We are really pleased to be here again. And I can say again because I know that Commissioner Nichols has been here very frequently over the last several months, and I have had the opportunity over the last several years to be out here. And it's like a little home week to us, I think, to a great extent.

We had the opportunity to have an informal gathering last night, meet with a number of officials, and we had a wonderful barbecue at the district headquarters last night, and had the chance this morning early -- earlier than some of us would have selected -- to meet with City, County, elected officials, chamber officials from both cities and your elected representatives in the State Legislature. And it's been very informative.

As usual West Texas, unlike a lot of the rest of the state, is very, very constructively candid in dealing with us, and it is very helpful to us. And I say that not in jest at all. It is very helpful and always welcome and we appreciate it.

We have these meeting around the state two or three times a year, sometimes little less than that in a legislative session year, to really remind us of who we work for, and we work for the citizens of the state. And it is always a healthy reminder to be out here and see more clearly than we ever get when the delegation presents their needs to us by video or by slide or just over the microphone with statistical information in Austin. We see much more clearly what the needs are, and when we hear Rob Junell tell us about traffic jams in San Angelo, it's always good to go down there and see what a traffic jam is by San Angelo standards.

But there is so much growth going on here and development, even from the last time I was here. And we have a number of very interesting projects going on, and needless to say, more to come, but it's a terrific opportunity for us to reacquaint ourselves and hear directly from you about the needs of your communities, which we see increasingly, as I mentioned yesterday, as an integrated economy.

It's not totally that way, but when we start a transportation project, as you all largely know, projects can start and never finish for a decade or two or three. So by the time many of our projects are finished, what may be a budding economic integrated -- economically integrated community may be a full-fledged economically integrated community.

Our new executive director, Wes Heald, has seen it in spades from his vantage point in Fort Worth, seeing the Dallas and the Fort Worth economies grow into a single unit to a great extent. And from a transportation planning standpoint, we don't view the two cities very much independently anymore. It is a single unified transportation planning area.

And I think it's not too early to start viewing the Midland/Odessa area and vicinities north and south, markets north and south, if you will, Lubbock, Amarillo on the north end, San Angelo on the south, as an economy really unto itself that we need to understand a lot better, particularly as it emerges hopefully with a stronger oil price in months or years to come, but certainly with more diversification.

We think it's coming, I know you all believe it's coming, and I think we are in it together to make sure it does come and that we don't get in the way of the development of this economy, so we have got a lot to learn and we are glad to be here again to hear from you directly.

Commissioner Anne Wynne has asked me to convey her regrets for not being here. As most of you know, I think, she recently gave birth to a baby girl, Lila, and they are both doing well. I am sure Lila is ready to get out of the house, but Anne is not yet, so she's going to pass and wanted us to convey her regrets for not being here.

Before we start into our agenda I would like to ask Commissioner Nichols if he has any comments.

MR. NICHOLS: Oh, I'll just echo what you said. I appreciate the opportunity to be back in Midland/Odessa area again. Y'all's hospitality is always -- is that feedback -- always appreciated and look forward to coming back again in the future. Thank you very much.

CHAIRMAN LANEY: We're going to be hearing from a number of folks this morning, and I would like to start off with our two local mayors, Mayor Mike Atkins of Odessa and Bobby Burns of Midland. Mayor. Remember the warning I gave you earlier.

MAYOR ATKINS: Yes, Chairman, we sure do. Good morning. I am Mayor Michael Atkins of the City of Odessa, and this is my good friend and working partner, Mayor Bobby Burns of the City of Midland.

MAYOR BURNS: On behalf of all the citizens of Midland/Odessa, which comprise the Odessa/Midland MSA, we want to welcome you and express our appreciation for this the first ever TxDOT Commissioners meeting in the Midland/Odessa area.

MAYOR ATKINS: We would like to show you today that Midland and Odessa are joined together in numerous ways and that they are truly a single population center. Examples of how they are interconnected are that the two cities have been designated by the Department of Commerce as one standard MSA. For some time, we have had a single MPO serving the area. Many of our local groups in each community, such as our realtors multiple listing service and the blood bank, have been merged into a single organization.

MAYOR BURNS: And the list really goes on. The Post Office Department has established a single postmark, "Midland/Odessa," for both cities. The only other twin cities in the U.S. to have a common postmark are the cities of Minneapolis and St. Paul in Minnesota. Also, the two cities are jointly served by a single commercial airport, Midland International Airport, located halfway between our two cities. Our two cities are also connected by three four-lane divided highways with a combined traffic count approaching 50,000 vehicles per day and growing rapidly.

MAYOR ATKINS: Probably most significantly, however, if you have noticed is the fact that Odessa has continued to grow and our growth is taking place in an easterly direction, just as Midland is continuing to grow and its growth is taking place westerly. A lot of people do not know this, but at some parts of the area, our cities are now only two miles apart. In fact, the next time either one of us get into an annexing mood, this gap may be gone and the two cities will actually be joined.

MAYOR BURNS: As we have attempted to point out, Midland/Odessa is truly one metropolitan center and one community of interest. We urge TxDOT, and we you know you already have, recognize this, and whenever corridors are specified, or future traffic counts are estimated or projected, we urge you to consider Midland/Odessa as a single point on the highway map. We are truly one.

(Laughter)

MR. PERRY: We appreciate our mayors participating in this today. I am Charles Perry, chairman of Motran. Motran has frequently presented the Commission information about our La Entrada al Pacifico trade corridor. There's a map here. There's also a smaller version attached to the handout which we have given you.

La Entrada trade corridor was first proposed by Motran to Governor Francisco Barrios of the State of Chihuahua in a meeting in July of 1993 in Ojinaga, Mexico -- and I might add, in an unairconditioned building, and that's above and beyond the call of duty to meet in Ojinaga in --

(Laughter)

MR. PERRY: Governor Barrios immediately recognized the economic potential for this route and he instructed his Economic Development Department to work with Motran to develop this corridor. They have done so diligently, and since that time, both the states of Sinaloa and Durango have joined together with Motran and Chihuahua to form what we call Alianza to promote this corridor.

The La Entrada corridor has been widely recognized by a number of people and organizations and letters of endorsement which have been presented to TxDOT before, and I won't get into those today.

Many things have occurred to help develop this corridor. In June of last year, Governor Bush in this very building signed into law a state law recognizing this corridor and instructing TxDOT to install signs along the corridor, which have been done, all the way from Lamesa to Presidio. This has certainly raised awareness by the public of the corridor and its importance.

And then late in 1997, Motran commissioned the Perryman Group to perform a study to determine the economic impact of La Entrada on both Texas and the three western Mexico states. The increases in trade as determined by Dr. Perryman were extremely bullish. For example, he projected by 2020, in excess of 2 million truck trips per year through this corridor if it were fully developed.

Copies of the Perryman report were presented to the Economic Development Department of Chihuahua, as well as the mayor of Chihuahua City, members of various chambers of commerce in Chihuahua. All of these parties were very impressed, and after they had formally reviewed it, they called for a meeting which was held in Chihuahua on March 26 of this year.

It was a very productive meeting, and at that meeting, there were several agreements made between the parties. The first and most important is Governor Barrios' government will place a top priority on improvements of Federal Highway 16 immediately south of Ojinaga, which is about right there. There's approximately 30 kilometers of highway across the mountains, but they are narrow, winding and steep. And the intent is to bypass those mountains and put in a new segment of highway there which will then make the Federal Highway 16 from Ojinaga to Chihuahua a pretty good highway for truck traffic.

The La Entrada al Pacifico trade corridor signs which match those that we have in the U.S. will be prepared, with the exception of trade corridor will be in Spanish, and Motran will furnish these to the Chihuahua state government. They will be installed along Federal Highway 16 between Ojinaga and Chihuahua City. And we are waiting for them to tell us how many signs they need and then they will be fabricated and shipped to them to be installed.

Chihuahua state government and Motran agreed that they will work together to establish regular airline service between Chihuahua City and Midland International within 18 months. The time period is to allow the finish of construction of the new terminal building which will have facilities to handle international travelers, and Chihuahua representatives said that they have very close connections with Air Mexico and Aspen Airways and they agreed to contact them. We agreed to contact several of the feeder airlines in the U.S.

Chihuahua has also appointed two special representatives, one from the state government and one from the private sector, to be point persons to work with Motran so that we only have two people that we need to go to when we're working with this project.

The -- you will have to excuse me because I'm going to go ad-lib from this point on because I see there's a page missing out of my script.

(Laughter)

CHAIRMAN LANEY: I have got that page up here. I'm not going to give it to you.

(Laughter)

MR. PERRY: Do you have page 4? Could I borrow that? Never prepare enough of these things, as you probably -- Chihuahua representatives wanted to meet again in the month of May; however, due to our schedules, we asked that we postpone that to early June to follow up on all of these things we have agreed to, and we will be meeting with them in June.

Now, one thing I would like to add is that based on the contacts we have in both Ojinaga and Presidio, they are reporting to us that there has been a substantial increase in truck crossings at that port of entry and that weekend traffic has -- in the last six months, weekend traffic has increased dramatically and now has become a problem, causing crossing delays in Presidio. You take that one back home that you finally heard of a traffic jam in Presidio, Texas, on weekends now.

Today we have two -- we have three specific projects we would like to mention that we are requesting improvements on, and getting away from La Entrada right now, talking about the first one, is the improvement of State Highway 349 from the city of Lamesa to the Midland/Odessa area, which I might mention will become a northern part of the La Entrada corridor when completed.

In a public hearing held by TxDOT in Odessa on December 18, 1996, which was part of the I-27 study, this segment of 349 was identified by the public as the highway segment with the highest priority for widening in this area. As indicated on the map, and you have a copy of it in your handout, the truck priority system would presumably include a reliever route around Lamesa as far as Highway 387.

And what we would propose is starting at 387, extending our reliever to connect to 349, a four-lane 349 to a point approximately 8 miles from the center of Midland and then a reliever route around Midland to tie into 1788, the highway out here by CEED, and going on to the airport and to I-20. I will discuss that in detail here in just a second.

The improvements on 1788, at least adjacent to Interstate 20, will probably be considered under the current study underway for improvements of Interstate 20. There's a lot of congestion at that intersection, and we'll assume that that will be addressed in that study.

Now, we think that this reliever route is extremely important around Midland for several reasons. The first thing is, Loop 250, which I believe you saw yesterday, has become a vital economic corridor for the city of Midland. Much trade is being developed up and down that corridor. And one thing that would be very detrimental to that would be to have through-truck traffic attempting to cross through Loop 250.

In addition to that, the interchanges of Loop 250 and State Highway 191, and interchange between Loop 250 and State Highway 349, are -- have limited capacity. And to handle much more traffic on those two loops would require an extensive interchange there, multilevel interchange, and the probability is the economics would be in favor of a reliever route anyway, rather than the cost of those interchanges.

I would mention that both Martin County and Midland County, up to about this point, the County Commissioners Court have passed resolutions offering to furnish the right-of-ways necessary for both the widening and the reliever route.

I would mention that an immediate benefit of this project would be to complete a four-lane corridor connecting the three largest MSAs in West Texas, that is Amarillo, Lubbock, Midland/Odessa. Again, according to Dr. Ray Perryman, there already exists considerable trade along this corridor and it is projected to grow rapidly over the next 20 years. And incidentally, Dr. Perryman reports there is considerably more trade between Midland/Odessa and Lubbock than there is between Midland/Odessa and San Angelo or between Lubbock and San Angelo.

At this time, I would like to introduce one of our original board members of Motran who is described as a passionate supporter of highway improvements, our own Mrs. Nadine Craddick, who will wrap up the concept of the improvements on 349. Nadine.

MRS. CRADDICK: Commissioner Laney, Commissioner Nichols, Mr. Heald, all the staff of TxDOT, we want to welcome you here to Midland/Odessa and we want you to know, you will be invited back.

You have had heard a detailed description of the improvements that we feel are top priority projects for this area. It is so important to link the three largest MSAs in West Texas, and this project also serves additionally as a northern portion of La Entrada al Pacifico corridor. I cannot emphasize how important to us here in the Midland MSA this project is to us. Please know, we are passionate about this project.

We are here today to request funding to be provided for the planning and for the design of the entire project for four-lane construction from Lamesa to a highway that's about 4.5 miles north of Loop 250 in Midland to Farm Road 1788 just north of State Highway 191.

The distance of the approximate 4.5 miles north of Loop 250 was chosen by both Midland/Odessa together because we have been in contact with landowners in Midland County who have talked about donating the right-of-way for this project. In addition, this approximate location would bypass gas lines, pipelines, oil field sites that crisscross this vast ranch land. And we believe that the planning for this project can be done for maybe no more than a million dollars, which is just a drop in the hat.

And the Odessa district has agreed to oversee the entire project planning. Obviously, planning is only a start. We believe that this reliever route is so important to this corridor that we are asking for you to use your strategic priority program fund to build this road. We believe that we are behind in the development of a trade corridor between Midland/Odessa and Lubbock and Amarillo.

And based on the study that Charles talked about by Dr. Ray Perryman of economic trade potential between Lubbock and Midland/Odessa and other traffic data, we believe that Motran has calculated that we would have approximately 5000 vehicles a day if this road were completed today.

In conclusion, we urge you to provide the funds for the planning and the design of these improvements for State Highway 349 and that you fund these improvements with your strategic priority funding program. As you are probably aware, the Odessa district has never -- I will repeat -- has never received any money for use in the trunk system. All of the district's trunk improvements have been done with discretionary funds. This would be a first-time-ever appropriation for a trunk system highway here in the Odessa district.

On behalf of the citizens of Midland/Odessa, I want to thank you for your willingness to listen to our priorities and our concerns pertaining to our area, and we want to thank you for having your meeting here today. We look forward to working with TxDOT on this project and all other improvements for the Midland/Odessa area. Thank you so much.

MAYOR ATKINS: Good morning. I am still Mike Atkins, mayor of the City of Odessa. I have been given two minutes to give what is approximately, very easily 20 minutes of material, and I am mindful of your admonition to do it within that time, and it's taken me ten seconds to tell you that. I apologize, but I am going to move very quickly.

I wanted to speak to you briefly about issues that are of concern to Odessa and some of our priorities. In particular we wanted to point out that we have placed on the overhead here an area located right in -- right in here. This is an industrial park. The demand for additional industrial building sites -- yes, right in there. Thank you -- has caused us to create in Odessa. It's going to be a 108-acre industrial park. As you can see, it's located between Interstate 20 on the south there and on Business 20 on the north at John Ben Shepherd Parkway.

This industrial park is located in an enterprise zone. It's been developed with a combination of both public and private funds. Our community, through the City, the chamber and other meetings in general have identified this John Ben Shepherd Parkway interchange at Business 20, which is number 2 up there, and also at Interstate 20 as highest priorities in Odessa.

These critical components of Odessa's growth have been presented to your consultants now working on the Interstate 20 corridor study through Odessa and Midland, and both of these intersections are on the metropolitan transportation plan. We feel it's extremely important to the growth of Odessa that these two interchanges be constructed.

The interchanges will facilitate not only critical access to the new industrial park, but will serve as a connector from the largest inland chemical complex in the United States to the new industrial park and to a high-growth area for residential and commercial development which is located to the north here. These interchanges at Interstate 20 and Business 20 will facilitate a new improvement gateway from Interstate 20 to what is Odessa's growth corridor.

Two of our present biggest assets are Interstate 20 and the railroad which are located at item number 2 there. Without proper access to and from this adjacent property, this industrial park, these two assets could, in fact, become a hindrance.

In addition, I would share with you that we have future roadway improvements for Odessa to include extending John Ben Parkway to the north -- if you will show that -- up to 338 and also to extend what is 52nd Street to the west. Those extensions in our community are going to open up a much needed area for new commercial and residential developments. That's an area of our community that's previously been landlocked, believe it or not, but now we are beginning to see rapidly develop.

In summation, Odessa respectfully requests your consideration for immediate funding for interchanges at John Ben Shepherd Parkway at Interstate 20 and at Business 20. Secondly, we respectfully request a long-range planning study for interchanges on the North Loop 338 at John Ben Shepherd Parkway and at 52nd Street. If I've run over, it wasn't by much. I appreciate your patience in allowing us to be here this morning.

MAYOR BURNS: Chairman Laney, Mr. Nichols and TxDOT staff, we appreciate the opportunity to address you this morning. We have a concern, an issue we would like for you to take a very good look at in Midland. It has to do with the exit on the eastern side in Midland off of Loop 250.

We think we have a great opportunity for Midland and also TxDOT. As it stands right now, as you exit off of the Midland exit going onto Loop 250, I think most travelers of today may exit off Loop 250, they get on Business 80, and then get back on Loop 250. I think most of our travelers, most of our Midlanders, most people from our region are simply lost at that point and don't use that exit.

What we are proposing, and I must admit that I'm not an engineer, so I'm not proposing anything specifically, but we are proposing a new exit directly off the interstate directly onto Loop 250. And it may be an improvement of the older exit. Like I say, I'm not an engineer, I don't know the best way to do it, but after significant talks with the people of Midland over the past four years, this has been a subject that's been brought up over and over and over again.

I think it will be a tremendous asset to our loop. It will be a tremendous asset to the business travelers. Many business travelers simply don't know that there are things in Midland that they might want to stop and do. We have hotels, we have restaurants, we have shopping, we have recreational facilities right on the loop.

As it stands right now, all the travelers also going west, I think, simply don't see that, know that, or know there's a reason to stop in Midland. We want to give them an opportunity. I also believe that three-fourths of the people that live in Midland, as they return from Abilene or return from Dallas, they will use that exit to go back to their own homes. It will be a very high priorital exit.

A very key fact, I think, for you is that it will be a substantially less cost than what's been previously proposed. It is substantially less expensive than, of course, the alternatives which require overpasses over Business 20 and also the adjacent railroad crossing. It would really enhance that stretch of the interstate, which at one time was designed and probably still is designed more for rural than urban population, but now it serves a population in excess of a couple hundred thousand.

We know this is involved in the I-20 study that's recently being considered, and we appreciate that, but we think this proposal is very practical. It makes good common sense, and it would improve the transportation system in and around Midland. You would have a big impact on our city. And we appreciate your considering it. Thank you very much.

CHAIRMAN LANEY: Thank you, Mayor. If that's the conclusion of the formal presentation, I know we have a number of elected officials that we would like to hear from, unless they don't want to be heard from. That's usually not the case. We'll start with Senator Duncan. Senator Duncan, welcome, glad to have you.

SENATOR DUNCAN: Thank you, Mr. Chairman, Mr. Nichols, Heald, Behrens. It's always my pleasure to appear before you.

First of all, I want to say, and I know on behalf of the West Texas delegation, we appreciate so very much the fact that you are here in Odessa and Midland to hear the concerns of the folks out here and their transportation needs. I think it's very important for the public to know that your Commission has been very active in getting out to communities in rural areas of the state to try to determine the needs and to do the best you can to allocate the very limited resources the department has to be able to meet all of the needs in the state.

And I think in particular this particular Commission has probably done a better job than any before in doing that, so your presence here today is a very significant message, I think, to the folks that we represent that you care about what our concerns and needs are, and that you are trying to do something. So from my perspective, I think that's very significant gesture, not just a gesture, but also an action on your part to do what is the right thing.

We -- Mr. Perry and others have I think very articulately given you the needs and described the needs of this community and this area. I want to emphasize just two things right now at this point. One is that I think you are correct and I really appreciate the fact that y'all are considering Midland/Odessa as a unified transportation planning area. I think that's very important because when you look at that these communities, their economies are directly integrated and, basically, you are looking at a statistical area of about 200 -- little over 200,000 people.

I want to also emphasize another fact, that in West Texas, our economies -- and I think the Chairman alluded to this earlier -- are significantly integrated, all the way from Amarillo, Lubbock and Midland/Odessa, and then down to San Angelo, the Big Spring area. We are all in a constant transportation mode of moving goods and services and people back and forth between those communities.

So that concept, I think, fits very well with a unified -- not just Midland/Odessa, but a unified West Texas on what our transportation needs and priorities are going to be. And I see a movement in that direction to try to unify those areas. And I think that helps make your job a lot easier when communities can come together in a large area. And this area, if you look at from Amarillo all the way down to San Angelo has more than 750,000 folks in it, so you see there's a lot of population moving back and forth and a lot of economy, goods and services that are going to be, I think, even growing in the types of things that are going to be happening, so we want to emphasize that fact.

And one other thing, and finally, I want to emphasize the connection between Lamesa on the La Entrada, and I think if you look at the La Entrada -- and I have grown kind of fond of the concept. When I first came to the Senate, was the real exposure I had to this concept, and the more I look at this concept, the more I am excited about the potential in the future for this particular corridor to be developed.

I think the first leg of that right now that we are talking about is this leg between Lamesa and Midland/Odessa. I know when I come to Odessa -- by the way, Odessa, San Angelo and El Paso and Lubbock are all in the 28th Senatorial District, but when I come to this area, I travel that roadway most of the time, and there is a lot of traffic, at least from my perspective. I see a lot of folks going and using that highway as a connector between Midland and Odessa, and so I would urge you to look very closely at the request that Motran has had on that.

Finally, I want to congratulate Motran on the very fine job that they have done in providing leadership in pulling these communities together and coming up with some very credible ideas and plans. Thank you.

CHAIRMAN LANEY: Thank you, Senator. Appreciate your compliments. Always makes us real nervous.

(Laughter)

CHAIRMAN LANEY: Representative Buddy West.

REPRESENTATIVE WEST: As you said, we very seldom ever give up the opportunity to say a few words, especially on behalf of our communities. We thank you for having this meeting here today and coming out and breaking bread with us. And that's where I think you can settle a lot of your differences is when you have the opportunity to break bread with one another and visit.

But Chairman Laney, I want to just kind of reiterate some of the things that have been said here this morning. In West Texas and Odessa, we support the Motran concept. We are behind it 100 percent. I think it's something that our communities, we will all benefit from it. Whether you drive from Odessa up through Andrews, Seminole, into Lubbock, whether you drive through Midland and up to Lamesa, these roads are something that's vital to the Permian Basin. Having been one that traveled the Permian Basin many a year in my job, I know that good highways are needed.

And another highway that I would just like to bring up on my own personal point of view, this last Tuesday, driving in from Austin, coming from Sterling City across to Midland on 158, I would love to see that, from a personal standpoint, go ahead and complete that at the earliest convenience, because a lot of people exit the Permian Basin on weekends and then come back to make their living here, and that highway is used extensively.

And I -- the man that was riding with me was a former state representative. And I pointed out how that highway from Sterling City to the Midland County line was the two-lane road, and then we joined four-lane highway that was developed through the discretionary funds of the Odessa district and -- but we can't say enough for the support that we have received and we know we are going to continue to receive, our Motran group, the activities that they have had and the La Entrada corridor. We have all been supportive of it and will continue to be supportive of it.

And we thank you for taking this time to come and visit with us. Thank you very much.

CHAIRMAN LANEY: Thank you, Representative West. Last, but hardly least, Representative Tom Craddick, who has been active -- very active on introducing me to this area since the moment I landed in the saddle. Welcome.

MR. CRADDICK: Thank you very much, Mr. Chairman, members. We want to thank y'all for coming, welcome you out here. I appreciate your readiness to meet with us at any time, which I know you have done in the last few months when we have had problems, and we appreciate that very much. It makes us feel good that you're willing to meet at any time and take your time out of your busy schedule to do that.

Let me say a couple of things first. I would like to know the prize for being the quickest -- the shortest speaker. Do we get to pick the project? And then I notice that the two commissioners are very relaxed, and so is the new executive director. I guess that's because we're out of session of the legislature. You feel saferight now. We are glad that you feel relaxed when you come out.

But let me talk to you. I have two major priorities. Number one is 349, obviously, what you have heard today, and the reliever route around north Midland, to put this project, really -- start it out. I think there are three major ties that we need to talk about. One is Midland/Odessa together, which we -- that's our number two priority, is to be considered as one, but together, we are the largest MSA in West Texas. We're larger than both Amarillo and Lubbock, so if you consider us together, we are trying to tie the three major cities, Amarillo, Lubbock, Midland/Odessa together, and those are important things.

But if you look at what's happened in the last couple of sessions of the legislature, you will notice that Lubbock has expanded through Texas Tech, their medical facilities, into the Midland/Odessa area, and we have a lot of movement between the two cities now with the medical facilities in Odessa to come in, the PA program that is being established in Midland, which will be the whole PA program in Texas Tech that is going to be built in Midland, adjoining Midland College, not in Lubbock at the Tech campus, so you'll see a lot of movement back and forth, and this is where, again, the four-lane of 349 is really important.

To us, the key is to get 349 as a four-lane. That's our number one priority for the West Texas region out here that we live in. And I think the number one priority sub-part of that is to get the dollars available from y'all so that we can look at these -- this and build this project and get the study done and get it started and get the reliever route.

I know when Commissioner Nichols was out here, we talked to him about the reliever route, and I think it was your idea that we start at this end and probably try and get that done first. And we are interested in doing whatever we can to get the Commission to do this, but mainly, we would like to state to you basically our two priorities today are 349, the reliever route is the sub-part of that, and to be recognized as one MSA, which everybody else is doing. We would like you, when you look at funding, to consider us as one.

And we appreciate y'all coming and come back any time. If I get to pick, I will take 349 as my prize today. Thank y'all very much.

CHAIRMAN LANEY: You would have had the pick, but you weren't the fastest.

(Laughter)

CHAIRMAN LANEY: Robert, do you have any comments?

MR. NICHOLS: No.

CHAIRMAN LANEY: Does that conclude the presentations, Charles? I appreciate the work and the -- etcetera, the candor, and particularly appreciate Motran's work in the two communities, helping us by helping the communities prioritize their projects. It makes an enormous difference, as you know, and it helps us focus on -- truly focus on the viability and the feasibility of funding projects like these. So I very much appreciate the time and the comments. And I think we will be able to be back to you in relatively short order.

We will now, I think, move into the presentation by Joe Morales, yes, presentation of the district activities.

MR. MORALES: Good morning, Chairman Laney, Mr. Nichols, Mr. Heald, Mr. Behrens. First item, I also want to express my appreciation to the Commission for bringing their monthly meeting to the district. I want to thank Senator Duncan, Senator Bivins, Senator Madla and Representatives Craddick, West, Gallego, Walker and Turner for their support. I also want to thank Motran and the residents of the district who support transportation issues in the region.

By the way, I have a slide presentation behind you, okay?

CHAIRMAN LANEY: Thank you for telling us.

MR. MORALES: All right. I was thinking you have that in your notes.

This is a big district, as you can see. It covers 18,000 square miles and 12 counties from Andrews to the Rio Grande and from Stanton to the Davis Mountains. There are 3295 centerline miles and 7882 lane miles. Our 310 miles of interstate highway ranks us third among the 25 TxDOT districts. That's almost 10 percent of the state's total interstate mileage. Only the San Antonio district and the Dallas district have more.

Talk to you about construction. There's a lot to keep pace with the transportation needs in a district this large. We know that we cannot do everything at one time, so like someone said, timing is everything. The timing has been right for the last -- for some important construction projects.

In Midland, the timing has been right for extending Loop 250. It's been right for the last five years and every year. We have built another portion -- every year we have built another portion of the main lanes and overpasses. We are currently working on the main lanes from State Highway 349 east to Fairgrounds Road.

All along Loop 250, as we complete the main lanes major retail businesses have been springing up. For a time, it seemed like a new building was going up every week, Outback Steakhouse, Target Stores, Best Buy and others. In 1999, we are going east with frontage roads to prepare for another section of Loop 250, all the way to interstate.

In Odessa, the timing is now right for extending John Ben Shepherd Parkway and 52nd Street up to Loop 338. That will open up a developing business district that threatens to rival the one just up the road in Midland. There is already a new Home Depot, and builders are putting the finishing touches on a new car lot and Circuit City and other businesses.

The timing is right for expansion of four miles of State Highway 18 just north of Fort Stockton from two lanes to four lanes. Business development and intersecting county roads along that stretch of highway are contributing to traffic congestion and turning accidents.

We also will be building an interchange on Interstate 20 at Moss Road to serve West Odessa. By the way, that interchange is being designed by consultants.

In maintenance, we get good marks for the conditions of the highways. That is because every seven years, our highways get a seal coat. We spend nearly $5 million to seal coat almost 400 miles every summer to extend the life of our highways. If we have to cut back on preventative maintenance just because our highways are in a little better shape than other roads somewhere else, we know that pretty soon, they won't. Good maintenance practices save money in the long run.

We have more than 300 miles of 30- to 40-year-old interstate in the district. A lot of it is reaching a stage of its life when it will need some major rehab work. We are right now asking for letters of interest from consulting firms who want to conduct comprehensive pavement evaluations to help prioritize what needs to be done.

This summer, we will rehabilitate 14 miles of Interstate 20 near the junction with Interstate 10. Right now, we have highway rehabilitation projects going on in Crane on U.S. 385 and the south frontage road of Interstate 20 west of Odessa.

We have done some major urban rehabs in Odessa on U.S. 385, which is Grant Street, and in Midland on State Highway 349, which is Big Spring Street, and on State Highway 158, which is Florida Street. We finished the rehab in Kermit this winter.

We are getting ready to rehab State Highway 349 in Iraan and State Highway 158 southeast of Midland. We are about to do a major rehab on U.S. 90 through Sanderson. So as you can see, we try to spread our money.

The work of our maintenance section crews in this district complements our long-range practices. Every day, they are hard at work doing everything from blade work to patching potholes to repairing sign damage to picking up dead animals.

We are contracting routine maintenance work for bridge joint repair, replacing concrete traffic barrier, replacing faded road signs, doing highway shoulder buildup with recycled asphalt pavement wrap so there is not a drop-off along the driving lane, and sealing cracks in the roadway, to mention a few.

We are also very proud of our special jobs crew. It has fog-sealed over 2200 lane miles during the past four years. To list just a few of the other things they have done, they have built crossovers and turn lanes. They have put down 75 miles of seal coat and rotomilled miles of highway to improve drainage, safety, ride comfort and deteriorating surfaces. Here, they were adding a safety lane in front of the school in the community of Greenwood.

We are also working hard to bring our older bridges up to standards. Hard as it is to compete at the state level, we have finally gotten the go-ahead to replace two bridges in the district and there is another request in the pipeline that we expect to see approved.

We have been able to work out some very cost-effective partnerships with third parties to help improve rural communities. I would like to give you two examples. In Fort Stockton, we used scrap culverts to build these planters for native plants along our right-of-way on Business 10. Prison inmates at the Intermediate Detention Unit of the Texas Department of Criminal Justice did most of the labor-intensive work and the TDCJ donated the plant material.

In Balmorhea, the rock lining of the canal that runs adjacent to our right-of-way was also placed by prisoners. Local business contributed materials, and the effect was to complement improvements that we included in our rehabilitation project for State Highway 17 through town. You can see the results.

Long-range planning. Our planning emphasis is starting to hit its stride. The goal of our planning is to move projects up and have projects ready on the shelf. We were involved as the Department recently completed a Lubbock-to-I10 route study that identified north/south corridor improvements from Lubbock to Interstate 10.

In support of Motran's requests for expansion of Highway 349 from south of -- from south Lamesa and new connection from State Highway to FM 1788, we will ask for consulting funds to do the work to develop schematics for the new route. In fact, the Odessa district is willing to be the lead district and develop plans for the entire Lamesa to FM 1788 corridor as one project.

We currently have a consultant on board (MK Centenniel) conducting an Interstate 20 corridor study to create a comprehensive plan for developing the entire corridor in the MPO from east of Midland to west of Odessa. When they complete the study, we have a good snapshot of viable projects along the corridor out to the year 2025.

In addition, a district team including planning staff and the area engineers from Odessa, Midland, Pecos and Fort Stockton are developing a 25-year plan for highway improvements in the district outside the MPO. This fall, we'll be coming to you with project specific requests.

We will have several consulting projects pending for developing PS&Es and advance planning, including coordination of right-of-way, utility adjustments and schematics that will be finalized within six months and that help us to get the advanced work done so that when dollars become available, we will be ready to put them to work.

Training. Our district training program is focused on getting our younger employees trained to oversee construction, perform maintenance work and do planning. To make training as cost effective as possible, we have brought it to the district so we can get the biggest bang for our bucks. That includes training for GeoPak-1, CAiCE, tort liability for inspectors and other courses.

We just concluded training on the use of 10-yard dump trucks in Monahans and heavy equipment in Stanton. We used our own district funds to build a training room in a part of the warehouse that was freed up when we cut back on the amount of stock that we carried. Killed two birds with one stone there.

Operating budget. We are well aware that nothing happens without funding, so we work very hard to forecast our operating budget as accurately as possible. For fiscal year '98, we have projected our budget expenditures to within 3 percent. We are very proud of the fact that we are among the top districts in forecast accuracy.

Our budget for administration, the 604 account, is a good example of how we try to put every dollar we can for actual on-the-road work. 20 of the 25 districts get more 604 administration dollars than we do, but when you look at the administrative budget per FTE, only three districts spend less per FTE, and four of those districts are the Houston, Austin, San Antonio, Dallas districts, who have up to five times as many employees.

The point is, we have cut the administrative cost to the bare bones. We try very hard to put our money in maintenance, construction, transportation, planning, the things that make a real difference out on the road.

We have 233 employees in maintenance with an annual budget of $9.3 million. That includes salaries and materials. And we are spending $4.3 million in maintenance contracts. We have 72 employees planning and designing highways with a budget of $2.7 million. So as you can see, 305 of the district's 332 employees are directly engaged in maintenance or construction and planning.

If we had a couple more employees, we could put them to work developing PS&Es and preparing plans so we would have important projects on the shelf and ready do go in case some funding suddenly should become available somewhere in the state.

If we had increased letting authority -- and that's the key word -- we would put the money to work to improve mobility and protect the transportation infrastructure in the district, especially the interstates. There are federal funds available to us in that category to do more, and if the district's letting authority was raised to $50 million from our current $32 million, we would use that to address the growing needs of interstate maintenance.

I guess this is the slide I have been looking for, in conclusion, every employee in the Odessa district takes seriously the responsibilities that you and the citizens of Texas have placed with us. Like you, we want Texas highways to continue to be the envy of the world. I can promise you that we will continue to do our part. Thank you for your time.

CHAIRMAN LANEY: Joe, thanks for the presentation. To you and all the district from -- from the entire Commission and the Austin staff, you do a terrific job and your employees do a terrific job, and it was a real pleasure last night having the opportunity to visit with a number of your employees. And that is the only context in which we have the opportunity, so thank you very much for the effort and all that went into that.

Robert, any comments?

MR. NICHOLS: No. Joe, we thank you. You do a good job and the local elected officials bragged about you this morning at the breakfast.

MR. MORALES: That means I am getting the $50 million? There was two things --

CHAIRMAN LANEY: No, you took too long, too.

MR. MORALES: My staff gave me some advice. They told me not to say anything after my speech. I just didn't do it. Anyway, we love to have you and, again, please come back.

CHAIRMAN LANEY: Thank you, Joe. Wes, do you have any comments to Joe from the district presentation?

MR. HEALD: Well, I might say, Joe, that's probably one of the most professionally presented reports I have ever seen. You did a great job. I might like to recognize, we had another district engineer that snuck in the back a while ago, and I don't know whether he's here -- afraid somebody is going to get some of his funds or not, but I would like to recognize district engineer from San Angelo, Walter McCullough. Would you raise your hand, Walter?

CHAIRMAN LANEY: You are too late to participate in any additional funding, Walter. Good to see you. Glad you are here.

Lot of projects, lot of needs, and we appreciate the prioritization, Joe. I know you had a hand in helping them think through and prioritize where we are asked to spend the dollars.

As all of you know probably by this point, we don't make decisions from the dais at the same meeting, generally speaking. There are a few exceptions, but we will take these all into our thoughts and considerations and probably be back with you in relatively short order. I think some of these are very worthwhile.

But now let's turn to our regular meeting and proceed with the agenda, and the first item is the approval of the minutes from the Commission meeting of March 30, 1998. Any comments or questions on these minutes?

MR. NICHOLS: I move we accept them.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

CHAIRMAN LANEY: Wes, I will turn it over to you walk us through the rest of the agenda.

MR. HEALD: Okay. We have a -- see agenda item -- caught me off guard here. I thought you were going to handle the resolution, agenda item number 2, we have a resolution to encourage Congress to eliminate the federal deadline for the metrication of highway designs and specifications. I think this is to go to the congressional delegation.

CHAIRMAN LANEY: I think so. I think so. And, yes, I was supposed to handle that. My apologies, but this is the first of the flies to go down, right, mosquitos, gnats, whatever they were. Would you like to elaborate on this?

MR. NICHOLS: Sure. In the mid '80s, the federal government required all state DOTs to convert to the metric system, which in theory was a good idea. Everyone who's dealt in math and science and physics and engineering understands how much better the metric system is for conversion purposes. And their intentions were good.

We are required to switch under the current law, but on a -- when you get to the real practicality of implementation, the industry has not converted, what we are in effect requiring, and current law requires, is something that we have spent millions of dollars on in the conversion effort to metrication, and on a daily basis, we have literally thousands of our employees and vendors converting back and forth.

The suppliers, the contractors, local real estate agents doing appraisals, comparisons all the way through the system are still in the English system, so what we in effect have -- this law has done is require two systems, which is more expensive. And we are -- all we are asking the government to do is to, rather than forcing us and penalizing us by withholding of federal funds for not doing a full conversion on a special date, allow each state in the United States as they see the industry convert to allow us to convert at our own speed, as opposed to an artificial deadline. That kind of wraps -- that's kind of it in a nutshell.

CHAIRMAN LANEY: Appreciate it. I make a motion. So moved.

MR. NICHOLS: Second.

CHAIRMAN LANEY: All in favor?

(A chorus of ayes)

MR. HEALD: Mr. Chairman, to go on with our business part of our meeting, we should have a rather short meeting this time. Agenda item 3.a. proposed adoption of rule changes, and I believe Joanne Wright from our General Counsel Office is going to present the first item.

MS. WRIGHT: This minute order proposes the repeal of Section 7.41, 7.61 and 7.71, amendments to sections 25.70 through 25.72, and new sections 25.74 through 25.76 concerning railroad crossings. The purpose of these proposed changes is to consolidate rules concerning railroad crossings at a single location under Chapter 25 and to make minor nonsubstantive corrections to the existing sections 25.70 through 25.72.

CHAIRMAN LANEY: As I understand it, there are no real substantive changes in the rules?

MS. WRIGHT: No, there are not.

CHAIRMAN LANEY: We're just consolidating. Do you have a motion?

MR. NICHOLS: I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Thank you, Joanne. The next item under agenda item 3 is vehicle titles and registration rules, changed -- proposed rules, changes, and Jerry Dike will be handling it.

MR. DIKE: Good morning, Commissioner, Mr. Nichols. The first thing I would like to do is correct Commission -- a mistake I made at the Commission meeting last month. I told you on the golf cart license plates in Grayson County -- they did say golf cart and I said standard license plate, 6-by-12. Those are the motorcycle size version. The other golf carts throughout the state that use golf carts, now, you pay regular registration fees and use the standard Lone Star state plates, but these --

CHAIRMAN LANEY: These are the ones that we put on the golf carts that go up to 70 miles per hour on the interstates?

MR. DIKE: Those are the ones in Grayson County, yes, sir.

All right. This minute order proposes the adoption of Rule 17.22, which is House Bill 1532, passed last session, that allows the County or the State refusal to register a vehicle if the motor vehicle owner owes the County money for a fine, fee or tax that is past due. And we are proposing the -- I recommend your approval.

CHAIRMAN LANEY: Any questions?

MR. NICHOLS: No questions. I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Next item, still under agenda item 3, has to do with traffic operation, debarment of a maintenance contractor, and Thomas Bohuslav, the director of the construction division.

MR. BOHUSLAV: Morning, Commissioners, Chairman Laney. Item 3.a.(3) is proposed adoption of the appeal of Texas Administrative Code Section 25.501 through 25.506 and new sections 29.21 through 29.26, concerning debarment of a maintenance contractor. These sections provide procedures for the debarment of State highway maintenance contractors, and due to recent Department reorganization, the maintenance duties now reside in the new maintenance division, and the position of deputy director field operation no longer exists.

Accordingly, the existing rule proposed for appeal appears in Chapter 25, Traffic Operations, and the proposed new sections will more appropriately appear in Chapter 29, Maintenance. The new sections 29.21 through 29.26 have been rewritten to refer to the maintenance division and to delegate responsibilities to the executive director or the director adjacent to me, not below the level of deputy or assistant deputy director.

And these sections also correct the name of the department and its commission. Staff recommends adoption.

CHAIRMAN LANEY: These are proposed rules?

MR. BOHUSLAV: Repeal and proposed.

CHAIRMAN LANEY: Proposed, so there's a comment period?

MR. BOHUSLAV: Any questions?

MR. NICHOLS: No questions. I so move.

CHAIRMAN LANEY: And I second. Before we vote, let me just encourage you, Thomas, to make sure you get each of the commissioners to focus carefully on these rules and make sure that we elicit whatever comments we have. I know I am going to have some. I would suspect that Robert and Anne will have some as well. All in favor?

(A chorus of ayes)

MR. HEALD: We're moving along. Proposed rules changes for final adoption. This is agenda 3.b., and Jerry Dike will be handling amendments to disabled person license plates.

MR. DIKE: Yes, sir. This minute order adopts amendments to Rule 17.24 of the concerned -- disabled person license plates and identification placards. These are the two new placards. The characteristics are that State law required a hologram to help deter counterfeit placards, and it also required driver license so that it could be identified by law enforcement officers through the windshield. There's the new version.

It also provided for disabled license plates for vehicles that are specially equipped to transport people without one or both legs.

We received no comments during the public period and we recommend your adoption of these final rules.

MR. NICHOLS: What's the difference between the red and blue?

MR. DIKE: The blue is permanent for a four-year period, and the red, temporary, depending on what the doctor certifies.

CHAIRMAN LANEY: When will this go into effect?

MR. DIKE: This is actually already in effect, Commissioner.

CHAIRMAN LANEY: What do you need us for?

MR. DIKE: For the rules. The law is in effect, but we need the rules filed and we need it to go through the comment period.

MR. NICHOLS: I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Jerry, don't leave. Jerry will be handling the next items, amendments to exempt and alias vehicle registration.

MR. DIKE: Yes, sir. This minute order adopts the amendments to Rule 17.50 concerning exempt and alias vehicle registrations. That's the exempt plates and then those law enforcement vehicles, the covert investigations that use Lone Star State plates. This implements Senate Bill 557.

And no comments were received during the public comment period, and we recommend your approval.

CHAIRMAN LANEY: Any comment?

MR. NICHOLS: No comment. I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Thank you, Jerry. Agenda item number 4, multimodal transportation, under public transportation, Jim Randall will present allocation of the FTA rural mass transportation funds for fiscal year '99.

MR. RANDALL: Good morning, Commissioners, Mr. Heald, Mr. Behrens. The next items on the agenda for you is allocation of FTA rural mass transportation funds for FY 99. The proposed minute order authorizes allocation of $8.2 million for FY 1998 in federal administration funds for rural public transportation. Funding for rural public transportation operations is allocated based on the formula in the Texas Administrative Code, Section 31.36.

Prior to allocating funds to the individual transit systems, which is under item A in the minute order, the total portion of $8.2 million is adjusted by reserving $500,000.00 for State administrative expenses, 15 percent for the mandatory inner-city bus set-aside and 10 percent for expansions for strategic planning awards.

The portion reserved for strategic planning awards, which is item B in the minute order has been repeated on this minute order for ease of reference. At the February Commission meeting, the Commission passed a minute order allocating this entire amount as strategic to assist those rural systems experiencing the deficit in State funding and/or not achieving the 5 percent growth.

The portion reserved for mandatory inner-city bus set-aside, which is item C, will be awarded under future minute orders. The division is currently selecting inner-city bus projects which will qualify for this funding.

Finally, the portion reserved for State administrative expenses is allowable up to 15 percent; however, the $500,000.00 set-aside is roughly 6 percent. This has been the standard for the program for several years now.

Lastly, you will note there's two columns of numbers on this minute order with a 6-month extension of the Multimodal Transportation Deficiency Act of 1991. Additional funding authorization for transit was made available for half of the fiscal year for 1998. This additional authorization made available approximately two-thirds of the total apportionment for world transportation, the spending order authorizing both the total and the available apportionment. The available apportionment will be allocated at this time and the remaining balance will be released upon availability.

And we would recommend approval of this minute order.

CHAIRMAN LANEY: Was there any controversy in the transit industry about any of this?

MR. RANDALL: No, just straightforward with the formula being in our rules.

CHAIRMAN LANEY: Any questions?

MR. NICHOLS: If there were any adjustments and surprises coming out of conference then we would come back and review this?

MR. RANDALL: Yes, sir. Yes, sir.

MR. NICHOLS: That's the only comment I had.

CHAIRMAN LANEY: I move we adopt.

MR. NICHOLS: Second.

CHAIRMAN LANEY: All in favor?

(A chorus of ayes)

MR. HEALD: Jim will also present minute order, approval of planning funds, a consultant -- planning funds for Wichita Falls region.

MR. RANDALL: Item 4.a.(2) requests approval of $48,528.00 in federal transit funds for the North Texas Regional Planning Commission. The North Tex agency has taken the lead in Wichita Falls and the surrounding 11 county regions to coordinate public and human services transportation. Their objective is to establish a system that -- so that residents of a specific county need to make only one telephone call to obtain information on transit services or to schedule trips to the doctor or job site or for any other purposes.

The North Tex consortium, which was formed about seven months ago, has recently mailed out surveys to assess transportation needs or resources in the 11-county region. With the funding from TxDOT, the local group will hire a consultant to analyze the survey results, prepare a coordination of service plan. The federal planning dollars will be matched by $12,132.00 in local tariffs and in-kind contributions. The source of the proposed federal funding is a federal transit administration Section 5313 program. Each year TxDOT receives these funds for a statewide planning activities. This one-time financial assistance will help improve local coordination in that area.

We recommend approval of this minute order.

MR. NICHOLS: No questions. I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Agenda item 5, removal of a portion of State 161 from the state highway system, transfer to North Texas Tollway Authority for construction, operation and maintenance of a turnpike project. Robert Wilson will be the presenter.

MR. WILSON: Good morning. I'm Robert Wilson. I'm the director of the design division. And transportation code Section 366.35 allows the Transportation Commission to approve the transfer of a segment of the free state highway system to a regional toll authority, providing certain conditions are met. You received a request from Dallas County, the City of Irving, and the North Texas Tollway Authority to transfer a portion of State Highway 161 corridor from Interstate 635 to Belt Line Road to the North Texas Tollway Authority for the purpose of constructing, operating and maintaining the main lanes as a toll road.

This would be a western extension of the current President George Bush Turnpike now being developed by N.T.T.A. This is all shown on my map here to the right. N.T.T.A. also requested that you commit $24 million previously allocated to State Highway 161 to the construction of an interchange at 161 and I-635. They also requested that you consider a state infrastructure bank loan as might be needed as an additional funding source.

A public hearing was held on March 30 to receive public input on this proposal. Two commenters were in support of the proposal, Dallas County Judge Lee Jackson and City Mayor of Irving, Morris Parrish. One commenter was opposed to a toll road and suggested that funding from the Federal Transportation Bill be used when it's passed. These comments were considered and they are summarized in Exhibit "A". No other oral or written comments were received on the proposal.

The minute order I am presenting to you today addresses the conditions of Texas Transportation Code 366.035 and Title 43 of the Texas Administrative Code, Chapter 27. It is found that the proposed transfer will not adversely affect regional mobility and will result in construction of the necessary improvements in an efficient and expeditious manner with minimum public investment.

The minute order proposes the approval of the transfer to N.T.T.A. subject to the approval of the Governor and it outlines the conditions of the transfer.

Staff recommends your approval of this minute order.

CHAIRMAN LANEY: Do you have any questions?

MR. NICHOLS: No, just a comment. I think this is a great example of a partnership between Texas Department of Transportation and one of the local regional tolling authorities to make a project happen and leverage private funds on transportation needs. That's --

CHAIRMAN LANEY: I have got a couple of questions, Robert. I agree with what Robert said, but I have a couple of questions. What they requested was a transfer, the commitment of 24 million that we had already previously allocated for 161 as a State-funded road, and an unspecified amount of a SIB loan. Nothing in here addresses a SIB loan. We are not attending to do that, right?

MR. WILSON: It does not approve a SIB loan. It just says that you will consider one if and when they make an application for one.

CHAIRMAN LANEY: What if they are unable to raise the funding required to build this?

MR. WILSON: That's part of the purpose of a SIB loan, is whenever they figure out how much they can justify sale of bonds for, and I would expect them to come to you for a State infrastructure bank loan, and it will be up to you, I would suppose, at that time, to decide if that's a worthy loan to make.

CHAIRMAN LANEY: The question I raise is, if we transfer it and it's theirs and they can only raise some specified amount from the public financial markets and we are either unable or unwilling to cover the gap to the full extent they would like us to, what happens to this piece that we have transferred to them?

MR. WILSON: I would expect we would have to draft a minute order and bring it back onto our system.

CHAIRMAN LANEY: Okay. We will have transferred it to them by that time? We are going to do this right away?

MR. WILSON: Well, we have to enter into agreements. There are several agreements that need to be finalized for that to all take place, so that will take some time. I don't know how long after that it would be financial feasibility would have to be determined and so -- it will take quite a while for all that to happen.

CHAIRMAN LANEY: Mr. McCarley, did you want to make a statement? Somebody was standing up behind you, Robert, and I just wanted to --

MR. McCARLEY: James McCarley, executive director of N.T.T.A., just to maybe help walk through it, we expect to know that financial feasibility probably within 60 days. We will begin negotiations immediately, of course, with your staff, assuming you pass the minute order, to work out the agreement, and I'm sure we'll have language in there that should something fall through, that we would transfer it back. But our financial advisors tell us today we are very close to -- with your 24 million to having the funds for the $115 million project, so we'll know one way or the other probably in about 60 days, and we anticipate selling bonds late this fall.

CHAIRMAN LANEY: I just didn't want to see the transfer leave a segment of the highway orphaned somehow or another without the funding to develop it.

MR. McCARLEY: We are very confident we can bring it to fruition.

CHAIRMAN LANEY: Can I have a motion?

MR. NICHOLS: So moved.

CHAIRMAN LANEY: Seconded. All in favor?

(A chorus of ayes)

MR. HEALD: Agenda item 6, Thomas Bohuslav will present for consideration minute order authorizing award or rejection of contracts.

MR. BOHUSLAV: Item 6.a.(1) is for consideration of award or rejection of maintenance contract let on April 7 and 8, 1998, with an estimate of $300,000.00 or more. We have a total of 14 projects let and received 42 bids for an average of 3 bids per project. The low bid total is $9,347,031.42 for an amount underrun of $606,805.46 for 6.09-percent underrun.

We have one contract we recommend for rejection on page 1 of Exhibit "A" on the bottom of the page, project in Harris County, number 4031. We received one bid from Infrastructure Services, Incorporated for $519,796.65, an amount overrun of $216,596.65 for a 71.49-percent overrun. The district stated that the project needs to be redesigned after reviewing a similar project that was recently let in their district that came in with a lower cost. Two other contractors that didn't bid said they would definitely bid if the project were modified. It's recommended that this project be rejected, modified and relet at a later date.

We concur with the district's comments and recommend the contract be rejected. And staff recommends award of all contracts with the exception stated. Any questions?

CHAIRMAN LANEY: No question.

MR. NICHOLS: I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. BOHUSLAV: Item 6.a.(2) is for consideration of award or rejection of a building construction contract let on April 2, 1998. This project is for the construction of TransVISION traffic management center in Tarrant County and includes the regional training center. We have only one project, and seven bidders. The low bid on the project $5,222,000.00 for amount overrun of $222,000.00 or 4-percent overrun. The staff recommends award of the building contract.

CHAIRMAN LANEY: So moved.

MR. NICHOLS: Second.

CHAIRMAN LANEY: All in favor?

(A chorus of ayes).

MR. BOHUSLAV: Item 6.a.(3) is for the consideration of the award or rejection of highway construction contracts let on April 7 and 8, 1998. We had a total of 101 projects let. The total number of bids received was 351, for an average number of bidders per project of 3.48. Total low bid was $283,781,224.67 for amount overrun of $3,108,233.11, or 1.1-percent overrun.

We had 12 DBE/HUB low bid contractors. We recommend rejection on two contracts, first one being in Hall County on page 8, third from the top, project number 3099. We had one bidder on this project from J. Lee Milligan, Incorporated, for the amount of $434,950.07, or $176,570.92 overrun or 68.34 percent. The district visited with J. Lee Milligan, was informed the job really didn't fit their schedule. In addition, there's another contractor in the area that was unaware of this project and felt they could bid it. The district did not recommend awarding it. We concur with the district's assessment and recommend this project be rejected and relet in the future.

The second project is in Wells County on page 12, the last project on that page. We received one bid from V.C. Huff, Incorporated, in the amount of $458,726.08 for an amount overrun of $87,986.07 or 23.79 percent over. We found in discussions with the contractor that due to small quantities of roadway work involved, the bid on our portion of the work overran the engineering estimate. And the district recommends that the bid be rejected for that project and plans to relet without the roadway work, and we concur with the district comments to reject all the bids on this project.

In addition, I would like to bring your attention to some additional projects. On page 3, second from the bottom, project number 3076, we received three bids, low bid being from Continental Construction, Incorporated, for an amount of $597,610.47, for an amount overrun of $163,048.22 or 37.52-percent overrun. The contractor stated that low production rates were expected due to the phase work and constrained work areas, and in addition, there is an item 409. It was the first time the district had this item and they had no bid history on it and so they had underestimated the price on it. We received good competition for the project and we concur with the district's comments and recommend award of this contract to Continental Construction, Incorporated.

An additional project is on page 6, third project, number 3052. We received four bids, and H.B. Zachary Company was the low bidder for an amount $9,574,808.76, or $3,392,096.00 overrun, 59.4 percent. The major factor that they gave us was that the existing material on the side is a shaley material that could not be used on the project and they would have to haul it off and haul in suitable material. In addition, the key factor mentioned by the contractor was a sharp increase in the cost of construction materials, including cement. We received good competition on the project. In addition, we believe the low bidded prices are reasonable and feel that reletting this project would result in higher cost to the State. Concurrence with the North Central Texas Council of Governments has been obtained. We therefore recommend the project be awarded to H.B. Zachary Company.

An additional project on page 10, on the top of the page, project number 3056. We received three bids, low bidder being J. Lee Milligan, Incorporated, for the $4,442,321.05, for an amount overrun of $1,167,962.88, or 35.67-percent overrun. This project consists of constructing an interchange at convergence of U.S. 385 and U.S. 87 in Hartley. According to discussions with the contractor by the assistant area engineer, his price reflects an inadequacy of the material near the project site, thus causing an increase of material cost for the project. We believe our estimate was low, in addition. We recommend awarding the project for the following reasons: There was reasonable competition, it's not feasible to redesign the interchange, and the higher cost designs are primarily due to a material shortage in the area.

We concur with the district's comments and recommend the project be awarded to J. Lee Milligan, Incorporated.

Last project I have comments on is on page 11, the third project, project number 3002. We received three bids, the low bid being Duininck Brothers, Incorporated, for $15,376,141.32, amount overrun of $3,361,642.28, 27.98-percent overrun. Some of the primary reasons for the overrun on this project is that cement is apparently at a premium right now. In fact, most of the firms we contacted indicated that it's virtually impossible to get quotes on cement at this time. Aggregate suppliers just recently began experiencing difficulty in keeping up with demand with respect to asphalt stabilized base aggregates, and the project requires stages -- several phases of move-ins and move-outs and we failed to recognize that in our estimate. We received good competition on this project. Division concurs with the district recommendations of award of this contract. Any questions?

CHAIRMAN LANEY: How pervasive is this cement shortage?

MR. BOHUSLAV: We found it nearly impacts every district, even to the point where contractors have stated they could not receive quotes from cement suppliers. In some cases, a rationing is affirmed where contractors can only receive concrete on projects out of a five- or six-day workweek. We even talked to some Odessa district people who are experiencing a shortage out here in Odessa as well.

MR. NICHOLS: Due to bulk train shipments?

MR. BOHUSLAV: It's due to the cement shortages. I don't know about that. There is some impact on the train shipments as well in receiving aggregates, but it's primarily a -- the demand on the market right now through the industry in Texas. It seems to be impacting Texas and the regions surrounding Texas.

CHAIRMAN LANEY: I understand that concrete pouring on 45 in the Ennis area is stopping on Friday at this point. Cement, the prices are rising throughout the state, too.

MR. BOHUSLAV: Significantly.

CHAIRMAN LANEY: Any questions?

MR. NICHOLS: On the same subject, the prices rising, I remember reading in AASHTO that the fourth quarter of this past year they were saying, nationally, highway construction costs were up by about 13 percent. Are we seeing these type of increases?

MR. BOHUSLAV: If you will notice on the bid letting this month, usually our total estimate underrun as we bring them to you, the total amount bid, in this case has been a month when it's come over a little bit under 1 percent, but that maybe a trend throughout the summer with the bigger lettings and the material shortages.

MR. NICHOLS: But you constantly update your adjustments or estimates based on --

MR. BOHUSLAV: We should take that into account in our estimates, yes.

MR. NICHOLS: So you're definitely seeing a substantial increase overall in highway construction costs?

MR. BOHUSLAV: Yes. We usually see from a 2- to 6-percent underrun on our bids each month, and with a 1-percent, that's a change of 5 percent over the course of just a few months.

MR. NICHOLS: That's all I have.

MR. HEALD: Thomas, what about the number of bidders? Are we seeing a decline there?

MR. BOHUSLAV: I think you normally see an average of about five -- four or five bidders. In this case, we're getting down in three range, so we've seen with a larger number of projects out there that we have fewer number of bidders, or they're stretched farther and fewer between.

MR. HEALD: I don't know that I could substantiate this, Mr. Nichols, but it appears to me the capacity is just about -- they've just about got all the work they can handle, and I think the average number of bids is going down.

MR. NICHOLS: Which increases the price.

MR. HEALD: And then we've got the rail shipment problems in East Texas and we've got the cement shortage.

MR. NICHOLS: That's all I have. I move the acceptance of these contracts with the exceptions.

CHAIRMAN LANEY: Second. All in favor.

(A chorus of ayes)

MR. HEALD: Thomas, go ahead. Next item is 6.b, contract claim.

MR. BOHUSLAV: 6.b.(1) is a consideration of a claim settlement for contract claim filed by Traylor Brothers, Incorporated, for project C47-7-128 and C47-7-121. This is a part of North Central Expressway. Traylor Brothers, Incorporated filed a claim in the amount of $5,451,939.00 for recovery of additional costs incurred during construction of the projects.

On March 5, 1998, contract claim committee met informally with representatives of Traylor Brothers, Incorporated to discuss the issues surrounding the claim. The contract claim committee offered Traylor Brothers, Incorporated a settlement of $456,000.00, and by letter dated March 20, 1998, Traylor Brothers, Incorporated accepted the settlement amount.

And staff recommends approval of the minute order as presented.

MR. NICHOLS: I have already had my questions answered.

CHAIRMAN LANEY: So moved.

MR. NICHOLS: Second.

CHAIRMAN LANEY: All in favor?

(A chorus of ayes)

MR. HEALD: Thank you, Thomas. Agenda item number 7.a, contested cases. Let's see, Joanne Wright, I believe, you are going to present that.

MS. WRIGHT: This is a minute order to affirm the Department's cancellation of an outdoor advertising permit held by Texoma Advertising Company, Incorporated, for the reason that the permit holder had removed a nonconforming sign that had been damaged. As you know, under the Texas Litter Abatement Act, the Department has a responsibility to regulate outdoor advertising along interstate highways and the primary system. Under Department rules governing outdoor advertising, the Department may cancel the permit for a nonconforming sign that was grandfathered if the sign is removed.

Texoma Advertising contested cancellation of the permit and requested an administrative hearing which was held before an administrative law judge with the State Office of Administrative Hearings. The judge, after hearing the evidence, issued a proposal for decision finding the Department's action was justified, and recommended that cancellation of the permit be upheld.

Staff recommends the Commission's approval of this minute order and the issuance of an order adopting the ALJ's findings and conclusions and affirming the cancellation of the permit.

CHAIRMAN LANEY: Questions?

MR. NICHOLS: No questions. So move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. HEALD: Thank you, Joanne. Under routine minute orders, we can take these all together, unless you would prefer to exclude something. Agenda item 8.a, speed zones, establish or alter regulatory and construction speed zones on various sections of highways in the state. Agenda item 8.b, load restrictions, revision of load restrictions on various roads and bridges on the state highway system. Agenda item 8.c, right-of-way disposition, purchase and lease, problem in Harris County, and I believe Gary Bernethy, as director of our right-of-way division is going to present that.

MR. BERNETHY: Mr. Chairman, Mr. Nichols, the agenda item is the reaffirmation of the approval of a sale of some surplus property that the minute order was approved and past in the February meeting. A condition of that -- of that passage was that the Office of General Counsel concur that we waive the surface rights.

In talking with the Office of General Counsel, they felt that we should define the term "impractical" as it's set out in the statute, so we contacted other State agencies that disposed of surface properties, the General Land Office and the University of Texas, and neither of them had written policy as far as the definition of "impractical," but each of them had some criteria that they normally would waive surface rights, and those were if it was a economic unit in itself, they would waive the surface rights, if it was in an urban area, they usually waived the surface rights, and if the property would require financing to develop in order to facilitate that financing, they normally waived surface rights.

So each of those criteria fit the properties that we are disposing of, so we hereby recommend that we go ahead with the sale of the surface tract, that we waive the surface rights and maintain the mineral rights. Staff recommends approval.

MR. NICHOLS: We actually approved this last month with those exceptions, but you want us to vote on again to clarify the actual wording?

MR. BERNETHY: Yes, sir.

MR. NICHOLS: So move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes)

MR. BERNETHY: Item 8.c.(2) on a project in the Lubbock district on U.S. 82, when the Department contacted the property owner, the property owner requested that the Department consider buying the entire parcel under a new statute that allows the Department to do that, we proceeded with the appraisal of the whole property, as well as that needed for the right-of-way.

The value for the whole property was $15,000.00. The value for that portion needed for right-of-way was $14,900.00, so we felt like it did fit the criteria of an economic remainder. Under the statute, we must have Commission approval to require an economic remainder, and we are hereby requesting that in this minute order.

CHAIRMAN LANEY: Go ahead.

MR. HEALD: Agenda item 8.d, request for eminent domain proceedings on noncontrolled and controlled access highways. That's routine, so we present these for your consideration.

CHAIRMAN LANEY: So moved.

MR. NICHOLS: Second.

CHAIRMAN LANEY: All in favor?

(A chorus of ayes)

MR. HEALD: Agenda item number 9 is for an executive session, and Mr. Chairman, I don't think we need an executive session during this meeting. That concludes my part of the business meeting.

CHAIRMAN LANEY: That concludes our agenda in record time. We get to pick our project.

If there's no further business before the Commission, we do usually reserve this portion of the Commission, if anyone has -- wants to speak to the Commission, public comment period, but I don't think we have anyone signed up and nobody looks like they are rushing to the microphone. So that being the case I will entertain a motion to adjourn.

MR. NICHOLS: I so move.

CHAIRMAN LANEY: Second. All in favor?

(A chorus of ayes).

CHAIRMAN LANEY: Thank you very much.

(Whereupon, at 10:34 a.m., the meeting was concluded)

THE STATE OF TEXAS

COUNTY OF MIDLAND

I, Joni Spinks, Certified Shorthand Reporter for The State of Texas, do hereby certify that the above and foregoing contains a true and correct transcription of all the proceedings (or all proceedings directed to be included, as the case may be) as were reported by me.

I further certify that this transcription of the record of the proceedings truly and correctly reflects the exhibits, if any, offered by the respective parties.

Witness my hand this the_____day of May, 1998.