know the proposition bonds, sometimes referred to as Ogden Bonds or Krusee-Ogden Bonds, they allow us to advance forward some of our construction funds, and in particular, there was 20 percent of that money -- which is almost $600 million -- that is flagged for safety. I think many of us recognize that the four-lane undivided, no-shoulders is hazardous. Of our different categories, it has the worst accident record than the other categories of roads.

I know in my conversations with Senator Ogden over the years related to that, that has been a very big concern of his, I've heard him bring it up over and over. Is there any way our administration, in trying to prepare safety categories of funding for that 20 percent, I know have categorized I think three different types -- four?

MR. BEHRENS: There are four types: one is widening narrow roadways, one is adding additional left-turn lanes, one is looking at centerline median barriers for existing divided highways, and the third is grade separations at intersections. I think both of these projects may have some elements that we could look at that could possibly rank and make that program, probably not the whole project in entirety but some elements of the project.

MR. NICHOLS: That's why I was asking the question, trying to find the funding. You came before us I think it was 18 months ago, and I think we did fund the projects and that's going, so safety is extremely important to us here, and I think we recognize that as a problem.

So I think I would just say that I think there may be some hope or chances here with some of these new tools that an opportunity may have presented itself that was not here two years ago.

Anyway, you have done everything we have asked and we very much appreciate it, and thank you for a great presentation.

MAYOR SANDERS: And we're committed to continuing to do that.

MR. WILLIAMSON: Mayor, forgive my ignorance. Is Bastrop part of CAMPO?

MAYOR SANDERS: Yes -- no, not CAMPO. Williamson, Travis and Hays are CAMPO; they considered Caldwell and Bastrop a while back but did not vote them into it.

MR. WILLIAMSON: You received endorsements of sorts from I think four of the five commissioners, and I think that's a clear signal the commission wishes to do something, staff. It's unfortunate it falls upon me, as it did Chairman Johnson previously and Chairman Laney before him, to be the fellow that says, however, but I want to suggest to you that the commission has a limited amount of gasoline motor fuel tax and vehicle registration allocation with which to plan for the entire state, and the near- urban areas of the state have, for several years now, participated in the transfer of tax revenues out of near-urban Texas to exurban and rural and border state Texas to improve the transportation system in that part of the state.

Near-urban Texas is probably at the point where its patience with doing that is understandably coming to an end, so the commission faces the uncomfortable task of figuring out how to refocus on Dallas, Fort Worth, Houston, Austin, San Antonio, Brownsville, El Paso, Corpus Christi, while at the same time addressing the needs of the entire state because, as we're fond of saying around here, this is one state, we are one people, we have to keep it glued together and make sure everybody is given attention to.

That's a long-winded way of saying it seems to me that if you wanted to get these projects funded really fast that Bastrop and Lee Counties would go home and form a two-county RMA, float a bond to pay for it, come to us with a pass-through toll proposal that would allow you to be reimbursed for the cost of building these roads and get the show on the road. I just can't imagine this commission not being able to find a way to put a portion of the Ogden-Pickett Safety Bonds with a well thought out RMA for these two projects, with a pass-through toll element associated with that, that would let you get these projects moving fast. You would suffer some cash flow loss for a few years but you wouldn't suffer ultimately; your counties would be reimbursed ultimately, you would be able to turn to your citizens and say: We're going to front the money, we're going to build these today, the state is going to reimburse us over time, and we can get started tomorrow.

I just can't imagine that this commission wouldn't view that approach very favorably. I mean, we're fixing to do that for our fellow Texans from Cameron County, we've done it for our fellow Texans in Grayson County. It's a good idea to at least look at it.

MAYOR SANDERS: And I don't disagree, I just think that when we talk about Austin's particular problems as an urban solution, this is part of Austin's problem.

MR. WILLIAMSON: Mayor, I understand that yourself and all off the attendees wish to make that argument, and I appreciate it and in many ways I acknowledge it, but I'm going to tell you one of the reasons many of these projects all across the state, like yours, haven't been done is because we don't have the money to do them, and the hollow promise is just not this commission's way. To say great job and we'll find a way to do it and not be able to do it is not what these five people stand for. It's unfortunate that it falls upon me to say to you I kind of know where we're going in the next few years, it's a tough old row we're fixing to have to hoe the weeds out of, but I see a solution that will work for your communities if you'll just consider it.

MAYOR SANDERS: And as I started the whole thing, recognizing the fact that you have very tough decisions to make and we appreciate the decisions you do, and just giving us even the opportunity to be here.

MR. WILLIAMSON: Clearly the commission is very sympathetic to these specific particular two problems; we understand this is bad. One of the most difficult parts of this job, though, is to say to people from Bastrop County, as bad as it seems, this same situation is duplicated in a hundred places across the state, a thousand places across the state, no better and no worse, it's all across the state, and we struggle to address all of those. And it seems to me that there is a custom-made solution for these two problems if you wish to step through the window and take advantage of it. Otherwise, as the commissioners have said, we'll do what we can.

Thank you for coming and seeing us.

MAYOR SANDERS: And we appreciate it very much, anything that you can do. And our job on CARTPO is largely to identify the need, certainly the local governments will have to work out some of that solution.

MR. WILLIAMSON: I'm kind of curious, Mayor.

MAYOR SANDERS: About my dog?

(General laughter.)

MR. WILLIAMSON: No. You've been around a while and you're kind of familiar with transportation and stuff. Is it your view -- and I'm really curious about this -- is it your view that when we construct a toll road that we're double-taxing the citizens of our state?

MAYOR SANDERS: You're trying to set me up there, aren't you.

MR. WILLIAMSON: No, I'm really not setting you up, I'm really kind of curious about that because that's a criticism we hear frequently.

MAYOR SANDERS: And I talked to Mayor Wynn also about these issues, and I supported their decision. I just think that we've really got a tough situation, and I've got to think, particularly as far as CARTPO goes, the way that Bob Daigh has presented that to us, we're well aware of the situation with funding in the state and the lack thereof and what we're not getting from Washington. I think it's difficult, at best, at times to tell people, well, you've got a road and we're now all of a sudden going to toll it and this is your way to get to work. Since I have over 50 percent of our people commute into Austin on 183, it would be a tough decision to make.

But at the same time, I agree with the idea that if we got increased capacity, that there ought to be a way of tolling that. But I just think there's got to be a way of controlling it so we just don't have toll roads all over the place; there's got to be some system or plan to do this so that when I'm going to travel from here to Big Bend -- well, that's not a good example because there's only really one road to take -- I'm not going to just constantly be running into toll roads. I'm reminded of the fact that in Florida you get on the Florida Pike and you go along and you never get off but you keep hitting toll booths, probably every time you change counties, so you may go a few miles and you pay another toll and a few more miles and you pay another toll.

I think in the long run, if people really understood what it's going to cost them in tolls, they might be a lot more receptive to a gas tax or even a road tax of some type because I figure that just in commuting from Lockhart to Austin at 13 cents a mile, that would be about $3.90 a day; when you do the math, that's about $1,800 a year just to commute back and forth to work. I don't think people realize or quite have looked at that particular thing. I'd much rather pay $5- or $600, if I know I'm going to have to pay that much, in some kind of a road use tax.

MR. WILLIAMSON: Your answer actually kind of laid the groundwork for me to ask my next question because when I was talking about the pass-through toll, several of your partners in the back were shaking their heads like we can't do that, we won't do it. Would it surprise you to know that if we passed a minute order today instructing the staff to expand this stretch of 290 -- I don't know about 71, I know about 290 in a little more detail -- and instructed our staff to add that capacity, in effect build a new two-lane road, I guess is what it would amount to, and to allocate to provide for the maintenance of those two lanes for a 40-year life, that the gasoline tax you pay now and the allocated vehicle registration fee you pay every year now on a vehicle mile basis, would it surprise you to know that those taxes would never pay for that road?

MAYOR SANDERS: No, it wouldn't surprise me. I think we'd have to look at a significant increase.

MAYOR SANDERS: And that in fact it would never ever pay for the road; it wouldn't pay for half of the road. Would that surprise you?

MAYOR SANDERS: That kind of surprises me, that part.

MR. WILLIAMSON: We have our staff putting together some data now. One of the nice things about the Mobility Fund planning process we took the state through the last six months is it's subjected us to an awful lot of soul-searching, it's forced us to look at facts from different perspectives because many people allege -- one fellow of note in South Austin -- allege that using tax money to build roads and collecting tolls is double taxation, and we've discovered a lot of people in Texas believe that. We suspected that wasn't the case because we can see our cash flow. These are engineers and accountants, they kind of know money-in and money-out, what are roads costing, how long are they lasting, but we've been inspired to nail it down to make sure that we know what we're talking about.

And what we're discovering is some of the most popular and needed roads in the state -- MoPac South, for example; 290 in your area is another example -- based on the current taxation scheme we use in Texas, will never pay for itself, won't pay for half of the cost of the road and the maintenance of the road.

And so what we've chosen to do is be real honest with the taxpayers that come see us and say we want to do everything we can but you know, if you've got a buck and you've got two dollars worth of roads, a dollar worth of road isn't going to get built someplace if we don't do something else. It's better to say than to smile, we think, and say we'll do what we can, that's the easy way out; we're not the easy way out bunch.

MAYOR SANDERS: Mr. Chair, you've got a tough job and I'm sure they aren't compensating you enough.

MR. WILLIAMSON: We do it for love.

(General laughter.)

MR. WILLIAMSON: Thank you. You made a great presentation. Was there anybody else from your organization that wanted to follow up or have any kind of dialogue about pass-through tolls, a great mechanism?

MAYOR SANDERS: I don't think so, sir.

MR. WILLIAMSON: Members, anything else?

(No response.)

MR. WILLIAMSON: We want to thank you. Traditionally, we take a break after a delegation presentation and we resume. We're going to be on a pretty close time schedule today, so I'm telling you right now we're taking six minutes and six minutes only to allow our audience --

Thank you.

(Whereupon, a brief recess was taken.)

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

MR. WILLIAMSON: Members, so you're aware, we don't change our agenda lightly, but I've been informed that our friends from Cameron County are in need of catching an airplane at a certain time today. I wish for them to hear the remarks of Coby Chase on the legislative program; I will not allow them to miss their plane; if the remarks and the discussion goes too long, we will stop and take up the Cameron County matter out of order.

Is it my understanding, Cameron County, we need to walk out of here no later than eleven o'clock? Is that correct? That being the case, Mike, why don't we skip item 3 and 4 and go to item 5, and then we'll return to item 3 after we take up Cameron County.

MR. BEHRENS: Okay, Mr. Chairman. We'll go to item 5; we have a discussion item where Coby Chase, our Legislative Affairs director, will discuss our proposed legislative agenda and some of those statutory changes that would affect the department. Coby?

MR. CHASE: Good morning. My name is Coby Chase, and for the record, I'm the department's director of Legislative Affairs.

At last month's commission meeting I laid out some legislative issues for your consideration. Those came from you, from within the agency, and from our partners in the legislature. At your request, I am here today to continue the dialogue regarding the development of the commission's legislative agenda for the upcoming session of the Texas Legislature.

Since last month's commission meeting, my staff has been diligently researching issues that were discussed here and that Chairman Williamson has asked us to research. We're in the throes of that research effort now and I have very little to add at this time. I do expect to have some more substantive recommendations on whether to go forward or not on some of those issues by next month's meeting.

Of the issues discussed last month, we are making significant progress on: advanced acquisition of rights of way; land-based transportation planning; granting RMAs the authority to enter into the transit business; and all previously discussed House Bill 3588 modifications -- that is, eliminate the toll equity cap, eliminate the rail expenditure cap, broaden CDA authority, and things of that nature.

Other issues we are researching are: the disposition of the proceeds from the sale of department property; providing definition to the fact that we can use Fund 6 to construct our buildings; establishing the concurrent jurisdiction of courts for eminent domain cases; awarding small maintenance contracts to the second lowest bidder; creation of a state-funded State Infrastructure Bank program for eligible highway projects; TxDOT taking a more direct role in the Border Colonia Program; providing some type of assistance to disadvantaged counties for toll projects; and identifying funding sources for the Texas Mobility Fund.

I would like to state that we have investigated the public transportation enclave city issue I mentioned last month, and we now find no overriding reason to pursue such legislation and I've recommended to Mr. Behrens that our pursuit of this issue cease at this time. The issue more greatly affects those few communities than it does TxDOT and it seems best, from our standpoint, for those communities to decide where to go with it.

Last month I mentioned to you that Cathy Williams was leading an internal effort to identify personnel-related issues which may be of interest to you during the upcoming session. Cathy and the Human Resources Division have completed their work. These proposed issues include: paying relocation expenses for new hires; allow for salary increases for employees who move laterally within an agency; the accrual of comp time for work done at home; and an increase in administrative leave for outstanding performance.

These are not all necessarily unique to TxDOT. Cathy is working with other state agencies and the SACC, the State Agency Coordinating Council, and they're deciding how to move forward on that as well, so we are part of a larger team. Some of those are very important to us in particular, though.

In addition, at last month's commission meeting, Commissioner Nichols asked that we identify a funding source for the agency's rail ventures, whether that be the acquisition, construction or relocation of rail facilities. Also, Chairman Williamson has asked that a source of revenue be found to capitalize the existing Aviation revolving loan fund, possibly $4 million for the upcoming biennium, and to establish a state-funded public transportation SIB program, or State Infrastructure Bank program, possibly to the tune of a one-time amount of $40 million. All of these efforts are underway.

I would also like to comment again on what I brought up last month regarding the ongoing discussions surrounding the conversion of tax roads to toll roads. Clearly this issue has continued to evolve with the chair of House Transportation recently announcing publicly that he intends on revisiting this issue next session. As I stated last month, if we here in this room do not develop a precise acceptable definition for what is eligible for conversion to a toll road, then others will do it for us and we may or may not be comfortable with the outcome.

We have a clear interest in ensuring that this agency's ability to convert tax roads to toll roads is kept intact, but we do need to correct the misperception that we can do it by some sort of unilateral fiat. We must be willing to accept the fact that we should work with others to ensure that these conversions are palatable to the public.

I'd like to bring to your attention, for informational purposes only, another issue that has come to us from the Speaker's Office and that pertains to providing toll tags for use of our travelers. The idea is to make toll roads friendlier for tourists and business travelers. Right now they're pretty much limited to throwing coins into a bucket which doesn't make any toll road look all that attractive.

Representative Peggy Hamric, if I remember correctly, raised this at the last House Transportation hearing and the Speaker's Office became interested at the same time. Doing something to capture the tourist and business traveler market through rental car agencies, for instance, might be worth looking into.

I learned recently that in Chile they've developed a day pass of sorts for people who infrequently use toll roads, and if I understand correctly, in looking at agencies across the United States, nobody does it, not even Florida. In Orlando, the mecca of tourism, they're trying to figure out how to get the tourist market to use toll tags while they're in town. They think it would not only raise revenue but it would be a benefit for travelers in the region.

At any rate, we may be asked by the Speaker's Office to look at this and whether or not legislation is required.

That concludes my prepared remarks.

MR. WILLIAMSON: Members, by way of reminding ourselves and by way of informing the audience, the legislature in 2003, for the first time in the state's history, authorized the Department of Transportation Commission to develop and present a legislative program. It is in our best interest to broadly announce and discuss and inform our transportation partners from Dallas to Brownsville, from El Paso to Tyler, and the free press what our intentions are.

The purpose of Mr. Chase being here with us each month until December is to remind us that we are taking public positions on policy that will be presented to the legislature, and most important, so that we can say honestly no one was caught off guard or no one didn't have the opportunity to be prepared for what we think is good transportation policy.

It's appropriate at this time to ask Mr. Chase any questions you might want to ask him about matters he's working on or to offer him guidance as to where to go and how to get there on the matters he's discussed. The floor is open to the members. Mr. Houghton?

MR. HOUGHTON: The State Infrastructure Bank, currently the State Infrastructure Bank is funded with gas tax money. Correct?

MR. CHASE: If I remember correctly, it's capitalized with federal funds.

MR. HOUGHTON: Gas tax. Do we have the opportunity to leverage the State Infrastructure Bank currently?

MR. CHASE: In what sense?

MR. HOUGHTON: Sell bonds.

MR. CHASE: I believe so, yes. James Bass will be up here later.

MR. HOUGHTON: So we're looking for the opportunity that the state fund that Infrastructure Bank.

MR. CHASE: Yes, there are two discussions. One is a state-funded Infrastructure Bank using state funds because you have more flexibility in how you spend it. Whenever you use federal money, all sorts of strings are attached to it; state money is more flexible in what you can use it for and you can move it through the system faster.

The other discussion is creating a State Infrastructure Bank type program for other modes of transportation.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Coby, one of the issues that you brought before us at the last meeting had to do with the relocation of rail, and I noticed in the presentation this morning that was, at least in my mind, somewhat conspicuously absent. I hope we have not let that drift to the side. I spoke on it.

MR. CHASE: It has not been derailed.

(General laughter.)

MR. JOHNSON: I think the benefits are enormous, not only to congestion and mobility, but to the environment. And I believe Commissioner Houghton and I know you have seen the benefits of the Alameda Corridor from the Port of Los Angeles through all those communities, and what it has provided in terms of benefit to congestion mobility and also the environment, and is structured financially where it, in essence, pays for itself. Not that that template would work in Texas in any of our communities -- it may or may not, but I still think the benefits are enormous and I hope we don't let that get derailed, per se.

MR. CHASE: Oh, no, sir. I might have spoke a little bit in code just for the sake of speed when talking about the removing the cap or raising the cap on the amount of money we can spend on such activities. That's part of that.

MR. JOHNSON: I did notice in our LAR, Legislative Appropriations Request, that we are thinking in those terms, and that's a very, very worthwhile way to approach things.

MR. CHASE: Absolutely. And that is at the very top of our thinking.

MR. WILLIAMSON: Mr. Nichols?

MR. NICHOLS: A couple of areas. One is there are different coalition groups in the state, various transportation supportive groups who are interested in and have expressed a strong interest in taking actually position statements on coming to the legislature and asking for I guess you would call it an optional regional transportation tax or fee. So I think that will be an issue for sure; I'm sure you're aware of that.

They have taken in that a number of possibilities of funding sources. I would like to request that your department spend some time investigating that, looking at the possible sources of revenue, finding out and trying to identify which ones might. Any funds that people get for transportation is obviously helpful, but I want to try to ensure, to the best that we can, that we don't run into something that long-term is detrimental to what might be considered back stay or traditional transportation fees. So we could possibly work with those so we could maybe come up with a recommendation or white paper or something in that area.

MR. CHASE: Absolutely.

MR. NICHOLS: The second thing is I know that contracting practices is an important issue with a number of the legislators, and we may want to work with administration and staff and you may have or may add some ideas of doing an internal study to try to come up with any contracting practices, recommendations that we might go to the legislature with that would be beneficial to the state, save money, improve the process or any efficiencies. I think we certainly should bring that to them.

MR. CHASE: Absolutely, we shall.

MR. WILLIAMSON: There are three things that continue to be of concern to me. I think all the commission is aware that rail relocation will probably be the object of attention of the governor in the next legislative session. We should be prepared to continue to present alternatives to the governor as he requested. I think the commission is united in agreeing with the governor that after what we did two years ago, the next significant step in improving urban transportation systems, so I don't want to lose our focus on that at all.

On the matter of conversion, it was never our intention to convert an existing traveled tax road to a toll road without the approval of local authorities. It was inadvertent that that step in the process was left out. I think the commission is united in instructing you to inform the legislature of not only our willingness to address that problem, it's in all of our best interests that the public feel comfortable that that decision, if it were made, is a decision based on local leadership and not state leadership.

I am extremely interested in having the right answers for the legislature on the matters of a revolving account for aviation and a revolving account for public transit, aviation because the legislature is always interested in what we can do to improve regional aviation in their particular areas, public transit because the governor has made it abundantly clear that public transportation will be a focus of his agenda for the next two years and beyond. We need to be prepared with some solutions in response to his instruction.

That's all I've got to say. Any other? And we would look forward to hearing from you on these matters and other matters at the October meeting.

MR. CHASE: I'll be there.

MR. WILLIAMSON: Thank you very much.

We're doing good, so now we're going to, Mike, if you don't mind, hop back to the discussion on Parmer Lane.

MR. BEHRENS: Mr. Chairman, that's agenda item number 3. I will ask Bob Daigh to come up. Bob is our district engineer here in the Austin District and he will discuss an intersection problem that we're looking at in Austin at Loop 1 and Parmer Lane. Bob?

MR. DAIGH: For the record, my name is Robert Daigh, the Austin District engineer.

We have been asked by the community to look at the situation at Parmer Lane and Loop 1 North in Austin. There are concerns that have been raised by several neighborhoods and elected officials regarding the traffic congestion that exists now at this intersection and the impact of the Central Texas Turnpike project on this intersection.

We are evaluating a number of possible improvements at this location. They include adding lanes to the frontage roads themselves, the possible addition of turnaround structures, both northbound and southbound at the Parmer Lane/Loop 1 location, and we are also considering the possibility of adding flyovers. We are looking at all possible alternatives, we continue to study these, and we hope that within the next few months we will be able to reach a conclusion.

We invite you all to come out and visit the site to get a better understanding of the situation if you have time and desire to do so. We'll also be happy to provide detailed briefings for those of you that might want to learn more about it.

I'll be happy to answer any questions you have.

MR. WILLIAMSON: Bob, correct me if I'm wrong -- and I mean that sincerely -- this is a congestion issue; this is not a toll issue. Is that correct?

MR. DAIGH: It is viewed by the department as a congestion issue; there are others that view it as a toll issue.

MR. WILLIAMSON: But from our perspective, we have been aware for quite some time that being an imperfect organization, as the world is imperfect, this was a design flaw that we didn't catch early on, we caught sometime back, long before it became the source of attention by anyone, but we caught it as a congestion problem, not as a toll problem.

MR. DAIGH: Yes, sir.

MR. WILLIAMSON: And this area is represented by whom in the legislature?

MR. DAIGH: It is represented by Representative Stick.

MR. WILLIAMSON: And the senator?

MR. DAIGH: It is Senator Barrientos, I believe.

MR. WILLIAMSON: Members, any questions or dialogue with Mr. Daigh?

MR. NICHOLS: The last thing we want to do is create a congestion problem as we're trying to solve one with an expansion of a freeway, even if it's a tollway. Your team, we had a meeting yesterday and I know you have been studying many different options of ways to improve the intersections that people are concerned about.

MR. DAIGH: Yes.

MR. NICHOLS: Do you feel real comfortable, as you have evaluated these different options, that we will be able to come up with I guess you'd call it an option that won't cause an additional time delay and actually might improve it some?

MR. DAIGH: Yes, sir, I am very confident that the department can come up with a solution that will make the travel times less for the residents than they are today.

MR. NICHOLS: And that you feel like you can have that done possibly by the same time the toll road would be open?

MR. DAIGH: Yes, sir. I believe there will be competition as to what could finish first, but approximately in the same time.

MR. WILLIAMSON: Stand by just a second, Bob; there's a few more things I want to ask you about.

Representative Stick, I see you're in the audience. I've got a note here you have a comment. Is that correct?

MR. STICK: Yes, sir.

Mr. Chairman and members of the commission, I appreciate you giving me just a couple of seconds to talk with you. First is the thank yous, both to you for all of your flexibility and your understanding. I know I've bugged you for the last 18 months on this. Mr. Chairman, I'm sure you rue the day that you gave me your cell phone number, and I promise when this is all over I'll get rid of it.

Bob Daigh has just been tremendous. He's fielded a lot of calls from me, from my office on this, and I appreciate you keeping this at the forefront of your agenda.

This is an ongoing concern, as you know; from almost the day I took office, I've been working with you to try to find some resolution on it. It is affecting home purchases in this area, it is affecting the values of the homes that are there, it's affecting whether or not people are willing to move into the area, and with the development of Robinson Ranch, it's going to have a serious impact on economic development one way or the other. I say one way or the other because if we are able to meet the needs at this intersection, it could also have an explosive effect on economic development and really improve the economic development efforts that we are undertaking in that area right now.

This is not a part of the CAMPO plan, although I'm pleased to tell you that the atmosphere in CAMPO is improving considerably; we're talking all of us, regardless of which side of the issue we're on, and we are making significant progress. In fact, this last week we agreed at the next jousting tournament not to use real weapons. So I think we're seeing significant improvements there.

(General laughter.)

MR. STICK: Mr. Chairman and members, my comment today basically is going to be I know that we are making progress on this and I appreciate that. Anything that you can do to move this quickly would be of great benefit. Even the ability to announce to people in the area that there is a solution and describe to them the possibility of what that solution is will have a significant impact on the issues that I've already described to you here just a few moments ago.

I'm happy to answer any questions that you have, if there are any. Otherwise, I just appreciate what you're doing and the speed with which you are doing it.

MR. WILLIAMSON: Members? Mr. Nichols?

MR. NICHOLS: I was just going to reiterate, we very much appreciate you being here and appreciate the situation and concern that you've had because of your constituents and their concerns. You have expressed that very clearly to us and I can assure you that we have given it our full attention to try to come up, through the staff and administration and the district, with whatever reasonable we need to do to make sure that what they're concerned about is resolved as quickly as possible in a manner that's the safest and stuff also.

I think, and I know I had a meeting with Bob and I'm sure you've had many meetings with him and some of the others and I think that we as a commission have given him direction. That's a staff function to work that stuff out, but have given our full support for them to try to resolve it and get it worked out, and I feel very comfortable that they will.

MR. STICK: Thank you, Commissioner. I appreciate that comment.

MR. WILLIAMSON: We appreciate you being here.

MR. STICK: Thank you, Mr. Chairman.

MR. WILLIAMSON: Bob, you know, one of the things we've struggled mightily with is the balance between the commission interfering with operational matters and staying on its side of the fence -- which is policy -- and I wouldn't want you to think anything I or Mr. Nichols said was otherwise, but I've just got to tell you making Texans feel comfortable about the path that has been chosen to address congestion problems in this state -- that ubiquitous four-letter word -- is difficult enough; it's made more difficult when these situations arise and we don't resolve them quickly, whether it's the Austin District or the Houston District or the Fort Worth District, Dallas District, doesn't matter. Texans have to know that the commission pays attention, thinks about what's fair and what's right, and then acts and moves on.

So this isn't part of the CAMPO process, we don't ever want to interfere with local planning, this is a problem we've known about for a while. If the commission has been in any way wishy-washy about its wishes to you, we'd like to clarify that today. We want this problem off the table. And if Tuesday is not too quick, I'll take you out and you and I will go out and take a look at it Tuesday and we'll make some decisions, if that's okay with you.

MR. DAIGH: Okay.

MR. WILLIAMSON: I'll give you a call and we'll get about it.

MR. DAIGH: Okay.

MR. WILLIAMSON: Anything else, members?

MR. HOUGHTON: Is there a cost to the fix?

MR. DAIGH: Well, there is no single fix that has been determined, we're still analyzing a variety of options -- enough said.

MR. WILLIAMSON: I will represent to you, Mr. Houghton, by Tuesday we're going to know what it is because we're going to get this solved.

Thank you, Bob.

MR. DAIGH: Thank you.

MR. WILLIAMSON: Let's take up Cameron County.

MR. BEHRENS: Let's go to agenda item number 11, and this will be the recommendation that we authorize a regional mobility authority for Cameron County. And I think, speaker, if you would yield first to our staff to introduce this item, and I'll bring up Phil Russell and he will present it to the commission.

MR. RUSSELL: Good morning, commissioners. I am Philip Russell, director of the Turnpike Division.

In June of this year, Cameron County filed a petition for the authorization to form an RMA. The petition identified the West Loop as the initial project for development by the RMA. The project would be a 7-and-a-quarter mile long facility, four-lane facility, located in the city of Brownsville, on the current right of way on the UP Railroad. The project would extend from the intersection of 77 and US 83 south to Palm Boulevard.

On August 31, we conducted a public hearing, pursuant to the RMA rules. Notice of the hearing was published in the Texas Register and in newspapers of general circulation in Cameron County. During the public hearing, as well as after the hearing, we received several statements, both written and oral, relating to the creation of the RMA. In general, there was broad support for the formation of the RMA; there was some general discussion about representation within the RMA, what the initial project might be, whether it's the West Loop or the second causeway bridge; there was some discussion about toll roads in general in the area. We did receive some resolutions of support from the Cameron County Commissioners Court, the Brownsville and the Harlingen-San Benito MPO.

If you choose to approve this minute order, you would authorize the creation of the Cameron County RMA, the area would be the entire geographic area of Cameron County, the initial project would be the West Loop project; and the initial board would be composed of seven members, six of which would be appointed by the Cameron County Commissioners Court, and of course, the chair would be appointed by the governor. And I will stand by for any questions you might have.

MR. WILLIAMSON: Members, the floor is open for questions with Mr. Russell.

MR. NICHOLS: Is the county going to make its presentation?

MR. WILLIAMSON: I believe the county is going to make its presentation.

MR. NICHOLS: Then I'll hold my comments or questions till after that.

MR. WILLIAMSON: Then we are pleased to recognize Commissioner David Garza, a good friend of this department, a great Texan, and a pretty fair county commissioner, I'm told.

MR. GARZA: Thank you very much, Chairman Williamson and commissioners. It's a pleasure to be here this morning. Mr. Behrens, good to see you.

We are very pleased in Cameron County to have submitted to you our application for the creation of our RMA authority. Cameron County has in the past undertaken many large infrastructure projects; toll projects are not new to Cameron County. We now have three international bridges of which we are part owners and we have one street-highway route in Brownsville -- which I believe item 6(a)(4) will probably detail some of that with you -- which is a toll.

Our last major toll project was Veterans Bridge in Brownsville which was a $100 million project and it included a multitude of partners for the county to be able to accomplish that, including TxDOT, and we thank you for your help then and your continuing help now.

Another major infrastructure project that Cameron County is involved with is the relocation of railroads in our urban areas, and I was really happy to hear the commentary. Commissioner Houghton was with us last week down there and he mentioned to us some of your discussion, and that is really good to hear because we are positioned already to move forward with our projects in that. We have 180 at-grade crossings in Cameron County, we have 500,000 vehicular crossings daily, and with our railroad relocation plan which will allow us to create our first regional mobility authority project, we will reduce that to 125,000 vehicular crossings a day and 80 railroad crossings instead of 180.

So as we speak, we're waiting on constant call with the State Department because we have a presidential permit which we hope to hear from today by 4:00, and when we do we'll let you know; that will allow us to move with that relocation project forward.

Of course, today we're here because we would like you to approve our regional mobility authority. We do not believe that toll roads are double taxation; we believe that toll roads is an opportunity for our constituency to have an alternative means of mobility, and we want to make sure that we afford that opportunity to our residents in our area. We want to make sure that mobility does not impede our economic development opportunities that we might have in the future, either at the seaport, at the land port, or moving product from the land port to other parts of the state of Texas.

So we would like to say that the West Loop project is the identified project but there are many other projects that we would like to have considered for the RMA. We look at the second causeway that is going to be an ideal project for the RMA group; we look at 281 that links Brownsville to Hidalgo that would be an excellent candidate for that; and another one is 511. So there's plenty of projects that we would like to have looked at for that potential.

The West Loop project, 7.2 miles of right of way, available for us as soon as we can get this RMA rolling and available for us when we get your help in doing that rail relocation. We ask for you to help us with this. We think that with the approval of this RMA for Cameron County, we'll enter a new era of partnership with your department in which we can do great things of starting your Trans-Texas Corridor plan from the border to county line.

So I thank you in advance. I do wish to invite Commissioner Johnson and Commissioner Nichols to come view our area and see the projects firsthand. I thank Chairman Williamson for having been down there, and Commissioner Houghton and Commissioner Andrade for having visited. Thank you, sir.

MR. WILLIAMSON: Members, questions or comments for Mr. Garza? Mr. Johnson?

MR. JOHNSON: Commissioner Garza, thank you so much for that generous invitation, and I can assure you I will take it up.

I want to salute you and your fellow commissioners.

MR. GARZA: Well, I would like to introduce, if I may, Commissioner John Wood.

MR. JOHNSON: I think this is a very important step and so meaningful for a border county to take this step. I think you recognize the challenges that we face in this state of dealing with congestion, and it is also heartening to hear the numbers that you spoke of in terms of the railway location and the impact that it's going to have on crossings in your part of the world, and you multiply that significantly if you go to our large metropolitan areas.

And so I think you're doing a lot of things right and I look forward to coming down there, and I certainly salute this step because I think it will solidify the partnership that the residents of Cameron County have with this department.

MR. GARZA: Thank you.

MR. WILLIAMSON: Mr. Nichols?

MR. NICHOLS: I want to compliment you and the county and the community for having such a forward-thinking attitude. I think the steps that you are taking with this are going to have impacts that are going to be just wonderful for your community as time moves on. Not only are you going to solve a problem today, but you're going to generate some opportunities in the future that you would not have had otherwise, whether those be by road or transit or whatever, with the revenues to come.

I can't wait till we approve this, so I'll hold back until he finishes making his comments.

MR. WILLIAMSON: Mr. Houghton.

MR. HOUGHTON: You're going to hold back? That would be a first?

(General laughter.)

MR. HOUGHTON: I just love it, I really do. I expressed that and one of the things in my notes is a common theme that we're seeing with CARTPO before you came and your group is communities, regions coming together to plan and not coming, as I call it, to Austin to genuflect and say please, please, please. So I think it's an outstanding day, I really do, and especially for the border. There have been people that try to put a blanket on the border, David, as you and I talked, and call it one; that is so far from the truth. Your issues in Cameron, Hidalgo and those areas, those counties are completely different. You have your own issues, you have your own goals and objectives, and I applaud you.

And as I mentioned, you have a tremendous district engineer down there. Mario is working with those groups in planning and achieving the goals, finding ways to achieve your goals. So I applaud you.

MR. WILLIAMSON: Well, I think you've heard some good things, David, and I think it's probably going to be no surprise how we're going to vote.

Let me just add that when the governor started sending his appointees to this commission, he had a couple of instructions. One of his instructions was: I don't want the communities of Texas having to come to Austin, Texas and beg for the tools they need to solve their problems, I want us to develop tools that are in their control, I want to empower regions to solve their problems and to generate cash flow for themselves for the future.

We have taken the necessary steps at the legislative level, almost unanimously; the governor has given us the necessary instructions, he has appointed men and women to carry that out; you are the last step in this journey. I am so pleased; you're going to be so pleased you did this. In ten years, if you're still on the court or doing something else or if you're just a citizen again, you are positioning your part of the state to never have to beg Austin, Texas for anything again, and that's what the governor wanted to establish that kind of empowerment.

So we're pleased, I can't tell you how pleased we are. We hope every community in the state takes advantage of this at some point.

MR. GARZA: Well, we know how important toll projects are because our revenues from our bridge system is the equivalent to 11 cents per hundred on our tax rate, so we understand that concept well.

MR. WILLIAMSON: Thank you, Commissioner.

MR. GARZA: Thank you very much.

MR. WILLIAMSON: Anything else you need from us? Who gets the pleasure of moving?

MR. NICHOLS: I'll move.

MR. WILLIAMSON: Mr. Nichols has moved. Who takes the pleasure of seconding?

MR. HOUGHTON: I will second.

MR. WILLIAMSON: Mr. Houghton seconds. All those in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries unanimously. Thank you, Cameron County, very much. And we will take a five-minute break to allow Cameron County to unimpededly get to the airport.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We're back from recess, and Mr. Behrens, I turn it over to you, sir.

MR. BEHRENS: We'll return back to agenda item number 4 which is Aviation. We have two minute orders before you to be presented by Dave Fulton, our Aviation director, the first being funding for our airport aviation projects, and the second being to appoint two members to the Aviation Advisory Committee. Dave?

MR. FULTON: Thank you, Mike. Commissioners, for the record, my name is Dave Fulton; I'm the director of the TxDOT Aviation Division.

The first minute order contains a request for grant-funding approval for six airport improvement projects. The total estimated cost on all of these requests, as shown on Exhibit A, is approximately $9.6 million: approximately $7 million in federal, $1.3 million in state funding, and $1.3 in local funding.

A public hearing was held on August 23 and no comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: Members, are there questions of Mr. Fulton?

MR. JOHNSON: Does any of this money go to Nichols International in Cherokee County?

MR. FULTON: No, sir. I believe that we've already taken care of that.

(General laughter.)

MR. WILLIAMSON: Other questions, members? Mr. Houghton, do I have a motion?

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. FULTON: Thank you. The next item is a minute order to appoint one new member and reappoint one current member to the Texas Aviation Advisory Committee. The proposed new member is Mr. Pete Huff from McKinney, Texas; the member proposed for reappointment is Mr. Bill Knowles from Palestine, Texas. Both individuals meet the statutory requirements for service on the Texas Aviation Advisory Committee. We would recommend approval of this minute order and will point out that Mr. Knowles and Mr. Huff are present and wish to briefly address the commission.

MR. WILLIAMSON: What's the proper procedure, Mr. Monroe: let them address now?

MR. MONROE: (From audience.) Yes, sir.

MR. WILLIAMSON: Mr. Huff, we'll take you first, please.

MR. HUFF: Good morning, Mr. Chairman, fellow commissioners. I'm Pete Huff; I'm from McKinney, Texas, the county seat of Collin County. Recently, McKinney was designated the fastest growing city in the United States of America over 50,000 which not all Texans know but I'm trying to pass that word on. We've gone from 20,000 maybe four years ago to 96- today, so we're going to have to compete in the over 100,000 probably next time.

The airport is a major part of North Texas. I'm passionate about aviation but more passionate about the economic development of aviation, especially for the state of Texas. I've been here since 1940, really look forward to this appointment, and will do my very best to contribute to the aviation structure in the state of Texas. I'll be glad to answer any questions.

MR. WILLIAMSON: Members?

MR. JOHNSON: Thank you for coming this distance and thank you for your service.

MR. HUFF: Thank you very much, I appreciate it.

MR. WILLIAMSON: I've got a question for you.

MR. HUFF: Yes, sir.

MR. WILLIAMSON: Which side of the McKinney Airport issue are you on?

MR. HUFF: Oh, that's easy.

(General laughter.)

MR. HUFF: Let me just address that a bit. I travel the country quite a bit, and in fact, I was in Santa Fe just very recently. They proceeded to tell us a similar story: there are a few dissident people that bought land cheap around the airport and don't like their airport now but it's a major economic development tool to that community. We have our dissidents as well and we very respectfully deal with them and so forth, but our motto basically is we're going by all the rules, environmental, federal, state, local, but we're building an airport and we're going to build it within the rules.

It's a tremendous economic tool for our city, and in fact, we couldn't support that growth without it. It goes to building roads and sewers and water lines and power lines, and it's part of our strategy, so we've got to go by the rules but we're going to build an airport.

MR. WILLIAMSON: Well, the reason I asked the question -- did you want to also talk?

MR. NICHOLS: I didn't want to interrupt you.

MR. WILLIAMSON: Well, I asked the question because in the role that we play, we have to not only tolerate those who disagree with us but we actually -- a Texan who pays taxes -- well, I guess any Texan, Texans have the right to be heard, and not only do they have the right to be heard but they have the right to be listened to. We have dissidents to our toll program, we have dissenters from the Trans-Texas Corridor. We are not perfect individuals, we have to make subjective decisions based on objective analyses. And I would urge you, as I remind myself everyday, a Texan who disagrees with you is a Texan first and they're entitled to be heard and to be thought about, and those folks that are concerned about the McKinney Airport are entitled to be heard.

MR. HUFF: Absolutely. We've had the most inclusive master plan; we've had 50 people from not only McKinney but the surrounding communities, and Ms. Kaminsky who spoke -- and I was here at that -- and a lot of her supporters were involved in this and at meetings and so forth and were involved in this, and we continue to do this. I'm on the city council there and I get the heat, both sides of that issue, but we've got to go by the rules and we have to make decisions, so we do it in the best interest of our community but we'll listen to everybody -- we must.

MR. NICHOLS: I was just going to thank you for your willingness to serve on this committee.

MR. HUFF: Well, I appreciate the opportunity and I'll do my very best.

MR. WILLIAMSON: We know you will; good to have you aboard here in a few minutes.

MR. JOHNSON: I had one other observation.

MR. WILLIAMSON: Oh, Mr. Johnson has changed his mind.

MR. JOHNSON: Mr. Huff brought up and I think it's important to note and it really bears emphasizing, these smaller airports like this are really economic engines for communities like McKinney and I think they provide a wonderful service. And I think as you mentioned, clearly there are to most issues two sides and differing viewpoints, and we have to sit down and listen to those and make determinations, use our best judgment. But I think this is a prime example of a benefit to the community and not everybody endorses that it's 100 percent beneficial, but the most part, I think people would agree with that.

MR. HUFF: Let me just give one small example. Texas Instruments moved their corporate fleet to McKinney four or five years ago. They fly nonstop McKinney-Tokyo often because they have lots of business over there. The tax value on those planes is more than a 15-story building in McKinney, Texas. And they don't send kids to schools, they don't require roads, they don't require hospitals, it's tremendously clean; we call it economic development and we're trying to lure people outside Texas to McKinney, we're working very hard at it, but it is a major engine and it really does benefit the whole community.

There may be a slight increase but we approved a Wal-Mart in another part of town, and those people complained to us, but the economic value of the Wal-Mart was like $5 million a year. And I keep telling everybody has their cross to bear but we have to build a community so we have to make compromises but we have to do what's best for the whole community.

MR. NICHOLS: So you're saying the property value of those airplanes is actually on the tax rolls?

MR. HUFF: Yes, sir. That's the name of the game, sir.

MR. NICHOLS: Well, I understand that, but there are actually some counties that treat it differently.

MR. WILLIAMSON: Are you going to call your county here in just a few minutes?

(General laughter.)

MR. NICHOLS: No. It's just interesting.

MR. HUFF: The rule is if it's used for business, if you are reimbursed business expenses, then it's a taxable asset; if it's not, if it's personal transportation, then it's not a taxable asset.

MR. WILLIAMSON: Yes, we're calling Cherokee County at one o'clock.

MR. HUFF: Sorry, Mr. Nichols.

(General laughter.)

MR. WILLIAMSON: Other comments for this gentleman?

MR. HOUGHTON: Just congratulations.

MR. HUFF: Thank you very much.

MR. WILLIAMSON: Thank you very much for your willingness to serve also.

MR. HUFF: Not a problem.

MR. WILLIAMSON: Mr. Knowles. Usually I let the other commissioners comment but I've just got to ask you: Why in the world would you think a recommendation from Bascom Bentley and Cliff Johnson would be --

(General laughter.)

MR. KNOWLES: Oh, my goodness. What a small world.

MR. WILLIAMSON: Bascom calls me and says this is a really good guy, you need to reappoint him. I'm thinking well, why is he trying to help him, this is hurting.

MR. KNOWLES: You know, I've not seem him at the airport lately either.

MR. WILLIAMSON: He's too busy at his courthouse throwing people in jail, and then my roommate comes home and says, You know, this Bill Knowles, he needs to be reappointed. This guy has got two strikes against him.

(General laughter.)

MR. KNOWLES: Well, notwithstanding that, Mr. Chairman, members, thank you very much for giving me a chance to speak. I just wanted to emphasize that with over 40 years of aviation involvement as a pilot and as a mechanic, I'm obviously passionately involved with aviation, but as a banker, I have to echo what Mr. Huff says, really my major interest is seeing Texas improve through the economic development aspects of airports, particularly in small areas like Cherokee County or Palestine or the equivalent, because it is true, they're our lifeblood with the outside world in many ways for attracting business.

That having been said, I have had the privilege of serving under the Texas Aeronautics Commission as a commissioner and then transitioning over to TxDOT, and it's been a wonderful change. I applaud TxDOT for its support of aviation in Texas, and most importantly, for supporting the Aviation Section of TxDOT.

With the quality of people we have there, aviation is obviously on the upswing in Texas, and I can say from a personal standpoint just the items that have come about in the past seven or eight years, such as terminal building, the so-called RAMP Program which is part of TxDOT's improvement of small airports have been very, very progressive and that really, I guess, in a long way of saying is why I'd like to remain part of this committee to see it continue over the next three years.

So I really appreciate your considering me, notwithstanding Bascom Bentley. I'll tell him that, though.

(General laughter.)

MR. KNOWLES: Any questions?

MR. WILLIAMSON: Commissioners? Mr. Johnson?

MR. JOHNSON: I have one, and I want you to know that I was put up to asking this question here and absolutely disavow any interest in the answer, and the question is what was the score of the Jacksonville-Palestine football game?

MR. KNOWLES: Thank you, Robert. You should have asked it. Bad news.

(General laughter.)

MR. HOUGHTON: They tax planes in Palestine like they do in McKinney?

MR. KNOWLES: The same situation as McKinney. We would love to have Texas Instruments; maybe we can make them an even better deal. Palestine Intergalactic Airport.

MR. NICHOLS: You have served on aviation in Texas a long time, and during that period I know that a lot of things happen because people help make them happen, and we very much appreciate the input and leadership you've shown on the advisory board for a long time. Thank you very much.

MR. KNOWLES: Thank you very much.

MR. WILLIAMSON: Does Bob McFarland have a plane?

MR. KNOWLES: Bob doesn't; he'd like to.

MR. WILLIAMSON: He has everything else, I figured he have a plane.

MR. KNOWLES: He taps me when he wants to go somewhere.

MR. WILLIAMSON: We appreciate you serving. Tell the judge we all say hello.

MR. KNOWLES: Thank you very much. I appreciate the chance to be here.

MR. FULTON: With that, commissioners, I would recommend approval of this minute order.

MR. WILLIAMSON: Members, do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Do I have a second?

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Dave.

MR. BEHRENS: Commissioners, we've covered agenda item number 5; we'll go to agenda item number 6 which is our proposed rules for this month. Our rules for proposed adoption, the first one being agenda item 6(a)(1) which will be rules concerning our Adopt-A-Highway Program, and Doris Howdeshell will present this.

MS. HOWDESHELL: Good morning, commissioners. Thanks for the opportunity to be here today. For the record, my name is Doris Howdeshell and I'm the director of the Travel Division who is responsible for administering the Adopt-A-Highway Program.

Today the proposals for amendments are to Section 2.61, 2.62, 2.63 and 2.68 concerning the public participation program which is the Adopt-A-Highway Program. I'd like to summarize the changes for you; they are relatively minimal.

The first one we are actually adding a definition for an Adopt-A-Highway coordinator and the term "vandalism" to the definitions portion of the rules. The changes in the rules will also allow an individual to adopt a stretch of highway in addition to a group. We will be requiring participants to agree to hold the department not responsible for any injuries or damages suffered during their participation in the program. We're also amending the rules to allow the submission of the application to the district Adopt-A-Highway coordinator instead of directly to the district engineer which should make the process and the paperwork easier.

We're requiring groups to give us a second contact person, and in the case of some of our university participants, we're asking for a faculty sponsor so that we'll be able to get in touch with those groups during the summer months. We're also adding some requirements where we have supervision for minor participants and individuals under the age of seven will not be able to participate in the program.

This was one of the most asked-about issues that our district Adopt-A-Highway coordinators shared with us, and of course, we're concerned about the safety of children so we have put some limitations on their participation. And we also amended the rules to include individuals not being able to have illegal drugs on them when they're picking up trash along the roadway.

The last few changes are we changed the wording to where the pickups will be spread out fairly evenly over the year instead of giving a group an opportunity to pick up say their four times during the first three months of the year and then not have to pick up the rest of the year. We're also asking for the opportunity for participants to suspend their adoption of a section of highway that has gone under construction and allow them to adopt an additional section until their preferred section is finished.

And then the very last one is we are taking the memorial program which was a pilot program and making it a permanent part of the program. We currently have three groups that were memorial groups -- that was the limit in regard to the pilot program -- and we do have some groups that are waiting to adopt in that portion of the program; there have been no issues with that.

So that's the summary of the primary changes, and staff is ready to recommend approval of the proposed rule changes.

MR. WILLIAMSON: Members, do we have questions or comments for Doris? Mr. Johnson?

MR. JOHNSON: Doris, I think this is a terrific program and I apologize for not being able to make the luncheon. I'm flattered to be invited, and unfortunately, I just couldn't get here in time.

Do you, off the top of your beautiful head, know roughly how many miles of highway in this great state have been adopted by groups or corporations or whatever?

MS. HOWDESHELL: Yes, sir. We have about 3,600 groups that participate and they have about 7,700 miles of highway adopted which is about 10 percent of our system. This is a program that's very near and dear to my heart, and we're hoping that some of the rule changes will open up opportunities for more groups to adopt as well.

MR. JOHNSON: I think that's fantastic. It appears to me that a lot of the rule changes are just sort of housekeeping that you've learned from experience, minor tweaks that need to be made, and then in a few instances where we can expand the program to be more inclusive.

MS. HOWDESHELL: Yes, sir, that's a good summary of our changes, and actually, we worked very closely with our Adopt-A-Highway coordinators in the districts since they're the ones that actually implement the program on the ground, so to speak, and talk to the participants face to face on a regular basis. We asked them what their major concerns were with the rules and we got their feedback to try to make the program more efficient for implementation.

MR. JOHNSON: Lastly, I don't know if you were the responsible party, but there was a lapel pin that was left up here "Adopt-A-Highway" and I'm appreciative for it.

MS. HOWDESHELL: Yes, sir, I brought that this morning, and we actually gave them out at the luncheon yesterday.

MR. JOHNSON: I'll wear it proudly.

MS. HOWDESHELL: Thank you very much.

MR. WILLIAMSON: I think that everybody is satisfied. Do I have a motion?

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MS. HOWDESHELL: Thank you.

MR. BEHRENS: Agenda item 6(a)(2) is proposed rules under Transportation Planning and Programming, and these will be rules concerning federal, state and local participation, and Mark Marek, our director of the Design Division, will be presenting them. Is this your first time, Mark?

MR. MAREK: Yes, it is.

MR. WILLIAMSON: Uh-oh.

MR. NICHOLS: Be careful.

MR. BEHRENS: I shouldn't have said that, should I.

MR. MAREK: Thank you, Mr. Behrens, for bringing that to the commission's attention.

MR. NICHOLS: Let's get that list of questions.

MR. BEHRENS: I try to treat everybody fairly.

(General laughter.)

MR. MAREK: For the record, my name is Mark Marek and I am the director of the Design Division.

MR. WILLIAMSON: How long have you been there?

MR. MAREK: I've been there since July 1, 2004.

MR. WILLIAMSON: What were you doing before then?

MR. MAREK: I was Ken Bohuslav's deputy director in the Design Division.

MR. WILLIAMSON: How come Ken never told us about you?

MR. MAREK: That's just Ken's way.

MR. WILLIAMSON: I saw Ken earlier in the day. Did you ask him to come here and offer emotional support?

MR. MAREK: No, sir, he came on his own I think to heckle.

MR. WILLIAMSON: You're well prepared for this.

(General laughter.)

MR. WILLIAMSON: Old Ken, he's gone to the dark side. Be careful about those guys who go to the dark side.

MR. MAREK: For the record, my name is Mark Marek, I am the director of the Design Division.

The minute order before you today proposes amendments to Sections 15.51, 15.52, 15.54, and 15.55 relating to federal, state and local participation in the development of highway improvement projects to be codified under Title 43. This is basically a cleanup of these rules with respect to some things that have changed legislatively and some things that have changed with federal mapping.

Section 15.51 is amended to define additional terms used in the subchapters to include the on- and off-system Safe Routes to School Program established by recent legislation to advance the safety of school-age children in the state, and to include a definition for on-system turnpike projects.

Section 15.52 is amended to clarify that the standard payment provision includes right of way. Section 15.54 is amended to update cross-references and remove participation ratios for traffic signals and continuous and safety lighting systems since cost participation for these items is included in Chapter 25 of this title relating to Traffic Operations.

The appendix in Section 15.55 is amended to maximize the department's flexibility in the use of federal funding in conjunction with the restructuring of the Unified Transportation Plan. Some participation ratios have been revised to allow the department the flexibility to request federal reimbursement for additional right of way and preliminary engineering activities, thus reducing the required state and local participation required for some types of projects.

With the elimination of the urban system boundaries on the new Federal Census maps, the urban road participation ratios have been made equivalent to those we use on the farm to market road programs.

In order to rehabilitate as many bridges as possible, Section 15.55 has been amended to allow additional time for local governments to complete their equivalent match project if it has been shown that a good faith effort to comply with the deadlines has been made.

Staff recommends your approval of these proposed rules.

MR. WILLIAMSON: Questions or dialogue with --

MR. NICHOLS: Mark Marek.

MR. WILLIAMSON: Oh, I know, I'm thinking what his nickname is.

MR. NICHOLS: Mr. Access Management.

MR. WILLIAMSON: Access Management Mark.

MR. NICHOLS: I had a comment. I have no problem with any of these. On the Off-System Bridge Program, I think that's a reasonable move. We had said, when we set that up, three years and now you're locking in the three years if it's under contract within three years.

MR. MAREK: Yes, sir.

MR. NICHOLS: My only advice or caution, I guess, to administration is when we set this program up, we had a lot of flexibility at the local level to allow the district engineer to work with the counties to get a lot of these things done, and then I know historically once we establish a process and have a rule for that process, that over time the rule has a tendency to expand and get tighter and tighter, and I just want to emphasize that we sure do want to try to keep some flexibility in this area. Ever since we put it together, it's dramatically increased the number of bridges that have been repaired in the state.

MR. MAREK: We have stated that the additional time will be two years or less will be presumed to be a reasonable time in the rules.

MR. WILLIAMSON: Other questions or dialogue?

MR. JOHNSON: I just had a question. I'm curious about the pronunciation of your name, and I apologize for this question, but it blurted into my mind. Is Mar-ek relative to Ma-rek what Bohslav is to Bohooslav?

MR. MAREK: Yes, sir, that would probably be an equivalent.

MR. JOHNSON: Are there any Ma-reks in this department? Are you related to any Ma-reks?

MR. MAREK: I'm not related to any of them but there are others, yes, sir.

MR. JOHNSON: Thank you for clarifying that.

MR. WILLIAMSON: I thought it was Mar-ek.

MR. MAREK: Mar-ek is how my family would pronounce it, yes, sir.

MR. WILLIAMSON: Well, who's Ma-rek?

MR. JOHNSON: It's some people who spell their name exactly the same but pronounce it differently.

MR. WILLIAMSON: Oh, that was like Bohslav and Bohooslav.

MR. NICHOLS: I so move.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MAREK: Thank you, commissioners.

MR. BEHRENS: Agenda item 6(a)(3), proposed rules in Traffic Operations concerning our Logo Sign Program. Carlos?

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

The minute order before you provides for the withdrawal and reproposal of rules for the department's Logo Sign Program; these rules were initially proposed in July. This reproposal is designed to accommodate public comment. One commenter noted that neither existing program rules or proposed revisions allowed for the contractor to recover the economic value of signs installed during the final years of the contract period. We believe that this is a valid comment and justified making this change.

Part of the contractor's responsibility is to install and market these signs to local businesses, although it can take a few years to recover initial sign costs through rental fees. Therefore, we have added a new depreciation schedule that allows the contractor to recover the remaining economic value of signs that are less than three years old at the end of the contract period.

The proposed rules will also make various changes required from the last legislative session: they will allow for the use of dual logos and the rental fee will be the same as for a single log; allow the department to use the best value contracting approach when awarding a contract; increase the percentage of program revenue return to the department to at least 10 percent of all rental fees.

We recommend approval of this minute order.

MR. NICHOLS: So the reason is because of the economic value of life was not in there and that's considered a substantial change and we're going to cancel and redo.

MR. LOPEZ: Yes, sir, that's correct.

MR. NICHOLS: All right.

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. LOPEZ: Thank you, commissioners.

MR. BEHRENS: Agenda item 6(a)(4) is proposed rules concerning Oversize and Overweight Vehicles and Loads, and Carol Davis will present this.

MS. DAVIS: Good morning. For the record, I'm Carol Davis with the Motor Carrier Division.

We have proposed amendments today to our administrative rules concerning Oversize and Overweight Vehicles and Loads. Most of these proposed amendments are cleanups and clarifications on our current policies concerning bonds, route inspections and which days we're open on Saturdays surrounding different holidays, and then we also have a proposal to bring our trunnion axle configurations in line with our WASHTO regional partners in our regional permitting agreement.

The other item proposed is to require applicants for permits to transport super-heavy loads to obtain an analysis from an independent licensed PE when they submit their application rather than the Bridge Division doing those analyses. And what that will do is that will be a more effective use of the Bridge Division's personnel and also will shorten the turnaround time for applicants. Right now it's about six to eight weeks to get those super-heavy permits, and if they bring in their own analysis, that will shorten that period.

Staff recommends approval and if you have any questions.

MR. HOUGHTON: What's a super-heavy?

MS. DAVIS: Over 200,000 pounds, between 250- and 400,000 pounds.

MR. WILLIAMSON: Do we have a motion?

MR. NICHOLS: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, on.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Carol.

MR. BEHRENS: Going to agenda item 6(b), we have one rule for final adoption and this is the use of options to purchase advanced acquisition of real property. John Campbell.

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

I'd like to present for your consideration this minute order item 6(b) which provides for the final adoption of new Section 21.16 concerning the use of options to purchase for advance acquisition of real property. We received no comments during the comment period, and staff recommends your adoption of these rules which mirror the authority provided for in the underlying statute.

MR. WILLIAMSON: Questions or comments, members? Yes, Mr. Nichols?

MR. NICHOLS: A few months ago when this went out as a proposed, one of the comments I had made at that time was that our people are trained, are constantly updated on the proper steps to take in acquiring right of way property. The business -- which is a different type of business -- of acquiring options might require some additional training and I was wondering if we were going to go outside and get some professional expertise in this area and train our folks. Have we done that?

MR. CAMPBELL: Yes, sir. We have, as a result of your comment in the past commission meeting, we have a couple of pilot efforts already underway, and what we did is secured a technical expert contract with a land broker to just assess our methodology generally and our assumptions about developing the options.

MR. NICHOLS: All right.

MR. WILLIAMSON: Other questions or comments?

MR. JOHNSON: John, in this arena of utilizing options to acquire property where expansions or new facilities might go, are we looking at the possibility of utilizing that in terms of acquisitions of ongoing businesses rather than either as an option or as a purchase and lease-back trying to create some flexibility for business owners and also for the department in keeping their location which they have an investment in up and running while we're, in essence, waiting for funding to expand a facility or build a new facility?

I'm familiar with one situation on the I-35 expansion in the Temple area that hopefully we're -- and I know wherever we expand these things in our major metropolitan areas, businesses are affected, and I hope we're looking at methods to work with business owners whereby the impact to them and the time element can be worked out to where it's not as harmful as might be if all of a sudden we just either bought something and said I'm sorry, it's ours, see you later. Is that our mind set? And if it's not, I hope it will be.

MR. CAMPBELL: Yes, it is. And in fact, we have quite a bit of experience because of the length of our right of way acquisition process and then our actual need for the property, we do very frequently lease back to occupants until such time as TxDOT needs the property.

And in our discussions about options, a lot of it has been couched in those same circumstances. We want to make sure that we afford -- again, we negotiate this on an agreed-to basis with the owners, and so we're going to afford them every use that they want to maintain on it through the term of the option. And in most of these cases, the option, until such time as we exercise it, we'll have no need for the property, and so we'll want them to be able to continue their use of it until we do need it.

MR. JOHNSON: Excellent. Thank you.

MR. HOUGHTON: Will this mitigate any of the eminent domain condemnation issues that we've faced in the past going forward?

MR. CAMPBELL: Well, I think it will probably indirectly because what we'll want to do as our strategy would be to identify properties that would be your typical complex issue properties for these options, and what that does then is it affords us the ability to start working on those issues earlier, and therefore, not having to end up in condemnation to resolve those things. So I think it will have that indirect impact on moving some of the more complicated parcels automatically out of the ED path.

MR. HOUGHTON: If you had this on the Texas 130, do you think you could have mitigated some of the issues there on subdividing property? I know that's a crystal ball type question.

MR. CAMPBELL: Yes, sir, but I think yes is the answer because what the option does is it gives TxDOT some of that speculative type flexibility. So much of what we get burdened with is our inability to address things that we see coming, and so the option would have probably been a useful tool for us on 130 to just be able to get out ahead and get some headway made on those complex parcels.

MR. JOHNSON: Indulge me for a moment. I know there's a controversy -- it's not an option issue, and I apologize for bringing it up at this time -- in Smith County on the Tyler Loop. Has there been any action on that particular issue or agreement?

MR. CAMPBELL: I was trying to recall the details of the situation on the Tyler Loop. That was more an issue --

MR. JOHNSON: It was a subdivision platted that was going to increase the right of way cost by a considerable amount of money.

MR. CAMPBELL: The practical headway that was made, a lot of the department's awareness of that situation was after the fact. There were, in fact, houses built on most of the strategic properties through the highway's path. The progress that we have made is practical, in that the developer that's out there -- or more accurately, these were individual residential construction owners have ceased any more construction. But like I say, we got there after the fact and now TxDOT's focus will be on making sure that we properly compensate for the structures and for the property interests that we did have to take. There remains a local legal argument ongoing between the city and the developer.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Other questions or comments?

MR. NICHOLS: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Hold on a second, John. Were you earlier present when we had the discussion from Coby about the relocation of rail lines?

MR. CAMPBELL: Yes, sir, I was present.

MR. WILLIAMSON: I suspect in line with Commissioner Nichols' comments about getting expertise for specialized type of work, we might want to begin to think about where we're going to turn for expertise on evaluating rail lines, not in the context as a rail line but as a potential transportation corridor, as potential marketing to the private sector if we are able to arrange voluntary swaps with the rail lines.

We probably would benefit from beginning to develop that expertise so we can at least have a handle when the legislature will ask us questions in just a few short months that will go something like this: How do you know the UP line through Houston is worth $3 billion or $2 billion or $600 million or whatever it is? We'll need to be prepared to tell them that outside of what other expertise the legislature chooses to turn to. So we might want to start working on that.

MR. CAMPBELL: I understand. We'll be prepared.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: Agenda item 6(c), our rule review concerning our Right of Way rules. Richard?

MR. MONROE: Good morning, commissioners. My name is Richard Monroe; I'm general counsel for the department.

Before you now is a minute order which I would recommend you approve. This is part of a statutory program under which all state agencies are required to publish their rules as they are, not connected with any amendment, for the public to look at and comment on. The rules were published, these are our Right of Way rules; no comments were received during the comment period, and by approving the minute order, you will in essence reinstate our Right of Way rules, make sure that John Campbell has a job from now on, and that's an end to it. So I would recommend that the minute order be approved.

MR. WILLIAMSON: Questions of Mr. Monroe?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: As fascinating as rule readoption is, I think I have something a little more important to present to the commission, and in case you haven't already heard, it concerns the Laredo case.

MR. WILLIAMSON: Would this be the case where we are in conflict with --

MR. MONROE: The City of Laredo for the placement of the border inspection stations, yes, sir.

Page 24 of the decision, conclusion: "For the foregoing reasons, Plaintiff's motion -- Plaintiff is the City of Laredo -- for summary judgment, Docket Number 65, is hereby denied, the State Defendant's motion for summary judgment, Docket Number 66, is hereby granted, and the Federal Defendant's motion for summary judgment is hereby granted. Plaintiff's NEPA claim and its MPO claim are dismissed and all other claims are dismissed with prejudice. Signed Keith P. Ellison, United States District Judge."

MR. WILLIAMSON: Congratulations, Richard. Very good.

MR. MONROE: The real credit goes to the Transportation Division of the AG's office. They do a wonderful job for us, and I would point out in this case that the defendants got together and decided to let the Transportation Division AG be the lead attorney for all defendants in that case. I can tell you as a former federal attorney, that almost never happens, so it shows their high regard for the Transportation Division as well. When they're allowed to handle something, they do a very good job of it.

MR. WILLIAMSON: Thank you very much, and pass our thanks on to them, please sir. The commission is very pleased.

MR. MONROE: Thank you.

MR. WILLIAMSON: Good news, great news.

MR. BEHRENS: Agenda item number 7 is a discussion item. Jim Randall and his staff in TP&P have been working on the 2005 Statewide Mobility Program, and Jim will present where they are in the draft of that 2005 program.

MR. RANDALL: Good afternoon, commissioners. My name is Jim Randall, director of Transportation Planning and Programming Division.

Item 7, the update of the Statewide Mobility Program is currently scheduled for commission action on November 18, 2004. The consideration of the Statewide Mobility Program will represent the final action necessary for approval of the 2005 Unified Transportation Program. The Unified Transportation Program is made up of both the Statewide Mobility Program and the Statewide Preservation Program.

The process of developing the UTP began with a public hearing on November 24, 2003 where the staff presented the department's project selection process and proposed funding levels. The process was approved on January 29, 2004 and staff was directed to develop the 2005 UTP.

On May 27, 2004, the commission approved the 2005 Statewide Preservation Program. The Preservation Program is part of the MAINTAIN IT budget strategy and includes categories specifically for preservation of the existing transportation system.

The Statewide Mobility Program is part of the BUILD IT budget strategy and includes programs primarily established for mobility and system enhancement. At this time, the current draft of the 2005 Statewide Mobility Program does not include an exhibit for Category 2, Metropolitan Area Corridor Projects. The eight large metropolitan planning organizations and their corresponding district staffs have linked their Category 2 program to the Metropolitan Mobility Plan.

Working with the metropolitan districts, staff will schedule a financially constrained Category 2 program utilizing traditional Fund 6 dollars, Texas Mobility Funds, and Proposition 14 bonds and assemble an exhibit to be considered in November as part of the 2005 Mobility Program.

We anticipate the Category 2 program will contain approximately $4.7 billion worth of projects during the first four years of the program. Last year's Category 2 program had $2.5 billion for the first four years. We're able to do this utilizing the new financing tools made available to us by the voters and the legislature.

The projects recommended for commission consideration in Category 3, Urban Area Corridor Projects, were developed through the consensus of the 17 smaller metropolitan planning organizations and their associated districts through the UTP Category 3 work group. Likewise, Category 4 projects, Statewide Connectivity Corridor Projects, were developed through the consensus of the Category 4 work group. Their report to the commission outlined the transitional period in which all Phase 1 Texas Trunk System projects will be reauthorized before using the recommended criteria for selecting new corridors.

In order to move forward with the use of Proposition 14 revenue bonds, staff will be recommending that the commission authorize $550 million for the Safety Bond Program. This will comply with Texas Transportation Code Section 222.003 which requires the commission to issue bonds in their aggregate principal amount of $600 million to fund projects that reduce accidents or correct or improve hazardous locations on the state highway system. Staff is recommending that $50 million be set aside for right of way and project development costs needed for these safety projects.

Staff will also be recommending a $15 million Curb/Ramp Program to address construction of handicap-accessible wheelchair ramps at on-system intersections. This program will allow stand-alone contracts to be awarded to address this needed improvement.

Staff will also recommend that the DEVELOP authorization for Category 11 District Discretionary be increased from $2.3 billion to $3.3 billion. The allocation to the districts will be calculated using the Category 11 formula used to distribute the Construction funds.

No new Category 12 Strategic Priority projects are being recommended in this update. This category can be amended throughout the year at the discretion of the commission. Currently the draft 2005 Statewide Mobility Program contains highway improvements totaling over $6 billion. This includes new FY 2008 allocations in Categories 5, 7, 8, 9, 10 and 11. With the addition of the anticipated Category 2 program, staff will be recommending authorization of approximately $10.7 billion for FY 2005 through FY 2008.

In addition to the 2005 Mobility Program, it will include the Transit Program and the Aviation Capital Improvement Program, and we have representatives from the Aviation Division and PTN to address any questions you may have on these two particular programs.

Staff is proposing a 30-day public comment period to begin October 1 by posting the draft 2005 Statewide Mobility Program on the department's website. Initially this posting will not include the Category 2 program. Upon completion of the coordination with the metropolitan districts, the draft will be amended with the Category 2 program.

Mr. Chairman, that concludes my remarks.

MR. WILLIAMSON: I'm sure there will be some questions and comments, members. Let me just ask you, Jim, I think there's some confusion in the public about the Statewide Mobility Plan and the Mobility Fund Strategic Plan. For purposes of clarification, the document before us now will eventually incorporate elements of the Strategic Mobility Fund Plan.

MR. RANDALL: Yes, sir. The Strategic Plan allows us to move forward with issuing the bonds on the TMF.

MR. WILLIAMSON: But this is our basic program document as opposed to our Mobility Fund document.

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: And it should be said for everyone that we're going to have a basic program across the state, as we've always had. Irrespective of toll or public transportation decisions the community makes or the state makes over the next ten years, this is the basic program.

MR. RANDALL: That's correct.

MR. WILLIAMSON: Members, the floor is open to Jim for discussion or dialogue, questions, comments, objections.

MR. NICHOLS: I have no objection, I was going to make a few comments. I had a chance -- well, we've worked through pieces of this as we've gone but in the meeting I had with you the other day, you were showing me some generalities of percentages related to the impact of the acceleration of projects.

MR. RANDALL: Yes, sir.

MR. NICHOLS: I think the public is not only interested in what new project dollars are going where, but are we really accelerating things, and the legislature and everything that we have worked with has been toward a goal not only to increase with the tools but also to accelerate.

In your $10.7 billion for years '05 to '08, would you like to make any comments as to what percent acceleration that is, or what it would have been a number of years ago?

MR. RANDALL: We'll be able to accelerate 88 percent of our projects within 50 percent of the time that it normally does in the past. In other words, over a 12-year period we would have X dollars to do projects; now we'll be able to do 88 percent of those within six years. That's using the new funding tools that's been provided to us.

MR. NICHOLS: And I think that's what you told me the other day and I think it is absolutely amazing. This is a process we've been going through for -- this is the first UTP, as I understand it, we have begun a process a couple of years ago, taking all those categories and squeezing them down to a small number of them, and then going to an allocation basis on some of these categories, and this is the first UTP where all of that comes together and includes the tools like the Texas Mobility Fund, Prop 14, and so on.

And the result of that, from what our understanding is, is that that money that would have been under the normal way business was conducted previously, spread out over a 12-year period would have been X number of dollars per year over 12 years. There are estimated revenues for that 12-year period. We're going to be able to take 88 percent of all those projects and do them in a compressed time period of six years.

MR. RANDALL: Yes, sir.

MR. NICHOLS: And to me that's just bells and whistles going off; I don't hear them yet, but I think when it settles out, it will. Plus, because of the leveraging, not only do you have an acceleration in a shorter period of time, you also are going to have a leverage impact based on many of the proposals that have been brought in from the metros.

MR. RANDALL: Yes, sir. Dallas is an excellent example of being able to leverage the funds that would be in Category 2 and what's proposed right now that they could leverage $1.6 billion into $4-1/2 billion in projects over the life of the UTP from '05 to '15. So that's remarkable that they're able to do that.

MR. NICHOLS: And this is one of the things that I don't think the public has gotten it yet. So if we had been doing business as usual like three, four, five, six, seven and so on back years ago, that $1.6 billion that would have been spread out over a period of time, not only is it compressed so we can do it quicker, but because of the new tools and the leverage factor the community of the Dallas-Fort Worth region came up with, instead of it building $1.6 billion of new expansion projects, we're in effect really building $4-1/2 billion. It's almost a tripling -- not double but triple in a compressed time period.

MR. RANDALL: Right.

MR. NICHOLS: Which is going to be an amazing ramp up. That's it. Thanks.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Jim, I'm going to echo a lot of what Robert said. I think it's truly remarkable if you look at the pure numbers that are presented. I mean, they jump off the page at you, the difference between what Robert has referred to as sort of the business as usual and what we're going to be able to accomplish, and the timing of that which just geometrically multiplies the meaning of those dollars by getting them done more quickly, Texans are able to utilize those facilities so much more quickly and they'll reap the rewards.

But what I think about when we go through this exercise and we look at the numbers and we look at the timing, is the legislature who provided the tools, some of the tools for us to be able to do this, the Mobility Fund leverage, the Prop 14 leverage, those are significant events and I think when you look at this document and you relate -- not only if you parallel the amount of financial impact that it has and the timing impact that it has, if I were in the legislature, I would sort of -- I shouldn't do this but I would sort of pat myself on the back because this is a seminal step towards showing how we can deal with some of the challenges we have.

I've heard Robert talk about numbers and the Transportation Committee of the Governor's Business Council talk about our needs over the next 20 years are something like between $75- and $85 billion shortfall, but when you see what we're able to do with this amount of leverage, both in terms of financial impact and timing impact, it shows that hopefully we're on the right track.

And then if you create these little hybrids whereby communities and RMAs can deal specifically with the challenges they have, by maybe not utilizing one of the tools but several of the tools combined together that this is a great step and we're going to see a lot of construction and a lot of work in the next three to five years and people are going to probably be a little inconvenienced and they're probably going to voice that inconvenience, but in the long term the impact of this is very significant.

Also, the leverage that the Metroplex area has been able to accomplish, I think is a template for others around the state to look at what they have done, how they've done it, will impact all across the state. I salute Michael Morris, and under your leadership what you have been able to do and are doing, because I think this is a great model and example that you've provided for the rest of the state.

Thank you, Mr. Chairman.

MR. WILLIAMSON: Yes, sir. Thank you, Mr. Johnson.

MR. HOUGHTON: I was in that meeting yesterday with you, Jim, and I was just dumbfounded by the 88/50. Can that get better?

MR. RANDALL: We can try.

MR. HOUGHTON: I mean, realistically, could that get better?

MR. RANDALL: I think it would be difficult to get any better right now; I think we're just about at capacity, but that doesn't mean we won't try to do better.

MR. HOUGHTON: With all the spreadsheets we had yesterday, what jumped off the page was the 88/50, and I echo my fellow commissioners, it was just amazing. Is the construction industry fully aware of what's coming, Michael, do you think?

MR. MORRIS: I had that conversation earlier with people from the construction business. I hope they're ready.

MR. HOUGHTON: That's the question. You've got two issues here: the fiscal, the dollar issue, and then the physical issue. I think we've fixed the fiscal issue with the dollars, now it's the physically building out the system.

MR. MORRIS: Michael Morris, North Central Texas Council of Governments.

I think, Commissioner, within the regions that are developing this -- and I'm going to speak later on this item -- there are commitments that are being made that if this particular thing were to be a toll road and this particular project will be built -- and we phrased the term "near neighbor, near time frame" -- and we establish this policy that leveraging would occur by sweat equity and the tolls that are paid by the people in this particular area, and you're going to benefit from that, not a project 20 years from now but a project in the same time frame.

What's going to be critical to maintain that partnership is the institutional ability to deliver that, and I was talking to some construction folks earlier -- I hope industry is ready. You have a second benefit -- and I think, Commissioner Johnson, while we may create some disruption due to construction, you have a second benefit, in that these decisions now selected within the regions, we are staging these construction jobs as part of the proposition that comes before you: I'm sorry Community X, your project isn't going to be under construction when the parallel facility is under construction.

We're working out a construction phasing that now can be done within the regions, where before you didn't dare risk it because you waited 20 years for your project, the last thing you're going to do is say okay, I'm sorry, we're going to wait two years.

So I think we're dealing with the phasing issue better with decentralized decisions. You certainly are seeing synergy being developed with commitments. I'm hoping the institutional ability to contract, contractors not leaning to inflated prices due to limited capabilities. We met with the concrete industry last week with regard to concrete prices. When DFW Airport and the Super Conducting Super Collider were being built 15 years ago, we had to sit down and not compete against ourselves in the public sector.

Frankly, it's a nice problem to have, but you may be on the verge of a competitiveness that could lead to inflated prices, so within your structure, is the Right of Way Division ready, are the contractors ready, are the contract personnel ready? This would be a good time to strategically check that process because that synergy -- we call it "Tools-N-Time" TNT, you, know the notion of a dynamite explosion. It's not just more money now which is the time factor, it's the ability of doing what is two or three times the number of projects where before you were only doing one.

And Commissioner, I share your concerns. The MPOs are not in a position to influence that very much but Mr. Behrens is and I'm sure he understands these tables and the implications to his Bridge Division and his geometric design districts as we move forward. But commitments are being made and hopes are being made, and I hope we can all deliver those.

MR. HOUGHTON: I'm going to ask you another question. Would you consider a toll being paid on any new facility a match by that community to that construction project? The old days of 80-20, would this be a community's match?

MR. MORRIS: Well, I spoke to you last month on toll credits and was making the argument that it is a way to flex toll in-kind match to other transit-related projects.

MR. HOUGHTON: That's the reason for my question.

MR. MORRIS: I still think we've got to be very careful. I was arguing, because of the need of transit, elderly and disabled persons -- you had a very passionate program along the border -- that in some cases I think the policy of having in-kind match is the appropriate policy. For road transportation projects, I think we've got to be somewhat careful of not too much in-kind match because we actually need the cash value to actually be towards the project. So in these partnership programs you see -- not just in our region, you're seeing the leveraging or sweat equity of local bond programs.

You know, it doesn't get a lot of publicity. Denton County, on one of these partnership programs, we're going to toll 121 -- which you've probably been emailed on -- to build Interstate 35 which is a NAFTA Corridor project in a near neighbor, near time frame, with $50 million coming from the Denton County bond program. So the old days of a $5 million bond program were looked at pretty positively. We now have the leveraging of a toll being introduced to leverage money to an interstate highway with the additional of a $50 million bond program backed up by property tax.

So I wouldn't want to get too lazy with regard to the 20 percent match being paid by toll users, therefore we don't need the 20 percent in real cash to build the project because when you see the MPOs' Texas Metropolitan Mobility Plan, in your out-year needs, you're going to want every nickel on the roadway side to help pay for the maintenance of that infrastructure.

MR. HOUGHTON: I've got another question for Jim. Have all the communities submitted plans?

MR. RANDALL: Yes, sir.

MR. HOUGHTON: Toll plans -- excuse me -- leveraged plans?

MR. RANDALL: Not all of them have leveraged plans but they have some of their TMMPs.

MR. HOUGHTON: Okay.

MR. RANDALL: I'd like to mention that Max Proctor and Howard Lyons in the Programming and Scheduling Section have done a tremendous job in putting this together, and they're a real asset to the department.

MR. HOUGHTON: It was obvious yesterday. Thank you, Jim.

MR. WILLIAMSON: I'm just checking a couple of things, if you'll bear with me a moment.

Are there any other questions or comments for Mr. Randall?

MR. NICHOLS: In the metro commitments on the leveraged projects, as I understand it, you have some of the communities that actually put in dollar amounts and things like that, whereas some of the others have made the commitments with specified projects but they're still working on the dollars, and that's kind of part of the district and part of the MPO in that area. Is that correct?

MR. RANDALL: Yes, sir.

MR. NICHOLS: And that you expect within 30 days or 60 days or something like to actually have those dollars fairly well cleared up?

MR. RANDALL: Yes, sir, firmed up. That's why we haven't been able to put it out on the website yet is we're still firming up that information.

MR. NICHOLS: A lot of us are going to be very interested, when we have the opportunity, to see what the actual dollar amount is of extra money that came in because of the leveraging, and any other benefit.

MR. WILLIAMSON: Members, we have two witnesses. Jim, if you'll take a seat. First we're going to hear from our good friend Roger Baker. It looks like Roger and I were correct about the price of oil. Does that make us feel good, Roger?

MR. BAKER: Well, I'm going to talk about that so we'll get to find out more.

The reason I'm speaking today is to advise you once again to abandon your policy of trying to solve urban congestion problems by encouraging massive deficit spending on toll roads. In fact, I think it would be a prudent government policy on your part to prepare to cut your losses. The toll road bonds on SH 130 are going to default because they depend on cheap oil being available to power cars and trucks for decades to come, and that just can't happen.

But meanwhile, the toll roads are already controversial for other reasons stemming largely from the role that road contracting and real estate interests play in state politics. When the toll road bonds default and as fuel prices continue to rise, I would expect the public is going to focus strongly on state road building policy and expect to have it make good long-range sense.

Where we're at now is that this commission has encouraged the eight biggest metropolitan areas in the state to submit metropolitan mobility plans that seem to encourage toll roads as a central theme while largely ignoring their cost as a planning constraint. I believe that if you decide that it's a good policy to go shopping with borrowed money, it would be a whole lot better to spend that money on rail projects in particular rather than on toll roads or on any kind of other big new roads either.

We import 60 percent of our oil and its price has gone up about 40 percent in the last year because all the world's oil producers are close to topping out on their ultimate production at perhaps 85 million barrels a day. Supply will soon fall even while demand grows. This fuel problem will be worse next year and worse the year after that as the world's giant oil fields deplete.

Rail is an inherently more energy efficient kind of transportation infrastructure than roads and encourages efficient and easy to serve land use development along corridors, as compared to the sprawl development encouraged by roads in combination with private automobiles. It's never too late to think things through, wise up and cut your losses. The current emphasis on roads will lead to obsolete patterns of Texas infrastructure too dependent on fossil fuel to compete very well in the world economy of the decades to come.

And I have some good background material on the oil problem to get you started here, if you're interested.

MR. WILLIAMSON: I think we all agree with you about the oil, have for quite some time.

MR. BAKER: Well, it may be a hundred next year and that's going to affect toll road economics, you know it.

MR. WILLIAMSON: It's going to affect all road economics, whether it's toll roads or tax roads. Right? If the price of gasoline is five bucks, people are going to drive less. Right?

MR. BAKER: Yes, but that certainly has a profound effect on policies and what role that your infrastructure is going to be playing in this state ten and twenty years from now.

MR. WILLIAMSON: So that suggests the commission's now three-year, almost four-year focus on combining concrete roads, steel roads, pipelines and utilities into one corridor was a wise decision. Correct? Would you agree or disagree?

MR. BAKER: I think that you need to shift gears to rail primarily. That would be my focus, if I were you. You know, I think the Trans-Texas Corridor plan was priced at something like $180 billion, and I just don't think it will work. It's largely deficit spending.

MR. WILLIAMSON: Or if you have private sector partners and let them worry about it.

MR. BAKER: Well, I think Wall Street is going to get tired of fronting money for these things with the price of oil that you've got now.

MR. WILLIAMSON: You might be right about that.

Mr. Nichols, would you care to joust with Mr. Baker?

MR. NICHOLS: We've had this opportunity many times and I'm sure we'll have many more. One of the arguments that you make --

MR. WILLIAMSON: We enjoy hearing from you; we really do enjoy it when you come up because it gets us to focus on some things that we need to focus on.

MR. NICHOLS: On one hand, I want to say it almost reinforces my feelings for toll roads because they're user fees as opposed to a fuel tax, because as the price of fuel goes up, the demand for more fuel-efficient vehicles will go up, instead of getting 15 miles per gallon, they'll get 30 miles per gallon, 50 miles per gallon and so on which makes it much more important to actually have a user fee like a per-vehicle charge, as opposed to a gallon consumption.

And all the major vehicle manufacturers are working frantically hard at alternative fuel. There's huge federal encouragements and incentives to do that, whoever cracks that first. But 50 years from now that's the way it's going to be, I'm convinced, which makes even more reason to have a user fee as opposed to a consumption per gallon kind of tax base.

MR. BAKER: Well, let me close by reminding you of one fact that I think is sort of telling in this context, and that is in the official statement that was issued for the SH 130 bonds for those combined projects, the analysts said these bonds may appear to be viable and could pay back assuming that the price of fuel does not go over $2.50 a gallon during the lifetime of these bonds, even including the taxes that might be added. That's a specific number: $2.50 a gallon.

Also, there were other provisos saying that assuming that the transportation patterns of Texas did not change, and we're talking 30 and 40 years.

MR. NICHOLS: I've been in business a pretty good while and the one thing that I have learned is that the public, the American public will pay for convenience; they will pay a lot for convenience. They want cable TV when they could run an antenna; they drink bottled water which costs more per gallon than gasoline, more than gasoline -- never would have thought it; and they go to tanning salons instead of getting in the back yard out in the sun; and they will pay to get out of congestion, they will pay to get out of congestion.

They are in congestion now and those who are jammed up in lines every day, getting longer and longer in Houston, Dallas and Austin, will pay to get out of that; give the public the opportunity of the choice of an alternate way to get home and to work.

Our incentive in the Texas Mobility Fund does allow, and we did say when we went out to the metropolitans that if you come up with a leveraged plan and you an also blend that with transit, rail, any of those kind of things, we will consider it. In the Dallas plan they did that; if you go look at the Dallas plan, you will see that there are expenditures from the Texas Mobility Fund for passenger rail.

MR. WILLIAMSON: And about all we can do, Roger -- we think you're a pretty serious guy and actually several of us up here at the podium share your concern for the price of crude oil -- but we can't take Weatherford and Yoakum and LaGrange and bring them to a point and say we know this is true, therefore accept it.

We can only put ideas out, put projects out, put processes out, ask communities and regions to develop the tools we have, and hope that they will go down a certain path that we think reflects where we're going to be.

I mean, the fact that North Texas decided to spend an awful lot of its allocation on public transit speaks well for North Texas, I think -- my part of the state. The fact that Austin has so far decided not to do that or CAMPO, reflects, I think, the fact that community leaders in Travis and Hays and the other counties that are part of CAMPO are more concerned about the instant congestion problems they have right now; they're hoping that Metro and the Metro vote this fall will address longer term commuter rail.

The fact that the governor has advocated the beginning of a plan for statewide commuter and high-speed rail, the fact that this commission is no longer rail-angry -- would it be a good word? -- and in fact are commuter rail friendly, I mean, we're moving in the direction you think we should move, probably not as fast as you think we should move, maybe not as fast as some of us think we should move, but about as fast as we think the public is ready to accept.

MR. BAKER: Well, the public is going to get there when world oil peaks and it's probably going to peak in less than a decade, maybe within a few years.

MR. WILLIAMSON: Governor Perry exactly shares your belief about that.

MR. BAKER: But you can get out ahead of the public and understand what's coming.

MR. WILLIAMSON: And Roger, I think that more than any commission before we've been doing that. Sometimes at much criticism from citizens in the state, from members of the free press, and from even some legislators, we're attempting to do that.

MR. BAKER: Thank you.

MR. WILLIAMSON: Come back.

MR. BAKER: You can throw away my other card. I signed up twice and I'll just listen the next time.

MR. WILLIAMSON: Michael?

MR. MORRIS: Mr. Chairman and members of the commission, thank you for letting me speak. I'll try to go through this in the time limits you permit; I just want to touch on a few points.

First, I come before you with "Constraints Breed Innovation" and you're seeing, and we've said please be patient and let us proceed, and I think you, working with the eight MPOs, you're seeing those innovations from expedited hurricane evacuation procedures to multimodal transportation investments.

It's unfortunate toll roads are getting so much of the press in these Texas Mobility Funds, similar to the previous speaker's focus on toll roads, but if you could get the legislature and Texans to read these Texas mobility plans you've asked for, you're seeing great insight into these evaluations within the regions.

Dallas-Fort Worth moved forward in transit in '73 and '79 because of long energy lines. People think we do transit because of the air quality issues or other things; it's a business decision to not be dependent on oil prices, and that's been the mantra in Dallas-Fort Worth since the '70s.

The metropolitan planning organization directors and staff persons have been coming to your meetings for years, but we are partners with you in the next few months as you wrestle with the Unified Transportation Program and the Texas Metropolitan Mobility Plan. Several of us will come as often as we can to assist your staff last month, this month, the next two months as you talk about these particular issues, and we have several of the MPO staff here today.

The first point that I think is important is you permitted leveraging opportunities to occur within the regions as MPOs and districts worked these issues out, and remember, the reason why this was permitted -- yes, the legislature has given us tools -- you made a conscious decision to formula-allocate Category 2 funds.

If you hadn't done that, we couldn't have taken the risk to develop these entrepreneurial partnership programs within the region for fear that our gas tax money would have been moved to some other part of the state. And I know that was a hard decision to make, but because you were able to say okay, you're guaranteed to get your formula funds, now go ahead and see what you can bring to the dance, you're seeing those opportunities.

Second, I've talked about -- and commissioner, you've already picked up on the point -- it's not just the leveraging of money to build more, it's the leveraging of them to be built sooner and the leveraging of them to be built correctly. And instead of waiting and holding your breath that the home office gave you the right score to build your project, we're actually sitting down and scheduling projects to maximize both need and minimize disruption to the public as we then work on this aggressive construction schedule over ten years.

The third point is the point that was brought up earlier. I'm really here to hopefully have you maintain the commitment to transit as part of the Texas Mobility Fund because you hear from your Legislative Division, you don't get your fair share of discretionary funds from Austin, you get 90-1/2 cents of the formula but you're not getting the discretionary program.

There are applications going to Washington on rail start funds that are using both regional transportation council money and leveraged Texas Mobility funds -- back to the definition of leveraging, Commissioner -- rail funds that are for the discretion by Congress to come back to this state to increase the discretionary funds from Washington to the region.

So hopefully you can keep to that leveraging notion and the leveraging of Texas Mobility funds to transit for another 60 days because we literally are putting applications together right now for rail to Love Field and rail in that particular corridor that are assuming -- and I was at the board meeting yesterday at DART and they still have your $40 million, well, we know the RTC approved it but we're not sure the commission is going to -- if you could hold to that, it could pay leveraging tenfold in discretionary funds back from Congress.

This other comment I say out of respect because you have lots of pressures on you, but if you could keep to your schedule that you're under to approve the Unified Transportation Program, it would be in all of our best interests because some of us are in non-attainment areas, we have a new eight-hour standard, we've got to deliver a new conformity document by June of next year, we've got to code up all these new transportation networks, and we're literally moving ahead with toll roads that currently are being built as gas tax supported roads, so once you make your concurrence, we'll resimulate it as a toll road, we've then got to put all these other projects into that air quality analysis and get that back through the community or we get into a lapse situation.

So where you have eight-hour non-attainment areas, Houston and Dallas-Fort Worth, we put a schedule together last year assuming you were still going to take action in your November meeting. From us in the field who have got to deliver an air quality plan as a result of this and whose districts are already building projects that are going to have to get flipped, if you could hold to that schedule, it would really help us deliver those air quality plans by that May time frame.

And the last comment is to say thank you to you. Thank you for creating the opportunity, thank you for permitting the MPOs and the districts in these eight metropolitan areas to develop eight experiments. We have met every month since, Commissioner, you handed us the ball with the Texas Metropolitan Mobility Plan, you've seen consistent definitions, consistent formulas, consistent unit costs, consistent definitions of congestion.

So as you and we move forward with the legislature to say these are our transportation needs, this is our leveraging, this is our partnership, this is our diversity, this is the role of transit or hurricane evacuation or reliability, these are these particular visions for these eight metropolitan areas. You've given us the opportunity to do that and you've seen one size does not fit all.

It's a big state. We're made up of different folks; we have different histories of the understanding of financial shortfalls. You can't accuse some communities of being behind the eight-ball, it just takes time for those communities to go through those particular pressures. But in the times when we were getting 600 emails a week -- you were probably getting them too -- not one time did any of you call or Mr. Behrens or Steve Simmons or Amadeo and say: Oh, my gosh, what have you done in City X, look at all the trouble you've gotten us into. You stayed firm, you had confidence in the process; that process is delivering the commitments and hopes we asked for two years ago, and we stand ready to defend those in the next 60 days before you as you move forward on your actions with regard to those projects.

I'll be happy to take any comments.

MR. WILLIAMSON: I know you're going to have a comment or two, Robert, but I've just got to say while it's on my mind. Michael, you -- unknowingly I think -- touched on something that I've been wanting to say for quite a while but I've been hesitant to say. We were under a tremendous amount of pressure to interfere with your business and Houston's business and San Antonio's business, and particularly Austin's business.

I think it was lost on a lot of people that we set a process up to go through this that permitted local leaders to make important decisions about their region, and for us to have interfered with that process, to have picked the phone up and called and said, you know, we're getting too much heat about this, are you sure you know what you're doing, would have automatically influenced how you went about your business.

MR. MORRIS: My wife asked me if I knew what the hell I was doing.

(General laughter.)

MR. WILLIAMSON: And we have some legislators in the Austin area, frankly, who didn't understand why we wouldn't rush in and interfere with CAMPO, but if you believe in local control, regional authority, local responsibility and the authority to act, then you have to believe in it. You have to say here it is, we think you can solve that problem, just as you said. And I appreciate you acknowledging that.

MR. MORRIS: You're going to see in the 121 Corridor, you're going to see a unanimous decision on the part of the Regional Transportation Council; you're not going to hear this part, you're going to hear a unanimous decision of the cities along this corridor with regard to that particular decision. That takes a long time and a lot of plugging and plotting.

We're starting to hear citizens say: Oh, I thought you were going to build a free road and then you turn around and build a toll road; I didn't know you were going to build these other six roads as part of that particular process. They're standing up at podiums and saying: Well, I was part of the people that sent out those angry messages because I didn't know.

Now, I'm sure we're still going to get angry messages even by people who say I'm only going to drive on the toll road, I don't drive on Interstate 35 or Farm to Market Road 423 so I'm opposed to it. And in the back of my mind I say we're building a system of transportation improvements, especially unsafe roads that kill people.

I said at a public meeting -- we had joint public meetings on this -- and I probably shouldn't have said this, I said to the person: I hope your daughter never goes to a birthday party on Farm to Market Road 423 because you said you're never go to go on there, so if she gets invited up there in the next two years, you know it's a dangerous road, you better not go up there and take her to the party. I shouldn't have probably said it.

But at some point you're trying to develop a system of improvements, and if you do believe in accountability and if you believe in "Constraints Breeds Innovation" and if you believe in the MPO process and working out these issues within the regions, you've got to let that pendulum go over there for a while.

And Mr. Behrens or no one called up and said to us: Boy, you're getting us into heat, or I never heard from the governor's office or anyone else, and you let that play out. And I think over time you're going to find that this point in Texas history developed the core balanced integrated transportation system that so many people talk about in rhetoric but now has been put in place in these eight metropolitan areas.

MR. WILLIAMSON: Members?

MR. HOUGHTON: Do you all get together -- I say you all -- the MPO directors get together and share information on a regular basis?

MR. MORRIS: Well, it's really interesting. We have an organization of MPOs; they meet four to six times a year; we get together and share everything from how to give presentations to how do we work better with our districts. What you did, though, under this Texas Metropolitan Mobility Plan, we decided early to develop these plans together.

Now, one of my hidden objectives of working with the other eight MPOs to do this was I didn't want to -- since I was one of the authors of the formula for allocation of funds to the districts which would create the ability of leveraging funds, I didn't want a situation to occur where somehow we didn't meet as MPOs this Texas Metropolitan Mobility Plan responsibility. If two of us did it and six or did it, then the next thing in front of you is okay, this didn't work, we're taking back this formula allocation. I couldn't risk that because I saw the potential leverage.

So to answer your question, Commissioner, we've been meeting, the eight MPOs and staffs have been meeting jointly with district personnel since last summer every month to put these plans together, not to give one MPO a one-upmanship, it's whoever had a good idea, to cross-pollinate those ideas to the other metropolitan areas. And we think it worked so well at the end of the process -- and by the way, we traveled to different urban regions around the state, El Paso, Corpus Christi and I chaired those meetings and we didn't have any of them in Dallas-Fort Worth because I felt it important to get out and see the other communities. We as that committee -- which grew from 12 people to 14 people to 28 people and I think our last meeting we probably had 50 or 60 MPO and TxDOT people -- we committed to meet as a group maybe four times a year, and it may be on other cross-pollination or technology transfer ideas.

It could be funding of projects. Hidalgo, for example, does very quality work with regard to intersection and signal improvements, and there's no reason why that tool can't cross-pollinate into other metropolitan areas.

We want to formalize it within the TMPO process -- TMPO is the Texas Metropolitan Planning Organizations which is made up of the 25, and at their last meeting two months ago, I asked them to formally establish the eight largest metropolitan area committee and I didn't want to be a renegade out there and meeting with MPOs and eight largest metropolitan areas and I'm the person who hates the other 16 MPOs, so we want to formalize it within our structure.

I encourage the other Category 3 small metropolitan areas to do the same and have technology transfer, and there's no question at certain times like leveraging funds, that could be a topic for all MPOs, it's not just for large metropolitan areas.

So we would like to take the opportunity you gave us to formalize it within our structure and to continue that institutional memory on other topics that may arise. We've got to do another Texas Mobility Plan I think three or four years from now but there's 100 topics that could be put on the table to cross-train.

And I think the really neat part was it wasn't MPOs meeting with MPOs, it was MPOs meeting with TxDOT districts, and I think there was a greater appreciation for what MPOs do and there was a greater appreciation by MPOs for what TxDOT people do, and I think when you read those Texas Mobility Plans, I'm hoping you see the benefits of both institutional structures in those reports.

MR. WILLIAMSON: Mr. Nichols? Mr. Johnson?

MR. JOHNSON: Briefly, Michael, I wanted to thank you for and salute your leadership in the North Central Texas Council of Governments. As I mentioned before, the template that you have provided on the SMP I think is going to be something that other areas of the state are going to copy and it's going to be very successful, but that's just one area that I think your leadership has benefited the whole state. Your creativity and imagination has benefited transportation all through all parts of this state, and I thank you for it.

I love your word "decentralized decision-making" because, in essence, as the Chair pointed out, that's one of the things that I think motivates us and guides us is that decisions ought to be made locally. They're the people that are most familiar with the challenges that they have, the resources they have, and where we can work together to provide help to meet those challenges and solve those issues, we do so, but the impetus needs to come locally; it needs to be decentralized, and I think you have done a marvelous job in that area. Thank you.

MR. MORRIS: We appreciate it. Thank you. Thank you for the opportunity.

MR. NICHOLS: I was just going to say your group, your MPO is probably one of the most premier operations in the whole country, I really mean that -- you're probably in the top six. You have done outstanding work and we appreciate it.

One of your concerns when you went through your comments was that we keep our UTP schedule, the approval of that schedule. I have not heard any word from administration or our planning group that that schedule may be delayed.

MR. MORRIS: I'm not aware of any other, I'm just saying other times things come up and maybe late last-minute controversies and it's easy to say okay, these projects will all be here 30 days from now. I'm just reminding you that we've got to code all these up, at least in us non-attainment areas we've got to code them up and we've got to turn around in air quality.

MR. NICHOLS: I appreciate your re-emphasizing that.

MR. MORRIS: But I'm not aware of any proposal.

MR. NICHOLS: Anyway, I haven't heard anything that might delay that, and Mike is sitting here nodding that he doesn't think there's going to be a problem.

MR. MORRIS: And if there is a project, maybe you could take that project out and decide that on 30 days from now instead of holding up the whole thing.

MR. NICHOLS: I don't think it's going to be a problem.

MR. WILLIAMSON: I would want to emphasize that also, Michael. I know you know it but some that we deal with every day probably don't, but we understand what we were getting into when this all started and we knew that once we went down this path almost three years ago that there were certain disciplines we were going to have to enforce on ourselves in order for you to be successful. So I don't see, absent hurricane or an emergency we can't predict, I think you can count on us being right on schedule. We want to be good partners, as you've been a great partner for the state of Texas.

MR. MORRIS: Well, I appreciate the opportunity. Thank you.

MR. WILLIAMSON: I'm going to let you guys decide -- I would say guys and gal, but you guys decide. We're at the four-hour mark; I'm happy to take a break and get a sub, I'm happy to push on. Looking at the schedule and knowing that we have some in the audience that are probably going to be with us a while, I think we've probably got another two hours of work, but I could be wrong. But what's your pleasure, members?

MR. JOHNSON: Do you really think two hours?

(General laughter.)

MR. WILLIAMSON: We'll have two work hours. The question is do you want to go to three o'clock without eating, do you want to perhaps ask somebody to go get us a sandwich and have it back here, or do you want to just stop for 30 minutes and go get a sandwich and start again?

MR. NICHOLS: My inclination would be to continue on and let's get through this thing. If we want to order out for sandwiches and take a little five-minutes, that would be fine. You could run in the hall and take a bite and run back.

MR. WILLIAMSON: Good job. Thank you very much. We appreciate the information you gave us, and no action is required at this time, I don't think.

MR. RANDALL: No, sir.

MR. WILLIAMSON: You just want to know that we're okay with you sending it out, and we're okay.

MR. RANDALL: Yes, sir. We should stay on schedule and we'll be briefing each commissioner.

MR. WILLIAMSON: Take Mr. Morris's comments to heart and we'll try to stay on schedule.

MR. BEHRENS: Going to agenda item number 8, Jim is going to be up for that. Agenda item number 8(a) is to consider authorizing a bridge replacement program in Erath County.

MR. RANDALL: Thank you, sir. Again, Jim Randall with the Transportation Planning and Programming Division.

This minute order authorizes CONSTRUCT authority for a bridge replacement project on County Road 396 at the east fork of Armstrong Creek at a total estimated construction cost of $216,000 in Category 6, Structures Replacement and Rehabilitation of the 2005 Statewide Preservation Program.

This structurally deficient off-system bridge is currently load-posted, very narrow and is on a local school bus route. To avoid further deterioration, corrective action needs to be taken to replace the structure. In order to provide a safe and efficient transportation system for the area's citizens, this bridge needs to be replaced. We recommend approval of this minute order.

MR. WILLIAMSON: Members, are there questions of Mr. Randall on Erath County?

MR. JOHNSON: So moved.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Item 8(b), this minute order authorizes CONSTRUCT authority for two grade separation projects on US 69 at FM 344 and FM 346 east of the community of Bullard and near the city of Tyler, respectively. The county has experienced recent growth with the opening of a major grocery outlet, and additional new public and private schools. Traffic signals have been installed at both locations but grade separations are needed to facilitate traffic flow in this rural area.

The total construction cost for both projects combined is $13.3 million. This minute order will authorize $10 million to be funded from Category 12 Strategic Priority of the 2004 Statewide Mobility Program, using $5 million for each project. The remaining $3.3 million will come from the Category 11 District Discretionary Funds. These grade separation projects have strong local support and provide for increased safety and enhanced mobility. We recommend approval of this minute order.

MR. NICHOLS: Anybody have any questions?

MR. JOHNSON: So moved.

MR. NICHOLS: Do I hear a second?

MR. HOUGHTON: Second.

MR. NICHOLS: All in favor, say aye.

(A chorus of ayes.)

MR. NICHOLS: Any opposed?

(No response.)

MR. NICHOLS: Motion carries.

We'll go 8(c).

MR. RANDALL: Okay, sir. Item 8(c), Transportation Code Chapter 361 authorizes the department, acting by and through the Texas Turnpike Authority Division, to acquire, construct, operate and maintain turnpike projects on the state highway system. This minute order authorizes CONSTRUCT authority for a project to construct a four-lane turnpike facility on State Highway 45 Southeast from Interstate 35 at FM 1327 south of Austin to the US 183/State Highway 130 interchange, a distance of approximately 7.4 miles.

Minute Order 108897, dated May 30, 2002, contained provisions which included the opening of the State Highway 45 Southeast connector by 2007. Minute Order 109729, dated July 29, 2004, designated this section of the roadway as a turnpike project on the state highway system and as a controlled access facility for the purpose of development, maintenance and operation.

In order to ensure the timely opening of this road, it is necessary to advance this project to CONSTRUCT authority to be funded at a total construction cost of $167 million with $80 million to come from Category 12 Strategic Priority and $87 million coming from Category 4 Statewide Connectivity Projects of the 2004 Statewide Mobility Program. We recommend approval of this minute order.

MR. NICHOLS: We do have a speaker on this. Before we ask the speaker, are there any questions that you would like to ask?

MR. HOUGHTON: Jim, this is the one we approved in Childress. Correct?

MR. RANDALL: Yes, sir.

MR. NICHOLS: We do have a speaker, Dick Kellerman, Central Texas Sierra Club.

MR. KELLERMAN: Thank you, commission. Talking about the connector for State Highway 130 to Interstate 35 south of Austin.

Let me mention that there was mention this morning from the dais of the need for not only hearing but listening to citizens during public hearings, and this is one instance, I think, where citizens weren't heard and I'd like to tell you what's happening.

During the public hearings on the State Highway 45 Southeast, many people didn't like the options that were given for the various routes between 130 and I-35. In fact, all of the options started at one point and ended at another point, and there were no two points, the two points were the same for all the options, and other options were recommended.

Also, there was concern that State Highway 45 Southeast would naturally make State Highway 45 Southwest the next choice for road building. State Highway 45 Southwest, however, passes right directly across the Barton Springs Edwards Aquifer Recharge Zone, a very sensitive part of the city, a very sensitive part of our environment, 40,000 people drink from that aquifer. Our concern was that the Southeast would just naturally make the Southwest be built.

Well, when the final environmental impact statement was published in March of this year, there was no mention of options other than the two point options that were given in the original proposal, and there was no mention of an environmental impact statement or the environmental impact on the aquifer. This is not unusual at all. I've been speaking at Texas Department of Transportation meetings for years and let me tell you that the citizens' observations and recommendations and concerns are not generally considered.

This one is a little different and we decided not to turn the other cheek this time after many, many road concerns in the past. There's such a thing as the National Environmental Protection Act, NEPA, and NEPA has been in place for a number of years and they have a number of regulations that have to be followed in the building of a highway and any kind of transportation facility.

First of all, they say that there have to be serious options to be chosen from in terms of putting in a transportation facility. Secondly, they say that the facility can't be looked upon in its own small segmented way but there has to be a broad concern, it shouldn't be segmented -- that's the term that NEPA uses. Well, this environmental impact statement has violated these two NEPA rules and we've decided to bring a lawsuit against the Federal Highway Administration and against the Texas Department of Transportation.

So in July, three organizations here in Central Texas, the Save Our Springs Alliance, the Save Barton Creek Association, and the Sierra Club filed in court here in Texas a lawsuit, the foundation of which was the violation of NEPA regulations. Now, what we hope that the courts will do for us is: one, not build that highway State Highway 130 where it's being proposed; and two, to require the Texas Department of Transportation and the Federal Highway Administration to consider the impact of another highway across our aquifer.

Are there any questions?

MR. NICHOLS: I don't have any questions yet. Are you through?

MR. KELLERMAN: Yes.

MR. NICHOLS: Ted, do you have any comments or questions?

MR. HOUGHTON: No.

MR. NICHOLS: Johnny?

MR. JOHNSON: Well, my observation is clearly those organizations have filed a lawsuit and what happens in that lawsuit will determine the outcome of this. I think what you have done, though, is you've made some assumptions which might not necessarily be true. You're assuming that 45 is going to be built to the southwest; it may or may not be. It would have to go through the same rigorous standard that 45 Southeast has gone through.

A question, you mentioned options. Are you talking about physical option of a point of beginning and a point of ending, or are you talking about different paths that a roadway might take between those two points?

MR. KELLERMAN: I guess there's two parts of that option question. One is the way it's set up now. There's a point on Interstate 35 and there's a point in State Highway 130, and between those two points there are a number of options.

MR. JOHNSON: Several potential paths.

MR. KELLERMAN: But the beginning and end points are the same, so our concern during the public hearing was that really wasn't an option. What we were doing is getting just a series of roads between the two points, and if the two points remained the same, it really wasn't different options.

MR. JOHNSON: Well, I mean, please remember that those points, beginning and end, are selected for a reason. It has to do with way traffic patterns are and logical points of beginning and end, depending on whether you're heading from east to west or west to east from 35 to get on 130 or from 130 to get back to 35. You just can't arbitrarily stick those where they don't make any common or logistical sense because nobody would use them and you'd have a travesty then that would be an utter waste.

MR. KELLERMAN: Yes, that's the second part of our concern was that they were, in fact, arbitrary, the choice of TxDOT's proposals of these options were arbitrary. In fact, if you take a look at a map, any old ordinary road map and say what's the best way to connect Interstate 35 and State Highway 130 so that trucks and traffic coming from the south can loop to the north and vice versa and use SH 130 to its greatest potential, the connection is Texas 21 from San Marcos which connects San Marcos to 183 which, in fact, turns into State Highway 130.

It's shorter because it's the hypotenuse; you don't have to go to the two legs. It's cheaper because Texas 21 is already in place and it has plenty of right of way. And in fact, if the options that TxDOT has proposed do become the toll road or do become the choice and a road is built there, anybody with any sense is going to use Texas 21 anyway to connect to State Highway 130 because it's shorter, and if there's a toll on State Highway 45, obviously they'll save a toll.

So we were proposing that Texas 21 be considered, seriously considered as a connector to State Highway 130.

MR. NICHOLS: Let me ask two questions. The first question is I was at a lot of the hearings and I read a lot of comments from your group and Save Our Springs and some of the others. Way back when we were originally considering what we call 45 Southeast, at the time it wasn't southeast of anything, it was all the way across 35, going west and making a full connection. Because of many of the comments and because of those concerns -- I'm not saying your group, but I'm saying some of the other groups actually requested us to hold off building the western segment of that until after we opened up 130 and 45 Southeast. So we did.

MR. KELLERMAN: That's right.

MR. NICHOLS: Okay. Now, you're saying it wasn't even logical that we went that way.

Let me also ask you a second question before you get into that too much. If I understand your comment a while ago about the lawsuit -- I guess it's two or three different groups going together?

MR. KELLERMAN: Three groups.

MR. NICHOLS: Okay, three groups. Did you say that you're thinking about suing or did you say you are filing suit?

MR. KELLERMAN: We filed suit in July.

MR. NICHOLS: You've already filed suit? All right, I'm through talking.

MR. WILLIAMSON: I was going to suggest that we needed to listen to Mr. Kellerman as a Texas citizen; you're entitled and we listen and we hear, but because there's litigation involved, I think we probably shouldn't be in a dialogue. So thank you very much.

MR. KELLERMAN: I understand.

MR. WILLIAMSON: Except for me to say, as I always do when these testimonies are entered into our record, we have heard what you've said on the record, by our silence, we do not agree that the assertions you made are accurate. Thank you very much.

MR. KELLERMAN: You're welcome.

MR. BEHRENS: I think Jim has recommended approval of this minute order.

MR. WILLIAMSON: Any other questions or discussion with Mr. Randall, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. WILLIAMSON: I have a motion. Do I have a second?

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. RANDALL: Okay, sir. Item 8(d), this minute order approves the final adoption of the Texas Mobility Fund Strategic Plan as shown in the attached Exhibit B. The Texas Mobility Fund, established by the 77th Legislature and approved by Texas voters, allows the department to issue bonds to finance mobility projects throughout the state. This fund also allows the state to participate in a portion of the costs of constructing and providing publicly owned toll roads and other public transportation projects, such as transit, light rail, and commuter rail, in accordance with the procedures, standards and limitations established by law.

Transportation Code Section 201.947 provides that the commission may not issue obligations before the department has developed a strategic plan outlining how the proceeds of obligations will be used and the benefit the state will derive from the use of the money in the fund.

Public outreach was initiated by sending letters to members of the Texas Legislature, county judges, metropolitan planning organizations, and other transportation stakeholders requesting public input and comments by April 16, 2004. The department received 68 comments via email or letter. Based on the initial comments, the department drafted a proposed strategic plan which was approved by Minute Order 109707, dated June 24, 2004. The plan was released to the public for a 20-day review and comment period which ran from June 25 through July 15. Exhibit A contains a summary of these comments.

Based on the comments received, input from individual commissioners and the administration, the proposed strategic plan was amended. Staff recommends approval of the Texas Mobility Fund Strategic Plan as attached in Exhibit B to this order.

MR. WILLIAMSON: Okay, members, let's take a moment and question or comment to Jim or other staff as we feel like we should. This is an important decision.

MR. NICHOLS: I'll go ahead and volunteer my comment. I think it's an outstanding plan.

MR. HOUGHTON: Jim, is it clear to the eight that are listed in the plan that by October 1 we need to have that plan?

MR. RANDALL: Yes, sir, I believe so.

MR. HOUGHTON: And is it clear if they do not have leveraged projects that we will reallocate those?

MR. RANDALL: Yes, sir, I believe so.

MR. WILLIAMSON: Well, not that we will, we may.

MR. HOUGHTON: We may reallocate.

MR. WILLIAMSON: And we made it clear to the areas of the state, the 22 percent of the people that live in the state that live outside of the eight metro areas, there is a certain amount of this reserved for statewide connectivity and other transportation matters that might occur in those parts of the state?

MR. RANDALL: Yes, sir. We received at least responses from four county judges that were asking that question, and once we have action on this, we'll respond back to their comments.

MR. WILLIAMSON: It is not the intention of the commission to fence out anyone within the state.

MR. RANDALL: Correct.

MR. WILLIAMSON: And we've made it abundantly clear, as evidenced by the North Texas plan, that public transportation options, where that reduces congestion -- I wish Dick was still here so he could hear me say that -- public transportation options are every bit as acceptable as leveraged options or tolled options.

MR. RANDALL: Yes, sir. We amended the plan to try to emphasize that fact.

MR. WILLIAMSON: I notice several of the comments that we were concerned about, particularly the email comments that I think were mostly generated from the Austin area, focused on three things that the commission ought to acknowledge and perhaps comment on. One was the idea that the Metropolitan Mobility Fund plan would be "seizing" already tax-financed projects for toll roads. Are we reasonably certain that almost every road we build in the state is never paid off by the taxes paid on that road? Has our research taken us to the point that we're pretty comfortable about that?

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: Another statement that struck me was that "No city in our country has toll networked their major arterial lifelines." This isn't a city plan, is it?

MR. RANDALL: No, sir.

MR. WILLIAMSON: This is a regional plan.

MR. RANDALL: Right, and this is how the commission lays out how they intend to distribute the Texas Mobility Funds once we issue the bonds.

MR. WILLIAMSON: And I see here another assertion -- I don't know who designed this email; they did not research their information too well -- an assertion that "The Texas Mobility Fund is going to be dedicated exclusively to toll roads." Is that the inference in the strategic plan?

MR. RANDALL: No, sir. Like I said, one of the amendments we did with having input from the administration and commission is to emphasize that it can be used for public transportation projects such as transit, light rail, commuter rail, things like that.

MR. WILLIAMSON: We've laid out principles and we've attempted to focus the Mobility Fund plan on reducing congestion, improving safety and expanding economic opportunity. Is that correct?

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: Any other questions or discussion, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. NICHOLS: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Thank you, sir.

MR. WILLIAMSON: Thank you, Jim.

MR. BEHRENS: Agenda item number 9 is our Finance section; agenda item 9(a) will be consideration of the adoption of the Legislative Appropriations Request for FY 2006-2007.

MR. WILLIAMSON: Now I've got to buy Steve lunch; I bet him lunch he wouldn't finish it.

(General laughter.)

MR. BASS: Good afternoon. I'm James Bass, director of the Finance Division of TxDOT.

Item 9(a) brings, just hot off the presses to you, the department's Legislative Appropriations Request, or LAR, for Fiscal Years 2006 and 2007 for your consideration.

As we spoke last month, this is the document where the commission is able to put their money where their mouth is, so to speak, as it is in this LAR where the commission allocates the limited resources available to the department, both dollars and FTEs, to the commission's priorities as discussed in the earlier strategic plan.

The LAR before you has a total request for the 2006-2007 biennium of $15.4 billion, almost $3.2 billion more than the planned expenditures in the 2004-2005 biennium. The first question that should likely pop in your head is how would this increased activity be funded. Primarily it's through some tools from the last legislative session that we're able to fund this increased activity.

Most importantly, it's through the utilization of the bond proceeds of the Texas Mobility Fund.

Out of that $3.2 billion increase, just over 1-1/2 billion would be financed by the proceeds of the Texas Mobility Fund.

As you all realize, after we issue that roughly $3 billion of the Mobility Fund and spend it over time without additional revenue coming into the Mobility Fund, our activity would drop as we pay debt service on that and then wait till the bonds are paid off and then reissue in later years.

Another $1.1 billion of that $3.2 billion increase is through the receipt of additional federal reimbursements. This is not to say that we expect additional allocation through the formula programs of the Federal Highway Administration. Rather, this is the result of the aggressive management of our federal reimbursement process.

I believe we've spoken earlier about the tapered match approach that we are using with our Federal Highway transportation partners, and we're beginning to see the results of that in 2005, 2006 and 2007.

Out of the $3.2 billion increase, about $250 million of that is from the State Highway Fund. That, however, is not due to a projected increase in the revenues of the State Highway Fund, it is primarily due to a projected increase in local participation on one project in the state. With the agreement with the Harris County Toll Road Authority on the Katy Freeway, they are going to be contributing $100 million in '06 and another $100 million in '07 for the construction of that project. That flows through the State Highway Fund so in our method of finance, it shows additional money coming in; however, out of that total $253 million increase financed by the State Highway Fund, $200- of it is really flowing from Harris County.

In addition, the last major portion of that $3.2 billion increase would be funded by the General Revenue Fund, and this is associated with three exceptional item requests within the LAR. I believe you've had some brief discussions about that earlier in today's meeting. One of those is for a total of $4 million over the biennium to further capitalize an Aviation Loan Fund Program within the department.

Similarly, there's a request for $40 million over the biennium to capitalize a transit loan, or in effect, a Transit Account in the State Infrastructure Bank. And lastly, there's a request for $200 million of General Revenue Fund over the biennium to establish a Rail Relocation Fund.

Your second question after I've gone through the sources of funding for that increase is where are these increased dollars going to, which activities. Of the $3.2 billion increase, about $548 million is going to our PLAN IT activities. That's pretty equally split between our design and right of way acquisition activities. The lion's share, just over $2 billion of that would go to the BUILD IT activity, highway construction, and included in the BUILD IT activity are two of the exceptional items request, the Aviation Loan Fund as well as the Rail Relocation Fund.

Within the MAINTAIN IT activity, we are reflecting an increase of just over $450 million. In the USE IT activity there is an increase of $77 million, of which $40 million is for the Transit Loan Fund. Within the MANAGE IT activity, there is a requested increase of $21 million.

One last item I'd like to call to your attention within the LAR is a particular schedule titled the "Right of Revisions and Additions Request." This is the schedule where the department has the opportunity to request changes to our riders that appear in the General Appropriations Act. Currently we have 57 riders. After an aggressive review of these riders, TxDOT is requesting, through either deletion or consolidation, that this figure be reduced to a total of only 20 riders.

A couple of interesting notes on this exercise concern our capital budget and our FTEs, or full-time equivalents. The department has listed a dollar amount for capital budget and number of FTEs as informational items within these riders; however, we are requesting that rather than being restricted by an inflexible number printed in the Appropriations Bill, that instead we be limited in both of those areas by a percentage of our total appropriations, allowing us to react to additional needs and demands that may be placed upon the department.

After that not so brief summary, I would be open to any questions that you may have, and would recommend your approval.

MR. WILLIAMSON: The floor is open to you, members.

MR. HOUGHTON: In the BUILD IT category, James, yesterday we went through the plan for all of the activity in the BUILD IT. Out of that $2 billion, how much is that leveraged?

MR. BASS: That hasn't been matched dollar for dollar and it's not truly in line with the plans yet because of the timing of the two different documents. We were obviously aware of what was going on; however, out of that $2 billion increase, I could not say how much was for different areas or projects. Unfortunately, I can't answer your question how much that would leverage through the mobility plans as the different areas have submitted.

MR. WILLIAMSON: We're absorbing, James.

MR. NICHOLS: I'm going to ask you a -- I hate to use speculative, but this ramp up, significant increase from the last one, basically because we're issuing bonds and moving some of these programs forward.

We would also, after talking to Jim Randall with the ramp up, the compression of 88 percent in six years, this number, particularly in the design, right of way, construction -- I guess in the preservation too -- it's going to really ramp up, not just this one but the one after. I mean, if we're dealing with a compression in six years, this two-year, the next two-year and the following two-year, we anticipate substantial ramp up. Is that correct?

MR. BASS: Correct. And this increase, as I was alluding to before with the Mobility Fund, we do not project that this is a sustainable increase or that the $15 billion would be a sustainable level because, again, that increase is primarily due to the Mobility Fund, and once we fully utilize the revenues going in there, we'll issue that money and then it will be some period of time, assuming that there's no additional money dedicated to it, where we could reissue.

As well as the management of our federal reimbursements is really bringing forward -- we don't get any additional federal money, it's changing the timing and the cash flow associated with that and bringing a lot of that money forward, it's really just a one-time benefit and influx that allows us to accelerate and deliver projects faster. However, once we realize that one-time benefit, we will return to more historic levels on our federal reimbursements.

MR. HOUGHTON: You're talking about a four to five year program, aren't you, on the ramp up, and then after that -- the numbers I saw -- leveling out after that period of time?

MR. BASS: Correct. Through the Mobility Fund?

MR. HOUGHTON: Right.

MR. BASS: Correct.

MR. HOUGHTON: Because of the Mobility Fund, because of the Prop 14 projects being brought forward.

MR. BASS: And as we go throughout time and the mobility plans that have been submitted and those projects go through different development cycles and are further refined, traffic and revenue studies and different things are done, the amount of Mobility Funds that are needed in a particular year or a particular biennium obviously may fluctuate. This was our best read at the time that we were going through and developing the document.

MR. JOHNSON: Jim, which years are impacted the most when we commence repayment of the Prop 14 bonds?

MR. BASS: Within this document right now we actually do not include any bond proceeds from Prop 14; we've assumed all the bond proceeds and allocated those to the Mobility Fund. That may not be a correct assumption or preparation of the document, but that's the way the document currently reads.

MR. JOHNSON: But the Statewide Mobility Plan -- which we've gone over at least three components of it today -- do reflect the impact of the Prop 14 bonds?

MR. BASS: Yes.

MR. JOHNSON: I think it's interesting the timing that both the LAR and the Statewide Mobility Plan are central to this meeting because they are, from a financial standpoint, extraordinarily interesting and crystal clear documents on the benefits of House Bill 3588 and the tools, especially the leverage factor. And we've talked about not only the leverage financially but the leverage in time which to me, as a user, is probably more important.

You mentioned the reduction in riders from 57 to 20. That's a very laudable goal. Do we have a specific plan in which to eliminate or combine 37 of the riders?

MR. BASS: We've listed that within that 500 or so pages before you.

MR. JOHNSON: I guess I didn't get to that section.

MR. BASS: There's about 23 or 25 pages which list those 37 riders that we are requesting be deleted and then also offering a brief explanation as to why. In general, I'd say the majority of those 37, we're of the opinion that they are duplicative of current statutory language or the thought or the intent of those riders has already been incorporated into department practice, and therefore, the rider would no longer be necessary.

MR. NICHOLS: This is a huge budget and I hate to go in and pick on small items but there is one small item which I have discussed with you and our executive director. In our research -- which I've always been a very strong supporter of -- is a recommended increase from $44.7- to over $50 million, basically a $5-1/2 million increase. Our research program has always paid good dividends and stuff, but off this budget, something else happened at the legislature somewhat related to that, and there was a rider -- I don't know if it's one of the ones that you listed to possibly pull off -- that was put in that removes $5 million from Fund 6 and literally just gives it to one of the universities.

MR. BASS: Correct, and rather than being through a rider -- because then we might have requested that that be re-looked at -- it's actually through the direct appropriation to that particular entity.

MR. NICHOLS: So instead of funding it out of General Revenues, there was just this thing put in there that took $5 million out of our Fund 6 constitutionally road-dedicated money and gave it to a university.

I'm going to recommend that rather than increasing in this budget in that category $5-1/2 million, that we leave our research budget the same as it was in the previous appropriation, and I know you are going to have an opportunity all through the session, as this issue comes up, to discuss it again with the legislature. But I hate to see us increasing it and then them increasing it also.

MR. BASS: And one thing I would point out -- and I know that you're aware of this -- the increase in the research program would, of course, be spread out amongst all the various state universities who we work with throughout the research program.

MR. NICHOLS: I understand.

MR. BASS: And the direct appropriation was applied to merely one of those entities.

MR. NICHOLS: Yes, but what possibly could happen is somebody else in the legislature may recognize that and rather than removing the five, they may go in there and add five for this one and five for that one and five for that one, try to balance it out that way. I think if the program is to take the transportation funds and put them into transportation research to improve safety and efficiencies in different modes, that's what it should be used for.

Anyway, I'm supportive of research. We did a number before last session, we had them go back and run the math forward of the actual dollar savings that we have gotten from research and it was an amazing multiple of the dollars that was put in it. Anyway, I'm just suggesting that when we vote on this today that we leave the research portion of it at the same level but when you go into the legislative session maybe -- anyway, that would be my recommendation.

MR. WILLIAMSON: Let me ask you something, is this a minute order item?

MR. BASS: This is a minute order item and it lists the requested amount by fiscal year by strategy, so within the minute order there is a separate line for the research strategy.

MR. WILLIAMSON: So are we able to accommodate Mr. Nichols' request by amending this document right now?

MR. BASS: Yes, sir, we are always able to accommodate. One question I would ask, if the commission decides to go in that direction, is where would you like us to redirect those dollars. After we pull them out of the research strategy, which particular strategy would you like us to reallocate them to, if you will?

MR. WILLIAMSON: BUILD IT. But let's be sure that we have commission consensus on this. John, do you object taking $5 million a year away from the University of Texas at San Antonio and sending it back?

MR. JOHNSON: I thought we were taking it away from Lamar.

MR. WILLIAMSON: Maybe it's the University of Houston. What specific school was it? I thought it was UT San Antonio.

MR. BASS: No, sir. It was the Texas Transportation Institute.

MR. WILLIAMSON: Where is that?

MR. NICHOLS: It's on the other end of that highway that needs to be divided that we were talking about earlier.

MR. JOHNSON: Let me ask Robert a question. Robert, my interpretation of what you're saying is you don't object to the total amount of money being spent on research as proposed by the LAR, what you do have serious concern is how this amount of money would be appropriated and an additional $5 million by rider go to TTI, so in essence, instead of the amount of money shown -- which is roughly $50 million or so in the biennium -- we, in essence, would be spending $55 million in the biennium.

MR. NICHOLS: Yes, and it wasn't by rider, it was by direct appropriation. In other words, they reappropriated some of our transportation money for educational purposes?

MR. BASS: It's a much smaller scale but it's similar to the Department of Public Safety receiving an appropriation.

MR. NICHOLS: It's kind of the door cracked open and all of a sudden it totally benefited one university -- which is a great university -- but what can happen this next session they may see that they should have balanced it out and then do five for this one, five for that one, three for that one, four for that one, and in effect, our constitutionally dedicated transportation funds are getting reallocated -- which has happened before on other things -- and the door is cracked open.

And all I'm saying is while we are going to these universities spending transportation dollars, we set a level and we had raised that level -- I mean, it hasn't stayed flat forever, we incrementally increase that. I hate to see it jumped up and then do it again. So I'm saying just bring it back. If they're going to do an end-run, let's go ahead and raise it here. And I hope that we can spend a little more time on that particular item during the session.

MR. JOHNSON: Mr. Chairman, relative to your question to me, I concur with Robert's direction here. I don't know if by changing our LAR request, I don't know the proper method or way to get where we're trying to get to, but in tone and tenor I think he's exactly right.

I believe this is an amount of money that ought to be spent on research and very hesitant when you have these direct appropriations, because in essence, those are budgetary items, expenditures that are coming out of the constitutionally dedicated funds which are being directed by others and they ought to be directed by this agency.

MR. WILLIAMSON: Ted, have you got a viewpoint?

MR. HOUGHTON: I don't know if this is going to have any effect on the legislature from making that direct appropriation, whether we increase it or reduce it. I mean, if they want to do it, they'll do it anyway, regardless if it's $44 million or $50 million.

MR. WILLIAMSON: I think Robert's view might be we can actually reduce it down to $20 million and at least talk about it as it goes through the process.

MR. HOUGHTON: That's fine with me. I would say is there a reason to increase it by 12.52 percent. Do we know there's going to be that much research done, do we have that kind of request for research?

MR. BASS: What happens within the research program, in TxDOT there are research management committees that focus on different areas of transportation.

MR. HOUGHTON: So we can validate that we need that kind of research.

MR. BASS: Correct. They had a strong belief that there were additional projects that could bring some benefit if there were additional money available to them, and that's how, I believe, the decision was made to allocate additional funds to the research strategy.

MR. HOUGHTON: Robert, I'd be glad to amend it to go the University of Texas at El Paso; I have no problem with that.

(General laughter.)

MR. WILLIAMSON: I knew that was coming. Well, let's kind of put that to the side for a moment and see what other changes we might want to make.

MR. HOUGHTON: The first bond sale, James, will occur in '06? What's the first tranche do you think?

MR. BASS: Actually, the way we have it loaded in here, we actually assume some Mobility Fund being utilized in 2005.

MR. HOUGHTON: At the end of '05?

MR. BASS: Correct. The numbers in here assume about midway through the year that we'd have an issuance and then begin expending it over the second half of the fiscal year.

MR. HOUGHTON: How much, do you know?

MR. BASS: The estimate in here is that we would spend around $375 million in '05.

MR. HOUGHTON: In our first issuance?

MR. BASS: Correct. Well, that would actually be the expenditures which I think may be the issuance might be $500- or $700-. Again, the actual amount of the issuance, I would hesitate to say what it's going to be right now. We're going to couple it more closely with the actual plans that have been submitted rather than just the theoretical.

MR. HOUGHTON: I didn't match the plans up yesterday and I should have.

MR. BASS: At this point within the LAR, again because of the timing, it's more a theoretical approach as to how we hope and plan to use the Mobility Fund and over time we'll be able to marry it more closely to the actual plans.

MR. WILLIAMSON: James, I'll have to study this more over the weekend, but it appears we've addressed the concerns I had last time. I haven't had a chance to be sure we used the right words in the administrator's statement, but it appears that we have linked our strategic plan with our appropriations request; it appears that we are making it clear that we're focused on population growth, miles traveled and economic activity for some of our measurements.

And we have a slimmed-down version of the LAR. Is it bound within here?

MR. BASS: No, sir, it is not yet.

MR. WILLIAMSON: It's a separate document?

MR. BASS: Correct, about one-fifth the size of what's before you.

MR. WILLIAMSON: When will it be ready?

MR. BASS: That will depend upon how many additional adjustments we want to make with the more detailed, and then once that's been settled, we'll go to the other.

MR. WILLIAMSON: Because the detailed is what LBB is expecting and then the slimmed-down is what we're going to ask them to at least consider as an alternative.

MR. BASS: Correct. And we have the format so I wouldn't expect it to take more than a couple of days to get the streamlined version.

MR. WILLIAMSON: Other questions or discussion, members?

(No response.)

MR. WILLIAMSON: Well, let me take a stab at this, and you can help me, Mike, or you can help me, Mr. Monroe. We're going to want to approve this LAR and authorize the department to move ahead subject to amending the research appropriation request to reflect the lower amount. Would you state that figure again, Robert?

MR. NICHOLS: To the previous years', the 2004-2005.

MR. BASS: If I may, the amount we increased -- from the minute order before you and the instructions that I'm hearing is that we would subtract $2.5 million in '06 from the A13 Research line, another $2.5 million from '07 in that same line, and we would add that to the highway construction strategy under the broader BUILD IT program of the department.

MR. NICHOLS: You showed an increase of almost $5.6-.

MR. BASS: Correct.

MR. NICHOLS: All I'm suggesting is that we leave it at the current level which is $44,712-.

MR. BASS: And evenly split that between the years?

MR. NICHOLS: Sure. Which doesn't reduce it, it just doesn't increase it.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: I have a motion. Do I have a second?

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

Item 9(b) proposes the delegation to the Finance Division director the department's declaration of intent to reimburse project and financing costs from the proceeds of tax-exempt debt. This is being proposed as an administrative efficiency, and before such a declaration would ever be made, there would be close coordination with the administration. This declaration is a required step in ensuring the tax-exempt status of our bonds if we intend to reimburse ourselves for any earlier expenses, and staff would recommend your approval.

MR. WILLIAMSON: You've heard the recommendation, members. Is there discussion or questions?

MR. NICHOLS: I so move.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Just continue on with agenda item number 10, the SIB loan for the City of Kyle.

MR. BASS: Agenda item 10 seeks your preliminary approval of a loan to the City of Kyle in the amount of $14 million to pay for the construction of Farm to Market 1626 from Farm to Market 2770 to I-35 in the city of Kyle. Staff recommends your approval so that we may begin negotiations with the city.

MR. WILLIAMSON: You've heard the recommendation members.

MR. HOUGHTON: Move to approve.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. BEHRENS: Agenda item number 12 would be a contested case that we have in Wichita County concerning some advertising signs, and Richard Monroe will present that.

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

What happened in this contested case -- and I believe your briefing books have material on it -- a sign was destroyed in Wichita County, both realistically and under our rules; therefore, that sign lost its permit. The company maintained no, it was capable of repair and we went in and repaired it under your rules, and therefore, the permit remains.

This matter was sent to the State Office of Administration Hearings; the SOAH judge said, I'm looking at the pictures and this looks like one destroyed sign to me. So she held in favor of the department. If you approve the minute order, what you will, in effect, be doing is approving that administrative law judge's decision in that case in favor of the department.

I would urge approval of the minute order.

MR. JOHNSON: What would happen if we didn't approve the administrative judge's ruling?

MR. MONROE: Well, as a matter of fact, you have disapproved it in other cases where you didn't agree with it to some extent. I suppose then we would have to figure out what we do permit-wise in this matter.

MR. JOHNSON: I move approval.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: Thank you.

MR. WILLIAMSON: Can't we just get away from regulating billboards altogether and let the market work?

MR. BEHRENS: Agenda item number 13 is our contracts for the month of September, both our maintenance contracts and our highway and building construction contracts. Thomas?

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

Item 13(a) is for consideration of award or rejection of highway maintenance contracts let on the 9th and 10th of September, whose estimated costs are $300,000 or more. We had five projects; staff recommends award of all projects listed.

MR. NICHOLS: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BOHUSLAV: Item 13(b) is for the award or rejection of highway construction and building contracts let on September 9 and 10 this year. There were 83 projects; average number of bidders was four; we had an overrun of about 8 percent and I sent you information last month that that's consistent with our overruns recently. We are making adjustments in our estimates to address those overruns for future lettings.

We have two projects we recommend for rejection. The first one is Project Number 3218 in Potter County. We had two bidders on this project, it was 70 percent over. This is for some revegetative work, planning work. We'd like to go back and redesign this project.

MR. WILLIAMSON: Is this where we're going to cut down all the trees?

MR. BOHUSLAV: I don't think we're cutting down trees on this project, sir.

(General laughter.)

MR. BOHUSLAV: We want to change some of the requirements in this project, go back and redesign it, relet it.

The second project we recommend for rejection is Project Number 3222 in Refugio County. We had one bidder on this project; it was 61 percent over. This project was to replace an existing bridge using fiber reinforced polymer beams on a farm road, and we'd like to go back and redesign that and let it using conventional construction which would be concrete construction.

MR. NICHOLS: What kind of polymer?

MR. BOHUSLAV: Fiber reinforced polymer.

MR. NICHOLS: Plastic bridges?

MR. BOHUSLAV: Yes, sir. We've done this actually in Corpus before; it runs a little bit high; we thought we'd try it again.

MR. NICHOLS: Having come from the plastics industry, it sounds like a great idea to me.

MR. JOHNSON: The advantage in the Corpus district if you're in the saltwater air would be corrosion issues. What county is this?

MR. WILLIAMSON: No. The advantage was they [inaudible] a gullible district engineer, that's the advantage.

MR. JOHNSON: An additional consideration.

MR. BOHUSLAV: The advantage is -- and I'm not the expert in this area -- but lightweight; you can handle them a lot easier; it could be prefabricated construction; you can set them in place a lot easier than normal construction techniques and so on. They are a bit cost-prohibitive now. The hope is that some day the fabrication costs would come down to where they would be more cost-effective.

MR. WILLIAMSON: Did the concrete and steel guys approve this?

MR. BOHUSLAV: I didn't ask them to.

MR. WILLIAMSON: That's the right answer.

MR. BOHUSLAV: Mr. Nichols, you did suggest that I talk to the other commissioners about our incentive construction program, and I can do that again but we actually are going to meet with them I believe in October or December and have you tour our facilities, and at that time I thought I could go through what we do in regard to our incentive construction program.

MR. NICHOLS: Oh, good. Well, let me make a comment real briefly then. We began some time ago doing incentive contracts to accelerate construction, tighten it up, and then I have noticed over the years it's worked pretty good. It seems like we go to higher and higher percentages all the time. In other words, more of our contracts seem to have the incentive program which is good because it gets things done on time and keeps from dragging out.

When we reached the point where we had that meeting in I think it was Brownwood -- Abilene about a year ago, I think it was Abilene -- anyway, we were at about 75 percent of our dollars on our construction contracts were incentive, and you always put this chart in the back since we started talking about it, and it looks like we're dollar-wise up to 90 percent of the dollars of the contracts this month were incentive contracts.

MR. BOHUSLAV: It is 90 percent this month but that number bounces around from 60 percent and this is one of the higher months that we see, depending on the type of projects that we have let.

MR. NICHOLS: But when people ask sometimes how many of your contracts are incentive contracts, here it's only 58 percent of our contracts are incentive contracts but 90 percent of the dollars are. But anyway, okay.

MR. BOHUSLAV: Do you have any other questions?

MR. JOHNSON: Move approval.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item number 14 concerning building construction. This would be a recommendation to approve selection of a developer for a new Houston District headquarters building using the design-build project delivery. Zane Webb.

MR. WEBB: Good afternoon, commissioners. I'm Zane Webb, Maintenance Division.

The minute order you have before you concerns Transportation Code Section 201.1055 that was enacted by the 78th Legislature to authorize the Texas Department of Transportation to enter into an agreement with a private entity to design, construct and lease, with an option to purchase, a district office on property owned by the department. A team representing Houston, finance, and maintenance published requests for qualifications; of the 22 respondents, four were asked to submit proposals. Of those four proposals, they were ranked and listed in the minute order.

The minute order authorizes staff, under administration direction, to enter into negotiations with the ranked proposers. Once the negotiations have been determined that agreement has been reached of technical scope and a guaranteed maximum price that the administration approves, a second minute order will be brought before the commission for approval to execute the lease agreement.

I think each of you or at least most of you are aware and have been briefed on what we're trying to do with this agreement. Those buildings in Houston are very old and we'd like very much to replace them, and this looks like the only way we're going to be able to do it. Staff recommends approval.

MR. WILLIAMSON: Questions or discussion, members?

MR. JOHNSON: I have one observation -- actually it's a question. Zane, what we're doing today is to basically approve you to start a dialogue or commence negotiations with the company or group of companies that was judged to have the best proposal.

MR. WEBB: That's correct, sir.

MR. JOHNSON: Is part of our team that will be assisting you, is Finance going to be an element?

MR. WEBB: Yes, sir.

MR. JOHNSON: The reason I bring that up is clearly the payments on a leaseback purchase obligation, the assumption of interest rates will determine the size of the payments over time and I think it's something that we have to pay a lot of attention to, and I even suggested the consideration that we might use a marker, depending on how long we lease, and let it float relative to that marker. If it's a 30-year payment, it might be the U.S. Treasury 30-year rate floating to be recalculated annually or something. I mean, there are a lot of ways to skin that cat, but I just bring that up at this point to make sure that we had that clearly in focus and we don't let that sort of slide by.

MR. WEBB: Yes, sir. John Munoz, the deputy director of the Finance Division is here today, and he will be on that team and is very involved with this and has been from the start of it.

MR. HOUGHTON: How much weight is finance given in the ultimate choice?

MR. WEBB: Thirty percent.

MR. HOUGHTON: Thirty percent weight on the financial part?

MR. WEBB: Yes, sir.

MR. HOUGHTON: Thirty percent to this point; now going forward?

MR. WEBB: That's correct, 30 percent to this point. Now, going forward what will happen is the entire package will be put together. We've already made the selection by rank and that was 70 percent on technical method and 30 percent. Now what we're going to do is go into negotiations with the highest ranked proposer, and of course the entire package will be looked at at that point -- in other words, the technical part of the operation and how we put the scope of the project together, plus the best price we can get as a guaranteed maximum price over the 30 years or 25 or 20, depending on what we decide to take.

MR. HOUGHTON: Go ahead.

MR. NICHOLS: No, go ahead.

MR. HOUGHTON: When do you get to a point in these negotiations where you say this isn't working financially? Because I can see the volatility in the financial piece that Commissioner Johnson brought up.

MR. WEBB: Yes, sir. Well, as with any negotiation, I guess, with a consultant type contract, if you reach some point where you say well, we've exceeded what we think this ought to cost for the value we're getting, then we can always back off and go to the number two proposer.

MR. HOUGHTON: Are they ranked like this, this is number one, number two, number three and number four?

MR. WEBB: Yes, sir.

MR. HOUGHTON: Okay. I have the same issue as Commissioner Johnson.

MR. NICHOLS: A comment I was going to make, first of all, this in effect does pick the first one that you're going to work with.

MR. WEBB: Yes, sir.

MR. NICHOLS: We would normally think in terms of this is the one that's going to be the winner.

MR. WEBB: Yes, sir.

MR. NICHOLS: Unless something falls through and doesn't get worked out later, but they have the apparent best value at this point.

I was going to compliment you. I had the opportunity to go through the process that you went through and I was real impressed with your approach. You began a process, you knew where it needed to go because you already had the real estate, but you established -- instead of designing the building and then saying give us a proposal to do the detail work, you left a lot of flexibility in there.

You basically established, here's what our need is; we need so many square feet; we've got so many employees; we're going to have so many parking lots. Figure out a place to put all that stuff; figure out how to stack it, and efficient utilities and roofing and all that.

And so each of these conceptually put together a facility in that range and came up with an estimated cost and came up with a financing package and then you had a way to technically score all that stuff. My hat's off to you; I think you did an outstanding job on that and I think we're going to do real well because of that.

The other comment I wanted to make was that before on this Houston District office -- which has been kicked around for way too many years -- the difficulty in getting it built was the sheer cost, roughly $30 million, and the appropriation from the legislature, there never seemed to be a good session which they wanted to approve that much; everybody agreed it needed to be done. But by having a financing package that's a lease to own with an option to buy it out somewhere along the way, is the best of all benefit and that way they can allocate what we would have been paying on rent or whatever and actually building on a facility.

I'm going to recommend -- I think this is great the way you worked it through the legislature and the appropriation -- we might want to consider -- I remember a few years back, I think after you got on as head of Maintenance, you did a study of facilities statewide, and I know there were a lot of old maintenance offices and area offices that needed to be replaced that were like pre-World War II buildings -- called them barns even -- and to get them built in a reasonable period of time, there's never a budget cycle that works.

But if you grouped a number of these together and made a reasonable package and approached that package with the legislature maybe this session, they would take this type of approach. Because I think you're going to be able to go in there this session and show them a success story based on a chance they took, and we might have an opportunity to do something similar with some of these old barns that need to be replaced. Does that make sense?

Anyway, it's food for thought. I wish you would kind of consider it and kick it around because I'm real impressed with what you've done here.

MR. WILLIAMSON: That was a good decision.

MR. JOHNSON: Turn them over to Aviation and convert them into hangars.

(General laughter.)

MR. WILLIAMSON: Any other questions or discussion for Zane? What's your pleasure, members?

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 15 is our routine minute orders. They've all been duly posted on our required agenda. I don't think any of them have anything to do with any personal property that the commission may have. I'd be glad to go through any of them that you would like; otherwise, I'd recommend approval.

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Mr. Chairman, if I could take the liberty, Randy Cox, come up here to the podium. Randy Cox is our new Bridge Division director, and trying to be fair in the treatment, what I did to Mark a while ago, Randy is new on the block so he is here and I wanted to introduce him to you, commissioners, and also put him on the spot because he can tell you maybe a little bit about the polymer reinforced bridges.

MR. WILLIAMSON: I don't want to hear about the polymer reinforced bridges; I want to hear about Windy Man.

MR. BEHRENS: He's going to tell you, though, that those bridges are a result of research.

MR. COX: Correct. FRP is one of the innovative materials that we're looking at to look at longevity of bridges and rapid construction of bridges, also through rehab of bridges. It's a very good material to strengthen bridges and try to extend the life of our structures out there.

MR. NICHOLS: So plastic bridges may be the wave of the future?

MR. COX: Could be.

MR. NICHOLS: I knew I was in the plastics business for some reason.

MR. BEHRENS: If the price gets right.

(General laughter.)

MR. JOHNSON: Randy, were you lost in Lubbock about this time a month ago?

MR. COX: Yes, I was. You met me at the airport. That's correct.

MR. JOHNSON: Congratulations.

MR. WILLIAMSON: Were you chasing Windy Man?

MR. COX: No, we weren't chasing Windy Man.

MR. NICHOLS: What's that story.

MR. WILLIAMSON: Windy Man has been destroyed.

MR. HOUGHTON: Are we going to fix it?

MR. WILLIAMSON: In fact, it's not Randy anymore; it's Windy Cox.

MR. COX: Windy Cox. Thank you. It's an honor to take the Bridge Division.

MR. WILLIAMSON: Now tell us a little bit more about these plastics. What do you mean research? Who did the research?

MR. COX: It's been researched really worldwide but TxDOT has spent some research money looking at the use of FRP for strengthening. We strengthened a bridge in the Bryan District that was rated an SH-10, roughly half the load-carrying capability and we strengthened it up to current capabilities. We're looking at building entire bridges out of FRP; we looked at the possibility of building ferry ramps for our ferry system out of FRP because it is corrosion-resistant. So TxDOT monies are being spent, along with federal monies that are being spent.

MR. HOUGHTON: What research facility is doing this?

MR. COX: University of Texas has looked at it and other, Lamar University looked at some of it.

MR. NICHOLS: Lamar University? Are you serious? Lamar actually got a grant?

MR. WILLIAMSON: No, he listens good.

MR. JOHNSON: They do all of our plastics work.

(General laughter.)

MR. NICHOLS: We're looking forward to working with you, and I don't know if they told you that on your first -- I guess it will be the next commission meeting, whenever the first item is, that Steve and Amadeo and Mike slip us some trick questions back here on your first one?

MR. COX: Yes, sir. I saw Mr. Marek this morning get his.

MR. WILLIAMSON: We treated him kind of nice because he wouldn't take the bait, he just closed it in and closed it down.

MR. HOUGHTON: What color is your tie?

MR. WILLIAMSON: Hook-em Horns?

MR. COX: The best color.

MR. JOHNSON: What color is your bridge manual?

MR. COX: I don't think we have a bridge manual.

MR. HOUGHTON: Soon will be and it will be maroon, I think.

MR. COX: The construction specifications are burgundy.

MR. JOHNSON: That's what I saw you carrying in the airport.

(General laughter.)

MR. WILLIAMSON: Where are you from originally?

MR. COX: I'm from Austin. I grew up in Austin.

MR. WILLIAMSON: Originally from Austin?

MR. COX: Originally from Austin and I could never leave, and I love this town and love this area.

MR. WILLIAMSON: Have they ever sent you out to any of the districts and brought you back in?

MR. COX: Oh, yes, sir. I visit all the districts. In 1986, I was a field engineer and I traveled the state and wore out, I believe, three automobiles doing that, and enjoyed meeting everybody and enjoy working with the districts.

MR. HOUGHTON: When will you come to El Paso?

MR. COX: When will I come to El Paso?

MR. HOUGHTON: Yes. Soon?

MR. COX: You bet. I enjoy El Paso.

MR. WILLIAMSON: What are we going to do about the Windy deal? Is that still a controversy out there?

MR. COX: I believe, the last I heard, the district was maybe backing down a little bit on that.

MR. WILLIAMSON: Reevaluating its position?

MR. COX: Reevaluating, that's correct.

MR. WILLIAMSON: Wind and trees seem to be a problem in the Panhandle.

MR. COX: That's true.

MR. WILLIAMSON: Well, we're glad you're here and we'll think of some more difficult questions if Mike will give us a little more time to prepare.

MR. COX: Thank you. Look forward to working with you guys.

MR. JOHNSON: Thank you, Randy.

MR. WILLIAMSON: That kind of reminds me of the emus, it's a good idea.

We're now entering the open comment period of our meeting. Are there any speakers signed up for open comment?

MR. BEHRENS: We have none signed up.

MR. WILLIAMSON: Is there any reason, Mr. Monroe, for us to have executive session?

MR. MONROE: No, sir.

MR. WILLIAMSON: Is there any other business to come before the commission at this time? We were going to discuss Amadeo's birthday.

MR. NICHOLS: Is it his birthday?

MR. WILLIAMSON: I was going to see if he's asleep; he looks like he's asleep back there.

(General laughter.)

MR. BEHRENS: We have no other business.

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

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Let the record reflect that we are adjourned at 2:06.

(Whereupon, at 2:06 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: September 30, 2004

I do hereby certify that the foregoing pages, numbers 1 through 210, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Sunny L. Peer before the Texas Department of Transportation.

__________10/04/2004
(Transcriber) (Date)
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731