MR. WILLIAMSON: Good morning.

AUDIENCE: Good morning.

MR. WILLIAMSON: It is 9:03 a.m., and I would like to call the October 2006 meeting of the Texas Transportation Commission to order here in Denton, Texas. Welcome to all of you.

This is the first time the Texas Transportation Commission has held its official meeting in Denton. We wanted to see firsthand what all the commotion is about all this growth. It is our practice to take the commission meetings on the road three or four times a year. This gives us a chance to see firsthand how local communities are dealing with their transportation challenges, and I hope it gives you the opportunity to have some insight into how we conduct our business.

Before we begin today's meeting, I would ask that each of you join with me in taking out your cell phone or your Blackberry or your PDA or your computer or whatever the heck you carry, and place it on the silent or vibrate mode so that we will not disrupt anybody when they're giving testimony. Thank you very much.

Please note for the record that public notice of this meeting, containing all of the items on the agenda, was filed with the Office of Secretary of State at 2:45 p.m. on October 18, 2006.

Let me remind you that if you wish to address the commission today, we ask that you complete one of two speaker cards. Both can be found at the back of the room at the registration table. If you're going to comment on something that's on our posted agenda, we ask that you fill out a yellow card such as the one in my right hand. If you wish to make a general comment at the end of the meeting in the general comment period, we ask that you fill out a blue card such as the one in my right hand.

Regardless of the color of card and regardless of what you have to say, we ask that you try to limit your remarks to three minutes so as to give everybody the opportunity to speak and keep us on somewhat of a steady schedule.

It's our custom to open our meetings with comments from each commission member. We always start with the commissioner from El Paso, Ted Houghton. Ted, do you have anything to share with us this morning?

MR. HOUGHTON: Just good morning, and thanks, again -- as I did earlier this morning -- to the people of this fine county and city for their hospitality. And I'd be very remiss if I didn't thank my chauffeur, Brian Barth, over here, works for the Dallas District.

Bill, I learned a lot about your district in a matter of 45 minutes from Dallas to Denton and what's really going on up in this part of the world.

And Brian, I heard some great things about you from some of the people in this area. It's a testament to you and the other employees.

Now, I slept with my door open last night and it harkened me way back. At about three or four o'clock this morning, I hear mooing going on and neighing of a horse or two, so it was refreshing not to hear traffic or things like that. This is a very beautiful part of the world.

And Mr. Chairman, this is a fabulous facility, and I don't know, are these the cheap seats up here because there's a balcony up there. Have you noticed the folks in the balcony in the nice lounge chairs enjoying themselves?

(General laughter.)

MR. HOUGHTON: But again, thanks for everything.

MS. ANDRADE: Good morning. It sure is good to be here this morning in the great city of Denton, and you don't know how appreciative I am of whoever put the signs out there that said Commission Meeting, because I landed at DFW and I'm not used to it, so when I got here and I saw that sign, I was so relieved.

But I also got to see a lot of the district, although I didn't have a chauffeur, Ted, but I learned on my own. But it's good to be here, I'm looking forward to your presentation. I apologize for not being here yesterday to attend the events, especially our employee dinner, however, I had a situation that came up in my business that I had to stay behind and support my staff.

But again, it's great to be here and really looking forward to hearing about this area. Thank you.

MR. JOHNSON: Well, good morning. Much of what I will have to say will echo my colleagues to my right, your left. The hospitality yesterday was without par. It was five star, blue ribbon, however you want to describe it, and very informative which we certainly appreciate it. When you're not local to an area, the more you can find out about it, the better. Everybody who went to such great lengths to make yesterday and today very special has done a tremendous job, and I do want to thank you.

Other than that, I can't think of anything else to say other than thank you.

MR. WILLIAMSON: Thank you, members. I echo the remarks of my colleagues. We appreciate all of the hospitality. I'm not surprised, I come from just 48 miles cross country, and spent a fair amount of my younger years in the Denton area when it was a very small city, and I somehow knew that folks from Denton and Denton County would put on a good show for us, and we really appreciate that.

We have several speakers that we'll hear from through the morning, but I'm not sure that a great friend of transportation is scheduled to speak or not, and I don't like to open any meeting without recognizing a House or a Senate member who has been a strong supporter of transportation. And I'll tell you, I don't waste my time on people who haven't been.

But Myra Crownover has been steadfast in her support for solutions that are sometimes uncomfortable for some of us, and she's to be recognized for that and thanked by this commission and the employees of this agency for taking the long-term view of how we have to solve these problems. And maybe you've got a part in this, it just didn't jump out at me.

But we appreciate your service to the State of Texas and we particularly appreciate everything you do for transportation in the state, Myra.

MS. CROWNOVER: Thank you.

(Applause.)

MR. WILLIAMSON: I would also note for the record that Congressman Burgess and Senator Craig Estes both have very capable representatives here today. David and Diane, can you stand up? David is with Congressman Burgess. Congressman Burgess, I think everyone in the room knows, is a strong transportation guy. Diane with Senator Estes back there, and I think so far we can say that Senator Estes is committed to transportation as well; I don't think we've seen anything different.

Thank you both for being here, and please thank your respective employers and leaders for their help.

Ladies and gentlemen, we need to open our meeting with approval of our minutes for the September meeting. Copies of those minutes are included in your briefing materials and you've had those for several weeks. Do I have a motion?

MR. HOUGHTON: 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: Motion carries. Thank you, members. Mike?

MR. BEHRENS: Thank you, Mr. Chairman.

As is our practice when we are out on the road at these meetings, we like to hear from our local district and also we like to hear from the transportation leaders in the area. So at this time I'd like to ask Bill Hale, our Dallas District engineer, to come forward to lead that presentation and also introduce some of our special guests.

MR. HALE: Thank you, Chairman and commissioners and Mr. Behrens.

I wanted to thank you for coming to our district. Our district is very proud to have you up here. We've done a lot of work in this area and the tools you've given us and gotten through the legislation for this operation has made it very well up in this area.

We're glad you chose Dallas. It's very appropriate that you came to Denton because Denton, from the very beginning when those tools were taken care of, went above and beyond to put those tools into place and work with us on projects and get projects going in this area. They understood the tools that the legislature gave us would have a lot of effect in our area.

They demonstrated this and continue to demonstrate this with the strong transportation leadership in this region -- we have quite a few -- and of course, while the leadership in this area is significant, they are one of many groups, we have several groups in this area. And that's one of the biggest challenges. I was asked last night about what the biggest challenge was, and the biggest challenge is the very amount of people in this area.

I was in Abilene at one point and Abilene had 250,000 people over 13 counties; we're about 3-1/2 million people over seven counties. So it's much more difficult but we have a lot of leaders in this area to help make this go forward. It makes our region strong for transportation and it makes me proud to be one of the two DFW district engineers in this area, the other one, of course, being Maribel Chavez.

It enables us to solve significant transportation problems. The DFW transportation leaders have a vision and their vision is one that looks over the horizon. They call it Over the Horizon Transportation Radar, and they use this and it gives them the ability to see what others can't see. Anyone can identify immediate problems but the leaders in this area look for problems in the future and try to solve them now with the solutions and ability to do things that we have available at this point. They are leaders that commit to solving problems now for the things that they see over the horizon, and that's the reason for the name.

That doesn't mean we don't have disagreements, and we've had quite a few disagreements in this area, but they attack the problems together. We do attack them together and our disagreements and conflicts result in better solutions. We've come up with a lot of solutions in this area, and with everyone at the table taking significant roles, it's been very enlightening and solutions have come that are best for the region.

What it does mean that my response to questions since I got here has changed, and it used to be I agreed with the problem but I don't have a solution other than about 10 or 15 years after I'm gone we may have a project in that area. I now can work with each group and we have a problem and I can identify the problem and here's the available solutions, and then together we work on a solution and get them done now rather than 15, 20, 30 years from now. Sometimes solutions involve difficult decisions but the options are now available.

To include the Dallas District's local presentation instead of an extended briefing, I'd like to introduce a video presentation we've prepared to show you and the audience assembled here for this Transportation Commission meeting, the transportation challenges, issues, successes, and the Dallas District, the region, and the Denton County.

This video was made up by my staff which I'm proud of and I'll recognize them at this moment. I would like to recognize Scott Dorsett, Rhonda Schmid, and Brian Barth, who helped put this thing together. So it was not done by professionals who were paid for this thing, they did it out of our office, so I appreciate it.

(Whereupon, the video began.)

SPEAKER: Hello and welcome to Denton. Denton County was established by the Texas Legislature on April 11, 1846. Early pioneers settled along the Trinity River and its tributaries and on the edge of the frontier as it moved westward. The first settlements were near Hebron in the southeast corner of what would become Denton County, Pilot Point in the northeast, and Little Elm on the eastern border with Collin County. This new county was named for John B. Denton, a pioneer preacher and lawyer.

For a decade, Denton County was on the northeast Texas frontier. Cattle and horses ranged on the unfenced prairies and residents were engaged in ranching and subsistence farming. In 1890, Denton embarked on a course that would make it a higher education center when North Texas Normal College, now the University of North Texas, was established. Legislation authorizing the Girls College of Industrial Arts, now Texas Women's University, was passed in 1901.

Denton covers 911 square miles in North Texas. The eastern cross timbers juts through the center part of the county, blackland prairie covers its western half and along its eastern edge. By the 1970s, Denton County was the fastest growing county in the country, with most of that growth along the Interstate 35 East corridor. With a population of 75,000 in 1970, Denton County has grown to see nearly half a million residents in 2006.

Transportation has certainly played a large part in Denton County's growth. As with all seven counties in the Dallas District, solid leadership and use of innovative tools has helped put important projects to the forefront of transportation goals.

Among other significant projects in the Dallas District is the High Five Interchange project in north Dallas which is one of the largest highway projects in the nation. The Dallas High Five Interchange connects Central Expressway and LBJ Freeway and is as tall as a 12-story building. Completed almost a year ahead of schedule, the $260 million project began in earnest on January 2, 2002 and replaced an outdated, three-level, partial cloverleaf interchange which was built in the 1960s.

The High Five Interchange at US 75 and Interstate 635 has improved traffic flow, driving conditions, and safety for more than 500,000 commuters a day. Aesthetic enhancements such as colored columns and lighting have helped heighten driver awareness as motorists pass through the project. Innovative strategies were used throughout the life of the project and included the preparation of an extensive CPM prior to project letting, window milestones, proactive public awareness campaigns, incentives and disincentives, along with progressive lane rental.

The Dallas High Five Interchange is a towering example of engineering and effort in the Dallas District.

Our transportation system has not been able to keep pace with the needs of a rapidly increasing population. The problem is expected to worsen in the next 25 years as the state's population increases an additional 65 percent and road use doubles. The total transportation needs in the DFW region are projected to be $115 billion by the year 2030. This leaves us with a significant funding gap of $70 billion if we are to adequately meet our future transportation mobility challenges.

From 1970 to 2000, the Dallas District seven-county lane mileage increased 25 percent, however, the daily vehicle miles driven increased 250 percent. This has to do with the DFW area adding approximately one million residents per decade over the past three decades. Based on these facts, it is safe to assume that by the year 2030 the DFW region will add another three million residents. Remarkably, our lane mileage additions pale in comparison to the amount of congestion on the roadways which also means a loss of money since the current estimated cost of congestion in the DFW region is $5.3 billion a year through user delays and wasted fuel.

Many people wonder why the current gas tax does not provide enough revenue to support our transportation system with today's demands. Back in 1956, almost all of the state and federal revenue was able to go to constructing new infrastructure. This is no longer the case. Now Texas is dealing with an interstate system that is 50 years old and has over 80,000 miles of highway. This means almost all of the state and federal revenue we receive from making mobility improvements must go to rehabilitation and maintenance instead of building new highways.

TxDOT and our regional transportation leaders are aware of these challenges and are following five focused goals: to reduce congestion, enhance safety, expand economic opportunity, improve air quality, and increase the value of our transportation assets. These goals are being achieved by implementing four core strategies which include: using financial options to build transportation projects, empowering local leaders to solve local transportation problems, striving to drive down the cost of new projects, and demanding consumer-driven decisions that respond to market forces.

In 2003 Texas leaders took charge to make a difference to help expand our transportation system. Governor Rick Perry and the Transportation Commission sought innovative approaches to build and finance new infrastructure. State Highway 121 is the perfect example for this revolutionary way of thinking.

The Dallas District opened State Highway 121 in July, two months ahead of schedule, and it is the first toll road in the DFW area to open utilizing House Bill 3588 legislation which authorizes the financing of roadways with toll revenue. The toll road is the first of its kind in the nation without coin baskets or toll plazas and without stopping and waiting in lines. It is also the first toll road in the nation to feature all video toll collection.

By utilizing innovative transportation legislation, the Dallas and Fort Worth districts have drawn a new picture for the future of transportation in Texas and nationwide. It involves initiatives that alter the highway planning processes and provides an opportunity for local communities to select transportation projects that best meet their needs.

As examples, Denton County and the project cities partnered with TxDOT using a comprehensive development agreement to leverage the previously mentioned State Highway 121 toll road into 14 Near Neighbor transportation projects valued at approximately $1.5 billion that otherwise lacked funding. Among these needed projects are: Interstate 35 East from Carrollton to Denton, FM 423 from The Colony through Frisco, and FM 720 linking NTTA's Lewisville Lake Toll Bridge to Interstate 35 East and the Dallas North Tollway, as well as other projects shown on these maps.

In addition to the Denton County CDA, the Dallas-Fort Worth region is utilizing this tool to leverage other transportation assets to fund Near Neighbor projects in the following corridors: in Dallas County on State Highway 161 and Interstate 635, in Collin County on State Highway 121, in Tarrant County on the State Highway 114 Funnel, and on Interstate 820/ State Highway 183/Interstate Highway 35W corridor project.

The region has also developed a new revenue-sharing partnership with the North Texas Tollway Authority on the Southwest Parkway in Tarrant and Johnson counties, along with the George Bush Turnpike eastern extension, and the Trinity Parkway in Dallas County, to fund additional transportation projects for that region.

North Central Texas is a vibrant region rich in culture and business opportunities. The task at hand now is searching for ways to meet the impending transportation challenge. As roadways across the Metroplex begin to feel the impact of increased traffic, the Dallas District will continue to lead the industry with ideas, options and opportunities for transportation solutions, solutions geared toward benefitting local communities, residents and businesses.

The road ahead for Dallas and Texas is bright. We do not need to look far to see examples of hardworking, engaged leaders who are trying to stay ahead of the potential transportation crisis, leaders such as our Denton County partners who are committed to addressing the transportation problems of today and the challenges of tomorrow.

(Whereupon, the video ended, followed by applause.)

MR. HALE: Again, I'd like to thank Scott Dorsett, Rhonda Schmid, and Brian Barth for that.

MR. WILLIAMSON: There's a test. Name the song that led into your DVD or name the band. No help.

MR. HALE: Merle Haggard.

MR. WILLIAMSON: John?

MR. JOHNSON: I failed.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: Rolling Stones.

MR. WILLIAMSON: Hope?

MS. ANDRADE: I have no idea.

MR. WILLIAMSON: Mike?

MR. BEHRENS: Texas A&M Aggie Band.

MR. WILLIAMSON: You should have kept that song going, that's a great song. U-2. That was a good video.

MR. HALE: Thanks. That was done in-house with our people.

MS. ANDRADE: Is that staff present here?

MR. HALE: Yes. You guys stand up.

MR. WILLIAMSON: I'm serious, it was great.

(Applause.)

MR. WILLIAMSON: Lays it out in a non-confrontational way, just the facts, here we are.

MR. HALE: All right. Before I move forward with my other presenters, we've got several presentations and they're not going to be more than about 20 minutes long and we'll get finished with the whole thing.

I want to introduce the district engineers that are here from my adjacent districts. I've got Maribel Chavez.

(Applause.)

MR. HALE: Larry Tegtmeyer from Wichita Falls.

(Applause.)

MR. HALE: Bobby Littlefield from the Paris District.

(Applause.)

MR. HALE: I believe that's all I have at this time.

Now, the next presentation I've got right here is from Judge Mary Horn. At this time it is my pleasure to begin presentations by local leaders by introducing Judge Horn. Judge Horn has been instrumental in SH 121 CDA in Denton County and the associated Near Neighbor/Near Time projects that will be funded that you saw in the video a minute ago. She's a strong and important regional transportation leader and has been a key TxDOT transportation partner as we employ the new funding tools, and she packs heat, so you want to talk to her.

JUDGE HORN: Thank you. Well, good morning and thank you for being here. This is going to be a tough act to follow, for sure.

Chairman Williamson, Commissioner Johnson, Commissioner Andrade and Commissioner Houghton, welcome to Denton County, the city of Denton, and the Meritt Bois D'Arc Buffalo Ranch. It is truly an honor to host the Transportation Commission monthly meeting here these two days.

The past two years has seen many changes in the transportation infrastructure industry, and Denton County prides itself on being in the forefront as the state and region create and implement new tools that will allow us to meet our transportation needs well into the future. There is no more critical task before us.

The new tools that the Texas Legislature adopted and your commission continues to earnestly implement have found a home in the North Central Texas region. One such tool is the use of the comprehensive development agreement for State Highway 121 in Denton and Collin counties.

We'll direct you to the screen here because they're going to be putting some things up here that I want you to notice.

This concession CDA will result in the timely implementation of many critical Near Neighbor/Near Time projects, such as FM 720, FM 423, FM 2934, FM 3537, Paige Road, Memorial Drive, South Colony Boulevard, ramp improvements at US 75 and Parker, I-35E Beltline Road, State Highway 114 West, FM 407, Interstate Highway 35 from Bush Turnpike to 2181, Corporate Drive, Freeport Parkway, State Highway 121 Sandy Lake ramps, and the State Highway 114 Funnel. This represents a nearly $2 billion increase in non-tax funding for critical mobility improvements within a four-county area.

None of this would have been possible without the hard work and dedication of the commission and TxDOT staff, in particular the Dallas District Engineer, Bill Hale, Deputy District Engineer Bob Brown, Transportation and Development Director Brian Barth, and Denton Area Engineer Buz Elsom. Bill, Bob, Brian, Buz, we call them the B team, but they all get As in my book and I want to publicly thank them for the work that they do.

I will now turn over the presentation to the City of Denton's Mayor Pro Tem Pete Kamp.

(Applause.)

MAYOR KAMP: Thank you, Judge Horn. Again, I want to welcome everyone to the city of Denton. We're really excited having you here. I think the only thing is you haven't been able to spend enough time, so we want to welcome you back any time, and if you need a personal tour guide, I was born here, so please do let us know. Welcome, again.

The concession CDA on State Highway 121 took a lot of work by a lot of transportation people. Most of those people are here in this room today. And as a member of the Regional Transportation Council, I watched the dedication and the efforts of our COG staff in general, and Michael Morris specifically. We watched as they crafted new policies and procedures in order to maximize the benefits of the new tools that were created and implemented by the state, and I can't tell you how much we appreciate that.

It's really quite impressive to see this entire region and we do think regionally, I can assure you that. You know, we all obviously have specific things that we need -- you're quite aware of that -- but we do work regional partnerships, we are proud of that, and that is with TxDOT right by our side at all times.

Judge Horn just listed many of the projects that will benefit from these partnerships. None is more critical to the city of Denton than, guess what, I-35. I believe a couple of the commissioners experienced our parking lot yesterday coming in. That wasn't peak hours.

The improvements on I-35 are scheduled to start at 635 -- of course LBJ -- in Dallas and move all the way through Denton to US 380 that is just a couple of miles south of where we stand right now. It's currently anticipated that the costs -- and this was yesterday's -- are $1 billion -- because we haven't checked this morning so that could have changed -- calls for ultimately ten lanes from 635 to 2181, and that's general purpose lanes. There will be six, the frontage road and two HOV managed lanes. As the project moves north from 2181 in Corinth and moves through Denton, the project calls for eight general lanes, six frontage roads and the possibility for the managed lanes in the future.

And again, these improvements would not be possible on I-35 if it wasn't for the successful use of the concession model of the CDA tool. I mean, it certainly wouldn't happen in anyone's lifetime in this room. I cannot tell you how much we appreciate it.

I'd like to personally thank you, Chairman, and all the commissioners for stepping up and making the tough calls to make this possible. And I do hope that later this morning you will give a favorable consideration to the memorandum of understanding that RTC passed at our last meeting in October. We appreciate that very much.

I will let you know for the chairman and commissioner who weren't here last night, we do have some gifts for you from the City of Denton. Again, welcome. We hope you will come back and visit us more often.

It's now my pleasure to introduce one of Denton County's appointments to NTTA, Vice Chairman and former Denton Mayor Jack Miller. Thank you so much for your attention.

(Applause.)

MR. MILLER: Thank you, Pete, Chairman, commissioners, Michael. That mooing you heard this morning was some of our voters that are going to their early polls here, so I know you probably didn't recognize that.

(General laughter.)

MR. MILLER: We're delighted to be here. Paul Weisman, our chairman, offers his apologies. He's in New York City today; he'd rather be here. And so on behalf of Paul and the rest of our board of directors, we also would like to say welcome to you.

Incidentally, I was impressed with the signage this morning. Even I could find my way here. And then the parking help here, that was fantastic. I think I even saw a little bit of new blacktop down there, but it was very helpful.

I moved to Denton 52 years ago to go to college, and Interstate 35 was not a problem because it didn't exist. We had a two-lane road, Highway 77, from here to Dallas, and the first time we hit multiple lanes was the old circle at the Harry Hines Boulevard in Dallas. And it wasn't very dependable getting to Dallas at that time, and now we have Interstate 35 and it's not very dependable getting to Dallas now either, but we're all doing something about that immobility in our area.

We have a long history of toll roads in our area. Our predecessor, the Texas Turnpike Authority, opened the first tollway here 50 years ago, the Dallas-Fort Worth Turnpike. And then almost 40 years ago the Dallas North Tollway was opened, and then subsequent to that, we've opened a number of roads that we now have 54 miles of toll roads in our area and we have about 700 employees that provide the services to our citizens.

We've had a great partnership with all of the political subdivisions in our area, our counties, our cities, the other transportation agencies, and TxDOT, and for everyone involved, we say thank you.

We look forward to this new era, and it is a new era with all the new tools we have. Our board approved three documents just a little over a week ago that will help to solidify this three-legged stool that Bill refers to and the collaborative process. The first one was the updated memorandum of understanding on the comprehensive development agreement that we reached earlier in the year. The second one was the memorandum of understanding and the development of toll roads in the region. And the third one was the tolling services agreement that will put into operation for the operation of State Highway 121 in Denton and Collin counties.

And we say thank you for everybody that cooperated with us: Bill and his group, Maribel and her group, the Regional Transportation Council, Michael Morris, and of course we have our executive director here, Allan and his group, all made this possible.

We look forward to working with everyone to continue to bring the solutions to our area. We pledge to continue to work with everyone and to work in a collaborative way.

So again, on behalf of the board of directors and our employees, we say thank you very much. We really do look forward to the future, and as I retired from the political field, I said, I hope now that when I ride off into the sunset I don't get stuck in traffic. And we're going to help make that happen.

At this time it's a pleasure to introduce my commissioner in Precinct 1, Commissioner Cynthia White from Denton County, who is also the chair of the Regional Transportation Council.

MR. WILLIAMSON: Thank you, Jack.

(Applause.)

MS. WHITE: Well, good morning. Thank you, Jack, I appreciate that. On behalf of the Regional Transportation Council, I'd like to welcome you to Denton County and the North Texas area. We're very happy that you're here today.

Right now I'd like to take a moment and just broaden the geographical area that we're looking at today and into a region that has applied the new funding tools that have recently been made available to our local governments.

In Dallas County, the cities of Grand Prairie and Irving have embraced the concession model for the CDA projection State Highway 161 from I-30 to 183. This approach has the potential to deliver over $1 billion in new construction in and around State Highway 161. As with State Highway 121, these new funds will come from concession payments made from the private sector.

These new projects made available through the concession CDA on State Highway 161 include: Loop 12 at State Highway 114, Loop 12 at State Highway 183, Hunter Farrell, McArthur and Gifford, park and ride lot on I-30, I-30 frontage roads, I-20 frontage roads, Camp Wisdom and Lakeridge Parkway.

Another project critical to the viability of the North Texas region is the 635 managed lanes CDA. This too is a concession CDA designed to build the managed lanes on 635 from US 75 to I-35E and the managed lanes on I-35E from 635 to Loop 12. Original designs called for managed lane tunnels under the DNT, however, during the value engineering it was determined that because of the operational costs associated with the tunnels an alternative method was needed. Based on these value engineer studies, the open trench method was proposed which depresses the managed lanes underneath cantilevered main lanes, eliminating the high operational cost of tunnels.

The Interstate 635 managed lane concept is a $1.2 billion project, but because of the CDA process and the new funding options provided by the state, it will be delivered to the public at a cost of $700 million. That is a savings of $500 million to the taxpayers of this state.

Further to the west we have two critical projects to the region: the convergence of State Highway 114, 635 and State Highway 121, and the numerous farm to market roads, not so affectionately referred to as the Funnel, for obvious reasons; and state Highway 183, Loop 820, I-35W project that has to date escaped receiving an infamous moniker.

These two projects represent the key connections within the region that link Dallas and Tarrant County. Without innovative transportation solutions in the way we program and build projects of this magnitude, the people impacted by these two projects would have little hope of seeing them constructed in their lifetime. But TxDOT plans to use the design-build concept and the pre-development model to take advantage of opportunities to significantly reduce costs and to deliver them to the driving public in the shortest time possible.

You heard Councilwoman Kamp mention the MOU between TxDOT and the RTC that outlines the framework for moving forward together in a partnership that establishes a new transportation paradigm. I hope that you will adopt it and continue to work hand-in-hand with North Texas.

The RTC, the Dallas and Fort Worth district offices of TxDOT, Denton County and its cities know full well the magnitude of the challenges that stand before us today, but as you see from what we have accomplished together, we are all up to that challenge.

Here now to speak more on that challenge is a man who needs no introduction, the director of transportation for the North Central Texas Council of Governments, Michael Morris.

(Applause.)

MR. MORRIS: Madame Chair, thank you very much.

One thing just to add with regard to LBJ that I think is important, if we did not have the tools that you have been proposing, the LBJ project would be dead. We would be back into an environmental process, five years from now trying to get consensus from the public. We are using $200 million from the CDA produced from 161 and 121 to backstop and proceed with the 635 improvements.

So as you go around saying, Well, gee, what are CDAs doing? CDAs are permitting now for the traditional projects that were intended to be funded on their own to be able to proceed because of the cost overruns we've seen in that particular structure.

I want everyone in this room to understand who is important in transportation. Most of us have dealt with district engineers on signs on our interstate highways, everyone in this room has. We've had conversations for years about what we think should be put up. Bill Hale has put up signs on the interstate highways for this particular group in order to get to this particular meeting, probably against AASHTO standards. Federal Highways is in the room. He's taken leadership, he did it anyway.

(General laughter.)

MR. MORRIS: That blue sign you saw today is the symbol of Dallas-Fort Worth region's attitude about going and getting the job done in transportation.

We have created a new policy in our office: you need to review five things before you can come to our office and complain about what it is we're doing with regard to CDAs and tools and the new tool structure. One of those -- and I want to compliment you -- I've just added is the remarks you all gave at the short course earlier this month. I don't think you realize the magnitude each of you in your presentations to both TxDOT and to the state, the implications of a group of policy officials that have a common vision, have now put some armor around that particular vision.

And Commissioner Andrade, the noise that you're going to hear from Dallas-Fort Worth is not the complaining about where we're going, it's now the construction of the transportation projects that we have within the region.

So we have added that to our requirement, that if you are going to come and complain, you're going to see those speeches that were given by you at the short course before you come to us with regard to it.

I want to just quickly go through some policy items and some information and just wrap this up and take questions if you have any.

Commissioner Johnson and Mr. Chairman, we're prepared to work with you, not just from the Dallas-Fort Worth region but all the MPOs in Texas, using the TMMP data we have just gone through and recycled, in order to prepare for the legislature on what the transportation needs are in the particular region and make sure we account for both the capacity needs anticipated as well as the reconstruction needs as we move forward.

I know the business council has come out with certain information and I think it's critical we all get together and tighten all that up to make sure we're reflecting what those particular needs are.

This is the graph that is shown 100 times a year within the region that has created the support that new things have to be done if we're going to go ahead and build a new transportation system: still unmet needs on the roadway system, Trans-Texas Corridor we're trying to move forward on -- I'll give you a report on -- and then obviously the rehabilitation cost of an aging infrastructure. This is looking over the horizon and doing things today that will make Dallas-Fort Worth sustainable for generations to come.

This particular graph you hopefully now see from lots of regions. It's a method we introduced into the TMMP process a few years ago. We think it's critical to demonstrate if nothing changed in transportation, what would the future be -- which we call the do-nothing; show the commission, your community, your local policy officials if you used your traditional gas revenue what would you be able to do -- that is your revenue-constrained option; go develop all the new tools that you've given us, what is the future transportation improvements that can be made; and then what remains unfunded which is the conversation necessary with the legislature as we move forward.

With regard to our particular region -- and I've shown this to you previously so I don't want to spend a lot of time on this -- the tools and discussion of the last two years is getting this region to about 40 percent of where it has to go, a significant improvement. We're going to go from a congestion in the future of 1.56 which means it's 56 percent longer to travel during the peak period than the off-peak period, we're going to move that all the way down to 43 percent, a significant reduction of almost 40 percent in that time frame, and we still think we're leveraging additional tools.

For example, building 121 in Denton as a toll road creates a revenue source to build Interstate 35 both with gas tax and managed lanes that are tolled which creates a revenue source that leverages to continue to build transportation. We think we'll have about $2 billion from the concession program you have in place on projects we haven't yet fully assigned those revenues to, nor, Mr. Chairman, the modes of transportation that those revenues should be.

That congestion you have on Interstate 35 should not all be solved by the roadway system. There's a parallel rail line being built by the transportation authority in this county, and we're looking forward in partnering, what role these tools can play to build passenger rail improvements in the corridor as well.

The regional mobility authority partnership, this is the three-legged stool that Mr. Hale and Maribel refer to. We have the North Texas Tollway Authority that will have full responsibility to build certain things; we have TxDOT that will have full responsibility to build certain things with a very capable group of people in the districts and in Austin and using your tools to permit us to build those particular projects; and we have a very capable RTC who gets it, has got it for a long time.

Early in the '90s as we were pushing TxDOT to consider new toll roads and Arnold Oliver was your district engineer and working with him closely, the analogy I came up with this morning is like trying to pull a big building with a rubber band, and it takes several years for that inertia to be overcome to start moving. Just like the Acme cartoon, that object is now coming -- which is TxDOT -- very fast with lots of momentum, and we couldn't be prouder of the success of the partnership to accomplish that particular momentum that we see today.

Three updates on our structure. The Regional Transportation Council has sent five new toll roads over to NTTA as part of the protocol. We thought it very important to begin with the support of both of the boards, your commission and their board, on approving the protocol. The RTC acted quickly to get five projects there. Those projects were evaluated in a joint team with our office, NTTA and the Dallas and Fort Worth districts. We hope to get some feedback on those particular projects to proceed with changes to our regional mobility plan which will recommend to the RTC this winter specific projects that previously were going to be built as gas tax roadways and wait 25, 30 or 40 years into the future. We now have hope for those communities to be built as toll roads potentially five, six years from now.

The second thing, Mr. Chairman and commissioners, you'll see from our region is very innovative ways, working with the North Texas Tollway Authority to leverage funds. In some cases we will request and get agreement on excess revenue, in other cases we may wish to minimize our gas tax funds we're putting into a joint project so we can move it to a higher priority project. CDAs obviously will continue to be an option in the future.

We will have conversations with the North Texas Tollway Authority in what we call these irregular mobility dividends. What we mean by that is NTTA over time creates bonding capacity. It's possible they could come forward and say, Okay, Region, what do you need; we will assist you in the construction of additional projects, leveraging the bonding capacity that that particular system has.

So within the tools you've given us, there's a whole set of tools within those tools within the Dallas-Fort Worth region that can promote additional leveraging, including flexing funds to goods movement, improvements at Tower 55, flexing funds to rail investments within the region, and policies the RTC has discussed that no one should wait for a bus that either doesn't have shade or people standing in the dirt or something. We may be flexing funds into policy principles or standards that transit users in our region will all be able to meet a certain transit level of service with regard to that particular item.

Those are the hopes and opportunities these tools and this momentum that you've created permits within the region.

We will be having conversations with regard to the Trans-Texas Corridor and what those funds should be for. We very much understand -- and why these are in different boxes -- that the Trans-Texas Corridor is a system of improvements that creates inter-city movements between Oklahoma and Mexico, and over time we will continue to tighten up any clarification that needs to occur there.

The leadership you have given us with regard to the Trans-Texas Corridor has created a new partnership. I want to thank our two district engineers who have worked closely with Amadeo and the home office and Mr. Behrens. We now have an administrative initiative in place to create a special team of district, your home office and our MPO staff to go ahead and get these corridors environmentally cleared as quickly as possible.

You realize now, I think, that environmental clearances are like gold. There is an asset to data, there is an asset to environmental clearances. Environmental clearances are valuable because now, with your new tools, be sold to a marketplace where a CDA person would love to come in with a cleared environmental project to bring revenue to a particular item.

And Mr. Behrens, your staff has jumped in in very quick time, they get it, we're moving ahead, we're sharing a team, we're going to create a special set of staff persons working on the Trans-Texas Corridor that don't get in the way of getting our other projects environmentally cleared, and we very much appreciate that leadership that is shown.

The project is already moving into segments. We've got to be very careful we don't break these up into small elements because regional rail, for example, regional freight rail improvements that are critical, that may start at twelve o'clock on the dial on the Burlington Northern route, coming all the way around the western side of the region to hit the Union Pacific corridor heading out east. We may wish to clear that as one large project and build that as a system of improvements and not break it up into small parts. So that's the evaluation that we're going through now.

And to wrap up the region's presentation, from the county, from the city, from the RTC, from our tollway authority, from our districts and from the MPO, these partnership opportunities that we have within the region, this initiative and this noise we hope to create, we now have clear roles. All of us, from your goals and strategies, we're focused on the customer and not our name badges.

We now can build projects faster, we can build more projects. Those projects we're building can be staged and constructed correctly within the region so we're not constructing in parallel corridors. We can build the important projects like the LBJs that would have suffered and been set back 10 or 15 years because we didn't have the CDA revenues to backstop those initiatives.

We can build the inter-city improvements to get our individual customers, goods movement and persons to other communities in Austin and San Antonio and other places. You have created an opportunity to flex our funds for goods movement improvements, reminding you we're the largest inland metropolitan area in the United States and goods movement is critical to us. And then you've created an opportunity to flex our funds for multimodal options.

We get it, we're moving ahead, and we couldn't thank you more for the opportunities that you've given us.

We'll be happy to take questions, if any. I know you have a busy agenda.

MR. HOUGHTON: Michael, outstanding job. And Bill, why don't you join Michael up here, if you don't mind, because I have a question.

Obviously we will not know until, I call it, the envelope is opened on what these concessions will bring us, but you have some of, I say, better than -- that's what I want you to put up there, all those roads, there we go -- you have an idea what this concession may bring us on 121. What is the value of those assets today that you will build?

MR. MORRIS: What we have done is broken up our commitment into two parts. When we sat down with the judge and the commissioners -- and Commissioner Jacobs is here too, who was instrumental in this partnership -- we sat down and said, Look, we've got to commit to you under this phrase we coined, Near Neighbor, to get you enough support to stand in front of citizens that said we were promised this gas tax roadway from the commission but we wish you to look at this different vision.

Originally these were around $400 million, with a cost increase, the lines on that map are about $500 million. We purposely took a small bite of what we knew was going to be a larger concession value. We think there may be $800 million from this system of three CDAs, revenue still coming back.

MR. HOUGHTON: Three CDAs or one? Let's say the 121.

MR. MORRIS: We break it up into three, you look at them as two. So 121-Denton and 121-Collin, the whole set, you're looking at probably another $800 million or so or projects in addition to this that we haven't sat down with the elected officials in Denton County, and we'll start doing that in November-December-ish, as you, I think, open the envelope in January or February, whenever that time is, so we can then immediately move forward.

You're going to see discussions like how much money do we put on Interstate 35W to extend Interstate 35W further to the north across the lake; what money should we put in to help build the rail system; those type of things.

Remember, the RTC has created a policy that in February the region was in total disarray -- and people behind me should be laughing at this point -- with regard to how to share these revenues and we went back and created a new policy where the county in which the project is in receives the bonding capacity -- that is a term we use. We take the concession value and break it up into two components. The bonding capacity element resides in the county, the excess revenue is allocated to the counties that create the toll users of that county that are paying into the toll system.

So you go through all those particular mathematics, you've got another $800 million or so plus coming to projects in Denton County, and in Collin County we probably have a similar amount, but we still have to build the remaining portion of 121 in Collin County which is somewhere around $350 million, so you have $500 million plus.

You're going to see us bring in a project soon. One of our biggest concerns in Collin County is US 75 between 121 and 121. Back to your safety problem, Mr. Chairman, that is a huge fatality problem. You're going to see us come up with a very imaginative way, I think, of flexing RTC money, TxDOT money, maybe a small amount of shadow toll revenue, and the CDA funds to be flexed onto the 75 project.

MR. HOUGHTON: So to summarize, what's the new outside revenue that you anticipate?

MR. MORRIS: My memory is probably $2-1/2 to $3 billion total. $2 billion of it is maybe on the 121, a billion is probably on the 161. 161 still has to pay for some of those particular improvements. But we should have a net after construction of $2 billion plus. The first $200 million we've given is to the LBJ project so it can proceed, and we don't know if you need it yet but we want to make sure that proceeds to its CDA.

MR. HOUGHTON: So roughly $3 billion infusion into this region.

MR. MORRIS: And that doesn't account yet what we're doing with the protocol in the NTTA.

MR. HOUGHTON: Correct. I'll wait for other questions, Mr. Chairman.

MS. ANDRADE: Michael, this always gives me an opportunity to thank you for everything that you do.

Bill, so none of these projects were funded.

MR. HALE: No, they were not.

MS. ANDRADE: And we didn't anticipate funding in the near future.

MR. HALE: We were developing these projects at the time, most of them in Denton County, with a SIB loan that ended up going back to the members who were doing that and replaced it with the money off these toll roads.

MS. ANDRADE: So besides the $3 billion of infusion that Commissioner Houghton has talked about, we're also going to be able to look at, with the excess revenue, Michael, perhaps rail, perhaps public transportation, so this will also give us revenue to look at those other modes of transportation.

MR. MORRIS: It gives the region hope on flexibility. It also moves projects -- I think Commissioner Johnson, you always speak about this -- it moves them in time 25 years. We're talking to people who beat our doors down about very dangerous roads which we would have said four years ago it's a long line, think about 20 years or do it yourself. Now you've given us a whole bunch of other opportunities to improve, especially the safety elements of these very congested facilities.

MS. ANDRADE: This is great, I don't see anything wrong with this picture. And I have to tell you that I also want to congratulate the leadership of this region, with the judge and the commissioner and the mayor. I want to take you all with me when I do presentations so that I can boast about what can happen when you all get together and work together.

MR. MORRIS: Commissioner, if you take us on the road, we'll have just a small fee that we'll use to help build our transportation system.

(General laughter.)

MS. ANDRADE: So now we're charging for that too. I understand completely. Thank you so much.

MR. JOHNSON: Michael, just an observation. It's incredible what has transpired in the last just few years, certainly last five, in terms of one, the ability to grasp concepts and to take them to the extreme which, from a leverage standpoint means so much because you've taken a limited resource and been able to extrapolate it into numerous projects which are very much needed but you've done it in a way that they're going to be here sooner. As the example you gave, some of them, as Ric likes to say, might not ever get done if we would have depended upon the traditional method of doing things.

And I think you've sort of set a template which is, one, to be admired, but secondly to be copied for regions not only around the state but around this nation on the way to get things done and to keep people moving.

MR. MORRIS: Well, to just share with you, I flew in from Calgary, Canada last night.

MR. JOHNSON: A favorite place of mine.

MR. MORRIS: It's a very beautiful place. We were asked what's all the stuff going on in Texas, so now you've gone international with regard to communities who are sitting are backlogs, high safety problems. Amadeo and I are going back to Washington, D.C. in January to speak to large groups of people with regard to what is happening here. The nation and now nations are looking to Texas -- and I know you already know this -- to either look at this as an experiment that they'll monitor or that they'll see the mechanics of this leveraging.

And not to get too much into the level of the playing field, but it is critical to introduce tolls in certain corridors if you're very much into air quality of the region and trying to maintain compact cities and increase densities around rail systems. It's something we don't talk enough about, but it is not in the best interest of a region for a developer to be able to go 40 miles north of here and develop a 1,000-home neighborhood, don't meet all the water and sewage necessities and fees that are paid back in the central cities, and take $10- or $15,000 off a home and create huge leapfrog developments that occur in this and counties to the north.

And the introduction of tolls helps level the playing field in public policy with regard to development and sustainable elements and flexing money to transit. It's a much more mature way -- if the region is mature enough, frankly, to get it, it's a much more mature way for public policy and elected officials to maintain the quality of life of their region over time.

MR. JOHNSON: Bill, I have an observation for you and a question. The observation is when I was coming up here I realized that we were in Abilene not too long ago and you were the district engineer there, and I thought, well, Bill is one of those rare creatures, he's got to host the commission in two different venues, but then I realized also Maribel, when she was in El Paso and also Fort Worth, did it, so you've joined your colleague to the west in what I think is a pretty exclusive group.

The design element for the 635 managed lanes in a depressed but open air concept I think is fascinating. The fact that it saves a lot of money is very impressive. One, how did we come across that concept, and then secondly, recognizing the challenge when we go depressed of flood issues and water issues, how are we going to handle when we have deluges that North Texas can experience, the water, where is it going and those sorts of issues? Are you going to wind up being on the national news like some of our other cities that have depressed sections of highway?

MR. WILLIAMSON: We're going to pipe it to the Trans-Texas Corridor and sell it.

(General laughter.)

MR. HALE: That was part of the value engineering study that went into that. We were at times having trouble getting through. The tunnel system came about because we needed to get through some intersections, particularly the Dallas North Toll Road, trying to avoid it by going beneath it. And then as we looked through it, the columns and everything that went through there was a big issue. And it's up on our table but the drainage won't be as big a problem as it would be in some other areas, and then as we went through we started getting the "Big Dig" issue.

The thing that got my concern was that we were going to have to have the fire department take care of anything that went into that tunnel, and by opening this up to air, then we would be able to eliminate that cost. So we went back to our consultants and our staff and they spent six to eight months going back through this thing and they came up with that design that we have right there that really allows for future expansion, if it needs to.

MR. JOHNSON: That's another plus.

MR. HALE: We had a request from the City of Dallas at one point to maybe put some transit, rail line in that, and we may look at that at some point

MR. WILLIAMSON: On top of the columns in the middle?

MR. HALE: It would need some support beneath there but there is a possibility of some transit in that corridor right there.

MR. JOHNSON: And aesthetically, as long as there's a blue sky and a sunset that I see, that's just sensational.

MR. HALE: And one of the things, it all fell within the environmental clearance was that it wouldn't go above a certain elevation, the clearance was based on that, and that was the issue with the public in that area, and by what we've done here, it keeps it from going up, it goes down and it keeps the public happy in that area.

MR. MORRIS: I think, Commissioner, another thing to add, people beat you up on why are you delegating responsibility to regions on project selection. Here was a classic example. The district first came and said, We have a cost overrun on the tunnel, MPO, we need $500-, $700 million. We said, Okay, well, that's all well and good, there goes the Airport Freeway in Dallas County. Well, wait a minute, we don't really want to do that.

So I think the partnership, you used to just go to the home office and say we need more and there weren't hard decisions being made within regions. Now my conversation with Bill is: Do you want the tunnel and no Airport Freeway, or do you want to see if TxDOT can come up with some imagination. And you've heard me say constraints breeds innovation. Now that you've created a region that can have that conversation among the staff members within the region, that constraint forced innovation to bring this project in which we think is a much better design, actually may help us build multimodal improvements in the corridor easier than put those in a tunnel, and it gives us the flexibility of holding some of the funds to build other needs that we have within Dallas County.

MR. JOHNSON: That's A-plus.

MR. WILLIAMSON: I absolutely agree, it's wonderful.

First of all, Michael, thank you for all that you do for the state, not just for the region you work for but everyone in the room knows that you volunteer a lot of time and expertise for the state, and we appreciate it.

I want to address my comments and have my dialogue with you from a slightly different perspective.

You can sit down, Bill, it's okay.

MR. MORRIS: I wish I could sit down.

(General laughter.)

MR. WILLIAMSON: As the plan takes root and as we begin, we can see some of the benefits of the plan beginning to develop. There will inevitably be three major points of contention with policy-makers. In this context, policy-makers could be federal, Congressional members of the Senate, most likely will be House and Senate members in the legislature, and in some cases it will be local officials and NTTA board members, and eventually HCTRA commissioners who are acting in a capacity as HCTRA board members.

The three flash points will be: one, is it really fair to build 121, force people to pay tolls and then take that money and spend it on something else -- that will be one of the first arguments that will be advanced; and then the second flash point will be the problem really isn't as bad as you guys make it, you're just putting a wish list of everything everybody in the state wants to build and you're putting a dollar figure on it and causing that to be the need; and then the third flash point, when we finally knock those two down -- which I'm asking you to help us do -- the last line of defense will be well, we don't really need all of this, the state is not going to grow like we're projecting it's going to grow.

I guess I would ask you, and through you I maybe am speaking to those who might be listening to this, to begin to help us educate policy-makers from Senators Hutchison and Cornyn to Jack and everybody in between who plays in this process. It doesn't really matter if you raise the gas tax, you start from the position that you've got to raise the gas tax to do what the tolls would have done, and you've got to raise the gas tax somewhere between 30 cents and $1.20 a gallon. We think it's closer to $1.20 a gallon, some think that it's 30 cents a gallon, but everybody agrees it's somewhere between 50 cents a gallon tax and $1.41 a gallon tax is what it takes to not have to build toll roads.

If you did that, you would be collecting that gas tax from everybody in the state, you would be pooling it and then building Mary's road from everybody's money. So there's literally, in a cash flow perspective, no difference between forcing everybody to pay gas tax into a common pool and cutting the pie or telling people if they want to pay tolls, you can use this road and we're going to cut the pie and build other projects. It is the same cash flow end game. And I'm going to need your help in explaining that to policy-makers, not that I don't understand what they say.

I think Mr. McCarley is here, I've come to know Jim real well the last six years, I think he's a really bright guy, and he and I had this conversation just six months ago about how do you explain to people is it really fair to take your money on 121 and go and spend it here on 161. And I've thought a lot about it, Jim, and I've finally decided it's no difference, in my view, between taking the tolls and taking the gas tax. Either way you're taking people's money from Highway 51 in Weatherford and you're spending it on the LBJ Freeway. Now, someday you're going to take people's gas tax in Dallas County and spend it over in Weatherford. But that's the same thing that happens with the concept of using concessions for tolls.

The second thing I'm going to need your help on -- and we're getting ready for it -- is explaining to policy-makers that graph you had up there of the declining problems as you spend more money, because there really are United States senators, United States congresspersons, Texas senators, Texas House members, county commissioners and city councilpersons and NTTA and HCTRA board members who are so locked in on just trying to keep it from getting worse that they don't realize what we're about is solving the problem as opposed to just living with it.

If we want to just live with it, they're probably correct, we probably don't need all this damn money, we'll just live with the problem. But that's not what we're about. What we're about is solving the problem, not living with the problem.

And then finally, as to the population issue, I don't know what you do, you rely on people who you think know what they're talking about and you make the best decisions you can, and if you're a policy-maker and you're really afraid that we're going too far too fast, then why not let the private sector take that risk off your taxpayers' hands. Then if they're wrong, their shareholders pay the price, not our taxpayers.

And that's basically all.

MR. MORRIS: What I think, Mr. Chairman, we should write -- meaning jointly, your office take the lead -- four white papers on topics, we'll use them as discussion items. First with regard to gas tax, let's remember that when you increase the gas tax, everybody gets to pay more. You not only have the problem that you talk about that you may pay more and get no improvements, but everyone is going to pay more.

What is very successful to the elected officials in this region is the people that are paying more are the people that are benefitting from the particular improvement because to pay you have to get on the facility. And people getting on the facility, that's freeing up capacity on other facilities of which people who are not paying more that are going to benefit. The elected officials that talk to me is you always have to give them a choice. So if we build them a toll road, then we have frontage roads next door or we have a gas tax supported roadway in the neighborhood. If we always give them a choice, then the person who wishes to pay the fee is always the person that's benefitting.

We have that nowhere else in public policy if you think about what you pay into income tax or other things, and I think we should talk about that in very layman's terms.

Specifically to your three questions, the first question is very important because you're in Denton County. Denton County, we came to these individuals with that exact same question -- and they're in the audience and they can share with you, if you wish, or maybe they should write down their own views -- Michael and Bill, we get the SIB loan, what's wrong with you, we want our gas tax supported roadway, what's going on? And we came, sheepishly, at our first meeting: We got another idea. What's your idea, are you going to build it faster? No, we've got another idea, it's going to be a toll road.

Well, we were thrown out four times. The first meeting was two minutes long, then the next meeting was eight minutes long, but we eventually showed them another picture, not in words, a map, and said, We can build 121 as a gas tax supported road and build nothing else, or we can build all those things.

And that's the story that I think you have to say is what do you wish your future to be, just this, or in most places nothing because they didn't have your support to build it as a roadway. Show them a map of nothing and then show them that if this is built, you not only get that but you get these other improvements.

The reason why I think Bill Hale introduced the judge in Denton County so glowingly in the beginning is they were the first group of elected officials that got it and that their ability is to build a system of improvements for their community and not just a particular project.

The second item is with regard to the problem of how do you capture oh, you're a bunch of people that look into the future, you have a bunch of capacity needs, you're coming up with numbers just like mental health comes up with, just like the jail system comes up with, these are just voodoo numbers. We need to probably do a better job of going into our TMMPs, and we purposefully have cut toll road congestion -- all across your whole state we all use the same definition, it's just level of service -- not just, it's only the level of service of facilities. Congested facilities that you experience that you know are congested, they're not even in that first number, and we probably need to do a better job of that.

The second number on that particular sheet is a number that won't go away, that's the rehabilitation cost. I did a special project with Bill Hale this summer, and said, Bill, I'm getting a lot of push back that people don't believe that our infrastructure, bridges and pavements, once they hit 40, 45, 50 years old are going to have to be totally reconstructed -- which is that number there. Well, Bill, who also teaches at UTA on pavement management, says I'll go back and show you in the real world that these projects, if we're lucky, can get 40 or 45 years. He pulled all his records from his district, went back and pulled them, communicated with Maribel, she pulled records. Michael, in our region, 30-35 years is a good project; maybe with today's technology we may get to 40 or 45 years.

So we went back, you've got to go back in 1985 and pulled an aerial photograph of what existed in 1985 which is what will be 50 years old in 2030 and said, You see all this? That's 50- years old. Recent data from the district said, I don't believe you, Michael, we'll get to 45 or 50, but let's assume you do. So I think the second number is a conservative number. And when you show a number like that, half of this audience probably doesn't get this table even though they've seen it a hundred times. We need to translate this into a white paper and say it in layman's terms about what that particular item is.

I don't think these are expanded or false numbers, and I think we should work closely with the business council and try to come to grips, even if we hold a joint meeting or something, so there's one voice with regard to what Texas is communicating to the legislature, and I think that would be beneficial.

The third is about growth. This region has added a million people every decade since 1960. Last year we added 167,000 persons which means we're now adding a million people every seven years. But let's assume not another soul comes to the region, just the difference between birth and death rates in our region now is 100,000 people a year.

But let's even assume all those people never have children, why don't we go ahead and do that analysis for you. Assuming no one else was to come to the Dallas-Fort Worth region, where we just looked at backlog needs, let's come up with those dollar amounts are and say okay, let's assume Texas never grows one more person. That number $35 billion does not go away, that $35 billion is independent of growth. Growth only influences the first number.

So even if you set the first number to zero or something smaller -- remember, a lot of these facilities are going to need to be improved without growth, we go in and look at the 20.6, maybe we can get it down to $10 or $15 billion but no growth. You had marginal reductions in those numbers just due to growth, and we owe you an analysis and a small white paper maybe to try to accomplish that.

But I think, Mr. Chairman, there is going to be push-back, we still hear it a little bit in our particular region. That's why we've come up with the five things you've got to read if you want to come in and complain. But I think we need to add to it, because these are hard questions, one or two or three pages of communication.

One thing that all of us have discovered, there's probably been hundreds of meetings in our region to get to a particular point, someone may be participating back 80 meetings ago and you're having a person 80 meetings ago communicating to a person who has had 110 meetings, those are the ones that do kind of bad. And if we could maybe get a little bit of this on a piece of paper so everyone can understand our congressional delegation, our legislative delegation that doesn't have the time to go all to those particular meetings, get that down to some simple principles, I think it's probably important that we do that between now and December and maybe work on that together and have those available as the sessions begin.

MR. WILLIAMSON: Well, I do think the resistance will develop, and as you are, I'm starting to see it pop up in some of the journals that are written every day and every week.

Part of the problem is, I can tell you as a former member, we don't ever like to admit that we've ignored a problem, and to say that there's a $200 billion problem is to say why haven't you been taking care of it. And for some guys and gals, not for the former Member Cain, but for some guys and gals it's hard to do, isn't it, David? It's hard to look back and say I ignored this problem. So better to say I don't believe those numbers than it is to say I didn't watch what I was doing.

Okay, what else, members, for this young man?

MS. ANDRADE: Thank you.

MR. JOHNSON: Thanks, Michael

MR. HOUGHTON: Thank you.

(Applause.)

MR. HALE: That concludes our presentation, everybody made their presentation.

MR. WILLIAMSON: Okay. In a moment we're going to take a bit of a break, but we're going to take about 30 seconds to say something very important.

There are a lot of very progressive and forward-thinking transportation people in this room. This minute could take about 30 minutes to recognize all of them and do them what they're owed, from Grady Smithy who walked back through here holding his heart, limping to get here, to the commissioner of Denton County.

But one person in the last year or so has really stood out to the commission as not the only person -- I mean, Sandy has stood out, there's a whole bunch of people in this room that have stood out, but a person has been very vocal in a highly political environment in advocating for some tough stuff, and this commission wishes to say to you, Judge Horn, how very much we appreciate your style and your substance and your self-discipline.

The only way the problem is solved is to do that. If you turn tail and run the first time somebody accuses you of all the things that we've all been accused of, you'll never solve the problem. And you have stood firm, you've been self-disciplined, you've been rational in your logic. We are very appreciative, all of us are. In fact, we're going to give you a special hand.

(Applause.)

MR. WILLIAMSON: Let's take ten minutes, and thank you.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: Mike, we're on the agenda.

MR. BEHRENS: We're going to go to agenda item number 2. This is our ongoing discussion about our recommendations to the legislature on how we can improve the operation of the department. Making that presentation is the director of our Government and Business Enterprise Division, Coby Chase. So Coby, will you lead that discussion?

MR. CHASE: For the record, my name is Coby Chase and I am the director of TxDOT's Government and Business Enterprises Division. Today I will further discuss the formulation of your legislative agenda for the 80th Session of the Texas Legislature, and maybe make a small announcement that next month we will start discussion of federal legislative priorities for two months.

As has been said before, the Transportation Commission is authorized by law to make recommendations to the Texas Legislature on statutory changes that would improve the operation of the department. The purpose of this dialogue is to make these issues public.

I have been before you now each month, beginning in January of this year, to discuss the content of your upcoming report to the legislature. Soon after today's meeting, my staff and I will discuss with the commission's assistants and commissioners and administration our draft report in preparation for its presentation at the November commission meeting. Let me state that again, at the November commission meeting the commission will be presented with a draft report with draft recommendations.

It is our intent to also place that draft on the internet for public review and comment immediately following the November commission meeting. Following one final scrubbing through December, it will be presented in its final form to you for adoption at the December meeting. From there it will be distributed to the appropriate legislative leadership.

As you know, my staff and I have been traveling the state speaking to anyone who will listen about what the commission is considering, and we have had a lot of invitations, actually. I've spent a lot of time in this region of the state particularly speaking with a lot of people that we work closely with on the priorities as they are at least listed right now, and we've got a lot of great, healthy feedback.

And as I mentioned to you in previous months, we decided to go above and beyond anything we've ever done before by sending letters to over 1,900 interested parties, detailing the issues we are considering for inclusion in your legislative agenda. And we have encouraged everyone to send their comments in writing, and a lot of those might wind up with the commission, the executive director or us, but make sure we see them because we'd like to have at least a written record of people's concerns so we have something to address other than somebody called and said, whatever the case may be. E-mail works just fine too.

This morning I'd like to discuss, much like last month, some of the concerns that we've heard from some of our transportation partners. I do not intend to go over every single issue that's ever been presented, but the ones that have raised the most questions and caused the most dialogue.

Billboard relocation is at the top of that list. We've received a lots of feedback from cities, large and small, regarding the billboard issues. As we've discussed, in cities that have strict ordinances on the placement of new outdoor advertising, sometimes do not allow TxDOT to relocate a billboard to accommodate a highway project. TxDOT must then buy the structure which can be very costly.

The proposal provides that TxDOT's outdoor advertising rules supersede locally enforced ordinances unless the city wants to pay the fair market value of the billboard. Of course, relocating of billboards does not increase the number of billboards in an area, but that does not stop cities who prohibit new billboards from opposing the measure.

General Land Office review of land issues. Another proposal concerns the General Land Office's review of TxDOT property.

MR. WILLIAMSON: Do you want our comments, do you want to dialogue each piece of time, or do you want to run through the list and then go back and do it?

MR. CHASE: Whatever you prefer.

MR. WILLIAMSON: Why don't we do it one at a time then.

MR. CHASE: Absolutely.

MR. WILLIAMSON: Discussion with Coby on the billboard matter?

(No response.)

MR. WILLIAMSON: Let me ask you, Coby, have you thought about approaching primarily Michael and the young man in Houston, and Mr. Aulick, and whoever is in San Antonio now, and asking them how they would feel? I know what their reaction probably would be. But what about either we've got to get the cities to reimburse us, or you've got to agree to let us reduce your allocation by the cost of moving those billboards in order to give them a tool to go to the cities and hammer on them and say, Wait a minute, you're affecting transportation when you do this. At least give them a chance to say we don't like that idea.

MR. CHASE: Oh, absolutely, we'll make sure we do that again. We've had an open public discussion with the Houston-Galveston Area Council, Patrick Marotta from our staff made that presentation. I don't have personal knowledge of what the reaction was from them.

The Partners in Mobility, led by Michael Morris, had Jefferson and me up here a couple of weeks ago and we talked the issue back and forth, not to any resolution, and Partners in Mobility didn't say yes or no.

But we'll make a pass at our MPOs and ask them to kind of weigh in more directly on this and explain some of our thinking.

Yes, sir?

MR. HOUGHTON: Can we not dovetail the other issue of LED boards in that, morph it in, weave it in?

MR. CHASE: I don't think the LED issue is a legislative issue, I think that's a policy issue by the commission.

MR. HOUGHTON: Well, it could have an effect on the reduction of billboards. If you have a replacement, if you have an LED, it may replace five, a ratio of replacement. And I think they would talk that language.

MR. WILLIAMSON: The only reason I raise it, Coby, is I almost always have the goal of educating or dialoguing beyond you. If we're going to adopt our goals and adopt our strategies and rigorously adhere to them and require our DEs to do the same thing, at some point we've got to say to our partners, Now, look, we're all about reducing congestion in this business, every dollar that's spent on moving a billboard or renovating a rest stop is a dollar that wasn't spent on reducing congestion or cleaning up the air or whatever. And so I think we just have to begin to contextualize all those cash flow issues.

MR. CHASE: Oh, right. And at some point, maybe in our federal discussion, there are other things that kind of hit this, like Congressional demonstration projects and the effects they have on budgets and how they actually rob from other Texans, they don't rob from other states when they do that. And it's a similar issue, and I'll definitely raise that next month.

So yes, in the context of maybe one LED takes the place of five regular billboards, that's a good point. We will certainly make a deliberate pass on this issue at the MPOs.

MR. WILLIAMSON: Okay.

MR. CHASE: General Land Office review of land issues. Another proposal concerns the General Land Office's review of TxDOT property. We are not, of course, opposed to them reviewing the use of our property, that's healthy, but we would like to ensure that they do not dispose of TxDOT property without the commission's approval or the department's approval.

We would also like to deposit the proceeds of any surplus property sales to the State Highway Fund since that is where the money came from to buy the property in the first place, however, the General Land Office does not seem supportive of this measure. In their words, exempting TxDOT from their review would eliminate the checks and balances provided by the present statute, though, as you know, TxDOT operated independently from the GLO's oversight for the first 80 years of our existence.

However, I am pleased to report that Commissioner Patterson does support our proposal to extend the Lemon Law coverage to active duty non-resident members of the Armed Forces.

MR. WILLIAMSON: We all heard that.

MR. CHASE: One of the issues proposed last session that generated quite a bit of consternation among certain professions would have provided an alternative method of procuring professional services. Specifically, the commission sought a market-based alternative method that incorporates value in addition to qualifications.

Invariably, the criticism we have heard from architects and engineering consultants is that they will not be able to help themselves from submitting substandard designs that will endanger the driving public. While what I tell them is there is no market for shoddy engineering.

MR. WILLIAMSON: Wait a minute, say that again. That was a great sentence. Say that again: What we invariably hear...

MR. CHASE: Invariably, the criticism we have heard from architects and engineering consultants is that they will not be able to help themselves from submitting substandard designs that will endanger the driving public. You can go back to testimony from last session; it's on the record, it's not something that was whispered to us.

MR. WILLIAMSON: In other words, I'm an engineering firm and I don't want to be rated on the value that I offer the state dollar-wise because I won't be able to help myself from doing a substandard job if I do that.

MR. CHASE: Yes. Help me help you not hurt you or help you, something like that, yes.

MR. WILLIAMSON: Tell me, Coby, is it only TxDOT that has to live with that non-competitive aspect?

MR. CHASE: No. It's government-wide.

MR. WILLIAMSON: Government-wide?

MR. CHASE: Yes.

MR. WILLIAMSON: So are you telling me that school districts have to live with that?

MR. CHASE: I believe so, yes.

MR. WILLIAMSON: And city government?

MR. CHASE: Yes.

MR. WILLIAMSON: And county government?

MR. CHASE: Yes.

MR. WILLIAMSON: And hospital district government?

MR. CHASE: I believe so.

MR. WILLIAMSON: They all have to live with that non-competitive approach to procuring services?

MR. CHASE: Yes, as does the federal government.

MR. WILLIAMSON: Has anyone ever done a study of how much that drives the cost up for the taxpayers?

MR. CHASE: Yes. I can't off the top of my head tell you how fresh that is, but yes, there have been cost comparisons that the agency has done.

MR. WILLIAMSON: So maybe we need to gather those studies up and freshen them up a little bit, and perhaps Judge Horn would like to know how much more her taxpayers are having to pay in tolls on 121 because we couldn't get a competitively procured engineering service -- in direct violation of strategy number three which is to encourage competitive procurement of all things.

MR. CHASE: It is interesting. It is one of the few areas of our business where we can't be competitive in that sense.

And what I have told these engineering firms -- and without exception, they are all polite, I'm not going to pretend that they're not, but they disagree with me -- is that there is no market for shoddy engineering work. And the legion of engineers that TxDOT has on staff would never risk their own licenses by approving such work. In my opinion, this is a red herring issue.

Railroad Relocation and Improvement Fund. One of our most important tasks this session will be to capitalize the Rail Fund. I think every group -- well, not every group -- most groups we talk to, at least those who have to deliver infrastructure to regions, find this to be a very important issue, by and large.

We will continue to work with the railroads that are willing to be involved in a solution. A few weeks ago we heard from the Houston-Galveston Area Council that they would be reluctant to support the fund without a clear indication beforehand of where it will be spent which we went through that same exact exercise with the Texas Mobility Fund. It was kind of the Henny Penny story of who will help bake the bread versus who will help eat the bread. And I think they're going through an exercise themselves of wondering, and they know where their rail problems are in Houston. But the first question ask yourselves, well, what can I do with the money here, and I think they're asking themselves that question.

But the true issue is, like the Texas Mobility Fund, the first thing you have to do is get it funded, and figuring out where to spend the money happens later on. And so we're in that education process right now.

We'd appreciate any further guidance you have on that topic.

We've also heard from the Port of Houston that they are not quite there yet in supporting a measure that requires the collection of fees at Texas ports. They don't want to lose competitiveness with other ports on the Gulf Coast. While this is a legitimate concern, we should also realize that the attractiveness of Texas ports may increase when we have a more robust freight-rail network responsive to the needs of shippers

Also, keep in mind that these same groups experienced similar concerns, like I said earlier, to the Texas Mobility Fund, but that program certainly seems to be working very well.

The importance of this issue cannot be overstated. Just ask the people of San Antonio who experienced yet another train derailment in their backyard.

Any discussion or questions?

MR. WILLIAMSON: I'm trying to think about how to form the question I would like to ask. If I understand the argument correctly, the rail companies agree that it would be better if there was some way to run rails either more safely or not at all through downtown Texas, but they're not prepared to recommend a funding solution for the Rail Relocation Fund if it's a direct assessment on them.

MR. CHASE: Right. And then if the money is taken and spent on a competitor's moving another rail line, that's kind of the rub in that.

MR. WILLIAMSON: So they might could get through paying for it but they could never get through I pay into the common pot and my competitor gets his railroad line moved.

MR. CHASE: Right. That seems to be a large part of the issue, especially if they see that it is a fee, or whatever the case may be, which there is no case that may be at the moment, something that the railroads would pay directly. They don't want to pay to subsidize each other, I guess, is what it comes down to, subsidize their competition.

Now, when you talk about independent, non-railroad generated revenue, the discussion does shift a little bit, and there might be something there.

MR. WILLIAMSON: So logically then, if the legislature said, okay, we're going to raise the sales tax a penny, we're going to put that in the Rail Relocation Fund, by inference, UP wouldn't care then if we spent it all on BNSF?

MR. CHASE: I don't know that they wouldn't care. I mean, our point has been it should be a decision made with the state and its regional partners of where the problems are the most. I don't know that they wouldn't care, but it seems to be most the discussion is if the railroads or shippers are asked to pay more, if that were to occur. That seems to be where the rub is.

MR. WILLIAMSON: Okay.

MR. CHASE: CDA enhancements. We've proposed several refinements to the CDA statute, such as eliminating the sunset date and removing the cap and allowing them for non-tolled highways. Some have registered their opposition to these refinements based on their overall anxiety about the CDA process itself. Some engineers and some in the contracting community are uneasy about a method of building highways that differs from what they are used to, but statewide congestion dictates that we must employ every tactic available to finance and build infrastructure.

Concession fees. The proposal to deposit concession fees and surplus toll revenue in the Texas Mobility Fund is designed to ensure that these important revenues will be used for transportation purposes and give it a measure of protection not currently afforded in existing law.

And I will say part of this is probably my fault. In the document we circulate, we're not crystal clear about what the intention is with what happens with that money once it gets into the Mobility Fund. It's been raised to us that the streams would become cloudy and if it was raised in a region it wouldn't wind up back in a region. And we've gone to great lengths to reassure people that is not the intention of putting these funds into the Mobility Fund.

But like I said, these concession fees aren't given the same level of protection that even the gas tax about what can happen to them. They have no constitutional protection, things of that nature.

We should be clear that if this proposal is accepted, we would be able to keep track of where the revenue is generated so that the proceeds are poured back into transportation projects in that area, as presently defined in the statute.

MS. ANDRADE: Coby, I need more clarification on that. So does this also apply if an RMA is overseeing the CDA, that concession fee is going to the Mobility Fund, not back to the region

MR. CHASE: It doesn't require it to go back to the Mobility Fund. I'm sorry, maybe I didn't follow your question.

MS. ANDRADE: Okay. Let's say that an RMA is overseeing the CDA and they get a concession fee, so what you're saying is that concession fee is going to be put in the Mobility Fund?

MR. WILLIAMSON: No. There are some who have told us that's what we should do.

MS. ANDRADE: Okay.

MR. CHASE: And then there are some who are concerned if that were the case that the state would take control of that money and take it out of a region. We're trying to reassure people that's not the case.

MS. ANDRADE: Okay, because that's not what I'm going out there and saying, so that kind of surprised me. Thank you.

MR. CHASE: And it's good news because it shows that a lot of our communities are very interested in making sure they are harnessing the power and not like the gas tax.

And if I may, not so much editorialize but comment on an earlier discussion today about where the gas tax is spent, and I think it's very important to continue to emphasize over and over again -- and it always gets the right reaction when we have the conversations, my office with people -- that a gas tax dollar and a toll dollar are very, very different. It needs to be emphasized over and over again, a toll dollar is not diluted and it stays in the region. We do not pick up toll dollars from this region and build a toll road in Lubbock nor any other road, nor do we slice it off for any other purpose, it just stays. It is the best kind of transportation dollar there is right now.

MR. WILLIAMSON: And in fact, we're trying to create a system of regional and local partnerships that make it almost politically impossible to do that.

MR. CHASE: Right. And it was interesting, the map that Michael Morris and Bill Hale had about the benefits of 121 and how it can build other roads in the region. And it creates kind of a healthy dialogue, so to speak, that one part of a region is paying for another part of the region, but the dialogue tends to ignore that every time I go to the gas pump, we're building great roads in New York with it. But you send it a thousand miles away and you don't bat an eyelash, but it goes down the street a little bit and it causes a lot of concern -- and that's good. At least they know they're keeping it in the area.

Regional toll authorities given the ability to turn into an RMA, if they so choose. Similar to last session, there will be some resistance to the idea of providing a legal mechanism by which a regional tollway authority can dissolve, by which a county can withdraw from an RTA, and by which an RTA can take on the powers of a regional mobility authority. It would be strictly voluntary on the part of the regional leadership, of course, we've never backed away from that.

We will continue our discussions with NTTA and other leaders on this and other matters. I would also like to say that we've had a very healthy recent exchange of legislative ideas with NTTA's executive director, Allan Rutter, who came down to Austin and spent a great deal of time, missed his flight, and spoke to us at great length about that. But we are talking to them about that.

State acquisition of toll roads. Lastly, we have a proposal to require the state to acquire existing toll road systems. As an example, earlier this year the Harris County Toll Road Authority briefly considered the idea of putting their assets on the market. If HCTRA decided to move forward with this idea, the state would want a seat at the table, a chance to bid.

This proposal has generated some concern that we would initiate involuntary takeovers of existing toll roads which is not the case. We would be clear that the owner of the existing system would determine whether or not to sell their assets. The only question is whether or on the state has a seat at the table should that occur.

Let me restate, in conclusion, that I've limited my discussion today to only the items that really seem to be our lightning rod issues. This speaks a whole lot about the other issues. I mean, not that others haven't had concerns, but those are kind of at the top.

As I've said previously, we need to be clear what our goals are and what problems we are trying to solve. Any compromise that can be reached must remain faithful to our goals, so I will restate them now. Our goals are to reduce congestion, improve safety, expand economic opportunity, improve air quality, and increase the value of our transportation assets.

Those are my prepared remarks for today. If you have any other questions, I'm completely available, completely at your disposal.

MR. WILLIAMSON: Members, any other questions for Mr. Chase?

(No response.)

MR. WILLIAMSON: Good job. Keep rolling it out, keep educating the public as you go, we don't want anyone to accuse us of hiding the ball.

MR. BEHRENS: We'll go to agenda item number 3. We have one rule for final adoption this month. This is under Public Transportation and it's revised rules because of federal legislation. Eric?

MR. GLEASON: Good morning. For the record, my name is Eric Gleason, TxDOT director of Public Transportation.

This minute order adopts amendments to Section 31.3 relating to definitions, and new Section 31.17 relating to Section 5316 Job Access and Reverse Commute, or JARC, Grant Program, and new Section 31.18 relating to Section 5317 New Freedom Grant Program to be codified under Title 43, Texas Administrative Code, Part 1.

JARC is an FTA program that funds activities fostering the availability of public transportation services targeted to employment and employment-related transportation needs such as trips to workforce centers, job interviews, and training locations and daycare.

New Freedom is an FTA program that provides new public transportation services and public transportation alternatives beyond those currently required by the Americans with Disabilities Act of 1990.

Projects for these programs must be derived from a local coordinated public transportation/human services plan developed with public involvement. These rules link that federally described planning process to Texas' ongoing regional coordination planning process. The FTA also requires the state to use a competitive selection process for projects in both programs. Project selection will be based on the potential of the project to help achieve the commission's five goals.

We received several comments on the proposed amendments and new sections during the comment period. A public hearing on the proposed rules was held on August 30, 2006.

One comment raised the concern that these programs would establish competitive services with already existing service. The rules require these projects to be derived from a locally developed coordinated public transportation/human services transportation plan, specifically addressing this issue. No changes in the proposed rules were made as a result of this comment.

The Texas Workforce Commission commented on the need for more explicit recognition of workforce system needs and participation and the development of the coordinated plan, as well as clarifying that any TWC funds used as a match for JARC must also meet federal and state requirements or restrictions regarding eligible populations served. In response to the comment, the department has incorporated language that requires participation by local workforce enrollment boards or their service providers in JARC proposals.

Finally, a number of changes were made based on publication of additional information from FTA on implementation of the JARC and New Freedom programs during the comment period. Two changes of note were made: one, language was included that if allowed by federal regulation, private for-profit operators are eligible to receive funds as a sub-recipient; and two, language is modified to reflect further definition of a New Freedom project, applying the beyond ADA requirement to both new public transportation services and to public transportation alternatives. Previous language had implied that a proposed project could include new service or service alternatives or provide enhancements to existing service that went beyond ADA.

A number of other relatively minor changes were made as well in response to the new federal information.

PTAC has reviewed the rules and is unanimous in their agreement with them. We recommend your approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this matter.

MS. ANDRADE: I have one question. Eric, considering where we're at on our coordination efforts, where does this fit in? Do we still have time to include some of these new rules and so forth?

MR. GLEASON: I think the rules anticipate Texas moving ahead with its coordination efforts. Those plans that we're beginning to see coming in right now, and that you will get a presentation on next month by Mr. Morris -- with one of the many hats that he wears -- on some of the barriers and constraints to coordination, we see those plans and the future plans like that as being the basis for which projects under these programs will be derived.

We've been doing a lot of thinking in my staff about next steps of coordination, we're waiting to hear the results of the barriers and constraints report. We're looking at some leadership opportunities, we think, for the department in the area of sustaining the planning effort, the department-funded current planning effort that is coming to a close. We have sources of funds that we can continue to provide funds for ongoing planning.

We think it's going to be important for the department to step up and recognize innovation and award funds in support of innovative ideas and leadership through these competitive programs, and we think it will be important, as well, for the department to be in a position to support technical needs, technical analysis, feasibility studies to help resolve and further identify options on some of these barriers and constraints that we'll hear about next month.

So we're looking at those areas, we're waiting to hear the barriers and constraints report, and we think that following that we'd be in a position relatively soon after that to come back to the commission with more details on how we think we should move ahead with that.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Members, we have one witness on this matter. Jamal? If you don't mind, sir, you might help me with your last name.

MR. MOHARER: Moharer. My wife says she needs more hair.

(General laughter.)

MR. MOHARER: My name is Jamal Moharer, and I'm chairman of the board for NDMJ Transportation from Tyler, Texas. I serve on the East Texas Regional Transportation Coordination Committee, representing private sector as well as Smith County.

It is really a true privilege to be here before you today. I've been looking forward to this.

My comments are with regards to the JARC Program, as stated on the card. And while I may be new to these proceedings, I've had exposure to transportation for the past 27 years, some in the airline industry as an airline transport pilot and Federal Aviation Regulations, but recently, last 20 years or so, in ground transportation and public transportation.

I'm here before you primarily today to thank you for your effort. Especially I'm here to publicly thank Mr. Gleason and his staff for their cooperation. I'm also here to thank Mr. Bob Jackson and his staff for their cooperation. They've been very professional, cooperative, and responsive, and probably they don't get to hear that very often but I want to take this chance to publicly thank them for that.

My comments are in general and they're for your consideration. Having been involved or exposed to transportation, I've always truly believed that transportation is another form of public utility, and every Texan should have fair and equal access to it. And in order to ensure that fair and equal access of the public to transportation, we must ensure fair and equal access to the funds by the providers. To deny that, then we might accidentally deny the equal access of the public to the transportation.

I would like to point out that public funds are used to procure building roads and bridges by for-profit companies. It will not be viewed as awkward to use public funds to procure passenger transportation via for-profit companies either. Profit is literally an embedded DNA part of free enterprise, and by the private sector having access to these funds, you will expand the availability of those services to the general public and users.

Private sector and free enterprise and profit is what made this country what it is and made it great.

And I would like to just say that we're available 24-7 with no geographical boundaries and we're not client-specific as some government programs may be. And finally, I just wanted to say this is the reason why I'm here because the staff, Eric Gleason, Bob Jackson and other TxDOT members, have viewed those as a viable option, and I wanted to thank them and thank you for having the vision to include private sector as a possible provider to achieve your goals. Thank you.

MR. WILLIAMSON: Wait a minute. Questions, members?

(No response.)

MR. WILLIAMSON: Well, thank you very much. We appreciate you coming and offering your comments. It was a pleasure meeting you, sir.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Members, you've heard Eric's explanation and his recommendation, you've heard the witness, you've asked questions. What's your pleasure?

MS. ANDRADE: 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: Motion carries. Thank you.

MR. BEHRENS: Agenda item number 4 is under Transportation Planning. We have one minute order which is to recommend the certification of the eligible counties under the Economically Disadvantaged County Program. Amadeo will present that.

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

The minute order before you certifies the counties that are eligible to participate in the Economically Disadvantaged County Program for fiscal year 2007 and it also sets the recommended levels of match adjustment for each county. These are shown on Exhibit A.

Transportation Code 223.053 defines an economically disadvantaged county as a county that has, in comparison to other counties in the state, below average per capita taxable property value, below average per capita income, and above average unemployment. The comptroller sends us a list of these counties that qualify for the program, our Finance Division then runs them through our formulas, and we determine their eligible reduction of their local match.

Transportation Code 223.053 also requires the commission to certify a county as economically disadvantaged on an annual basis as soon as possible after the comptroller provides these reports, and we have done that, and staff has provided that in Exhibit A and recommends your approval of this minute order.

I'll be happy to answer any questions.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation.

MR. SAENZ: I will add, commissioners, that for this year the number of counties that are eligible stayed the same except that we had 16 counties that went off the list from last year, no longer qualify, and 16 new counties that came onto the list this year. So even though we don't have an increase or decrease in the total number of counties, there are 16 different counties, or really 32 counties that are impacted differently.

MR. WILLIAMSON: Generally where are the 16 counties that went off?

MR. SAENZ: They're scattered throughout the state, Mr. Chairman. Atascosa County, Bastrop County, Bosque County, Coleman, Culberson, Deaf Smith, Hardeman, Jim Hogg.

MR. WILLIAMSON: That's fine.

MR. SAENZ: And of course, the counties that came on are also scattered throughout the state.

MR. JOHNSON: So moved.

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. Thank you.

MR. BEHRENS: We will be deferring item 4(b) to get more information. So we'll go to agenda item number 5 which is Pass-Through Tolls. One minute order, the first one, will be authority to negotiate a pass-through toll agreement with the City of Brenham, and the second one will be the authority to execute an agreement with Galveston County. Amadeo?

MR. SAENZ: Thank you, Mr. Behrens. Again, commissioners, Amadeo Saenz.

Item 5(a) is a minute order that authorizes the department to begin negotiations for a pass-through toll agreement with the City of Brenham for improvements on US 290 and associated access roads from FM 577 to the Burlington Northern Santa Fe Railroad line.

The city has submitted a proposal to make some improvements on the 290 and 577 as well as also some improvements to the frontage roads to convert those frontage roads from two-way to one-way. If negotiations prove to be successful, then we will come back to the commission for final approval to enter into an agreement with the City of Brenham.

In a nutshell, the City's proposal is that they are providing assistance for us to cover a shortfall in the development of this project in the amount of about $15 million. The City will provide us that money, TxDOT will continue to develop the project as we are doing right now.

Staff recommends approval of this minute order.

MR. JOHNSON: Amadeo, what are the benefits of this particular project?

MR. SAENZ: US 290 is a project that is on one of our hurricane evacuation routes. By being able to build this overpass, we will eliminate an intersection that is signalized, so this will allow us to move traffic at all times, not only during hurricane evacuation, much faster, much more efficient. The conversion of the frontage roads from two-way to one-way will allow for also more efficient and effective and safer movement in the community. So all in all, the project will provide great enhancements to that major statewide corridor.

MR. JOHNSON: And safety-wise, aren't there two intersections that would be drastically improved?

MR. SAENZ: Right. The intersection with 577 currently is an at-grade intersection. We also have another intersection immediately, I would say, to the north and to the west that is on the business. So being able to grade separate these two intersections greatly will enhance the safety of this corridor, as well as improve the mobility.

MR. WILLIAMSON: So it would be logical for us to conclude this probably doesn't help us further clean air goals, it probably doesn't help us further our improve transportation asset goal.

MR. SAENZ: We've not run the indices but it will protect our asset value of our facility. Any time you have an intersection, you have stopping conditions, you have a lot more pavement damage in that particular area.

As far as air quality, you're having a stop-and-go, you're eliminating a potential stop-and-go situation so you're improving air quality there because you're reducing congestion through that intersection.

MR. WILLIAMSON: But Brenham is under no threat of being found a non-attainment area.

MR. SAENZ: No, they're not a non-attainment area.

MR. WILLIAMSON: So this is primarily a safety investment?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: It's a minor congestion investment?

MR. SAENZ: Yes, sir, and protection of the asset value.

MR. WILLIAMSON: Protection of the asset value investment.

MR. JOHNSON: And an evacuation route.

MR. SAENZ: And of course, safety through evacuation route.

MR. WILLIAMSON: And when we authorize this, if you successfully negotiate this, now, my understanding is this could end up being part of TTC-69 and you're going to name this portion of TTC-69 after the local House member?

MR. SAENZ: We will work with the community or the legislature.

MR. WILLIAMSON: Would she appreciate that, John?

MR. JOHNSON: If this were further to the east, I think she would be more receptive, if TTC-69 were further to the east.

MR. WILLIAMSON: Would you maybe be the official commission contact on that matter and call her and she how she'd feel about that.

MR. JOHNSON: Okay, I'll take the arrow.

(General laughter.)

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I've got 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. Thank you.

MR. SAENZ: Thank you, commissioners.

Item 5(b), the minute order before you provides for the final approval of the department to execute a pass-through toll agreement with Galveston County for improvements on FM 646 from FM 1764 to Interstate 45. The department and Galveston County have agreed on the reimbursement through pass-through tolls for the construction of this facility in the total amount of $53,650,000. This will involve the design and construction of the facility; the per-vehicle per-mile reimbursement will be 15 cents per mile; the minimum amount to be reimbursed in any one year after the project is completed and open to traffic will be $2,682,500 and the maximum will be $5,365,000. If you look at and roll out the numbers based on projected traffic, it will have a payout of somewhere between 15 and 16 years.

In looking at this project and in running it through our goals and strategies, when we start looking at the solution for this project, it's a regional project. It's got statewide significance because it does provide another important parallel corridor to move traffic during the hurricane season on hurricane evacuation routes. It will have a high impact on reducing congestion; you're adding an additional corridor to what's there. As far as air quality, it also has a high impact on air quality for the HGAC region. It has safety impacts, and of course, it does have moderate to high economic opportunity impacts.

When we look at the asset value of the facility, it only has a return of 16 percent, but the other goals that we're meeting and the other things that we're meeting should allow this project to move forward.

MR. WILLIAMSON: So for the benefit of our audience that's learning today, when you say it only has an asset value return of 16 percent, what you mean by that -- and what we do now with all of our projects -- is we look at how much of the cost to build and maintain a road would be recovered only through the tax system. In other words, the people who use this road, we apportion their taxes over this 40-year life and try to understand how much of this road in total do the taxpayers pay for.

And we actually are beginning to do that on the roads that Michael selects in his region simply as a way of understanding how the region's are making their decisions but not as a way of allocating anything. But we think it's very important for policy-makers to understand that we build roads every day that the taxpayer will never completely pay for. In fact, we haven't found a road yet in this state that the taxpayer completely paid for, all of them are subsidized by future year congestion, future year poor air quality, future year repair and maintenance. There's no road that pays for itself in the state of Texas.

So that's why we asked him what's the asset value contribution of this particular investment. The answer is 16 percent. That means the rest of the taxpayers of the state and the future congested road users of the state are subsidizing this particular project that we're fixing to approve to the tune of 84 percent. And the justification for that is we are improving congestion slightly, we're enhancing safety in a major league way because we're eliminating two very dangerous intersections, and we're also improving hurricane evacuation.

MR. SAENZ: And improving air quality.

MR. WILLIAMSON: And we have some improvement of air quality.

MR. SAENZ: I think just for the record, as I mentioned, this was a regional to statewide project. The county is paying at least 15 percent of the cost plus also assuming the risk of construction and right of way costs that's not going to be reimbursed.

MR. WILLIAMSON: Is that the guy that came down and talked to us a year ago?

MR. SAENZ: This project was unique in that when it was first submitted by the county they had shorter limits, and then when they started looking at it and determining the impacts and how they could maximize the project, they came back a second time and they increased the limits so that we could make a connection to 45 that would allow this thing to really work as a truly hurricane evacuation route. So it's been in the mill for a little bit because of some changes that happened throughout the development of the project.

MR. HOUGHTON: 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: Motion carries. Thank you.

MS. ANDRADE: Mr. Chairman, I have a question. How many pass-through toll agreements have we executed?

MR. SAENZ: The commission has approved, I believe this is the eleventh for us to execute. I don't know exactly, Commissioner, how many have actually been signed. I will have to check that.

MR. WILLIAMSON: Five.

MS. ANDRADE: So we've got five out there that are already working.

MR. SAENZ: Right, we have five out there. Montgomery County was our first one and they are fixing to let some of their construction work already.

MS. ANDRADE: Good. Thank you.

MR. SAENZ: We will be executing, I think, the sixth one on Monday with Grayson County.

MS. ANDRADE: Thank you.

MR. BEHRENS: Agenda item number 6 concerns Toll Road Projects, the first being in Dallas County where we're going to be asking to get authorization to issue --

MR. WILLIAMSON: I'm sorry, I don't want to display too much of my ignorance, but did you explain Titus County and I just missed it?

MR. SAENZ: Titus County is not on our agenda this month.

MR. WILLIAMSON: Did you eliminate it?

MR. SAENZ: You have an earlier agenda there.

In meeting with the county and discussion with their consultants, we elected to move it to next month.

MR. JOHNSON: This is the bypass?

MR. SAENZ: Yes, sir, in Titus County it will be a bypass.

MR. WILLIAMSON: I feel much better about it. Thank you.

MR. BEHRENS: Back to agenda item number 6, like I was saying, Dallas County, we're asking to authorize requests for proposals for two projects, that will be 6(a), and 6(b) will be to accept the quarterly General Engineering Consultant report for projects in Travis and Williamson counties. Amadeo?

MR. SAENZ: Yes, sir, thank you. Commissioners, item number 6(a), the minute order before you authorizes the department to issue a request for proposals to the short-listed proposers to develop, design, construct, finance, maintain and operate the I-635 managed lane project along I-635 from east of Luna Road to north of I-30, and also on I-35E from south of the Loop 12/I-35E split to south of Valwood Parkway in Dallas County, and other facilities to the extent necessary for connectivity, mobility, safety and financing.

The minute order will also approve the payment of a stipend of $1 million to be paid to the unsuccessful proposers for payment of their work product which we will then own and then we will use and incorporate into the successful proposer's contract. We will evaluate that the value of that work product is at least a million dollars before that can be compensated.

This project was talked about during the presentations by the district and the local officials. It's an important project we've been working on for quite some time. This is a project that is not 100 percent toll viable, this is a project that requires some commitments from the RTC. In fact, as we went through the financials, we found out, even after the value engineering, we found out that there was still some additional revenue that was needed to cover this project, and we went back to RTC, and first they had identified $400 million, and in at the later stage when we found out we were still short, they identified an additional $200 million that they would commit to cover the toll equity for this project.

By putting in this toll equity, we believe that the proposers can now bring a proposal that will allow them to finance the remainder of the facility and then recoup their revenue investment over the life of a 50-year concession.

Staff would recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All 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. Thank you.

MR. SAENZ: Thank you.

Item 6(b) is seeking your acceptance of the General Engineering Consultant's quarterly progress report for our Central Texas Turnpike projects, dated as of August 31, 2006.

The project is on schedule -- it's really ahead of schedule. It's going to open to traffic earlier, and final completion for the entire project will still be 2007 but several segments, as you all know, will open on November 1, we have another couple of segments that will open in December, and then the remainder of the projects will open in 2007, with the final project completed by December of 2007.

The sections that will open on November 1, 2006 will be the Loop 1 extension from Parmer Lane to 45 North, and then also the State Highway 45 project over the 130, and then also a segment of 130 from US 79 to 290.

The project is well underway, it is under budget by $479 million, according to the GEC report, and we look forward to opening our first toll roads in Central Texas.

Staff would recommend that you approve the report. I'll be happy to answer any more questions you may have.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation.

MR. JOHNSON: It's a great, great report.

MR. HOUGHTON: It's outstanding. Congratulations.

MR. SAENZ: I believe when I looked at the quarterly report that I presented to you the prior quarter, I think we were under budget just barely over $400 million. We've in essence, I guess, saved some more money during this last quarter by being able to get some things done. The important part is that we're going to be able to open that facility much sooner than what was originally projected.

MR. JOHNSON: Another A plus.

MR. SAENZ: Thank you, sir. I'll pass that on to staff.

MR. WILLIAMSON: Under budget and ahead of time, that's what we're all about.

MR. JOHNSON: Let me ask you a question, Mr. Chairman. In the mathematical model, Amadeo has said we're $479 million under budget, we talked about a design modification in I-635 that perhaps is a $500 million savings. Being liberal in rounding the $479- up to $500 million and adding that to the other $500 million, that's a billion dollars, would that mean that perhaps we're only $85 billion short?

MR. WILLIAMSON: Actually when we open up these roads, we'll take your billion and then we will have immediately increased the value of our transportation assets by $2 billion because that's what we think we can sell that road for right then, if we wanted, to the private sector. So we're actually putting a $3 billion dent in the $86 billion shortfall.

MR. JOHNSON: That's great. Another A plus.

MR. WILLIAMSON: We have a plan and we're making it work to solve the problem.

MR. SAENZ: Another thing, Commissioner, I think that we may add is these toll roads that we are building will not tax our maintenance budgets in the future because the maintenance money and the operational money that's needed will come from the tolls that will be collected. So in essence, our number of center line miles is increasing but our maintenance does not have to cover this additional center line miles.

MR. WILLIAMSON: Calculate that for me, because if we can get down to $82 billion, that's even better.

(General laughter.)

MR. SAENZ: I think if we look at the other projects that are being developed, our $86 billion gap is beginning to drop because of those projects that we have planned in the future and it should get closer to $80-.

MR. HOUGHTON: And when you start awarding 121 and 161.

MR. WILLIAMSON: And 290 in Houston.

MR. JOHNSON: Move acceptance.

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. Thank you.

MR. BEHRENS: Agenda item number 7 is to discuss a memorandum of understanding which would be between TxDOT and the Regional Transportation Council, of course, which is the MPO for the Dallas-Fort Worth region. Amadeo?

MR. SAENZ: Thank you.

The minute order before you approves a memorandum of understanding with the Regional Transportation Council, the RTC, which is the MPO for the Dallas-Fort Worth region, and it's for the administration, sharing and use of surplus toll revenues and CDA concession payments within the region and selection of projects to be financed with surplus toll revenues and CDA concession payments.

Just a little bit of background. State legislation requires that the money from concessions and also surplus revenue remain in the region. We have been working with RTC as we've moved forward with the development of this comprehensive development agreement, the CDA, as to how we're going to allocate or account for the money that comes from concessions and surplus revenue so that the region can then plan and develop projects within the region.

The RTC has put in place a mechanism of how they're going to distribute the money within the region itself. This MOU, in essence, puts in place the mechanism where we will take those concession fees, set them in an account so that the region knows how much money they have, and then from there they will use that through the planning process to select additional projects, and when those projects come into being constructed, that money will be used to pay for those projects.

This is for all projects that are within the region. The projects that are part of the Trans-Texas Corridor, as you heard earlier this morning from Michael, will be handled a little bit different. We will still have a lot of coordination between ourselves and the region but the money for Trans-Texas Corridor is more for Trans-Texas Corridor, according to the statute, but we will still be coordinating with the region to address other needs that are part of the corridor or connected to the corridor with the surplus revenues and concession fees of TTC projects.

But concession fees and surplus revenue from regional projects that the RTC has identified will go into this special account so that they can keep track and know how much money they have and select other projects to be done.

I'll be happy to answer additional questions you may have. The staff would recommend approval of this minute order to approve this memorandum of understanding.

MR. JOHNSON: Commissioners, we have one person who has signed up to speak on this issue. Would you like to ask questions of Amadeo first or listen to the testimony?

MR. HOUGHTON: Why don't we hear the testimony.

MR. JOHNSON: Michael Morris, if you're present, would you please step forward and present your testimony? Are you really at 616 Six Flags Drive?

MR. MORRIS: Yes, sir, that's our office.

Mr. Chairman, thank you very much. Michael Morris, MPO staff director of Dallas-Fort Worth.

I don't want to go through the details of the agreement, it's the completion of lots of protocols and other things that you've accomplished. I'm here to thank your staff. We started working on this during the summer, a lot of detail went into this, lots of different groups involved in the functions from finance to legislation.

Teresa Lemons was very helpful and I just wanted to publicly recognize her, from TxDOT's staff back in Austin. I don't think she's here today. She was very instrumental in getting this through.

Bill Hale and Maribel have worked hard to get it done. We wished to get this on your agenda because you're in our region, so several months ago we planned it to come today. I won't go through the details of it, I think it's self-explanatory, but this is the end of a long series of agreements that implements a partnership where TxDOT is our agent to build a lot of these particular projects through the accounting system and agreement that you have before you.

So I wanted to pass on those thanks to your staff.

MR. JOHNSON: Thank you.

MR. HOUGHTON: This is somewhat, Michael, what you have previously illustrated, the use of these funds from CDAs. Now we can memorialize that fund and the bank account be set up in El Paso, Texas somewhere, bearing interest.

MR. MORRIS: I think the first three-quarters of what you said, Commissioner, were true.

MR. JOHNSON: Which is generally a higher percentage than most of what he says.

(General laughter.)

MR. WILLIAMSON: Don't leave, Michael.

MR. HOUGHTON: I just congratulate you again. I think when you talk about $3 billion potentially being infused into this region, when it wouldn't otherwise have been done so, I think is fabulous.

MR. MORRIS: And Commissioner, there are elements of this, as Amadeo pointed out to you, that we may wish to add to your legislative program with Coby. As you know right now, your interest in Fund 6 goes to the General Revenue. What's in your agreement is to see if we can convince the legislature that the interest in this particular fund be dedicated to the region to build more mobility or air quality projects or something there.

So some of your elements are contingent on legislative authority that we would like to partner with you to see if we can get fully implemented.

MR. JOHNSON: Well, I think this has been a very collaborative effort, and you and your staff and all the people that you work with are to be congratulated too.

I know that our department's people -- and I'm glad you mentioned Teresa by name -- have done a lot of work on this, and here again, we have a template for something that can be adopted here and will work here and we can spread it to other areas, probably modify it, depending on the area, but it's a template for something that holds great promise.

Hope, did you have anything?

MS. ANDRADE: Michael, I just also want to thank you. Just like Commissioner Johnson said, I think this will serve as a great example for the rest of the state. And I so appreciate you appreciating our staff because I know that they worked hard to make this happen, but look at what can happen when you are determined to work on what's best for your region and for the state. So I thank you very much.

MR. MORRIS: Thank you.

MR. WILLIAMSON: I think it's a big moment, Mr. Chairman, for North Texas. And one of the things I've been contacted about has to be addressed at some point, and I would ask you if you have an opinion yet.

Judge Kelleher makes a very logical argument when she says probably 80 percent of the tolls that have been paid on and collected and will be paid and collected on the North Dallas Tollway were paid by citizens of Dallas County. At what point do those citizens receive recognition and a rate of return for the fact that they're the largest supplier of the tolls on these new toll roads?

MR. MORRIS: Amadeo referred to the Regional Transportation Council has a policy of where the funds go, and if this agreement is passed, you would be the master keeper of the total amount of which then we would have those dollar amounts allocated.

Mr. Chairman, because of the judge's comments, the Regional Transportation Council instructed us in the spring to work with TxDOT to respond to that and other concerns that were raised. And what we do is we look at where the users of toll roads, if they're on a CDA or NTTA toll road, what is their resident county. It's something like 55 percent of the total amount of tolls are paid by residents of Dallas County. So in our allocation process that the RTC has adopted, is the excess revenue is then re-allocated back to transportation projects in those counties.

So even if a toll road was never built in Dallas County in the future and you have a CDA -- let's assume you just had the CDAs on 121 and you didn't have CDA on 161 which is in Dallas County, the excess revenue from the 121 projects, 55 percent of that excess revenue would return to Dallas County. And that equity issue that is both by the bonding capacity and a portion goes to the county in which it's in and the excess revenue goes to the counties in which users are paying toll roads, we think we're paying back to those residents who are paying toll roads based on that allocation of revenue.

So in our particular case, on your previous agenda item, we took $200- of the, say, $700 million and we put it on the LBJ project, so the toll road users that travel up and down the Dallas North Toll Road, there's a large share of them are east-west users of the new project you've approved that's now going to proceed. So the equity issue we've addressed is to reward the toll users of Dallas County with a fair share allocation and to give to them additional transportation facilities that will help them get from the origin and destination of which they travel.

We will keep track of the small accounts and your office will keep track of the total revenue, and then you will be acting as our RMA in this structure here because we will then recommend to you LBJ is our best project or a portion should go to US 75 or a portion should go to X, they'll come before you as our agent, and then you'll instruct staff to take money out of that particular account and go procure the implementation of those projects that come forward.

So I think Judge Kelleher is correct, there should be an allocation or sensitivity to the user, and the RTC in the spring has responded with a significant portion of those funds to be returned for transportation projects in the counties in which toll users are paying into the system.

Now, we do have a little bit of Tarrant County users also, 5 to 7 percent are coming from Maribel's district. Your current legislation says it has to be retained in the district in which the toll road is in, so the Regional Transportation Council will allocate an equivalent amount of gas tax money to Maribel's district to account for what would have been the small amount of toll road revenue that would return to Tarrant County toll road users.

So it's sort of an added complicated element that we address the equity issue for this side of the region by additional gas tax money, and at some point in the future the legislation may want to be looked at maybe six or eight years from now when there's more trust on these particular credit union accounts that the toll road revenue should reside within the region in which it's created and I don't have to do this additional mathematics keeping track of eastern and western elements.

But for today we're very supportive of both your elements, and I think the judge's concerns are correct, and we think the RTC has addressed those concerns in the allocation of these revenues to be able to go back to Dallas County projects.

MR. JOHNSON: You've heard the testimony. Any questions of Mr. Saenz?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. JOHNSON: Those opposed, no.

(No response.)

MR. JOHNSON: Motion carries.

MR. HOUGHTON: Congratulations.

MR. JOHNSON: Amadeo, thank you.

MR. WILLIAMSON: Nice job, Michael. Good job, region.

MR. JOHNSON: I need to excuse myself.

MR. BEHRENS: Agenda item number 8 is Finance. Agenda item number 8(a) is the Quarterly Investment Report that we need approval on. Agenda item 8(b) is for Supplemental Resolutions, statements and documents and agreements that relate to the State Highway Fund Revenue Financing Program. James?

MR. BASS: Good morning. For the record, I'm James Bass, CFO at TxDOT.

Item 8(a) presents the Quarterly Investment Report for the fourth quarter of fiscal year 2006 which ended on August 31. The investments covered in the report are associated with the 2002 projects of the Central Texas Turnpike System and the lease with an option to purchase for the Houston District Headquarters facility. At the end of August, the balance for the invested funds for the 2002 project stood at $928 million, and for the lease with option to purchase at $34-1/2 million.

The details of these investments have been provided to you in the quarterly report, and I would be happy to answer any questions that you may have.

MR. HOUGHTON: One question. The earlier testimony, the $479 million savings, who realizes the savings?

MR. BASS: That will be split and shared amongst the local governments who were committed to funding the right of way for the project, so part of that savings was realized through lower right of way acquisition costs, and then the remainder would come to the commission. The commission had covenanted to provide $700 million of toll equity over a five fiscal year period, and the savings that would be realized to the state would lower that level of commitment.

MR. HOUGHTON: It really isn't cash to us, it's just a matter of relieving us of our obligation.

MR. BASS: It would free up future cash that we were planning to go to one project would now become available.

MR. HOUGHTON: Right. So moved.

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. Thank you.

MR. BASS: Item 8(b) approves the second and third Supplemental Resolutions, the preliminary Official Statement, and other related documents and agreements relating to the State Highway Fund Revenue Financing Program -- sometimes referred to as Prop 14 -- and authorizes designated department officials to act on behalf of the commission in the issuance of those obligations.

This particular issuance would generate $1 billion in bond proceeds with debt service payable over the next 20 years. This issuance received Bond Review Board approval on the 21st of September. And one thing I'll point out in addition, this minute order would amend the master resolution in order to conform a definition of credit enhancement to conform it with the Mobility Fund and with the commission's derivative management policy. And staff would recommend your approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation.

MR. HOUGHTON: So moved.

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. Thank you.

MR. BEHRENS: Agenda item number 9 is our State Infrastructure Bank for this month, an application from the City of Sinton.

MR. BASS: Item 9 seeks final approval of a loan to the City of Sinton in the amount of $170,000 to pay for lighting along US 181 in downtown Sinton. Since this loan is for less than $250,000, this is the one and only time that the commission will see this loan, rather than the normal two-step process.

Interest would accrue from the date funds are transferred from the SIB at a rate of 3.83 percent, with payments being made over a period of five years, and staff recommends your approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation.

MR. HOUGHTON: So moved.

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. Thank you.

MR. BASS: Thank you.

MR. BEHRENS: Agenda item number 10 under Right of Way, Tarrant County, we have project 121 that's been talked about, and we're looking to get authorization for purchasing options on that right of way.

MR. WILLIAMSON: Why isn't Maribel presenting this?

MR. BEHRENS: We can turn it over to her.

MR. WILLIAMSON: She's right over there, she's anxious to speak.

MR. SAENZ: We're going to have to make sure that she's okay with that because we're giving Bill authority to do options in her county, so we might have to bring her up, get it okayed for the record.

Good morning again, commissioners. Amadeo Saenz, assistant executive director for Engineering Operations.

The minute order before you and bring to you for consideration under agenda item 10 is to authorize us to use an option agreement to secure right of way for a potential future purchase of required right of way along the proposed route for State Highway 121 from 2499 to the Dallas County line in Tarrant County which is the Fort Worth District.

The minute order provides authority to the Dallas District engineer to negotiate the execution of the options contract and to expend funds for option fees and related administrative expenses. The timely execution of the options contracts to effectively purchase the development rights during the interim prior to scheduled right of way acquisition provides a strategic opportunity to realize lower acquisition costs, less complicated negotiations, and therefore, a more efficient acquisition process.

Staff would recommend your approval of this minute order.

The reason that the Dallas District is doing it is because Dallas is acquiring some right of way on 121 within the Dallas District and this project is immediately to their west, so we figured since they were already doing it, Dallas District would be more in line to continue and do it more efficiently.

I think Maribel just figured out a way to get Bill to pay for it, but we'll let them decide which was the right reason.

MR. WILLIAMSON: No doubt. She said, Okay, you can handle it if it will come out of your share of the pie.

MR. SAENZ: I think that's kind of what it is. Bill may not know that.

(General laughter.)

MR. WILLIAMSON: Members, you've heard the staff's explanation -- sort of -- and recommendation.

MR. HOUGHTON: So moved.

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 barely carries.

MR. BEHRENS: Agenda item number 11 is our contracts for the month of October, both Highway Maintenance and Department Building Construction contracts, and then our Highway and Transportation Enhancement Building Construction contracts. Thomas?

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

Item 11(a)(1) is for consideration of the award or rejection of Highway Maintenance and Department Building Construction contracts let on October 4 and 5, 2006, whose engineers' estimate is $300,000 or more. We had eleven projects; we had 41 bids; average of 3.7 bids per project.

We recommend award of all projects in the exhibit. Any questions?

MR. WILLIAMSON: My question is how long has it been since you've presented before noon.

MR. BOHUSLAV: Maybe three years, four years. How long have you been here?

(General laughter.)

MR. WILLIAMSON: Five years.

MR. HOUGHTON: So moved.

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. Thank you.

MR. BOHUSLAV: Item 11(a)(2) is for the consideration of award or rejection of Highway and Transportation Enhancement Building Construction contracts let on October 4 and 5, 2006. We had 55 projects; an average of 4.1 bids per project.

We recommend award of all projects in the exhibit. This does include the re-let of the Calatrava Bridge here in Dallas, $69 million.

MR. HOUGHTON: That's the bridge regarding the steel issue. Correct?

MR. BOHUSLAV: Yes.

MR. WILLIAMSON: Are we sure the mayor is okay with that?

MR. BOHUSLAV: I believe the district has the money in hand. Is that right?

MR. HOUGHTON: Everyone happy?

MR. WILLIAMSON: Maribel is okay with this?

(Inaudible speaker from audience.)

MR. WILLIAMSON: I don't care about her paying for it. I mean, she's a strong supporter of this department, I want to be sure we're not doing something she's uncomfortable about.

FEMALE SPEAKER: She is delighted.

MR. HOUGHTON: So moved.

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. Thank you.

MR. BEHRENS: Agenda item number 12 is our Routine Minute Orders. They've all been duly posted, as we're required to do so. I don't think any of the routine minute orders individually have any impact on any personal areas of any of the commissioners, so I would recommend approval of the routine minute orders.

MR. HOUGHTON: So moved.

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.

MR. BEHRENS: That concludes our portion of the agenda.

MR. WILLIAMSON: Michael, do we have any general comments?

MR. BEHRENS: Yes, we do.

MR. WILLIAMSON: We do? Oh, my gosh, we've got more general comments today than we've had in five years. There must be a controversy. I think this is Dilip Patel or is it Philip? Dilip Patel, owner of Microtel Inn Suites.

(No response.)

MR. WILLIAMSON: Bret Berkman, owner of Berkman's Office Machine in Austin, Texas.

MR. BERKMAN: Greetings. I'm glad to hear that you folks have been treated so well since you got here. It sounded like a wonderful facility.

My name is Doc Berkman and I own Doc's City RV Park. I'd like to thank you for the opportunity to speak to what I consider a very important issue: the change to the Logo Sign Program. I'm here selfishly, for myself and other small, homegrown local businesses around this great state. I know my time is limited so I'll get right to it.

After reading all materials available to me regarding the vendor and contract changes to the program, several things are apparent to myself and others. First, I must ask why the seemingly predatory and malicious actions have been taken against small business and why has it been allowed. It seems equivalent to an extortion with an eye towards extermination. Inadvertent damage is still damage.

This program has always been first come, first served and everyone paid the same amount, from Mom's Biscuits to McDonald's, from Earl's Service Station to Chevron-Texaco, from Doc's City RV Park to LaQuinta or Howard Johnson's -- I guess I'm showing my age a little bit there.

If anyone recalls, this state program was not a greed-based, profit-garnering opportunity for the state, it was designed for the travelers to our great state to assist them in finding the delightful rural businesses that are the backbone, or at least the rib cage, of our state of Texas. Now, essentially, TxDOT has decided to change the playing field in a manner detrimental to any but large corporate entities with very deep pockets, certainly deeper than mine.

What you are guaranteeing with the decision to award this contract for the Logo Sign Program to Lone Star is that we as small businesses will be unable to compete for any signage with significant traffic and financial impact benefits. I can scarcely believe this was the commission's desire. The huge immediate price hike, coupled with quickly escalating annual fees will see to it that us small businesses will be eliminated from this program.

I am upset. I waited years to get on that highway sign at Exit 26A, Interstate 35W north and south ramps; took us a long time to get that money together; takes us a lot of money to keep it up there every single year. It is huge for us. And now I stand to lose it because I can't compete financially? What year is this?

Again, I must say that I can scarcely believe it was the commission's intention to do this. Do you people realize what you have done with your decision? Do you know how much harm you will cause and have caused already to the small business structure of society?

With all due respect to the commission, with the same respect to my upbringing and my conscience, I must say that it seems as though someone in the decision-making process with an eye to unrealistic profits has been targeted, bought and paid for by bigger business to perhaps squeeze all of the smaller businesses off of the important signs. Predatory and malicious actions, ladies and gentlemen. Could such a thing happen? Again, I say what year is this, what country do we live in?

I submit to you, obviously a good-looking, intelligent, capable group, that from the standpoint of logic, fairness, and observance of the history of this program, that this action taken by TxDOT does not pass the acid test. It is a shame that TxDOT has chosen to rush down the path to projected profits using the backs of small business to walk upon.

Furthermore, I resent and think it patently unfair to have to pay for unrequested, superfluous and yet to be implemented services/initiatives that will, quote, add value to the program. Trust me, Mom's Biscuits, Earl's Tire and Lube isn't going to benefit from a big colorful website or having everything translated into Spanish. I don't need dual languages available to my customers or multiple. You can't speak English and you're here for longer than a vacation, I can't afford to reprint the world for you, learn our language.

But don't charge me for services I don't need, didn't ask for, and aren't even yet available, according to the very letter I received from Lone Star. I realize that this isn't important to you all but it is to me and it will be to many other small businesses. I get my value from the state and have so far. Myself and many others don't need and can't afford to pay for unnecessary services.

I had a nice conversation with a fine representative named Doug Skowronek down at TxDOT in Austin on the 20th. While he appreciated my perspective, he told me that currently the retention re-sign rate is very high in the program. I replied with a question to him and asked him if he had ever run his own business or owned his own business. He said no, he had not. I assured him that after waiting sometimes for years to get on a sign and sometimes for years coupled with the years necessary to obtain the financial outlays to create the sign to get on there, pay for it every single month, it is going to be that much more difficult to let it go. Every one of us will sign and re-sign.

The question is, lady and gentlemen, the real acid test will not be this year and how many people re-sign, it will be next year and the year after and the year after that. Then where will the unrealistic projected profits be as people fall out of this program on these escalating prices year after year?

The awarding of this contract was a mistake. It should be undone immediately before it breaks the back of small businesses who are already getting killed by unreasonable and illegal profiteering during a time of war by the electricity and oil industries, but that's another sermon and I haven't got time for that today.

I want to thank you very much for your time and hope that there's some way that this can be reconsidered. It is predatory and malicious action that will break the back of small businesses across this great state and I know that's not what you all intended in the beginning.

Thank you very much for your time.

MR. WILLIAMSON: Mr. Berkman, we appreciate you taking your time.

MR. BERKMAN: Any questions, by the way? I don't know what the format is.

MR. WILLIAMSON: Well, let me finish. We appreciate you taking your time to come and enter your comments into the record.

Mr. Jackson, is this matter in regard to something on which we are now in pending litigation?

MR. JACKSON: Yes, sir.

MR. WILLIAMSON: Thank you.

Mr. Berkman, because we're in litigation, we cannot do what we would normally do which would be to ask you questions and dialogue with you. We're terribly sorry for that.

MR. BERKMAN: I am too, sir.

MR. WILLIAMSON: We do take note and everything you've said will be entered into the record, any written material you've given will be entered into the record, and at the appropriate time will be reviewed.

MR. BERKMAN: I can't ask for much more than that.

MR. WILLIAMSON: That's all we can say.

MR. BERKMAN: I understand. Thank you for your time.

MR. WILLIAMSON: Thank you very much, sir.

(Applause.)

MR. WILLIAMSON: Larry Nix?

MR. NIX: Good morning. Mr. Chairman, members of the commission, my name is Larry Nix. I'm president of the Texas Association of Campground Owners, representing over 400 RV parks and campgrounds in the state of Texas. We feel like we're an important part of the tourism industry in Texas and we've partnered with TxDOT in many important state projects.

I'm here today in my capacity as president of our association and as one of the small businessmen that make up the backbone of the Texas economy. I want to specifically speak about the new Texas signage program.

Our members are very concerned about the dramatic increases with the current Logo Program and the prohibitive costs in the new TODS Program. It will be virtually impossible for RV parks to afford interstate or highway signs, effectively pushing out the small businessmen in favor of the larger corporations. We don't believe that this is best for the Texas traveling public.

In the past several years TxDOT has not erected any blue camping signs for the trail blazing purposes even though these signs are a valuable tool for the RVing public. However, on the new TODS Program, if just one business, regardless of their nature or relevance to the camping industry, takes a TODS sign, then the blue camping signs come down. So if a winery, for example, takes a TODS sign, it will kill all the blue camping signs in that area.

As a side note, we're very sensitive to the plight of the Texas State Parks Program and support the restoration. Under the new TODS Program, state parks will continue to have their own free directional signage, while the longstanding blue camping signs that direct campers to RV parks and state parks are all taken down.

TxDOT daily traffic counts and a, quote, cost of goods sold are now used to justify the significant price increases, even though both are largely irrelevant to the RV or campground industry because we're depending on the over-the-road travelers, not the folks who take those roads to work every day. The average cost of a campsite in Texas of our members is about $25, a far cry from the projected $250 hotel room, so obviously the hotels have a much bigger pool of money to work with than we do.

The new price increase for the Logo signs are a minimum of 30 percent higher and sometimes as much as 300 percent higher, and those costs just keep climbing. The TODS Program is no more of a bargain in that its average costs will be somewhere between $2,000 and $3,000 a year. Road signs simply do not bring in enough business to justify that cost.

Most RVers know where they're going to spend the night before they ever hit the road, but they need those blue camping signs to kind of help them out to get to the final destination.

The cost may be acceptable for other tourism ventures, especially the large corporate players, but small businessmen of any nature will have a hard time justifying these new costs. Even if someone signs up for the program for year one, they'll monitor the results and probably not be back for year two. The advertising cost calculation simply does not make much sense for RV parks to purchase this type of advertising.

In conclusion, I submit to you that while we understand the new signage program will be in place January 1 of 2007, it is simply not a realistic expectation that our segment of the Texas tourism industry, the RV parks, will participate in this program due to the exorbitant signage prices. We're sure that wasn't your intention, but for a small business, the high cost simply equates to a bad return on investment.

Thank you for your time and for all that you do for TxDOT.

MR. WILLIAMSON: We appreciate the civilized manner and the kind words, and your words and any written information that you submitted will be entered into the record and reviewed when the litigation is cleared up. Thank you, sir.

Mike Patel? Are you any kin to Dilip?

MR. MIKE PATEL: No. My name is Mike Patel and I represent Asian-American Hotel Owners Association. We have 9,000 members in 50 states, and I represent the state of Texas where I have 1,200 members and in the North Texas region we have 600 members in this state.

I'm also here because we have a concern regarding the Texas Logo Sign, and I would like to read TxDOT goal why the program was set up. It is the intent of this specific system to provide the best value to the state by returning a minimum 10 percent program fees collected to the state while encouraging program growth and ensuring reasonable program fee to all participating businesses and entities operating in the state of Texas.

Today I represent my fellow members who are here today who came with me today, and our concern is, one, we do not care who the vendors selected by the TxDOT, whether selected by four vendors and who were selected given the opportunity to do business with state, but our concern is rates. All our rates have been increased anywhere from 30 to 70 percent, and this is a concern.

I have reviewed the RFP process and the RFP process were not on the same guidelines. Both companies were provided different traffic counts and the rates were different, they were not apple-to-apple compared. When we are consumer, I have been paying $700 rates on my signage and now I will be forced to pay $1,400 which is 100 percent rate increase.

This primary signage were giving our travelers and family who travel on interstate giving them a proper direction and where to take exit, and it is one of the five goals that you said today, that when our travelers who are traveling on the road, giving them direction. It's not a value of earning a business. If you have a sign, it doesn't mean that all our business will earn extra business by having the sign, the signage is purpose of giving them safety on the road, giving them a proper direction that there is exit coming up within a mile. That was the purpose.

Also, TxDOT on the goal that TxDOT will get 10 percent of the revenue, based on the public information, TxDOT is earning 40 to 50 percent revenue from the vendors which is okay, but we also understand the increase is necessary but how much increase is necessary? Fifty percent, 100 percent? That's substantial increase that TxDOT has appointed the new vendor.

Mr. Chairman, all we ask the fee should be reconsidered and what the fees were currently we have been paying for last year, that should have been evaluated and look at all angles of the avenue, look at from the family traveler standpoint of view and look at other safety measures.

In conclusion, all I ask is many of the small business will be forced to go out of business because if you look at driving on the road, there will be a mom-and-pop restaurant who will not be able to afford a sign because there will not be enough traffic count. The only reason people travel, there is not enough restaurants or anything, people will be allowed to go take the exit and go to the restaurant; otherwise, they will be forced to not participate in this business.

Thank you for your time.

(Applause.)

MR. WILLIAMSON: Thank you, Mike, and thank you for your words. Your words and your written information will be entered into the record and reviewed at the appropriate time.

Kaliash Patel?

MR. KALIASH PATEL: My name is Kaliash Patel. I'm from Tyler, Texas, and I think I gave you a map and a letter about putting a new light for the [indiscernible] and around -- I don't know what you call that -- there is no light on my exit. I asked those people work up there and they say there is no plan to change anything. And if you look it up, Tyler exit, there is more accidents happen on my exit. You can check 911 report or maybe Highway Department accident report, they'll tell you.

MR. WILLIAMSON: Okay.

MR. KALIASH PATEL: And we're also concerned about the safety part on the exit. We have bridges like this. If you standing here and take exit and go other side, you cannot see anything, it's not quite visible. And you might need to look up something on that part.

MR. WILLIAMSON: Okay.

MR. KALIASH PATEL: And I don't know, maybe reducing speed or put traffic light or something. You guys can make a decision on that part.

And we also have a Texas Logo sign right now. With the changing of the company and the price increase, we have question on that part also.

North from my town, a town called Winona, it's only 500 population, there's only two restaurants. They couldn't afford price like that going up. And right before my exit there's Tyler Skate Park, there's a small restaurant, barbecue place, and there's nothing else within 10 or 20 miles either direction, people passing on the highway, it's too high priced for them also. And they could not put any advertise. I have a hotel and people pull into the hotel and there's nothing to eat by it and they drive right out also. So it will help my business and their business also.

Another part, when you see price increase on Logo sign, if the Highway Department is looking for money, maybe they can look it up the other side, billboard sign company. They have more money and they have flat rate, $40 for a year. You can increase on that and it will help you on that side, just not increasing Logo sign only. So just trying one side, maybe look at other side also, it will help money.

MR. WILLIAMSON: I understand.

MR. KALIASH PATEL: Some of those small business, they were complaining of the big city. I know big city has more traffic. Like if I had a hotel in the big city, if you guys going to pass right on the exit but doesn't benefit all the time on traffic counts, I don't know how you're going to look it up on that part. Traffic count is more but it's not necessary people are going to pull in.

So those are the issues I have and maybe you can think about or look it up.

MR. WILLIAMSON: On this matter, we'll have somebody look into this.

MR. KALIASH PATEL: I fax it yesterday. I talked to three different people but I don't know what the right person.

MR. WILLIAMSON: We'll have somebody from this table look into it.

On this matter, the other matter of the Logo signs, we'll make sure that your testimony is put into the record. Thank you very much.

MR. KALIASH PATEL: All right. Thank you, sir.

MR. WILLIAMSON: Rakesh Patel?

MR. RAKESH PATEL: Respected Chairman, my name is Rakesh Patel and I am president of Days Inn in Kilgore, Texas. I have a sign for Days Inn of Kilgore, Texas, Exit 589A and 589. I recently received a new contract for sign renewal which has increased from $790 to $1,200. That is a significant increase in sign renewal for one sign only. My concern is for this increase consider my request as an individual as well as the community of Kilgore. Thank you.

MR. WILLIAMSON: Thank you. Your testimony will be entered into the record.

Either Davey or Darry Patel? Which is it, Darry or Davey?

MR. DANNY PATEL: Danny Patel.

Respected Chairman, honored guests, I'm Danny Patel. I am from Longview, Texas, and I'm concerning here for the new contract with the Logo sign. They increased their price due to the visitors or the traffic count which was not true and unfair. That's what I'm coming for. Thank you.

MR. WILLIAMSON: Thank you very much. Your words will be entered into the record.

And now Dilip Patel, did you come back? Not here?

(No response.)

MR. WILLIAMSON: What about Harry Patel?

(No response.)

MR. WILLIAMSON: Mike Morrill?

MR. MORRILL: My name is Mike Morrill. I'm the project manager for Lone Star Logos, the new vendor for the Service Sign Program.

I think it's appropriate for me to point out a few things and give the commission a progress report today dealing with the execution of the program.

First off, Lone Star is executing ahead of schedule. To date we have sent out all contracts to existing participants and we are fully implementing our marketing plan. Come to find out, the attrition rate is less than half of what we had projected in our proposal. Additionally, I'd like to add that we approximately 1,000 requests for new Logo signs throughout the state of Texas.

As you know, the TODS Program was an integral part of this RFP process. We are being received by the more rural, non-controlled roadway businesses with great enthusiasm and continue to put those signs into service on a weekly basis.

The last thing I really want to emphasize today is that Lone Star is committed to the department and to all participants. Thank you.

MR. WILLIAMSON: Now, I don't think there's any difference in talking with him than there is talking with anyone else. Correct?

MR. JACKSON: Correct.

MR. WILLIAMSON: But I'd like to ask him one question just to sooth Doc's mind. Have I ever met you?

MR. MORRILL: No, sir.

MR. WILLIAMSON: Have you ever talked to me about this business?

MR. MORRILL: No, sir.

MR. WILLIAMSON: Thank you. Your words will be entered into the record.

MR. MORRILL: Thank you.

MR. WILLIAMSON: Now, Rod, we saved you for last. Where are you, Rod? We saved you for last because you're always organized, articulate, to the point and we enjoy dialoguing with you. But I'm afraid if you're testifying on the Logo deal, we're not going to be able to dialogue. So I guess you can just come up here and take a free shot at us. Rod Johnson.

MR. ROD JOHNSON: I may have missed part of what you said on the way in.

MR. WILLIAMSON: I said we saved you for last because you're always organized and to the point and we enjoy not only your testimony but we enjoy dialoguing with you, but if it's about the Logo sign, we can't talk to you today because there's litigation.

MR. ROD JOHNSON: It's about your agenda, the next agenda coming up. I got a copy of the one for your next meeting a couple of hours ago, and of course, the household goods movers were on there, as you're probably aware. I was surprised to see it on there, maybe even shocked a little bit, because there weren't any changes in it and I thought that there would have been.

Two reasons. The first one are the errors in the publication, and maybe I was soft on this the last time I said it and maybe just no one responded me to correct me, because I could be wrong, but when you add things to the rules, you underline them so that the public, movers like me -- some of us aren't all that sharp some days, today may be one of them, I have a cold -- but they didn't underline them. They added definitions and didn't underline them; they added insurance requirements and they didn't underline them. So it's not possible for the public or a lot of movers to respond to them.

I've given each one of you a copy of that, it's red-tagged, the part that's been added is highlighted that is new language. For the rules to be published, as I understand it, that should be underlined. It's not. That makes it improperly published, as I understand it. That was the first reason that I thought they probably wouldn't have been on the agenda for final adoption because they hadn't been properly published.

The second was the lack of response to the overwhelming amount of disapproval from the movers in Texas. Overwhelming, what's that? Three to one, that would be overwhelming. Three to one.

MR. WILLIAMSON: Just out of curiosity, was it three and one?

MR. ROD JOHNSON: Three to one.

MR. WILLIAMSON: But it was just like three guys and one guy?

MR. ROD JOHNSON: You see that big stack there?

MR. WILLIAMSON: Oh, here it is.

MR. ROD JOHNSON: By bulk, it's probably 80 percent rejected, by individual count it's three against one for.

MR. WILLIAMSON: How many of these guys are your subs?

MR. ROD JOHNSON: How many of the guys? Three to one. There was maybe 20, probably about 40 responses, about 30 opposed it, with solutions, nice, positive solutions, simple two-word corrections, two words comply with the law, do this.

MR. WILLIAMSON: You know, you and I, because you've drug this out, you made poor old Billy retire.

MR. ROD JOHNSON: No, he didn't retire, he went on to better places.

MR. WILLIAMSON: No, you ran him out, the association made him retire. It's all your fault.

(General laughter.)

MR. ROD JOHNSON: I actually like him quite a bit, I like bright people in this. If you've got bright people to deal with, you come up with bright solutions, you don't come up with dumb solutions. We're on our way to a really --

MR. WILLIAMSON: Wait, don't insult my boys.

MR. ROD JOHNSON:  -- not the best solution. Did I say that correctly? Because we can do better than this, we have to do better than this. You can't have three times the movers -- and most of those responses generally were submitted in the last couple of days when the small movers started finding out about it.

At the hearings I watched grown men break down, gasp for breath and almost break into tears about what's about to happen to them. It's on the record. It's mortifying. It's horrible to see people I happen to know are dying of cancer, the guy sitting there saying don't take the last bit of what I have away from me, leave something for my family. No theatrics, I know he's dying.

And we're all dying because no one side of this won't go untouched because it can't just be some rules get published and everyone goes happily along. This affects two-thirds of the movers negatively in the state of Texas.

It's not complicated to solve, that's the beauty of it. Even the guys that were on the other side of it have started coming over. That's why you don't see it, little, tiny, small guys, those are big guys. Some of the people in there said we don't like this. We want you to comply with the laws that protect small businesses. That's what it's really about. The laws, the rules. The rules there don't comply with the laws that protect small business. Chapter 2006 says that if possible, if it's feasible -- that's the word -- if it's feasible, you need to provide an alternative method for registration and reporting.

Well, now, TxDOT has had that for household goods movers since 1996, so you can't say it's not legal, you can't say it's not feasible. Unless you want to say what you've been doing up until now, including today, is still not legal and not feasible to have an alternative reporting, an alternative registration process. It's very effective. All of us have been operating underneath it. There's nothing that's done anything to say that it should go away.

In fact, the law says it has to be there if it's legal and feasible. It is legal, it is feasible, it is there today. Two words changing in the rules as they are now will provide most of what people need. And that's not just the small guys. At the rate things are changing, by the time your next meeting rolls around, I predict it to be more towards 90 percent of the people because we need this. We don't need more burdensome rules that provide no benefit to the public.

In one of our last meetings, someone said that there was a lack of insurance and I told you that I would check that out because I didn't think that was probably the case. I went to TxDOT, I said, I'd like to see your file that shows there's a lack of auto liability coverage in Texas. Not one piece of paper. I said, Let's take another approach, I want every complaint that the Texas DOT has ever had lodged against it in the past five years, and I'd like you to go through, and I'll pay for that, show me where the problem is. They didn't want to do it, they didn't have the time. I said, Make copies, send it to me, I'll do it. We went through it, we did it. Now, how many problems do you think we found? Not one, not one.

MR. WILLIAMSON: But Rod, I don't think we're doing it because people have complained to us, I think we're doing it because it's our perception that the legislature passed a law and told us to do it.

MR. ROD JOHNSON: Well, there's nothing wrong with the law. You comply with both of them. There's nothing wrong with complying with 2702 and 2006, they are totally congruous, there's no opposition between them at all. All you have to do is direct TxDOT to marry them, hitch them up and get them married.

MR. WILLIAMSON: But I mean, you've said for the record, you implied that we were doing this on our own motion.

MR. ROD JOHNSON: No, I didn't mean that.

MR. WILLIAMSON: I promise you, it's going to be on our legislative agenda in December to move regulation to you or to the DPS. We want out of this.

MR. ROD JOHNSON: And so do we, and that's why we need a smart solution to this. And there is a smart solution to it. No part of 2702 repeals 2006.

MR. WILLIAMSON: Or maybe it needs to be the Department of Insurance.

MR. HOUGHTON: Department of Insurance.

MR. WILLIAMSON: Department of Insurance, not DPS. We're going to ask the legislature to move regulation of you to the Department of Insurance, not DPS.

MR. ROD JOHNSON: Can we do that today or tomorrow?

MR. WILLIAMSON: They don't meet till January.

MR. ROD JOHNSON: Well, what happens to these rules?

MR. WILLIAMSON: Well, I'm going to take your comments and go check into it, like I always do.

MR. ROD JOHNSON: You always do, and I appreciate it. I would very much appreciate it if you'd ask your department to make the rules comply with the laws in Texas that protects small business. It's not optional, it's mandatory.

MR. WILLIAMSON: But you know, Rod, I'm never going to admit without knowing and researching it myself that they've done it, what I'm saying is I'm going to take your testimony and give it the respect it deserves and look into it.

MR. ROD JOHNSON: Well, they've addressed it before and I appreciate that. TxDOT has addressed it before and said it wasn't legal and feasible, and it's hard to say we've got rules today that provide alternative registration and reporting and they're not legal and feasible, and they're exactly the rules we're saying use those.

MR. WILLIAMSON: I hear what you're saying. I trust you understand I'm never going to admit that my staff has done something wrong until I look for it myself.

MR. ROD JOHNSON: And I've not said they've done anything wrong. I don't think you've ever heard me say that they've done anything wrong ever. I've told you that they've been the most professional people I've ever dealt with. Everyone makes mistakes, everyone has opinions, and I understand that and I appreciate that. A lot of smart people out there, we need a smart solution.

MR. WILLIAMSON: I should have know you were going to show up, we're not 40 miles from where you live.

MR. ROD JOHNSON: 41.86, actually.

MR. WILLIAMSON: This was an easy one for you.

MR. ROD JOHNSON: Well, it's never easy, because it isn't just me, there's a lot of other people out there. Since I came up here, I've had hundreds of people come to me, and movers get angry like other people get angry when they feel like they've been blind-sided by something, and there's a groundswell building. You've got it there in front of you. It isn't just Rod standing up here anymore saying this isn't working out, the majority of the people are saying it's not working out, they're saying we don't want this, we want you to comply with the laws in the state of Texas that protect small business. Please do that, please do that. Thank you.

MR. WILLIAMSON: It's always good to see you.

MR. ROD JOHNSON: It's good to see you. You have a short trip back home too.

MR. WILLIAMSON: You're always welcome to testify with us. We like your approach.

MR. ROD JOHNSON: Thank you.

MR. WILLIAMSON: Any reason to go into executive session, Mr. Jackson?

MR. JACKSON: No.

MR. WILLIAMSON: The most privileged motion is in order.

MR. HOUGHTON: Move to adjourn.

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. We stand adjourned at 12:32 p.m.

(Whereupon, at 12:32 p.m., the meeting was concluded.)